STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-721

)

BARRY L. CRITOPH, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, WILLIAM B. THOMAS, held a formal hearing in this case on September 22, 1983, in Clearwater, Florida. The transcript was received on October 3, 1983, and the parties requested 15 days thereafter to submit proposed findings of fact and conclusions of law. These were filed and have been considered. Where not adopted and incorporated herein they were found to be irrelevant or immaterial, or not supported by the weight of the evidence, and have been rejected.

APPEARANCES

For Petitioner: Stephanie A. Daniel, Esquire

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: John J. Fogarty, Esquire

327 South Garden Avenue Clearwater, Florida 33517

On January 28, 1983, the Petitioner filed an Administrative Complaint charging the Respondent with violating Section 489.129(1)(e), Florida Statutes, in that he aided or abetted an unregistered or uncertified person to evade the provisions of Chapter 489, Florida Statutes; with violating Section 489.129(1)(f), Florida Statutes, in that he knowingly combined or conspired with an unregistered or uncertified person by allowing such person to use his certificate with the intent to evade the provisions of Chapter 489, Florida Statutes; with violating Section 489.129(1)(j), Florida Statutes, in that he failed in a material respect to comply with the provisions of Chapter 489, Florida Statutes, when he failed to qualify Cedar Homes of Pinellas Inc., or to properly act as the qualifying agent for Cedar Homes of Pinellas Inc., contrary to the provisions of Section 489.119(2) and (3), Florida Statutes; and with violating Section 489.129(1)(g), Florida Statutes, in that he acted in the capacity of a contractor under a name other than on his certificate.

On May 27, 1983, the Petitioner filed a Motion to Amend Complaint before any responsive pleadings had been filed by the Respondent. By this Motion the

Petitioner additionally alleged that the Respondent violated Section 489.129(1)(k), Florida Statutes, in that he abandoned a construction project without notice to the owner and without just cause; and that he violated Section 489.129(1)(h), Florida Statutes, in that he diverted funds or property received for the completion of a specified construction project, resulting in his inability to fulfill the terms of his obligation.

Thus, the issue is whether the Respondent's license should be revoked, suspended, or otherwise disciplined as a result of the foregoing alleged violations of the Construction Practice Act.

The Petitioner presented four witnesses, Jerry J. Taylor who is a DPR investigator, Gilbert R. Lopes who is a license inspector for the City of Largo, Mary Fedico who contracted with Cedar Homes to build an addition on her home, and Kenneth Larrow who was the vice president of Cedar Homes and the principal investor of funds in the corporation. The Respondent testified in his own behalf. Ten exhibits were offered by the Petitioner, all of which were received in evidence.

FINDINGS OF FACT

1. At all times material hereto, the Respondent was licensed as a certified building contractor, having been issued license number CB C012964 by the State of Florida. At all times material hereto, the Respondent was licensed as an individual only.

   
   

2. On or about April 14, 1982, Cedar Homes of Pinellas, Inc., entered into a contract with Mary Fedico to enclose the carport on her home, which was located at 2085 Victory Avenue, Largo, Florida. The contract price was

   $5,000.00. Mike Fredricks acted as the saleman for this contract on behalf of Cedar Homes of Pinellas, Inc.

   
   

3. At all times material hereto, Cedar Homes of Pinellas, Inc., was owned by Kenneth Larrow. The only employees of this corporation were Kenneth Larrow and his son. Cedar Homes of Pinellas, Inc., was formed in January of 1982 for the purpose of performing room additions and other types of construction. On April 14, 1982, the sole officer of Cedar Homes of Pinellas, Inc., was Kenneth Larrow, who also served as a director. An attorney John L. Riley, was the registered agent.

   
   

4. At all times pertinent hereto, Kenneth Larrow was not licensed to engage in the business of contracting in the State of Florida.

   
   

5. On or about April 16, 1982, Kenneth Larrow and his salesman, Mike Fredricks, went to the City of Largo Building Department to obtain a construction permit for the enclosure of Mary Fedico's carport. Neither of these persons wash qualified, or licensed, to engage in the business of contracting in the City of Largo. Therefore, the Largo Building Department refused to issue a permit for this construction.

   
   

6. When Kenneth Larrow and Mike Fredricks were unable to obtain a permit for the construction of the addition to Mary Fedico's home, they informed the Largo Building Department that the qualifier for Cedar Homes of Pinellas, Inc., was Barry L. Critoph, the Respondent. The Largo Building Department informed Mr. Larrow and Mr. Fredricks that the Respondent had to sign the permit application in order for a permit to be issued for the construction to be performed on Mary Fedico's home.

7. On or about April 16, 1982, the Respondent applied for and obtained a construction permit for the enclosure of Mary Fedico's carport. This permit was issued to Cedar Homes of Pinellas, Inc., with the Respondent as the qualifying contractor.

   
   

8. At all times relevant hereto, the Respondent did not qualify Cedar Homes of Pinellas, Inc., with the Construction Industry Licensing Board. At all pertinent times, the Respondent did not have in his possession a certificate issued by the Construction Industry Licensing Board with the notation "Cedar Homes of Pinellas Inc." thereon. Moreover, the Respondent admitted he was not positive that he had properly qualified Cedar Homes of Pinellas Inc., when he obtained the permit for the enclosure of Mary Fedico's carport.

   
   

9. On or about May 5, 1982, Cedar Homes of Pinellas, Inc., entered into a second contract with Mary Fedico to finish the interior of the carport which was to be enclosed by Cedar Homes of Pinellas, Inc., pursuant to the prior contract, for a price of $710.

   
   

10. Kenneth Larrow began to perform the work required under the terms of the two contracts. Mary Fedico never saw the Respondent at the project site. Mr. Larrow hired all subcontractors and was responsible for paying them. He was also responsible for supervision of the construction of the carport enclosure.

    
    

11. The Respondent did not know that there was a second contract for interior work in Mary Fedico's carport enclosure, and the Respondent performed no work on the project. He did drive his car by the site three times, but he never entered onto the project, and he simply viewed the construction being performed from the street. The Respondent had no knowledge as to who the subcontractors were on the Fedico project, and he had no responsibility for hiring them. He had no knowledge of the money that was being obtained from this project, and he did not know whether or not the subcontractors were being paid.

    
    

12. At a time uncertain, construction of the carport enclosure addition to the Fedico home began to slow down. When Mary Fedico began to receive notices from subcontractors that they were not being paid, she contacted Kenneth Larrow about problems with the construction. However, when Mr. Larrow was unable to satisfactorily respond to Mary Fedico's questions regarding the work, she and her son-in-law took over the project, completed it, and paid all the subcontractors. The cost of completion was between $2,000 and $2,500 more than the contract price had been.

    
    

13. As a result of the Fedico contracts noted above, Kenneth Larrow was charged with using the designation of "contractor" without a license, in two counts. Kenneth Larrow plead nolo contendere to these charges, and he was sentenced to pay a fine of $250 plus court costs. Mary Fedico first became aware that the Respondent had some involvement with the construction of the addition to her home when she was subpoenaed to appear at this court proceeding. Prior thereto, she had not been notified by either the Respondent or Mr. Larrow, that the Respondent had any connection with her carport project.

    
    

14. The Respondent's involvement with Cedar Homes of Pinellas Inc., was limited to obtaining permits and "supervision". As compensation therefor, the Respondent was to received two percent of the gross sales of the company. He was supposed to check jobs and verify construction, but this supervision was to consist of checking the projects contracted for by Cedar Homes of Pinellas Inc., at his own convenience, to determine if these projects were "okay". The

    Respondent was not connected with the financial operation of Cedar Homes of Pinellas Inc., he had no financial control over the operations of the corporation, and he could not sign checks. All subcontractors were hired and paid by Kenneth Larrow. Mr. Larrow and his salesmen actually entered into the contracts, and the Respondent had no involvement with the contracts except to determine if work contracted for was structurally sound. Kenneth Larrow actually supervised all of the construction projects of Cedar Homes of Pinellas Inc., on a daily basis, and the Respondent was not aware of all the projects entered into by the corporation.

    
    

15. Kenneth Larrow eventually made restitution to Mary Fedico in the amount of $1,250 for the problems which occurred in connection with the carport enclosure work on her home.

    
    

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction over the parties to and subject matter of this proceeding, pursuant to the provisions of Section 120.57(1), Florida Statutes, and Section 455.225(4), Florida Statutes.

    
    

17. The Construction Industry Licensing Board is empowered to suspend, revoke or otherwise discipline the certificate or registration of a contractor if he is found guilty of violating the following provisions of Section 489.129(1) Florida Statutes: "(e) aiding or abetting any uncertified or unregistered person to evade any provision of this act; (f) knowingly combining or conspiring with an uncertified or registered person by allowing one's certificate or registration to be used by such person with the intent to evade the provisions of Chapter 489, Florida Statutes; (g) acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certificate holder or registrant as set forth on the issued certificate or registration; (h) diversion of funds or property received for prosecution or completion of a specified construction project or operation when as a result of the diversion the contractor is or will be unable to fulfill the terms of his obligation or contract; (j) failure in any material respect to comply with the provisions of Chapter 489, Florida Statutes; and (k) abandonment of a construction project in which the contractor is engaged or under contract as a contractor for a period of ninety days or more without notice to the owner and without just cause".

    
    

18. License revocation proceedings are penal in nature. The prosecuting agency is required to prove its charges by competent substantial evidence. See Florida Real Estate Commission v. Webb 367 So.2d 201 (Fla. 1978); Brewer v. Insurance Commissioner and Treasurer, 392 So.2d 593 (Fla. 1st DCA 1981); and City of Lake Wales v. PERC 402 So.2d 1224 (Fla. 2nd DCA 1981).

    
    

19. Competent substantial evidence was presented to show that Kenneth Larrow evaded the provisions of Chapter 489, Florida Statutes, when he engaged in the business of contracting in the State of Florida without being properly registered or certified, and competent substantial evidence was presented to show that the Respondent aided or abetted Kenneth Larrow to evade the provisions of Chapter 489, Florida Statutes. The Respondent obtained a building permit for construction to be performed on the home of Mary Fedico, but he was not the contractor for this construction. Mary Fedico entered into a contract with Cedar Homes of Pinellas Inc., which was owned by Kenneth Larrow. Kenneth Larrow assumed total responsibility for the project in that he actually performed the work, he hired subcontractors, made payments to subcontractors, and received all funds for the project from Mary Fedico. Section 489.105(3), Florida Statutes,

    defines "contractor" to mean "the person who is qualified for and responsible for the entire project contracted for," and who is "except as exempted in Chapter 489, the person who, for compensation, undertakes to, submits a bid to, or does himself or by others, construct, repair, alter, remodel, add to, subtract from, or improve any building or structure, including related improvements to real estate, for others or for resale to others." The Respondent's involvement with the construction of the carport addition to Mary Fedico's home does not amount to that of a contractor. He is thus guilty of violating Section 489.129(1)(e), Florida Statutes, by aiding and abetting Kenneth Larrow to evade the licensing requirements of Chapter 489, Florida Statutes.

    
    

20. Competent substantial evidence was presented to show that the Respondent knowingly combined or conspired with Kenneth Larrow by obtaining a building permit for Mr. Larrow to engage in contracting, thereby enabling Mr. Larrow to evade the licensing provisions of Chapter 489, Florida Statutes. Kenneth Larrow did in fact violate Chapter 489, Florida Statutes; he was criminally prosecuted for contracting without a license and plead nolo contendere to these charges. The primary issue then becomes whether or not the Respondent acted knowingly.

    
    

21. State of mind is not capable of direct proof. However, state of mind may be inferred, and one's actions and intent may be established by the facts and circumstances of a case. [See Edwards v. State, 302 So.2d 479 (Fla. 3rd DCA 1974)]. With reference to the violation of Section 489.129(1)(f), Florida Statutes, a prima facie case of intent is established "when a certificate holder or registrant allows his certificate or registration to be used by one or more companies without having any active participation in the operations, management, or control of said companies." Section 489.129(1), Florida Statutes. The evidence establishes a prima facie case of intent with reference to the violation of Section 489.129(1)(f) Florida Statutes. The Respondent allowed his certificate to be used by Cedar Homes of Pinellas Inc. The Respondent had no active participation in the operation of this company, or in the management of it, or in its control. The Respondent presented no competent substantial evidence to rebut the prima facie intent established by the Petitioner; thus, he is guilty of violating Section 489.129(1)(f), Florida Statutes, by knowingly combining or conspiring with an uncertified person or unregistered person by allowing his certificate to be used by such person with the intent to evade the provisions of Chapter 489, Florida Statutes.

    
    

22. The Respondent is also guilty of violating Section 489.129(1)(g), Florida Statutes, in that he engaged in contracting under a name other than the name on his certificate. He was contracting under the name Cedar Homes of Pinellas Inc., and was therefore under a duty to qualify this corporation prior to engaging in the business of contracting. However, Cedar Homes of Pinellas Inc. engaged in the business of contracting for a period of approximately three months using the Respondent's certified building contractor's license without first having been properly qualified as required by Section 489.119, Florida Statutes.

    
    

23. There is not sufficient evidence to support a conclusion that the Respondent is guilty of the remainder of the charges alleged in the Amended Complaint. Thus, he is not guilty of violating Sections 489.129(1)(j), 489.119(2) and (3), 489.129(1)(k) and 489.129(1)(h), Florida Statutes.

Moreover, the Petitioner has either conceded that there is insufficient evidence to warrant a finding of guilt on these charges, or the Petitioner has abandoned them.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that license number CB C012964 held by the Respondent, Barry L.

Critoph, be suspended for two years.

THIS RECOMMENDED ORDER entered this 2nd day of December, 1983.

WILLIAM B. THOMAS, 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 2nd day of December, 1983.

COPIES FURNISHED:

Stephanie A. Daniel, Esquire

130 North Monroe Street Tallahassee, Florida 32301

John J. Fogarty, Esquire

327 South Garden Avenue Clearwater, Florida 33517

Fred Roche, Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. J. K. Linnan Executive Director

Florida Construction Industry Licensing Board

Post Office Box 2 Jacksonville, Florida 32201

Docket for Case No: 83-000721

Orders for Case No: 83-000721