T. Carpenter, on September 30, 1980. The parties were represented by:
For Petitioner: Michael E. Egan, Esquire
For Respondent: Richard M. Cowen, Esquire
312 South Harbour City Boulevard Suite 4, Riverview Building Melbourne, Florida 32901
By amended administrative complaint, Petitioner seeks imposition of a $500 fine and revocation of Respondent's pool contracting license No. RP 0018040 or, in the alternative, suspension of said license pending rehabilitation.
Petitioner charges that Respondent diverted funds received for completion of projects, has been disciplined by a local licensing board, abandoned construction projects, and filed a petition of bankruptcy. Each of these allegations constitutes a cause for disciplinary action by Petitioner under Section 468.112, Florida Statutes (1977). 1/
Atlas Pools, Inc., contracted with Mr. and Mrs. Jerry Thompson in May, 1978, to construct a swimming pool on the Thompson property for a completed price of $5,940. Work ceased in mid-July, 1978, by which time the Thompsons had paid Atlas Pools $5,643. The Thompsons hired another pool contractor to complete the project at additional cost in excess of $2,000.
Atlas Pools contracted with Mr. and Mrs. Dennis Perry in June, 1978, to construct a swimming pool on the Perry property for a completed cost of $5,770. Work ceased in late July, 1978, after the Perrys had paid Atlas Pools $5,474.50.
The Perrys completed the project through self-help and use of another pool contractor at a further cost of $1,566.
Atlas Pools contracted with Mr. and Mrs. Thomas Wolters in June, 1978, to construct a swimming pool on the Wolters' property for a completed cost of
$6,980. Work ceased in mid-July, 1978, after the Wolters had paid Atlas Pools
$6,631. The Wolters completed the pool through self help at an additional cost in excess of $1,300.
Atlas Pools contracted with Mr. and Mrs. Albert Sentman in June, 1978, to construct a spa on the Sentman property for a completed cost of $5,500. The Sentmans paid Atlas Pools a $550 deposit after which the spa was delivered but not installed. The Sentmans completed the project by other means at an additional cost of $6,137.
Respondent abandoned each of the above projects without notice to the customer, who ultimately learned of the company's bankruptcy from a third party source. Each of the four projects described above was completed at a final cost to the purchaser in excess of $900 over the contract price.
The company filed a Voluntary Petition of Bankruptcy with the U.S. District Court, Middle District of Florida, on August 1, 1978. Thereafter, on March 7, 1979, the Brevard County Contractors Licensing Board revoked the certificate held by Atlas Pools for a minimum period of one year, with the requirement that financial rehabilitation be demonstrated as a condition of reinstatement.
At the time of bankruptcy, Respondent was president of Atlas Pools, Inc., and owned one-third of the stock. He was, at all times relevant to this proceeding, the company's only licensed pool contractor. He is currently employed in pool construction work by a licensed contractor.
Proposed findings of fact were submitted by the parties. To the extent these proposed findings have not been adopted herein or are inconsistent with the above findings, they have been specifically rejected as irrelevant or not supported by the evidence.
CONCLUSIONS OF LAW
Section 468.112, Florida Statutes (1977), provides in part: "(2) The following acts constitute cause for
disciplinary action:
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(e) Diversion of funds or property received for prosecution or completion of a specified construction project or operation when as a result of the diversion, the contractor is, or will be, unable to fulfill the terms of his obligation or contract.
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(h) Abandonment of a construction project in which the contractor is engaged or under
contract as a contractor. A project is to be considered abandoned after 90 days if the contractor terminates said project without
notification to the prospective owner and with- out just cause.
(7) The filing of a petition in bankruptcy, either voluntarily or involuntarily, or the making of a composition of creditors or the appointment of a receiver for the business of the registrant or certificate holder may be considered by the board as just cause for suspension of a certificate of registration."
There was no evidence that Respondent or his company diverted any funds in violation of Section 468.112(2)(e). Faulty cost estimating or other management failure could well have resulted in the financial losses, as suggested by the fact of bankruptcy. Therefore, this portion of the charge should be dismissed.
Respondent contends that the abandonment of the projects and bankruptcy discussed herein were acts of the corporation and not a proper basis for disciplinary action by the Petitioner. This argument must be rejected in view of Section 468.107, Florida Statutes (1977), which sets out the requirements for licensing. Under these provisions no business organization may engage in contracting unless a licensed contractor ".... is legally qualified to act for the business organization in all matters connected with its contracting business and that he has authority to supervise construction undertaken by such business organization ..."
As the qualifying licensee for Atlas Pools, Respondent was charged with supervising his company's contracting and construction activities in the public interest. This is not to conclude that Respondent is liable in a personal capacity for damages. Rather, Respondent is responsible from a license standpoint for the project abandonment and renunciation of financial obligations to members of the public through his company's bankruptcy. Therefore, Petitioner has the authority to impose discipline under Sections 468.112(2)(h) and (7), cited above.
Section 468.112 provides in part:
"(1) On its own motion or the verified written complaint of any person, the board may investigate the action of any contractor certified or regis- tered under this part and hold hearings pursuant
to chapter 120; provided, however, when any complaint involves a contractor certified or registered under this part for acts or omissions occurred in any
area of the state which has a local board, the board shall forward the complaint to the municipality, city, or county where the alleged violation occurred for its action. Where no local board exists, the board shall take jurisdiction...
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(2) The following acts constitute cause for disciplinary action:
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(f) Disciplinary action by any municipality, city, or county, which action shall be reviewed by the state board before the state board takes any disciplinary action of its own."
The above provisions recognize the regulatory interest of a local board where, as here, one exists. These provisions also give Petitioner authority to impose discipline for the same acts which led to disciplining by the local board. However, Petitioner is required to review local board action before taking such further disciplinary action.
In this case, there has been no showing of fraud or other willful conduct, nor did the local board impose a fine. Therefore, disciplinary action in this proceeding should be limited to license suspension or revocation.
Section 468.112 provides in part:
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"(4) After suspension of the certificate
or registration on any grounds set forth in this section, the board may remove the suspen- sion on proof of compliance by the contractor with all conditions prescribed by the board for removal of suspension; or, in the absence of such conditions, as in the sound discretion of the board.
(5) After revocation of a certificate or registration, the certificate or registration shall not be renewed or reissued for at least l year after revocation and then only on a showing of rehabilitation of the contractor."
Under the above disciplinary provisions, Petitioner may either suspend Respondent's license until he demonstrates financial rehabilitation, or revoke said license for a minimum period of one year. The local board action has had the effect of denying Respondent the privilege of pool construction contracting since March 7, 1979. Therefore, the more severe penalty of license revocation is not appropriate. Furthermore, imposition of the mandatory one year revocation period could frustrate the "fresh start" concept of Federal Bankruptcy Law which provides that a governmental unit may not deny or refuse to renew a license to a bankrupt or associated person solely because of the bankruptcy. 11 USCS 525
