DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )
vs. )
KEITH C. POWELL, )
Respondent. )
Case No. 07-4372PL
Pursuant to notice, a final hearing was held in this case on November 15, 2007, in Sarasota, Florida, before Carolyn S. Holifield, designated Administrative Law Judge of the Division of Administrative Hearings.
For Petitioner: Scott A. Smothers, Esquire
Wright, Fulton, Moorhead & Brown, P.A. Post Office Box 2828
For Respondent: Keith C. Powell, pro se
Stellar Building Services, Inc. 727 Tuxford Drive
The issues in this case are whether Respondent violated Subsections 489.129(1)(g)1., (j) and (m), Florida Statutes (2004),1/ and, if so, what penalty should be imposed.
On July 12, 2007, Petitioner, the Department of Business and Professional Regulation (hereinafter referred to as "Department" or "Petitioner") filed a four-count Administrative Complaint before the Construction Industry Licensing Board (hereinafter referred to as "Board") against Respondent,
Keith C. Powell (hereinafter referred to as "Respondent" or "Powell"). Count I charged that Respondent violated Subsection 489.129(1)(j), Florida Statutes, by abandoning a construction project in which the contractor was engaged or under contract as a contractor. Counts II and IV charged that Respondent violated Subsection 498.129(1)(m), Florida Statutes, by committing incompetency or mismanagement in the practice of contracting.
Count III charged that Respondent violated Subsection 489.129(1)(g)1., Florida Statutes, by committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer. Respondent disputed the charges and requested a formal hearing. The matter was referred to the Division of Administrative Hearings on September 20, 2007, for
assignment of an Administrative Law Judge to conduct the hearing and prepare a recommended order.
At hearing, the Department presented the testimony of three witnesses: Barry Freedman; Larry Ekstrom; and Keith Towles.
Petitioner's Exhibits A, B, D through I, and Exhibits L2/ through N were admitted into evidence. Respondent cross-examined Petitioner's witnesses, but did not present any testimony or offer any exhibits.
At the request of Petitioner, the time for filing proposed recommended orders was set for 20 days after the hearing transcript was filed. The Transcript was filed on November 30, 2007. Petitioner timely filed its Proposed Recommended Order. Respondent did not file a post-hearing submittal.
At all times relevant to this proceeding, Respondent was a certified general contractor in the State of Florida, having been issued License No. CG C1507065. Respondent's license as a general contractor was first issued on April 12, 2004, and is current and active.
At all times relevant to this proceeding, Respondent was part-owner and the qualifying agent of a Florida corporation named Golden Rule Construction Group, Inc. (hereinafter referred to "GRCG").
The Board is the state agency charged with regulating the practice of contracting in the State of Florida pursuant to Chapters 455 and 489, Florida Statutes.
Facts Related to Freedman Property
On or about June 1, 2005, Barry Freedman (hereinafter referred to as "Freedman") entered into a contract to construct a room addition and remodel a bathroom at Freedman's residence at 2349 East Manor Avenue in Port St. Lucie, Florida.
The pre-printed contract indicated that the contractor was GRCG. Also, the letterhead on the contract included the name "Golden Rule Construction Group, Inc." and the company's address, telephone number, fax number, and Respondent's general contractor's license number.
The contract was executed by Freedman, as the homeowner, and Steve DiBenedetto (hereinafter referred to as "DiBenedetto"), as the contractor.
All negotiations and presentations relative to the contract were between Freedman and DiBenedetto.
The contract price was $52,652.00. Of this amount, Freedman paid $14,657.00, all of which was accepted by DiBenedetto as contractor for GRCG. Initially, on or about
May 31, 2005, Freedman gave DiBenedetta a $10,000.00 check as a deposit for the construction project. On or about July 13,
2005, Freedman gave DiBenedetto a $4,657.00 check as a second payment under the contract. The payee on both checks was GRCG.
DiBenedetta and a man identified as John Smith3/ commenced the bathroom remodeling project in June 2005 and satisfactorily completed that project by September 2005.
The bathroom remodeling project was started and completed, even though no building permit had been pulled. Based on representations of DiBenedetta and/or John Smith, Freedman believed no permit was necessary for the bathroom remodel.4/
The Contract does not delineate or specify the cost of the room addition and the cost of the bathroom remodeling project. However, the value of the bathroom remodel was estimated by a qualified independent third party to be
$7,804.00.
The room addition was to begin in September or October 2005, after the plans for the addition were completed. The plans were never provided by GRCG, and it never commenced work on the room addition as provided for in the Contract. Eventually, Freedman went to the architect and purchased the plans for the room addition in order to move forward on the project.
After completing the bathroom remodel, GRCG abandoned the project and never began the room addition that was provided for in the contract.
The amount paid by Freedman to GRCG, $14,657.00, exceeds the value of the work performed by $6,853.00.
Facts Related to Ekstrom Property
On or about October 28, 2004, Larry Ekstrom (hereinafter referred to as "Ekstrom") entered into a contract (hereinafter referred to as "Ekstrom Contract") with GRCG to construct a new home a 117 Creek Drive in Port Charlotte, Florida (hereinafter referred to as "Eckstrom property"). The Ekstrom Contract was executed by Ekstrom, as the owner, and Keith Powell, as the contractor.
The Ekstrom Contract price was $808,306.31.
The Ekstrom Contract provided that work on the construction project was to commence upon issuance of the permit by Charlotte County. In accordance with that contract, after the permit was issued, GRCG began work on the construction project at the Eckstrom property.
Eckstrom's understanding was that, pursuant to the Eckstrom Contract, GRCG would request periodic payments from Eckstrom that would be used to pay for materials, suppliers, and sub-contractors.
Ekstrom made two payments to GRCG as payment for the project under the Ekstrom Contract. The first payment in the amount of $40,420.00 was made on October 29, 2004, when the Ekstrom Contract was fully executed. The second payment in the amount of $82,900.59 was paid to GRCG on or about March 3, 2005, as a "progress payment" under the terms of the Ekstrom Contract.
On or about July 1, 2005, a Claim of Lien was recorded against Eckstrom's property by Tom Brunton Masonry, Inc. (hereinafter referred to as "Brunton Masonry"), for $18,029.91.
The Claim of Lien was for the unpaid costs of labor, services, and materials furnished by Brunton Masonry for improvements to the Ekstrom property at 117 Creek Drive from April 2005 until May 2005. According to the Claim of Lien, Brunton Masonry provided the subject labor, services, and materials pursuant to a contract it had with GRCG. The Claim of Lien indicated that the total value of the labor, services, and materials furnished by Brunton Masonry was $39,243.91, "of which there remains an unpaid balance of $18,029.91."
Eckstrom successfully negotiated with Brunton Masonry and the $18,029.91 lien was reduced to $14,000.00. On or about October 25, 2005, Eckstrom paid Brunton Masonry the negotiated amount of $14,000 to satisfy the Claim of Lien.
On or about August 2, 2005, a Claim of Lien was recorded against the Eckstrom property by Murphy Concrete Works,
Inc. (hereinafter referred to as "Murphy Concrete"), for
$35,400.00. The Claim of Lien was for labor and material furnished by Murphy Concrete to perform concrete work on the Eckstrom property in accordance with a contract with GRCG. According to the Claim of Lien, the subject labor and materials were furnished between March 4 and 11, 2005.
In order to remove the lien from his property, in or about September 2005, Eckstrom paid Murphy Concrete $35,400.00 to satisfy the Claim of Lien.
Eckstrom paid a total amount of $49,400.00 to satisfy the above-referenced liens against his property.
In April, May or June 2005, Eckstrom had a conversation with Keith Powell, in which Powell told Eckstrom that there was a company takeover by one of GRCG partners.
In or about early summer 2005, GRCG stopped work on the Eckstrom property. Prior to that time, GRCG scraped and filled the lot and put in the foundation footers and stem wall.
Prior to the liens being recorded against the Eckstrom property and after GRCG had ceased working on the property,
Mr. Powell talked to Eckstrom and offered to complete the construction project. However, because previous discussions and representations with Powell had not yielded any positive results, Eckstrom had no confidence in Powell and, thus, did not accept Powell's offer.
After GRCG ceased work on the Eckstrom property for more than 90 days, Eckstrom contracted with Towles Corporation to complete the construction project. Towles completed the construction of the house at a cost of $934,000.00.5/
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. §§ 120.569 and 120.57, Fla. Stat. (2007).
Petitioner is the agency charged with regulating the practice of contracting pursuant to Section 20.165 and Chapters
455 and 489, Florida Statutes.
Respondent, as a certified general contractor and the primary qualifying agent for GRCG, is required to comply with the provisions of Chapter 489, Part I, Florida Statutes, and all applicable rules adopted pursuant thereto.
Pursuant to Section 489.129, Florida Statutes, the Board is empowered to revoke, suspend or otherwise discipline the license of a contractor who is found guilty of any of the prohibitions listed in Subsection 489.129(1), Florida Statutes.
The four-count Administrative Complaint alleges that Respondent is guilty of the acts in Subsection 489.129(1)(g)1.,
and (m), Florida Statutes, which provides as follows:
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:
* * *
(g) 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;
* * *
(j) 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.
* * *
(m) Committing incompetency or misconduct in the practice of contracting.
Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent alleged in the Administrative Complaint. Department of Banking and Finance v. Osborne, Stern and Co., 670 So. 2d 932 (Fla. 1996).
Subsection 489.1195(1)(a), Florida Statutes, states:
A qualifying agent is a primary qualifying agent unless he or she is a secondary qualifying agent under this section.
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.
The clear and convincing evidence established that Respondent was the primary qualifying agent for GRCG at all times relevant to this proceeding. As the primary qualifying agent GRCG, Respondent is jointly and equally responsible for the supervision of all operations of the business, for all field work at all sites, for financial matters for the organization, and for each specific job. See § 489.1195(1)(a), Fla. Stat. Therefore, Respondent is deemed responsible for and guilty of
any offenses committed by GRCG, the organization for which he serves as the primary qualifying agent.
The Department met its burden as to Count I of the Administrative Complaint. The clear and convincing evidence established that Respondent ceased working on the Freedman construction project and failed to return for at least 90 consecutive days, without just cause and without notification to Freedman. By doing so, Respondent abandoned the project and, thus, violated Subsection 489.129(1)(j), Florida Statutes.
The Department met its burden as to Count II of the Administrative Complaint. The clear and convincing evidence established that Respondent accepted money from Freedman in an amount greater than the work actually performed. This conduct by Respondent constitutes misconduct in the practice of contracting and, therefore, is a violation of Subsection 489.129(1)(m), Florida Statutes.
The Department met is burden as to Count III of the Administrative Complaint. The clear and convincing evidence established that two valid liens were recorded against the Eckstrom property for supplies and services ordered by GRCG and for which the owner had paid the contractor. Moreover, the clear and convincing evidence established that GRCG did not pay the lien holders for the materials and services they provided. Rather, the clear and convincing evidence established that
Eckstrom, the owner of the property, paid the lien holders in order to have the liens removed from his property. By failing to have the liens removed, Respondent committed mismanagement or misconduct in the practice of contracting that caused financial harm to a customer and, thus, violated Subsection 489.129(1)(g)1., Florida Statutes.
The Department failed to prove Count IV of the Administrative Complaint, that Respondent violated Subsection 489.129(1)(m), Florida Statutes, as it relates to the Eckstrom Contract. In its Proposed Recommended Order, the Department states that this charge is based on Respondent's company, GRCG, accepting money from Eckstrom in an amount greater than the work actually performed for Eckstrom. The Department's reliance on that fact must fail for two reasons. First, this allegation was not included in the Administrative Complaint and, therefore, cannot be properly considered in this proceeding. Second, even if the allegation had been included in the Administrative Complaint, the Department failed to establish that factual allegation by clear and convincing evidence. For the foregoing reasons, the Department failed to meet its burden as to
Count IV.
Florida Administrative Code Rule 61G4-17.001 provides the guidelines for the violations alleged in this case.
The range of penalties for a first violation of Subsection 489.129(1)(j), Florida Statutes, is a $1,000.00 to
$5,000.00 fine and/or probation. Fla. Admin. Code R. 61G4-17.001(1)(j).
The violation of Subsection 489.129(1)(m), Florida Statutes, in this case relates to misconduct in the practice of contracting that caused financial harm to a customer.
See § 489.129(1)(g)2., Fla. Stat. The range of penalties for a first violation of such misconduct as contemplated by Subsection 489.129(1)(m), Florida Statutes, is a $1,000.00 to $2,500.00 fine. Fla. Admin. Code R. 61G4-17.001(1)(m)4.b.
Florida Administrative Code Rule 61G4-17.002 provides, in pertinent part, the following:
Circumstances which may be considered for the purpose of mitigation or aggravation of penalty shall include, but are not limited to, the following:
Monetary or other damage to the licensee's customer, in any way associated with the violation, which damage the licensee has not relieved, as of the time the penalty is be assessed. (This provision shall not be given effect to the extent it would contravene federal bankruptcy law.)
Actual job-site violations of building codes, or conditions exhibiting gross negligence, incompetence, or misconduct by the licensee, which have not been corrected as of the time the penalty is being assessed.
The danger to the public.
The number of complaints filed against the licensee.
The length of time the licensee has practiced.
The actual damage, physical or otherwise, to the licensee's customer.
The deterrent effect of the penalty imposed.
The effect of the penalty upon the licensee's livelihood.
Any efforts at rehabilitation.
Any other mitigating or aggravating circumstances.
There is no evidence that supports mitigation or aggravation of the prescribed penalty range for the violations established in this case.
There is no evidence that Respondent has been previously disciplined for any violations under Chapter 489, Florida Statutes. Therefore, the guidelines that should be used are those specified for the first violation.
Pursuant to Florida Administrative Code Rule
61G4-17.001(5), the Board is required to order the contractor to make restitution in the amount of the financial loss suffered by the consumer.
Subsection 455.227(3)(a), Florida Statutes, provides that the Board may assess costs related to the investigation and prosecution of cases, excluding costs associated with an
attorney's time. Also see § 489.129(1), Fla. Stat. However, in this case, no evidence as to those costs was presented.
RECOMMENDED that Petitioner, the Department of Business and Professional Regulation, Construction Industry Licensing Board, enter a final order: (1) finding that Respondent, Keith C. Powell, violated Subsections 489.129(1)(g)1., (j), and (m),6/ Florida Statutes, and imposing a $1,000.00 fine for each violation, for a total of $3,000.00; (2) requiring Respondent to make restitution to Barry Freedman in the amount of $6,853.00;
$49,400.00; and (4) requiring Respondent to attend a minimum of seven additional hours of continuing education.
DONE AND ENTERED this 31st day of January, 2008, in Tallahassee, Leon County, Florida.
CAROLYN S. HOLIFIELD
Filed with the Clerk of the Division of Administrative Hearings this 31st day of January, 2008.
1/ All references are to 2004 Florida Statutes, unless otherwise indicated.
2/ Exhibit L incorrectly states Respondent's general contractor's license number as CG C041625. After Respondent pointed out this error, he stipulated that he holds a Florida State general contractor's license and the correct number is CG C1507065, as listed in the Administrative Complaint.
3/ DiBenedetta introduced John Smith to Freedman as one of the owners of GRCG.
4/ Freedman testified that in March 2006, about seven months after the bathroom remodeling project was completed, he pulled the permit.
5/ The amount Eckstrom paid to Towles Corporation represents the cost plus 10 percent and additional costs "where [Eckstrom] ran over on his allowances."
6/ The violation of Subsection 489.129(1)(m), Florida Statutes, is applicable only to the Freedman Contract.
Scott A. Smothers, Esquire Robert A. Crabill, Esquire
Wright, Fulford, Moorhead & Brown, P.A. Post Office Box 2828
Keith C. Powell
Stellar Building Services, Inc. 727 Tuxford Drive
G.W. Harrell, Executive Director Construction Industry Licensing Board Department of Business and
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.
