STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 83-2289

)

WILLIAM B. GARRISON, )

)

Respondent. )

)

RECOMMENDED ORDER

Notice was given and on Monday, June 25, 1984, a formal hearing was conducted before Charles C. Adams, Hearing Officer with the Division of Administrative Hearings. This recommended order is being entered following the receipt and review of the transcript of the proceedings which was filed with the Division of Administrative Hearings on July 19, 1984. The parties in the person of counsel have also submitted proposed recommended orders and associated argument. These proposals were filed with the Division of Administrative Hearings on August 14, 1984. Having considered the proposals, they have been utilized to some extent. Where not reported, the proposals have been rejected as being contrary to facts found or based upon a lack of relevance or materiality.

APPEARANCES

For Petitioner: Michael Egan, Esquire

Post Office Box 1386 Tallahassee, Florida 32302

For Respondent: Jeffrey Savlov, Esquire

Post Office Box 10082 Tallahassee, Florida 32302

ISSUES

The issues in this matter are as promoted by an administrative complaint brought by the State of Florida, Department of Professional Regulation against William B. Garrison. In particular, the respondent is charged with having diverted funds or property received for the completion of a specific project in violation of Section 489.129(1)(h), Florida Statutes (1979). In addition, the respondent is charged with signing a statement falsely indicating that payment had been made for all subcontracting work, in violation of Section 489.129(1)(1), Florida Statutes (1979), and of making misleading, deceptive, untrue or fraudulent representations in the practice of his profession in violation of Section 455.227(1)(a), Florida Statutes (1979). It is the respondent's denial of these accusations and request for formal hearing which eventuated in this recommended order.

FINDINGS OF FACT

1. Respondent is a holder of a registered building contractor's license issued by the Florida Construction Industry Licensing Board. That license number is RB0029142, first issued in 1975. Respondent has been associated with the construction business on a full time basis since 1970. From 1975 through 1981 respondent operated as Garrison Builders of Tallahassee, Inc. At all times relevant to the administrative complaint, respondent was the qualifier of Garrison Builders of Tallahassee, Inc., pursuant to Section 489.119, Florida Statutes.

   
   

2. On August 6, 1980, Garrison Builders of Tallahassee, Inc., contracted with TBW, Inc., to build eight townhouses at Larette Drive, in Tallahassee, Florida, for a contract price of $269,424.00. That base contract price was subject to change orders, the first of which decreased the contract price by

   $8,000 and the second which increased the contract price by $864.00. As a consequence, the final contract price was $262,388.00. Garrison Builders of Tallahassee, Inc., was paid a total of $257,598.38 under the terms of the contract. Garrison Builders paid out, related to the account for this project,

   $257,890.01.

   
   

3. As of March 31, 1981, respondent had failed to pay the following subcontractors and materialmen in the amounts designated:

   Butterfield's Floor Covering, Inc. $ 277.10* Barineau & Sons Heating and Air Conditioning 2,420.00 Big Bend Rental Center, Store #1 596.96

   Sam Crowder Co. 61.39

   Discount Lumber, Inc. 445.33*

   Ken Driggers, Inc. 32.14

   Deep South Insulation Co. 600.00

   John T. Daniel Cabinet Co. 3,400.00

   Miller Sheet Metal 1,292.00

   Melco Wood fixtures 1,502.59

   Maples Concrete Products Co., Inc. 1,571.31

   Quality Plumbing, Inc. 5,864.00* Tallahassee Glass & Screen 690.56

   Tallahassee Rug Co. 1,486.51

   Yarbrough Paint & Decorating Center 1,589.15 City Building Department-Systems Charges 1,790.10 Wallpaper Installation-50 rolls @ $7.00/roll 350.00*

   
   

   Total $23,969.14

   
   

   *Billing not complete

   
   

4. The contract between Garrison Builders and TBW was to be performed in

   150 days after August 6, 1980, subject to allowances for rain days, etc. Garrison Builders was responsible for satisfying the claims of the materialmen and subcontractors as reflected above, in keeping with the terms of the contract. Respondent, as president of Garrison Builders, was responsible for the overall project. In keeping with the contract terms, respondent and the job foreman for the subject project made application and certification for payment. These applications and certifications may be found as part of the petitioner's composite Exhibit Number 2, admitted into evidence. The last of those applications was made by the respondent on February 17, 1984. Prior to that

   payment, Garrison Builders had been paid $247,136.70. On that occasion, as on other occasions, respondent certified, "that all amounts have been paid by him for work for which previous certificates for payment were issued and payments received from the owner. . . ." in signing the certification for an additional

   $10,461.68 draw. At that point in time approximately 98 percent of the job had been completed. Nonetheless, contrary to the certification statement, materialmen and suppliers had not been paid as demonstrated in the accounting set forth above showing that as of March 31, 1981, $23,969.14 was still owed, which amount far exceeds the difference between the contract price of

   $262,388.00, and the amount Garrison Builders had been paid prior to the last draw, i.e., $247,136.70. That differential is $15,251.30.

   
   

5. In a meeting in March 1981 at which respondent attended and was represented by counsel, respondent admitted to a representative of TBW that materialmen and suppliers had not been satisfied in terms of payment. By affidavit of April 3, 1981, a copy of which is petitioner's Exhibit Number 5 admitted into evidence, he acknowledged the $23,969.14 of outstanding claims effective March 31, 1981. Moreover, in a court appearance involving TBW and some of the materialmen and suppliers in which the question of possible liens by those latter entities was litigated, respondent admitted that he had lied in his statement of certification in the contractor's application and certificate for payment, wherein he stated that all materialmen and suppliers had been satisfied before obtaining payments under the contract. This admission, taken in the context of the other facts found, indicates that the respondent appreciated that materialmen and suppliers had not been paid when he made application for the February 17, 1981, draw and swore that they had. This oath as to that circumstance was not one of mistake or inadvertence. It was a comment made with the knowledge of the implications of the oath. Thus, the effect was to be false, misleading, deceptive, untrue and fraudulent, contributing to a loss of

   $277.10 which the owner paid Butterfield Floor Covering without reimbursement.

   
   

6. Respondent was not paid the balance of the contract price, the owner having claimed that the contract was 90 days beyond the contract date for completion, and upon the assertion by the owner that additional funds had to be expended to complete the contract over and above the contract amount.

   Respondent claims that the reason for late completion concerned a problem with a subcontractor who was providing cabinets, one John Daniel. In addition, respondent alludes to the fact that he was in the hospital from November 10, 1980, through November 20, 1980, and again from December 2 through 19, 1980, and as a consequence was unable to supervise the job in a manner which he preferred. Daniel was a subcontractor chosen by the owner and accepted by the respondent.

   From a review of the evidence, it is unclear whether Daniel was the responsible agency for the project being approximately 90 days over the contract period. It is also uncertain whether the essentially 90 day delay was in view of respondent's failures as responsible agent for Garrison Builders. Had Garrison Builders been responsible the owner would have been entitled to deduct essentially $20 a day for late penalties. Finally, the owner's claim of expenditures in excess of $10,000 to complete the job was not satisfactorily proven. In summary, the job was late for reasons unestablished.

   
   

7. Certificates of occupancy were issued for the eight units in March 1983 signaling the completion of the job.

   
   

8. On the subject of whether respondent diverted funds and property from this project into other projects thereby affecting the outcome of the project, the proof on balance demonstrates that Garrison Builders, under the aegis of the

   respondent, made a bad bargain by underbidding this project as opposed to diverting funds and property to other pursuits.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action per Section 120.57(1), Florida Statutes.

   
   

10. Respondent made a motion for summary disposition of this action following the presentation of the petitioner's case. Having considered the petitioner's presentation, petitioner is found to have sustained its burden of establishing a prima facia showing related to the violation of Section 455.227(1)(a), Florida Statutes, thereby violating Section 489.129(1)(c), Florida Statutes, and Section 489.129(1)(1), Florida Statutes. The proof was not sufficient to show a violation of Section 489.129(1)(h), Florida Statutes, as to diversion of funds or property.

    
    

11. Respondent in his defense of the action failed to overcome the prima facia showing related to violations proven as set forth in the previous paragraphs. His proof did not disturb the impression that the petitioner had failed to sustain its burden related to the alleged violation of Section 489.129(1)(h), Florida Statutes. Having concluded that competent, substantial evidence was shown by the petitioner to establish that respondent falsely indicated that payment had been made for all subcontracted work, labor, and materials, resulting in financial loss to the owner, the Butterfield Floor covering claim; and in addition, that respondent made misleading, deceptive, untrue and fraudulent representations in the practice of his profession related to payment of various materialmen and supplies as envisioned by Section 489.129(1)(1), and 455.227(1)(a), Florida Statutes, respectively, respondent is subject to the penalties set forth in Section 489.120(1), Florida Statutes. See Bowling v. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981).

RECOMMENDATION

Upon consideration of the findings of facts and conclusions of law, it is RECOMMENDED that a final order be entered which finds the respondent guilty

of a violation of Section 489.129(1)(1), Florida Statutes, and Section

455.227(1)(a), Florida Statutes, and dismisses the allegation of a violation of Section 489.129(1)(h), Florida Statutes. For the violations established, a penalty of a 60 day suspension should be imposed against the respondent.

DONE AND ENTERED this 11th day of September 1984 in Tallahassee, Florida.

CHARLES C. ADAMS

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 11th day of September 1984.

COPIES FURNISHED:

Michael Egan, Esquire ROBERTS, EGAN & ROUTA, P.A.

217 South Adams Street Tallahassee, Florida 32302

Jeffrey H. Savlov, Esquire Post Office Box 10082 Tallahassee, Florida 32302

Fred M. Roche, Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

James Linnan, Executive Director

Board of Construction Industry Licensing Board Department of Professional Regulation

Post Office Box 2 Jacksonville, Florida 32202

Docket for Case No: 83-002289

Orders for Case No: 83-002289