STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 84-3844

)

RAYMOND T. GRADY, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice a formal hearing was held in the above case before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on January 14, 1985, in Melbourne, Florida.

APPEARANCES

For Petitioner: H. Reynolds Sampson, Esquire

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Nicholas F. Tsamoutales, Esquire

4690 Lipscomb Street, N.E., Unit 9 Palm Bay, Florida 32905

BACKGROUND

By administrative complaint filed on October 10, 1984, petitioner, Department of Professional Regulation, Florida Construction Industry Licensing Board, has charged that respondent, Raymond T. Grady, Jr., an aluminum specialty contractor, had violated various provisions within Chapters 455 and 489, Florida Statutes. Generally, petitioner has alleged that respondent diverted funds from a project which diversion prevented respondent from fulfilling his contractual obligation, and made misleading, deceptive, untrue, or fraudulent representations in the practice of his profession in conjunction with a building contract entered into by respondent in August, 1983 in Palm Bay, Florida.

Petitioner alleges this conduct constitutes a violation of Subsections 455.227(1)(a) and 489.129(1)(c) and (h), Florida Statutes. By an amendment filed on December 19, 1984, petitioner has also charged that respondent violated Subsection 489.129(1)(g), Florida Statutes, by doing business under an unregistered name.

Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes. The matter was referred to the Division of Administrative Hearings by petitioner on November 5, 1984 with a request that a Hearing Officer be assigned to conduct a formal hearing. By notice of hearing dated November 19, 1984, the final hearing was scheduled for February 14, 1985 in Melbourne, Florida.

At the final hearing petitioner presented the testimony of Lyman Crowshaw, Dawn F. Crowshaw, Roger Clutier and Clyde Pirtle and offered petitioner's exhibits 1-11; all were received in evidence except exhibit 11.

The transcript of hearing was filed on January 25, 1985. Proposed findings of fact and conclusions of law were filed by respondent and petitioner on January 24 and February 11, 1985, respectively. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order, except where such proposed findings of fact have been rejected as subordinate, cumulative, immaterial or unnecessary.

At issue herein is whether respondent license as a registered specialty contractor should he disciplined for the alleged violations set forth in the administrative complaint.

FINDINGS OF FACT

1. At all times relevant hereto, respondent, Raymond T. Grady, Jr., held registered specialty contractor license number RX DO32138 issued by petitioner, Department of Profession Regulation, Florida Construction Industry Licensing Board. 1/ According to the official records of petitioner, Grady was first licensed in 1977. He later qualified F & L Contracting, Inc., a contracting company doing business in Palm Bay, Florida, in February, 1982. The 1983 annual report filed by F & L Contracting, Inc., with the Department of State reflected that Grady was secretary-treasurer and resident agent of the corporation while a Fred James Henderson served as president. Grady continued to qualify F & L Contracting, Inc. until February 27, 1984, when he notified petitioner that he was no longer its qualifying agent. Presently, his license is on an inactive status.

   
   

2. Fred James Henderson did business under the name of F & L Contracting, Inc., F & L Contractors, Inc. and F & L Construction, Inc. All had the same street address and telephone number and were the same for all practical purposes. Only F & L Contracting, Inc. was qualified by Grady with the State.

   
   

3. On or about August 25, 1983, Lyman and Dawn Crowshaw of 356 Holiday Park, Palm Bay Florida, entered into a contract with F & L Contractors, Inc., to have a utility room added to their residence for a price of $5,835. The contract was negotiated by Henderson. When the contract was signed, Henderson gave the Crowshaws his business card which reflected the name "F & L Contracting, Inc.," and had the same telephone number and address as F & L Contractors, Inc. Under the agreement, Lyman Crowshaw gave F & L Contractors, Inc. a check in the amount of $1,945 as the first of three payments for the work. The check was deposited into the bank account of F & L Contracting, Inc., the company which Grady had qualified.

   
   

4. Because Henderson held no license from the State, he could not pull job permits in the City of Palm Bay. Therefore, it was necessary for Grady to sign all applications and pick up the permits on behalf of Henderson. In this regard, the city building officials perceived Grady to be the individual who

   qualified Henderson to do business as a contractor. For this reason, the official notified Grady that no permit could be pulled on the Crowshaw job because of a setback restriction on Crowshaw's property. When Crowshaw learned of this, he immediately requested a refund of his money, but Henderson did not oblige. After the Crowshaws sent a letter to F & L Contracting, Inc. on November 18, 1983 demanding payment, and their attorney did the same on January 4, 1984, Henderson and his wife finally executed a promissory note on January 11, 1984 promising to pay the Crowshaws $500 per month plus 18 percent interest until the $1,945 was repaid. Henderson signed the note individually and as president of F & L Contractors, Inc.

   
   

5. Mr. Crowshaw received one $500 payment on January 21, 1984 from Henderson. After he received no other payments, Crowshaw filed a complaint against Grady in an effort to recover his money. That prompted the instant proceeding.

   
   

6. The Crowshaws and Grady had never seen each other prior to the final hearing. The Crowshaws did have two telephone conversations with someone who represented himself to be Grady in late 1983 and early 1984, and in those conversations, Grady assured them that he would get Henderson to repay the money owed.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

   
   

8. The administrative complaint as amended alleges funds from the Crowshaw project that respondent (a) diverted which prevented him from fulfilling his contractual obligation (Subsection 489.129(1)(h), F.S.), (b) made misleading, deceptive, untrue and fraudulent representations in the practice of his profession on the Crowshaw job (subsections 455.227(1)(a) and 489.129(1)(c), F.S.), and (c) violated Subsection 489.129(1)(g) by doing business under the unregistered name of F & L Contractors, Inc.

   
   

9. Through his counsel, Grady argues that he did not have any personal dealings with the Crowshaws, that Henderson is the guilty culprit, and that the contract in question involved a different entity than the corporation which he qualified.

   
   

10. Initially, the contention that Grady is absolved of all responsibility because of his lack of participation and knowledge in the Crowshaw contract is rejected. This is true since Grady has "a statutorily imposed professional duty, as sole qualifying agent of record of (F & L Contracting, Inc.), to supervise all of (F & L's) projects." Alles v. Dept. of Professional Regulation, 423 So.2d 624, 626 (Fla. 5th DCA 1982). See also, Hunt v. Dept. of professional Regulation, 444 So.2d 997 (Fla. 1st DCA 1983). As such, he is responsible for any acts or omissions on the part of the company which he has qualified. Next, the fact that the contract in question involved F & L Contractors, Inc. and not F & L Contracting, Inc. is immaterial. Indeed, the evidence reveals the two "entities" had the same telephone numbers, address and principals, and funds given to the contracting company were deposited into the bank account of the company which Grady had qualified. Then, too, Grady pulled

    the permits for all jobs and he was perceived by the City of Palm Bay building officials as being the licensee who qualified Henderson to do business as a contractor. Therefore, the distinction in the two names is deemed to be immaterial and it is concluded that Grady is responsible for the actions of both.

    
    

11. Count two of the administrative complaint charges that Grady, or Henderson, made untrue or misleading representations to a consumer (Crowshaw); however, there is no suggestion by petitioner as to what specific conduct underpins this charge. If the charge is based upon Grady's representation to the Crowshaws that he would get Henderson to satisfy their debt, Grady fulfilled that obligation when Henderson later signed a promissory note. If it is based upon Henderson's failure to repay the deposit, the charge must also fail since Henderson signed a legally enforceable promissory note to do so, and any default should be pursued in county court. There being insufficient evidence to support a violation of Subsections 455.227(1)(a) and 489.129(1)(c), Florida Statutes, Count II of the complaint should be dismissed.

    
    

12. It is next alleged that Grady violated Subsection 489.129(1)(g) by doing business under an unregistered name. This charge stems from the Crowshaw contract being executed under the name of F & L Contractors, Inc. while the registered name was F & L Contracting, Inc. The evidence is clear and convincing that Grady attempted to secure a permit under the unregistered name, and that a violation of the foregoing statute has occurred. Accordingly it is concluded that Grady is guilty of violating Subsection 489.129(1)(g), Florida Statutes.

    
    

13. Finally, Count I of the complaint charges that respondent (presumably through Henderson) diverted funds from a project which prevented the contractor from fulfilling the terms of his obligation or contract. To support this allegation, petitioner has sought to introduce copies of what purport to be the 1983 bank statements and other miscellaneous records of F & L Contracting, Inc. However, the records were not authenticated by the bank custodian, and as such, they are inadmissible. Even so, petitioner points out that it filed a notice to produce evidence upon respondent's counsel four working days before the final hearing which directed Grady to produce at hearing certain bank records of F & L Contracting, Inc. Grady promptly filed an objection indicating such documents were not in his possession or control, and therefore did not produce the documents at hearing. Petitioner contends the objection was not timely, that insufficient cause was given by Grady for not complying with the notice, and therefore the proffered documents should be received in evidence. However, petitioner was untimely in serving the notice to produce, and it is unreasonable and oppressive to require Grady to retrieve record's that are more easily obtained by petitioner from the bank itself. Sunrise Shopping Center, Inc. v. Allied Stores Corp., 270 So.2d 32 (Fla. 1st DCA 1972). Accordingly, the objection to petitioner's exhibit 11 is sustained.

    
    

14. Even though Henderson did not repay the Crowshaws, there is no direct evidence to indicate that he diverted their funds from the project. Since no diversion on the part of Handerson has been shown, no guilt can be imputed to Grady under the rationale in Allas. Therefore, it is concluded that Count I of the administrative complaint should be dismissed.

    
    

15. Petitioner recommends that Grady pay a $1,000 administrative fine and obtain a signed release from the Crowshaws indicating restitution has bean made by either he or Henderson. Petitioner also recommends that Grady's license be suspended (presumably indefinitely) if restitution is not made.

16. Since it appears to the undersigned that this action has been brought only for the purpose of obtaining restitution for the Crowshaws, an administrative fine is unwarranted given the amount of money ($1,435) which Grady is obligated to pay the Crowshaws in the event Henderson does not repay his debt. Therefore, a one year suspension of his license is appropriate, unless Grady obtains a signed release from the Crowshaws indicating restitution has been made.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating Subsection

489.129(1)(g), Florida Statutes, and that his license be suspended for one year,

unless Grady obtains a signed release from the Crowshaws indicating restitution has been made.

DONE and ORDERED this 1st day of March, 1985, in Tallahassee, Florida.

DOANLD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009Apalachee Parkway Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 1st day of March, 1985.

ENDNOTE

1/ The administrative complaint alleges that Grady is an luminum specialty contractor rather than a registered specialty contractor. However, respondent made no objection to this variance, and it is assumed that such a distinction is immaterial to the disposition of this case.

COPIES FURNISHED:

H. Reynolds Sampson, Esquire

130 N. Monroe St. Tallahassee, Florida 32301

Nicholas F. Tsamoutalas, Esquire 4690 Lipscomb St. N.E.

Unit 9

Palm Bay, Florida 32905

Docket for Case No: 84-003844

Orders for Case No: 84-003844