STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, )

)

vs. ) Case No. 01-2108PL

)

DAVID G. MALT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case on August 24, 2001, by video teleconference between West Palm Beach and Tallahassee, Florida, before Claude B. Arrington, a duly-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 Second Avenue, Suite N-607 Miami, Florida 33128

For Respondent: Robert H. Springer, Esquire

3003 South Congress Avenue, Suite 1E Palm Springs, Florida 33461

Wellington H. Meffert II Akerman, Senterfitt and Eidson

301 South Bronough Street, Suite 200 Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Whether Respondent committed the offenses alleged in the Administrative Complaint and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

Respondent, a certified building contractor and a certified roofing contractor, was the qualifying agent for Malt Construction, Inc., at all times pertinent to this proceeding.

On May 17, 2000, Petitioner filed an Administrative Complaint against Respondent containing certain factual allegations regarding a re-roofing project for two adjacent townhouses with a common roof. 1/ Based on those factual allegations, Petitioner charged Respondent with the following:

1. Count I: violating Section 489.129(1)(j), Florida Statutes (1997), by having failed in any material respect to comply with the provisions of Part I of Chapter 489, Florida Statutes, by violating Section 489.119(6)(b), Florida Statutes.

2. Count II: violating Section 489.129(1)(j), Florida Statutes (1997), by having failed in any material respect to comply with the provisions of Part I of Chapter 489, Florida Statutes, by violating Section 489.1425, Florida Statutes.

3. Count III: violating Section 489.129(1)(k), Florida Statutes (1997), by abandoning a construction project in which the contractor is engaged or under contract as a contractor.

4. Count IV: violating Section 489.129(1)(n), Florida Statutes (1977), by

   committing incompetency or misconduct in the practice of contracting.

5. Count V: violating Section 489.129(1)(o), Florida Statutes (1997), by committing gross negligence, repeated negligence, or negligence resulting in a significant danger to life or property.

6. Count VI: violating Section 489.129(1)(p), Florida Statutes (1997), by proceeding on any job without obtaining applicable local building department permits and inspections.

Respondent timely requested a formal administrative hearing, the matter was referred to the Division of Administrative Hearings, and this proceeding followed.

Mr. Springer represented Respondent at the final hearing and Mr. Meffert represented him in filing the Proposed Recommended Order.

At the final hearing, Petitioner presented the testimony of Marian Ridella (a field investigator for the Construction Industry Licensing Board of Palm Beach County); Ralph Pokorny (a self-employed general contractor); Betty Jean Lowe (Land Development Director for the Village of Palm Springs, Florida); Craig Johns (former building inspector for the Village of Palm Springs); Lawrence Gauer (homeowner and resident of one of the subject townhouses); Warren Poitivent (a resident of Mr. Gauer's townhouse); and Leslie Knopf (roofing consultant). Petitioner offered 15 sequentially numbered exhibits, each of which was accepted into evidence. Respondent presented the testimony of

Robert C. Malt, but called no other witnesses and presented no exhibits.

For ease of reference, David G. Malt will be referred to as Respondent. Malt Construction, Inc., will be referred to as MCI. Robert C. Malt will be referred to as Mr. Malt. Robert C. Malt & Co. will be referred to as RCM.

A transcript of the proceedings was filed on September 7, 2001. Each party filed a Proposed Recommended Order, which has been duly-considered by the undersigned in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is a licensing and regulatory agency of the State of Florida charged with the responsibility and duty to prosecute administrative complaints pursuant to Chapters 455 and 489, Florida Statutes.

2. At all times pertinent to this proceeding, Respondent was licensed as a certified building contractor and a certified roofing contractor, having been issued license

   numbers CC C027427 and CB C023123. At all times pertinent to this proceeding, MCI was a corporation engaged in roofing contracting, and Respondent was its qualifying agent.

3. A re-roofing job by MCI on the shared roof of two townhouses located at 105 and 106 Woodland Road, the Village of Palm Springs, Florida (the Village), is at issue in this

   proceeding. These two townhouses are part of a building consisting of four townhouses. All four townhouses have a shared roof. Essentially, the work by MCI was to re-roof half of the entire roof.

4. At the times material to this proceeding Lawrence Gauer owned the townhouse at 105 Woodland Road (Gauer townhouse) and RCM owned the townhouse at 106 Woodland Road (RCM townhouse).

5. Both townhouses are within the permitting jurisdiction of the Village.

6. Mr. Malt, Respondent's brother, owns RCM.

   
   

7. Mr. Malt is a certified general contractor, developer, and real estate broker. Mr. Malt has extensive experience building townhouses, having built over 4,000 dwelling units, including the townhouses where the work at issue in this proceeding occurred. Mr. Malt also owns the company that manufactured the engineered pre-stressed concrete structural members that served as the foundation for the roof at issue in this proceeding. Mr. Malt is not a licensed roofing contractor, and his general contractor’s license does not authorize him to perform roofing work.

8. In the fall of 1998, Mr. Malt determined that the RCM townhouse should be re-roofed. Mr. Malt contacted the owners of the other three townhouses to determine whether they wanted to re-roof their portions of the shared roof. Mr. Gauer decided to

   have his part of the shared roof re-roofed with Mr. Malt, but the owners of the other two townhouses declined.

9. At all times material to this proceeding, Respondent authorized Mr. Malt to act as an agent for MCI.

10. On January 7, 1999, MCI contracted with Mr. Gauer and with RCM to perform the work at issue in this proceeding.

    Mr. Gauer signed the contract in his capacity as owner of his townhouse. Mr. Malt signed the contract on behalf of RCM as owner of its townhouse. Mr. Malt also signed the contract on behalf of MCI in his capacity as its agent.

11. The total amount of the contract was $5,000, with each owner (Mr. Gauer and RCM) being responsible for payment of

    $2,500. The contract required each owner to pay $1,250 upon execution of the contract with the balance due within five days ". . . of completion (inspection by the Village . . .)". On or about January 7, 1999, Mr. Gauer paid $1,850 to MCI. There was no explanation as to why Mr. Gauer paid more than the contract required on that date.

12. Respondent's license number did not appear in the contract, and the contract did not contain a written statement explaining the rights of consumers under the Construction Industries Recovery Fund.

13. On January 13, 1999, Mr. Malt, as agent for MCI, applied to the Village for the requisite building permits for

    the subject work. On January 13, 1999, the Village issued two separate permits, one for each townhouse, authorizing the re- roofing work contemplated by the subject contract. Each permit reflected that the valuation of the work was $2,500.

14. Consistent with the applicable building code, the Village's building department issued a notice with each permit that because the roof was flat, the roof had to provide positive drainage to prevent the ponding of water or the roof had to be constructed of specific water retaining material.

15. Mr. Malt, as agent for MCI, hired the crew that performed the roofing work at issue in this proceeding. At all times material to this proceeding, Mr. Malt supervised the roofing crew that worked on the two townhouses.

16. Prior to beginning work on the roof, Mr. Malt checked weather forecasts for the area. On January 13, 1999, the roofing crew removed the existing roofing material from the roof. At the end of the workday, the crew covered the exposed roof with plastic sheeting commonly referred to as Visqueen.

17. For a flat roof, the accepted standard in the roofing industry is to remove only as much roofing material as can be replaced with finished roofing material the same day. A plastic sheeting such as Visqueen is inadequate to protect an exposed flat roof from a heavy rainfall. The failure to adequately

    protect the exposed roof on January 13, 1999, constituted negligence.

18. On the night of January 13, 1999, an unexpected heavy rainfall event occurred. As a consequence of the rainfall and the inadequately protected roof, substantial amounts of rainfall intruded in both townhouses, causing extensive damage.

19. The work crew spent most of January 14, 1999, cleaning up following the rain event the previous day.

20. As of Friday, January 15, 1999, the roof was still exposed. On that date, MCI installed a base coat of hot asphalt and insulation, which was inadequate to waterproof the flat roof. At the end of the workday, the roofing crew covered the roof with Visqueen and left for the weekend. On January 16, 1999, additional heavy rains occurred. Again, as a consequence of the rainfall and the inadequately protected roof, substantial amounts of rainfall intruded in both townhouses, causing additional damage to both townhouses. The failure to adequately protect the exposed roof constituted negligence.

21. Mr. Gauer's homeowner's insurance company paid his policy limits for emergency services and repairs to his townhouse. The repairs were completed on or about February 19, 1999. Mr. Gauer subrogated his rights against MCI to his insurance company. There was a civil action pending by the

    insurance company against MCI at the time of the final hearing based on the subrogation rights.

22. Mr. Gauer's homeowner's insurance did not cover damages to his or Mr. Poitivent's personal property. The value of those losses was not established.

23. During the week beginning January 18, 1999, MCI installed new roofing material on the roof. In doing so, the roofing crew covered the clothes dryer vent for each townhouse with roofing material. As a result, Mr. Gauer's clothes dryer did not vent properly, and he paid an independent contractor

    $250.00 to inspect and clean out the dryer vent. MCI promptly corrected the deficient work after Mr. Gauer told Mr. Malt that his dryer vent had been covered during the re-roofing.

24. The accepted standard in the roofing industry is that roof vents are not to be covered over without some specific instruction to do so. MCI's failure to adhere to that standard constituted negligence.

25. MCI asserted that it completed the roofing work in 1999. At the times pertinent to this proceeding, Craig Johns was a building inspector for the Village. Mr. Johns inspected the subject roof on the following dates in 1999: June 15, July 15, August 12, and August 30. Following each inspection, Mr. Johns found that the roof did not pass inspection. Among other deficiencies, Mr. Johns found that the roof did not

    provide positive drainage, which was required for a flat roof covered in asphalt. 2/ As of the final hearing, MCI had not obtained a passing final inspection from the Village's building department.

26. Mr. Malt established that Respondent had just cause to believe that MCI had completed all work on the project in 1999. Consequently, Respondent is not guilty of abandoning the work within the meaning of Section 489.129(1)(k), Florida Statutes (1997).

27. As of June 15, 2001, Petitioner's costs of investigation and prosecution in this case, excluding costs associated with attorney's time, totaled $794.23. 3/

    CONCLUSIONS OF LAW

    
    

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

29. Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. See

    Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Evans Packing Co. v. Department of Agriculture and Consumer Services, 550

    So. 2d 112 (Fla. 1st DCA 1989); and Inquiry Concerning a Judge, 645 So. 2d 398 (Fla. 1994).

30. Section 489.119(6)(b), Florida Statutes (1997), provides as follows:

    (b) The registration or certification number of each contractor or certificate of authority number for each business organization shall appear in each offer of services, business proposal, bid, contract, or advertisement, regardless of medium, as defined by board rule, used by that contractor or business organization in the practice of contracting.

    
    

31. Section 489.1425, Florida Statutes (1997), provides, in pertinent part, as follows:

    1. Any agreement or contract for repair, restoration, improvement, or construction to residential real property must contain a written statement explaining the consumer's rights under the Construction Industries Recovery Fund, except where the value of all labor and materials does not exceed $2,500. The written statement must be substantially in the following form:

       
       

       CONSTRUCTION INDUSTRIES RECOVERY FUND

       
       

       PAYMENT MAY BE AVAILABLE FROM THE CONSTRUCTION INDUSTRIES RECOVERY FUND IF YOU LOSE MONEY ON A PROJECT PERFORMED UNDER CONTRACT, WHERE THE LOSS RESULTS FROM SPECIFIED VIOLATIONS OF FLORIDA LAW BY A STATE-LICENSED CONTRACTOR. FOR INFORMATION ABOUT THE RECOVERY FUND AND FILING A CLAIM, CONTACT THE FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD AT THE FOLLOWING TELEPHONE NUMBER AND ADDRESS:

       
       

       The statement shall be immediately followed by the board's address and telephone number as established by board rule.

       
       

       (2)(a) Upon finding a first violation of subsection (1), the board may fine the contractor up to $500, and the moneys must be deposited into the Construction Industries Recovery Fund.

       
       

32. Section 489.129, Florida Statutes, provides, in pertinent part, as follows:

    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, registration, or certificate of authority, 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 to 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, a financially responsible officer, or a secondary qualifying agent responsible under s. 489.1195 is found guilty of any of the following acts:

       
       

       * * *

       
       

       1. Failing in any material respect to comply with the provisions of this part or violating a rule or lawful order of the board.

       2. 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.

       
       

       * * *

       
       

       1. Committing incompetency or misconduct in the practice of contracting.

       2. Committing gross negligence, repeated negligence, or negligence resulting in a significant danger to life or property.

       3. Proceeding on any job without obtaining applicable local building department permits and inspections.

       
       

       * * *

       
       

       (4) In recommending penalties in any proposed recommended final order, the department shall follow the penalty guidelines established by the board by rule. The department shall advise the administrative law judge of the appropriate penalty, including mitigating and aggravating circumstances, and the specific rule citation.

       
       

33. Petitioner established by clear and convincing evidence that the subject contract failed to contain Respondent's certificate number as required by Section 489.119(6)(b), Florida Statutes (1997). Consequently, Respondent violated the provisions of Section 489.129(1)(j), Florida Statutes (1997), as alleged in Count I of the Administrative Complaint.

34. Respondent asserts that the contract did not have to contain the language required by Section 489.1425, Florida Statutes (1997), because although there was a single document, there were two agreements, each in the amount of $2500, which is the statutory threshold. In support of that argument, Respondent points out that MCI obtained two building permits, each for a $2500 project. That argument is rejected because the

    statute plainly requires the language except where the value of all labor and materials does not exceed $2,500. The value of all labor and materials of the subject contract is $5,000.

    Additionally, Respondent argues that since RCM is a corporation, it would not be entitled to recovery from the Construction Industries Recovery Fund. Section 489.141, Florida Statutes (1997), contains the criteria for recovery under the Construction Industries Recovery Fund. Even if RCM could not qualify, Respondent's argument that the contract did not have to have the language required by Section 489.1425, Florida Statutes (1997), should be rejected because the statute does not make the distinction between notice for eligible and non-eligible owners. Petitioner established by clear and convincing evidence that Respondent failed to comply with the provisions of Section 489.125, Florida Statutes, thereby violating the provisions of Section 489.129(1)(j), Florida Statutes (1997), as alleged in Count II of the Administrative Complaint.

35. Count III of the Administrative Complaint alleged that Respondent abandoned the project within the meaning of Section 489.129(1)(k), Florida Statutes (1997). Because the undersigned has found that MCI had just cause to believe that all work had been accomplished, it is concluded that Petitioner did not prove that Respondent is guilty of abandoning the work as alleged in Count III. The only evidence to support Petitioner's theory

    that Respondent abandoned the project was that Respondent completed its work without obtaining a passing final inspection, which is addressed in Count VI.

36. Count IV of the Administrative Complaint alleged that Respondent violated Section 489.129(1)(n), Florida Statutes (1977), by committing incompetency or misconduct in the practice of contracting. Petitioner failed to establish those allegations by clear and convincing evidence. There was insufficient evidence to establish that Respondent was in any manner incompetent. Petitioner's allegations as to misconduct were subsumed in its allegations of negligence.

37. Count V of the Administrative Complaint alleged that Respondent violated Section 489.129(1)(o), Florida Statutes (1997), by committing gross negligence, repeated negligence, or negligence resulting in a significant danger to life or property. Petitioner did not establish gross negligence, but it did establish by clear and convincing evidence repeated negligence and negligence that resulted in significant danger to property.

38. Count VI of the Administrative Complaint alleged that Respondent violated Section 489.129(1)(p), Florida Statutes (1997), by proceeding on any job without obtaining applicable local building department permits and inspections. Petitioner established this violation by clear and convincing evidence

    since it is undisputed that MCI failed to obtain a passing final building inspection for this work.

39. Rule 61G4-17.001, Florida Administrative Code, contains penalty guidelines for the violations established in this proceeding. The recommended penalties that follow are within those guidelines. 4/ In making the recommendations, the undersigned has considered Respondent's long history as a licensee without prior discipline and the fact that he had no direct involvement in this work.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent guilty of the violations alleged in Counts I, II, V, and VI of the Administrative Complaint. The recommended penalty for the violation alleged in Count I is an administrative fine in the amount of $100. The recommended penalty for the violation alleged in Count II is an administrative fine in the amount of $100. The recommended penalty for the violation alleged in Count V is an administrative fine in the amount of $500. The recommended penalty for the violation alleged in Count VI is an administrative fine in the amount of $500. It is further recommended that the final order require Respondent to pay

Mr. Gauer restitution in the amount of $250. It is further

recommended that the final order require Respondent to pay investigative costs in the amount of $794.23.

DONE AND ENTERED this 5th day of November, 2001, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

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 5th day of November, 2001.

ENDNOTES

1/ While the roofs of two townhouses are involved in this matter, they will be referred to in the singular because they constitute parts of one shared roof.

2/ Mr. Malt resolved all deficiencies noted by Mr. Johns except for the issue as to drainage. There was a dispute between

Mr. Johns and Mr. Malt as to whether the roof had positive drainage. Mr. John's testimony that there was no positive drainage was based, in part, on his observation of ponding water on the roof 48 hours after a rainfall. Mr. Malt testified, credibly, that the roof had positive drainage, and he explained how the roof was constructed and engineered for positive drainage to internal drains at either end of the building. The re-roofing work would not have changed the engineered drainage system. Mr. John's observations of ponding water 48 hours after the rain event could be explained by the failure of the property owners to keep the internal drains free of debris. In finding that Mr. Malt's testimony is credible, the undersigned has considered his extensive experience, that the drainage system is identical to thousands of other roofs constructed by Mr. Malt or

his company, and that the roof at issue had lasted approximately

20 years.

3/ Petitioner's Exhibit 14 is an affidavit from the custodian of records, who certified that the printout of costs is a true and correct copy of the cost summary data compilation on file with Petitioner. This exhibit was disclosed on the Prehearing Stipulation filed by the parties and admitted at the final hearing without objection from Respondent. Respondent asserts for the first time in his Proposed Recommended Order that the exhibit is inadmissible. That untimely objection to this business record is rejected.

4/ For Count I the guideline is found at Rule 61G4- 17.001(10)(c). For Count II the guideline is found at Rule 61G4-17.001(10)(j). For Count V the guideline is found at Rule 61G4-17.001(15). For Count VI the guideline is found at Rule 61G4-17.001(16).

COPIES FURNISHED:

Theodore R. Gay, Esquire Department of Business and

Professional Regulation

401 Northwest Second Avenue, Suite N-607 Miami, Florida 33128

Robert H. Springer, Esquire

3003 South Congress Avenue, Suite 1E Palm Springs, Florida 33461

Wellington H. Meffert II Akerman, Senterfitt and Eidson

301 South Bronough Street, Suite 200 Tallahassee, Florida 32301

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

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Hardy L. Roberts, III, General Counsel 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: 01-002108PL

Orders for Case No: 01-002108PL