STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY )

LICENSING BOARD, )

)

Petitioner, )

)

vs. ) Case No. 04-0375PL

)

LARRY E. SHIMKUS, )

)

Respondent. )

)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, conducted the final hearing in West Palm Beach, Florida, on April 13-15, 2004.

APPEARANCES

For Petitioner: Theodore R. Gay

Assistant General Counsel Department of Business and

Professional Regulation

8685 Northwest 53rd Terrace, Suite 100

Miami, Florida 33166

For Respondent: Bruce G. Kaleita

Law Office of Bruce G. Kaleita, P.A. The Barristers Building

1615 Forum Place, Suite 500 West Palm Beach, Florida 33401

STATEMENT OF THE ISSUES

The issues are whether Respondent, as the qualifier of Thomson Homes, Inc., is guilty of financial mismanagement or

misconduct in the practice of contracting, in violation of Section 489.129(1)(g)1, Florida Statutes; abandoning a construction project in which the contractor was engaged or under contract as a contractor, in violation of Section 489.129(1)(j), Florida Statutes; failing to satisfy within a reasonable time a civil judgment obtained against the licensee or business organization qualified by the licensee and relating to the practice of construction, in violation of Section 489.129(1)(q), Florida Statutes; and failing to comply with a provision of Chapter 489, Part I, Florida Statutes, by failing to include the contractor's certificate number on each contract used by him or his business organization, in violation of Sections 489.119(6)(b) and 489.129(1)(i), Florida Statutes. If Respondent is guilty of any of these violations, an additional issue is the penalty that should be imposed.

PRELIMINARY STATEMENT

By Amended Administrative Complaint dated December 15, 2003, Petitioner alleged that Respondent is a certified residential contractor who qualified Thomson Homes, Inc., on or about April 26, 1999. The Amended Administrative Complaint alleges that Respondent sent a letter to Petitioner dated August 30, 1999, advising that he was no longer qualifying Thomson Homes, Inc. The Amended Administrative Complaint alleges that Steven D. Thomson, the previous qualifier of

Thomson Homes, Inc., ceased qualifying the business on or about March 3, 1999.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., entered into a contract, on or about June 28, 1998, with Reginald and Katie Shepherd to construct a home in North Palm Beach Heights. Mr. Thomson allegedly obtained a building permit, but canceled it on or about February 23, 1999. On or about May 3, 1999, Thomson Homes, Inc., allegedly reactivated the building permit.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., completed the slab and concrete blocks, but stopped construction on the home in June 1999. On or about July 19, 1999, a supplier allegedly filed a claim of lien against the property for $3827.10 in unpaid supplies provided from April 30, 1999, through May 21, 1999. On or about August 11, 1999, a subcontractor allegedly filed a claim of lien against the property for $150 in unpaid services provided from April 30, 1999, and May 11, 1999. Respondent allegedly failed to satisfy these liens.

The Amended Administrative Complaint alleges that the Shepherds filed a civil action against Thomson Homes, Inc., on or about October 7, 1999. They allegedly obtained a judgment on or about November 14, 2000, determining that Thomson Homes, Inc., had abandoned the job and awarding the Shepherds a

judgment of $45,914.48 against Thomson Homes, Inc. Respondent allegedly failed to satisfy the judgment within a reasonable time.

Count I of the Amended Administrative Complaint alleges that Respondent committed mismanagement or misconduct in the practice of contracting that caused financial harm to a customer, in violation of Section 489.129(1)(g)1, Florida Statutes. Count I alleges that the financial mismanagement occurred when the contractor, after having been paid for the liened services or supplies, failed to satisfy a valid claim of lien within 75 days.

Count II of the Amended Administrative Complaint alleges that Respondent abandoned a construction project in which the contractor was engaged or under contract as a contractor, in violation of Section 489.129(1)(j), Florida Statutes.

Count III of the Amended Administrative Complaint alleges that Respondent failed to satisfy within a reasonable time a civil judgment obtained against the licensee or business organization qualified by the licensee and relating to the practice of construction, in violation of Section 489.129(1)(q), Florida Statutes.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., entered into a contract, on or about June 16, 1999, with Dale and Joanne Dively to construct a home in Jupiter. The

contract price was allegedly $199,725, and Thomson Homes, Inc., allegedly received $17,972. The contract allegedly omitted the license number of Respondent or Thomson Homes, Inc. Respondent allegedly never applied for any permits, and Thomson Homes, Inc., allegedly never commenced construction.

On or about August 16, 1999, a surveyor allegedly filed a claim of lien against the property for $107.50 in unpaid services provided from June 30, 1999, through July 2, 1999.

Respondent allegedly failed to satisfy this lien.

The Amended Administrative Complaint alleges that the Divelys filed a civil action against Thomson Homes, Inc., on or about October 5, 1999. They allegedly obtained a judgment on or about August 2, 2000, determining that Thomson Homes, Inc., had abandoned the job and awarding the Divelys a judgment of

$28,893.75 against Thomson Homes, Inc. Respondent allegedly failed to satisfy the judgment within a reasonable time.

Count IV of the Amended Administrative Complaint alleges that Respondent failed to comply with a provision of Chapter 489, Part I, Florida Statutes, by failing to include his certificate number on each contract used by him or his business organization, in violation of Sections 489.119(6)(b) and 489.129(1)(i), Florida Statutes.

Count V of the Amended Administrative Complaint alleges that Respondent committed mismanagement or misconduct in the

practice of contracting that caused financial harm to a customer, in violation of Section 489.129(1)(g)1, Florida Statutes. Count V alleges that the financial mismanagement occurred when the contractor, after having been paid for the liened services or supplies, failed to satisfy a valid claim of lien within 75 days.

Count VI of the Amended Administrative Complaint alleges that Respondent failed to satisfy within a reasonable time a civil judgment obtained against the licensee or business organization qualified by the licensee and relating to the practice of construction, in violation of Section 489.129(1)(q), Florida Statutes.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., entered into a contract, on or about October 31, 1998, with Keith and Karen Deyo to construct a home in Jupiter. The contract price was allegedly $148,900, and Thomson Homes, Inc., allegedly received $20,000. Mr. Thomson allegedly obtained a building permit on or about January 15, 1999, but canceled it on or about March 9, 1999. On or about April 26, 1999, Thomson Homes, Inc., allegedly reactivated the building permit.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., stopped construction on the home in July 1999.

Between March 25, 1999, and July 23, 1999, five providers of

services or supplies allegedly filed claims of liens against the property. Respondent allegedly failed to satisfy these liens.

The Amended Administrative Complaint alleges that the Deyos filed a civil action against Thomson Homes, Inc., on or about October 6, 1999. They allegedly obtained a judgment on or about March 15, 2000, determining that Thomson Homes, Inc., had abandoned the job and awarding the Deyos a judgment of

$55,458.64 against Thomson Homes, Inc. Respondent allegedly failed to satisfy the judgment within a reasonable time.

Count VII of the Amended Administrative Complaint alleges that Respondent committed mismanagement or misconduct in the practice of contracting that caused financial harm to a customer, in violation of Section 489.129(1)(g)1, Florida Statutes. Count VII alleges that the financial mismanagement occurred when the contractor, after having been paid for the liened services or supplies, failed to satisfy a valid claim of lien within 75 days.

Count VIII of the Amended Administrative Complaint alleges that Respondent failed to satisfy within a reasonable time a civil judgment obtained against the licensee or business organization qualified by the licensee and relating to the practice of construction, in violation of Section 489.129(1)(q), Florida Statutes.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., entered into a contract, on or about November 28, 1998, with Tina Centofanti to construct a home in Jupiter. The contract price was allegedly $141,900, and Thomson Homes, Inc., allegedly received $6190. Mr. Thomson allegedly applied for a building permit on or about April 27, 1999, but no one ever picked up the permit, and Thomson Homes, Inc., never commenced construction.

The Amended Administrative Complaint alleges that, on or about August 11, 1999, a surveyor allegedly filed a claim of lien against the property for $150 in unpaid services provided between May 19 and May 25, 1999. Respondent allegedly failed to satisfy this lien.

The Amended Administrative Complaint alleges that

Ms. Centofanti filed a civil action against Thomson Homes, Inc., on or about August 27, 1999. She allegedly obtained a judgment on or about October 4, 1999, awarding her a judgment of $5220 against Thomson Homes, Inc. Respondent allegedly failed to satisfy the judgment within a reasonable time. On or about

June 13, 2002, Ms. Centofanti allegedly assigned her judgment to Joan Thomson.

Count IX of the Amended Administrative Complaint alleges that Respondent committed mismanagement or misconduct in the practice of contracting that caused financial harm to a

customer, in violation of Section 489.129(1)(g)1, Florida Statutes. Count IX alleges that the financial mismanagement occurred when the contractor, after having been paid for the liened services or supplies, failed to satisfy a valid claim of lien within 75 days.

Count X of the Amended Administrative Complaint alleges that Respondent abandoned a construction project in which the contractor is engaged or under contract as a contractor, in violation of Section 489.129(1)(j), Florida Statutes.

Count XI of the Amended Administrative Complaint alleges that Respondent failed to satisfy within a reasonable time a civil judgment obtained against the licensee or business organization qualified by the licensee and relating to the practice of construction, in violation of Section 489.129(1)(q), Florida Statutes.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., entered into a contract, on or about September 12, 1998, with James and Donna Barr to construct a home in North Palm Beach Heights. The contract price was allegedly $170,900, and Thomson Homes, Inc., allegedly received $57,155.

Mr. Thomson allegedly obtained a building permit on or about April 27, 1999.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., completed the slab, but stopped construction on the

home in June 1999. Two suppliers of services allegedly filed claims of lien against the property for services provided between approximately May 10, 1999, and July 19, 1999.

Respondent allegedly failed to satisfy these liens.

The Amended Administrative Complaint alleges that the Barrs filed a civil action against Thomson Homes, Inc., on or about October 6, 1999. They allegedly obtained a judgment on or about May 8, 2000, determining that Thomson Homes, Inc., had abandoned the job and awarding the Barrs a judgment of $45,435.62 against Thomson Homes, Inc. Respondent allegedly failed to satisfy the judgment within a reasonable time.

Count XII of the Amended Administrative Complaint alleges that Respondent committed mismanagement or misconduct in the practice of contracting that caused financial harm to a customer, in violation of Section 489.129(1)(g)1, Florida Statutes. Count XII alleges that the financial mismanagement occurred when the contractor, after having been paid for the liened services or supplies, failed to satisfy a valid claim of lien within 75 days.

Count XIII of the Amended Administrative Complaint alleges that Respondent abandoned a construction project in which the contractor was engaged or under contract as a contractor, in violation of Section 489.129(1)(j), Florida Statutes.

Count XIV of the Amended Administrative Complaint alleges that Respondent failed to satisfy within a reasonable time a civil judgment obtained against the licensee or business organization qualified by the licensee and relating to the practice of construction, in violation of Section 489.129(1)(q), Florida Statutes.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., entered into a contract, on or about September 8, 1998, with Sandra Harvey to construct a home in North Palm Beach Heights. The contract price was allegedly $140,760, and Thomson Homes, Inc., allegedly received approximately $80,000.

Mr. Thomson allegedly obtained a building permit on or about January 15, 1998, but canceled it on or about February 23, 1999. On or about May 3, 1999, Thomson Homes, Inc., allegedly reactivated the building permit.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., completed the slab, beam/column, roof framing, wall sheathing, framing anchor, and roof metal, but stopped construction on the home around June 6, 1999. Three suppliers allegedly filed claims of lien against the property for services or supplies provided between May 14, 1999, and July 20, 1999.

Respondent allegedly failed to satisfy these liens.

The Amended Administrative Complaint alleges that

Ms. Harvey filed a civil action against Thomson Homes, Inc. She

allegedly obtained a judgment on or about March 30, 2001, determining that Thomson Homes, Inc., had abandoned the job and awarding Ms. Harvey a judgment of $46,267.32 against Thomson Homes, Inc. Respondent allegedly failed to satisfy the judgment within a reasonable time.

Count XV of the Amended Administrative Complaint alleges that Respondent committed mismanagement or misconduct in the practice of contracting that caused financial harm to a customer, in violation of Section 489.129(1)(g)1, Florida Statutes. Count XV alleges that the financial mismanagement occurred when the contractor, after having been paid for the liened services or supplies, failed to satisfy a valid claim of lien within 75 days.

Count XVI of the Amended Administrative Complaint alleges that Respondent abandoned a construction project in which the contractor was engaged or under contract as a contractor, in violation of Section 489.129(1)(j), Florida Statutes.

Count XVII of the Amended Administrative Complaint alleges that Respondent failed to satisfy within a reasonable time a civil judgment obtained against the licensee or business organization qualified by the licensee and relating to the practice of construction, in violation of Section 489.129(1)(q), Florida Statutes.

The Amended Administrative Complaint alleges that Thomson Homes, Inc., entered into a contract, on or about July 13, 1999, with Richard and Kathleen Beltz to construct a home in North Palm Beach. The contract allegedly omitted the license numbers of Respondent and Thomson Homes, Inc. Thomson Homes, Inc., allegedly received $17,283.70 under the contract, but performed no work.

The Amended Administrative Complaint alleges that the Beltzes filed a civil action against Thomson Homes, Inc., on or about February 4, 2002. They allegedly obtained a judgment on or about May 22, 2002, determining that Thomson Homes, Inc., had abandoned the job and awarding the Beltzes a judgment of

$23,280.20 against Thomson Homes, Inc. Respondent allegedly failed to satisfy the judgment within a reasonable time.

Count XVIII of the Amended Administrative Complaint alleges that that Respondent failed to comply with a provision of Chapter 489, Part I, Florida Statutes, by failing to include his certificate number on each contract used by him or his business organization, in violation of Sections 489.119(6)(b) and 489.129(1)(i), Florida Statutes.

Count XIX of the Amended Administrative Complaint alleges that Respondent committed mismanagement or misconduct in the practice of contracting that caused financial harm to a customer, in violation of Section 489.129(1)(g)1, Florida

Statutes. Count XIX alleges that the financial mismanagement occurred when the contractor, after having been paid for the liened services or supplies, failed to satisfy a valid claim of lien within 75 days.

Count XX of the Amended Administrative Complaint alleges that Respondent abandoned a construction project in which the contractor was engaged or under contract as a contractor, in violation of Section 489.129(1)(j), Florida Statutes.

Count XXI of the Amended Administrative Complaint alleges that Respondent failed to satisfy within a reasonable time a civil judgment obtained against the licensee or business organization qualified by the licensee and relating to the practice of construction, in violation of Section 489.129(1)(q), Florida Statutes.

On April 6, 2004, Respondent filed a Motion for Prevailing Party Attorney's Fees as a Small Business Party Under Section 57.111, Florida Statutes.

During the hearing, the Administrative Law Judge struck all counts alleging that Respondent failed to satisfy civil judgments for failure to state a claim on which discipline could be predicated. The Recommended Order addresses this issue in the Conclusions of Law.

At the hearing, Petitioner called eight witnesses and offered into evidence 93 exhibits: Petitioner Exhibits 1-30 and

32-94. Respondent called three witnesses and offered into evidence eight exhibits: Respondent Exhibits 1-8. All exhibits were admitted except Petitioner Exhibits 35, 43, and 88 and Respondent Exhibit 2, which were proffered.

The court reporter filed the transcript on April 28, 2004. Petitioner filed its proposed recommended order on May 12, 2004, and Respondent filed his closing statement on May 7, 2004.

FINDINGS OF FACT

1. At all material times, Respondent has been a certified residential contractor, holding certificate number CR C013599. From April 26, 1999, through August 30, 1999, Respondent was the qualifying agent of Thomson Homes, Inc. All contracts described below involved contracting work to be performed in Palm Beach County, Florida.

2. Previously, Steven Thomson, who is a general contractor, had been the qualifying agent of Thomson Homes, Inc. Mr. Thomson and his then-wife, Lori Thomson operated Thomson Homes, Inc., as a homebuilding business in the Palm Beach County area. At no time material to this case has Ms. Thomson been certified or registered as a residential, building, or general contractor, except from March 22, 1999, through April 30, 1999, when she held a temporary nonrenewal certificate as a general contractor. This certificate authorized Thomson Homes, Inc., to continue or complete contracting work already in progress.

3. In 1998, Mr. Thomson filed for divorce from

   
   

   Ms. Thomson. During the divorce proceedings, Mr. Thomson learned that Ms. Thomson was the sole shareholder of Thomson Homes, Inc., which Mr. Thomson had previously believed was equally owned by him and his wife. In early March 1999,

   Ms. Thomson fired Mr. Thomson, who then resigned a couple of weeks later as qualifying agent of Thomson Homes, Inc.

4. Respondent learned from an independent mortgage broker that Thomson Homes, Inc., was seeking a qualifying agent. The mortgage broker, who made all of the retail loans for Thomson Homes, Inc., never told Respondent anything negative about the company, probably because he was unaware of any problems.

5. Respondent had heard of Thomson Homes, Inc., through its television and newspaper advertisements. When Respondent visited the office of Thomson Homes, Inc., to discuss the position with Ms. Thomson, he found a salesman and a secretary/receptionist working in the office. Nothing in the appearance or operation of the office suggested that Thomson Homes, Inc., was anything other than a typical homebuilding business. Ms. Thomson explained that her business needed a qualifying agent because her husband had previously been the qualifying agent, but they were in the process of obtaining a divorce.

6. Respondent initially obtained a certificate as a residential contractor in 1978. Neither Petitioner nor any local jurisdiction has ever disciplined Respondent or any contracting business that he has qualified.

7. For 20 years, Respondent was in the business of affordable residential construction. He managed subcontractors, paid subcontractors and suppliers, and performed other duties of a residential contractor. For the most part, Respondent worked as an individual, not as an employee of a homebuilding business. At one point, Respondent formed a corporation with another individual, but, unsatisfied with his partner's high-volume approach to homebuilding, Respondent terminated that relationship and resumed building homes individually.

8. In April 1999, Respondent signed the paperwork to enable him to qualify Thomson Homes, Inc. After doing so, on April 27, 1999, Respondent signed and delivered to the Town of Jupiter Building Department a form authorizing Thomson Homes, Inc., to obtain building permits.

9. Based on the representations of Ms. Thomson during their negotiations, Respondent believed that Thomson Homes, Inc., did not have any active contracting jobs. He was unaware that Ms. Thomson had ever held a temporary certificate. Until early August 1999, Respondent never knew that, using

   Ms. Thomson's temporary certificate and later Respondent's

   certificate, Thomson Homes, Inc., was engaged in the contracting business at all times between the withdrawal of Mr. Thomson's certificate and the withdrawal of Respondent's certificate.

   Although most of the company's jobs and office were in the same subdivision, the size of the subdivision made it unlikely that Respondent would discover a Thomson Homes, Inc., job site by chance.

10. Respondent and Ms. Thomson agreed that Respondent would receive four percent of the contract price for pulling each permit, $1000 per week, and 35 percent of the profit on each job. In return, Respondent would supervise construction, manage subcontractors, perform estimates of construction costs, and preapprove all contracts. Ms. Thomson would manage the office and sales staff, handle the banking, and pay the bills.

11. Ignorant of the legal obligations imposed upon a qualifying agent, especially where, as here, the contracting business had no financially responsible officer, Respondent intended to allow Ms. Thomson to handle, without supervision, all of the financial responsibilities of Thomson Homes, Inc. Respondent admitted that he intended to limit his responsibilities to field work and not involve himself with the company's financial matters or office operations. Respondent also admitted that he deemed himself unqualified to handle the financial responsibilities of the company.

12. During their negotiations, Ms. Thomson told Respondent that his job with Thomson Homes, Inc., would not start until the company resumed construction. She explained to him that there would be a delay as she reestablished the necessary financing. Unconcerned by this fact and wanting to finish up some other work, Respondent agreed to wait until he heard from Ms. Thomson before starting work for Thomson Homes, Inc. Respondent understood that the company might reasonably need several months to reestablish financing.

13. Ms. Thomson never summoned Respondent to work.

    
    

    Thomson Homes, Inc., never paid Respondent any compensation whatsoever. After some time had passed without hearing from Ms. Thomson, Respondent began to call her to determine when he would begin work for Thomson Homes, Inc. At first, he had

    Ms. Thomson's cell number, so he would talk to her, and she would repeatedly tell him that the financing was not yet in place. Eventually, Ms. Thomson changed her cell number and did not give it to him. However, Respondent called the office and spoke with the secretary/receptionist and salesman, both of whom assured Respondent that everything was "okay."

14. On August 27, 1999, Respondent visited the office of Thomson Homes, Inc., trying to find Ms. Thomson in the office. However, he found no one present, and the office was locked. On

    August 30, 1999, Respondent mailed his letter to Petitioner resigning as the qualifying agent of Thomson Homes, Inc.

15. On June 24, 1998, Thomson Homes, Inc., entered into a contract with Reginald and Katherine Shepherd to construct a home for $146,350 and sell a lot for $25,500. The contract requires the work to commence within ten days after the issuance of the building permit and funding of the construction loan and substantial completion within 150 days from the date of the slab pour.

16. The loan closed on the Shepherds' home on November 17, 1998. The closing statement identifies the lot as Lot 1, Block 23, North Palm Beach Gardens. At the loan closing, Thomson Homes, Inc., received from the closing agent $13,457.20 plus

    $225 for a survey.

    
    

17. Eight days after the loan closing, Thomson Homes, Inc., applied to the Palm Beach County Building Department for a building permit. The Building Department issued the permit on February 4, 1999, but Mr. Thomson, who had been the qualifying agent under whose certificate the permit had been issued, canceled the permit on February 23, 1999.

18. Pursuant to the contract, Thomson Homes, Inc., was obligated to commence construction by February 14, 1999, but failed to do so. Instead, Thomson Homes, Inc., commenced construction sometime in early April 1999, after Ms. Thomson

    used her temporary certificate to reinstate the building permit. The initial work was poor, as the building sewer and underground plumbing failed inspections on April 23, 1999. However, three days later, they passed inspections. On April 30, 1999, the slab failed two inspections before passing on May 10. On

    May 10, 1999, the beam failed an inspection. This was the last work that Thomson Homes, Inc., ever performed on the Shepherds' residence.

19. On May 14, 1999, the construction lender issued a check in the amount of $24,880 jointly to Mr. Shepherd and Thomson Homes, Inc. Mr. Shepherd endorsed the check, and Thomson Homes, Inc., deposited it to its credit. By this point, Thomson Homes, Inc., had received $38,562.20 and had completed the work described in the preceding paragraph, as well as additional carpentry work.

20. On August 2, 1999, the Shepherds spoke with

    
    

    Ms. Thomson on the telephone. The parties disagreed over whether Thomson Homes, Inc., had done sufficient work to earn another draw. Two days later, the Shepherds tried to send a fax to Thomson Homes, Inc., during regular business hours, but the company's fax machine was not working. The next day, August 5, during normal business hours, Mr. Shepherd visited the office of Thomson Homes, Inc., but found the office closed with a sign on the door indicating the company had ceased doing business.

21. By letter dated August 4, 1999, the Shepherds advised Thomson Homes, Inc., that it was in breach of contract and terminated their relationship with the company. The Shepherds sent a copy of this letter to Respondent's local address. A few days later, Respondent's wife called the Shepherds and asked them why they had sent a copy of this letter to her husband. Respondent testified that his wife never told him about the letter, but this testimony is not credited. However, the August

    4 letter and ensuing, brief telephone call a few days later are the only contacts that the Shepherds had with Respondent, and these contacts were with Respondent's wife.

22. On August 11, 1999, Wallace Surveying Corporation filed a Claim of Lien against Lot 1, Block 23, North Palm Beach Heights, for $150 for surveying that took place from April 30, 1999, through May 11, 1999. Thomson Homes, Inc., never paid this claim. The Shepherds paid this claim, and Wallace Surveying Corporation signed and delivered a Satisfaction of Lien on November 22, 1999. Thomson Homes, Inc., had received more than enough money to pay for the liened services.

23. On October 6, 1999, the Shepherds filed a complaint in circuit court against Thomson Homes, Inc. On November 14, 2000, the court entered a Final Summary Judgment Against Defendant, Thomson Homes, Inc., in the total amount of $45,914.48. Among the findings in the judgment are that Thomson Homes, Inc.,

    breached its contract by accepting money and abandoning the project and failing to pay subcontractors and suppliers, such that construction liens attached to the property. The judgment was never satisfied.

24. In February or March 1999, Thomson Homes, Inc., entered into an undated contract with Dale and Joanne Dively to construct a home for $199,725. For an unknown reason, at the request of Ms. Thomson, the Divelys initialed each page of the contract on June 16, 1999. The contract does not bear Respondent's certificate number. The contract requires the work to commence within ten days after the issuance of the building permit and funding of the construction loan and substantial completion within 150 days from the date of the slab pour.

25. The loan closed on the Divelys' home on June 16, 1999.

    
    

    The closing statement identifies the lot as Lot 583, Egret Landing at Jupiter. At the loan closing, Thomson Homes, Inc., received from the closing agent $16,767.20. The Divelys had previously paid Thomson Homes, Inc., $2000 on January 28, 1999, to prepare construction plans.

26. Thomson Homes, Inc., never applied for a building permit. Except for ordering a survey, Thomson Homes, Inc., never commenced any construction.

27. On August 6, 1999, the construction lender informed the Divelys that Thomson Homes, Inc., had ceased doing business.

    The Divelys immediately telephoned Thomson Homes, Inc., but learned that the telephone had been disconnected. By this point, Thomson Homes, Inc., had received $18,767.20 and performed no work whatsoever, except to order a survey. When Thomson Homes, Inc., abandoned the job, it had received money far in excess of the value of the work that had been done.

28. On August 17, 1999, Wallace Surveying Corporation filed a Claim of Lien against Lot 583, Egret Landing at Jupiter, for $107.50 for surveying that took place from June 30, 1999, through July 2, 1999. Thomson Homes, Inc., never paid this claim. The Divelys paid this claim, and Wallace Surveying Corporation signed and delivered a Waiver of Lien on February 9, 2000. Thomson Homes, Inc., had received more than enough money to pay for the liened services.

29. On October 6, 1999, the Divelys filed a complaint in circuit court against Thomson Homes, Inc. On August 2, 2000, the court entered a Final Summary Judgment Against Defendant, Thomson Homes, Inc., in the total amount of $28,893.75. Among the findings in the judgment are that Thomson Homes, Inc., breached its contract by accepting money and abandoning the project and failing to pay subcontractors and suppliers, such that construction liens attached to the property. The judgment was never satisfied.

30. On October 31, 1998, Thomson Homes, Inc., entered into a contract with Keith and Karen Deyo to construct a home for

    $123,400 and sell a lot for $25,500. The contract requires the work to commence within ten days after the issuance of a building permit and funding of the construction loan and substantial completion within 120 days from the date of the slab pour.

31. The loan closed on the Deyos' home on December 23, 1998. The closing statement identifies the lot as Lot 13, Block 33, North Palm Beach Heights. At the loan closing, Thomson Homes, Inc., received from the closing agent $5500.70 plus $225 for a survey. The Deyos had previously paid Thomson Homes, Inc., $6445 by check dated November 10, 1998.

32. Petitioner Exhibit 39 purports to represent the building permit for the Deyos' home. However, the only document in the package identifying the Deyos' lot is the Notice of Commencement, which the Deyos signed on December 23, 1998. The original application appears to have been signed by Mr. Thomson on November 25, 1998, which would be after the contract, but before the loan closing; this is inconsistent with the typical practice of Thomson Homes, Inc., to apply for the building permit after--usually long after--the loan closing. Another page of Petitioner Exhibit 39 states that Respondent is the

    "builder," but is signed by Ms. Thomson as "contractor/owner builder."

33. The only clear documentary evidence of permit activity is Petitioner Exhibit 7, which is Mr. Thomson's letter of February 22, 1999, to the Deyos advising them that he "will be withdrawing his general contractor's license" from their job. However, the permit package does not contain a copy of this letter, so it is impossible to determine if Mr. Thomson followed through on his warning.

34. Notwithstanding, the confused state of the purported building permit, Mr. Deyo testified convincingly that Thomson Homes, Inc., started construction in January 1999 and ended construction in July 1999, even though the job was not complete. Mr. Deyo always cooperated with Thomson Homes, Inc., regarding all draw requests. The construction lender issued checks, jointly to Mr. Deyo and Thomson Homes, Inc., on April 13, 1999, May 10, 1999, and July 15, 1999, respectively, for $33,873,

    $12,772, and $15,549. Mr. Deyo endorsed the checks, and Thomson Homes, Inc., deposited them to its credit.

35. In early August 1999, the Deyos found that the office of Thomson Homes, Inc., was closed, and the business had ceased operations.

36. Unlike the other customers of Thomson Homes, Inc., Mr. Deyo met Respondent one time at the office while Mr. Deyo

    was loudly complaining about the lack of progress in constructing his residence. Ms. Thomson introduced the two men, who spoke briefly. The record is unclear whether Respondent heard Mr. Deyo's loud complaints, which he had voiced prior to the two men's conversation, or whether Mr. Deyo restated his complaints directly to Respondent.

37. Numerous subcontractors and suppliers filed liens against the Deyos' property. On July 21, 1999, Maschmeyer Concrete Company filed a Claim of Lien against Lot 13, a/k/a 6359 Dania Street, for $2827.31 for services and materials supplied from April 7, 1999, through April 30, 1999. On August 11, 1999, Coastal Plumbing, Inc., filed a Claim of Lien against Lot 33, Block 13, North Palm Beach Heights, for $2765

    for services and materials supplied from March 25, 1999, through May 24, 1999. On August 19, 1999, Griffin & Wilson Stucco, Inc., filed a Claim of Lien against Lot 13, Block 33, North Palm Beach Heights, for $3500 for services and materials supplied from July 12, 1999, through July 23, 1999. On September 10, 1999, L&W Supply Corp. filed a Claim of Lien against Lot 13, Block 33, North Palm Beach Heights, for $810.53 for services and materials supplied on July 11 and 12, 1999. On September 29, 1999, Gale Industries, Inc., filed a Claim of Lien against Lot 13, Block 33, North Palm Beach Heights, for $300 for services and materials supplied on July 6, 1999. On October 18, 1999,

    Mystic Electric, Inc., filed a Claim of Lien against Lot 13, Block 33, North Palm Beach Heights, for $4580 for services and materials supplied from July 2, 1999, through July 20, 1999.

38. Thomson Homes, Inc., never paid any of the claims in the preceding paragraph. The Deyos paid over $27,000 to satisfy these and other liens filed against their property as a result of Thomson Homes, Inc., not paying suppliers of services or materials. In their releases or satisfactions of lien, five of the six lienholders recited the money received from the Deyos, and these sums totaled $8777.31. Thomson Homes, Inc., had received more than enough money to pay for the liened services and materials.

39. On October 6, 1999, the Deyos filed a complaint in circuit court against Thomson Homes, Inc. On March 15, 2000, the court entered a Final Summary Judgment Against Defendant, Thomson Homes, Inc., in the total amount of $55,458.64. Among the findings of the judgment are that Thomson Homes, Inc., breached its contract by accepting money and abandoning the project and failing to pay subcontractors and suppliers, such that construction liens attached to the property. The judgment was never satisfied.

40. On November 28, 1998, Thomson Homes, Inc., entered into a contract with Tina Centofanti to construct a home for

    $114,400 and sell a lot for $27,500. The contract identifies

    the lot as Lot 8, Block 26, North Palm Beach Heights. The contract requires the work to commence within ten days after the issuance of the building permit and funding of the construction loan and substantial completion within 150 days from the date of the slab pour.

41. The loan closed on Ms. Centofanti's home on February 12, 1999. At the loan closing, Thomson Homes, Inc.,

    received $225 for a survey. Ms. Centofanti had previously paid Thomson Homes, Inc., $1000 and $4000, respectively, by checks dated November 28, 1998, and January 11, 1999.

42. On April 27, 1999, Thomson Homes, Inc., using

    
    

    Ms. Thomson's temporary certificate, applied to the Town of Jupiter Building Department for a building permit. On the same date, Thomson Homes, Inc., submitted to the Building Department an Agent Authorization signed by Respondent and authorizing the Building Department to issue building permits in the name of Thomson Homes, Inc. The Building Department issued the building permit on May 11, 1999, but canceled the permit on August 16, 1999, after Thomson Homes, Inc., ceased doing business.

43. On March 3, March 8, April 21, May 26, and June 8, 1999, Ms. Centofanti sent letters to Ms. Thomson at Thomson Homes, Inc., inquiring and later complaining about the lack of activity on her home. The June 8 letter asks why Ms. Thomson

    had not picked up the building permit, which had been issued a month earlier.

44. On June 14, 1999, Ms. Centofanti addressed a letter to Respondent at Thomson Homes, Inc. The letter, which was sent return receipt requested, asks Respondent to explain the inactivity, but Respondent never picked up the letter at the post office, presumably because he was unaware of its existence. By letter dated August 11, 1999, to Ms. Thomson, with a copy to Respondent, both addressed to Thomson Homes, Inc.,

    Ms. Centofanti fired Thomson Homes, Inc. Again, Respondent was presumably unaware of this letter.

45. Except for obtaining a survey, Thomson Homes, Inc., performed no work on the job. On August 11, 1999, Wallace Surveying Corporation filed a Claim of Lien against Lot 8, Block 26, North Palm Beach Heights, for $150 for surveying that took place from May 19, 1999, through May 25, 1999. Thomson Homes, Inc., never paid this claim. Ms. Centofanti paid this claim, and Wallace Surveying Corporation signed and delivered a Waiver of Lien on September 27, 1999. Thomson Homes, Inc., had received more than enough money to pay for these liened services.

46. On August 27, 1999, Ms. Centofanti filed a statement of claim in county court against Thomson Homes, Inc., and

    Ms. Thomson. On October 4, 1999, the court entered a Default

    and Final Judgment against both defendants in the total amount of $5220. The judgment lacks any findings, but the statement of claim alleges that Thomson Homes, Inc., breached its contract by accepting money and not performing the contract and failing to pay a subcontractor, such that a construction lien attached to the property. Because Ms. Centofanti obtained a judgment lien against other property of Ms. Thomson, Ms. Centofanti was able to sell her judgment on June 18, 2002, for $4000.

47. On September 12, 1998, Thomson Homes, Inc., entered into a contract with James and Donna Barr to construct a home for $140,900 and sell a lot for $30,000. The contract requires the work to commence within ten days after the issuance of the building permit and funding of the construction loan and substantial completion within 120 days from the date of the slab pour.

48. The loan closed on the Barrs' home on December 31, 1998. The closing statement identifies the lot as Lot 6, Block 47, North Palm Beach Heights. At the loan closing, Thomson Homes, Inc., received from the closing agent $8159.50 plus $225 for the survey. The Barrs had previously paid Thomson Homes, Inc., $500 and $2000, respectively, by checks dated September 30, 1998, and November 19, 1998. After the closing, the construction lender issued checks dated May 17, 1999, and July 31, 1999, respectively, in the amounts of $34,239 and $8876 to

    the Barrs and Thomson Homes, Inc. The Barrs endorsed the checks, and Thomson Homes, Inc., deposited them to its credit.

49. On April 27, 1999, Thomson Homes, Inc., using

    
    

    Ms. Thomson's temporary certificate, applied to the Town of Jupiter Building Department for a building permit. On the same date, Thomson Homes, Inc., submitted to the Building Department an Agent Authorization signed by Respondent and authorizing the Building Department to issue building permits in the name of Thomson Homes, Inc. The Building Department issued the building permit on May 25, 1999.

50. Thomson Homes, Inc., commenced work on the home in May 1999. However, after performing little other work, Thomson Homes, Inc., ceased work on the home on June 14, 1999, after the slab pour.

51. On August 11, 1999, Wallace Surveying Corporation filed a Claim of Lien against Lot 6, Block 47, North Palm Beach Heights, for $300 for surveying that took place from May 10, 1999, through June 3, 1999. On August 31, 1999, Albrecht Masonry filed a Claim of Lien against Lot 6, Block 47, North Palm Beach Heights, for $5600 for masonry services and materials. Thomson Homes, Inc., never paid these claims. Unlike the other customers of Thomson Homes, Inc., the Barrs negotiated an agreement with Albrecht Masonry in which it obtained releases of the liens in return for which the Barrs

    conveyed to it the real property. Due to this arrangement, the Barrs' out-of-pocket losses were limited to $8500. Thomson Homes, Inc., had received more than enough money to pay for the liened services and materials.

52. On October 6, 1999, the Barrs filed a complaint in circuit court against Thomson Homes, Inc. On May 8, 2000, the court entered a Final Summary Judgment Against Defendant, Thomson Homes, Inc., in the total amount of $45,435.62. Among the findings in the judgment are that Thomson Homes, Inc., breached its contract by accepting money and abandoning the project and failing to pay subcontractors and suppliers, such that construction liens attached to the property. The judgment was never satisfied.

53. On September 9, 1998, Thomson Homes, Inc., entered into a contract with Sandra Harvey to construct a home for

    $115,260 and sell a lot for $25,500. The contract identifies the lot as Lot 5A, Block 42, North Palm Beach Heights. The contract requires the work to commence within ten days after the issuance of the building permit and funding of the construction loan and substantial completion within 120 days of the slab pour.

54. The loan closed on Ms. Harvey's home on December 8, 1998. At the loan closing, Thomson Homes, Inc., received from the closing agent $2506.80 plus $225 for the survey. Prior to

    the closing, Ms. Harvey paid Thomson Homes, Inc., $7060 by check dated November 25, 1998. After the closing, the construction lender issued checks dated April 21, 1999, and May 26, 1999, respectively, in the amounts of $28,010 and $11,411 to

    Ms. Harvey and Thomson Homes, Inc. Ms. Harvey endorsed the checks, and Thomson Homes, Inc., deposited them to its credit.

55. On November 25, 1998, Thomson Homes, Inc., using Mr. Thomson's certificate, applied to the Palm Beach County Building Department for a building permit. The Building Department issued the building permit on January 15, 1999.

56. Thomson Homes, Inc., commenced construction on the home in February 1999 and ceased work in June 1999 without finishing the job. At the time that Thomson Homes, Inc., abandoned the job, the Building Department inspector had passed the slab, beam/column, roof framing and sheathing, wall sheathing, framing anchors, and roof metal.

57. Ms. Harvey spoke with Ms. Thomson repeatedly about the work on a regular basis, but, like the other customers, was unable to obtain a satisfactory explanation for why Thomson Homes, Inc., had ceased working on her home. Then, on

    August 11, 1999, Ms. Harvey found that Thomson Homes, Inc., had ceased doing business.

58. On August 13, 1999, Orr Woodworks, Inc., filed a Claim of Lien against Lot 5A, Block 42, North Palm Beach Heights, for

    $3079.94 for services and materials supplied from May 14, 1999, through June 22, 1999. On September 1, 1999, J.W. Hodges Drywall filed a Claim of Lien against Lot 11, Block 33, North Palm Beach Heights, for $3000 for services and material supplied from May 28, 1999, through June 3, 1999. On October 18, 1999, Mystic Electric, Inc., filed a Claim of Lien against Lot 5A, Block 42, North Palm Beach Heights, for $3000 for services and materials supplied from July 2, 1999, through July 20, 1999.

    Thomson Homes, Inc., never paid these claims, but, for various reasons, Ms. Harvey was never required to pay them either, although the record is unclear whether all of them were released, waived, or satisfied. Thomson Homes, Inc., had received more than enough money to pay for the liened services and materials.

59. On October 6, 1999, Ms. Harvey filed a complaint in circuit court against Thomson Homes, Inc. On March 30, 2001, the court entered a Default Final Summary Judgment Against Defendant, Thomson Homes, Inc., in the total amount of

    $46,267.32. Among the findings in the judgment are that Thomson Homes, Inc., breached its contract by accepting money and abandoning the project and failing to pay subcontractors and suppliers. The judgment was never satisfied.

60. On July 13, 1999, Thomson Homes, Inc., entered into a contract with Kathleen and Richard Beltz to construct a home for

    $140,500 and sell a lot for $35,500. The contract identifies the lot as Lot 8, Block 47, North Palm Beach Heights. The contract does not bear Respondent's certificate number. The contract requires work to be commenced within ten days after the issuance of the building permit and funding of the construction loan and substantial completion within 120 days from the date of the slab pour.

61. The parties agreed upon a loan closing date of

    
    

    August 10, 1999, but the closing did not take place as scheduled because no one from Thomson Homes, Inc., appeared at the closing.

62. Prior to the date scheduled for the loan closing, the Beltzes paid Thomson Homes, Inc., $12,283.70 by check dated April 22, 1999.

63. Thomson Homes, Inc., never commenced construction or provided any services in return for the money that it had received from the Beltzes.

64. On February 4, 2002, the Beltzes filed a complaint in circuit court against Thomson Homes, Inc. On May 22, 2002, the court entered a Default Final Summary Judgment Against Defendant, Thomson Homes, Inc., in the total amount of

    $23,280.28. Among the findings in the judgment are that Thomson Homes, Inc., breached its contract by accepting money and abandoning the project and failing to pay subcontractors and

    suppliers, such that construction liens attached to the property. In fact, no party supplied any services or materials to the home under the direction of Thomson Homes, Inc., and no construction liens attached to the property. The judgment was never satisfied.

    CONCLUSIONS OF LAW

    
    

65. The Division of Administrative Hearings has jurisdiction over the subject matter. §§ 120.569 and 120.57(1), Fla. Stat. (2004).

66. Section 489.129(1), Florida Statutes, provides:

    
    

    The [Construction Industry Licensing 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. Obtaining a certificate, registration, or certificate of authority by fraud or misrepresentation.

    2. Being convicted or found guilty of, or entering a plea of nolo contendere to, regardless of adjudication, a crime in any

       jurisdiction which directly relates to the practice of contracting or the ability to practice contracting.

    3. Violating any provision of chapter 455.

    4. 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.

    5. Knowingly combining or conspiring with an uncertified or unregistered person by allowing his or her certificate, registration, or certificate of authority to be used by the uncertified or unregistered person with intent to evade the provisions of this part. When a certificateholder or registrant allows his or her certificate or registration to be used by one or more business organizations without having any active participation in the operations, management, or control of such business organizations, such act constitutes prima facie evidence of an intent to evade the provisions of this part.

    6. Acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certificateholder or registrant as set forth on the issued certificate or registration, or in accordance with the personnel of the certificateholder or registrant as set forth in the application for the certificate or registration, or as later changed as provided in this part.

    7. 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;

       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 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; or

       3. The contractor's job has been completed, and it is shown that the customer has had to pay more for the contracted job than the original contract price, as adjusted for subsequent change orders, unless such increase in cost was the result of circumstances beyond the control of the contractor, was the result of circumstances caused by the customer, or was otherwise permitted by the terms of the contract between the contractor and the customer.

    8. Being disciplined by any municipality or county for an act or violation of this part.

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

    10. 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.

    11. 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.

    12. Committing fraud or deceit in the practice of contracting.

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

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

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

    16. Intimidating, threatening, coercing, or otherwise discouraging the service of a notice to owner under part I of chapter 713 or a notice to contractor under chapter 255 or part I of chapter 713.

    17. 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.

    
    

    For the purposes of this subsection, construction is considered to be commenced when the contract is executed and the contractor has accepted funds from the customer or lender. A contractor does not commit a violation of this subsection when the contractor relies on a building code interpretation rendered by a building official or person authorized by s. 553.80 to enforce the building code, absent a finding of fraud or deceit in the practice of contracting, or gross negligence, repeated negligence, or negligence resulting in a significant danger to life or property on the part of the building official, in a proceeding under chapter 120.

    
    

67. Petitioner must prove the material allegations by clear and convincing evidence. Department of Banking and

    Finance v. Osborne Stern and Company, Inc., 670 So. 2d 932 (Fla. 1996) and Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

68. The key legal issue in this case is to identify the grounds on which Petitioner may discipline Respondent, as a qualifying agent, for the wrongful acts and omissions of the business that he has qualified. In general, three different approaches are possible. First, Respondent is liable for his own acts or omissions in the practice of contracting, but he is not liable for any acts and omissions of Thomson Homes, Inc. Second, Respondent is liable for all acts and omissions of Thomson Homes, Inc., in the practice of contracting during the period that Respondent served as the qualifying agent. Third, Respondent may be liable for certain acts and omissions of Thomson Homes, Inc., in the practice of contracting during the period that Respondent served as the qualifying agent, but only to the extent that Respondent's acts or omissions constituted violations of the disciplinary statutes. In selecting an approach, courts will construe this disciplinary statute in favor of the licensee and against the regulatory authority. See, e.g., Djokic v. Department of Business and Professional Regulation, Division of Real Estate, So. 2d , 29 Fla. Law Weekly D1370 (Fla. 4th DCA 2004).

69. Notwithstanding the preference shown licensees in interpreting disciplinary statutes, the courts have rejected the first approach. In Camejo v. Department of Business and

    Professional Regulation, 812 So. 2d 583 (Fla. 3d DCA 2002) (per

    curiam), the court rejected the defense of a contractor that Petitioner could not discipline him for the wrongful acts and omissions of the business that he had qualified because he had not signed the applications for the building permits that the business had obtained. In an earlier case, Alles v. Department

    of Professional Regulation, 423 So. 2d 624 (Fla. 5th DCA 1982), the court endorsed the principle, also in a disciplinary case, that a qualifying agent has a duty to supervise the business's contracting work.

70. In arguing for the second approach--strict liability-- Petitioner incorrectly relies upon the two cases cited in the preceding paragraph and ignores two cases. In O'Connor v.

    Department of Professional Regulation, 566 So. 2d 549, 553 (Fla. 2d DCA 1990), the court declined to impute the gross negligence of the business that the contractor had qualified to the individual contractor himself. The court distinguished between former Section 489.129(1)(d), Florida Statutes (1987), which authorized discipline of an individual contractor if he or any member of the business that he had qualified violated a building code, and former Section 489.129(1)(m), Florida Statutes (1987), which authorized discipline of the individual contractor if he committed gross negligence. The court reached the same result in Hunter v. Department of Professional Regulation, 458 So. 2d 842 (Fla. 2d DCA 1984) (abandonment of a job by the business

    that the contractor qualified not imputed to the individual contractor herself).

71. Petitioner's argument for unrestricted strict liability finds no statutory support either. Section 489.129(1), Florida Statutes, consistently distinguishes between a contractor and a business organization when identifying grounds for discipline and generally establishes a statutory scheme under which Petitioner may impose discipline against an individual contractor or the business that he has qualified for each party's acts and omissions in the practice of contracting.

72. When the Legislature chose to render an individual contractor liable for the acts and omissions of the business that he has qualified, the Legislature did so in plain language. For instance, Section 489.129(1)(q), Florida Statutes, expressly imposes upon the individual contractor the duty to discharge promptly a judgment against him or the business that he has qualified. The second sentence of Section 489.129(1)(e), Florida Statutes, imposes upon the individual contractor the duty to participate actively in the business of the business that he has qualified, or else risk a finding that he has attempted to evade his statutory responsibilities.

73. Section 489.129(1), Florida Statutes, addresses individual contractors and business organizations as distinct entities. For instance, Section 489.129(1)(a), Florida

    Statutes, authorizes discipline if a contractor or business organization uses fraud to obtain his or its certificate or certificate of authority.

74. Much of Section 489.129(1), Florida Statutes, is directed toward the entity that performs contracting work-- whether a natural person operating individually or under a fictitious name or a corporation or other form of business organization. In general, the statute applies to any certificateholder or registrant, so that it extends to individuals who have obtained certificates as residential contractors, as has Respondent, and businesses that, pursuant to Section 489.119(2), Florida Statutes, have obtained "certificates of authority," as has Thomson Homes, Inc.

75. For instance, Section 489.129(1)(g), Florida Statutes, refers to a "customer," a "contractor's customer," the abandonment of a "customer's job," and the "contract between the contractor and the customer." Section 489.105(13), Florida Statutes, defines a "business organization" in such a way as to include a "contractor," as that term in used in Chapter 489, Part I, Florida Statutes. Section 489.119(4), Florida Statutes, which, contrary to Section 489.105(13), Florida Statutes, suggests a distinction between a business organization and a contractor, authorizes discipline against a business organization holding a certificate of authority in the same

    "manner" and on the same "grounds" as discipline against a contractor. Therefore, Section 489.129(1)(g), Florida Statutes, is limited to Thomson Homes, Inc., as the contracting party with the various customers, and does not extend to Respondent, who was not a contracting party with any of the customers.

76. For the same reasons, Section 489.129(1)(j), Florida Statutes, is also limited to Thomson Homes, Inc., as the "contractor [that] is engaged or under contract as a contractor," and does not extend to Respondent. And, for the same reasons, Section 489.119(6)(b), Florida Statutes, which are discussed below, is limited to Thomson Homes, Inc., as the author of the contract, and does not extend to Respondent.

77. Having rejected the first and second approaches to determining an individual contractor's professional liability, it is necessary to analyze the third approach, in which the individual contractor is liable for acts or omissions of the business that he has qualified, but only to the extent that the individual contractor's acts or omissions constitute violations of the disciplinary statutes.

78. There is no conflict between the case law, in which the courts hold that a qualifying agent maintains a duty of supervision, and the statutes. The key statute is Section 489.1195(2)(a), Florida Statutes, which provides:

    All primary qualifying agents for a business organization are jointly and equally responsible for supervision of all operations of the business organization; for all field work at all sites; and for financial matters, both for the organization in general and for each specific job.

    
    

79. Section 489.1195(1), Florida Statutes, explains that a qualifying agent is a primary qualifying agent, absent, as here, the presence of secondary qualifying agents. Thus, the statutory reference to joint liability is to liability between or among qualifying agents, not between a qualifying agent and the business that he has qualified.

80. Section 489.105(4), Florida Statutes, defines "primary qualifying agent" as follows:

    "Primary qualifying agent" means a person who possesses the requisite skill, knowledge, and experience, and has the responsibility, to supervise, direct, manage, and control the contracting activities of the business organization with which he or she is connected; who has the responsibility to supervise, direct, manage, and control construction activities on a job for which he or she has obtained the building permit; and whose technical and personal qualifications have been determined by investigation and examination as provided in this part, as attested by the department.

    
    

81. Numerous provisions in Section 489.129(1), Florida Statutes, identify grounds under which Petitioner may discipline a qualifying agent for his acts or omissions, without regard to the acts or omissions of the business that he has qualified.

    For example, Section 489.129(1)(a), Florida Statutes, authorizes discipline for obtaining a certificate by fraud; Section 489.129(1)(b), Florida Statutes, authorizes discipline for conviction or pleading no contest to a crime involving the practice of contracting; and Section 489.129(1)(d), Florida Statutes, authorizes discipline for assisting another person in the unlicensed practice of contracting.

82. Three provisions in Section 489.129(1), Florida Statutes, identify grounds under which Petitioner may discipline a qualifying agent for his acts or omissions, which acts or omissions may or may not involve the acts or omissions of the business that he has qualified. Section 489.129(1)(l), Florida Statutes, authorizes discipline for "[c]ommitting fraud or deceit in the practice of contracting"; Section 489.129(1)(m), Florida Statutes, authorizes discipline for "[c]ommitting incompetency or misconduct in the practice of contracting"; and Section 489.129(1)(n), Florida Statutes, authorizes discipline for "[c]ommitting gross negligence, repeated negligence, or negligence resulting in a significant danger to life or property."

83. The last two provisions apply directly to qualifying agents who fail to discharge their duties, with respect to the businesses that they have qualified, to supervise all

    operations, supervise all field work at all sites, and supervise all financial matters.

84. The first provision, prohibiting fraud or deceit, applies directly to qualifying agents who claim not to have had sufficient authority to discharge their duties, even though they have already filed the affidavit in compliance with Section 489.119(2)(a)1, Florida Statutes, which provides:

    The application for primary qualifying agent must include an affidavit on a form provided by the board attesting that the applicant has final approval authority for all construction work performed by the entity and that the applicant has final approval authority on all business matters, including contracts, specifications, checks, drafts, or payments, regardless of the form of payment, made by the entity, except where a financially responsible officer is approved.

    
    

85. Except for the allegations that Respondent failed to pay promptly judgments against Thomson Homes, Inc., Petitioner has pleaded a case in which Respondent's liability is imputed. Subject to the preceding exception, Petitioner has not pleaded a case in which Respondent's liability, although related to the acts and omissions of Thomson Homes, Inc., is based on Respondent's own incompetence or misconduct; gross negligence, repeated negligence, or negligence resulting in a significant danger to life or property; or fraud or deceit, assuming that Respondent filed the required affidavit attesting to the fact

    that he had the requisite authority over Thomson Homes, Inc., to serve as its qualifying agent.

86. Petitioner's imputed-liability theory invites a determination of the extent to which Petitioner proved that Thomson Homes, Inc., is guilty of the alleged violations. Petitioner has proved that Thomson Homes, Inc., is guilty of all of the alleged violations, except for Count XIX.

87. As to Count I, Thomson Homes, Inc., received over

    
    

    $38,000 from, or on behalf of, the Shepherds and failed to pay the bill of the surveyor, who then filed a Claim of Lien, which Thomson Homes, Inc., never satisfied, even though it had received more funds than the amount due the surveyor. As to Count II, Thomson Homes, Inc., legally commenced construction no later than when it accepted funds at the loan closing, and the company abandoned construction no later than May 10, 1999. As to Count III, Thomson Homes, Inc., failed to satisfy the judgment obtained by the Shepherds (although the judgment was not obtained until nearly 15 months after Respondent had ceased qualifying Thomson Homes, Inc.).

88. As to Count IV, Thomson Homes, Inc., failed to include the contractor's number on the Dively contract (although the parties effectively entered into the contract a couple of months prior to Respondent's qualifying Thomson Homes, Inc.). As to Count V, Thomson Homes, Inc., received nearly $19,000 from, or

    on behalf, of, the Divelys and failed to pay the surveyor, who then filed a Claim of Lien, which Thomson Homes, Inc., never satisfied, even though it had received more funds than the amount due the surveyor. As to Count VI, Thomson Homes, Inc., failed to satisfy the judgment obtained by the Divelys (although the judgment was not obtained until nearly one year after Respondent had ceased qualifying Thomson Homes, Inc.).

89. As to Count VII, Thomson Homes, Inc., received nearly

    
    

    $68,000 from, or on behalf of, the Deyos and failed to pay numerous suppliers of services and materials, who then filed Claims of Lien, which Thomson Homes, Inc., never satisfied, even though it had received more funds than the amount due these lienholders. As to Count VIII, Thomson Homes, Inc., failed to satisfy the judgment obtained by the Deyos (although the judgment was not obtained until nearly seven months after Respondent had ceased qualifying Thomson Homes, Inc.).

90. As to Count IX, Thomson Homes, Inc., received over

    
    

    $5000 from, or on behalf of, Ms. Centofanti and failed to pay the surveyor, who then filed a Claim of Lien, which Thomson Homes, Inc., never satisfied, even though it had received more funds than the amount due the surveyor. As to Count X, Thomson Homes, Inc., legally commenced construction no later than when it accepted funds on November 28, 1998, and the company abandoned construction no later than May 25, 1999, which was the

    last day of surveying work. As to Count XI, Thomson Homes, Inc., failed to satisfy the judgment obtained by Ms. Centofanti (although the judgment was not obtained until five weeks after Respondent had ceased qualifying Thomson Homes, Inc.). Although Ms. Centofanti sold her judgment two years and eight months after obtaining, the failure of Thomson Homes, Inc., to satisfy the judgment prior to its assignment was a failure to satisfy a judgment within a reasonable time.

91. As to Count XII, Thomson Homes, Inc., received nearly

    
    

    $54,000 from, or on behalf of, the Barrs and failed to pay the surveyor and concrete supplier, who then filed Claims of Lien, which Thomson Homes, Inc., never satisfied, even though it had received more funds than the amounts due these lienholders. As to Count XIII, Thomson Homes, Inc., legally commenced construction no later than when it accepted funds on

    September 30, 1998, and the company abandoned construction no later than June 14, 1999, which was the slab pour. As to Count XIV, Thomson Homes, Inc., failed to satisfy the judgment obtained by the Barrs (although the judgment was not obtained until eight months after Respondent had ceased qualifying Thomson Homes, Inc.).

92. As to Count XV, Thomson Homes, Inc., received nearly

    
    

    $50,000 from, or on behalf of, Ms. Harvey and failed to pay three suppliers of materials or services, who then filed Claims

    of Lien, which Thomson Homes, Inc., never satisfied, even though it had received more funds than the amounts due these lienholders. As to Count XVI, Thomson Homes, Inc., legally commenced construction no later than when it accepted funds on November 25, 1998, and the company abandoned construction in June 1999. As to Count XVII, Thomson Homes, Inc., failed to satisfy the judgment obtained by Ms. Harvey (although the judgment was not obtained until one year and seven months after Respondent had ceased qualifying Thomson Homes, Inc.).

93. As to Count XVIII, Thomson Homes, Inc., failed to include the contractor's number on the Beltz contract. As to Count XIX, Thomson Homes, Inc., received over $12,000 from, or on behalf of, the Beltzes, but apparently did not fail to pay any suppliers of materials or services because no one filed any Claims of Lien against the property. As to Count XX, Thomson Homes, Inc., legally commenced construction no later than when it entered into a contract on July 13, 1999, after having already accepted funds, and the company abandoned construction on August 10, 1999, when it failed to appear at the loan closing. As to Count XXI, Thomson Homes, Inc., failed to satisfy the judgment obtained by the Beltzes (although the judgment was not obtained until two years and nine months after Respondent had ceased qualifying Thomson Homes, Inc.).

94. At the hearing, the Administrative Law Judge struck Counts III, VI, VIII, XI, XIV, XVII, and XXI, which pertain to Respondent's failure to satisfy judgments against Thomson Homes, Inc. Although, as noted above, the obligation to satisfy judgments is not imputed, the obligation can only arise once the customer has obtained the judgment. In each case, the customer obtained the judgment after Respondent had ceased serving as the qualifying agent of Thomson Homes, Inc. As noted by Section 489.1195(3)(d), Florida Statutes, a change in the status of a qualifying agent is prospective only, and the former qualifying agent remains responsible "for matters for which he or she was responsible while in a particular status." However, the condition precedent to liability to pay the judgment is the judgment itself, so Respondent was never responsible to pay any of these judgments while he served as the qualifying agent of Thomson Homes, Inc. For this reason, Counts III, VI, VIII, XI, XIV, XVII, and XXI failed to state grounds on which discipline could be based.

95. A different timing issue precludes liability under Count IV. Even if imputed, an obligation to add an individual's contractor number to a contract may attach only after the individual has become a qualifying agent. The Divelys and Thomson Homes, Inc., entered into their contract prior to Respondent's becoming the qualifying agent. For this reason, as

    well as others discussed below, Petitioner failed to prove Count

    
    

    IV.

    
    

96. The remaining counts all involve mismanagement or

    
    

    misconduct in the practice of contracting due to the failure of the contractor to pay for liened services or materials after the contractor had received adequate funds; the abandonment of a project in which the contractor is engaged or under contract; and the failure to include the certificate number or certificate of authority number on each contractor, as required by Section 489.119(6)(b), Florida Statutes. As noted above, Thomson Homes, Inc., clearly violated these provisions, but its violations may not be imputed to Respondent for the purpose of discipline, for the reasons discussed above.

97. At this stage, Petitioner is limited to the theories of liability set forth in the Amended Administrative Complaint and tried at the three-day hearing and may not add new theories, such as Respondent's incompetence and negligence in discharging his statutory obligations of supervision. See, e.g., Hunter v. Department of Professional Regulation, 458 So. 2d 842, 844 (Fla. 2d DCA 1984) (charging document must provide licensee with reasonable notice of the charges).

98. However, by filing a request for attorneys' fees under Section 57.111, Florida Statutes, Respondent invites some comment on his performance in the costly debacle of Thomson

    Homes, Inc. Section 57.111(4)(a), Florida Statutes, authorizes the award of fees unless, among other things, "special circumstances exist which would make an award unjust."

99. Special circumstances in this case would make an award of fees unjust. Respondent has prevailed because Petitioner mispleaded the case. Of Respondent's incompetence, there is little doubt. Respondent did not even know that his responsibilities as a qualifying agent extended to financial matters. Respondent entrusted his certificate to a perfect stranger, treating his license with less respect than he would a set of golf clubs or a tape measure. Respondent's ignorance enabled Ms. Thomson to cheat the customers in this case out of considerable sums of money. Respondent's request for fees and costs is denied as a matter of law and as a final order, pursuant to Section 57.111(4)(d), Florida Statutes. No further orders will issue on this request.

RECOMMENDATION

It is

RECOMMENDED that the Construction Industry Licensing Board enter a final order dismissing the Amended Administrative Complaint against Respondent.

DONE AND ENTERED this 12th day of July, 2004, in Tallahassee, Leon County, Florida.

ROBERT E. MEALE

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 12th day of July, 2004.

COPIES FURNISHED:

Tim Vaccaro, Director

Construction Industry Licensing Board Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Leon Biegalski, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-2202

Theodore R. Gay

Assistant General Counsel Department of Business and

Professional Regulation

8685 Northwest 53rd Terrace, Suite 100

Miami, Florida 33166

Bruce G. Kaleita

Law Office of Bruce G. Kaleita, P.A. The Barristers Building

1615 Forum Place, Suite 500 West Palm Beach, Florida 33401

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 must be filed with the agency that will issue the final order in this case. Notwithstanding the foregoing, the final order denying Respondent's request for fees and costs, pursuant to Section 57.111, Florida Statutes, is a final order and is subject to immediate appeal.

Docket for Case No: 04-000375PL

Orders for Case No: 04-000375PL