STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 75-2073

)

JAMES R. JOHNSON d/b/a )

1. R. JOHNSON COMPANY, )

   )

   Respondent. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Pursuant to notice a hearing was held before Charles C. Adams, Hearing Officer with the Division of Administrative Hearings, at the Florida Construction Industry Licensing Board Offices, 6501 Arlington Expressway, Jacksonville, Florida at 9:00 A.M., June 10, 1976.

   
   

   APPEARANCES

   
   

   For Petitioner: Barry S. Sinoff, Esquire

   1010 Blackstone Building

   233 East Bay Street Jacksonville, Florida 32202

   
   

   For Respondent: Eugene Loftin, Esquire

   1636 Shadowood Lane

   Jacksonville, Florida 32207 ISSUE

   Whether or not, by the acts alleged in the Administrative Complaint, the Respondent violated the conditions of Chapter 468.112(2)(e), Florida Statutes, by diverting funds or property received for prosecution or completion of the specified construction project or operation where, as a result of the diversion the contractor is or will be unable to fulfill the terms of his obligation or contract.

   FINDINGS OF FACT

   
   

   1. James R. Johnson holds general contractor's certificate number 004762 and has been doing business as J. R. Johnson Company, a Florida corporation from a period around March 23, 1973 up to and including the time of the allegation set forth in the administrative complaint.

      
      

   2. On or about October 16, 1974, James R. Johnson, d/b/a J.

      R. Johnson Company, a Florida corporation, entered into a contract with The Sisters of St. Joseph, Inc., a nonprofit Florida corporation to build the Villa Folora Addition, St. Augustine, Florida, for a contract price of $177,244.00. Petitioner's Exhibit "A", admitted into evidence is a copy of the contract. During the course of the work on the project, J. R. Johnson Company supplied The Sisters of St. Joseph, Inc., with sworn certificates and applications for payment as signed by its employee and agent, one Frank Jaquett, which certified that all suppliers of labor, services and materials were being duly paid. The applications and certification of payments are found in Petitioner's Exhibit "B", admitted into evidence.

      
      

   3. At the period of about February 4, 1975, The Sisters of St. Joseph, Inc., had paid J. R. Johnson Company the sums of

      $31,434, $52,844, and $51,785, representing the payments for the certificates and applications for payment as set forth in Petitioner's Exhibit "B".

      
      

   4. At the time the Respondent was working on the subject project, he was also doing work in North Carolina. One of the projects in North Carolina was a shopping mall identified as Berkley Mall. This project had been started in 1974 and around June 25, 1974, the lender on that project failed financially and problems commenced. Between February 7 and February 15, 1975, the bonding agent on the mall project in North Carolina went into bankruptcy.

      
      

   5. One of the subcontractors on the St. Augustine project, was a partnership known as AAA Plastering, in which George Chandler was a 50 percent owner. On February 25, 1975, AAA Plastering placed a claim of a lien on the project in the amount of $18,000. This claim of lien is shown in Petitioner's composite Exhibit #C, admitted into evidence. In January, 1975, the AAA Plastering had been paid $1,600 for work done on the project.

      This payment was made by J. R. Johnson Company. Subsequent to that date, no further payment has been made by J. R. Johnson Company to AAA Plastering. After the January payment of $1,600,

      AAA Plastering was entitled to $16,200 further payment, based upon final calculations under the contract terms. There had been a dispute between the Respondent and AAA Plastering about the quality of the plasterer's work, and this was indicated in testimony given in the course of the hearing, and supported by Respondent's Exhibit "A", which is a letter from the architect commenting on the work itself. The Respondent's Exhibit "A" was admitted into evidence. Nonetheless, the work was completed by AAA Plastering and payment over and above the $1,600 payment was not forthcoming from the Respondent. The only additional payment which AAA Plastering company did receive was $7,620, which was a result of a court disbursement after the Respondent had failed to make the payments and the owner of the project had entered into the suit and made disbursement. AAA Plastering Company gave a satisfaction of lien in return for the payment of $7,620.

      
      

   6. Other liens had been filed against the project as shown in Petitioner's composite Exhibit "C". These liens had reached amounts as high as $76,000 in April, 1975. An amount of $41,181 was paid out through the court in satisfying these liens that had been recorded. All liens, including the AAA Plastering Company lien were for labor, services or materials supplied by the said subcontractors to the Villa Flora Addition for which J. R. Johnson Company had made application for payments in three payment requests. The J. R. Johnson Company did not pay the money received from The Sisters of St. Joseph, Inc., to the subcontractors who had filed the said liens, the liens being filed in February and March, 1975.

      
      

   7. The Petitioner's Exhibit B", shows that the stucco and drywall work, in which the AAA Platering Company was involved, was applied for and certified for payment by the representative of the Respondent in the amount of $4,967 for the period of November 25, 1974 through December 30, 1974 and in the amount of $16,143 for the period of December 30, 1974 through January 24, 1974. As indicated before, the approximate amount of the AAA Plastering Company contract was in the vicinity of $18,000, for which the AAA Plastering Company was only paid $1,600 from the Respondent. Notwithstanding the Respondent's contention that the work by the AAA Plastering Company was not up to standards and did not warrant a 100 percent satisfaction of the agreement with the AAA Plastering Company, the Respondent has not adequately explained the disparity between the $1,600 paid and the $17,800 requested. The Respondent and his bookkeeper, Robert Bensinger are unable to identify the Respondent's position on the per- centage amount of payment which they felt the AAA Plastering Company was entitled to. George Chandler, a partner in the AAA Plastering Company at

      the time of the contract, indicated that in February, 1975 he had approached the Respondent, in the person of Mr. Bensinger for payment over and above the $1,600 that he had been given. Mr.

      Chandler approached Mr. Bensinger because he felt that the AAA Plastering Company had completed the project and was entitled to payment. According to Chandler, Bensinger told him that he could not pay him the money because the money that had been paid by the owner in the Villa Flora project had been sent to the North Carolina Project and any payment would be made to AAA Plastering Company upon receipt of payment due on the North Carolina project.

      
      

   8. At the time that the North Carolina project, the Villa Flora project and several other projects were under way, the Respondent had a common bank account for all those projects, in which moneys received from the owners were kept.

      
      

   9. Based upon a review of the testimony and the documents offered into evidence and specifically of Mr. Chandler, it is determined as a matter of fact, that AAA Plastering Company was entitled to a greater portion of those funds received from the owner in the form of disbursements to the Respondent, than it received and it is further determined that money was taken from the Villa Flora project and used to honor obligations on the project in North Carolina.

      
      

      CONCLUSIONS OF LAW

      
      

   10. It is concluded as a matter of law, based upon the facts which have been recounted, that the Respondent diverted funds or property received for prosecution or completion of the Villa Flora construction project or operation where, as a result of that diversion, the contractor was unable to fulfill the terms of his obligation or contract, in violation of Chapter 468.112(2)(e), Florida Statutes.

RECOMMENDATIONS

It is recommended that the Petitioner revoke the certified general contractor's license of James R. Johnson, Number 004762.

DONE and ENTERED this 22nd day of July, 1976, in Tallahassee, Florida.

CHARLES C. ADAMS

Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

COPIES FURNISHED:

Barry S. Sinoff, Esquire 1010 Blackstone Building

233 East Bay Street Jacksonville, Florida 32202

Eugene Loftin, Esquire 1636 Shadowood Lane

Jacksonville, Florida 32207

================================================================= AGENCY FINAL ORDER

================================================================= BEFORE THE FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD

FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD,

Petitioner,

vs. CASE NO. 75-2073

JAMES R. JOHNSON dba J. R. JOHNSON COMPANY, CG C004762,

c/o Eugene Loftin, Esquire, 1636 Shadowood Lane,

Jacksonville, Florida 32207,

Respondent.

/

FINAL ORDER OF FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD

This cause came before the FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD at its regular meeting on October 8, 1976.

Respondent was notified of the meeting so that respondent or counsel might appear before the Board. Respondent did appear.

The FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD on October

8, 1976 after consideration of the findings of fact and the recommendations of the recommended order, by motion duly made and seconded voted to suspend respondent's license until such time respondent shows financial responsibility. It is therefore,

ORDERED that the certification of respondent JAMES R. JOHNSON, Number CG C004762 be and is hereby suspended until such time as respondent shows financial responsibility.

Respondent is hereby notified that he has 30 days after receipt of this final order to appeal pursuant to Chapter 120, Florida Statutes, and the Florida Appellate Rules.

Harold Haimowitz President

FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD

Docket for Case No: 75-002073

Orders for Case No: 75-002073