STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 76-1241

)

E. J. LAMBERTH, III )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held pursuant to notice in Room B-20, Police Building, 2801 Salzedo Avenue, Coral Gables, Florida on September 23, 1976 before Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Barry Sinoff, Esquire

1010 Blackstone Building

Jacksonville, Florida 32202

For Respondent: James W. Bowling, Esquire

Vernis and Bowling Sailboat Bay, PH II

2951 South Bayshore Drive Coconut Grove, Florida 33133

This matter came on to be heard upon the Administrative Complaint filed by the Florida Construction Industry Licensing Board against E. J. Lamberth, III, alleging that Lamberth had violated Section 100-22(h)(3), Chapter 10, Code of Metropolitan Dade County in that he obtained building permits for construction work to be done but did not actually supervise, direct or control the construction covered by said permits, and that Lamberth violated Florida Statute 468.112(2)(a) and Florida Statute 468.112(2)(c) by willfully or deliberately disregarding and violating the applicable building code of a municipality and county of the State of Florida and knowingly combined and conspired with uncertified or unregistered persons by allowing his certificate or registration to be used by any uncertified or unregistered person with the intent to evade the provisions of Chapter 468, Part II, Florida Statutes.

Lamberth requested a formal hearing on the allegations against him as contained in the Administrative Complaint and the Florida Construction Industry Licensing Board referred this matter to the Division of Administrative Hearings to conduct the formal hearing pursuant to Chapter 120, Florida Statutes.

FINDINGS OF FACT

1. E. J. Lamberth, III, is a certified general contractor having been licensed by the Florida Construction Industry Licensing Board. Mr. Lamberth's license was not renewed by the Florida Construction Industry Licensing Board when it expired in June, 1975. However, the Board does not question Mr. Lamberth's right to issuance of such a license pending the outcome of this hearing, and the failure of the Board to reissue Mr. Lamberth's license is an apparent administrative oversight.

   
   

2. Mr. Lamberth applied and obtained building permits as a Construction Industry Licensing Board Certified General Contractor for construction of modifications or additions to the homes of Mr. and Mrs. Cohen, Mr. and Mrs. Retter, and Mr. and Mrs. DeChant. Copies of the applications for building permits were introduced in the evidence. Exhibit I is the application for the Retter's permit; Exhibit V is the application for the permit for the Cohen's permit; and Exhibit VII is the application for the DeChant's building permit.

   
   

3. Lamberth notified the Board by letter received by the Board on or about December 24, 1974 of his resignation as qualifier for Addition Builders, Inc.

   
   

4. Lamberth's employment with Addition Builders, Inc. began when he answered a newspaper advertisement for a certified general contractor placed by Richard Butler. Butler was looking for a certified general contractor to supervise construction and to obtain building permits for a construction business which he was at that time incorporating. Lamberth checked with the local Better Business Bureau and having determined that there were no complaints against Butler, entered into an employment agreement with Butler. Subsequently, Butler did incorporate and E. J. Lamberth be came Vice-president for Addition Builders, Inc., a Florida corporation. Lamberth's duties were to inspect plans for any modification or additions which Addition Builders, Inc. contracted to construct, to supervise construction, and to be the qualifying agent for Addition Builders, Inc.

   
   

5. In August 1974, Richard Butler entered into a contract in behalf of Addition Builders, Inc. with Michael and Carol Retter for the construction of two-bedroom/one-bath addition to their house located at 460 N. W. Opa Locka Boulevard, North Miami, Florida. Construction of this addition was to take approximately three to six months. Construction began in September of 1974.

   
   

6. The construction at the Retter's residence was supervised by the building superintendent or chief carpenter, Mr. Braddock. Construction on the addition was intermittent during September and slowed to a halt in October 1974. The Retters called Addition Builders, Inc. in November and were advised by Mr. Braddock that Mr. Butler had withdrawn from the business but that Braddock would continue with the construction and complete the addition. Construction on the Retter's addition was approximately 50 percent complete, the floor, roof and walls having been built but the windows, doors and plumbing fixtures not having been set. Braddock came and did some work and advised the Retters that he had taken over the business from Butler. Mrs. Retter testified that she was working full-time during this period but that on days when she and her husband were home the construction personnel came at 9:00 a.m. and left in mid-afternoon. The personnel who came, with the exception of Braddock, were subcontractors employed by Addition Builders, Inc. During this period, she did not see Mr. Lamberth who she saw for the first time the day of the formal hearing. The Retters first learned of Lamberth's association with Addition Builders, Inc. from the officials of the city of North Miami, who gave the Retters Lamberth's name as the party who had drawn the construction permit. In January the Retters

   contacted Mr. Lamberth who advised them that he had withdrawn from the company and could not help them.

   
   

7. The contract price for the contract between the Retters and Addition Builders, Inc. was for $8,900 of which the Retters had paid $8,000 at the time construction of the addition ceased. It cost the Retters approximately $2,000 to finish the construction of the addition after Addition Builders, Inc. ceased to perform any work on the job.

   
   

8. E. J. Lamberth, III, has been a full-time employee of the Dade County Recreation Department since January 9, 1963. He was employed by Richard Butler as a qualifying agent for Addition Builders, Inc. and was made Vice-president of that corporation. Addition Builders, Inc. began operation in late July or August of 1974. Lamberth performed the duties for which he was employed. He drew the construction permits required, inspected plans for modifications and additions to be built by Addition Builders, Inc., and visited the various construction sites of the corporation at noon and in the late afternoon to determine the progress being made by the subcontractors employed by Addition Builders, Inc. Through his contact with Mr. Braddock and the subcontractors employed by Addition Builders, Inc., Lamberth arranged for the scheduling of the subcontractors on the various jobs. At this time, Addition Builders, Inc. had between six and eight projects under construction. Lamberth was able to determine the progress being made on the various sites through his periodic inspections two to three times per week. These inspections and his conversations with the subcontractors revealed in early October that Butler was countermanding Lamberth's directions and canceling Lamberth's instructions given to subcontractors. Because of these activities, Lamberth advised Butler that he, Lamberth, would have to be in charge of the projects underway and schedule work on the projects or he would have to withdraw as qualifying agent for Addition Builders, Inc. Because of Butler's continued interference, Lamberth eventually resigned from his position with Addition Builders, Inc. in December 1974.

   
   

9. Lamberth was not a stockholder in Addition Builders, Inc. When the work began on the various additions, Lamberth received 3 percent of the contract price as his compensation for his services to Addition Builders, Inc.

   Subsequent to being advised of the problems with Addition Builders, Inc., Lamberth attempted to locate Richard Butler. Richard Butler could not be located and has apparently left the State of Florida.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Respondent has raised the lack of the jurisdiction of the Board to consider the charges in this case on the basis of the provisions of Section 468.112(1), Florida Statutes, which states that where any complaint to the State Board which involves a contractor certified or registered under Part II of Chapter 468 which occurs in any area of the State which has a local Board, that the State Board shall forward the complaint to the local Board where the alleged violation occurred for action of the local Board. Only when there is no local Board shall the State Board acquire jurisdiction. The evidence indicates that in this case the local Board did take cognizance of the complaints against Addition Builders, Inc. and Mr. Lamberth and in a preliminary hearing, of which Mr. Lamberth apparently did not receive notice and did not have the right to appear and cross examine the complainants against him, the local Board determined that there was probable cause to refer the complaints against Addition Builders, Inc. and Mr. Lamberth to the State Board for disciplinary action.

11. Clearly, Section 468.112 indicates a joint jurisdiction over Board certified or registered contractors. While the State Board clearly has authority to consider violations where no local Board exists, the Hearing Officer sees no prohibition against a properly authorized local Board from referring a complaint to the State Board for disciplinary action. The jurisdiction of the State Board would appear to be concurrent with neither the State Board nor the local Board exercising exclusive jurisdiction to determine the validity of complaints.

    
    

12. The testimony and evidence clearly establishes what activities Lamberth performed for Addition Builders, Inc. He was the qualifying agent for Addition Builders, Inc., he drew construction permits for Addition Builders, Inc., he reviewed plans, he scheduled the work of subcontractors, he directed the work of Mr. Braddock, he reviewed the progress of construction at the various sites and generally supervised those matters relating to construction for Addition Builders, Inc.

    
    

13. Section 468.107(2) provides in pertinent part regarding the application of a business entity that:

    
    

    "Such applications shall also show that the person applying for the examination is legally qualified to act for the busi-

    ness organization in all matters connected with its contracting business; and that he has the authority to supervise construction undertaken by such business organization." (e.s.).

    
    

14. Although the application of Addition Builders, Inc. was not submitted into evidence, it was licensed; therefore, it is presumed that the State Board required Addition Builders, Inc. to comply with the provisions of this part prior to being licensed.

    
    

15. As corporate Vice-president, his primary duties and functions within the corporation were limited to the supervision and direction of construction. He was assisted on the site in this regard by Mr. Braddock, the construction superintendent or chief carpenter for Addition Builders, Inc. From the testimony and evidence, while legally qualified to act, Lamberth lacked the authority to act for the business in all matters connected with its contracting business, although he had authority to supervise construction undertaken by the business. It is also clear that Butler's interference with Lamberth's supervisory authority did not evidence itself until the Retter's construction was underway and had bogged down. At this point, Lamberth contacted Butler and asserted his authority as chief of construction and advised Butler not to interfere. When Butler continued to interfere, Lamberth threatened to resign as qualifying agent for the company if Butler did not stop. When Butler did not stop, Lamberth did resign.

    
    

16. From the testimony and evidence Lamberth did supervise and direct construction as contemplated by the Statute. He also fulfilled his contractual duties to Addition Builders, Inc. and their customers. However, Lamberth did not exercise that total degree of control and involvement with the business affairs of Addition Builders, Inc. necessary to prevent Butler's apparent defalcation of the corporation's cash assets. Under the circumstances, the question which arises is, "Should a certified general contractor be held

responsible for the misfeasance or malfeasance of another corporate officer?" To place the additional requirement upon a certified contractor within a corporate organization to manage the financial affairs of the business is to divert his attentions from supervising and directing construction. In a business where there is a differentiation of function and responsibility, the primary responsibility of the qualifying agent within a corporate organization is to direct and supervise construction, to monitor the business affairs and through the performance of his duties ensure the business success of the corporation and thereby protect the corporation's customers. The qualifying agent, of course, has the duty to assert himself as the qualifying agent for the corporation when, as in this instance, it comes to his attention that the interest of customers of the corporation are in danger. Lamberth did in fact do this, and asserted his position of qualifier in an attempt to make Butler, as the business head of the corporation, perform on the contracts. When Butler did not perform, Lamberth resigned. L. E. Lamberth, III fulfilled his statutory obligations as a certified general contractor and as qualifying agent for Addition Builders, Inc. and did not violate the provisions of the Dade County Code or the Florida Statutes as alleged.

RECOMMENDATIONS

Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Florida Construction Industry Licensing Board take no action against the certificate of L. E. Lamberth, III.

DONE and ORDERED this 12th day of October, 1976 in Tallahassee, Florida.

COPIES FURNISHED:

Barry Sinoff, Esquire 1010 Blackstone Building

Jacksonville, Florida 32202

J. K. Linnan Executive Director

Florida Construction Industry Licensing Board

Post Office Box 8621 Jacksonville, Florida

James W. Bowling, Esquire Vernis and Bowling Sailboat Bay - PH II

2951 South Bayshore Drive Coconut Grove, Florida 33133

STEPHEN F. DEAN

Hearing Officer

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

(904) 488-9675

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

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

FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD,

Petitioner,

vs. CASE NO. 76-1241

E. J. LAMBERTH, III, CG C006734,

P. O. Box 570444, Miami, Florida 33157.

Respondent.

/

FINAL ORDER OF FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD

This cause came before the FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD at its regular meeting on November 5, 1976.

Respondent was sent the Hearing Officer's findings and recommendations and was given at least 10 days to submit written exceptions to the recommended order. 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 November 5, 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 for the period of one year. It is therefore,

ORDERED that the certification of respondent E. J. LAMBERTH, III, Number CG C006734 be and is hereby suspended for the period of one year.

Respondent is hereby notified that he has 30 days after the 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: 76-001241

Orders for Case No: 76-001241