STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1588

)

LLOYD R. VAUGHN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in the above case before the Division of Administrative Hearings by its duly designated Hearing Officer, DONALD R. ALEXANDER, on October 20, 1982, in Fort Myers, Florida.

APPEARANCES

For Petitioner: Xavier J Fernandez, Esquire

Post Office Box 729

Fort Myers, Florida 33902

For Respondent: David J Dupree, Esquire

Post Office Drawer 610 Fort Myers, Florida 33902

BACKGROUND

By administrative complaint filed on May 10, 1982, Petitioner, Department of Professional Regulation, Construction Industry Licensing Board, seeks to take disciplinary action against the registered general contractor and registered air conditioning contractor licenses of Respondent, Lloyd R. Vaughn. In the complaint it is charged that (1) Respondent diverted funds from a construction project and was accordingly unable to fulfill the terms of a contractual obligation, and (2) Respondent had his contracting licenses revoked by the Division of Code Enforcement of Lee County, Florida. 1/

Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, to contest the charges. The matter was forwarded by Petitioner to the Division of Administrative Hearings on June 11, 1982 with a request that a Hearing Officer be assigned to conduct a hearing. By notice of hearing dated August 4, 1982 the final hearing was scheduled for October 20, 1982, in Fort Myers, Florida.

At the final hearing Petitioner presented the testimony of Lillian K. Decker and offered Petitioner's Exhibits 1-3; all were received in evidence. Additionally, Respondent's response to Petitioner's request for admissions was received as Hearing Officer Exhibit 1.

The transcript of hearing was filed on November 12, 1982. The parties were given the opportunity to file proposed findings of fact and conclusions of law; however, none were timely filed.

The issue herein is whether Respondent diverted funds from a construction project and had his local licenses revoked by Lee County.

Based upon all the evidence, the following findings of fact are determined: FINDINGS OF FACT

1. At all times relevant hereto, Respondent, Lloyd R. Vaughn, held license numbers RG 0018105, RG A018105 and RG 0018332 issued by Petitioner, Department of Professional Regulation. Construction Industry Licensing Board. These licenses authorize Respondent to engage in general contracting and air conditioning contracting. Respondent's current address is 3141 Southeast Eighth Avenue, Cape Coral, Florida.

   
   

2. On or about June 8, 1978, Respondent entered into a building contract with Lillian K. Decker to construct a residence at Lot 96, Lockmoor Pines Subdivision in Lee County, Florida, for the sum of $52,855. Decker paid a 10 percent cash deposit of $5,285 to Vaughn and a first payment of $15,945 to a local lending institution to be used in draws by Vaughn as construction progressed. The parties also agreed that the remaining balance would be obtained through draws from the same institution.

   
   

3. The contract contained a clause which provided generally that if Decker was in default in performing any obligations assumed or imposed under the contract, the builder could retain any sums paid by Decker.

   
   

4. Because of her husband's terminal illness, and the assumption of a substantial debt incurred by her daughter, Decker cancelled the contract at a later undisclosed time. Although Vaughn had not yet begun any work on the project when the contract was cancelled, Decker asked if he would agree to return $4,000 of her deposit and keep $1,285 for the time he had spent with her to date. He declined to do so. Instead, he tried to persuade her to allow the home to be built, sell it for a profit, and then have the deposit returned with a part of the profit; however, she refused.

1. Decker obtained a final judgment against Vaughn in Circuit Court on or about June 5, 1980 for the amount of the deposit plus accrued interest. However, she has been unable to enforce the judgment and to date has not received her deposit.

   
   

2. On or about January 22, 1981, the Lee County Construction Board revoked Respondent's local certificate of competency. The Board of County Commissioners affirmed this action on March 12, 1981.

   
   

   CONCLUSIONS OF LAW

   
   

3. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

4. Petitioner has alleged that (a) Respondent unlawfully diverted the deposit of Decker and was unable to complete the project, and (b) has been subject to disciplinary action by a local governing body.

   
   

5. The second charge was admitted by Respondent and needs no further discussion. Accordingly, it is concluded that Respondent is guilty of violating Subsection 489.129(1)(i), Florida Statutes, which makes it unlawful for a licensee to have disciplinary action taken by any municipality or county.

   
   

6. The first charge involves a purported violation of Subsection 489.129(1)(h), Florida Statutes. That subsection makes unlawful the following act by a licensee:

   
   

   (1)(h) 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. (Emphasis added)

   
   

   Because the statute is penal in nature, a strict interpretation of its provisions must be made. Bach v. Florida Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1980). Accordingly, while Respondent may have "diverted" the deposit of Decker by failing to return the same, such diversion did not result in Vaughn being "unable to fulfill the terms of his obligation or contract". That is to say, the contract had been cancelled by Decker, and no obligation to perform under its terms remained. Therefore, while Vaughn's conduct was reprehensible, it does not fall within the purview of the statute. This being so, it is concluded that Count II of the administrative complaint must be dismissed.

   
   

7. Given the nature of the offense committed by Vaughn, a two year suspension of Respondent's license is appropriate.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent be found guilty as charged in Count II of the

administrative complaint and that his licenses be suspended for a two year

period; Count I should be DISMISSED.

DONE and ENTERED this 30th day of November, 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 30th day of November, 1982.

ENDNOTE

1/ At the conclusion of the hearing Petitioner voluntarily dismissed Count III of the administrative complaint.

COPIES FURNISHED:

Xavier J Fernandez, Esquire Post Office Box 729

Fort Myers, Florida 33902

David J Dupree, Esquire Post Office Drawer 610 Fort Myers, Florida 33902

James Linnan, Executive Director Construction Industry Licensing

Board

Post Office Box 2 Jacksonville, Florida 32202

Samuel R. Shorstein, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 82-001588

Orders for Case No: 82-001588