STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, ) FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )
vs. ) CASE NO. 82-632
Respondent. )
Pursuant to notice this cause came on for administrative hearings before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings, on August 25, 1982, in Orlando, Florida.
For Petitioner: John O. Williams, Esquire
For Respondent: James R. Lavigne, Esquire
Pursuant to an Amended Administrative Complaint filed August 11, 1982, the Department of Professional Regulation has charged the Respondent, James Ellis, with violations of Section 489.129(1)(d), Florida Statutes (1981), alleging that he deliberately disregarded Section 10D-6.25(2)(e), Florida Administrative Code, in that he installed a septic tank improperly. Specifically, it is alleged that the inlet pipe or "stub-out" was not 12 inches "above original grade" pursuant to the requirements of the Seminole County Building Code.
The Respondent is also charged with violating Section 489.129(1)(g), Florida Statutes (1981), in that he allegedly acted in the capacity of a contractor under a business name other than that under which his contractor's license was certified. The Respondent is charged with violating Section 489.129(1)(j), and Section 489.119(2) and (3), Florida Statutes (1981), by allegedly failing to properly qualify a company under which he was doing business.
The Petitioner presented the testimony of Galon Lyell and Myron Roseland.
The Petitioner introduced six exhibits, all of which were admitted into evidence. At the outset of the hearing the Petitioner voluntarily dismissed Counts I and II of the Amended Administrative Complaint.
The Respondent testified in his own behalf and introduced seven exhibits, all of which were admitted into evidence.
The issues to be resolved concern whether the septic tank was Improperly installed vis-a-vis the Seminole County Building Code, and therefore whether the above-cited statutory section was violated and whether the Respondent was holding out as, and operating as a contractor under a different name and business entity from that properly registered with the Petitioner.
At the conclusion of the hearing the parties requested the benefit of a transcript, as well as the opportunity to file proposed findings of fact and conclusions of law. The transcript of the proceeding was filed on November 12, 1982, and, pursuant to agreed-upon extensions, all post-hearing pleadings of the parties were timely filed on or before December 10, 1982. In connection therewith, the parties have waived the 30-day requirement for Recommended Order pursuant to Rule 28-5.402, Florida Administrative Code.
All proposed findings of fact and conclusions of law submitted by the parties have been considered. Such proposed findings of fact and conclusions of law which have not been adopted herein are hereby rejected as being either not supported by competent, substantial evidence, as being immaterial or irrelevant to the issues in the proceeding or not credible. To the extent such proposed findings of fact and conclusions of law have been adopted by the Findings of Fact and Conclusions of Law made herein, they are accepted.
The Respondent is a certified building contractor, having been issued license number CB C011621 as an individual contractor. The Petitioner is an agency of the State of Florida, having responsibility and authority to license building contractors and to regulate their licensure status and their standards of practice pursuant to Chapter 489, Florida Statutes.
Sometime in December, 1979, the Respondent, doing business as Economy Steel Buildings, Inc., entered into a contract with Digital Machine and Tool Company to construct a steel building for that firm. The Respondent subsequently commenced the construction on land owned by Digital Machine and Tool Company and obtained a permit from Seminole County on December 6, 1979, authorizing the installation of a septic tank. On the face of the permit appeared language containing the specification that the "stub-out" or pipe exiting the septic tank be installed 12 inches above the original grade level. The Respondent observed that language on the face of the building permit and knew and understood its import, as his own testimony reveals.
The Respondent subsequently subcontracted the installation of the septic tank to a company known as Al's Septic Tanks, which installed the tank and drain field during the early part of February, 1980. On February 10, 1980, an inspector for the Seminole County Health Department, Don Gross, inspected the septic tank installation and informed the subcontractor and the Respondent that it was not in conformance with Section 10D-6.25(2)(e), Florida Administrative Code, in that the subcontractor had not followed the instructions on the face of the building permit (12 inches above grade level), which were designed to satisfy that Administrative Code section. Sometime between February 10, 1980, and the end of April, 1980, the Respondent received a "Notice of Violation" from the Seminole County Health Department regarding the alleged improper installation of the septic tank. The Respondent admitted that sometime soon after installation of the septic tank he became aware that it did not pass the
Seminole County Health Department inspection. The Respondent maintained that he made three attempts to contact the Health Department regarding the Notice of Violation during the month of April, 1980, but he introduced no competent, substantial evidence to show what efforts, if any, he made to correct the installation of the septic tank.
There were ongoing disputes between Digital Machine and Tool Company, its representative, Galon Lyell, and the Respondent during this period, and on May 21, 1980, the Respondent was told to stay off the premises and perform no further construction on the site. There arose at about this time a civil dispute between the Respondent and Digital Machine and Tool Company which is outside the scope of this proceeding. In any event, the Respondent did not correct the installation of the septic tank and there is no question that the septic tank was not installed with the "stub-out" pipe 12 inches above the original grade level. Digital Machine and Tool Company later obtained a corrected installation of the septic tank so that it would be "stubbed-out 12 inches above original grade" from a different subcontractor, at its own additional expense, in the amount of $855.
From the period of December, 1979, through the completion of the building for Digital Machine and Tool Company, the Respondent was performing contracting under the name of Economy Steel Buildings, Inc. The Respondent admitted that he was fully aware, as of November 19, 1979, that he could not properly perform contracting work under the name, Economy Steel Buildings, Inc., without properly qualifying that company. After a Notice of Violation (Respondent's Exhibit 6) was issued by the Construction Industry Licensing Board through Investigator Hunter, the Respondent was aware that contracting under an unqualified company name was improper. After that Notice of Violation, the Respondent made some attempts to separate his personal contracting business from that of his material supply company, Economy Steel Buildings, Inc. The Respondent, however, accepted payment for contracting and materials from his client, Digital Machine and Tool Company, for the subject project in the name of Economy Steel Buildings, Inc. The Respondent also paid Myron Roseland, a subcontractor, from Economy Steel Buildings, Inc.'s account for work attributable to the Digital Machine and Tool project. Finally, Petitioner's Exhibit 5 establishes that the Respondent attempted to discharge personal liability as a contractor, which attached to him through the Digital Machine and Tool Company project and other projects, by declaring bankruptcy pursuant to Chapter 11 of the Federal Bankruptcy Act as Economy Steel Buildings, Inc., since in that petition he listed numerous subcontractors, including Myron Roseland, who performed work on the Digital Machine and Tool Company job, as creditors of that corporation to be discharged.
In summary, during the period of December, 1979, through the completion of the building for Digital Machine and Tool Company, the Respondent was performing contracting work as Economy Steel Buildings, Inc. During that time period, Economy Steel Buildings, Inc., was not properly qualified or registered with the Construction Industry Licensing Board by the Respondent, who was the owner and sole stockholder of Economy Steel Buildings, Inc.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes, and Chapter 489, Florida Statutes (1981).
The Construction Industry Licensing Board is charged with enforcing the provisions of Chapter 489, Florida Statutes. Part I of this act sets the standards for licensure in the field of construction contracting and provides for disciplinary proceedings when the prescribed standards have been violated. Pursuant to Section 489.129(1)(d), Florida Statutes (1981) the board is authorized to revoke or suspend the certificate or registration of a contractor, or to impose an administrative fine not exceeding $1,000 if the contractor is found guilty of deliberately disregarding and violating applicable building codes. Section 489.129(1)(d) Florida Statutes (1981), provides as follows:
(d) Willful or deliberate disregard and violation of the applicable building codes of laws of the state or of any municipalities or counties thereof.
Subsection 489.129(1)(g), Florida Statutes (1981) provides for the above-referenced penalties upon proof that a contractor is acting in a contractor's capacity under a name other than that certified with the board where it states as follows:
(g) Acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certificate holder or registrant as set forth on the issued certificate or registration, or in accordance with the personnel of the certificate holder or registrant as set forth in the application for the certificate or registration, or as later changed as provided in this act.
Section 489.119(2) and (3), Florida Statutes (1981), provides pertinently as follows:
(2) If the applicant proposes to engage in contracting as a partnership, corporation, business trust or other legal entity, the applicant shall apply through a qualifying agent; the application shall state the name of the partnership and of its partners, the name of the corporation and of its officers and directors, the name of the business trust and its trustees, of the name of such other legal entity and its members; and the applicant shall furnish evidence of statutory compliance if a fictitious name is used.
Such application shall also show that the qualifying agent 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,
shall be in the name of the qualifying agent, and the name of the business organization shall be noted thereon.
(3)(a) The qualifying agent shall be certified or registered under this act in order
for the business organization to be certified or registered in the category of the business conducted for which the qualifying agent is certified or registered. If any qualifying agent ceases to be affiliated with such
business organization, he shall so inform the department. In addition, if such qualifying agent is the only certified or registered individual affiliated with the business organization, the business organization shall notify the department of the termination of the qualifying agent and shall have a minimum of sixty (60) days from the termination of the qualifying agent's affiliation with the business organization in which to employ another qualifying agent. The business organization may not engage in contracting until a qualifying agent is employed.
(b) The qualifying agent shall inform the department in writing when he proposes to engage in contracting in his own name or in
affiliation with another business organization, and he or such new business organization shall supply the same information to the department as required of applicants under this act.
The evidence establishes that the Respondent entered into a contract with Digital Machine and Tool Company during December, 1979, to furnish and construct a steel building on property owned by that firm. The Respondent commenced construction and obtained a permit from Seminole County on December 6, 1979, to install a septic tank. That permit contained language on its face which Respondent admitted he knew of and understood, which contained a specification that the "stub-out" of the septic tank be installed 12 inches above the original grade level. The reason for that specification was established to ensure that the installation of the septic tank complied with Section 10D-6.25(2)(e), Florida Administrative Code. The Respondent subcontracted the installation of the septic tank, but he understood and was fully aware that he was the contractor for the job and ultimately responsible to see that the septic tank was properly installed pursuant to all pertinent building code provisions. Section 489.105(3), Florida Statutes (1979), defines a contractor as:
'Contractor' means the person who is qualified for and responsible for the entire project contracted for and means, except as exempted in this act, the person who, for compensation, undertakes to, submits a bid to, or does himself or by others construct, repair, alter, remodel, add to, subtract from, or improve
any building or structure, including related improvements to real estate, for others or for resale to others.
There is no dispute that the Respondent was the general contractor for the project and thus no question, given the above authority, that the Respondent was ultimately responsible for the correct installation of the septic tank.
The septic tank was installed in the early part of February, 198(), and an :inspection was made by the representative from the Seminole County Health Department, Don Gross, on February 10, 1980. The evidence established that the septic tank was not installed in conformance with Section 10D- 6.25(2)(e) Florida Administrative Code, because the subcontractor failed to follow the instructions on the face of the permit regarding the 12-Inch, above- grade location of the septic tank pipe.
The record is unclear regarding precisely when the Respondent actually received official notice from the Health Department of the improper installation of the tank, but the Respondent admitted that at the time of installation of the tank he immediately became aware that it did not pass inspection. The record clearly establishes that the Respondent was on notice that some type of violation had occurred back in February, 1980, and yet failed to take immediate steps to correct it. The Respondent remonstrated that he attempted to contact the Health Department regarding the Notice of Violation three times during April of 1980, but failed to establish why no efforts were made to actually correct the installation prior to that time. In response to the Respondent's contention that he was prevented from going on the property by the owners so that it was impossible for him to correct the septic tank installation problem, it was contrarily established that not until May 21, 1980, was the Respondent, pursuant to a civil dispute between the Respondent and Digital Machine and Tool Company, ordered to refrain from going on the premises. Thus, there was an ample period of time between approximately mid-February, 1980, when he became on notice of the failure of the septic tank to pass inspection and early May, 1980, when a correction of the installation could have been accomplished by the Respondent. His failure to do so is concluded to constitute a deliberate violation of the above authority.
With regard to the charges contained in Count IV of the Amended Administrative Complaint, it has been established by clear and convincing evidence that the Respondent's company, Economy Steel Buildings, Inc., was performing contracting on the subject Digital Machine and Tool Company job and was not properly qualified with the Petitioner, Florida Construction Industry Licensing Board. The Respondent admitted that he was on notice as early as November 19, 1979, from communication with the Petitioner's investigator, that he was not to perform contracting under the name of Economy Steel Buildings, Inc., without properly qualifying that company. Unrefuted evidence demonstrates that after the Notice of Violation (Respondent's Exhibit 6) was issued by the Construction Industry Licensing Board investigator, Mr. Hunter, the Respondent did indeed make some attempts to separate his personal contracting business activities from those of the material supply company of which he was sole owner, Economy Steel Buildings, Inc. It is also established that the Respondent accepted payment for contracting and materials from the Digital Machine and Tool Company in the name of Economy Steel Buildings, Inc., and paid Myron Roseland from the Economy Steel Buildings, Inc.'s, account for work performed on that job.
Finally, it was shown, through Petitioner's Exhibit 5, that the Respondent attempted to discharge his personal liability as a contractor for debts incurred related to the Digital Machine and Tool Company job as well as other projects, by declaring bankruptcy in the name of Economy Steel Buildings, Inc., since in that bankruptcy petition he listed numerous subcontractors (some from the Digital project), including Myron Roseland, as creditors of Economy Steel Buildings, Inc., which should be discharged in the bankruptcy proceeding.
The purpose of Section 489.119(2) and (3), Florida Statutes, is to require companies wishing to perform construction to be properly qualified by a licensed contractor. Since individuals have a limited liability within a corporate structure, it is vital that a construction corporation display financial responsibility to clients and it is an important function of the board to review applications of corporations wishing to perform construction services for various criteria, including their financial responsibility status, before granting to them the right to obtain separate authorization to perform construction services within the State of Florida.
The Respondent is the sole owner and stockholder of Economy Steel Buildings, Inc., and was aware that he was required .to properly qualify the company with the board before he could do construction in the name of the company. The Respondent did not properly qualify the company with the board and later declared bankruptcy, listing the subcontractors of the Digital Machine and Tool Company project as debtors of the bankrupt corporation. This demonstrates clearly that the Respondent intended to contract and perform contracting work in the name of Economy Steel Buildings, Inc. Thus, the Respondent violated Section 489.112(2) and (3), Florida Statutes, by performing contracting work in the name of Economy Steel Buildings, Inc., which he had failed to properly qualify with the board as a corporate licensee.
Regarding the question of penalty, it should be pointed out that pursuant to Chapter 489, Florida Statutes, the Petitioner has no authority to revoke or suspend the Respondent's license and, additionally, impose an administrative fine. The above-cited authority clearly provides for power by the Petitioner to either impose discipline on the Respondent's licensure status, such as a suspension or revocation, or to impose an administrative fine, but not both.
Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence in the record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore,
That a Final Order be entered by the Petitioner finding the Respondent guilty of the violations alleged in Counts III and IV of the Amended Administrative Complaint and imposing an administrative fine of $1,000. The administrative fine should be suspended in part, provided the Respondent provides proof within sixty (60) days from the date thereof that he has made restitution to Digital Machine and Tool Company for the $855 it had to expend to obtain correction of the improper septic tank installation, as well as restitution of monies owed to Mr. Myron Roseland attributable to the Digital Machine and Tool Company project, in which event the Respondent's fine should be reduced to $250.
DONE AND ENTERED this 10th day of February, 1983, at Tallahassee, Florida.
P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building
Filed with the Clerk of the Division of Administrative Hearings this 10th day of February, 1983.
John O. Williams, Esquire
James R. Lavigne, Esquire 1971 Lee Road
James Linnan, Executive Director Construction Industry Licensing Board Department of Professional
