STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, )

)

vs. ) Case No. 99-2260

)

LUIS DELGADO, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Administrative Law Judge, Susan

1. Kirkland, held a formal hearing in this case on August 23, 1999, via video teleconference in Miami, Florida.

   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: No appearance.

   
   

   STATEMENT OF THE ISSUE

   
   

   Whether Respondent violated Sections 489.129(1)(e), (h)1., (l), (n), and (r), Florida Statutes (1995), and if so, what penalty should be imposed.

   PRELIMINARY STATEMENT

   
   

   On July 8, 1998, Petitioner, Department of Business and Professional Regulation (Department), filed an Administrative Complaint against Respondent, Luis Delgado (Delgado), alleging that Delgado violated Sections 489.129(1)(e), (h)1., (l), (n), and (r), Florida Statutes (1995). Delgado requested a formal hearing, and the case was forwarded to the Division of Administrative Hearings on May 20, 1999, for assignment to an Administrative Law Judge.

   The final hearing was scheduled to begin at 9:00 a.m., but neither Delgado nor a representative for Delgado appeared at the scheduled time. The commencement of the hearing was delayed until 9:25 a.m., to await the appearance of Delgado, who failed to appear for the final hearing.

   At the final hearing, the Department presented the testimony of Jorge Morell and Ricardo Reyes. Petitioner's Exhibits 1-21 were received in evidence.

   At the conclusion of the final hearing, it was established that proposed recommended orders were to be filed within ten days after the filing of the transcript. On August 31, 1999, the Transcript was filed. Petitioner filed its Proposed Recommended Order on September 10, 1999. The proposed order has been considered in the rendering of this Recommended Order.

   FINDINGS OF FACTS

   
   

   1. At all times material to this proceeding, Respondent, Luis Delgado (Delgado), was licensed by Petitioner, Department of Business and Professional Regulation, Construction Industry Licensing Board (Department), as a certified roofing contractor and as qualifying agent for Strong Roof, Inc. (Strong), having been issued license number CCC057175.

   2. The Lago Plaza Shopping Center (Lago) is a 154,000 square foot multi-tenant shopping center located in Hialeah, Florida. At all times material to this proceeding, it was owned by a New York real estate company named Emmes & Company through its subsidiary ABI Property Partners L.P. XIX (ABI).

   3. In 1996, the roof of Lago was in need of replacement.

      
      

      On February 5, 1996, ABI through its agent and property manager, Atlantic Western Asset Management (Atlantic Western), entered into a written contract with Strong to replace the roof for

      $185,000.

      
      

   4. On or about February 5, 1996, Strong provided Atlantic Western with a performance and payment bond for $185,000, as required by Article 21 of the contract between ABI and Strong. Unbeknownst to Atlantic Western at the time the bond was delivered, the performance and payment bond was not genuine, and Delgado knew that the bond was not genuine.

   5. The roof replacement work was completed by June 17, 1996. Unbeknownst to Atlantic Western, Delgado allowed Alberto Rodriguez (Rodiguez) and Galaxy Remodeling, Inc. (Galaxy) to use Delgado's contractor's license to obtain the building permit for the Lago project and to perform the work necessary to complete the project. At all times material to this proceeding, neither Rodriguez nor Galaxy was licensed to practice contracting in Florida, and Delgado knew they were not licensed.

   6. Pursuant to the contract, Atlantic Western made payments to Strong with seven checks payable to Strong in the total amount of the contract price of $185,000. The amounts and dates of the payments were as follows: $9,250 dated 2/14/96;

      $9,250 dated 3/13/96; $37,000 dated 4/2/96; $55,500 dated 4/11/96; $37,000 dated 4/27/96; $27,000 dated 6/13/96; and

      $10,000 dated 6/13/96. In exchange for each of the checks, Strong gave a signed release of lien representing that it had paid for all labor and materials used in the project

   7. Within 30 days after the last payment to Strong, Bradco Supply Corporation (Bradco), filed a claim of lien against Lago for $65,891.23 for roofing and/or siding materials ordered by "Galaxy Remodeling, Inc./Strong Rfg. Inc."

   8. On July 12, 1996, at the request of Atlantic Western, Delgado met at the shopping center with representatives of Atlantic Western and an attorney for the owner of the property

      to discuss the lien filed by Bradco. At the meeting, Delgado agreed to remove the lien, but he never did. Later Bradco sued to foreclose the lien, and the owner of Lago paid $60,000 to Bradco to have the lien removed. The owner unsuccessfully sought recourse against the payment bond, which turned out to be fraudulent.

   9. On or about June 17, 1996, when the work was completed, Strong gave a ten-year written warranty, which included correcting any leaks due to poor installation. Leaks were discovered, and Atlantic Western and the attorney for the owner reported the leaks to Strong, who failed to perform any correction work or otherwise investigate to determine whether its warranty would be applicable. Atlantic Western retained another roofing company to repair the leaks, at a cost of several hundred dollars.

   10. On or about September 27, 1996, the owner of Lago filed a lawsuit against Delgado, Strong, and others, alleging that the defendants breached the contract and committed various other civil wrongs related to the practice of contracting in reference to the roof replacement at Lago.

   11. On April 23, 1997, the lawsuit was mediated, resulting in a settlement agreement which was signed by Delgado individually and as president of Strong. Pursuant to the settlement agreement, Delgado admitted most of the factual

       allegations in the civil complaint and agreed to the entry of a judgment in the amount of $73,755.25. The settlement agreement provided that Delgado, Strong, Rodriguez, and Galaxy were to pay the plaintiff $2,500.00 by April 25, 1997; $2,500.00 by July 25, 1997; and $20,000.00 by August 25, 1997. The settlement agreement further provided that if the payments were not made, the plaintiff could execute on the judgment. On May 15, 1997, an Agreed Final Judgment was entered in accordance with the terms and conditions of the settlement agreement.

   12. The first $2,500.00 payment was made but no further payments have been made. The plaintiff garnished two bank accounts, totaling $3,084.28. At the time of the final hearing, there have been no other payments or collections toward satisfying the judgment, and the judgment remains unsatisfied. The judgment was not appealed and has not been discharged in bankruptcy. A motion for relief from judgment was never filed, and there has not been an agreement to receive periodic payments, other than as stated in the settlement agreement.

   13. As of August 10, 1999, the Department's costs of investigation and prosecution of this case, other than costs associated with attorneys' fees, totaled $473.25.

       CONCLUSIONS OF LAW

       
       

   14. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.

   15. The Department is the state agency charged with the responsibility of regulating the practice of contracting pursuant to Section 20.165 and Chapters 455 and 489, Florida Statutes.

   16. License revocation proceedings are penal in nature.

       
       

       The Department has the burden of establishing the allegations in the Administrative Complaint by clear and convincing evidence.

       Department of Banking and Finance v. Osborne Stern and Co.,

       
       

       670 So. 2d 932 (Fla. 1996).

       
       

   17. The Department alleges that Delgado violated Sections 489.129(1)(e), (h)1., (l), (n), and (r), Florida Statutes (1995), which provide:

       1. The board may take any of the following actions against any certificateholder or registrant: place on probation or reprimand the licensee, revoke, suspend, or deny the issuance or renewal of the certificate or registration, require financial restitution to a consumer, impose an administrative fine not to exceed $5,000 per violation, require continuing education, or assess costs associated with investigation and prosecution, if the contractor, financially responsibly officer, or business organization for which the contractor is a primary qualifying agent or is a secondary qualifying agent responsible

          under s.489.1195 is found guilty of any of the following acts:

          
          

          * * *

          
          

          (e) Performing any act which assists a person or entity in engaging in the prohibited uncertified and unregistered practice of contracting, if the certificateholder or registrant knows or has reasonable grounds to know that the person or entity was uncertified and unregistered.

          
          

          * * *

          
          

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

          1. Valid liens have been recorded against the property of a contractor's customer for supplies or services ordered by the contractor for the customer's job; the contractor has received funds from the customer to pay for the supplies or services; and the contractor has not had the liens removed from the property, by payment or by bond, within 75 days after the date of such liens;

          
          

          * * *

          
          

          (l) Signing a statement with respect to a project or contract falsely indicating that the work is bonded; falsely indicating that payment has been made for all subcontracted work, labor, and materials which results in a financial loss to the owner, purchaser, or contractor; or falsely indicating that workers' compensation and public liability insurance are provided.

          
          

          * * *

          
          

          (n) Committing incompetency or misconduct in the practice of contracting.

          
          

          * * *

          
          

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

          
          

   18. In Count I of the Administrative Complaint, the Department alleges that Delgado violated Section 489.129(1)(e), (h)1., Florida Statutes (1995), by failing to remove the claim of lien filed by Bradco within 75 days of the date of the lien. The Department has established the violation by clear and convincing evidence.

   19. In Count II of the Administrative Complaint, the Department alleges that Delgado violated Section 489.129(1)(e), Florida Statutes (1995), by obtaining the permit for the Lago project and allowing Rodriquez to do the work, when he knew or should have known that Rodriquez and Galaxy were not certified, registered, or qualified to perform roof work in Florida. The Department has established by clear and convincing evidence that Delgado violated Section 489.129(1)(e), Florida Statutes (1995).

   20. In Count III of the Administrative Complaint, the Department alleged that Delgado violated Section 489.129(1)(l), Florida Statutes (1995), by signing a statement with respect to a project or contract falsely indicating that the work was bonded and by signing a statement with respect to a project or

       contract falsely indicating that payment had been made for all materials which resulted in a financial loss to the owner. The Department has established by clear and convincing evidence that Delgado violated Section 489.129(1)(l), Florida Statutes (1995).

   21. In Count IV of the Administrative Complaint, the Department alleged that Delgado violated Section 489.129(1)(n), Florida Statutes (1995), by failing to honor a ten-year written warranty on the Lago project after being notified by Atlantic Western that the roof was leaking. The Department has established by clear and convincing evidence that Delgado violated Section 489.129(1)(n), Florida Statutes (1995).

   22. In Count V of the Administrative Complaint, the Department alleged that Delgado violated Section 489.129(1)(n), Florida Statues (1995), by failing to comply with terms of the settlement agreement he entered into with the owner of Lago. The Department has established by clear and convincing evidence that Delgado violated Section 489.129(1)(n), Florida Statutes (1995).

   23. In the sixth count of the Administrative Complaint, which the Department also entitled "Count V", the Department alleged that Delgado violated Section 489.129(1)(r), Florida Statutes (1995), by failing to satisfy the judgment against him and Strong relating to the Lago project within a reasonable time. The Department has established by clear and convincing

       evidence that Delgado violated Section 489.129(1)(r), Florida Statutes (1995).

   24. Section 455.2273(6), Florida Statutes, provides that the Department's penalty guideline set forth in Rule 61G4-17.001 (formerly Rule 21E-17.001), Florida Administrative Code, must be followed. Rule 61G4-17.001, Florida Administrative Code, provides:

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

* * *

(5) 489.129(1)(e): Assisting unlicensed person to evade provision of Chapter 489. First violation, $500 to

$2,500 fine; repeat violation, $2,500 to

$5,000 fine and probation, suspension or revocation.

* * *

(8) 489.129(1)(h): Mismanagement or misconduct causing financial harm to the customer. First violation, $750 to $1,500 fine and/or probation; repeat violation,

$1,500 to $5,000 fine and suspension or revocation.

* * *

(12) 489.129(1)(l): False payment statement, false statement of insurance coverage.

1. False payment statement, valid liens were filed or customer otherwise injured. First violation, $500 to $3,000 fine and/or probation, suspension, or

   revocation; repeat violation, $1,500 to

   $5,000 fine and suspension or revocation.

2. False statement of insurance coverage. First violation, $1,000 to $2,000 fine; repeat violation $1,500 to $5,000 fine and suspension or revocation. If financial injury to customer occurs: first violation,

$2,000 to $5,000 fine and suspension or revocation; repeat violation, $5,000 fine and suspension or revocation.

* * *

(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:

* * *

(d) The following guidelines shall apply to cases involving misconduct or incompetency in the practice of contracting, absent aggravating or mitigating circumstances:

1. Misconduct by failure to honor warranty. First violation, $500 to $1,000 fine; repeat violation, $1,000 to $2,000 fine and suspension or revocation.

* * *

3. Any other form of misconduct or incompetency. First violation, $250 to

$1,000 fine and/or probation; repeat violations $1,000 to $5,000 fine and suspension or revocation.

* * *

(18) Failure to satisfy a civil judgment obtained against the licensee or 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.

* * *

1. For any violation occurring after October 1, 1989, the board may assess the costs of investigation and prosecution. The assessment of such costs may be made in addition to the penalties provided by these guidelines without demonstration of aggravating factors set forth in rule 61G4- 17.002.

2. For any violation occurring after October 1, 1988, the board may order the contractor to make restitution in the amount of financial loss suffered by the consumer. Such restitution may be ordered in addition to the penalties provided by these guidelines without demonstration of aggravating factors set forth in rule 61G4- 17.002, and to the extent that such order does not contravene federal bankruptcy law.

3. The absence of any violation from this Chapter shall be viewed as an oversight, and shall not be construed as an indication that no penalty is to be assessed. The Guideline penalty for the offense most closely resembling the omitted violation shall apply.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department of Business and Professional Regulation, Construction Industry Licensing Board enter a final order as follows:

1. Finding that Luis Delgado violated Sections 489.129 (1)(e), (h)1., (l), (n), and (r), Florida Statutes (1995), as alleged in the Administrative Complaint.

2. Imposing administrative fines for each count in the Administrative Complaint as follows:

   1. Count I $750

      
      

   2. Count II $500

      
      

   3. Count III $3,000

      
      

   4. Count IV $500

   
   

   1. Count V $250

      
      

   2. Count VI $500

   
   

3. Assessing Luis Delgado $473.25 for the costs of the investigation and prosecution incurred in this case through August 10, 1999.

4. Requiring Luis Delgado to make restitution to ABI Property Partners L.P. XIX in the amount of $68,170.97 or, in the alternative, provide proof of satisfaction of the May 15, 1997, Agreed Final Judgment in Case No. 96-19621 CA (06) in the Eleventh Judicial Circuit in and for Dade County, Florida.

5. Revoking Luis Delgado's certified roofing contractor license number CCC057175.

DONE AND ENTERED this 17th day of September, 1999, 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 17th day of September, 1999.

COPIES FURNISHED:

Luis Delgado

344 Northwest 136th Place Miami, Florida 33182

Theodore R. Gay, Esquire Department of Business and

Professional Regulation

401 Northwest Second Avenue Suite N-607

Miami, Florida 33128

Rodney Hurst, Executive Director Construction Industry Licensing Board Department of Business and

Professional Regulation

7960 Arlington Boulevard, Suite 300

Jacksonville, Florida 32211-7467

William Woodyard, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

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: 99-002260

Orders for Case No: 99-002260