STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, ) FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 82-2385

)

STEVEN LEFTWICH, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on 21 January 1983 at Naples, Florida.

APPEARANCES

For Petitioner: Jane Heerema, Esquire

Post Office Box 1386 Tallahassee, Florida 32302

For Respondent: Guion T. DeLoach, Esquire

1035 Fifth Avenue North Naples, Florida 33940

By Administrative Complaint filed July 14, 1982, the Department of Professional Regulation, Construction Industry Licensing Board, Petitioner, seeks to revoke, suspend, or otherwise discipline the license of Steven Leftwich, Respondent, as a certified building contractor. As grounds there for it is alleged that Respondent diverted funds received for completion of a house for Edna and Dale Reed, abandoned a construction project for which he was the contractor, and had his permit pulling privileges suspended by Lee County.

At the hearing three witnesses were called by Petitioner, Respondent testified in his own behalf, and eight exhibits were offered into evidence. All of these exhibits were admitted into evidence except Exhibit 3.

FINDINGS OF FACT

1. Steven Leftwich is a certified building contractor, having been issued license No. CB C005800. At all times here relevant he was qualifying contractor for Monterey Builders, Inc., for whom he was president and chief operating officer.

   
   

2. On 6 June 1979 Monterey Builders, Inc., entered into a contract with Dale and Edna Reed (Exhibit 4) to construct a residence for them on their lot at

   Bonita Springs at a total cost of $69,426.00. The contract did not provide for institutional lender financing but provided the Reeds would make periodic cash payments upon the completion of certain stages of construction. Pursuant to this contract, Reed paid $6,942.60 prior to the start of construction and two additional payments of $13,885.20 each as the work progressed, with the third payment on October 27, 1979.

   
   

3. The lot required additional fill. The contract included a fill allowance of 400 yards and provided that the owner (Reed) would pay for all extras costing in excess of $100.00 at the time of request. By letter dated October 22, 1979 (part of Exhibit 8), Respondent advised the Reeds that payment for fill dirt was long overdue and, unless payment was received by October 26, 1979, they would be considered in breach of contract. Another page of Exhibit 8, which purports to be an undated and unsigned addendum to the contract between Monterey Builders and the Reeds, shows delivery of 404 yards of fill on 7-26- 69[sic], 465 yards on 7-27-79, and 170 yards on 7-30-79. Written on the bottom of this document is "DISCUSSED 10/15/79."

   
   

4. The month of the final draw is missing from the copy of Exhibit 6, admitted into evidence, but, from the testimony of Mrs. Reed, appears to be October, as found in finding No. 2 above. Since the second draw was on 9-24-79, it is unlikely that another $13,885.20 would have been paid three days later. The date of this third payment is significant only in that it corroborates Mrs. Reed's testimony that the third payment was made after the dispute over the fill arose.

   
   

5. When Monterey demanded payment for the 600 yards of fill allegedly used over the 400 yards allowed, Reed disputed the accuracy of this amount of fill. He engaged surveyors to compute the fill and this confirmed his belief that he was being overcharged for fill and declined to pay the amount demanded. Parenthetically, it is noted that one 16-yard load would have to be delivered every 20 minutes for nine hours on 26 July to place 404 yards on the property and at the same frequency of delivery it would take ten hours to deliver the 465 yards Monterey claimed was delivered on 27 July 1979. Regardless of the accuracy of the claim for fill delivered, the Reeds made the third payment of

   $13,885.20 after the fill dispute in the amount of $2,556.00 arose. Nevertheless, the Respondent contends that, by failing to pay the disputed bill for additional fill, the Reeds breached the contract and Monterey Builders was thereby relieved from continuing work on this contract.

   
   

6. Prior to stopping work on the project, Monterey Builders collected the third draw from the Reeds and had roofing material delivered to the site. When the third payment was made, the slab had been poured, plumbing roughed in, masonry walls completed, and lintel poured. Petitioner's witness estimated the project 15 percent complete, while Respondent claims the project was 35-40 percent complete.

   
   

7. In November the Reeds went to West Virginia to attend the wedding of Mr. Reed's son and when they returned a few days later the roofing material had been removed from the site, all builder's supplies had been removed, and the house remained in the stage of construction that existed when the third payment was made. At this time the Reeds had paid a total of $34,713, exactly 50 percent of the contract price. Efforts to contact Respondent were not too successful and work was never resumed by Monterey Builders.

   
   

8. Respondent testified that the profit on the contract had been booked by Monterey "up front" before any expenses were paid; that he purchased the roofing

   material out of funds provided by Reed; and that when the project was abandoned and the roofing material returned, this sum was credited to the Reed account.

   Despite the Reeds' demands that Respondent complete the contract, and the entering of a judgment in the Circuit Court for Collier County against Monterey Builders, Inc., for the sum of $37,243.00 plus costs when Monterey Builders failed to continue on the contract, the Reeds have been unable to recover any money from Respondent or Monterey Builders, Inc.

   
   

9. Following the discontinuance of the work on this contract by Monterey Builders, Mrs. Reed filed a complaint with the Lee County Construction Board.

   On January 22, 1981, at a scheduled hearing of the Lee County Construction Board Mrs. Reed's complaint against Respondent was considered. The Board voted to suspend Steven Leftwich's permit privileges and forward the findings on to the State (Exhibit 1).

   
   

10. Lee County Ordinance No. 76-11 (Exhibit 2) provides for the licensing of contractors by Lee County (issuance of certificates of competency) and for revocation and suspension of these certificates for cause. Among those causes for which certificates can be revoked is "abandonment of any contract without legal excuse or justification." This ordinance provides for notice to affected contractors by certified mail to their last known address. Respondent contends that he was unaware of the hearing at which his privileges were suspended. Exhibit 1 shows Respondent was not present at that hearing. There was no record in the Lee County file that showed notice was mailed to Respondent in accordance with Ordinance No. 76-11 requirements.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

12. Section 489.129, Florida Statutes, provides in pertinent part:

    
    

    1. The board may revoke, suspend or impose an administrative fine not

to exceed $1,000, place the contractor on probation, reprimand or censure,

a contractor if the contractor is found guilty of any of the following acts:

* * *

1. 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.

2. Disciplinary action by any municipality or county, which action shall be reviewed by the state board before the state board takes any disciplinary action of its own.

* * *

(k) 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.

1. While specific evidence of diversion of funds from the Reed contract to another purpose was not shown, the evidence was clear that the Reeds had paid more than the value of the labor and materials used plus the profit expected to the contractor at the time work on this project was stopped, and none of those funds have been returned to the Reeds. Respondent testified that the roofing material was purchased with money from the Reed account and when this material was returned the Reed account was credited. This constituted funds that did not go to the completion of the Reed contract and the funds were not returned to the Reeds. These funds obviously were diverted to another cause.

   
   

2. The issue of abandonment is even more clear. While Respondent contends that he had just cause to stop work on the contract when the Reeds failed to pay for the additional fill immediately upon his demand therefor, the law of contract indicates this is not so. Without expounding on contract law it is sufficient to say contracts involve mutual rights and obligations, ambiguities in a form contract prepared by the dominant party are construed against the dominant party, and there are various types of breaches of contract, each leading to different rights and obligations. Here there was a valid dispute regarding the amount of additional fill used, accordingly Respondent did not have just cause for abandoning the contract.

   
   

3. Respondent's contention that he was denied due process in the hearing before the Lee County Construction Board is an issue that would not normally be considered by this tribunal because it is in the nature of a collateral attack on the findings of the Lee County Construction Board. The alleged lack of due process could have been resolved by Respondent asking for reconsideration of the Board's action or by review in the judicial system. He took neither of these steps. He can hardly claim lack of knowledge of the Board's action since that action deprived him from continuing his occupation as a building contractor in Lee County.

   
   

4. However, Section 489.129(i) provides that before the state board can take disciplinary action against a licensee based upon disciplinary action by a local board, the local board's action "shall be reviewed by the state board." While the meaning of the quoted phrase is not abundantly clear, nevertheless, state action should not be taken based solely on local action that does not comport with due process. Lee County Ordinance No. 76-11 requires notice to the certificate holder and defines notice as "not less than fifteen (15) days notice, prior to hearing, by Certified Mail to the last known address of the holder of the Certificate of Competency sought to be suspended or revoked." Not only did Respondent testify that he did not receive notice of this hearing, but also Frederick Gutknecht, Lee County Director of Code Enforcement, testified that he could find nothing in the file to show Respondent received notice of the proceedings in which his permit privileges were suspended. Since those proceedings have not been shown to comport with due process, no action should be taken based solely on the disciplinary action by Lee County.

   
   

5. In these proceedings the same complaining witness testified against Respondent who testified at the Lee County Construction Board grievance hearing. Although the evidence there presented does not appear in the minutes of the board meeting (Exhibit 1), it is apparent that the local board considered a complaint involving the contract between the Reeds and Monterey Builders. It

   clearly appears there was but one transaction although three statutory violations are alleged.

   
   

6. From the foregoing it is concluded that Steven Leftwich as president and qualifying contractor for Monterey Builders, Inc., diverted funds received from the Reeds for completion of the house for which they had contracted, and that he abandoned construction of this project without just cause. A review of the record of proceedings before the Lee County Construction Board leads to the conclusion that the charge relating to Respondent being disciplined by the Lee County Construction Board should be dismissed. It is therefore

RECOMMENDED that the Petitioner enter a Final Order finding Steven Leftwich guilty of diverting funds received for one project to another cause and of abandoning a construction project without just cause; and that his license as a building contractor be revoked. It is recommended that he be found not guilty of being disciplined by a local board.

ENTERED this 16th day of February, 1983, at Tallahassee, Florida.

K. N. AYERS, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 1983.

COPIES FURNISHED:

Jane Heerema, Esquire ROBERTS, EGAN & ROUTA, P.A.

Post Office Box 1386 Tallahassee, Florida 32302

Guion T. DeLoach, Esquire 1035 Fifth Avenue North Naples, Florida 33940

James Linnan, Executive Director Construction Industry Licensing

Board

Post Office Box 2 Jacksonville, Florida 32202

Fred M. Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 82-002385

Orders for Case No: 82-002385