DEPARTMENT OF PROFESSIONAL ) REGULATION, CONSTRUCTION INDUSTRY ) LICENSING BOARD, )
vs. ) CASE NO. 84-4156
RICHARD M. HORTON, )
Respondent. )
This cause came to be heard on April 10, 1985, in Miami, Florida before Donald D. Conn, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented as follows:
For Petitioner: W. Douglas Beason, Esquire
For Respondent: Richard M. Horton, pro se
The Department of Professional Regulation, Petitioner, filed an Administrative Complaint before the Construction Industry Licensing Board against Richard M. Horton, Respondent, alleging that Respondent violated Sections 489.129(1)(h), (k) and (m), F.S. (1981), by leaving a job site with work remaining to be done and diverting funds received for the completion of the job hereby causing several liens to be filed against the business with which Respondent had contracted. At the hearing Petitioner offered the testimony of two witnesses and introduced sixteen exhibits, and Respondent testified on his own behalf and introduced five exhibits. A transcript of the hearing was filed on May 8, 1985.
At all times material hereto, Respondent has been licensed as a certified general contractor and certified mechanical contractor, having been issued licenses numbered CG-C011731 and CM-C011116.
On or about February 16, 1983, building permit number 1-83-01-01119 was issued as a result of an application signed by Respondent, as qualifier, for interior work at a vacant retail store site in Aventura Mall. The building contractor shown on the permit application was R. M. Horton Construction
Corporation. On or about April 1, 1983, Respondent applied for a second building permit at the same job site, which was issued as permit number 1-83-01- 02871.
The owner of the business located at the job site in Aventura Mall for which Respondent pulled these permits is Don Kaufman. Mr. Kaufman is co-owner and President of Pants Plus, Inc., and was in the process of opening a new retail store at Aventura Mall to be known as "Don Richards." On February 17, 1983, Kaufman entered into a contract on behalf of Pants Plus, Inc., with Rowley-Dees Construction Company. This contract was in the amount of $92,490 and was for all construction necessary to complete the new store, "Don Richards." Mark Rowley was shown as construction manager on the contract, and Kaufman assumed that Rowley was properly licensed to do this work and would obtain all necessary permits. The permits obtained by Respondent, referenced above, were for this same job for which Kaufman originally contracted with Rowley-Dees Construction Company.
After work was begun on Kaufman's job it was "red tagged" by the Dade County Building Inspection Department, and all work was delayed for approximately two weeks until Kaufman could execute a new contract with a properly licensed contractor. Kaufman executed a contract with Respondent on March 30, 1983, showing R. M. Horton Construction Corporation as the contractor, at which time Respondent pulled the second permit for this job on or about April
1 and work resumed.
The contract executed by Respondent with Kaufman on March 30, 1983, stated as to contract sum:
The Owner shall pay the Contractor in current funds for the performance of the Work, subject to additions and deductions by Change Order as provided in the Contract Documents the Contract Sum of Ninety-Two Thousand Four- Hundred Ninety ($92,490.00) Dollars:
provided, however, Contractor acknowledges that the sum of $41,620.50 has already been paid Rowley-Dees Construction Co., Inc., in connection with Phase 1 and Phase 2 of Article 5 Progress Payments, and Contractor acknowledges that Contractor shall have no claim to said sum.
The amount due Respondent for completing the job would therefore be $50,869.50.
Respondent received payments from Kaufman on behalf of Pants Plus, Inc., on April 21 and May 3, 1983, under this contract in the total amount of
$40,000, leaving an unpaid balance of $10,869.50. Respondent has received no further payments under this contract.
The store, "Don Richards," opened on May 1, 1983, but Kaufman testified that Respondent had not completed various construction items which he referred to as "minimal" incompletion of less than the ten percent of the job. Specifically, Kaufman testified that various cabinets, including a large jewelry display cabinet, lighting, carpeting and the water sprinkler system were all left incomplete by Respondent. In addition a four liens were filed by subcontractors in connection with the work they performed at "Don Richards." These liens were in the total amount of $19, 986.18.
Respondent contends that he had to provide many items that Kaufman, as owner, should have provided under the contract and that these "extras" increased his costs, but that the job was substantially complete when he left it. He testified that he was willing to forego the amount due him under the contract and to absorb the costs resulting from the "extras" in return for Kaufman satisfying the liens. However, there is no evidence that Respondent discussed this arrangement with Kaufman or that Kaufman agreed to it. Respondent did not offer any competent substantial evidence to corroborate his testimony about the "extras" or his contention that he was forced to absorb costs on the job which Kaufman should have paid.
On March 30, 1983, Kaufman and the officers of Rowley-Dees Construction Company executed a Guarantee and Indemnification Agreement which states, in pertinent part:
Rowley-Dees, Construction, Co., Inc., Thomas
G. Rowley and David Dees, jointly and severally agree that the written acknowledge of Pants Plus, Inc. that R.M. Horton Construction Corporation has failed or refused to perform any of the terms and conditions required to be performed by it in accordance with the attached Exhibit "A" shall bind each of them and; furthermore, Rowley-Dees Construction Co., Inc., Thomas G. Rowley and David Dees jointly and severally agree that any extension of time granted by Pants Plus, Inc. to R. M. Horton Construction Corporation in connection with R. M. Horton Construction Corporation's obligations required to be performed . . . shall in no manner whatsoever release Rowley-Dees Construction Co., Inc., Thomas G. Rowley and David Dees from any liability hereunder. Rowley-Dees Construction Co., Inc., Thomas G. Rowley and David Dees, jointly and severally agree that upon demand of Pants Plus, Inc., each of them, jointly and severally promise to pay any amount due and owing to Pants Plus, Inc. without any action or proceeding being taken by Pants Plus, Inc. against R. M. Horton Construction Corporation.
Kaufman never filed a written notice of Respondent's failure to complete the terms of his contract, nor did Kaufman ever file a demand for payment against Rowley-Dees Construction Company, Thomas G. Rowley or David Dees in connection with the liens filed by the subcontractors.
Respondent's contract with Kaufman required the job to be "substantially complete" by April 20, 1983, which was the original opening day of Aventura Mall. However the Mall did not open until May 1 and no stores could open before that date. "Don Richards" opened on May 1 which was the first day it could have opened.
Posthearing proposed findings of fact submitted pursuant to Section 120.57(1)(b)4, F.S., have been considered. 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.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this case. Section 120.57(1), F.S.
The burden of proof in this case is on Petitioner. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977). Since this action is penal in nature, involving the possible suspension or revocation of Respondent's license, Petitioner's burden is to prove the violations alleged in the Administrative Complaint by clear and convincing evidence. State ex rel. Vining v. Florida Real Estate Commission, 281 So.2d 487 (Fla. 1973); Bowling v. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981). This is a higher burden than proof by a simple preponderance of the evidence due to the nature of the action and the possible penalty that could be imposed.
Petitioner has charged Respondent with violating Sections 489.129(1)(h), (k) and (m), F.S. (1981), which authorize license disciplinary action for any of the following:
(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.
Petitioner has not established, by clear and convincing evidence, that Respondent diverted funds or property received from Don Kaufman for completion of his job at the Aventura Mall and was thereby unable to complete his contract with Kaufman. There was no proof that Respondent diverted any part of the
$40,000 he received on this job, and instead Respondent contends he used these payments for the normal expenses of his business and to recoup his costs associated with this job. Respondent's contention on this point is uncontroverted. The evidence also does not establish that Respondent was guilty of fraud, deceit, gross negligence or incompetency. There was no evidence that Respondent obtained the $40,000 which was paid to him through fraud or deception, or that the work he performed was grossly negligent or incompetent.
The evidence does establish, clearly and convincingly that:
Respondent left the job he had contracted with Don Kaufman to perform before that job was totally complete, although it was substantially complete;
Respondent received only $40,000 of the total amount due of $50,869.50 under his contract with Don Kaufman; and
Four liens in the total mount of
$19,986.18 were filed by subcontractors who performed work at Don Kaufman's new store, "Don Richards."
Respondent admitted that he did not completely finish the job due to an impasse which developed between himself and Kaufman. Since he did not receive the final payment of $10,869.50 which would have been due to him for completing the job, Respondent simply abandoned the job without explanation to Kaufman, who was then left to deal with the subcontractors liens. In his own mind, Respondent testified he felt this was a fair trade-off, but he never discussed this arrangement with Kaufman or obtained his approval. The Guarantee and Indemnification Agreement gave Kaufman recourse against Rowley-Dees Construction Company, and its officers, but Kaufman chose not to exercise his rights thereunder. In any event the Agreement did not relieve Respondent of his obligations under his contract with Kaufman nor his responsibilities as a licensee under Chapter 489, F.S.
Respondent did abandon this job without notification to the owner and without any showing of just cause. The supposed setoff of the remaining amount due Respondent for the amount due the subcontractors does not establish just cause. By his actions, Respondent has also demonstrated misconduct in the practice of contracting. Leaving an owner to work out his own settlement with subcontractors who have not been paid could hardly constitute conduct expected and required of licensees. An owner who contracts with a general contractor has a right to expect that subcontractor liens will no be filed against his property, and subcontractors have the right to expect that they will be paid for work performed. Therefore, the evidence presented does establish violations of Sections 489.129(1)(k) and (m), F.S. (1981).
The charges which have been proven relate solely to Respondent's actions while operating as a certified general contractor, license number CG- C011731. No charges have been proven relating to actions taken under his certified mechanical contractor's license number CM-C011116. Therefore, the only disciplinary action which can be recommended in this case relates to Respondent's license as a certified general contractor, CG-C011731.
Based upon the foregoing findings of fact and conclusions of law, it is recommended that a Final Order be entered suspending Respondent's certified general contractor's license number CG-C011731 for a period of sixty (60) days.
DONE AND ENTERED this 6th day of June 1985 at Tallahassee, Florida.
Filed with the Clerk of the Division of Administrative Hearings this 6th day of June 1985.
W. Douglas Beason, Esquire
Richard M. Horton
Salvatore A. Carpino, Esquire Department of Professional Regulation
James Linnan, Executive Director Construction Industry Licensing Board Post Office Box 2
