STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY )

BOARD, )

)

Petitioner, )

)

vs. ) Case Nos. 98-5212

) 98-5213

RONALD LEE FRAZIER, ) 99-2186

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on April 19, 2000, and October 1, 2001, in West Palm Beach, Florida, before Susan B. Kirkland, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Department of Business and Professional Regulation

401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128

For Respondent: Ronald Lee Frazier, pro se

Post Office Box 12735

Fort Pierce, Florida 34979-2735 and

1006 Southwest Sultan Drive Port St. Lucie, Florida 34983

STATEMENT OF THE ISSUE

Whether Respondent violated Sections 489.129(1)(k) and 489.129(1)(h)2, Florida Statutes (Supp. 1996); Section 489.128(1)(r), Florida Statutes (1997); and Section 489.129(1)(n), Florida Statutes (1995); and, if so, what discipline should be imposed.

PRELIMINARY STATEMENT

On April 14, 1998, Petitioner, Department of Business and Professional Regulation, Construction Industry Licensing Board (Department), filed a one-count administrative complaint against Respondent, Ronald Lee Frazier (Frazier), alleging that Frazier violated Section 489.129(1)(r), Florida Statutes (1997), and a three-count administrative complaint, alleging that Frazier violated Section 489.129(1)(d), (p), and (n), Florida Statutes (1995). Frazier requested an administrative hearing, and the cases were forwarded to the Division of Administrative Hearings for assignment to an administrative law judge. The cases were assigned Case Nos. 98-5212 and 98- 5213, respectively. The cases were consolidated for final hearing. On February 1, 1999, the Department filed a Motion to Relinquish Jurisdiction, stating that the parties had reached a settlement. The motion was granted, the files of the Division of Administrative Hearings were closed, and

jurisdiction was relinquished to the Department. Apparently, the parties were unable to finalize their proposed settlement.

On April 29, 1999, the Department filed a three-count amended administrative complaint, alleging Frazier violated Section 489.129(1)(k) and (n), Florida Statutes (1995). This amended administrative complaint involved the same project as the administrative complaint in Case No. 98-5213. The case was forwarded to the Division of Administrative Hearings for assignment to an administrative law judge. The case was reopened as Case No. 99-2186.

On July 28, 1998, the Department filed a three-count administrative complaint against Frazier, alleging that he violated Section 489.129(1)(r), Florida Statutes (1997), and Section 489.129(1)(n) and (o), Florida Statutes (1995). The case was forwarded to the Division of Administrative Hearings on August 23, 1999, for assignment to an administrative law judge. The case was assigned Case No. 99-3573.

By order dated September 24, 1999, Case Nos. 99-2186 and 99-3573 were consolidated for final hearing.

On October 1, 1999, the Department filed a four-count amended administrative complaint against Frazier, alleging that Frazier violated Section 489.129(1)(k) and (h)2, Florida Statutes (Supp. 1996), and Section 489.129(1)(j) and (r), Florida Statutes (1997). This amended administrative

complaint involved the same project as the administrative complaint in Case No. 98-5212. By letter dated November 24, 1999, the Department requested the Division of Administrative Hearings to reopen Case No. 98-5212. Because Case Nos. 98- 5212 and 98-5213 had been consolidated, Case No. 98-5213 was reopened along with Case No. 98-5212. For purposes of this proceeding, Case Nos. 98-5213 and 99-2186 are treated as one case.

Case Nos. 98-5212, 98-5213, 99-2186, and 99-3573 were

consolidated for final hearing, which was scheduled for January 12, 2000. On January 3, 2000, Frazier filed a Motion for Continuance, alleging that he was physically incapacitated and could not attend the final hearing. The final hearing was rescheduled for February 11, 2000. On February 10, 2000, Respondent requested another continuance, which was granted.

The case was set for final hearing on April 19, 2000, and Frazier was given leave to participate by telephone.

At the commencement of the final hearing at 9 a.m., Frazier, participating by telephone, advised that he had filed a petition for bankruptcy and argued that all counts in the cases were automatically stayed pursuant to 11 U.S.C. Section 362(a). A recess was taken to consider arguments of Frazier and counsel for the Department. Frazier was advised to call back at 1 p.m., at which time a ruling would be made on his

motion for stay, and was advised that the final hearing would be held at that time for any counts which were not stayed.

Frazier failed to call back and participate in the final hearing. It was ordered that Counts I, II, and IV of Case No. 98-5212 were stayed and Count III was to be heard. Counts I and II in Case Nos. 98-5213 and 99-2186 were stayed, and Count III was to be heard. Count I in Case No. 99-3573 was stayed, and Counts II and III were to be heard.

At the final hearing the Department called Thad Clark, John Ward, and Leslie Knopf as its witnesses. Petitioner's Exhibits 1-18 and 20-21 were admitted in evidence. Frazier presented no witnesses and offered no exhibits.

The parties were to file their proposed recommended orders within ten days of the filing of the Transcript, which was filed on May 10, 2000. On May 17, 2000, the Department filed its Proposed Recommended Order along with Petitioner's Motion to Postpone Deadline for Filing Proposed Recommended Orders, stating that the Department had filed a motion for relief from stay with the bankruptcy court and was awaiting a ruling. Frazier filed his Proposed Recommended Order on

May 25, 2000.

On July 3, 2000, an order was entered placing the case in abeyance pending the ruling by the bankruptcy court. On

July 20, 2000, the Department filed Petitioner's Status Report

and Motion to End Abatement and to Allow the Filing of Revised Proposed Recommended Order, enclosing a copy to the Order Approving Stipulation, Granting in Part Motion for Relief from Stay and Allowing Claims entered by the United States Bankruptcy Judge Steven H. Friedman on July 18, 2000, in In Re Ronald L. Frazier, Case No. 00-31417-BKC-SHF, United States Bankruptcy Court of the Southern District of Florida. The order granted stay relief under certain conditions for Count I of Case Nos. 98-5213 and 99-2186, and Count I of Case No. 99- 3573. Stay relief was denied for Count II of Case Nos. 98- 5313 and 99-2186 and Counts I, II, and IV of Case No. 98-5212. In addition, the order approved an agreement between Frazier and the Department that Count I of Case Nos. 98-5213 and 99- 2186 and Count I of Case No. 99-3573 would be withdrawn from the Division of Administrative Hearings so that the Construction Industry Licensing Board could enter an order of restitution to the complaining parties, the Andersons and the Heverlys, respectively in those cases. On August 15, 2000, the Department filed a motion requesting that the Division of Administrative Hearings relinquish its jurisdiction as to those two counts, and on August 28, 2000, an order was entering granting that motion.

On July 31, 2000, an Order Allowing the Filing of Revised

Proposed Recommended Orders was entered, allowing the parties

to file proposed recommended orders on or before August 15, 2000. The Department timely filed its Revised Proposed Recommended Order. On August 30, 2000, the Recommended Order was entered on Count III of Case No. 98-5212, Count III of Case Nos. 98-5213 and 99-2186, and Counts II and III of Case No. 99-3573.

The Final Order of the Construction Industry Licensing Board was filed with the Department's agency clerk on January 23, 2001. The Final Order substantially adopted the

findings of fact, conclusions of law, and recommended penalty of the Recommended Order, except that the Final Order set forth the Construction Industry Licensing Board's disagreement with the Administrative Law Judge's interpretation of the automatic stay provision in 11 U.S.C. Section 362(a) and added two years of probation to the recommended penalties. The Final Order also stated that the Construction Industry Licensing Board "reserves jurisdiction to remand this case to the Division of Administrative Hearings for further proceedings and for entry of an amended final [sic] order if such an order is necessary." The final order also ordered restitution to the Andersons and the Heverlys based upon the order of the Bankruptcy Court for the two counts for which the Division of Administrative Hearings relinquished jurisdiction.

On January 26, 2001, Frazier's bankruptcy petition was dismissed. On March 16, 2001, the Construction Industry Licensing Board voted to remand the case to the Division of Administrative Hearings, and a written order of remand was filed with the Division of Administrative Hearings on

April 24, 2001. On the same date the Division of Administrative Hearings issued its Order Accepting Remand, Reopening Files, and Requiring Status Report. A Notice of Hearing was issued scheduling the final hearing on Counts I, II, and IV of Case No. 98-5212 and Count II of Case Nos. 98- 5213 and 99-2186.

On September 28, 2001, Frazier filed a new bankruptcy petition.

Frazier failed to appear at the final hearing. The Department presented no witnesses but offered Petitioner's Exhibits 22 through 28, which were received in evidence. At the final hearing, the undersigned ruled that the counts at issue were no longer subject to the bankruptcy stay because during the interim since the April 19, 2000, final hearing the complaining parties had been put in position by virtue of the order of the Bankruptcy Court to make direct claims for compensation from the Construction Industries Recovery Fund.

On October 1, 2001, the Bankruptcy Court dismissed Frazier's petition for bankruptcy as having been filed in violation of a previous Bankruptcy Court order.

The Transcript of the October 1, 2001, final hearing was filed on November 6, 2001. The Department timely filed Petitioner's Revised Proposed Recommended Order. The evidence presented at the final hearing on April 19, 2000, and on October 1, 2001, have been considered in rendering this Recommended Order.

FINDINGS OF FACT

1. At all times material to this proceeding, Frazier was licensed by the Department as a certified roofing contractor, having been issued license number CC CO56955 as Ronald Lee Frazier, d/b/a Frazier Urethane 4 No Leak.

2. On or about April 18, 1997, John Ward entered into a contract with Frazier as Frazier Urethane 4 No Leak to repair the roof of a two-story building in Marathon, Florida, owned by Virginia Ward and managed for her by her son John Ward. Frazier was to apply a urethane coating to the roof and fix the roof leaks for $4,200.

3. Ms. Ward leased the building to Mr. You, who operated a restaurant named New China in the building. The customer and kitchen areas were on the first floor, and apartments for the kitchen workers were located on the second floor. Prior

   to April 18, 1997, Mr. You had complained that the roof was leaking both upstairs and downstairs. Shortly after a rainstorm, Mr. Ward personally inspected the building and confirmed that the roof leaked.

4. Mr. Ward contracted with Frazier to do the repairs.

   
   

   Mr. Ward explained to Frazier that it was necessary to get the roof repaired immediately because the leaking roof was interfering with his tenant's restaurant business. Frazier gave Mr. Ward a verbal quote of $4,200, which included a

   $2,100 deposit. Mr. Ward asked Frazier to deliver a written proposal.

5. Frazier personally delivered a written proposal, dated April 13, 1997, to Mr. Ward. Frazier and Mr. Ward signed the contract, and Mr. Ward gave Frazier a check dated April 18, 1997, for $2,100. The check was endorsed by Frazier and negotiated.

6. It was Mr. Ward's understanding that Frazier would begin pulling the permits on the following Monday and quickly would commence working on the roof repair after the permits were pulled.

7. After not hearing from Frazier, Mr. Ward made numerous attempts to contact him by telephone. Finally Frazier called Mr. Ward's wife and told her that he had been out of town, but would begin the project shortly. Still

   nothing happened on the project, and Mr. Ward again began trying to contact Frazier. Mr. Ward reached Frazier's answering service and left several messages.

8. On May 12, 1997, Mr. Ward called the Monroe County Building and Zoning Department and learned that no permits had been pulled for the roof repair work. He asked Mary Tucker with the Monroe County Building and Zoning Department to contact Frazier. Mr. Ward received a facsimile transmission from Ms. Tucker, indicating that Frazier had sent her a recovering affidavit and an application for a building permit for Mr. Ward to execute.

9. Mr. Ward did not feel that he could state as indicated on the recovering affidavit that the roof system was acceptable for recovering. He did not sign the documents forwarded by Frazier, but called Frazier by using Frazier's cell telephone number. Mr. Ward indicated that he wanted his deposit back since it did not appear that Frazier was going to do any work. Frazier said that he would get back with

   Mr. Ward. Hearing nothing from Frazier, a week later Mr. Ward sent Frazier a letter dated May 28, 1997, rescinding the contract and requesting that the deposit be returned.

   Mr. Ward got no response to the letter.

10. On June 5, 1997, Mr. Ward contracted with Stangle Roofing to perform the roof repairs, and Stangle Roofing fixed the leaks.

11. By letter dated July 7, 1997, Mr. Ward filed a grievance with the Monroe County Building and Zoning Department against Frazier. Mr. Ward indicated in his grievance that after he had written to Frazier rescinding the contract that Frazier had attempted to pull the permits for the project.

12. A meeting was scheduled by the Building Official of Monroe County to attempt to mediate the grievance. Mr. Ward attended the meeting, but Frazier failed to appear.

13. Mr. Ward filed a civil action against Frazier, seeking the return of the deposit. On November 24, 1997, Final Judgment was entered in the County Court of the Twentieth Judicial Circuit in and for Hendry County, Florida, Case No. 97-4135 P against Frazier in favor of John Ward in the amount of $4,497.20, representing the $2,100 deposit, prejudgment interest of $75.95, costs of $71.25, and attorney's fees of $2,500.

14. Using the Final Judgment, Mr. Ward made a claim upon the Construction Industries Recovery Fund. His claim was approved on March 27, 2000, for $2,175.95, and he received

    payment from Construction Industry Licensing Board in that amount.

15. On or about November 24, 1995, Frazier, as Frazier Urethane 4 No Leaks, Inc., contracted with Victor and Janie Anderson to remove and replace the roof of the Andersons' home at 433 111th Street, Marathon, Florida, for $4,657.25. The contract included a five-year warranty, which provided:

    Frazier Urethane warrants to Buyer that for a period of five (5) years the roof coating applied pursuant to this contract will not leak water as a result of defects in workmanship of Frazier Urethane, if all conditions to this warranty are met with strict compliance and if proper claims are made within a five (5) year period. In that event Frazier Urethane will repair said defects at its own expense.

    
    

16. The Andersons paid the full contract price to Frazier in two increments. On or about November 24, 1995, they paid $2,328.62, and on or about January 25, 1996, they paid $2,328.63.

17. In January 1996, Frazier removed and replaced the Andersons' roof, but Frazier applied the new roofing material without first installing a base sheet or moisture barrier. Typical manufacturers' instructions for products such as urethane require the installation of a base sheet before such products are applied. The Monroe County Building Code does require that self-adhesive roofs such as the one installed by Frazier must have a one-ply ASTM D226 type II anchor sheet

    with a four-inch headlap. In other words, the roof should have a base sheet of 30-pound felt before the urethane is applied. The base sheet or moisture barrier helps keep water off the roof, and it also facilitates removal and replacement of the roof.

18. Failure to install the base sheet contributed to the development of roof leaks which the Andersons began noticing approximately 17 months after the work was done, a much shorter time than the normal life expectancy for the urethane roof materials that Frazier used.

19. When the Andersons began noticing the leaks in June 1997, they notified Frazier by telephone and by letter. Frazier and his employees inspected the Andersons' roof and agreed to perform the work to stop the leaks. In September 1997, Frazier went to the Andersons' home and began attempting to work on the roof. Monroe County roofing inspector, Al Forrest, met with Frazier that day at the Andersons' home and discussed the work that needed to be done. Frazier agreed to correct the deficiencies in the roof; however, Frazier left that day without completing the work and never returned to perform work. Frazier failed to honor the five-year warranty.

20. In the Recommended Order entered on August 30, 2000, relating to the recovery of costs of investigation and prosecution of Case No. 98-5213 and 99-2186, it was found that

    the Department had incurred costs of investigation and prosecution in the amount of $1,219.18. The Department now seeks an additional amount of $678.14 for expenses, without explanation of the expenses. The Department has failed to establish that these expenses were costs of either prosecution or investigation.

21. The Department has established that it incurred costs for investigation and prosecution in Case No. 98-5212 in the amount of $293.03. The Department seeks an additional

    $190.64 for expenses without explanation of the expenses. The Department has failed to establish that these expenses were costs of either prosecution or investigation.

22. On February 7, 2000, the Construction Industry Licensing Board took disciplinary action against Frazier in DBPR Case No. 98-19678 for failure to honor a warranty and for failure to satisfy a civil judgment. Frazier was fined $1,000 and required to pay costs in the amount of $1,468.69 and to provide proof of having satisfied a civil judgment involved in that case.

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Sections 120.569 and 120.57, Florida Statutes.

24. In Count I of Case No. 98-5212, the Department alleged that Frazier violated Section 489.129(1)(k), Florida Statutes (Supp. 1996), which provides that the Department may take disciplinary action against a contractor for the following act:

    Abandoning a construction project in which the contractor is engaged or under contract as a contractor. A project may be presumed abandoned after 90 days if the contractor terminates the project without just cause or without proper notification to the owner, including the reason for termination, or fails to perform work without just cause for 90 consecutive days.

    
    

25. The Department has failed to establish by clear and convincing evidence that Frazier abandoned the project. The written contract did not contain a time certain in which the work must be completed, and Mr. Ward rescinded the contract and hired another contractor less than 60 days after the contract between Frazier and Mr. Ward was executed. Additionally, Mr. Ward stated in his grievance to the Monroe County Building and Zoning Department that Frazier had attempted to pull the permit for the project after May 28, 1997.

26. In Count II of Case No. 98-5212, the Department alleges that Frazier violated Section 489.129(1)(h)2, Florida Statutes (Supp. 1996), which provides that the Department may discipline a contractor for the following act:

    Committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer. Financial mismanagement or misconduct occurs when:

    * * *

    The Contractor has abandoned the customer's job and the percentage of completion is less than the percentage of the total contract price paid to the contractor as of the time of abandonment, unless the contractor is entitled to retain such funds under the terms of the contract or refunds the excess funds within 30 days after the date the job is abandoned. . . .

    
    

27. The Department has failed to establish by clear and convincing evidence that Frazier violated Section 489.129(1)(h)2, Florida Statutes (Supp. 1996), because the Department has failed to establish that Frazier abandoned the project.

28. In Count IV of Case No. 98-5212, the Department alleges that Frazier violated Section 489.129(1)(r), Florida Statutes (1997), which provides that the Department may discipline a contractor if the contractor is found guilty of the following act:

    Failing to satisfy within a reasonable time, the terms of a civil judgement obtained against the licensee, or the business organization qualified by the licensee, relating to the practice of the licensee's profession.

    
    

29. The Department has established by clear and convincing evidence that Frazier failed to satisfy within a reasonable time the civil judgment which was entered against

    Frazier in favor of Mr. Ward on November 24, 1997. As of March 27, 2000, when the Construction Industry Licensing Board paid Mr. Ward's claim from the Construction Industries Recovery Fund, Frazier had not satisfied the final judgment.

30. In Count II of Case Nos. 98-5213 and 99-2186, the Department alleged that Frazier violated Section 489.129(1)(n), Florida Statutes (1995), which provided that a contractor may be disciplined for "[c]ommitting incompetency or misconduct in the practice of contracting." Rule 61G4- 17.001(14)(a), Florida Administrative Code, provides that failure to honor a warranty constitutes incompetency or misconduct in the practice of engineering.

31. The Department has established by clear and convincing evidence that the leaks which appeared in the Andersons' roof after Frazier installed the new urethane roofing materials resulted from defects in the workmanship of Frazier, that the Andersons timely notified Frazier of the leaks, and that Frazier failed to honor the warranty to repair the roof to stop the leaking. Frazier violated Section 489.129(1)(n), Florida Statutes (1995).

32. Section 455.2273(5), Florida Statutes, provides that the penalty guidelines established by the Department shall be followed in disciplinary actions. The Department has

established penalty guidelines in Chapter 61G4-17.001, Florida Administrative Code, which provides:

Normal Penalty Guidelines. The following guidelines shall be used in disciplinary cases, absent aggravating or mitigating circumstances and subject to other provisions of this Chapter.

* * *

(14) Misconduct or incompetency in the practice of contracting as set forth in Section 489.129(1)(n), Florida Statutes shall include, but is not limited to:

(a) Failure to honor a warranty. First violation, $500 to $1,000 fine; repeat violation, $1,000 to $2,000 fine and suspension or revocation.

* * *

(18) Failure to satisfy a civil judgment obtained against the licensee or the business organization qualified by the licensee within a reasonable time. First violation, $500 to $1,000 fine and/or proof of satisfaction of civil judgment; repeat violation, $1,000 to $5,000 fine and/or proof of satisfaction of civil judgment, suspension or revocation.

* * *

(20) For any violation occurring after October 1, 1989, the board may assess the costs of investigation and prosecution. The assessment of such costs shall be made in addition to the penalties provided by these guidelines without demonstration of aggravating factors set forth in rule 61G4-

17.002. . . .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Ronald Lee Frazier did not violate Section 489.129(1)(k), Florida Statutes (Supp. 1996), as set forth in

Count I of Case No. 98-5212; finding that Ronald Lee Frazier did not violate Section 489.129(1)(h)2, Florida Statutes (Supp. 1996), as set forth in Count II of Case No. 98-5212; finding that Ronald Lee Frazier did violate Section 489.129(1)(r), Florida Statutes (1997), as set forth in Count IV of Case No. 98-5212; finding that Ronald Lee Frazier did violate Section 489.129(1)(n), Florida Statutes (1995), as set forth in Count II of Case Nos. 98-5213 and 99-2186; imposing an administrative fine of $1,000 for violation of Section 489.129(1)(r), Florida Statutes (1997), in Count IV of Case No. 98-5212; imposing an administrative fine of $1,000 for violation of Section 489.129(1)(n), Florida Statutes (1995), in Count II of Case Nos. 98-5213 and 99-2186; assessing costs of $293.03 for investigation and prosecution in Case No. 98- 5212; and revoking Ronald Lee Frazier's license.

DONE AND ENTERED this 21st day of December, 2001, in

Tallahassee, Leon County, Florida.

_____________________________ SUSAN B. KIRKLAND

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 21st day of December, 2001.

COPIES FURNISHED:

Theodore R. Gay, Esquire Department of Business and

Professional Regulation

401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128

Ronald Lee Frazier Post Office Box 12735

Fort Pierce, Florida 34979-2735

Ronald Lee Frazier

1006 Southwest Sultan Drive Port St. Lucie, Florida 34983

Hardy L. Roberts, III, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-2202

Suzanne Lee, Executive Director Construction Industry Licensing Board Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-2202

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 99-002186

Orders for Case No: 99-002186