H. JOHNSON AND ASSOCIATES, )
Respondent. )
This case was heard pursuant to notice on May 25, 1978 in the Lee County Courthouse, Lee County, Florida by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was presented on an administrative complaint filed by the Florida Construction Industry Licensing Board against Richard Young, d/b/a H. H. Johnson and Associates alleging that the Cape Coral Contractors Licensing Board had revoked Young's license and therefore Young was in vloiation of Section 468.112(2)(f), Florida Statutes.
For Respondent: E. G. Couse, Esquire
Post Office Drawer 1647 Ft. Myers, Florida 33902
Richard Young is a registered building contractor holding license number RB0027773. Young does business as H. H. Johnson and Associates.
On July 16, 1976, Young, in behalf of H. H. Johnson and Associates, entered into a contract for the construction of a single family residence with Anthony Ventura aid his wife, Patricia Ventura. This contract called for the construction of said residence within six months.
On or about December 25, 1976, the Ventura's moved into the house which had not been finished by Johnson without the approval of the contractor. After Ventura had moved in, Young obtained a certificate of occupancy from the local building authorities and continued to finish the house.
Thereafter, certain problems developed with final finishing work on the house, specifically, a drainage problem involving the driveway and garage. Ventura, who had occupied the house, would not go to closing and make payment of the final draw as payment on the construction. In an effort to correct the drainage problem, a concrete cap was poured in the garage of the Ventura residence. This concrete cap subsequently cracked and there were other problems relating to it. It was at this point that Ventura made a complaint to the Cape Coral Licensing Board. The Cape Coral Board arranged a meeting between Ventura and Young.
At the meeting between Ventura and Young, officials and members of the Cape Coral Building Construction Board ware present. This meeting resulted in an agreement as stated in the letter of the Board dated June 30, 1977 (Exhibit 7)
This letter lists specifically the agreement between Ventura and Young which was intended to resolve the complaint pending before the Board. The letter stated as follows:
Dear Mr. Young,
In our meeting on Thursday past it was my understanding that the following agreement was reached regarding the Ventura home.
The garage floor was to be replaced and the hot water heater elevated to proper level.
A drain was to be installed just in front of the garage door.
Door to utility room from garage was to be swung in the opposite direction to open out.
Any other warranty items such as the wall settlement, cracks and etc., were to be corrected under the normal warranty.
Mr. Ventura and yourself were to agree on a sum to be placed in escrow to insure completion. This item is strictly between you and he and does not involve the City of Cape Coral at this point.
Sincerely,
/s/
Mr. Herbert J. Werner, Director Department of Community Development
HJW/lec
cc: Mr. Ventura, complainant
Mr. Jack Scheall, Chairman of the Board
On the following day, July 1, 1977, Mr. E. G. Couse, legal counsel for Mr. Young, received a letter from Barbara A. Burkett, counsel for Mr. Ventura. See Exhibit 10. This letter indicated a dispute between Ventura and Young regarding credits for costs incurred by Ventura because of an alleged delay In construction, and certain material liens. Exhibit 10, a letter reflects that the amount of the final draw was $6,594, that Ventura asserted that Young was entitled to only $4,231 and that Young asserted a claim to $5,930. Burkett, in behalf of her client, proposed payment of the final draw in the amount of $6,994 to an escrow agent who would immediately disburse $2,762 directly to Mr. Ventura and disburse the remaining balance of $4,321 to H. E. Johnson and Associates upon completion of repairs as specified in the letter (Exhibit 10) and upon written acknowledgement of Mr. Ventura that tie repairs had been made and were satisfactory. In addition to the items listed in the letter of June 30, the Burkett letter lists repairs to the tile in the bathroom and repairs to a large sliding glass door in the pool area which also were to be repaired.
Because of his inability to reach any agreement with Ventura, Young refused to perform any of the repairs listed in Werner's letter of June 30, 1977 although he did make repairs to the bathroom. The conflict existing between the parties over the escrowed amount were brought to the attention of the Board by Mr. Couse as reflected in the minutes of the Board meeting of September 21, 1977 (Exhibit 1). The Board's position was stated by Mr. Kirby on page 2 of the minutes wherein Mr. Kirby stated that the Board's responsibility in the matter was to determine whether poor workmanship existed and that the matte of financial obligations did not lie within the jurisdiction of the Board. The Board then determined that the contractor was guilty of poor or faulty workmanship and thereby was in violation of Section 5-1/2-21 of the Cape Coral Code. The Board thereafter suspended the license of R. M. Young d/b/a H. H. Johnson and Associates for a period of 30 days effective immediately.
This decision of the Board was appealed to the City Council pursuant to the Cape Coral Code which remanded the Board's order for reconsideration of the penalty. As a result of the remand, another hearing was held on January 11, 1978. The minutes of this meeting reflect that Mr. Young and Mr. Couse were not present. See Exhibit 3. At this second proceeding additional evidence was taken to include statements by Mr. Ventura that he had not seen Mr. Young up until the time or the hearing, that the concrete contractor, Grimsley, had told him that he would repair the driveway and that the garage floor had been repoured and the repair was satisfactory to the customer. Bared upon Ventura's testimony and the testimony of others at this new proceeding, the Board voted to revoke the license of Young. This meeting resulted in the issuance of two orders, Exhibits 4 and 5. Exhibit 5 was identified as an order issued in error revoking Young's license for a period of 90 days. This order is dated January 11, 1978. On January 12, 1978 another order was issued which revoked Young's license effective January 11, 1978. These orders of the Board were appealed to the City Council on the basis of the failure of notice by Mr. Young. The City Council, having reviewed this, granted the appeal and referred the matter back to the Board to conduct another hearing at which Mr. Young could appear. This resulted in a hearing, the minutes of which were filed as late filed Exhibit A. This meeting was conducted on March 15, 1978. At this meeting Mr. Rollings, representing Mr. Ventura and Mr. Couse, representing Mr. Young were permitted to make argument to the Board. Mr. Rollings represented that all of the items the Board had requested the contractor to perform had been done two days prior to the meeting of March 15, 1978. Mr. Rollings represented that the concrete subcontractor had the work on his own accord. Mr. Rollings indicated that Mr. Ventura did not feel the Board should relieve Mr. Young of any possible
punishment and that the Board's responsibility was to make the contractor responsible for his work and not to settle money disputes and things of this nature. Mr. Couse argued that the work had been done and the delay was solely the result of the finance dispute between Young and Ventura. The Board heard the testimony of Grimsley and then having heard the arguments of counsel, Jack Scheall, a member of the Board, moved and it was seconded, that "the appeal be denied". Mr. Kirby, a member of the Board, asked "what the denial was for exactly." Mr. Tolisano, a member of the Board, replied, "the license was still revoked." A voice vote was taken and the motion carried.
CONCLUSIONS OF LAW
The complaint against Young is based on the provisions of Section 468.112(2)(f), Florida Statutes, which provides that "disciplinary action by any municipality, city or county, which action shall be reviewed by the State Board before the State Board takes my disciplinary action of its own," shall be grounds for disciplinary action by the State Board.
Review of the Cape Coral Board's action reveals several errors which must be considered by the State Board. The first problem in this case was the local Board's initial attempt to settle the dispute. Pursuant to its actions, an agreement was reached between the parties for the builder to fix the listed items when the owner paid the money into the escrow agent. The operative word is "when". If the parties were unable to agree to the conditions precedent, then there was no performance required under the agreement. The owner had no right to demand further action and the Board had no right to proceed to enforce the code against the builder after the parties settled the dispute when there was no showing that Young bargained in bad faith or refused to reach any agreement with Ventura. To the contrary, it was Ventura who changed the items which were to be performed, made demand for immediate payment of $2,700 to him and limited payment to Young based upon Ventura's approval of work done.
The second problem was the City Council's remand of the Board' s decision to the Board for reconsideration of the penalty without having made specific findings upon which to base its decision. There is no record of any additional findings or considerations by the City Council upon which the remand was made.
The third problem was the Board' a opening the record for the taking of additional testimony not related to extenuation and mitigation after the City Council had remanded the case to it. At this proceeding to which Young received no notice, additional general testimony was taken; however, when after Young's appeal no opportunity was given to rebutt the evidence presented at the first hearing.
The last problem was the Board's vote to increase the penalty although Mr. Rollings, counsel for Ventura, admitted that all the work under the agreement had been performed at least two days prior to the Board's consideration of increasing the penalty.
Assuming Ventura had a legitimate claim, when he agreed to the Board mediated settlement contingent upon the settlement of the financial dispute, Ventura accepted that resolution. He could not precipitate a breach of the agreement and then seek enforcement of the Board. Further contrary to the Board's position, in the absence of a showing of bad faith on the part of the contractor, the Board accepted the agreement of the parties as settling the claims of Ventura. The Board's Increase of the penalty for poor workmanship
after the work had been corrected and when the delay was occasioned by a financial dispute not only inconsistent with fair play but was legally inappropriate when the Board ratified the parties' agreement.
Section 468.112(2)(f), Florida Statutes, provides that the State Board shall take disciplinary action only upon review of the local Board's action. In this instance the facts do not show any bad faith upon the part of the licensee. Young apparently attempted to satisfy Ventura even though Ventura had occupied the house before closing and refused to pay the final draw due on the construction contract. Young agreed to a settlement at the institution of the local Board and it was Ventura who established different or unreasonable conditions upon the disbursement from escrow which resulted in Young's refusal to perform any of the work until a workable escrow arrangement had been made.
