Judges: D. R. ALEXANDER
Agency: Department of Business and Professional Regulation
Latest Update: Dec. 04, 1990
Summary: Contractor diverted funds and failed to finish project. Suspend license.
81-2658STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL ) REGULATION, CONSTRUCTION INDUSTRY ) LICENSING BOARD, )
)
Petitioner, )
)
vs. ) CASE NO. 81-2658
)
RAMIRO PALMA, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held before the Division of Administrative Hearings by its duly designated Hearing Officer, DONALD R. ALEXANDER, on January 6, 1982, in Orlando, Florida.
APPEARANCES
For Petitioner: Drucilla E. Bell, Esquire
130 North Monroe Street Tallahassee, Florida 32301
For Respondent: Ramiro Palma in pro se
2315 East South Street Orlando, Florida 32803
BACKGROUND
By Administrative Complaint dated August 31, 1981, Petitioner, Department of Professional Regulation, Construction Industry Licensing Board, has charged that Respondent, Ramiro Palma, violated certain statutory provisions while acting in the capacity of a registered building contractor. Specifically it is charged that Respondent (1) failed to affix his registration number to a contract entered into on or about January 14, 1979, in contravention of Subsection 468.107(6), Florida Statutes (1977) 1/ and that by failing to do so, he also violated Subsection 468.112(2)(g), Florida Statutes (1977) 2/, and
diverted funds received for completion of a specified construction project and, as a result of said diversion, was unable to fulfill the terms of his obligation under the contract in violation of Subsection 468.112(2)(e), Florida Statutes (1977) 3/.
Respondent disputed the allegations in the Administrative Complaint and requested a formal hearing to contest the charges pursuant to Subsection 120.57(1), Florida Statutes. The matter was transmitted to the Division of Administrative Hearings on October 22, 1981, with request that a Hearing Officer be assigned to conduct a hearing.
By Notice of Hearing dated November 5, 1981, the final hearing was scheduled for January 6, 1982, in Orlando, Florida. Petitioner presented the testimony of Oliver Johnson and offered Petitioner's Exhibits 1-8, each of which was received into evidence. Respondent testified on his own behalf and offered Respondent's Exhibits 1-4, each of which was received into evidence.
Proposed findings of fact and conclusions of law were filed by Petitioner on January 18, 1982, and have been considered by the undersigned in the preparation of this order. Findings of fact not included in this order were considered immaterial, not relevant to the issues, or were not supported by competent and substantial evidence.
The issue herein is whether Respondent's registered building contractor's license should be revoked or suspended, or whether he should be otherwise disciplined for allegedly failing to affix his registration number to a contract and diverting funds received for completion of a construction project.
Based upon all the evidence, the following findings of fact are determined: FINDINGS OF FACT
At all times relevant hereto, Respondent, Ramiro Palma, held registered building contractor license number RB 0031505 issued by Petitioner, Department of Professional Regulation, Construction Industry Licensing Board. He has held the license since 1977 and his offices are located in Orlando, Florida.
On or about January 14, 1979, Respondent entered into a contract with Oliver W. Johnson to construct a single story residence at 648 Morton Lane, Winter Springs, Florida. The contract called for Johnson to pay Respondent
$76,800, and for the home to be substantially completed within six months after starting. Respondent failed to affix his registration number to the contract as required by law.
A change order in the terms of the contract was executed by both parties on May 18, 1979, which added and deleted a number of items and increased the contract price to $79,100. However, it did not affect the original completion date of August, 1979.
In July, 1979, Respondent received the second bank draw on the home construction loan which brought the total amount of money he had received to
$42,500. Of that amount, Palma retained $11,827 as a contractor's fee and for undisclosed "overhead expenses".
When Johnson inspected his home in August, 1979, he found it only 30 percent to 35 percent completed. Johnson met with Palma was told that Respondent was running short of cash and could not pay the subcontractors to complete the job.
In mid-September, 1979, Johnson requested Palma to furnish him a list of unpaid bills on the project. These totaled $19,237.78. Johnson also discovered that at least $11,000 in additional funds over and above the $79,100 contract price would be required to finish the home. As a result of these discoveries, another change order in the contract was executed on October 15, 1979, in which the completion date was extended to November 30, 1979. Palma
also agreed to deduct $513.38 per month from the contract price beginning October 1, 1979, for interest charges, rent and furniture storage costs incurred by Johnson until the house was completed. At the same time, Palma promised Johnson that all cash shortages would be covered by the closing date of December 18, 1979. The closing date was subsequently extended to December 29, 1979.
At the closing Palma reimbursed Johnson only $1,800. He has failed to repay any other moneys since that time. Three liens totaling $8,363.41 were filed against the property in late December, 1979, and early January, 1980. In order to satisfy all outstanding liens and bills, Johnson was forced to obtain a second mortgage on his home in the amount of $17,845.
Palma blamed many of the cost increases on subcontractors who were not closely supervised, and changes in the contract. He acknowledged keeping almost
$12,000 of the $42,500 received as contractor's fee and overhead expenses even though the house was incomplete and the contract did not specify a fee for the contractor.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.
Subsection 468.107(6), Florida Statutes (1977) provides in part as follows:
(6) Each registered or certified contractor shall affix the number of his registration or certifi- cation to all his contracts and bids.
Subsection 468.112(2), Florida Statutes (1977) provides that the Board may discipline a licensee who is found guilty of the following:
(2)(g) Failure in any material respect to comply with the provisions of this act.
Respondent failed to affix his registration number to the original contract in violation of Subsection 468.107(6), supra, and may be disciplined for failing to comply in a material respect with a provision of Chapter 468. Accordingly, it is concluded that Respondent is guilty of violating those statutory provisions.
Subsection 468.112(2)(e), Florida Statutes (1977) prohibits the [d]iversion of funds...received for...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.
It is undisputed that Palma diverted almost $12,000 from the construction loan funds for his own use. As a result of this diversion, he was unable to fulfill the terms of the contract. Therefore, it is concluded that Respondent has violated the aforesaid statute.
Petitioner has recommended that Respondent's license be suspended for one year and that he be assessed a $1,000 administrative fine. Given the nature of the violations herein, it is concluded that this penalty is appropriate.
RECOMMENDATION
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Ramiro Palma, be found guilty as charged in
the Administrative Complaint dated August 31, 1981. It is further
RECOMMENDED that Respondent's registered building contractor's license be suspended for one year after the date of the final order entered in this proceeding and that Respondent pay a $1000 administrative fine.
DONE and ENTERED this 3rd day of February, 1982, in Tallahassee, Florida.
DONALD R. ALEXANDER
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 3rd day of February, 1982.
ENDNOTES
1/ Subsection 468.107(6) was subsequently renumbered as Subsection 489.119(5), Florida Statutes (1979) without change.
2/ Subsection 468.112(2)(g) was renumbered by the 1979 Legislature as Subsection 489.129(1)(j) Florida Statutes, without change.
3/ Subsection 468.112(2)(e) was renumbered as Subsection 489.129(1)(h), Florida Statutes (1979) without change.
COPIES FURNISHED:
Drucilla E. Bell, Esquire Department of Professional
Regulation
130 North Monroe Street Tallahassee, Florida 32301
Ramiro Palma
2315 East South Street Orlando, Florida 32803
================================================================= AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF PROFESSIONAL REGULATION CONSTRUCTION INDUSTRY LICENSING BOARD
DEPARTMENT OF PROFESSIONAL REGULATION/CONSTRUCTION INDUSTRY LICENSING BOARD,
Petitioner,
vs. CASE NO. 0001024
DOAH CASE NO. 81-2658
RAMIRO PALMA, RB 0031505
1501 Falcon Drive
Orlando, Florida 32803
Respondent.
/
FINAL ORDER
This matter came for final action by the Construction Industry Licensing Board on April 16, 1982, in Tampa, Florida. A formal hearing held pursuant to Section 120.57(1), Florida Statutes, resulted in the issuance of a recommended order (attached hereto as Exhibit A) which was reviewed by the Board.
Petitioner filed exceptions to said order which were also reviewed by the Board. Following a review of the complete record of the proceedings, it is ORDERED:
The findings of fact contained in the Recommended Order are approved and adopted and incorporated herein by reference.
The conclusions of law contained in the Recommended Order are approved and adopted and incorporated herein by reference.
The recommendation of the Hearing Officer is rejected. Following a review of the complete record, the Board adopts the exceptions to the recommended penalty as filed by Petitioner.
THEREFORE
It is ORDERED and ADJUDGED that the registered building contractor's license of the Respondent be and is hereby suspended for a period of five (5) years; provided, however, that the suspension may be lifted after a period of two (2) years if the Respondent provides satisfactory evidence to the Board that he has made restitution to the consumer named in the administrative complaint filed against the Respondent. It is further ORDERED that the Respondent be and is hereby fined 1000.00.
DONE and ORDERED this 23rd day of April, 1982.
FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD
John Henry Jones, Chairman
Docket for Case No: 81-002658
Orders for Case No: 81-002658
