STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 83-2941

)

JACK A. MARTIN, )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came on for administrative hearing before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings on January 4, 1984, in Sarasota, Florida. The appearances were as follows:

APPEARANCES

For Petitioner: Charles P. Tunnicliff, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: No appearance.

This cause arose upon an Administrative Complaint filed by the Department of Professional Regulation, Florida Construction Industry Licensing Board, wherein that Petitioner seeks to suspend, revoke or impose other disciplinary sanctions against the Respondent's licensure status as a licensed general contractor. Specifically it is alleged that the Respondent undertook to construct a house for Mr. and Mrs. Frank J. Sullivan and abandoned construction when the house was only approximately 50 percent complete but when the Respondent had received approximately 97 percent of the total contract price and that the owners of the property were forced to pay in excess of $10,000 to subcontractors to finish the work the Respondent allegedly failed to finish. In addition to that abandonment, it is charged that the Respondent diverted the funds received for the construction of the Sullivan's house to other uses, both of which charges concern violations of Section 489.129(1)(k) and (h) , Florida Statutes (1981). It is alleged, in Count II, that one Frederick Berbert contracted to build an addition on Emory K. Allstaedt's mobile home when Mr.

Berbert was not registered to practice contracting in Charlotte County. It is alleged that the Respondent obtained the building permit from the Charlotte County Building and Zoning Department, but that at no time pertinent to that contract did any contractual relationship exist between Allstaedt and the Respondent for construction of the addition to the home, and thus the Respondent violated Section 489.129(1)(e), Florida Statutes (1981) by aiding and abetting an uncertified person to evade the provisions of Chapter 489 as well as paragraph (f) of that subsection by knowingly combining or conspiring with an

uncertified person with intent to evade the provisions of Chapter 489. Finally, it is charged that the above acts constitute a violation of Section 489.129(1)(m), Florida Statutes (1981) in that they constitute misconduct in the practice of contracting.

The Petitioner presented six witnesses and 14 exhibits, all exhibits being admitted into evidence. The issue is whether the Respondent committed the acts or omissions charged, whether they constitute violations of the statutory authority plead in the Administrative Complaint and if so, what, if any, penalty is warranted.

FINDINGS OF FACT

1. The Respondent is a certified general contractor holding license number CG C016888. The Petitioner is an agency of the State of Florida charged with enforcing the provisions of Chapter 489, Florida Statutes, regulating the licensure and practice status and standards of building contractors in the State of Florida and enforcing the disciplinary provisions of that chapter.

   
   

2. On December 14, 1981, Respondent contracted with Mr. and Mrs. Frank J. Sullivan to build the Sullivans a home in Sarasota County, Florida. Those parties entered into a contract whereby the Respondent was to be paid the actual cost of construction including all labor and materials plus a commission in the amount of 8 percent of the actual cost of construction, provided however, that the total contract price would not exceed $49,000, including actual costs and commission. In January, 1982, Respondent commenced work constructing the home. The Respondent worked on the home for several months and then abruptly ceased and abandoned construction without explanation on May 14, 1982. At this time the house was approximately 70 percent complete. At the time the Respondent ceased work on the project he had already been paid $47,362.29 or approximately

   97 percent of the total contract price agreed to by the parties. The Sullivans thereafter had to pay $10,633.53 to subcontractors and materialmen who had been hired by the Respondent to supply labor and/or materials to the house, at the Respondent's direction, prior to his ceasing construction and leaving the job. Additionally, the Nokomis Septic Tank Company, Inc., the subcontractor who installed the septic tank, was owed $1,180.07 by the Respondent for the installation of the septic tank, which amount was to have been paid out of the total $49,000 contract price. The Respondent failed to pay Nokomis Septic Tank Company, which then filed a mechanic's lien on the property. In order to remove this cloud on their title to the property and avoid foreclosure of the lien, the Sullivans were forced to pay the $1,180.07 amount of the lien.

   
   

3. In addition to more than $10,000 paid to subcontractors who had already performed labor or supplied materials to the job before the Respondent left it, the Sullivans had to obtain a loan from their bank in order to finish the project. The contracted for items which the Respondent had left undone (approximately 30 percent of the construction) required them to expend

   $18,662.04 to complete the dwelling in a manner consistent with the contractual specifications. The items which remained to be constructed or installed are listed on Petitioner's Exhibit 7 in evidence.

   
   

4. The remaining amount of contract price which the Respondent was due upon completion of the job would have been $1,737.71. With this in mind, as well as the fact that the Sullivans had to pay in excess of $10,000 to defray already outstanding bills to subcontractors for labor and materials already furnished and then had to obtain a loan in order to pay $18,662.04 in order to complete the house, and it being established without contradiction that the

   Respondent was unable to make his payroll at the point of leaving the job, the Respondent obviously used substantial amounts of the funds he received from the Sullivans for purposes other than furthering the construction project for which he contracted with the Sullivans.

   
   

5. Concerning Count II, on December 22, 1981, Frederick Berbert doing business as Venice Enclosures of Venice, Florida, contracted with Mr. Emory K. Allstaedt of Grove City, Florida, Charlotte County, to build an addition to Mr. Allstaedt's mobile home. The contract specified a price of $4,952 for which Berbert was required to construct a 12-foot by 20-foot enclosure or porch. Mr. Allstaedt never did and never intended to contract with the Respondent, Mr. Martin, rather, his contract was only with Frederick Berbert. Mr. Berbert was a registered aluminum specialty contractor in Sarasota County. He was not registered or licensed to practice contracting in Charlotte County where Mr. Allstaedt lived and where the porch was to be constructed.

   
   

6. On December 28, 1981, the Respondent obtained building permit number 72030 from the Charlotte County Building and Zoning Department to construct a "Florida room" for Mr. Allstaedt's mobile home, the same room to be constructed by Mr. Berbert. Under Charlotte County Ordinances in evidence as Petitioner's Exhibits 13 and 13A, only a properly licensed "A", "B" or "C" contractor or a registered aluminum contractor can perform this type of job. The Respondent was appropriately licensed for this type of work in Charlotte County, but Mr. Berbert was not and thus could not obtain the permit in his own right. The Respondent's only connection with this job was obtaining the permit in his own name as contractor of record and in performing some minor work in replacing some damaged sheets of paneling shortly after the construction of the room addition and after the performance of the contract by Berbert. Though the Respondent listed himself as contractor in order to be able to obtain a building permit for the job, he never qualified as the contractor of record nor "qualified" Mr. Berbert's firm with the Construction Industry Licensing Board. Both Mr. Berbert and the Respondent were aware that Mr. Berbert could not legally perform contracting in Charlotte County at the time the Respondent obtained the building permit on Berbert's behalf.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction of the subject matter of, and the parties to this proceeding. Section 120.57(1), Florida Statutes (1981).

   
   

8. The Respondent is charged with various violations delineated in the Administrative Complaint of Section 489.129, Florida Statutes which concern the Board's authority to impose administrative sanctions upon the licensure status of contractors upon proof that th have committed acts or omissions amounting to legal violations of the various paragraphs of that section or Section 489.127, Florida Statutes. Specifically, the Respondent in this case is charged with violation of Section 489.129(1)(a), (f), (h) and (k), as well as (m) which provide as follows:

   
   

   1. The board may revoke, suspend, or

      deny the issuance or renewal of the certificate of registration of a contractor 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. Aiding or abetting any uncertified

         or unregistered person to evade any provision of this act.

      2. 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 registration 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.

         (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.

         (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.

         (m) Upon proof and continued evidence that the licensee is guilty of fraud or deceit

         or of gross negligence, incompetency, or misconduct in the practice of contracting.

         
         

9. A thorough review of the entire body of evidence and testimony in this proceeding reveals that the Respondent clearly violated Section 489.129(1)(k) , Florida Statutes (1981) by abandoning construction of the Sullivan's home. He, without explanation toe the Sullivans, left the project permanently, without ever returning for any purpose, without paying a substantial number and amount of the bills for labor and materialmen, and after having already received approximately 97 percent of the contract price while only constructing, at most:

   70 percent of the house. Further, the fact that, after having received almost all of the contract price, in excess of $10,000 remained outstanding in unpaid subcontractor's bills, as well as the fact that the Sullivans had to obtain a bank loan in excess of $18,000 to finish the construction, reveals without doubt that the Respondent clearly diverted funds meant for the construction and finishing of this house to unknown and unjustified uses which constitutes a violation of subparagraph (h) above. Thus, in view of the Respondent's unexplained termination of the job on May 14, 1982 without ever returning to resume performance of the work, and in view of the disparity between the

   $47,362.29 paid the Respondent and the ultimate cost of paying subcontractors and completing the dwelling after his unexplained default on the contract, it must be concluded that all charges in Count I have been established.

   
   

10. Concerning the charges in Count II, a thorough review of the evidence and testimony of record reveals that indeed the Respondent clearly aided or abetted the unlicensed contractor, Mr. Berbert, in evading the provisions of

    Chapter 489 by using his name and certification to obtain the building permit so that Mr. Berbert would be able to engage in a construction project in a county where he was not licensed. The uncontradicted evidence in the record and the above Findings of Fact reveal that the certificate holder, the Respondent, allowed his certificate and registration to be used Mr. Berbert and his company when the Respondent had no active participation in the operations, management or control of Mr. Berbert's firm, nor any part whatever in the construction project for which he obtained the building permit.

    
    

11. In view of the fact that the contract between Mr. Allstaedt and Mr. Berbert was between those two parties solely, with the Respondent not being a party thereto, and in view of the fact that he was never an employee or officer of Mr. Berbert's firm nor otherwise was shown to have any business relationship whatever with Mr. Berbert other than the use of his name and registration to enable Mr. Berbert to obtain the building permit, after which permitting the Respondent did not actively participate in the construction operation, there is no question that the presumption of intent to evade the provisions of Chapter

    489 contained in subparagraph (f) has been satisfied and is unrebutted. The violations alleged in Count II involving Section 489.129(1)(e) and Section 489.129(1)(f), Florida Statutes (1981) have therefore been established. Concomitantly, the acts proven concerning Counts I and II, establish the violation of Section 489.129(1)(m) alleged in Count III of the Complaint in that Respondent has clearly been shown to be guilty of misconduct in the practice of contracting. Thus, the allegations in all three counts of the Administrative Complaint have been proven.

    
    

12. The Respondent's infractions of the above statutory authority related to all counts are certainly serious ones. He contracted with the Sullivans to construct their home for the sum of $49,000 and only completed, at most, 70 percent of that work, although he received approximately 97 percent of the contracted price. Additionally, the sums of money paid him in large part were diverted to unknown uses inasmuch as approximately $28,000 was required to complete the work which the Respondent contracted to perform for that price such that, in effect, the Respondent has been unjustly enriched in the approximate sum of $27,658.28.

    
    

13. Additionally, the Sullivans were forced to endure their home remaining uncompleted for a substantial number of months after the May 14, 1982 abandonment by the Respondent until they were finally able to complete the home by their own devices. Therefore the Sullivans have suffered extreme financial inconvenience and delay by the Respondent's actions. The First District Court of Appeal in Bowling vs. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981), held that in proceedings which may result in the loss of a valuable business or professional license the critical matters at issue must be shown "...by evidence which is as indubitably `substantial' as the consequences." The proof by Petitioner must be as serious minded as the penalty is serious." It is patently obvious that the Petitioner's proof herein is certainly substantial enough to justify a serious penalty of the nature provided for in the above- cited statutory authority. Here the violations by Respondent are not merely technical infractions of certain pertinent statutes or rules regulating the business and practices of building contractors, but rather they resulted in a very serious financial and temporal loss by the victims, the Sullivans, who were certainly entitled to and did rely upon the expected fidelity of a licensed contractor to the mandates of Chapter 489, Florida Statutes. This consideration, coupled with the proven, intentional fomentation by the Respondent of a scheme to enable an unlicensed party to evade the provisions of Chapter 489, mandate that a substantial penalty be imposed.

RECOMMENDATION

Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore

RECOMMENDED:

That the contractor's license of Jack A. Martin be suspended for a period of ten (10) years, provided however, that if he makes full restitution to the Sullivans of all monies they expended for labor, materials and permits to enable them to complete the work he had contracted to perform, within one year from a final order herein, that that suspension be reduced to three (3) years after which his license should be reinstated.

DONE and ENTERED this 27th day of April, 1984, in Tallahassee, Florida.

P. MICHAEL RUFF 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 30th day of April, 1984.

COPIES FURNISHED:

Charles P. Tunnicliff, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Mr. Jack A. Martin

305 Park Lane Drive Venice, Florida

James Linnan, Executive Director Florida 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: 83-002941

Orders for Case No: 83-002941