STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )

Petitioner, )

)

vs. ) CASE NO. 77-1096

)

CLAUDE DuVOISIN, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Fort Lauderdale, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Robert T. Benton, II, on October 17, 1977. The parties were represented by counsel:

APPEARANCES

For Petitioner: Mr. Barry Sinoff, Esquire

1010 Blackstone Building

Jacksonville, Florida 32202

For Respondent: Mr. Keith L. Rinehart, Esquire

5353 North Federal Highway, Suite 202 Ft. Lauderdale, Florida 33308

By administrative complaint dated May 27, 1977, petitioner accused respondent of violating Sections 468.112(2)(e) and 468.112(7), Florida Statutes (1975), by diverting to other purposes monies Mr. and Mrs. Abraham Seaman (sic) had paid respondent for construction of a home; and by filing a bankruptcy petition on April 18, 1977, in the United States District Court for the Southern District of Florida.

FINDINGS OF FACT

1. Respondent Claude DuVoisin holds a current, active certified building contractor's license. He has been in the construction business since 1958, when he began in New Jersey. In 1970, respondent moved to Florida, where he has been principally engaged in building "luxury, custom" single family homes. He has built approximately 100 such homes in Florida and, until recently, ordinarily had five to seven under construction at any one time.

   
   

2. On January 23, 1976, respondent, as president of Claude, L. D., Inc., borrowed from the Landmark Bank of Plantation the sum of twenty-five thousand dollars ($25,000.00) at 9 percent interest, and signed a promissory note in that amount by which he committed the corporation to repay principal in ten equal monthly installments, unless demand should earlier be made for repayment of the entire indebtedness. The note provided for payment of interest monthly as it accrued. Claude, L. D., Inc., was a Florida contracting corporation controlled

   by respondent, until its involuntary dissolution on December 11, 1976. Respondent caused the corporation to make installment payments in accordance with the terms of the note on February 23, 1976, on March 31, 1976 (approximately a week late), and on April 23, 1976, but the corporation made no payment in May of 1976. The payment due May 23, 1976, was made on June 8, 1976.

   
   

3. On May 31, 1976, Al and Bessie Seamon entered into a written contract with Claude L. D., Inc., under which the corporation agreed to erect a single family residence on a Broward County site owned by the Seamons, in exchange for one hundred forty-seven thousand dollars ($147,000.00), Even before the agreement was executed, the Seamons paid Claude L. D, Inc., one thousand dollars ($1,000.00). The day after the contract was signed, one of the Seamons called from New York, requesting certain changes in the plans, which resulted in two months' delay in starting work under the contract. As work progressed, the Seamons requested more than 100 additional changes. One of these changes, involving the texture of the plaster on certain inside walls, was reduced to writing and signed by the parties to the original contract.

   
   

4. From time to time, the Seamons made installment payments under the contract. By January 18, 1977, those payments aggregated eighty-eight thousand four hundred twenty-one and seventy-four hundredths dollars ($88,421.74). Respondent caused these moneys to be deposited in accounts belonging to Claude

   L. D., Inc., the same accounts from which the loan to Landmark Bank of Plantation was repaid, and from which were made disbursements for labor and materials for the half dozen houses Claude L. D., Inc., had under construction, including the Seamons'. No money from corporate accounts was diverted to respondent's personal use.

   
   

5. When Mr. Seamon received a notice of lien from a roofing contractor with whom respondent had subcontracted, he inquired of respondent why the roofer had not been paid. Respondent said there was a crack in the roof he wanted the roofer to repair before being paid. Later the Seamons received a notice of lien from the contractor who installed the intercom system in the house. The Seamons had dealt directly with the intercom contractor, but the notices of lien raised questions in their minds and a meeting was scheduled with respondent. In January or February of 1977, respondent and his wife met the Seamons in a model home respondent had built. When the Seamons asked for an accounting of all moneys paid pursuant to the contract, respondent indicated that part of the money had gone to repay the loan from Landmark Bank of Plantation. Ms. Jeanne Klinger accompanied the Seamons to a second meeting, at a lawyer's office, where respondent again indicated that some of the money paid by the Seamons had been used to pay back a bank loan.

   
   

6. On April 18, 1977, Respondent filed a petition in bankruptcy in the United States District Court for the Southern District of Florida. Respondent did not complete construction of the Seamons' home.

   
   

7. The foregoing findings of fact should be read in conjunction with the statement required by Stucky's of Eastman, Georgia v. Department of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976), which appears as an appendix to the order.

   
   

   CONCLUSIONS OF LAW

   
   

8. Respondent moved ore tenus to dismiss the portion of the administrative complaint grounded on his filing a petition in bankruptcy, citing Perez v. Campbell, 402 U.S. 537, 29 L. Ed. 2d 223, 91 S. Ct. 1704 (1971) and Rutledge v.

   City of Shreveport, 387 F. Supp. 1277 (W. D. La. 1975). Essentially, respondent contends that Section 468.112(7), Florida Statutes (1975), which provides that "filing of a petition in bankruptcy . . . for the business of the registrant . .

   . may be considered . . . as just cause for suspension of . . . registration," is repugnant to the Supremacy Clause of the United States Constitution, Art. VI, cl. 2, in that Section 468.112(7) purports to authorize state law sanctions against contractors who exercise their federal statutory rights under the Bankruptcy Act. The motion to dismiss was denied on the ground that such a contention is properly addressed to the judiciary; as part of the executive branch of state government, the Division of Administrative Hearings had no authority to declare statutes unconstitutional.

   
   

9. Petitioner established that respondent filed a petition in bankruptcy. Petitioner also established that respondent was guilty of a "[d]iversion of funds . . . received for prosecution or completion of a specified construction project or operation where as a result of the diversion the contractor . . . [wash unable to fulfill the terms of his . . . contract." Section 468.112(2)(e), Florida Statutes (1975). Petitioner failed to prove that respondent had diverted money "to pay off a personal debt," but did establish that respondent used "monies paid to his company [by the Seamons] . . . for payment of corporate indebtedness."

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

1. That respondent's certified building contractor's license be suspended until and unless respondent is discharged in bankruptcy.

   
   

2. That respondent be on probation for a period of one year following restoration of his certified building con tractor's license, and that respondent be required to keep separate accounts for each project or operation with which he becomes involved while on probation.

DONE and ENTERED this 4th day of November, 1977, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

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

APPENDIX

Paragraph one of respondent's proposed findings of fact has been adopted, in substance, insofar as relevant, but much of the paragraph consists of proposed conclusions of law, which have not been adopted.

Paragraph two of respondent's proposed findings of fact has been adopted, in substance, insofar as relevant, but much of the paragraph consists of proposed conclusions of law, which have not been adopted.

COPIES FURNISHED:

Mr. Barry Sinoff, Esquire 1010 Blackstone Building

Jacksonville, Florida 32202

Mr. Keith L. Rinehart, Esquire Suite 202

5353 North Federal Highway

Ft. Lauderdale, Florida 33308

Docket for Case No: 77-001096

Orders for Case No: 77-001096