STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 76-1807

)

ABRAHAM SCOTT, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in the above styled cause on January 19, 1977, in Jacksonville, Florida.

APPEARANCES

For Petitioner: Barry Sinoff, Esquire

1010 Blackstone Building

Jacksonville, Florida 32202

By administrative complaint filed August 2, 1976, the Florida Construction Industry Licensing Board (FCILB, Petitioner herein) seeks to revoke the building contractor's license of Abraham Scott (herein called the Respondent). As grounds therefor, it is alleged that Respondent diverted 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 in violation of Chapter 468.112(2)(e), F.S.

Based upon my observations of the witnesses and their demeanor while testifying, the oral testimony and the documentary evidence received during the course of this hearing, I make the following:

FINDINGS OF FACT

1. Abraham Scott, Jr., is a registered general contractor with the FCILB and holds general contractor's license no. RG0008305.

   
   

2. Pursuant to an agreement entered during April, 1975, Respondent and Mrs. Ruth Jenkins of Lake Butler entered into a contract for construction of a home at a cost of $37,000. To finance the project, Mrs. Jenkins secured a loan from Guaranty Federal Savings & Loan Association of Starke, Florida in the amount of $30,600 and she additionally paid Respondent approximately $5,913.57. Guaranty Federal Savings & Loan had disbursed approximately 90 percent of the construction loan to Respondent when Mrs. Jenkins received liens filed against her property in the amount of approximately $9,579.53. The lienors included Lake City Industries, North Florida Concrete, Mayo Electric, Roy Ward Wholesale

Distributors, Sawyer Slade Gas Company and a local carpet distributor. At that juncture, Mrs. Jenkins complained to Respondent regarding the liens filed against her property and the fact that the house was not completed as per their agreement to no avail. Thereafter, Mrs. Jenkins contacted Mr. Harold K. Davis, Branch Manager of Guaranty Federal Savings & Loan Association, who terminated all further disbursements of the construction loan. At that point, approximately $28,436.50 had been disbursed to Respondent.

1. Mr. Hermon Cherry, investigator with FCILB investigated the Jenkins' complaint and discussed the matter with Respondent. Mr. Cherry testified that Respondent advised him that he had used part of the money from the Jenkins' project to complete a job in Hamilton County and that when the proceeds from that job were received, those receipts would be used to satisfy liens placed against the Jenkins property.

   
   

2. Petitioner's Exhibit #3, is a statement given to investigator Cherry on March 22, 1976, by Respondent. The statement is somewhat corroborative of Cherry's testimony that Respondent used portions of the construction loan monies received from the Jenkins project to complete another job. Respondent acknowledged that he was having financial problems in another county "in which I have money from this job tied in the amount of $2,500. As soon as I can collect this money from these jobs, I will clear this matter up". (See Petitioner's Exhibit #3).

   
   

3. Respondent acknowledged that he had monies due him from a project he had completed in Jasper, Florida and that this job was completed prior to the commencement of the Jenkins project. However, he failed to state that all obligations due and owing on that job in Jasper had been satisfied or that all unpaid subcontractors, materialmen, etc., who furnished materials, supplies or labor, in connection with the Jasper project had been paid. Based on that statement and Respondent's acknowledgement that the liens had been placed on the Jenkins project based on his financial difficulties with another project in which he clearly stated in Petitioner's Exhibit #3 that money from the Jenkins project had been tied up on another project, I find that the two matters, when coupled together provides proof positive that the Respondent diverted funds received for completion or the Jenkins project to another project and as a result thereof, he was unable to fulfill the terms of his obligation and contract with Mrs. Jenkins, in violation of Chapter 468.112(2)(e).

   
   

4. During the course of the hearing, Respondent introduced evidence indicating that a settlement agreement was being worked out to resolve the differences with Mrs. Jenkins property and to satisfy all lien claimants who had filed liens against Mrs. Jenkins' property. Mrs. Jenkins acknowledged the settlement agreement and indicated her willingness to accept the terms thereof as full satisfaction of Respondent's obligations to her pursuant to the construction of her home. (See Respondent's Exhibit #1.) Respondent testified further that he intends to fulfill all of the remaining deficiencies that may exist with respect to the Jenkins property and that he at all times intended to fulfill his obligations to her. For these reasons, I shall recommend that the Respondent's registered general contractor's license be suspended rather than revoked.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action.

6. The Respondent's acts and conduct including his admission that he had diverted monies received from the Jenkins project to another project in another county, constitutes a violation of Chapter 46o.112(2)(e), Florida Statutes.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, I recommend that the Respondent's registered general contractor's license be suspended for a period of 90 days in accord with the authority contained in Chapter 468.112(3)(a), F.S.

DONE AND ENTERED this 21st day of February, 1977, 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 32211

Mr. Abraham Scott, Jr. Route 1, Box 503

Lake City, Florida

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings

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

Docket for Case No: 76-001807

Orders for Case No: 76-001807