STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, CONSTRUCTION )
INDUSTRY LICENSING BOARD, )
)
Petitioner, )
)
vs. ) CASE NO. 82-2383
) 84-1171
HERBERT A. LICHT, )
)
Respondent. )
)
RECOMMENDED ORDER
Consistent with notice furnished the parties, a hearing was held In this case on May 15-18 and June 6, 1984, in Orlando, Florida before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings. The issue for consideration was whether Respondent's license as a certified general contractor in the State of Florida should be disciplined because of the alleged misconduct outlined in the various administrative complaints filed herein.
APPEARANCES
For Petitioner: Stephanie A. Daniel, Esquire
Staff Attorney
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Charles F. Tunnicliff, Esquire Senior Attorney
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
For Respondent: Melissa F. Allman, Esquire
Erwin, Van, Jacobs, Odom & Kitchen
305 South Gadsden Tallahassee, Florida 32301
BACKGROUND INFORMATION
The original Administrative Complaint in this case was filed by Petitioner on July 12, 1982 and alleged one instance where Respondent willfully or deliberately disregarded and violated local building codes by failing to obtain a permit to install aluminum soffits and facia, in violation of Section 489.129(1)(d), Florida Statutes, (1979). Thereafter the Administrative Complaint was amended on several occasions to allege various additional violations of Section 489.129, to include:
willful and deliberate repeated violations of Chapters 501, 502, and 841, Florida Statutes, and local
building codes;
making fraudulent, deceptive, misleading or untrue representations in the practice of contracting, Subsection 489.129(1)(c);
aiding and abetting an unregistered person to evade the provisions of Section 489.129, Subsection 489.129(1)(e)
knowingly combining and conspiring with an unregistered or uncertified individual by allowing his license to be used by that person with intent to evade statutory requirements, Subsection 489.129(1)(f);
failing to properly supervise the construction activities of a firm operating under his license, Subsection 489.129(1)(j);
failing to subcontract work to licensed subcontractors, Subsection 489.129(1)(j);
abandoning a project without just cause and without notice to the owner, Subsection 489.129(1)(k); and
being guilty of fraud, deceit, and misconduct in the practice of contracting, Subsection 489.129(1)(m)
In addition, on April 11, 1984, an additional Administrative Complaint was filed in this case which contained allegations similar to the above and which was consolidated with the case first filed. Respondent filed an election of rights form relating to the first Administrative Complaint in which he denied the allegations of wrongdoing and requested formal hearing.
At the hearing, Petitioner presented the testimony of Respondent, Herbert
A. Licht; Aldo Assarello, a licensed roofing contractor in Tampa, Florida; Ronald L. Ayers, a former employee of Perma-Vent of Tampa; Thomas J. Stiffler, a former employee of Superguard of Orlando; Bruce Coblitz, a former salesman who sold home improvements to be completed by Super guard and Perma-Vent Industries; Elliott Greenberg, formerly Respondent's partner in charge of sales for his various corporations, and President of Perma-Vent Industries; Michael L. Brandt, a former salesman for Perma-Vent of Tampa, Alvin J. Brown, a homeowner who contracted with Perma-Vent Industries; Carl C. Farley, a former installer for Perma-Vent Industries; Edward J. Ferguson, an aluminum siding installer who previously worked for Perma-Vent Industries and Perma-Vent Industries of Orlando, Inc., Gary L. French, former home improvement salesman for Respondent's companies; Charles C. Barefoot, an unlicensed installer of screen rooms and carports who previously did work for Respondent's companies; Gene E. Peterson, an aluminum installer who did a cost estimate on the Brown home for Brown's attorney; Floyd and Lois Newman, homeowners for whom Respondent's company did work; Lizzie and Elijah Thomas, homeowners for whom Respondent's company did work; Annette Odums, Thomas' granddaughter; Johnnie Mae Odums, Thomas' granddaughter; Nathaniel Boldes, Thomas' nephew; Laura Mae Williams, homeowner for whom Respondent's company did work; Sylvia B. Williams, daughter of Laura Mae Williams; Flossie Hudson, homeowner; Theresa Hudson, Flossie Hudson's daughter; Joel C. Thompson, expert in home repair and remodeling; John H. and Nancy Osgood, homeowners for whom Respondent's company did work; Daniel J. Dalfino, Custodian of Records at the Tampa Building Department; Archie M. Arthur, Tampa Building Inspector; Thomas A. Szucs, homeowner for whom
Respondent's company work; Frances Zubillaga, homeowner solicited by Respondent's representative; Allen E. Shevy, Petitioner's investigator; Charles
E. Taylor, Lake County building official; Gary L. Winn, City of Sanford building official; Steven Kolozsvary, installer who previously worked for Respondent on Hudson property; Lloyd O. Barrett, former Volusia County building official; A.
C. Myers, New Smyrna Beach Building Inspector; Bryce Francis, homeowner for whom Respondent's company did work; Lesley E. Young, Auditor with Florida Comptroller's office; Bobby J. Hunter, investigator for Petitioner; Ralph W. Jones, Chief Building Inspector for Orlando; Mable Johnson, homeowner for whom Respondent's company did work; Melvin I. Nichols, former employee of Perma-Vent; Charles R. Hughes, a contractor; William Neese, Orlando Building Inspector; Thomas Christianson, Sanford Building Inspector; James A. Mobley, Orlando Building Inspector; Woodrow A. Ayers, former employee of Perma-Vent of Tampa; Clyde Pirtle, investigator for Department of Professional Regulation; and George
Wood, an architect. Petitioner also offered Petitioner's Exhibits 1-116, 118- 128, 130-132, 135-139, and 141-158.
Respondent testified in his own behalf and presented the testimony of Joseph E. Panasuk, a certified roofing contractor; Paul D. Shipley, banker; Ronald Ayers who testified for Petitioner; and Charles W. Burgess, accountant who works part-time for Statewide Funding Corporation. He also offered Respondent's Exhibits' 8, 9, 16-21, 23-26, 32, 41-43, 45, 46, 48-50, 58-A, 61,
62, 64-67, 76-78, 80-81, 89, 96-A, 98-1OO-C, 103, 111, 113-116, 118, 120, 124,
134, 136, 137, 142-145, 147, 149, 151, 163-167, 171-A & B, 182, 183, 187-189,
197, 202, 205, 210, 213, 214, 223, 230-231, 235, 241, 243, 245-247, 259-265, and
269-274
FINDINGS OF FACT
At all times pertinent to the issues herein, Herbert A. Licht, was a certified general contractor in the State of Florida under license Nos. CG C011504 and CG CA-175O4. Respondent qualified All Florida Builders, Inc. under license No. CO CO11504 from February, 1978 until September, 1980. He also qualified Perma-Vent Industries of Orlando, Inc. (PVO) and Perma-Vent Industries of Tampa, Inc. (PVT) from inception to the present and was sole qualifier of both.
PVT, at all times pertinent hereto was licensed as a home improvement contractor under license H 0000969 having been licensed in March, 1980. Respondent was initially the president and vice president, and a director of PVT as well as owner of one-half the capital stock of the corporation. The business of PVT was to sell and install home improvement products and services in the Tampa area.
Similar in operation to PVT was Perma-Vent Industries of Orlando, Inc. (PVO), licensed as a home improvement contractor in December, 1979 under license number AC 0000874. Again Respondent owned one-half the stock in this corporation and initially was the president, vice president, resident agent and a director. Elliott Greenberg was the owner of the other half interest in both PVT and PVO. Elliott Greenberg is not licensed as a contractor by the State of Florida.
Perma-Vent Industries, Inc. (PVI) was initially incorporated in mid- 1980, but was not licensed by Respondent until February, 1983 when he secured license number HC 0001282. This company, of which Respondent was, again, president, vice president, registered agent, director and one-half owner, was
not qualified by Respondent until after the incidents pertinent to this hearing. At all times pertinent here, Respondent had failed to qualify PVI.
Another corporation established by Respondent was Statewide Funding Corporation (Statewide), set up in April, 1980, which operated as a collection agency for the financial paper generated by Respondent's other businesses as described above. Respondent had a relationship to this company identical with that of the others mentioned above. Respondent also operated All Florida Builders, Inc. (AFB) for 18 months from early 1978-1979/80, engaged in the business of selling and installing home improvements. AFB was the predecessor to PVO, but Greenberg had no proprietary interest in it. In addition to his ownership of one-half of the stock in the other corporations mentioned, however, Greenberg was also secretary/treasurer and a director of them all.
In the operation of the various businesses by the Respondent and Mr. Greenberg, there was some difference between how PVT and PVO operated and how PVI did. In the former, while Respondent handled the office and financial end of the business Greenberg handled sales and operations. As to the latter, Greenberg had almost total control of all aspects of the business though Respondent's license was used for those activities of the operation which needed it, such as the pulling of permits for particular jobs.
In both the PVO and PVT operations, Mr. Greenberg was the overall sales chief who oversaw the phone room canvassers and the street sales force, through managers who answered to him. Installation and construction was also within Greenberg's area of supervision through the "expediter", an individual who assigned the particular jobs and insured the proper materials were on hand. The "installers" or "mechanics", the individuals who actually did the hands-on work, were, in theory, independent contractors who were paid by the job. None of the instant companies maintained payrolls for these people, deducted withholding, or any other deduction called for. While the sales force of PVT was set up and operated exactly as that of PVO, the Tampa company had no expediter or installers. These services were performed for it by PVO's personnel even though the corporations were, theoretically, separate.
As to PVI, this was a different situation entirely. PVI's salesmen were independent contractors who, primarily, took orders for work to be done with, normally, materials and labor furnished by PVI. They were free to set their own prices and, as compensation, received the difference between the contract price for the job and the actual cost of labor and materials as charged by PVI. In the event the salesman, as was sometimes done, procured his own installer's, he would pay that individual's salary from his own profit which was the difference of his contract price and the cost of materials. PVI performed collections services on these contracts.
Turning to the operations of PVT and PVO, canvassers from the phone room, calling numbers in line from the local phone books, would try to set up appointments for salesmen to subsequently try to sell aluminum siding or home repair. The salesmen were trained using an "Eleven Point Sales Outline" adopted by Mr. Greenberg from a sales brochure used by another similar firm in another part of the country and brought by a former employee of this company. This sales program is typical of a high-pressure sales operation where the facts are often misrepresented or used loosely in order to convince a prospective buyer that he or she is getting special treatment.
Once the salesman got the prospective customer/homeowner to sign a contract for some type of service, the contracts were brought to the home office
where the Respondent himself, according to his repeated testimony, reviewed every contract entered into by PVT and many entered into by PVO. Once the contract was approved by Respondent a copy was forwarded to the operations section where the expediter, an employee of PVO, actually assigned the work to the workmen who would accomplish it, The expediter also determined how much raw material would be used on the job and insure that it was issued to the workmen and properly costed.
Many of the workmen utilized by Respondent's corporations to apply siding or otherwise do home repair work were themselves not licensed, but operated under the Respondent's license as a general contractor. Ordinarily the expediter furnished the workmen with blank letters of authorization, signed by Respondent and on hand in the PVO office, for the purpose of applying for the required permits in appropriate cases. There was some indication that, initially, the workmen were not required to obtain permits for their particular jobs. In fact, one workman, Melvin Nichols, indicated that he was advised by a representative of the Respondent that he need not bother with getting a permit unless there was trouble. Ordinarily, however, the applicators were given signed letters of authorization. This is a perfectly legitimate practice within the construction industry trade in Florida. However, once the job was completed the installer was supposed to obtain from the homeowner a certificate of completion, which he thereafter would turn in to the expediter as one of the
pre-conditions for receiving payment for his services. One of the other things the installer had to submit was a breakdown sheet indicating exactly what expenses were incurred by him, including permit fees, if any.
Once this was done, someone from whichever of Respondent's companies actually contracted for the work, PVI, PVO, or PVT, would return to the homeowner's residence with typed copies of the already signed, handwritten, agreement and other documents. When he first started in business, Respondent would conform these subsequently typed and executed documents to the date on the original handwritten documents. However, when he determined that this practice was not appropriate he ceased doing it and the typewritten documents were dated as of the date of their signing. As a result, there were often multiple documents covering the same work signed by the parties on different dates, creating a morass of paperwork which to the average customer was often confusing, especially in the situations where the customer could neither read nor write.
Initially, when the businesses were first started, the Respondent personally supervised the training of the salesmen and frequently went to the construction site to observe and insure that the work was being done properly. However, as his business expanded Respondent, by his own admission, had less and less time to do this and devoted more and more time to the financing and administrative aspects of the business which were done in the office. However, as will be seen below, Respondent still, on a period basis, personally involved himself in the actual procurement of signatures on mortgages and the other
quasi-legal aspects of the operation.
In the succeeding paragraphs several case studies will be analyzed individually. It will be possible to see a similar thread of activity, however, throughout the operations.
While Respondent claims he was not aware of the day-to-day activities of these three companies, and tries to exculpate himself from any responsibility for the operations of PVI, it is clear this was not so. The evidence clearly shows that the operations of all three companies were tied in together, all
operating out of or under the control of the home office, which was at the same location for all three (four if AFB is considered separately) and were established and financed by or through the arrangement of the Respondent, Licht.
BROWN
Some time during 1979 an individual holding himself out to be a representative of AFB came to the New Smyrna Beach, Florida, home of John H. Brown and his wife, Lilly Mae. This individual suggested that the Brown's should have their home with aluminum siding and also have aluminum soffit and facia installed. During this initial meeting, the AFB representative showed Mr. Brown some photographs of homes on which, he said, his company had applied this same product, and discussed how, if Mr. Brown were to agree, the improvements would be paid for. They discussed the monthly payments for the work and Mr. Brown was convinced to sign some papers relating to the job. He was not specifically told what the papers were, but he was assured his payment would be cheaper than those of other people for whom the same type of work was done. Neither Mr. Brown nor his wife can read or write and he advised the salesman of this fact. He is currently retired after 30 years of work with the Florida East Coast Railroad as a laborer and his sole source of income is his railroad retirement check. The Browns are, however, somewhat familiar with credit and credit financing, since they purchased their home utilizing a mortgage calling for monthly payments, and furnished the home through credit payments with Montgomery Ward.
Subsequent to the first meeting, on or about December 27, 1979, Mr. and Mrs. Brown (Mrs. Brown is senile with only sporadic periods of lucidity) signed a retail installment contract with All Florida Builders which provided for that company to install aluminum siding on all four walls of the Browns' home. The price was $4,000.00 which was to be financed over 60 monthly payments of $103.49, each, for a total of $6,209.40. The annual percentage rate on the financing was 18.8 percent and the payments were to be secured by an interest in the Browns' home.
Mr. Brown contends he did not know he was signing a contract at that time, and thought he was merely signing an authorization for the work to be done. This contract was not fully filled out at the time it was signed in that the salesman's license number was not contained thereon, nor was the amount financed listed. This contract was never signed by the contractor and the Browns were not furnished a notice of their right to rescind the contract at the time they signed it. The contract also contained a slight overcharge on the financing of the contract; this overcharging was not disclosed as is required by the statute. At no time during the preparation and execution of these documents were the Browns advised of the nature or content of the documents they were signing. In that connection, the salesman in question here was Ron Greenberg, who is, coincidently, the brother of Elliott Greenberg, mentioned previously.
The following day, December 28, 1979, Mr. Brown was convinced to sign a second retail installment contract for the same aluminum siding with the addition of soffit and facia. This time the work was to cost $6,500.00 payable in 60 payments of $167.93 each for a total of $10,089.60. The payments due under this contract were to be secured by a mortgage on the Browns' home.
This contract, also, was not complete at the time that it was presented to the Browns' for signature. Again, the salesman's name and license number were not noted on the contract, nor were the charges itemized and again, the company failed to execute the contract. This time, however, Brown was
furnished with a notice of right to rescind, but he was not advised of the nature of these or any of the documents he signed on this date.
Nonetheless, pursuant to that contract, AFB began to install siding on the Browns' home. However, the job was not completed, nor was any of the soffit and facia installed as called for in the contract. What little work was done was done without proper permit as required by the City of New Smyrna Beach.
Even though the work was not completed, in early 1980 representatives of AFB prevailed upon Mr. Brown to sign a certificate of completion without advising Mr. Brown of the fact that he was indicating thereon that the work called for in the contract was complete.
After AFB ceased work on the Brown property without completing the job called for, Brown was convinced to sign another contract calling for a cash price of $4,000.00 for the installation of aluminum siding on the Brown home. Sixty payments of $100.00 each would bring the total payments to $6,000.00 On the day this third contract was signed, Mr. Brown was also asked to sign, and did sign, a mortgage on his property in the amount of $4,000.00 dated December 27, 1979. Mr. Brown did not know he was signing a mortgage nor was he advised of the contents of the documents before he signed them. Thereafter, however, Respondent notarized the mortgage bearing date of December 27, 1979, indicating that he witnessed the signature of both Browns on that date. In fact, he did not witness the signatures on that date or any other date. In addition, subsequent to Brown signing the mortgage, Respondent altered the terms of the mortgage reflecting a $6,000.00 rather than $4,000.00 security interest. Respondent initialed the change and subsequently caused the mortgage to be filed in public records. None of the documents which Mr. Brown signed were given to him at the time of signing by the salesman. In fact, all copies which he received were sent to him by mail at a much later date. Respondent justified the alteration of the amount of the mortgage on the basis that he was conforming it to the intent of parties and the contract. However, Brown did not know what he had signed.
Approximately two years later, in early 1982, two salesmen from PVO advised Mr. Brown at his home that they were going to complete the work called for under the previous contract at a cheaper price. They advised him that in the future all payments were to be made to PVO and, as a result, Mr. Brown discontinued the payments which he had been making under the earlier contract with AFB regularly since 1979, even though the work had not been done. Pursuant to these oral representations, on February 2, 1982, Mr. Brown signed another installment contract and note which provided that PVO would install aluminum soffit and facia around the entire house, install aluminum window and door trim, and cover the rear porch ceiling with an aluminum ceiling material. The cash price for this work was listed on the contract as $3,440.00 payable over 54 monthly installments of $98.214 at 12 percent per year add-on interest. The contract also provided for payment to be secured by a mortgage on the Brown's home.
Again, Mr. Brown was not aware of the fact that he was signing a contract, nor was he verbally advised of the nature of the documents he was signing at or prior to doing so. The contract in question failed to contain the salesman's license number and the agreement itself was not signed by a representative of PVO. Mr. Brown was also not given either written or oral notice of his right to rescind the contract.
On February 24, 1982, Mr. Brown was convinced to sign yet another retail installment contract secured by a mortgage on his home. This contract
called for PVO to install aluminum ceilings on both the upstairs and downstairs porches. Again, Mr. Brown was not made aware of the fact that he was signing a contract at the time he signed this document, which called for a cash price of
$1,800.00 financed over three years at monthly payments of $68.10 each. The salesman's license number was again not listed on the contract, nor was Mr. Brown furnished either a written or verbal notice of his right to rescind the contract.
The work called for in the February 2 and 24, 1982 contract was performed as called for. However, no permit was ever obtained for the work though Section 10-65, New Smyrna Beach Ordinances requires it.
Once the work was completed, the Browns signed a certificate of completion. And at some time subsequent to February 24, also they signed a series of typewritten contract, notes, and other documentation including a mortgage on their property, all of which were dated February 2, 1982. All of these documents also contained the signature element for Leroy Jackson, an individual who had become a co-owner of the Browns' home subsequent to December 27, 1979, but prior to February 2, 1982. Mr. Jackson was a resident of Detroit, Michigan, and consequently the documents were sent there for his signature. The mortgage, bearing Jackson's signature and dated February 2, 1982, reflects that all signatures were affixed and the document notarized in Volusia County, Florida, on February 2, 1982. The notary jurat executed by an individual named French, indicates that this notary witnessed all signatures in Volusia County, Florida. However, as was stated before, no one signed the document prior to February 24, 1982, and Mr. Jackson's signature was affixed in Detroit, Michigan.
The typewritten contract executed on February 24, combined the terms of the handwritten February 2 and February 24 contracts increasing the monthly payment, the total amount of the payment, and the percentage rate. This document, however, and all other documents, bore the date of February 2, 1982, though they were not presented or signed until on or after February 24.
Further, the completion certificate which the Browns' signed, purportedly on February 19, 1982, referred to work that was not to be performed until after March 1, 1982 under the terms of the contract dated February 24, 1982. It is clear from all of the above that the documentation prepared by individuals in the employ of the Respondent is totally unreliable and false in most particulars, all to the detriment of the customer, Mr. and Mrs. Brown. Payment amounts were raised, the total amount was raised, interest rates were excessive without disclosure, and the documents themselves were insufficient in form.
As a result of Mr. Brown's ceasing payments on the 1979 contract when he signed the new ones in 1982, Mr. Brown was required to secure the services of an attorney who was able to negotiate a partial settlement of the matter with Respondent's company. Pursuant to the settlement, Mr. Brown continued to make payments of $100.00 per month on the December 27, 1979, contract and will do so until such time as the $1,000.00 balance is paid.
At the request of the Browns' attorney, in May 1984 an architect inspected the work performed on the Browns' home and determined that it was, for the most part acceptably done. However, in October 1982, a representative of another aluminum company had previously inspected the work done on the Brown house, at the request of Brown's attorney. His estimate of $5,000.00 for the work, which included labor, materials, and a 30 percent profit and overhead
margin, was substantially lower than that charged by Respondent's company for the same work.
NEWMAN
Some time in mid-1979, Floyd Newman was visited by a salesman for AFB. Mr. Newman repeatedly told the salesman he did not want any work done, however, the salesman convinced Newman to allow him to display his material.
During the course of the sales presentation, the salesman measured the Newmans' open carport. He then attempted to convince Mr. Newman to install an aluminum carport over the open area at a cost of $3,200.00. Mr. Newman immediately advised the salesman that he did not want the carport and could not pay for a carport out of his sole income of $212.00 per month from pension and food stamps. In response to this the salesman advised Mr. Newman that the company would finance the construction and asked if the Newmans would be willing to mortgage their home. Mr. Newman indicated absolutely not, nonetheless, the salesman convinced Mr. Newman to sign a piece of paper which he represented was merely for the company file. In reality it was a preprinted form retail installment contract. The only thing on the form at the time Mr. Newman signed it was the amount of $3,200.00. The space for the description of the work to be done, and that for the computation of payments was blank, except for the total sum. Mr. Newman was given neither explanation of the contract nor a copy at the time he signed.
This blank contract, however, was, subsequently filled in out of the presence of Mr. Newman. It called for the installation of a carport as well as the delivery of eight cans of paint for $3,200.00. The document, which was dated August 18, 1979, reflected the salesman as David Cavetta. However, numerous other spaces were still left blank. For example, the commencement and completion dates were not given, the finance charge information was not given, and the agreement was not signed by a representative of the company.
Several weeks after Mr. Newman signed the blank contract, two men came out to begin work on Mr. Newman's home. On their arrival, Mr. Newman asked them to leave but they went ahead nonetheless and completed the work. One of the installers, Charles Barefoot, was an independent, unlicensed contractor. He was compensated on a square foot basis. Barefoot and the other installer, Mr. Seibert, completed the installation of the carport without obtaining any permit required for the project.
About two weeks after the carport was completed the Respondent came to the Newmans' property with certain pre-printed blank forms that he wanted signed. At this point, Respondent told the Newmans' that the papers merely showed that the work had been done, and in response to his request Newman signed four or five of the documents.
One of the documents signed on this occasion was a mortgage deed, and others included a home improvement sales contract, a certificate of completion, a credit application, and a notice of right of rescission. The Newmans', whose ability to read and write is limited, did not know what it was they had signed and Respondent did not explain the documents to them. Mr. and Mrs. Newman completed the fifth grade of school. Neither has any experience with credit. The only purchase they made on time was their home, and on that occasion the paperwork was completed by the seller and the Newman's signed what they were asked to sign.
The contract brought by Respondent was dated August 18, 1979 but was not signed until approximately four weeks after that date. This typewritten contract provided for the same work as on the handwritten one. The cash price was $3,200.00, but when credit, life insurance, official fees, and a finance charge of $2,465.77 were added, the deferred payment price, with interest at
16.65 percent over 84 monthly installments came to $5,989.20. The interest rate on the contract exceeded the legal limit.
The mortgage deed, also dated August 18, 1979, which was signed in blank at the same time as the contract, at the request of Respondent, was filled in at a later date. Respondent notarized the Newmans' signatures on the instrument. The mortgage deed referred to property located on Huggins Street, in Lake County, Florida, property which the Newmans' had not owned for several years at the time the mortgage was executed. Consequently, there were two falsifications on the mortgage. The first was the improper property serving as security, and the second was the erroneous date, both items placed there by the Respondent after the Newmans signed. The Newmans denied giving Respondent the property description for the Huggins Street property. Respondent, at first contending that the Newmans were the ones who gave it to him, subsequently admitted that he may have secured the property description from county records subsequent to the date the Newmans signed the mortgage deed in blank. It is clear, and so found, that Respondent procured the Newmans' signature on a blank mortgage deed, filled it in with date and property description thereafter, and falsely notarized the exhibit. None of the documents were, according to Mr. Newman, explained to him at the time they were signed, nor was he given a copy of them at the time of signing. Instead he received copies through the mail several weeks after Mr. Licht had come to their home.
Approximately two months after the initial contact in August, Mr. Newman received a letter asking for the first month's installment payment for the carport. Thereafter, between November 2, 1979 and November 2, 1980, Mr. Newman made payments to AFB in a total amount of $775.00. It was not until approximately nine months after he began making payments that Mr. Newman found out what documents he had signed. When he did, he immediately stopped making payments.
While Mr. Newman was making the payments, however, a salesman from PVO, a successor to AFB, came back to the Newmans' property, ostensibly to see how the previous work had been accomplished, but in reality to sell additional home improvement services. On that visit Newman again signed a retail installment contract and a notice of rescission of rights, which provided for PVO to install aluminum soffit and facia around the Newman home for $1,375.00. At this point the contract was not completely filled in as to the terms of the financing, but the instrument did provide that the original contract of August 18, 1979 was to be incorporated in the latter contract dated July 22, 1980.
This work was performed by Larry Willbanks, an independent contractor acting as an applicator for the Respondent. Willbanks was not licensed as a contractor in the state of Florida and neither he nor anyone else obtained the required building permits to accomplish the work in question.
Once the work was done, the Newmans signed additional typewritten documents which conformed to the original handwritten documents signed previously. The typewritten contract which the Newmans signed after the work was completed was dated July 22 1980, though the actual signing took place several weeks later. It provided for payment of $4,683.05, which included the total price of the new work done and the unpaid balance on the carport, as well
as additional administrative expenses. After the finance charge was added in, the total deferred payment price was $8,615.88 to be paid over 84 monthly installments. The contract also, by bearing interest at 19.5 percent, overcharged the Newmans finance charges in the amount of $614.00.
Though the Newmans signed the documents dated July 22,they claimed they did not know they had signed an additional contract and note because they thought the work was included in the earlier contract. They have not received copies of these July, 1980 documents, however. After observing both Mr. and Mrs. Newman in their sworn testimony at the hearing, it is obvious that the Newmans may feel that they have an opportunity to take advantage of the situation and have themselves excused from any further payments. Nonetheless, clearly they are inordinately unsophisticated and there is little chance that they understood just what it was they were signing. When this is considered along with the obvious fact that Respondent personally secured an unlawful mortgage on property formerly owned by the them, it is clear that they were the victims and not the Respondent. In any event, several months after signing the documents, the Newmans stopped making payments on the basis that they felt they had been tricked into signing the earlier 1979 one.
SUTTON
Aleen Sutton, a nearly illiterate 72 year old laundress, resides in Sanford, Florida. At the time pertinent to this complaint, in 1980; her home was in very poor condition. There was a hole in the porch floor and in the kitchen; the dining room floor was sagging; and the windows were supported by rotten, cracked, and unstable wood.
Just about this time Mrs. Sutton was advised that a government sponsored home improvement project was under way in the area which would help low-income homeowners improve their property. In order to determine if she was eligible for the program, Mrs. Sutton went to the agency's office where she was told that a representative from the agency would come out to see her home and determine whether or not she could qualify.
Shortly thereafter Mrs. Sutton received a telephone call from a solicitor for PVO whom she mistook to be a representative of the agency. She was asked if someone could come out to talk to her about home improvements and, because of her misconception, she agreed.
A PVO salesman, Gary French, came out several days later and when he arrived, Mrs. Sutton, thinking he was with the agency, showed him all of the problems she was having with her home. French advised her that he would fix her home up and showed her pictures of a house which, he represented, would be what hers would look like when it was finished. At this point Mrs. Sutton still thought she was dealing with someone from the agency.
During the initial meeting French got Mrs. Sutton to sign three documents; a contract, a credit application, and a notice of rescission. According to Mrs. Sutton, she did not know what she had signed. Though she signed the right of rescission she was not advised that she had three days in which to decide to do so. Though she gave Mr. French information about her income and her previous credit history, she did not know she was agreeing to finance improvements to her home.
The contract she signed at that time provided for applying aluminum soffit and facia completely around the house; for capping all windows with
aluminum stock; for replacing all rotten wood; and for caulking and sealing all cracks. No mention was made in the contract about the hole in the front porch or kitchen floor or the sagging dining room floor. Though the contract outlined the financing provisions of the transaction, and called for the price to be secured by a mortgage on the house, there was no disclosure statement nor was the salesman's license number filled in. In addition, the contract was not signed by any representative of the Respondent.
The actual work on the Sutton property was done by Mr. Edward Ferguson, an independent contractor working for the Respondent on a per foot basis. At the time he worked on the Sutton property he did not have any type of a license for contracting issued by the State. At no time did he procure any of the required building permits for the work done.
Ferguson put aluminum around the windows and replaced some of the wood. He also installed some of the soffit and facia called for by the contract. However, he did not complete the installation, and the aluminum around the windows was improperly installed.
Before the work was completed, Respondent and some associates went to Sutton's house to get her to sign typewritten copies of the documents she had signed previously. At first Mrs. Sutton refused to sign, indicating that the work had not been completed, and that some damage had been done to her screens. When Respondent paid a cash settlement of $37.00 for the damage to the screens and the clean-up of the debris left by the workmen Mrs. Sutton signed the papers presented to her. The evidence conflicts on whether these documents were signed voluntarily or under coercion. On one hand there is evidence to indicate she was told that she had to sign the paper "or else" on the other hand, there is evidence that once Mrs. Sutton was paid the $37.00 she was completely satisfied and willing to sign as requested. It is likely that Mrs. Sutton, thinking the government was going to pay for the work signed without being coerced once she was paid for the damage and clean-up and it is so found. This does not affect the nature of the transaction. In any event, the documents were signed and the typewritten contract in the amount of $2,600.00 (cash price) and $4,032.96 (deferred payment price) provided that Mrs. Sutton was to give a security interest to secure the payment.
Mr. Sutton contends she did not know what she was signing and had she known the effect of these documents she would not have signed them. She also did not know that she signed a notice of rescission or a certificate of completion, and that since the work was not done she would not have signed it had she known what it was.
Respondent notarized Mrs. Sutton's signature on the mortgage as of May 29, 1980. This document is in error in that it bears an improper date. This is consistent with Respondent's demonstrated practice of violating the rules regarding notarization.
Mrs. Sutton was not furnished with copies of any of the documentation at the time she signed them, but received them somewhat later through the mail. Once the documents were signed, no one from PVO ever returned to the Sutton premises and the work called for in the contract was not complete.
Mrs. Sutton made several payments according to the terms of the contract after they were explained to her by her daughter. However, she fell behind in payments and this precipitated a conference Mrs. Sutton, Respondent, and officials of the Barnett Bank, to whom the mortgage had been sold by
Respondent. As a result Mrs. Sutton filed a suit against PVO as a result of which, in addition to an award to her of compensatory and punitive damages, the mortgage on her property was cancelled.
FRANCIS
In December 1981, Bryce Francis, in response to a brochure he received in the mail from PVO, expressed an interest in the company's services. As a result, one of PVO's salesmen, Jim Heidish, came out to Mr. Francis' DeLand, Florida, home and convinced Mr. Francis to sign a contract for PVO to spray the Francis' home. This initial contract was signed on December 12, 1981, and the contract price was $2,925.00. Somewhat later, on December 31, 1981, Mr. Francis signed a second contract with PVO calling for the company to install aluminum soffit and facia around the overhang of the home, to cover the front porch ceiling, and to replace rotten wood where necessary. This second contract had a price of $2,225.00.
Work was begun on the Francis' home without PVO or any of its employees procuring the required building permits from the City of DeLand or from Volusia County. Mr. Francis refused to allow any work to continue after the first day because of his dissatisfaction with the quality of the work performed. When he checked under some of the aluminum which was installed, which was sagging in some areas, he found that it had merely been installed over the rotten wood which had not been replaced.
OSGOOD
John and Nancy Osgood, older residents of Orlando, Florida, were visited at their home in December, 1981, by Gary French, a salesman for PVO. French asked Mr. Osgood if he would like siding put on his home. When Mr. Osgood told French that he could not pay for it because of his retired status and limited income, and would not mortgage his home to secure the work, French told Osgood that PVO did not need a mortgage. PVO would put up siding on the Osgood home as a demonstration of their product and workmanship for half the normal price, a total of approximately $600.00. Osgood said he would not object to paying a little bit to have his home improved, but that he could not afford any large sums. Mr. French reassured the Osgoods that they would pay only $25 or $50 a month and that they would not have to mortgage their home.
Mrs. Osgood also repeatedly told French she did not want the work done, but French kept coming back and after several days of pressure salesmanship the Osgoods finally decided to go ahead with the work, providing the siding could be obtained at cost.
On or about December 12, 1981, after the repeated visits by French, the Osgoods signed a retail installment con tract and note which called for PVO to install aluminum siding on the exterior walls of the home and trim on all windows and doors. Cash price was $7,000.00 which when financed over 108 monthly payments resulted in a deferred term payment price of $14,581.08 which included $7,570.00 in finance charges. The contract also provided that a security in the form of a mortgage on the Osgoods' home would be provided.
Neither Osgood can read or write with any proficiency. Though they have, in the past, purchased items on credit and have a mortgage on their home, they have never had any credit cards. Those cases where they did purchase on credit, the seller completed the paperwork and the Osgoods', accepting the seller's representation as true, signed what was put before them.
The Osgoods were never told that the contract price for the siding was
$7,000.00 which would eventually increase to $14,570.00. This amount far exceeds the $600.00 which Mr. French initially advised the Osgoods the work would cost. They also were never told that they would be signing a mortgage on their property to secure payment of the contract price. It is obvious that the Osgoods did not know what they were signing and signed trusting in Mr. French, who they had previously advised that they were unable to read and write.
This contract, as in the case of many others, did not contain the salesman's license number, nor was it signed by the company.
On December 18, 1981, the Osgoods signed another contract containing many of the same provisions as the previous one, as well as a notice of right of rescission. Here again, they were not advised before they signed as to the nature of the documents they were signing, what the documents pertained to and what their rights were under the contract. This contract, as well, was not signed by a representative of the company.
Several weeks later, on December 30, 1981, the Osgoods were prevailed upon to sign another contract with PVO for the installation of an aluminum awning over the front porch. This contract had a price of $1,665.00 and also called for the execution of a mortgage on the Osgoods' home as security. It also contained blank spaces when it was signed by the Osgoods which related to finance charges, total deferred payment, and the added annual percentage rate, as well as the number of payments to be made for the amount of monthly payments. The contract was not signed by any representative of the company.
Approximately two weeks later the Osgoods were induced to sign a fourth contract which, this time, provided for PVO to install eleven aluminum window awnings around the exterior of the home on each window. This contract, as in the case of the others signed by the Osgoods, contained blank spaces at the time it was presented to the Osgoods for signature. For example, the salesman's license number was not furnished and the contract was not signed by a representative of PVO. Although this contract also required the Osgoods to mortgage their home as security for the contract, they were not advised of this information prior to signing, nor were they advised of the total amount they would have to pay under the contract, or the amount of their monthly payments.
The `aluminum work called for in the several contracts signed by the Osgoods was performed by an independent contractor working for PVO who accomplished what work he did without any type of license and without first obtaining any of the required permits. While this work was being accomplished, Mr. Osgood received copies of all the documents which he had previously signed, but which had not been furnished to him at the time of signing.
After the work was stopped before completion, French presented the Osgoods with a typewritten contract bearing the date December 18, 1981, and typewritten copies of all the other documents, such as the right of rescission, completion certificate, and mortgage, which had been signed by the Osgoods when in handwritten form prior to that time. The typewritten contract incorporated all the provisions of the prior handwritten contracts and reflected a cash price for all the work of $12,565.00 to be paid over 108 monthly payments of $242.33 each. It was at this time that Mr. Osgood first learned that his monthly payments would be in that sum. Even at this point, however, the Osgoods were not advised verbally that they would be required, under the terms of the contract, to execute a mortgage on their property as security for their payment.
This mortgage, which was signed by the Osgoods before the work was satisfactorily completed, reflected the deferred payment price, of $26,171.64. The mortgage was notarized by Gary French, the salesman, who certified that the Osgoods had appeared before him and signed it on December 19, 1982. This was blatantly false. The Osgoods contend, however, that even at this point they were not aware that the document they had signed was a mortgage and they continued to rely on French's representation to them that a mortgage would not be necessary for the work to be performed.
When Mr. Osgood subsequently discovered that he had signed a mortgage on his house and that his monthly payments were far in excess of that which he had anticipated he would be required to pay, he nonetheless attempted to make the payments. He paid a portion of the first payment, but thereafter defaulted. Foreclosure action was brought against him by PVO, but was subsequently dismissed upon arrangements being made that the Osgoods would pay $25 a month until the entire debt is paid.
Though the Osgoods were convinced to sign a certificate of completion dated January 28, 1982, the project was incomplete at the time and remains incomplete. Not even half of the window awnings have been installed, and inspection of the property made in April of 1983 reflected that the aluminum siding was not properly grounded and that electrical wires are hanging dangerously close to one of the awnings. This latter feature may not be the responsibility of Respondent. An independent estimate of work identical to that provided for in the PVO contracts with the Osgoods reveals that a total cash price, including a 20 percent profit and overhead margin, and a 20 percent allowance for commission would be under $4,000.00, a sum substantially less than that listed as the cash price on the PVO contract.
GADSON
Some time during the spring of 1982, Mr. R. B. Polk, a salesman for PVO, came to the Ocala, Florida, home of Pearl B. Gadson, a 74 year sight- deficient widow who lives with her grandson on $274.00 a month which she receives from Social Security, and $300.00 which he receives from the same agency. Mr. Polk told Mr. Gadson that the government was fixing up homes for the elderly, which included the installation of aluminum, soffit and facia. Mrs. Gadson indicated that she didn't need the aluminum but did require boards replaced on the eaves and on the porch of her home. Mr. Polk specifically advised Mrs. Gadson that the government would pay or help pay for this work to be done, and since Mrs. Gadson had heard of a project in Lakeland, Florida, where the government was paying for the repair of private homes, Mrs. Gadson assumed that Polk was involved in the same type of project.
Mrs. Gadson advised Mr. Polk that before she made any commitment she wanted to talk with her son in Connecticut. When Polk came back the second time he told her he had already talked with her son about the work to be done on her home. On this second visit, Mrs. Gadson was prevailed upon to sign some papers which, she was told, she would have to sign in order for the government to assume the cost of her home repair. One of the documents that Mrs. Gadson signed on that occasion was a retail installment contract on a pre-printed form, which at the time she signed it contained blank spaces where the description of the improvements, as well as the terms of the contract should be inserted. The only information on the form at the time she signed it was her name and address and the salesman's name and license number. She also signed a notice of right of rescission and credit application on this same second visit. This contract, which was subsequently dated May 10, 1982, was filled in as to the missing
particulars by someone for PVO after Mr. Polk left the Gadson residence. When finally filled in, it provided for PVO to install aluminum siding on all exterior walls, new screens on the front of the home, and steps at the front door. Cash price was $7,000.00, to be financed over 84 payments of $153.56 per month, for a total deferred payment price of $12,899.04. The documents which Mrs. Gadson signed were not given to her at the time of signing, but were delivered by Mr. Polk on May 19, 1982, some ten days after signing.
When the installer, Melvin Nichols, applied for and obtained the building permit to do this work from the City of Ocala, he utilized a notarized letter of authorization signed by the Respondent. Eight days after the date on the contract, Mr. Nichols installed the siding as called for in the contract and put the screen on the front porch. He also attempted to repair the porch roof overhang but failed to do so satisfactorily and also failed to install the front steps.
At some later time Mrs. Gadson was also requested to sign typewritten copies of the documents previously signed, as well as a certificate of completion, both long and short form, and a mortgage. All of the documents, with the exception of the certificate of completion, were back-dated to the date of the original handwritten contract of May 10, 1982. At no time was Mrs. Gadson advised that she was signing a mortgage on her property, or for that matter, even a contract which would cost her some $7,000.00 if she paid cash for it. She believed that she was signing "government papers" and had she known that she was encumbering her property she would not have signed these documents.
Once she was informed that she had to pay, she began making payments to the best of her ability. However, she began to fall behind and is still not current or up-to-date on her payments.
At no time pertinent to this complaint was Mr. Polk licensed by the State of Florida as a home improvement salesman.
SZUCS
Michael Brandt, a salesman for PVT first approached Thomas Szucs in August or September, 1982 in St. Petersburg, Florida. Mr. Szucs, a 44-year old unmarried man, who lives alone, while having been determined to be mentally and physically competent is, nonetheless mentally retarded. Mr. Szucs receives a monthly income from Social Security because of his disability and is the beneficiary of a trust set up by his grandparents who also left him the house in which he resides in St. Petersburg.
The initial contact with Szucs took place in the home of Szucs' neighbor where Brandt was attempting to make a sale for PVT, and he asked Szucs if he was interested in having home improvement done. Apparently, Szucs indicated he was because somewhat later another salesman, Woody Ayers, came to Mr. Szucs' home on several occasions and as a result of their discussions, on September 4, 1982, Mr. Szucs signed a contract with PVT providing for the company to install aluminum soffit, facia, gutters and windows on his home.
This contract was a cash sales contract in the amount of $8,640.00. Szucs was not given a copy of the contract at the time of signature but did receive a copy in the mail at a later date. Mr. Szucs contends that he was advised by Mr.
Ayers that the work proposed by PVT would increase the value of the home by between eight and nine thousand dollars, but he was not advised of his right to rescind the contract within three days.
The work on the Szucs' house was performed by Melvin Nichols, an independent contractor working with PVT. Mr. Nichols has never been licensed as any type of contractor in the state of Florida. He began doing the work called for in the contract without first obtaining any permits from either local or county government and continued to do so until he was advised by the St. Petersburg police that he had to either get a building permit or stop work. Thereafter, on September 9, 1982, Mr. Nichols obtained a permit from the City of St. Petersburg using a letter of authorization signed by the Respondent.
Approximately ten days after Nichols started work on the Szucs' project, Mr. Szucs informed Mr. Ayers that he could not or would not pay cash for the work as was called for in the initial contract. As a result, a second contract, this time providing for the same work for the same cash price, but calling for 120 payments of $158.62 each, was signed. This contract provided that the amount due was to be secured by a mortgage on the Szucs' home and bore a date of September 4, 1982, several days prior to the actual date of signing.
Mr. Szucs was not notified of his right to rescind this contract nor was he advised that he would be required to sign a mortgage on his property to secure the payments due under the contract. However, when the work was completed Mr. Szucs was asked to sign a third contract, this time the typewritten copy of that installment contract signed previously. In addition, however, he was asked to sign a typed notice of rescission, certificate of completion and a mortgage, all of which, according to Szucs, were pre-printed forms and had not been filled in at the time they were presented to him for signature. This typewritten contract and the notices of rescission all were dated September 4, though they were signed somewhat later. The mortgage, in the amount of $19,034.40, giving a security interest in the Szucs' home in favor of PVT appears to have been filled in as to its particulars after signature by Mr. Szucs. Mr. Szucs received copies of the documents he had signed , in the mail, between two and four weeks after he signed them.
When Mr. Szucs' attorney, who had not been previously contacted regarding the work being done by PVT on the Szucs' residence, found out about it, he had an inspection of the work done by a state-certified contractor, who estimated that, including a 12 percent profit margin, the value of the work done was approximately $2,700.00. Thereafter, the attorney negotiated with Respondent for satisfaction of the mortgage on the Szucs' home and paid Respondent $3,000.00 for it.
There was substantial difference in the testimony regarding the value of the materials provided by PVT in this work on the Szucs' residence. Respondent attempted to show that the expert who testified regarding the value of the work done was motivated by some inappropriate consideration to give a low estimate. It is found however, that even if this estimate was low and allowing for some increase, the amount charged by Respondent was exorbitant.
LOREK
In April, 1983, Chester and Evelyn Lorek, entered into a contract with PVT to install shingles on the roof, drip edging around the roof, and aluminum soffit and facia on all existing overhang of their home in Tampa, Florida. The cash price on the contract was $7,631.55 to be paid over 120 payments of $139.89 a month, for a total of $16,786.80. After signing that contract however, the Loreks decided to pay cash instead of financing and thereafter, on May 9, 1983, entered into a second contract with PVT to perform the same work except for the drip edge for a cash price of $5,000.00.
According to normal practice, the contracts were forwarded by PVT to the expediter for that company located with PVO in Orlando, who attempted to locate a roofer to complete the project. PVO had been using Johnson's Roofing Company in Tampa for most of their work in that area. However, at this particular time, Johnson's was unavailable and attempts to locate another roofing contractor to do the job were unsuccessful. Since the work had to be performed on the roof before the aluminum work could be done, PVT entered into a contract with Gary Cook, who installed the aluminum soffits and facia, to obtain a local roofer to perform the necessary roofing work on the Lorek home. Cook, however, either could not or would not locate a licensed roofing contractor and instead did the work himself, along with his helpers. Cook is not a licensed roofer.
Apparently the Loreks had some question about the work being done because on May 9, 1983, they called the building department in Tampa and requested an inspection. According to the inspector who did the actual review, Archie Arthur, Cook had failed to secure any permit for doing the work. In addition, the work that was done was in violation of the building code in that the wrong size staple was used to affix the shingles to the roof, and neither the lead boots on the roof ends nor the flashing was replaced as required. As a result, a notice of violation was issued which ceased work on the property. Because the roof work was not done, Cook was unable to complete the aluminum work as well.
After the work was stopped however, the Loreks contacted another roofing contractor who was properly licensed, who obtained the necessary permit, and who completed the roofing work as necessary for an additional sum of
$1,960.00.
During all this time Cook was not licensed as a contractor in any capacity in Tampa or by the State, which fact either was known or should have been known to the Respondent. In any case, Respondent at no time visited the Lorek project while it was being accomplished.
HUDSON
In April or May, 1983, Flossie Hudson, a widow, was contacted by Bruce Coblitz about having some work done to her home in Orlando. Coblitz was an independent contractor who worked with PVI. At the time he dealt with Ms. Hudson he was licensed by the state of Florida as a home improvement salesman and he employed canvassers who obtained leads for him.
Mrs. Hudson had a carport which had previously been enclosed with blocks and a tar and gravel roof, but the interior had not been completed. On their first meeting, Coblitz told Mrs. Hudson that PVI could finish off the carport, making a room out of it, including drywall, ceiling, paneling, carpet and insulation for $1,600.00 and during their discussion Mrs. Hudson got the impression that she could have the work done for payments of from $50.00 to
$100.00. During that conversation on May 11, 1983, Mrs. Hudson signed a piece of paper prepared by Coblitz which turned out to be a home improvement sales contract and promissory note.
The terms of the agreement provided for PVI to finish the room remodeling by installing drywall, paneling, wall-to-wall carpeting and two inside doors for a cash price of $6,000,00 instead of the $1,600.00 which Coblitz had verbally represented to Mrs. Hudson. The $6,000.00 was to be
financed over 120 payments at $110.00 per month. At the time she signed the contract Mrs. Hudson also signed a notice of rescission and a credit application.
Mrs. Hudson contends that Mr. Coblitz did not tell her she was signing a contract nor did she know what any of the documents she signed were. As far as she was concerned she thought they were documents authorizing a credit check. Her eyesight, she contends, is not very good and she has never been able to ready very well, even though she went through the eighth grade in school. The documents themselves had blank spaces on them which were not filled in prior to Mrs. Hudson's signature and Mrs. Hudson was not given copies of the documents at the time she signed them.
Several days later, on May 16, 1983, Mr. Coblitz again visited Mrs. Hudson and had her sign a second sales contract which called for PVI to do the same work as outlined in the May 11th contract in addition to work to be done on an archway entrance and adjoining wall. The cash price was increased to
$7,000.00 and the monthly payments to $128.52.
Again, Mr. Coblitz did not advise Mrs. Hudson that she was signing a contract and again, she contends, she did not know that the document she had signed was a contract. According to her she was still waiting for Coblitz to bring out a contract for her to sign and, again, she was not given a copy of the May 16 contract at the time she signed it. Neither the May 11 nor the May 16 contract was signed by a representative of PVI nor was Mrs. Hudson ever informed of her right to rescind either contract within three days. Coblitz told her that the work performed by PVI would be guaranteed, but the contracts with PVI which were signed by Mrs. Hudson specifically stated that no warranties of any type were being given.
The work on Mrs. Hudson's property was begun by a PVI subcontractor, Steve Kolozsvary, an unlicensed contractor. Mr. Kolozsvary failed to pull any of the required permits for this work and he testified that when he was supposed to obtain a permit Mr. Valentine, an employee of PVI would give him a letter of authorization for that particular project. None was given him for this job. As of the time the work was begun, on May 19, 1983, Mrs. Hudson had still not received a copy of the contract. The following day she mentioned it to her daughter, Teresa, who decided that no work should proceed until her mother received the contract. On May 21, 1983, when the workmen came, she refused to let the work continue and sent them away. She claimed that she did this because her mother had no contract and also because the materials which the workmen had brought to the site appeared to her to be of inferior quality.
Once the work was stopped both Coblitz and Valentine, at different times, came out to Mrs. Hudson's home to find out what the problem was. When they found out that Mrs. Hudson was refusing to allow the work to proceed because she did not have a copy of the contract, Valentine proposed that a new contract be drawn up.
This new contract, dated May 25, 1983, provided for the same work to be completed as was called for in the earlier contract but with a reduction in cash price to $4,006.00 to be financed over 72 months at $95.69 each. Teresa Hudson advised her mother to sign this contract because some of the work had already been accomplished and she believed they had no choice. Based upon the advice of her daughter Mrs. Hudson signed this contract unaware that she had signed any previous contracts. She was given a copy of the May 25 contract when it was signed and the following day she exercised her right to rescind that
contract. This rescission was based on what was perceived as irregularities in the name of the salesman listed on the contract.
Kolozsvary applied for a building permit to do the Hudson work on May 26, 1983 after the contract had been rescinded but no further work was done on the contract. At the time of rescission 60 percent of the work called for had been completed.
Representatives of the City of Orlando, Building Inspection Department, inspected the property on June 1, 1983, and discovered several deficiencies. There was no fire-blocking material in the vertical and horizontal openings in the wall and the wires which held up the suspended ceiling were not properly spaced.
At no time when Mr. Valentine was negotiating with Mrs. Hudson for amendments to the contract on behalf of PVI was he licensed by the state of Florida as a home-improvement salesman. An independent evaluation of the work listed in the contract that PVI proposed to do resulted in a total estimated price for the work of $3,444.40. This amount included profit and salesman's commission. It is not so far off that price of $4,006.00 contained in the May 25, 1983 contract.
JOHNSON
Sometime in the late spring of 1983, a canvasser employed by Bruce Coblitz, came to the Orlando, Florida home of Mabel Johnson. He advised her that PVI was starting a new business and he was inquiring of residents in her neighborhood to see if anyone desired to have an extension or addition added to their home. Apparently Mrs. Johnson indicated some interest because approximately a week later Rick Midden came to Mrs. Johnson's home and was told by her that she wanted a cement-block addition. Midden talked her out of that indicating it would be too costly and suggested that the screened-in patio in back of her home could be modified by PVI with aluminum that would be considerably less expensive than the $25,000.00 estimated cost of concrete- block. In fact, Midden told Johnson that an aluminum addition would cost her approximately $10,000.00 with monthly payments available. Midden, at the time, was not licensed as a home improvement salesman in the state of Florida, a fact which was known to Respondent's associate, Mr. Greenberg.
On a second visit, Midden along with another salesman, Rick Woods, took Mrs. Johnson to visit another home in the area where PVI had constructed an addition similar to that which they were proposing for her. Mrs. Johnson was still not satisfied and wanted some more time to consider. Midden agreed to come back a fourth time.
On this fourth visit, Mrs. Johnson signed what she understood was a "temporary contract", a credit application and a notice of right of rescission. She was advised at that time by Mr. Midden that when the work was completed she would have to sign another set of papers.
This first contract, however, which provided for PVI to remove the existing roof over the patio, enlarge the slab, in stall a glass and screen enclosure, install paneling with insulation, wall-to-wall carpeting, and a server from the kitchen of the home, showed a price of $10,000.00 financed over
120 payments of $183.60. Total deferred price was $22,032.
This contract however was subsequently voided prior to work beginning and a second contract, along with the ancillary papers, was executed on June 1, 1983, and provided for PVI to do all that was included in the original contract plus adding three electrical outlets. The financing terms were identical with that in the previous contract and Mrs. Johnson was given a copy of both contracts and the notice of rescission at the time they were signed.
Thereafter on June 8, 1983, Mr. Midden applied for and obtained a building permit from the City of Orlando to do the addition to the Johnson home. Steven Kolozsvary was the individual who performed the work according to a subcontract with PVI and the addition was completed sometime that month.
Once the work was completed Mrs. Johnson was requested to sign a typewritten contract, a completion certificate, a notice of right of rescission, and a mortgage dated June 20, 1983. The terms of the contract were identical to the earlier non-voided handwritten contract. Mrs. Johnson was not given copies of the typed contract at the time of signature but received them approximately a week and a half later through the mail.
The work performed was not done correctly. Water seeped in around the baseboards and notwithstanding the fact that Mrs. Johnson kept calling PVI to speak with Mr. Midden, nothing was done to correct the problem. She ultimately spoke with Elliott Greenberg's son in July, 1983 and after several calls, someone finally came out to attempt repair but the problem was not corrected.
After continued effort to have the problem rectified, Mrs. Johnson finally filed a complaint with Petitioner herein and also called the City of Orlando, determining that a final inspection had not been performed. It was also discovered that no electrical permit had been pulled prior to the work and in September, 1983 an inspector with the Orlando Building Department found that the aluminum siding installed was not properly grounded. Another inspection by the Orlando Building Department, dealing with electrical code violations, indicated there was no light at the back door, there were no outside receptacles and there were insufficient receptacles within the structure. As for the outside receptacles, Mrs. Johnson indicated she did not want them installed because of the potential that other people would use her electricity. Efforts by the building department to determine who had done the electrical work on the project, through calls by the building department to PVI, resulted in PVI advising that they did not know who had done the work.
It was not until Mrs. Johnson filed her complaint with the Department of Professional Regulation and the City of Orlando that Respondent first came out to the Johnson residence. He determined that the water was seeping in because the slab for the addition had been poured too low and directed that the slab be repoured. This was done by Mr. Kolozsvary and the repairs were successful, approximately four months after the project was turned over as being completed under the contract.
THOMAS
Lizzie and Elijah Thomas are an elderly couple who live on a total of
$304.00 per month Social Security payments. Any time payments they have made in the past have been based on paperwork completed by the seller. They own their house in Orlando, Florida, which they share with their grandchildren Annette and Johnnie Odums. Though Annette has completed the eleventh grade she can barely
read or write and Johnnie Mae Odums, who went to school through the tenth grade, can read and write only a little.
In May, 1983, Bart Mauldin, an employee of Bruce Coblitz, contacted the Thomases asking them if they were interested in having any improvements done to their home. Apparently he felt that some potential was there because some time later Coblitz himself came to the Thomas home and advised them that PVI would install a new floor, cabinets and countertops in the kitchen; a bathtub, commode, soapdish, toilet paper holder and towel rack in the bathroom; and repair the bathroom sink and replace the bathroom tile. According to Coblitz all this work would cost five or six hundred dollars and on this visit the Thomases signed some papers pursuant to Coblitz' request. It turns out that these papers constituted a home improvement sales contract, promissory note contract, and security agreement and disclosure statement dated June 1, 1983. Lizzie Thomas actually signed the documents but Elijah signed with an "X".
This contract provided for PVI to do substantially the work referred to above for a cash price of $6,000.00 financed over 120 payments of $110.16 each. The payments were to be secured by a mortgage on the Thomas' home. This contract contained several blank spaces at the time it was signed by the Thomases, including the dates for the commencement and completion of the work, and the contract was not signed by a representative of PVI. Neither one of the Thomases were advised by anyone from PVI that the contract price was $6,000.00 instead of the $600.00 originally quoted. The Thomases were not given a copy of the contract at the time of signing.
On the date of signing they were also requested to sign a notice of right of rescission but they were not informed as to what that document was nor were they informed verbally of the right to rescind the contract. The Thomases also signed an application for an installment loan at the same time but they were not advised of the effect of the document they were signing.
About a week after the signing work was begun by Gary Householder, a subcontractor working for Bruce Coblitz. Householder and his crew worked on the home periodically for two days. On the second day, one of the workmen requested Mrs. Thomas sign a piece of paper. Because of arthritis in her hand she was unable to do so at the time. As a result she asked her granddaughter, Johnnie Mae to sign the paper which turned out to be a certificate of completion dated June 10, 1983. Neither Mrs. Thomas nor Johnnie Mae Odums knew what that document, signed on June 10, was. Neither was given an opportunity to read it even if they could, but they were told the workmen would be back the following day. The work that was performed pursuant to the June 1, 1983 contract was performed without the required building permit being pulled.
On June 11, 1983, Mrs. Thomas was asked to sign more documents which included typewritten copies of the previously signed contract and ancillary papers. The typewritten contract terms were essentially the same as those contained in the hand written contract and while Mrs. Thomas signed her name, Annette Odum signed Elijah Thomas' name to the typewritten agreement. Again, the cash price stated in the contract was $6,000.00 but neither Thomas was advised of this fact nor were they advised that they would be required to sign a mortgage on their home to secure the payments.
The right of rescission agreement was, again, signed without explanation, as was the long form certificate of completion. In that regard, the work covered by the contract had not been completed at the time the Odums were requested to sign that certificate.
The mortgage dated June 11, 1983, provided for 120 payments of
$110.16 each for a total of 13,219.00. Mrs. Thomas signed the agreement without knowing what it was and, again, Annette Odum signed her grandfather's name and witnessed her grandmother's signature. The second witness to Elijah Thomas' signature was William Valentine, the expediter, who in his capacity as notary, falsely notarized that Elijah Thomas signed the mortgage. Neither the Thomases nor Ms. Odums were advised that they had signed a mortgage on June 11, 1983.
Had Mrs. Thomas been aware of the fact that she was mortgaging her home she would not have signed the document. None of the typewritten copies were provided to the Thomases at the time of signing but were forwarded through the mail several weeks later. The Respondent signed the contract and all of the required papers including the dealer certification note on the certificate of completion for PVI.
Later in the month of June, 1983, Mrs. Thomas requested that her nephew, Nathanial Boldes, read some of the documents which she had received regarding the contract in question which she still felt was for $600.00. When Boldes read them he found that the cost was $6,000.00 not $600.00 and also discovered that his grandmother had already signed the mortgage on the property. He also observed the work on the project was not completed even though the certificate of completion form reflected that it was.
Mr. Boldes immediately called Mr. Coblitz and requested the work be completed. Coblitz responded that the work would be completed within three days. In fact, some additional work was done but the project was not completed as requested. Therefore, Mr. Boldes again contacted PVI and in response to this call, Mr. Valentine came out and went through the house with Mrs. Thomas making a list of the things that needed to be done. He procured Mrs. Thomas' signature on this list which turned out to be a completion certificate for these items. Notwithstanding this signature and the fact that the work was not completed, in mid-July, 1983, a representative of PVI persuaded Johnnie Mae Odums to sign the Thomas name to yet another certificate of completion without advising of the nature of this document. However, when they received copies through the mail, Mr. Boldes discovered that the completion certificates had been signed even though the work had not been completed. As a result the Thomases made no payments under the contract and the matter is currently in litigation.
An independent inspection of the work performed on the Thomas' home and that called for by the contract with PVI was conducted. The resulting estimate indicates that the cash price for the total project should be in the area of $4,392.00 including 20 percent sales commission and 20 percent profit.
WILLIAMS
Laura Mae Williams, a retired widow with limited reading and writing skills lives on a $238.00 monthly pension in a home located in Orlando, Florida.
In June, 1983, Gary French and Duane Beard, came to the Williams' home to see if they could sell her some home improvements. They offered to fix the roof and put siding on her home and advised her that the company they were with, PVI, had a good deal for older people.
At this point, French was sales manager with PVI and Beard was a salesman working with the company as an independent contractor.
Beard and French advised Mrs. Williams that the improvements they proposed would cost approximately $4,000.00 and could be financed with payments of $80.00 per month. Mrs. Williams told them that she could not do anything without talking with her daughter about it first. Nonetheless, they convinced her to sign some papers so that after she talked with her children, everything could be taken care of. In reality, on that visit, Mrs. Williams signed a home improvement sales contract, a promissory note, a security agreement, a disclosure agreement, credit application and a notice of rescission rights. None of these were explained to her. All she was told was that the documents were necessary so that the bank would finance her purchase.
This contract, dated June 16, 1983, provided for PVI to remove and replace the roof on the property for a cash price of $4,488.00 payable in 120 monthly payments of $81.69 each. The contract also provided for PVI to have a security interest in the property. None of the documents were explained to her truthfully and though they were given to her at the time she signed, she did not look at them because she had told French and Beard not to come until she had had a chance to talk with her children. She was assured that nothing would be done pursuant to anything they had discussed until she had done so and had gotten back to them. The contract which Mrs. Williams signed failed to reflect the license number of either salesman and the contract was not signed for the contractor.
On June 21, five days after Mrs. Williams unwittingly signed the contract, workmen showed up at her home and began to work on the roof. The work was accomplished by Joseph Panasuk doing business as Joseph Roofing, who accomplished the work without first obtaining the required building permit. It took approximately four hours to complete the work and when the work was completed, Mr. Panasuk had Mrs. Williams sign a certificate of completion. Mrs. Williams did not ask Mr. Panasuk to leave, even though she had not called Beard and French back and agreed to have the work done, primarily because she did not know she could do so.
The evening the work was completed French and Beard came out to Mrs. Williams' house with another paper for her to sign. Again, they did not explain what the document was, but merely said that it was necessary for the bank to finance the project. At this time, however, Mrs. Williams' daughter, Sylvia, was at home and urged her mother not to sign the document. Mrs. Williams did so, however, because she felt she had to. The following day, representatives of PVI came out with more papers to sign. At this point, Sylvia Williams reviewed them and noticed that the contract called for a deferred purchase price of about
$10,000.00 and again urged her mother not to sign the papers. Notwithstanding this advice, Mrs. Williams, nonetheless, signed. This contract, a typewritten copy, called for the same work to be done at approximately the same price as called for in the original handwritten copy.
When Sylvia Williams called the building department the following day, she found out that no permit had ever been pulled to do this work. She thereafter called PVI to check on whether a permit should be pulled and was told that it had been. When she told the woman with whom she spoke that the building department had told her no permit had been issued, she was referred to Bill Valentine, to whom she also told the results of her inquiry. Somewhat later Gary French called her back and said that because they had not read the contract to her mother, they were going to reduce the price to $2,600.00 plus interest, and would bring out a new contract for Mrs. Williams to sign.
Consistent with that, on June 214, 1983, Mrs. Williams was asked to and did sign a third contract which called for the same work to be performed but which reduced the cash price to $2,603.90, plus the finance charge of $1,249.06 for a total of $3,852.90. On this same date Mrs. Williams also signed a Notice of Rescission and a mortgage in favor of PVI.
That same date Mrs. Williams and her daughter took the contract to an attorney and had it rescinded. Thereafter, PVI filed a foreclosure action against Laura Mae Williams and this matter is currently in litigation.
Also on June 214, 1983, three days after the work was completed, the contractor obtained a permit to reroof Mrs. Williams' home from the Orange County Building Department, the City of Orlando Building Department, even though Mrs. Williams' residence is inside the city limits.
An independent evaluation of the contract and the work performed thereunder resulted in a total cost estimate for the project of $2,504.00, including commission and profit, and this figure is approximately $100.00 less than that called for in the final contract. The ultimate contract price here was not exorbitant.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding.
In the two administrative complaints filed herein as well as the numerous amendments to the first, Petitioner charges Respondent with numerous violations of Section 489,129, Florida Statutes (1979 and 1981). Review of both editions reveal there is no substantive difference in the two editions. Therefore, for the purpose of this discussion, this section will be referred to without year with application as appropriate to the time.
Section 489.129, Florida Statutes, permits the discipline of a licensed contractor when any of several situations are shown to be present. In its entirety, it reads:
The board may revoke, suspend, or deny the issuance or renewal of the certificate or registration of a contractor or impose an administrative fine not to exceed $1,000.00, place the contractor on probation, reprimand or censure, a contractor if the contractor is found guilty of any of the following acts:
Upon proof that a certificate or regis- tration has been obtained by fraud or misrep- resentation.
Being convicted or found guilty, regard- less of adjudication, of a crime in any jurisdiction which directly relates to the practice of contracting or the ability to practice contracting.
Violation of chapter 455.
Willful or deliberate disregard and violation of the applicable building codes or laws of the state or of any municipalities or counties thereof.
Aiding or abetting any uncertified or unregistered person to evade any provision of this act.
Knowingly combining or conspiring with an uncertified or unregistered person by allowing one's certificate or registration to be used by any uncertified or unregistered person with intent to evade the provisions of this act. When a certificate holder or registrant allows his certificate or regis- tration to be used by one or more companies without having any active participation in the operations, management, or control of said companies, such act constitutes prima facie evidence of an intent to evade the provisions of this act.
Acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certifi- cate holder or registrant is set forth on the issued certificate or registration, or in accordance with the personnel of the certifi- cate holder or registrant as set forth in the application for the certificate or registra- tion, or as later changed as provided in this act.
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.
Disciplinary action by any municipality or county6, which action shall be reviewed by the state board before the state board takes any disciplinary action of its own.
Failure in any material respect to comply with the provisions of this act.
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 without just cause.
Signing a statement with respect to a project or contract falsely indicating that the work is bonded; falsely indicating that payment has been made for all subcontracted work, labor, and materials which results in a financial loss to the owner, purchaser, or contractor; or falsely indicating that work- ers' compensation and public liability insur ance are provided.
Upon proof and continued evidence that
the licensee is guilty of fraud or deceit or of gross negligence, incompetency, or miscon- duct in the practice of contracting.
The board may specify, by rule, the acts or omissions which constitute violations of this section.
For the purpose of analysis here, the allegations regarding each customer contained in the various complaints filed will be addressed in the same order as in the Finding of Fact, supra.
BROWN
Respondent is alleged to have altered the mortgage signed by the Browns by raising the amount secured thereby from $4,000.00 to $6,000.00. That he placed his initials in the mortgage is to his credit, but does not offset the fact that without notifying the Brown's, he materially altered a document, which Brown did not know he had signed and about the contents and effect of which he had not been advised. This is a clear violation of Section 520.90(4), Florida Statutes (1979) which prohibits:
Any fraud in the execution or in the material alteration of any contract, mortgage, promis- sory note, or other document incident to a home improvement transaction.
It is also a violation of Section 455.277(1)(a) and thereby a violation of Section 489.129(1)(c), Florida Statutes(1979). The notarization of the signature of Mr. Jackson on the 1982 Brown mortgage, as if signed in Florida, when in reality, Mr. Jackson signed the document in Michigan, known to Respondent, is an additional incident of fraud constituting a violation of the 1981 edition of the same statutory provisions.
The fact that no permit was pulled for the work done under contract is a violation of Section 489.129(1)(d), Florida Statutes (1979), since a permit was required. When Respondent's agents convinced the Browns to sign the home improvement contract which called for interest charges of 12 percent, this excessive interest charge constituted a violation of Section 520.78, Florida Statutes (1979) which imposed a finance charge limitation at the time of 10 percent.
It is also clear that the majority of the contracts Brown was convinced to sign contained blank spaces relating to significant information. For example, the salesman's license number, and the nature of the security to be provided were left out. These omissions are violations of Section 520, Florida Statutes (1979) and, thereby, violations of Section 489.129(1)(d), Florida Statutes.
There is also no doubt that Respondent's agents, acting on behalf of All Florida Builders and, subsequently, PVO, made material misrepresentations of fact to the Browns to secure their signatures on the home improvement contracts. If this misconduct can be attributed to Respondent, it would constitute a violation of Section 489.129(1)(m), Florida Statutes. This question of attribution will be discussed along with situations similar to this, at a later point in this Order.
NEWMAN
In the allegations relating to the transactions with the Newmans, it is alleged that Respondent failed to obtain permits for the work done on this property and this has been proven. This conduct constitutes a violation of Section 489.129(1)(d) since failure to pull a permit when required is a violation of local building code. Further, Respondent's failure to insure that the Newmans were furnished a copy of the home improvement contract "immediately after the owner signs is a violation of Section 520.71, Florida Statutes and, thereby, a violation of Section 489.129(1)(d), Florida Statutes. His charging of a finance charge in excess of the lawful limit here violates Section 520.78, Florida Statutes.
When Respondent personally secured the Newman's signature on a mortgage form which did not, at the time, bear the legal description of the property being mortgaged, and thereafter, inserted a property description above the notarized signatures of the mortgage, his conduct constituted blatant fraud, and his representation to the Newmans, who did not know what they were signing, that they were merely signing documents permitting the work to be performed, is misleading and deceptive and clearly falls within the purview of Sections 455.227(1)(a) and 489.129(1)(m), Florida Statutes.
SUTTON
The Respondent's agent's representation to Mrs. that PVO would make structural repairs when such was never contemplated or intended, as shown by the fact that the contract she was induced to sign called only for cosmetic-type corrections constitutes a material misrepresentation prohibited in 455,227(1)(a) and 489.129(1)(c). The representation that her house would be as beautiful as that pictured in the brochure she was shown is no more than "puffing" and does not form the basis for discipline.
The failure to obtain required permits here, as other cases, constitutes a violation as previously described and the failure to complete the soffit and facia installation on the back of the house, as called for in the contract, is an unauthorized abandonment of a contracted project and punishable under Section 489,129(1)(k), Florida Statutes.
When Respondent or his agents threatened Mrs. with the loss of her home for failing to sign a second copy of a contract and allied papers because of her dissatisfaction with the work done by the company, this action constituted a misleading, deceptive, and untrue representation which violated Sections 455.227(1)(a) and 489.129(1)(c), Florida Statutes.
FRANCIS
Turning to the allegations involving the Francis property, there is ample evidence to establish that Respondent, through his agents, failed to pull a permit as required by the Volusia County, Florida building code. There is, however, also evidence that the Respondent provided his installer with the proper forms to do so, a practice not unknown to or prohibited in the industry, and, at pay-out, was presented with a receipt for sum consistent with that charged for a permit, which was obtained through the mistake of the installer. This evidence, when considered carefully, raises sufficient doubt of an intended or culpably negligent violation here. On that basis, it must be concluded that this alleged violation has not been proven.
OSGOOD
With regard to the allegations regarding the Osgoods, the representations made by Respondent's agent in his sales pitch to the owners, to the effect they would be getting work done for half-price, was untrue. In addition, the representation to the Osgoods, neither of whom could read or write, that they would not have to mortgage their home when, in fact, without their knowledge, they were presented a mortgage for their signature is fraud of the worst kind and constitutes a clear violation of Sections 520.71 and 489.129(1)(d), Florida Statutes.
The failure of Respondent's agent/installer to obtain a required permit is a violation of local building codes and Section 489.129(1)(d), Florida Statutes, as is the failure to obtain any of the required inspections when the work was done. So also, was the installer's violation of several sections of the Orlando electrical code a violation of that same section, and Respondent's failure to insure these requirements were met is a failure of supervision on his part. It does not constitute a violation of Sections 489.105(3) and 489.119(2), but does constitute a violation of Section 489.129(1)(m), Florida Statutes, since the continuing failure to supervise employees, by a contractor, is unquestionably gross negligence and incompetence.
Petitioner has also alleged that Respondent conspired with his unlicensed installer, Dan Powlouski, to evade the provisions of Chapter 489, Florida Statutes. While Respondent may be guilty of many shortcomings in the operation of his business, a conspiracy to evade the law as alleged here has not been shown to be one of them.
GADSON
In the complaint filed in Case Number 84-1171, Respondent is alleged to have made, through his agent, substantial misrepresentations and false promises in order to induce Ms. Gadson to sign the home improvement contract. Here, the evidence is overwhelming that this was done. It is unlikely that an uneducated, unsophisticated woman like Ms. Gadson would understand the subtle difference between tax credit or rebate and the government paying for the work and the fact she thought she would benefit be the transaction is immaterial. She was misled and the salesman's misconduct is clearly a violation of Section 520.90(8), Florida Statutes. Equally as flagrant was Polk's representation to the illiterate Ms. Gadson that the mortgage on her home he was getting her to
sign was no more than "government papers". Since this representation was untrue and Polk knew it to be untrue, it also constitutes a violation of Section 520.90(4), Florida Statutes.
The failure by Respondent's agent to give Ms. Gadson copies of the contracts and other documents she signed is a violation of Section 52.71, Florida Statutes, and his failing to insure that all spaces on the contracts were filled in when they were presented to the customer for signing, was a violation of Section 520.90(13), Florida Statutes.
It is also alleged that Respondent's salesman, Polk, was not licensed as a home improvement salesman and that Respondent knew or should have known this. Respondent claims to avoid responsibility for this by showing that Polk listed her license number on the contract. However, Respondent cannot avoid responsibility so easily. Respondent, with all his experience in dealing with salesmen during his years in this business had a duty to insure that his salesmen were properly licensed. Nonetheless, in instance after instance, the
evidence shows that unlicensed salesmen were used and often were involved in the improper conduct complained of. It is Respondent's responsibility to insure that activities conducted under his license are conducted in a lawful manner.
In the circumstances here, he cannot avoid his responsibility to insure that the people who represented him were qualified to do so and did so in a lawful manner.
Respondent is also charged here with the failure to supervise the construction activities of PVO. It has already been concluded above that failure of the licensee to supervise the construction activities on the projects being accomplished under this license constitutes incompetence and gross negligence. However, there has been no showing that this happened here. Ms. Gadson was, for the most part, satisfied with the work done and there is no substantial evidence to establish that any dissatisfaction was not quickly rectified.
SZUCS
The situation involving Mr. Szucs reveals that the homeowner, who by all standards is mentally deficient, if not incompetent, was taken advantage of by Respondent's agent. Szucs condition is apparent and good conscience would dictate that he not be called upon to enter into a contract such as involved here without assistance. The salesman's comments as to the value of the work and the increase in home value, shown subsequently to be substantially inflated, constitutes, in this case, a substantial misrepresentation in the procurement of a home improvement contract. As such, it is a violation of Sections 520.73(3), 455.227(1)(a), and 489.129(1)(c), Florida Statutes.
It has also been shown that Respondent's representatives failed to provide Mr. Szucs with copies of the documents he had signed in a timely fashion, in violation of Section 520.71, Florida Statutes. There was no evidence, however, that Respondent failed to get the required inspections or that he aided an unregistered contractor to evade the law.
LOREK
In the case involving the Lorek home, Petitioner alleges that Respondent used an unlicensed roofer, failed to obtain a permit for the roofing, and violated the city building code by using the wrong staples. While the evidence reveals that the wrong staples were used, resulting in a technical violation of the law, it also reveals that the aluminum installer was instructed by the expediter to hire a licensed roofer, preferably the one routinely utilized by the firm and was given funds to pay the roofer with. There is no evidence to indicate Respondent had any reason to expect Cook would disregard his instructions and wrongfully convert the money to his own account by doing the work himself. Consequently, it would be impossible to hold Respondent to account for these violations.
HUDSON
The situation is substantially different in the case of Mrs. Hudson. Here Bruce Coblitz, as an independent contractor writing orders for PVI, in an attempt to get Mrs. Hudson to sign a contract, assured her there was a 10 year warranty on all work. This misrepresentation, when the contract specifically stated no warranties of any type were given, is a blatant violation of Sections 455.227(1)(a) and 489.129(1)(c), Florida Statutes. This was compounded by the
fact that he also failed to give Mrs. Hudson copies of the contracts immediately upon signing as is required by Section 520.71, Florida Statutes.
There is no question that the installer who did the work on this project failed to pull a permit prior to starting work, and that the work, when done, was of generally poor quality and specifically failed to conform to the standards of the local building code, both of which violated Section 489.129(1)(d), Florida Statutes. There is also little doubt that Respondent failed to properly supervise the completion of the project in violation of Section 1489.129(1)(m), Florida Statutes. However, considering the chain of contracts between Respondent, through PVI to Coblitz to the installer, it can hardly be said that Respondent either conspired with or consciously allowed an unlicensed worker to improperly use his license.
JOHNSON
With regard to the contracts with the Johnsons, it is clear that the two contracts involved here were not completely filled in at the time of signing and that the owners were not given copies of the contract upon signing. This constitutes violations of Sections 520.73 and 520.71, Florida Statutes, respectively. It is also clear that the salesman who dealt with the Johnsons was not licensed and that Respondent knew or should have known of this in violation of Section 520.90(8), Florida Statutes. The evidence further reveals that though the installer properly pulled the required permits to do the work, Respondent failed to insure that the required inspections were accomplished upon completion, in violation of Section 489.129(1)(d), Florida Statutes. The installer's failure to comply with the local electrical code in this project, attributable to the Respondent, is also a violation of the same provision.
THOMAS
In the situation involving Mrs. Thomas, it is clear that Mr. Coblitz, an independent contractor with PVI, grossly underestimated the costs of the project, by far too much for it to be incidental, and that this constituted misrepresentation in the procurement of a home improvement contract in violation of Sections 455.227(1)(a) and 489.129(1)(e), Florida Statutes. It is also clear that Mr. Valentine, who acted as notary public on the mortgage Mrs. Thomas was prevailed upon to sign, acting on behalf of Respondent and in furtherance of Respondent's business interests, procured a forged signature on the document and thereafter notarized it knowing it to be false. This misconduct constitutes a violation of Section 489.129(1)(m), Florida Statutes, and if attributable to Respondent, supports discipline of his license.
The showing that neither edition of the contract Mrs. Thomas signed was given to her in a timely fashion reflects violations of Section 520.71, Florida Statutes, and, therefore, Section 489.129(1)(d), Florida Statutes. In addition, the evidence reflects that no required permit was pulled before work was started on the project in violation of Section 489.129(1)(d), Florida Statutes. Mrs. Thomas was made to sign a completion certificate without knowing what it was, before the job was completed and, in addition, Respondent's representative procured the signature of Mr. Thomas to be forged on the document by his illiterate granddaughter, in violation of Section 489.129(1)(m). Florida Statutes. It was also established that after the certificate of completion was signed, but before the job was completed and without cause or the consent of the Thomases, the job was abandoned in violation of Section 489.129(1)(k), Florida Statutes.
WILLIAMS
As to the allegations regarding the Williams transaction, the Respondent is alleged to have failed to use a licensed subcontractor and to have failed to procure the required building permits. There is no evidence to show that Panasuk Roofing, used on this job to fulfill Respondent's contract, was not licensed. It is shown, however, that a permit was not procured on this job until three days after it was completed and then, from the wrong agency. This constitutes a violation of Section 489.129(1)(d), Florida Statutes.
Most of the aggravated misconduct, by way of misrepresentation and unethical practices, was accomplished by the salesmen or independent contractors who procured the contracts under which the work was done.
It may well be that Respondent was not aware of the individual actions in each of the described cases of the salesmen/independent contractors who brought this business to his companies. As he claimed, the operations of the various businesses were left to his associate Mr. Greenberg. Respondent occupied almost all his time dealing with the financial aspects of the businesses and reviewing the contracts brought in. However, it is obvious, and Respondent so admits, that he did not properly supervise the installation of the product his businesses were selling. This is unfortunate for him for as the individual who qualified AFB, PVO, and PVT, and the only one whose license was on record, he was primarily responsible both for the representations of his agents and for the work done pursuant to his license. In addition, he cannot claim to be totally ignorant of the practice of improperly securing mortgages on his customers' homes because the decision to utilize mortgages was within his area of responsibility and he personally participated in enough "closeouts" where the mortgages were secured so that he undoubtedly knew what was being done. In fact, the evidence is clear in at least two cases that he was, himself, involved in these improper activities.
The Findings of Fact reflect an almost continuous practice of misleading statements, improper documentation, concealment of facts and circumstances, failure to comply with permitting and inspection requirements, shoddy workmanship, and notwithstanding Mr. Greenberg's testimony that the company would do anything to "make the customer happy," a continuing failure to stand behind the workmanship utilized to install an otherwise quality product.
Respondent in no way can be said to be an inexperienced neophyte. His business history reveals an extensive experience in construction,
development, and sales. No doubt, he knew the substance, if not the details, of what was being done by his agents and the fact that he participated in falsification of mortgages and the repeated violation of the requirements of a notary public leads to the inescapable conclusion that if he did not direct this misconduct, at the very least, he condoned it.
Admittedly, there is no other evidence of disciplinary action having been taken against the Respondent. However, in this case, the state of the evidence does not reasonably give this factor substantial mitigation weight. Respondent has, through both design and neglect, violated the standards set for contractors in Florida and his license must be disciplined. The evidence of his misconduct is great and supports substantial punishment.
Based on the foregoing, it is, therefore:
RECOMMENDED that Respondent Herbert A. Licht's certificate be suspended for a period of three years and that he pay an administrative fine of $10,000,00.
RECOMMENDED this 1st day of November, 1984, in Tallahassee, Florida.
ARNOLD H. POLLOCK
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
Filed with the Clerk of the Division of Administrative Hearings this 1st day of November, 1984.
COPIES FURNISHED:
Stephanie A. Daniel, Esquire Department of Professional
Regulation
130 North Monroe Street Tallahassee, Florida 32301
Joseph C. Jacobs, Esquire Melissa Fletcher Allaman, Esquire Post Office Box 1170 Tallahassee, Florida 32302-1170
Paul B. Steinberg, Esquire
300 71st Street, Suite 301 Miami Beach, Florida 331141
Fred Roche, Secretary Department of Professional
Regulation
130 North Monroe Street Tallahassee, Florida 32301
James Linnan Executive Director
Construction Industry Licensing Board Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION CONSTRUCTION INDUSTRY LICENSING BOARD
DEPARTMENT OF PROFESSIONAL REGULATION,
Petitioner, | |
CASE NOS. DPR | |
vs | 0042897, 0037440, 0022008 |
0040963, 0040032, 0038719 | |
HERBERT A. LICHT, | 0030088, 0034558, 0036218 |
License No. CG CO11504, | 0034933 |
and No. CG CA11504, | DOAH - 82-2383 |
84-1171 | |
Respondent. |
/
FINAL ORDER
THIS MATTER came before the Construction Licensing Board pursuant to Subsection 120.57(1)(b)9., Florida Statutes, on January 11,1985, in Tampa, Florida, for consideration of the Recommended Order (a copy of which is attached hereto and incorporated herein by reference) issued by the hearing officer in the case of Department of Professional Regulation vs. Herbert A. Licht, DOAH Case Nos 82-2383 and 84-1171, and the Exceptions filed by Petitioner and Respondent. The Petitioner was represented by Stephanie A. Daniel, Esquire.
The Respondent was represented by Melissa Fletcher Allaman, Esquire.
Upon consideration of the hearing officer's Recommended Order, the Exceptions, and the arguments of the parties and after a review of the complete record in this matter, the makes the following findings:
FINDINGS OF FACT
The hearing officer's findings of fact are hereby approved and adopted except as set forth in paragraphs 1 through 5 and 11A of Respondent Licht's Exceptions to Recommended Order, which are not supported by competent, substantial evidence. Paragraphs 1 through 5 and 11A above are hereby approved and incorporated as amendments to the Recommended Order. In all other respects Respondent Licht's Exceptions to the Recommended Order are denied.
There is competent, substantial evidence to support the hearing 0fficer's findings of fact as provided in 1 above.
CONCLUSIONS OF LAW
The Board has jursidiction of this matter pursuant to the provisions of Subsection 120.57(1) and Chapter 489, Florida Statutes.
The hearing officer's conclusions of law, are hereby approved and adopted in toto.
Petitioner's Respondent Licht's Exceptions to Recommended Order regarding penalty are hereby denied.
The hearing officer's recommendation with regard to penalty is hereby rejected. As provided in Chapter 84-173, Laws of Florida, 1984, the Board, after having made a review of the complete record, finds that Respondent's personal involvement was limited to the Brown and Newman transactions. Further, the Board ascertains that restitution satisfactory to the complainants had been made in all but one case (which is currently being negotiated).
There is competent substantial evidence to support the Board's findings and conclusions.
WHEREFORE, IT IS HEREBY ORDERED AND ADJUDGED:
The Respondent's licenses are hereby suspended for one year and Respondent is hereby ordered to pay to Petitioner an administrative fine of
$5000.00.
The Respondent is hereby placed on probation for a period of five years. As a condition of this probation, the Respondent shall break no law or rule of the Board relating to the practice of contracting.
Within thirty days the Respondent shall return his licenses to the Board Office, Post Office Box 2, Jacksonville, Florida 32201, or shall surrender the licenses to an investigator of the Department of professional Regulation.
Within thirty days of its filing, this Order may be appealed by filing Notices of Appeal and a filing fee, as set out in Section 120.53(2), Florida Statutes, and Florida Rules of Appellate Procedure 9.110(b) and (c).
DONE AND ORDERED this 20th day of February, 1985.
Donald W. Stobs, Chairman Construction Industry Licensing
Board
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been provided by Certified Mail to *
Herbert A. Licht
Permavent Industries of Tampa, Inc. 3000 North Boulevard
Tampa, FL 33609
Herbert A. Licht
Permavent Industries of Orlando, Inc. 2500 Industrial Boulevard
Orlando, FL 32804
* SEE BELOW:
and by hand delivery/United States mail to the Board Clerk, Department of Professional Regulation and its Counsel, 130 North Monroe Street, Tallahassee, Florida 32301, by 5:00 P.M. this 27th day of February, 1985.
FILED Department of Professional Regulation Florida Construction Industry Licensing Board
BOARD CLERK
CLERK
DATE
*Certified Mail to:
Melissa F. Allaman, Esquire
Erwin, Varn, Jacobs, Odom & Kitchen
305 South Gadsden Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Dec. 04, 1990 | Final Order filed. |
| Nov. 01, 1984 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 27, 1985 | Agency Final Order | |
| Nov. 01, 1984 | Recommended Order | Evidence of fraud and misleading sales practices by aluminum siding contractor supports supervision of license for three years and heavy fine. |
