STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, )

)

vs. ) Case No. 00-2938

)

RONALD J. POWELL, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, William R. Cave, an Administrative Law Judge for the Division of Administrative Hearings, held a formal hearing on August 23, 2000, in Lakeland, Florida.

APPEARANCES

For Petitioner: Robert A. Crabill, Esquire

Patrick Creehan, Esquire Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32388-2202

For Respondent: Ronald J. Powell, pro se

Post Office Box 70434

Indian Lake Estates, Florida 33855 STATEMENT OF THE ISSUE

Did Respondent commit the violations alleged in the Administrative Complaint dated April 11, 2000, and if so, what discipline is appropriate?

PRELIMINARY STATEMENT

By an Administrative Complaint dated April 11, 2000, and filed with the Division of Administrative Hearings (Division) on July 18, 2000, the Department of Business and Professional Regulation, Construction Industry Licensing Board (Department) is attempting to revoke, suspend, or otherwise discipline Respondent's Certified Residential Contractor's license. As grounds therefor the Department alleges that Respondent: (a) violated Section 489.129(1)(h)2., Florida Statutes (1997), by committing mismanagement or misconduct in the practice of contracting that caused financial harm to a customer and; (b) violated Section 489.129(1)(k), Florida Statutes, by abandoning a construction project which Respondent was engaged in under contract as a contractor. By an Election of Rights, with an Answer to Administrative Complaint attached, Respondent disputed the charges and requested an administrative hearing. By letter dated July 17, 2000, this matter was referred to the Division for the assignment of an Administrative Law Judge and for the conduct of an administrative hearing.

At the hearing, the Department presented the testimony of Jack Eggleston, Kevin Watkins, and John Fletcher. The Department's Exhibits numbered 1 through 11 were admitted in evidence. Respondent testified on his own behalf but did not offer any other witness or any documentary evidence. Chapters

20, 455, and 489, Florida Statutes, and Chapter 61G4-17, Florida Administrative Code, were officially recognized.

A Transcript of this proceeding was filed with the Division on September 27, 2000. The Department filed its Proposed Recommended Order on October 10, 2000. Respondent elected not to file a proposed recommended order.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made:

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

2. Respondent is, and has been at all times material hereto, a certified residential contractor in the State of Florida, having been issued license number CR CO13253 by the Florida Construction Industry Licensing Board.

3. At all times material hereto, Respondent was licensed with the Construction Industry Licensing Board as an individual.

4. On or about November 20, 1993, Respondent entered into a written contractual agreement (contract) with Kevin Watkins (Watkins) to construct a single family residence at 126 Meadow Lark Boulevard, Lot 65, Indian Lake Estates, Florida.

5. The contract price was $333,944.00.

6. Between December 7, 1993, and February 1, 1996, Watkins and Respondent executed 102 addenda to the contract which increased the contract price by approximately $241,874.43, for a total amount of approximately $575.818.43.

7. On or about December 9, 1993, Respondent obtained permit number 93-120l850 from the Polk County Building Department and commenced work on the project.

8. The contract provided that the "project shall be substantially completed on or about 195 days from the date all building permits are issued." However, due to the 100-plus addenda to the contract, it was estimated that an additional 190 days would be needed to complete the project. Additionally, construction ceased on the home for approximately 60 days so that Watkins could explore the possibility of a construction loan. However, due to the extent of completion, the lending institutions decided not to make any construction loans.

9. On or about May 27, 1996, Watkins moved to Florida with the expectations that his home would be completed within a short period of time. (Watkins' recollection was that the home was to be completed in a couple of weeks. Respondent's recollection was that the home was to be completed in a couple of months.) In any event, Respondent did not complete the Watkins home within a couple of weeks or a couple of months. After Watkins moved to Florida, Respondent paid for Watkins to live in a Best Western motel for a few weeks. Subsequently, Respondent moved Watkins

   into a rental home for which Respondent paid the rent through September 1996. Beginning October 1996 through July 1999, Watkins paid $600.00 per month for a total of $20,400.00 as rent on the rental home.

10. In early 1998, Respondent and Watkins went through the home, identified those items which had not been completed and Respondent made a handwritten list of those items.

11. Respondent failed to complete the items identified on the list. In fact, shortly thereafter, Respondent ceased working on the project and was unresponsive to attempts to contact him.

12. At the time Respondent ceased working on Watkins' home, the home was approximately 75 percent complete. While this estimation of completion may not be totally accurate, it is the best that could be derived based on the evidence presented, including Respondent's testimony to which I gave some credence.

13. Watkins paid Respondent $561,617.91, which represents approximately 97.534 percent of the total contract price plus addenda to the contract. Seventy-five percent of the contract price plus addenda to the contract equals $431,863.82 for an overpayment of $129,754.09. To date, Respondent has not returned any of the money he received from Watkins above the amount completed under the contract.

14. From early 1998, until August 1998, when Watkins had Respondent removed as general contractor on the building permit,

    Respondent failed to perform any work on the home for a period in excess of 90 days.

15. Respondent contracted with Jack Eggleston to install cabinets in Watkins home. Eggleston performed under the contract but Respondent failed to pay Eggleston in full, requiring Watkins to pay Eggleston $1,200.00.

16. After Watkins' home was partially complete, Respondent advised Watkins that he had the home insured when in fact he did not have the home covered with insurance.

17. While Respondent was building Watkins' home, Respondent and Watkins entered into a joint venture called Contractors of Central Florida to build modular homes sometime after January 1, 1995. Respondent contends that some of the checks Watkins claims as payment under the contract for his home, were in fact reimbursement to Respondent for funds he had advanced for the joint venture. There is insufficient evidence to establish facts to show that any of the checks Watkins claims as payment under the contract for his home were in fact reimbursement for funds advanced by Respondent for the joint venture.

18. Up until the time of the final hearing, the Department had incurred costs for the investigation and prosecution of this matter, excluding costs associated with an attorney's time, in the amount of $1,451.28.

    CONCLUSIONS OF LAW

    
    

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

20. The burden of proof is on the party asserting the affirmative of an issue before an administrative tribunal, Florida Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981). To meet this burden, the Department must establish facts upon which its allegations are based by a clear and convincing evidence. Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern Company, 670 So. 2d 932 (Fla. 1996) and Section 120.57(1)(j), Florida Statutes.

21. Sections 489.129(1)(h)2.(k), provide as follows:

    
    

    1. The board may take any of the following actions against any certificateholder or registrant: place on probation or reprimand licensee, revoke, suspend, or deny the issuance or renewal of the certificate or registration, require financial restitution to a consumer for financial harm directly related to a violation of a provision of this part, impose an administrative fine not exceed $5,000 per violation, require continuing education, or assess costs associated with investigation and prosecution, if the contractor, financially responsible officer, or business organization for which the contractor is a primary qualifying agent responsible under s. 489.1195 is found guilty of any of the following acts:

       * * *

       (h) Committing mismanagement or misconduct in the practice of contracting that causes

       financial harm to a customer. Financial mismanagement or misconduct occurs when:

       * * *

       2. The contractor has abandoned a 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 as of the time of abandonment 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; . . .

       * * *

       (k) 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

22. Without question, the Department has met its burden to show by clear and convincing evidence that Respondent violated Sections 489.129(1)(h)2. and (k), Florida Statutes, and is therefore subject to the penalties thereunder.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, and after careful review of the guidelines set forth in Rule 61G4-17.001(8) and (11), Florida Administrative Code, and the circumstances for purpose of mitigation or aggravation of penalty set forth in Rule 61G4-17.002, Florida Administrative Code, it is recommended that the Department:

1. Enter a final order finding Respondent guilty of violating Section 489.129(1)(h)2., Florida Statutes, and imposing

   a penalty therefor an administrative fine in the amount of

   
   

   $1,000.00;

   
   

2. Enter a final order finding Respondent guilty of violating Section 489.129(1)(k), Florida Statutes, and imposing a penalty therefor an administrative fine in the amount of

   $1000.00;

   
   

3. Assessing costs of investigation and prosecution, excluding costs associated with an attorney's time, in the amount of $1,451.28, plus any such further costs which have or may accrue through the taking of final agency action and;

4. Requiring Respondent to pay restitution to Kevin Watkins in the amount of $129,754.09 which represents the amounts accepted by Respondent for work not performed.

DONE AND ENTERED this 23rd of October, 2000, in Tallahassee, Leon County, Florida.

WILLIAM R. CAVE

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) 921-6947 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of October, 2000.

COPIES FURNISHED:

Robert A. Crabill, Esquire Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32388-2202

Ronald J. Powell Post Office Box 7043

Indian Lake Estates, Florida 33855

Rodney Hurst, Executive Director Construction Industry Licensing Board 7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

Barbara D. Auger, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit 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: 00-002938PL

Orders for Case No: 00-002938PL