STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 80-734

) GEORGE C. FULLER d/b/a BASS CREEK ) CORPORATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on August 11, 1980, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Barry S. Sinoff, Esquire

2400 Independent Square

Jacksonville, Florida 32202

For Respondent: George C. Fuller, pro se,

1675 Palm Beach Lake Boulevard West Palm Beach, Florida 33401

ISSUE

Whether Respondent, a certified general contractor, violated the construction industry licensing law, by: (1) acting in the capacity of a contractor under a name other than as set forth on his certificate; (2) diverting construction funds resulting in his unwillingness or inability to perform pursuant to a construction contract; and (3) abandoning three construction projects, and if Respondent is guilty of such violations, the appropriate disciplinary penalty which should be imposed by the Construction Industry Licensing Board.

Conclusions and Recommendation

Conclusions:

Respondent is guilty of the charges that he (1) acted in the capacity of a contractor under a name other than as set forth on his certificate, and (2) abandoned a single construction project; he is not guilty of the charges that he abandoned two other projects, and diverted construction funds which resulted in his unwillingness, or inability to perform pursuant to a construction contract.

Recommendation:

That Respondent's certified general contractor's license be SUSPENDED until such time as Respondent furnishes to the Board satisfactory evidence of having made restitution to purchasers entitled to the return of their deposits made pursuant to Hands High Ranchettes and Bass Creek of Boynton residential purchase agreements.

BACKGROUND

By administrative complaint dated March 24, 1980, the Construction Industry Licensing Board ("Board") charged the Respondent, George C. Fuller ("Fuller") with violating Sections 466.112(2)(d), (e), and (h), Florida Statutes by: (1) acting in the capacity of a contractor under a name other than as set forth on his certificate; (2) diverting construction funds resulting in his unwillingness or inability to perform pursuant to a construction contract; and (3) abandoning three construction projects.

Fuller disputed the factual allegations contained in the Board's complaint and requested a formal hearing pursuant to Section 120.57(1), Florida Statutes (1979). On April 16, 1980, the Board forwarded his request to the Division of Administrative Hearings, and asked that a Hearing Officer be assigned to conduct such a hearing.

By notice of hearing dated May 15, 1980, the final hearing was set for July 15, 1980. On July 1, 1980, counsel for the Board moved for a continuance based on a scheduling conflict, and, without objection by Fuller, the motion was granted and hearing reset for August 11, 1980.

At hearing the Board called Rozeanne White, Robert Kehr, and Muriel F. Mason as its witnesses, and offered Petitioner's Exhibits 1 - 6, each of which was received into evidence. Respondent Fuller testified on his own behalf.

Based on the evidence presented, the following facts are determined:

FINDINGS OF FACT

1. Respondent Fuller holds a currently active certified general contractor's license, no. CG C009750. Fuller is authorized by his certification to perform contracting only under his proper name, or the name of Bass Creek Corporation. (Testimony of Kehr, Fuller)

   
   

2. At all times material hereto, Fuller was a general partner in two Florida limited partnerships: Bass Creek of Boynton Associates, Ltd. and Hands High Ranchettes, Ltd. These partnerships attempted to develop and construct two residential subdivisions in Palm Beach County -- Hands High Ranchettes and Bass Creek. In furtherance of this undertaking Fuller, or his agents, executed written contracts to sell lots within the developments and construct residences thereon. The Board alleged, and presented evidence at hearing for the purpose of establishing, that Fuller violated Chapter 468, Florida Statutes (1978) by his actions relating to contracts executed with three individuals -- Muriel F. Mason, Rozeanne E. White, and George C. Mitchell. (Testimony of Mason, White, Fuller, Petitioner's Exhibits 1 - 6).

   
   

   [AS TO MURIEL F. MASON]

   
   

3. On September 10, 1978, Hands High Ranchettes, Ltd. entered into an Agreement of Purchase of Sale with Muriel F. Mason. By this agreement, Mason

   agreed to purchase a lot, with residence to be constructed thereon, in the Hands High Ranchettes residential development. The contract purchase price was

   $75,930.00. By January, 1979, Mason had paid into the Hands High Escrow Account, pursuant to the contract, an initial deposit of $3,915.00. (Testimony of Mason, Fuller, Petitioner's Exhibits 5, 6)

   
   

4. Early in 1979, the bank rejected her application for a mortgage loan to finance purchase of the property. Consequently, under the contract, Fuller was not required to commence construction on the property. Moreover, Mason subsequently notified Hands High Ranchettes that she no longer wished to proceed with the contract, and requested return of her initial deposit. Under such circumstances, the purchase contract requires, and Fuller admits, that Mason is entitled to the full return of her $3,515.00 deposit. (Testimony of Mason, Fuller, Petitioner's Exhibit 5).

   
   

5. During early July, 1979, Fuller notified Mason that 1e intended to return her $3,815.00 deposit, and that he would send her a letter to that effect. Fuller has recently earned substantial monies by selling land and completing a construction project which should enable him to return Mason's deposit no later than October, 1980. (Testimony of Mason, Fuller)

   
   

   [AS TO ROZEANNE WHITE]

   
   

6. On August 19, 1975, Hands High Ranchettes, Ltd. entered into a similar Agreement of Purchase of Sale with Rozeanne White, aid her husband. By the agreement, White agreed to purchase a lot, with residence to be constructed thereon, in the Hands High Ranchettes subdivision. The purchase price was

   $75,000.00. By March, 1979, pursuant to the agreement, White had paid into the Hands High Ranchettes Escrow Account a $7,500.00 initial deposit. (Testimony of White, Fuller, Petitioner's Exhibit 1)

   
   

7. In March, 1979, White obtained the necessary mortgage loan to finance purchase of the lot and construction of the residence. Hands High Ranchettes, however, except for clearing the lot and constructing foundation forms, never constructed the residence specified in the Purchase Agreement. (Testimony of White, Fuller).

   
   

8. In July, 1979, Fuller told White that due to severe financial problems associated with the development, he would be unable to construct her residence, and would refund her deposit within thirty days. Fuller's failure to timely construct the residence imposed a severe burden on White and her family. In anticipation of her new home being built, she had sold her existing residence. When the new residence was not constructed, she had to move her family into an 18' travel trailer for seven weeks during the summer. At the time she was pregnant, and was accompanied by her husband and two children. After Fuller failed to return her deposit, she filed a suit for damages and obtained a civil judgment against Hands High Ranchettes, Fuller, and Bass Creek Corporation for

   $43,000.00. In satisfaction of the judgment she ultimately accepted a settlement offer of $10,000.00 plus attorney fees. (Testimony of White)

   
   

   [AS TO GEORGE MITCHELL]

   
   

9. On April 28, 1979, George Mitchell and his wife entered a similar Agreement of Purchase of Sale with Fuller's other limited partnership -- Bass Creek of Boynton Associates, Ltd. The agreement covered the purchase of a lot and construction of a new residence in the Bass Creek subdivision. The purchase

   price was $68,301.00 and, pursuant to the contract, Mitchell paid an initial deposit of $1,001.00 (Testimony of Fuller, Petitioner's Exhibit 2).

   
   

10. Due to no fault of Mitchell's, the residence specified in their agreement was never constructed. Fuller admits that he defaulted on his obligation under the Agreement of Purchase and that Mitchell is entitled to the refund of his $1,001.00 initial deposit. (Testimony of Fuller, Petitioner's Exhibits 3, 4)

    
    

    [ACTIONS OF GEORGE FULLER]

    
    

11. Fuller, d/b/a Hands High Ranchettes, Ltd. and Bass Creek of Boynton Associates, Ltd. used the initial deposits received under the Purchase Agreements with Mason, White, and Mitchell to pay for clearing the lots, constructing foundation forms, and associated engineering and architectural fees. (Testimony of Fuller)

    
    

12. Fuller, by his own admission, failed to perform his contractual obligation to return the initial deposits to Mason, White, and Mitchell. He promises to refund, by the end of October, 1980, any deposit monies due Mason, White, Mitchell, and other persons who entered into agreements to purchase land and construct residences within the two subdivisions.

    
    

13. Fuller's failure to perform his contractual obligation to convey lots and construct the promised residences is not due to unwillingness or bad faith on his part, or a motive to avoid his contractual responsibilities. Rather, it is due to serious and complex financial difficulties he encountered in developing the two residential subdivisions. The two events primarily responsible for these financial difficulties were: (1) another party's breach of its contractual obligation to construct road improvements within the subdivisions; and (2) failure of the limited partner in these two ventures, Housing Capital Corporation of Washington, D.C., to furnish, as promised,

    $650,000.00 in interim development funds. In an effort to complete the developments, Fuller expended virtually all of his personal assets. (Testimony of Fuller)

    
    

14. Fuller has engaged in general contracting for over forty years; charges have never before been brought against him in connection with his construction activities. For approximately twelve years he constructed numerous buildings for the Catholic Diocese of Brooklyn, N.Y. and has a wide range of experience in constructing schools, commercial buildings, residences, and apartment buildings. Since obtaining his Florida license, he undertook and successfully completed a 153-home residential development in Delrey Beach, Florida. His professional livelihood and economic well-being are dependent on his continued ability to engage in general contracting. (Testimony of Fuller).

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. s. 120.57(1), Fla. Stat. (1979).

    
    

16. Section 468.112, Florida Statutes (1978) 1/ authorizes the Board to suspend or revoke a contractor's license upon finding the contractor guilty of, among other things, the following actions:

    
    

    1. Acting in the capacity of a contractor under any certificate or registration issued

       hereunder except in the name of the certificate holder or a registrant as set forth on the issued certificate.

       
       

    2. 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 . . .

       
       

       (h) Abandonment of a construction project in which the contractor is engaged or under con- tract as a contractor. A project is to be considered abandoned after ninety days if the contractor terminates said project without notification to the prospective owner and without just cause. 2/

       
       

17. In disciplinary proceedings against a licensee, it is incumbent upon the Board to support its charges with competent evidence, direct or circumstantial. See e.g., Fitzpatrick v. City of Miami Beach, 328 So.2d 575 (3rd DCA 1976).

    
    

18. The Board established by competent evidence that, in connection with the Mason, White, and Mitchell land transactions, Fuller acted in the capacity of a contractor under the names of Hands High Ranchettes, Ltd. and Bass Creek of Boynton Associates, Ltd. neither of which was set forth on his certificate. It is concluded, therefore, that Fuller is guilty as charged, of violating Section 468.112(2)(d) 3/, Florida Statutes (1978).

    
    

19. The Board failed to present sufficient evidence to support its charges that Fuller unlawfully diverted funds received for completion of the construction projects, resulting in his unwillingness or inability to fulfill his obligations. The Board failed to establish that Fuller's use of the purchasers' deposits violated contractual provisions or was not in furtherance of his construction obligation under the various purchase agreements. It is concluded therefore, that Fuller is not guilty of the charges that he violated Section 468.112(2)(e), Florida Statutes (1978) 4/.

    
    

20. Finally, the Board alleges Fuller abandoned the construction projects undertaken for Mason, White, and Mitchell in violation of Section 465.112(2)(h), Florida Statutes (1978). 5/

    
    

21. As to the Mason transaction, it is concluded that Fuller is not guilty of the charge because Mason never obtained the necessary mortgage financing contemplated by the Purchase Agreement. Under the express provisions of the agreement, Fuller's obligation to construct was contingent upon Mason's obtaining the necessary mortgage financing.

    
    

22. As to the White transaction, the evidence establishes that after she obtained the necessary mortgage financing in March, 1979, Fuller failed to construct the residence specified by the purchase agreement. In July, Fuller notified her that he would be unable to construct the residence due to financial difficulties incurred in the development. Fuller's financial difficulties in completing the developments were, however, attributable to Fuller's own actions in planning and implementing the developments, and cannot constitute "just

    cause" for excusing abandonment of the construction project. Fuller, therefore, is guilty of violating Section 468.112(2)(h), Florida Statutes (1978). 6/

    
    

23. As to the Mitchell transaction, the Board failed to present evidence to establish that Mitchell had obtained the necessary mortgage financing or otherwise satisfied the conditions precedent to imposing an obligation upon Fuller to commence construction of the specified residence. While the Board proffered an affidavit of George Mitchell purporting to describe his actions, and those of Fuller, this affidavit is bare hearsay, was ruled inadmissible and is considered incompetent, for any use other than to corroborate or explain other independent evidence submitted by the Board. See s. 120.58(1)(a), Florida Statutes (1979). In the absence of evidence establishing Fuller's duty to commence construction of the Mitchell residence, it must be concluded that Fuller is not guilty of violating Section 468.112(2)(h), Florida Statutes (1978). 7/

Based on the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED:

That Respondent's certified general contractor's license no. CG C009750 be SUSPENDED, until such time as Respondent furnishes the Board satisfactory evidence of having made restitution to purchasers entitled to the return of their deposits made pursuant to Hands High Ranchettes and Bass Creek residential purchase agreements.

DONE and ENTERED this 22nd day of August, 1980, in Tallahassee, Florida.

R. L. CALEEN, JR. Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

ENDNOTES

COPIES FURNISHED:

Barry Sinoff, Esquire 2400 Independent Square

Jacksonville, Florida 32202

George C. Fuller

1675 Palm Beach Lake Blvd. West Palm Beach, Florida 33401

Docket for Case No: 80-000734

Orders for Case No: 80-000734