STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 76-825

)

JOHN B. ROBERTS, )

)

Respondent. )

)

RECOMMENDED ORDER

The subject cause came on for hearing before the Division of Administrative Hearings duly designated Hearing Officer, James E. Bradwell, on July 21, 1976, in Pompano Beach, Florida.

APPEARANCES

For Petitioner: Barry Sinoff, Esquire

1010 Blackstone Building

Jacksonville, Florida 32202

For Respondent: John B. Roberts

5172 Northeast 14th Avenue Pompano Beach, Florida 33060

The licensee, John B. Roberts, Respondent, was duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes. The Petitioner, Florida Construction Industry Licensing Board, seeks to revoke the Respondent's certified general contractor's license, license no. CG CA03134 because he allegedly engaged in conduct (hereinafter set forth in detail) violative of Florida Statutes 468.112(2)(e), which is allegedly a diversion of funds or property received for prosecution or completion of a 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. Accordingly, the Board seeks to revoke the Respondent's State Certified General Contractor's License.

FINDINGS OF FACT

1. The Respondent holds certified general contractor's license no. CG CA03134. On or about February 3, 1973, Respondent, d/b/a John B. Roberts Construction Company, entered into a contract with Dominick A. Conte, 4319 Tranquility Drive, Highland Beach, Florida to construct a home for $58,000. It is this contract which is the subject of the Administrative Complaint. In addition to that contract, the Respondent entered into another contract with Mr. Conte to build a triplex for a total contract price of approximately $152,000. Specifically, the Administrative Complaint filed on or about April 6, 1976, copy of which was duly served on the Respondent and incorporated herein by reference,

   alleges that the owner paid the contractor $57,000 and he left the home partially built with no work started on the triplex. Additionally, the complaint alleges that the contractor issued a check on a closed account to Mr. Conte for $16,000 and Respondent never made good on that check. The Respondent and Mr. Conte applied for and received a construction loan commitment from Delray Beach National Bank to construct the house for Mr. Conte. The above parties also applied for a construction loan commitment to construct the triplex in the total amount of $151,000. The Respondent and Mr. Conte received a construction loan commitment for that project in the amount of $131,000.

   Respondent suggested that Mr. Conte deposit $16,000 as equity for the construction loan commitment for the triplex in the form of a check which was given to Respondent, drawn on Delray Beach National Bank. According to the evidence, this check drawn in the amount of $16,000 was never deposited by Roberts as was the understanding that Mr. Conte had received from him to the effect that the $16,000 was to be utilized for equity for the triplex agreement. When Mr. Conte encountered difficulties with Respondent in the construction of his personal home, Mr. Conte demanded the return of the $16,000 check. The Respondent gave him a check drawn on a closed account. Respondent admitted that the account had a nominal amount i.e., less than $100 on deposit when the

   $16,000 check was given to Mr. Conte. When Mr. Conte could not obtain the

   $16,000 from the Respondent, he instituted a civil suit and received a judgement in the amount of $18,500 against the Respondent. In December, 1972, Mr. Conte advanced Respondent $1,000 to obtain various permits and on January 5, 1973, he advanced Respondent an additional $3,000. Respondent commenced construction of the home in March, 1973 and according to the contract he was scheduled to complete it in November, 1973. At that time, according to Mr. Conte, Respondent was only about 50 percent complete at that juncture. At that time the mortgage construction loan was approximately $58,800 and Respondent had received draws of approximately $36,904. Mr. Conte advised the contractor during October that construction would have to speed up or he would be unable to meet the scheduled completion date. Sometime in late October or early November, Respondent abandoned the house. Mr. Conte admits that there were some modifications to the house that he agreed to pay and they were approximately $600 for stone work and approximately $1,300 for additional air conditioning and heating capacity. He received a roofing bill in the amount of $6,000 and when it was not paid, he received a notice of intent to file a lien. He received other bills totalling approximately $800 of which approximately $300 was for window glass and $500 represented an additional amount owed for plumbing expenses. He withdrew the balance of the mortgage commitment (approximately $22,000) and he paid an additional amount of between $20,000 to $25,000 to complete the construction.

   Further in his testimony he recalled adding approximately $600 for stone work and approximately $500 for marble work. He testified that there were no further additions to the house. He completed the house in February, 1974. At the time the Respondent abandoned the house, he had completed the foundation, the concrete block work, framing, stucco work, the roof was partially completed and the walls were erected. For this work, the contractor received approximately

   $40,000 from Mr. Conte. Respondent testified that there was a problem with the mortgage commitment on the triplex and that he later returned a check for the

   $16,000. Respondent testified that when he left the Conte project, he had expended approximately $52,000 from the construction loan draws and that his total expenditures for the project amounted to $86,083, including his profit.

   
   

2. It is undisputed that the parties have entered an agreement to construct a house for a total price of $58,000. Mr. Conte testified without contradiction that he made some changes in the plans which amounted to approximately ($1,900) nineteen hundred dollars which he paid over and above the contract price. Although Respondent argues that at the time that he abandoned

   the Conte project, he had expended approximately eighty-six thousand dollars ($86,000), there was no proof of that testimony despite the agreement and stipulation of all parties that the undersigned would consider such proof when submitted within a stated period of time. Respondent submitted a portion of his checking account which he maintains establishes his position, however, it suffices to say that the documents submitted only establish that monies were paid but the critical link of tieing such amounts to the Conte's project was not established.

   
   

3. The undersinged has considered the various additions to the project. Additionally it was noted that Respondent is a custom home builder and is experienced in the making of contracts for homes such as the one he undertook to construct for Mr. Conte. Since he takes the position that the contract price did not cover, according to him, the numerous changes in the Conte home, he is obliged to establish via some contract or Quantum Merit theory that Mr. Conte got more than he paid for as per their agreement. For it is easy to project that according to Mr. Conte's figures, the contract price would not have been adequate to complete the house based on the draw schedule and the construction progress. Thus at this rate, the project under Respondent's cost-basis, would have exceeded ($172,000) one hundred seventy-two thousand dollars. Clearly Respondent being well versed in the construction of custom homes, knew or should have known that in order to proceed with this project, he would need to renegotiate the contract based on the cost projections at the stage when he abandoned the project. Instead he did not attempt to renegotiate the contract and abandoned the job. He left the project subject to materialmen liens which Mr. Conte paid. Based on these facts, I find and conclude that Respondent failed to account for the amount of money that he drew from the Conte construction loan. Having done so, in view of the record evidence establishing that the project could not be completed within the contract price and the failure of Respondent to establish that the amounts withdrawn from the construction loan account were utilized on the Conte project or that he would be able to fulfill the terms of his contractual obligations, I find that he has engaged in a diversion of funds as alleged.

   
   

   CONCLUSIONS OF LAW

   
   

4. The parties were noticed pursuant to the notice provisions of Chapter 120, F.S.

   
   

5. The authority of the Board is derived from Chapter 468, Florida Statutes.

   
   

6. The Respondent, by utilizing approximately sixty six percent (66 percent) of the funds allocated for a project which he undertook to construct contractually while the project was less than fifty percent (50 percent) complete, engaged in a diversion of funds of a construction project within the meaning of Section 468.112(2)(e), F.S.

RECOMMENDATION

Having found that the Respondent has engaged in a diversion of funds as alleged, I recommend that his certified general contractor's license be suspended for a period of six (6) months.

DONE and ENTERED this 20th day of September, 1976, in Tallahassee, Florida.

COPIES FURNISHED:

Barry Sinoff, Esquire 1010 Blackstone Building

Jacksonville, Florida 32202

John B. Roberts

5172 Northeast 14th Avenue Pompano Beach, Florida 33060

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675

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

=================================================================

Mr. John B. Roberts c/o Glenwood Builders

261 E. Palmetto Park Rd. Boca Raton, Florida 33432

Dear Mr. Roberts:

At a formal hearing held in Pompano Beach, Florida on July 21, 1976, by the Division of Administrative Hearings, it was recommended that John B. Roberts' certified general contractor's license be suspended for a period of sixty days.

On March 4, 1977, at the Florida Construction Industry Licensing Board's montly meeting, the Board voted to dismiss the case against you, therefore the Administrative Complaint is hereby dismissed. Your Certified General Contractor's License remains in full force and effect.

Sincerely,

FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD

J. K. LINNAN Executive Director

cc: Barry S. Sinoff, Esquire 1010 Blackstone Building

229 E. Bay Street Jacksonville, Florida 32202

Mr. James C. Brady, Esquire Zealy & Brady

2691 East Oakland Park Boulevard Suite 400, Mercede West Building Ft. Lauderdale, Florida 33306

Docket for Case No: 76-000825

Orders for Case No: 76-000825