STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, CONSTRUCTION )
INDUSTRY LICENSING )
BOARD, )
)
Petitioner, )
)
vs. ) Case No. 85-0690
) 85-1468
S. A. STONE, )
)
Respondent. )
)
RECOMMENDED ORDER
Consistent with the Notice of Hearing furnished the parties by the undersigned on March 27, 1985, as amended by the Order of August 8, 1985, granting Respondent's Motion for Continuance, a hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Bearings in Chiefland, Florida, on October 17 and 18, 1985.
ISSUE
The issue for consideration was whether Respondent's license as a registered residential contractor should be disciplined because of the alleged misconduct outlined in the two Administrative Complaints filed in this case.
APPEARANCES
For Petitioner: W. Douglas Beason, Esquire
130 N. Monroe Street Tallahassee, Florida 32301
For Respondent: Jeffrey J. Fitos, Esquire
East Silver Springs Blvd. Ocala, Florida 32670
BACKGROUND INFORMATION
On January 16, 1986, by Administrative Complaint filed by Fred Roche, Secretary of the Department of Professional Regulation (DPR), Petitioner, Construction Industry Licensing
Board (CILB), acted to discipline Respondent's license as a registered residential contractor in Florida because of several alleged violations of Section 489.129, Florida Statutes, which allege various acts of misconduct relating to the business of contracting. On February 12, 1985, Respondent, through counsel, submitted an Election of Rights form on which he disputed the allegations of fact contained in the Administrative Complaint and requested a formal hearing. Thereafter on February 28, 1985, Petitioner initiated an additional disciplinary action against Respondent which was assigned DOAH Case No. 85-1468. On June 28, 1985, Petitioner moved to consolidate the two Administrative Complaints and to amend the Administrative Complaint filed in the earlier case. The undersigned thereafter entered an Order granting Petitioner's Motion to Amend the Administrative Complaint and also consolidated both cases for hearing which, after continuance as stated previously, was held on October 17 and 18, 1985.
At the hearing, Petitioner presented the testimony of Rollin
Janney, Director of Development for Levy County; William H. Davis, formerly Building Official for Levy County and currently a minister Rosemary B. Fumea Pamela E. Via, formerly office manager for Respondent Verenia A. Matthews and Mitchell Piperski. Petitioner also introduced into evidence Petitioner's Exhibits 1 through 38 with the exception of Exhibit 25 which was not admitted.
Respondent testified in his own behalf and presented the testimony of Oscar Underwood, formerly Chief of Police in Chiefland Albert C. Simmons, an attorney practicing in Ocala; Earl Jones, a plumber; Andrew C. Sension, an electrical contractor and introduced Respondent's Exhibits A through D.
Prior to the taking of any testimony herein, Petitioner voluntarily dismissed its Administrative Complaint in DOAH Case No. 85-1468 and presented no evidence on the allegations contained therein. Therefore, the hearing proceeded regarding the Administrative Complaint filed in DOAH Case No. 85-0690, exclusively.
Subsequent to the hearing but prior to the preparation of this Recommended Order, both sides submitted Proposed Recommended Orders which include proposed Findings of Fact. These proposed Findings of Fact have been thoroughly evaluated and considered and have been either accepted or rejected as shown in the Appendix attached hereto.
FINDINGS OF FACT
At all times pertinent to the Administrative Complaint filed herein, Respondent was a registered residential contractor in the State of Florida having been issued license number RR 0010134. Michael P. Freeman (a/k/a Dennis Freeman) was at no time material to the allegations considered herein a registered, certified, or otherwise licensed individual on record with CILB in Florida.
In July 1983, Respondent and Dennis Freeman agreed to form a corporation for the purpose of home construction in Florida to be known as D & S Homebuilders, Inc. (D & S). The officers of this corporation were to be:
President S. A. Stone (Respondent) Vice President Dennis Freeman
Sec. Treas. Kristina Freeman
The letter from Respondent to his attorney, drafted and written by Ms. Via, but signed by Respondent, requesting that the corporation be established, provided that Freeman was to be responsible for all materials, maintenance, labor, bills, etc., and Respondent was to be responsible only for the "quality of work." This letter served as an agreement between Freeman and Stone which was to be separate and apart from the Articles of Incorporation. Respondent was to receive a 7% commission on "all labor done or any type of construction by Mr. Freeman or D & S Homebuilders . . .", and through his Exchange Realty office, was to receive a 5% commission on all sales of property from the corporation or Mr. Freeman. D & S was organized as a corporation until November 21, 1984, when it was involuntarily dissolved for failure to file an annual report.
Though the corporation was formed and a Corporate Charter issued, and this action was taken at the request of the Respondent, the corporation was formed in the attorney's name. Neither Respondent nor the Freemans ever officially took over as officers or directors. In short, the corporation while legally born, never breathed. At no time during its life and during the period relative to the allegations contained in the Administrative Complaint herein, did the Respondent qualify the corporation with the Florida Construction Industry Licensing Board.
In addition to sending the letter to the attorney requesting that the corporation be established, Mr. Stone, on November 1, 1983, entered into a handwritten agreement with Mr. Freeman, also drawn by Ms. Via, which called for the use of his license: for Freeman to pay Respondent an additional $500.00 for
the use of the license on each job over $5,0000.00 and for Freeman to "be solely responsible for anything that might arise against S. A. Stone's license." The first payment was to be made on December 1, 1983, and the agreement was to last through November 1, 1984. Stone never got any financial benefit from his relationship with Freeman.
The agreement mentioned above was entered into at the behest of the then Chief of Police in Chiefland, Mr. Underwood, who requested that Respondent do anything he could to keep Freeman, who was then under investigation for other misconduct in the area. Mr. Underwood corroborates this. Pursuant to this request, when Respondent suggested an arrangement with Freeman, Freeman insisted that the agreement be in writing.
Stone contends that at no time did he ever intend for the agreement to be permanent nor did he ever intend to make any money out of it. He says he knew it was illegal and he entered it solely because of the request from the police. He contends, and there is no evidence to contradict his contention, that at no time did he ever receive any money from Freeman as a result of this agreement nor from the formation of D & S.
On July 26, 1983, Respondent executed an authorization for Dennis Freeman to act as his authorized agent to pull permits on his behalf at the Levy County Building Department. No mention was made on this form of D & S Homebuilders, Inc. The form was prepared by Mrs. Nancy Gilbert, the administrative assistant to Mr. Davis, the Levy County Building Official. At the time in question, Mr. Stone had introduced Mr. Freeman, his agent, to pull permits and Ms. Gilbert prepared the document to do what Mr. Stone wanted. The document is written in plural terms for repeated uses. Mr. Stone contends that his intention at the time was for it to be used for a single operation and that he failed to notice the erroneous pluralism, but other evidence of record disproves this contention.
While it is not the policy of the Building Office to prepare these authorizations for contractors, it is a normal practice in Levy County and other counties throughout the State to allow agents to pull permits on the license of their prime contractor or employer as was done here.
There is no evidence that the Bell job, which was for the most part accomplished by Respondent, was not satisfactory. Here, the work progressed smoothly and was properly completed, but based on his dissatisfaction with Freeman's performance during this job, he indicated to Freeman that there would be no further relationship between them. Nonetheless, the authorization was not revoked and Stone signed the permit
application for the Reagan house as seen below. Without that authorization, the Building Office would not have allowed Freeman to obtain any of the building permits utilized for the other construction projects referenced in the Administrative Complaint.
In July 1983, the Fumeas entered into a handwritten contract with Freeman, drafted by Kristina Freeman for the construction of a house for Bertha Reagan, Mrs. Fumea's mother. The contract had a price of $24,000.00. The Fumeas were to receive $10,000.00 for their land on which the house was to be built and Freeman was to receive a $14,000.00 loan from Mrs. Reagan for materials to build the house in question. When the house was sold, the initial $24,000.00 was to be returned to Mrs. Reagan. Any profit was to be divided 40% to Mrs. Reagan, 40% to the Freemans, and 20% to the Fumeas. The contract also called for the construction of a second house upon completion of the first.
By check, dated June 9, 1983, Mrs. Reagan provided Freeman with the $14,000.00 to be secured by a second mortgage on the property executed by both Freemans in favor of Bertha Reagan.
Thereafter, on August 24, 1983, Respondent, acting for D & S and S. A. Stone and Dennis Freeman, applied for a construction permit to build a residence for Mrs. Reagan as called for. In support of that application, Mr. Stone also furnished an affidavit to the effect that he was the qualifying contractor for residential building for D & S in Levy County. That same day, a building permit was issued to D & S, S. A. Stone, and Dennis Freeman for construction of the house in question.
Somewhat later, in August or September, 1983, Freeman began construction of the house. During their negotiations, Freeman had indicated that Respondent was his associate. Nonetheless, it was Freeman who did all the work but in September or October 1983, he quit work on the project. At that point the foundation, the floor, and the 2 x 4 framing was in. No roof, no plumbing, and no electrical work had been installed.
Mr. Fumea kept calling Freeman who repeatedly promised to finish work on the property by December 1983, but never did. The house was finally completed by another builder, David Allen, in 1984, for $21,000.00 additional. Allen was unable to complete the work started by Freeman and had to tear it down. Only the original footing was utilized.
Neither Mr. or Mrs. Fumea ever dealt with or saw Stone, nor at any time during the period of difficulty with the construction was any attempt made to contact him. The reasoning
was that even though Freeman had indicated Stone was the "S" in D & S before the work started, they did not believe Stone had anything to do with the contract.
The Fumea's knowledge of Respondent's relationship with D & S was based solely on Freeman's representations. They never dealt with Stone, never saw him at the job, nor did they complain to him when the work was not completed even though Chiefland is a small town and it would be easy to contact him.
Somewhat later, on September 7, 1983, Michael (Dennis) and Kristina Freeman entered into a contract with Herman R. and Verenia A. Matthews for the construction of a home in Levy County for a contract price of approximately $21,061.45 which included
$17,061.45 which was then owed to the Matthews by Freeman. Freeman was to build them a house on a lot they owned across from their residence for an investment. The $17,641.00 was made up of several loans by the Matthews to Freeman. At this time, the Matthews did not know of D & S. The loans in question had been granted on the basis of a personal friendship between the Matthews and Freeman. At the time, the Matthews were in Michigan and the loans were not secured nor was interest involved.
In addition to the $17,061.45 already advanced, the Matthews were to pay an additional $4,000.00 and any sums received from the cutting of timber on the property was to also be paid to Freeman.
On or about October 12, 1983, Michael Freeman, acting for D & S, applied for a construction permit to build the Matthews' house. Attached to the application was an undated, unnotarized affidavit signed by Michael Freeman indicating he was qualifying contractor for D & S. Pursuant to the application, that same day, a building permit for the construction in question, was issued.
Actually, construction had started without the benefit of a permit in early September, 1983. On September 9, 1983, the Matthews gave Freeman a $1,000.00 check with second and third payments of $1,000.00 each being paid on September 22, 1983. On October 17, 1983, Mrs. Matthews gave Freeman a check for
$7,000.00 of which $1,000.00 was the remaining amount due on the
$4,000.00 balance and $6,000.00 was an unsecured loan. This loan was repaid immediately with an exchange check, post-dated to October 24, 1983, in the amount of $6,000.00 drawn on the account of D & S by Michael Freeman. When the Matthews ultimately deposited the check, however, it was dishonored due to insufficient funds and the $6,000.00 loan was never repaid.
The Matthews first found out about D & S Homebuilders, Inc. when the Freemans in late August or September, 1983, indicated they had incorporated. Mrs. Matthews had never met the Respondent nor been aware that Respondent might be involved in the construction. Freeman had represented himself as a licensed contractor and had told the Matthews that he had rented space in Respondent's office. At no time, however, did he say that Respondent was involved in the business.
On November 14, 1983, Mrs. Matthews gave a check in the amount of $7,000.00 to Kristina Freeman, as a loan to D & S since she had been told that the company was haying trouble paying its bills. This loan was never repaid. By this time, the Matthews knew well that Freeman was in financial difficulties and did not have any money, so they did not ask for their loan back. In addition, on December 2, 1983, Mrs. Matthews gave Michael Freeman a check for $850.00 as a loan for payroll and on December 12, 1983, gave him a check for an additional $200.00 as a loan to assist him to buy property on which he was to build a house for Mr. Piperski. Neither of these latter two loans were ever repaid.
The house to be built for the Matthews was never completed by Freeman or D & S. Work stopped sometime in November 1983. After Freeman went to jail in January 1984, Mrs. Matthews had it finished by someone else.
The home was completed by this second contractor in April 1984 and the Matthews now live in it. In addition to the amounts set out above, the Matthews also paid an additional
$7,034.00 for materials and $6,590.00 for labor to complete the property. On top of this, they also paid $1,200.00 to RocLen Refrigeration for a dishonored check issued by Kris Freeman on the D & S account in January 1984 for the heating and air conditioning system. They also paid off a claim of lien in the amount of approximately $3,600.00 filed by McCoy Building Supply Center for building materials ordered by D & S for the property; approximately $240.00 to Arrington Tru-Value Hardware for miscellaneous building materials ordered by D & S for the property; and approximately $875.00 to satisfy a claim of lien filed by Keller Building Products of Ocala, based on a contract with D & S for miscellaneous building materials on the property.
Mrs. Matthews did not contact Respondent about the house because as far as she was concerned, he had nothing to do with it. Freeman had told her that D & S was owned by Freeman and his wife, most of the checks she gave to D & S were made out to Freeman and endorsed by either Freeman or his wife. All cash paid into the D & S account was done through dealings with one or the other of the Freemans, and she never dealt at all with Stone.
On November 25, 1983, Michael Freeman, acting for D & S, submitted a proposal to Charles Treis for the construction of a home on property in Chiefland, Florida, for a price of
$14,000.00 plus a travel trailer valued at $3,000.00. On the same day, Freeman and Treis entered a standard form agreement for the construction of this home by D & S for the amount stated, payments to be made of $5,000.00 as of signing $5,000.00 upon "rough in," and $4,000.00 plus the travel trailer upon completion of specified work. Construction was to begin on November 28, 1983, and was to be completed within 60 days. The contractor was to complete the house except for painting and staining, heating and air conditioning, floor covering, and appliances. Interior trim and doors were to be supplied by the contractor for, installation by the owner. That same day, Mr. Treis gave a check in the amount of $5,000.00 to Michael Freeman as the first payment on account in accordance with the terms of the contract.
This contract was amended on January 10, 1984 when Freeman agreed to install floor covering, build cabinets for the kitchen, install interior trim and doors, and paint and stain. the interior and exterior. He was also to supply wood ceiling in the living room area and kitchen and in return therefor, was to be paid $2,000.00 plus a travel trailer.
On December 20, 1983, Michael Freeman, on behalf of D & S, applied for a construction permit to build the Treis house and that same day a building permit was issued to D & S.
On January 6, 1984, Mr. Treis gave two checks to Mr. Freeman, one for $1,000.00 and one for $6,000.00 additional draws against the contract price.
In mid-January 1984, after the foundation was poured and the interior and exterior walls were partially erected, D & S ceased all construction activity because Freeman had been arrested and jailed in Marion County. At this point, the roof had not been installed nor were doors and windows in place. No one from D & S ever returned to complete his own construction.
On January 16, 1984, Mr. Treis paid Suwannee Valley Precast Company in the amount of $540.00 for a 900 gallon septic tank ordered by Mike Freeman at D & S. This bill was supposed to have been paid out of the first draw Treis gave Freeman but was not. To avoid a lien being filed against his property, Mr. Treis paid off the amount in question.
Mr. Treis also paid $710.33 to Sunshine Concrete and Building Supply for materials ordered by D & S and $189.00 to Lindsey Brothers Construction for labor for laying the foundation
walls, also procured by Freeman for D & S. In addition, Mr. Treis paid Harcan Lumber the amount of $4,500.00 for bad checks that Michael Freeman had written in payment for materials to go into the Treis property. As a result of all these additional debts, Mr. Treis was required to sell the property to pay off the creditors not paid by D & S.
Mr. Stone was not present at any time during the transactions described regarding Mr. Treis, and Freeman made no mention of him. In fact, Mr. Treis did not know anything about Mr. Stone. It was only after Mr. Treis found out that Freeman was in jail that he had any contact with Stone. Toward the end of January 1984, when he found out that the "S" in D & S was Respondent, Treis and a friend went to Stone's office to find out what Stone intended to do about the property. Stone indicated he was not responsible for anything that Freeman did and that he would not honor the contract that had been entered into with D & S.
At some time prior to November 26, 1983, in response to an advertisement placed in the Chiefland newspaper by D & S, Howard Robinson contacted Freeman to obtain an estimate for the construction of a home in Levy County. During the contract negotiations, Freeman provided Robinson with a D & S business card which bears only Freeman's name. Robinson is a resident of Largo but owns property in Levy County.
On November 26, 1983, Mr. and Mrs. Robinson, entered into a contract with D & S which was signed by Michael Freeman, for the construction of a home for the price of $16,900.00. Payments were to be made one-third upon acceptance of the contract, one-third upon "rough-in" inspection, and one a third upon completion. The owner was to install floor coverings, heating and air-conditioning and appliances, and the contractor was to provide a one year warranty on construction. Construction was to begin by November 29 and the house was to be completed within 60 days. Three days later on November 29, 1983, Mrs. Robinson issued a check in the amount of $5,633.33 to D & S Homebuilders, Inc. as the first payment for the construction of their home. This check was endorsed by Michael Freeman for D &
S. It should be noted here that, as previously, the business
card given to Mr. Robinson by Freeman at the time of their first meeting reflects only Freeman's name, not that of Respondent.
After the contract was executed, Mr. Robinson returned to Largo and did not come back to Levy County until January 1984.
On December 22, 1983, Mr. Freeman came to Largo to see the Robinsons for purpose of securing the second draw. At that time, he indicated the foundation and slab had been poured and that walls erected and the roof trusses were to be installed the
following day. Based on these representations, Mrs. Robinson issued another check for $5,633.33 to Freeman for the second draw under the contract even though the second draw was not due until after erection of the roof trusses.
As inducement to pay prior to the time called for in the contract, Freeman agreed to amend the contract to provide air conditioning and heating, furnish the floor covering, and build a
10 x 12 foot pump house.
After paying these additional sums, Mr. Robinson found out that construction on his house had not been started even though Freeman had indicated that it had. Therefore, in January 1984, Mr. Robinson made his first trip back to Chiefland since the signing of the contract to visit the construction site and discovered that the only work accomplished had been the digging of a footer.
On or about January 10, 1984, Freeman, on behalf of D & S, applied for a building permit to construct the property in question and this permit was issued that same day.
The only construction accomplished on Robinson's property was an oversized footer, approximately three feet wide and four or five feet deep, out of which the steel company had already taken the steel originally installed. Even after this however, Mr. Robinson did not contact Respondent because his dealings had always been with Freeman and he had never seen nor talked to Stone. Neither Stone or any of his agents or employees has ever contacted Mr. Robinson concerning either completing the construction or repaying the money paid under the contract. The only thing Mr. Robinson has ever been reimbursed with was a
$300.00 payment from the County when Mr. Freeman was on a work- release program while in jail.
In November 1983, Mitchell Piperski saw an ad in the paper for a home built by Mr. Freeman. This ad was in the name of D & S Builders and Mr. Piperski contacted Freeman at the phone number in the ad. Freeman thereafter came to Piperski's house and they discussed the possible construction of a home for the Piperskis. As a result of these discussions, Mr. Piperski, on December 19, 1983, entered into a contract with D & S signed by Michael and Kris Freeman for the construction of a home in Chiefland for a contract price of $16,500.00.
Since Mr. Piperski did not have a lot on which to build the house, Freeman took him a see a lot which he said he, Freeman, owned. The lot in question was a five acre corner and when Piperski said he did not need so much land, Freeman said he would keep one half. Since, however, the two parties could not
agree on the property, Piperski purchased a lot from someone else.
A short time thereafter, the Freemans came to the Piperskis and indicated they would be in financial difficulty if the Piperskis did not buy their property and as a result, the Piperskis agreed to allow Freeman to build the house on the property which, by warranty deed on December 19, 1983, Freeman conveyed to the Piperskis. At closing Freeman was paid $5,000.00 called for upon acceptance of the contract, and $12,500.00 for the lot.
During the negotiations, Freeman had told Mr. Piperski that there were three people involved in D & S. These three were Freeman, his wife, Kris, and someone else, undisclosed, who was in the real estate business. Mr. Piperski had known Stone from the lodge to which they both belonged but he had no idea that Stone was the "S" in D & S.
No work on the construction of the Piperski house was ever accomplished. When Piperski called the building department, he was told that Freeman could no longer build homes because Mr. Stone had pulled the authorization for him to use Stone's license. This disclosure was made to Mr. Piperski on January 8, 1984. Prior to that date and all through the negotiations, he had no idea that Stone was involved in the transaction.
That afternoon, Mr. Piperski went to a lawyer about the situation and the lawyer called Stone. When Piperski asked Stone for his $5,000.00 back, Mr. Stone said he would allow Freeman to use his license to complete the house. Notwithstanding this promise by Stone, Freeman never made any effort to secure a permit to begin construction.
Mr; Piperski did not contact Stone again after that one instance because he felt Stone knew what the situation was and what had to be done. Stone, on the other hand, did not contact Piperski either, nor did Freeman, and at no time was Piperski reimbursed the $5,000.00 deposit he made under the terms of the contract.
On January 9, 1984, Stone wrote to Mr. A1 Simmons, the attorney who formed the corporation known as D & S Homebuilders, Inc. In this letter Stone recalled that Simmons had formed the corporation in which Freeman was President, his wife was Secretary/Treasurer, and he, Respondent, was Vice-President. Stone also cited that there was a communications gap between Freeman and himself and as a result, asked how he could be removed as an officer of the corporation. Stone indicated that he was "going to notify the County that I am no longer going to
authorize the use of my license as D & S Homes." At the bottom of the letter, he states that it constitutes official notification to Freeman and to Mr. Davis, the building official, that his license is no longer to be used under D & S Homes. By this letter, Mr. Stone recognized that as of January 9, 1984, he was still a part of D & S Homes and was aware of the use of his license by D & S under the authorization given earlier in the year.
It has already been found that in November 1983, Stone and Freeman entered into an agreement for Freeman to pay Stone for the use of his license by D & S Homes. It is also noted, however, that on January 5, 1984, approximately two months later, Mr. Stone wrote to Freeman indicating his dissatisfaction with the way Freeman was managing the company and because of Freeman's failure to communicate with Stone in response to inquiry. In this letter, he makes it very clear to Freeman that if Freeman does not keep in touch, he will terminate the relationship that he has with D & S. By so doing, Stone puts to rest any question that he was still a part of D & S and agreed to Freeman's using his license for construction by that firm as late as January 5, 1984 - well after the contracts described above were entered into by Freeman.
D & S had a checking account with the Bank of Florida in Chiefland on which both Respondent and Freeman were authorized to write checks. In October 1983, Mr. Freeman drafted a check to Exchange Realty, which is owned by Respondent, in the amount of $500.00 which bears the notion, "commission on burnout." This check was deposited to the account of Exchange Realty. The handwriting on the endorsement appears to be that of Penny Via as does the name of the payee. On October 24, 1983, Mr. Stone wrote a check, apparently on a counter check payable to Exchange Realty in the amount of
$500.00. Again, this check is endorsed for deposit to the account of Exchange Realty and not only the endorsement but also the check itself, with the exception of the signature, appears to be drawn in the handwriting of Ms. Via. While offered to show Respondent's receipt of benefit from his association with D & S, this evidence does not do so.
Respondent knew of this account, nonetheless, and agreed to be a signatory on it so that he could work on the account when Freeman was out of town. After a short period, however, he took his name off the account though he cannot remember when that was.
Respondent's contention that he had little if any connection with the actual construction work accomplished by Freeman under the D & S banner is supported by the testimony of
Earl Jones, a plumber, who did the plumbing work on some of the houses constructed by Freeman during the Summer of 1983. Jones was hired by Freeman who, at the time, advised him that he was a general contractor and owned the business. Freeman admitted that he was a friend of the Respondent but during the whole period of his association with D & S, Jones never dealt with Stone and he feels that his employer was Freeman, not Stone. During the period of their association, Jones had no contact at all with Respondent. All bills for services rendered were sent directly to Freeman.
Andrew Sension, an electrical contractor, met Freeman when Freeman solicited bids for the drawing of house plans. Thereafter, Sension drew five house plans for Freeman through D & S and also did some electrical work. At that time, Freeman indicated that he and his wife owned D & S and throughout their relationship, Sension assumed that Freeman was licensed.
He has, however, worked for Respondent but never any project where Freeman and Respondent were involved together. To his knowledge, Respondent had a good reputation in the County as a contractor.
Respondent has lived in Chiefland for approximately 15 years and is licensed as a contractor in both Florida and Virginia where he operated as a general contractor for 10 or 11 years before coming to Florida. In addition, he worked as a contractor in Ft. Lauderdale for 5 or 6 years and in all his construction history, never had any disciplinary action taken against him.
Stone met Freeman some time in the middle of 1983 when Freeman came to his real estate office to buy a lot to build on. Later on, Freeman came back and said his brother an attorney, had suggested he contact Stone to form a corporation to build homes. At the time, Freeman, whose real name was Michael, was using the name Dennis Freeman, actually the name of his brother. When Stone checked Freeman's reputation out with the credit bureau, he checked the name, Dennis Freeman, and found that there was no adverse comments recorded. He did not know at the time that he was checking the record of a different individual.
Nonetheless, satisfied with the results of his inquiry, and willing to go into the proposition suggested by Freeman, the parties made an appointment with attorney Simmons to form a corporation. Stone contends, and Simmons concurs, that though the corporation was formed, it never became operative because while formed in the name of Simmons for incorporation purposes, the transfer of authority to the true officers, Stone, Freeman, and Freeman's wife, was never accomplished.
Were this all there were to it, there would be little difficulty in accepting Stone's exculpatory rationale. The fact remains, however, that his conduct and communications with his attorney in January 1984, several months after the corporation was formed, clearly reveals that though the official transfer of names never took place, he was well aware that D & S was active, that Freeman was building homes under the D & S banner, and that Freeman was using his, Stone's license, to do so with Stone's permission. The letter of January 9, 1984, to the lawyer clearly defeats Stone's contention that he felt the authorization for Freeman to pull permits was a one time proposition. If that were the case, he would not have indicated in these later communications that he was aware of what was going on and wished it stopped as of that time.
There is no doubt that Respondent never met Mrs. Reagan, the Fumeas, the Matthews, the Robinsons, Mr. Treis, or the Piperskis in the capacity of a contractor. None of the people ever indicated that they dealt with Stone.
Respondent admits that his contractor's license was withdrawn by the County but contends that this action was taken at a meeting to which he was not invited and did not attend. He did pot know of the action taken, he claims, until he read it in the newspaper. There is no evidence to contradict this. He firmly believes that his problem with the County is the direct result of the fact that he failed to contribute Mr. Davis' church when asked-to do so at the time he executed the general authorization for Freeman to use his license. Whether Mr. Davis is the complainant and the cause of the disciplinary action being taken here is immaterial however, and in any case, there is no evidence to support Respondent's contention.
As for Freeman, on January 30, 1984, he entered a guilty plea to one count of a third degree felony by failing to redeliver and one count of a third degree felony by forgery and committing grand theft. Thereafter, he was found guilty of the charges and placed on probation for two years.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding.
In the Amended Administrative Complaint filed in DOAH Case No. 85-0690, Petitioner alleges six violations of Section 489.129(1), Florida Statutes (1981), which permits the discipline of a certified or registered contractor if it can be shown that
the contractor is found guilty of any of several stated acts of misconduct. In the analysis of the allegations here, the specific charges will not necessarily be treated in the order set out in the Complaint.
Petitioner alleges that Respondent violated Section 489.129(1)(g) by engaging in the business of contracting in a name (D & S) not appearing on his license. Respondent vehemently denies that he was engaged in the business of contracting with Freeman through the use of the corporation known as D & S Homebuilders, Inc. He claims that though he discussed the possible formation of a corporation with Mr. Simmons, the attorney in Ocala, the corporation was never established and no business was conducted. He further contends that even if a corporation was in effect and business conducted, it was done by Freeman and not by him that his participation was merely to oversee the building. The evidence clearly establishes that the corporation was chartered even though corporate records reflect that transfer of officer responsibility was not accomplished.
The evidence also shows in the letters written by Respondent to
Simmons that Respondent would be responsible for the building aspects of the association. Respondent admitted that he did engage with Freeman under D &'S Homebuilders, Inc. for the misconstruction of the Bell residence, and he agreed to allow Freeman to use his license to finish up the Piperski house. In light of all of this, it is clear that Respondent violated the statutory provision by engaging in the business of contracting under the name of D & S, which name did not appear on his license.
It is also clear that the evidence established that Respondent failed to qualify the contracting company he was associated with, D & S, in violation of Section 4S9.129(1)(j), which authorizes discipline for a failure in any material respect to comply with the provisions of this act. Section 489.119, Florida Statutes (1981), requires any individual who proposes to engage in contracting as a corporation, to apply through a qualifying agent and qualify the corporation with the Board.
This was not done and Respondent's failure to comply constitutes the violation as alleged.
Petitioner also alleges that Respondent is in violation of Section 489.129(1)(i) in that he was subject to " . . . disciplinary action by any municipality or county which action shall be reviewed by the state board . . ." before the State Board takes any disciplinary action of its own. Here the evidence clearly establishes, and Respondent admits; that his registration in Levy County was suspended by the County. The action of the instant hearing, which constitutes a de novo evaluation of Respondent's performance, is sufficient Board.
action to constitute compliance with the terms of the statute requiring Board review.
Petitioner has alleged in paragraphs 13(d) and (e) of the Administrative Complaint the related allegations that Respondent combined and conspired with Freeman to aid Freeman in. engaging in the unlicensed practice of contracting in violation of Section 489.129(1)(f), and aided and abetted an unlicensed contractor (Freeman), in engaging in contracting without being licensed in violation of Section 489.129(1)(e).
At no time pertinent to the allegations contained in this Administrative Complaint was Freeman licensed as a contractor, either registered or certified, in Florida. There can be, then, little doubt from a thorough evaluation of the evidence, that Respondent was quite aware and worked with Freeman in allowing Freeman to engage in the practice of contracting in Florida even though unlicensed, through the use of his, Respondent's, license. His contention that at the time he signed the authorization for Freeman to pull building permits in the office of the Building Official, he intended only for this to be for a single job, is totally contradicted by the other evidence and is unpersuasive. The weight of the evidence shows that Respondent was fully aware that Freeman was engaged in the business of contracting utilizing Respondent's license, even though he may not have been aware of the shoddy character of Freeman s performance. In that regard, it must be noted that Respondent is not charged with any type of fraud or misconduct in the dealings with those parties who contracted with D & S through Freeman. Nonetheless, it cannot reasonably be stated that Respondent did not know that Freeman was engaged in the contracting and until such time as Freeman's misconduct was brought to his attention he concurred with Freeman's use of his license. This unequivocally constitutes a clear violation of the two statutory provisions as alleged.
This then leaves only the issue of Respondent's negligence or incompetence which is alleged in the Administrative Complaint as a violation of Section 489.129)(1)(m). To establish this violation, the Petitioner is required to show that Respondent is guilty of fraud or deceit, or of gross negligence, incompetence, or misconduct in the practice of contracting.
There is no evidence that Respondent is guilty of fraud, deceit or misconduct, in the dealings with clients of D & S Homebuilders, Inc. There is however, the question of whether his conduct constitutes gross negligence or incompetence, and as alleged in the Administrative Complaint, the claim is that his supervision of D & S Homebuilders, Inc. was so poor as to constitute gross negligence or incompetence.
Respondent contends that he did not now how Freeman was performing, and the evidence from those individuals with whom Freeman dealt, tends to indicate that while Freeman was dealing with them and entering into the agreements for construction of residences within Levy County, Respondent was not aware of the terms, conditions, or progress of the transactions until the end. This, however, is the crux of the entire problem. Having once authorized Freeman to use his license to conduct contracting activities in the County, it was incumbent upon him as a matter of good, common business and construction practice, to supervise the activities being conducted under his license. His failure to do so and his disclaimer of responsibility when contacted by those few victims of Freeman's avarice who attempted to seek redress from Respondent, constitutes gross negligence. There little if any evidence of incompetence in the conduct of Respondent's construction activities, but he has certainly demonstrated incompetence as a supervisor in his dealings with Freeman and his failure to insure that Freeman performed properly while utilizing his license. In substance, then, it is without question that Respondent's negligence and incompetence in supervision constitutes a violation of the statute as alleged.
Having thus established that Respondent is guilty of the allegations contained in the Administrative Complaint, the question remaining for resolution is what action should be taken. As stated previously, there is no evidence that Respondent profited in any way from the relationship he had with Freeman. There is also some evidence that at least initially and to a slight degree, the extent of their relationship was prompted by and in support of a law enforcement operation. Both these factors serve as mitigation of the gravity of Respondent's offenses. Another factor in mitigation is the indication that it was not at all unusual for them to pull permits in their name. Once this is done, however, there is no question that it is the full responsibility of the license holder to supervise the work performed by his agent and insure that it met the standards set forth for contracting in the State. Herein lies the primary fault of the Respondent.
Respondent obviously abrogated the very serious responsibilities he had as a registered contractor in this State to insure that work done under his license met the standards of the County and State. It was established that his failure to do so constituted gross negligence. His negligence clearly shows a lack of sincere interest in the welfare not only of his clients but also of his license. Therefore, action must be taken sufficient to impress upon him the necessity to insure that any action taken by an individual operating under a license issued by the Construction Industry Licensing Board be consistent with the
high standards set by the Board. It is imperative that corrective action of an adequate nature be taken.
Based on the foregoing Findings Of Fact and Conclusions Of Law, it is, therefore
RECOMMENDED that the Administrative Complaint in DOAH Case No. 85-1468 be dismissed. It is further recommended that based on the violations established in DOAH Case No. 85-0690, Respondent's license as a registered general contractor be suspended for six months and that thereafter Respondent be placed on probation for a period of three years.
RECOMMENDED in Tallahassee, Florida this 16th day of January, 1986.
ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 16th day of January, 1986.
COPIES FURNISHED
W. Douglas Beason, Esquire
130 N. Monroe Street Tallahassee, Florida 32301
Jeffrey J. Fitos, Esquire
1 East Silver Springs Blvd. Ocala, Florida 32670
James Linnan Executive Director Construction Industry
Licensing Board
P. O. Box 2, Jacksonville, Florida
Fred Roche Secretary
Department of Professional Regulation
130 N. Monroe Street Tallahassee, Florida 32301
APPENDIX
The following constitutes my specific rulings pursuant to Section 120.57(2), Florida Statutes, on all Proposed Findings of Fact submitted by parties to this case.
RULINGS ON PETITIONER'S SUBMISSION
1. Adopted in Findings of Fact 1 and 3.
2 ยท Adopted in Finding of Fact 1.
Adopted in substance in Finding of Fact 7.
Sentence 1 through 3 are irrelevant. Sentence 4 is accepted as to it relates to the letter being prepared by the building department but rejected as to this being done at Respondent's request.
Adopted in Finding of Fact 2.
Adopted in Finding of Fact 2.
Adopted in Finding of Fact 2.
Adopted in Finding of Fact 2.
Adopted in Finding of Fact 2. 1O. Adopted in Finding of Fact 4.
11. | Adopted | in | Finding | of | Fact | 4. |
12. | Adopted | in | Finding | of | Fact | 4. |
13. | Adopted | in | Finding | of | Fact | 4. |
14. | Adopted | in | Finding | of | Fact | 2. |
15. | Adopted | in | Finding | of | Fact | 10 |
16. | Adopted | in | Finding | of | Fact | 10. |
Adopted in Finding of Fact 12, except for the first sentence which is irrelevant.
Adopted in Finding of Fact 11.
Adopted in Finding of Fact 12.
Adopted in Finding of Fact 12, except for the last sentence which implied Freeman signed as affiant when in fact he signed as a witness.
Adopted in Finding of Fact 12.
Adopted in Finding of Fact 15.
Sentence 1 rejected as contra to the evidence. Sentence 2 adopted in Finding of Fact 13.
Adopted in Finding of Fact 14.
Rejected as irrelevant and misleading. There is no indication in the record that Respondent knew of this contract or that any demand for reimbursement was made upon him.
Adopted in Finding of Fact 17.
Adopted in Finding of Fact 17 and 22, except for sentences 3 & 4, which are rejected as irrelevant.
Rejected as irrelevant and inaccurate.
Rejected as irrelevant.
Rejected as irrelevant.
Rejected as irrelevant.
Rejected as irrelevant.
Adopted in Finding of Fact 19.
Adopted in Finding of Fact 19.
Adopted in Finding of Fact 20.
Adopted in Finding of Fact 20.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 24.
Rejected as irrelevant.
Adopted in Finding of Fact 24.
Rejected as irrelevant.
Adopted in Finding of Fact 24.
Rejected as irrelevant.
Adopted in Finding of Fact 24.
Adopted in Finding of Fact 26.
Adopted in Finding of Fact 26.
Adopted in Finding of Fact 26.
Adopted in Finding of Fact 28.
Adopted in Finding of Fact 28.
Adopted in Finding of Fact 29.
Adopted in Finding of Fact 30.
Adopted in Finding of Fact 30.
Adopted in Finding of Fact 30.
Adopted in Finding of Fact 30.
Adopted in Finding of Fact 31.
Adopted in Finding of Fact 32.
Adopted in Finding of Fact 32.
Adopted in Finding of Fact 35, except that November 6 in the proposal should be November 26.
Adopted in Finding of Fact 35.
Adopted in Finding of Fact 35.
Adopted in Finding of Fact 34.
Adopted in Finding of Fact 34 and 35.
Adopted in Finding of Fact 36.
Adopted in Finding of Fact 36.
Adopted in Finding of Fact 36.
Adopted in Finding of Fact 37.
Adopted in Finding of Fact 38.
Adopted in Finding of Fact 39.
Adopted in Finding of Fact 41.
Accepted but not adopted as irrelevant.
Adopted in Finding of Fact 41.
Adopted in Finding of Fact 43.
Adopted n Finding of Fact 45 and 46, except that it was the building office that advised Piperski that Freeman did not have a permit, not Respondent.
Adopted in Finding of Fact 46.
Adopted in Finding of Fact 62.
Adopted in Finding of Fact 62.
RULINGS ON RESPONDENT'S SUBMISSION
Adopted in Finding of Fact 1.
Sentence 1 through 3 adopted in Finding of Fact 7. Sentence 4 rejected as contra to the weight of the evidence. Sentence 5 and 6 adopted in Finding of Fact 8.
Sentences 1 and 2 adopted in Finding of Fact 9. Sentences 3 through 5 rejected as contra to the weight of the
evidence.
Sentences 1 and 2 adopted in Findings of Fact 26- 29. Sentence 3 rejected as not being a Finding of Fact but a Conclusion of Law.
Sentence 1 rejected as contra to the evidence. Mrs. Reagan did not sign the contract. Mrs. Fumea did. Sentence 2 adopted in Finding of Fact 15. Sentence 3 adopted in Finding of Fact 12. Sentence 4 adopted in general.
Sentences 1 and 2 adopted in Finding of Fact 17, 35 and 41. Sentence 3 rejected by contra to the weight of the evidence. Sentence 4 is rejected as irrelevant. Sentence 5 is ejected as contra to the weight of the evidence in that he failed to show the proper concern for the use of his licenses.
Rejected as irrelevant to the issues herein.
8 and 9. Adopted in Finding of Fact 4.
Adopted in Finding of Fact 62.
Adopted as a general fact.
Adopted in Finding of Fact 61.
Adopted in Findings of Fact 52-55.
| Issue Date | Proceedings |
|---|---|
| Jan. 16, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 23, 1986 | Agency Final Order | |
| Jan. 16, 1986 | Recommended Order | Contractor who allowed unlicensed individual to pull permits knowing that person was unlawfully engaged in contracting is negligent and guilty of misconduct. |
CONSTRUCTION INDUSTRY LICENSING BOARD vs. STEPHEN J. BOROVINA, 85-000690 (1985)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. RUBEN S. ARES, 85-000690 (1985)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. CHRISTOPHER JAMESON, 85-000690 (1985)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. DAVID H. HAMILTON, 85-000690 (1985)
SAMUEL OMEGA ROLLINS vs CONSTRUCTION INDUSTRY LICENSING BOARD, 85-000690 (1985)
