STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, )

)

Petitioner, )

)

vs. ) CASE NO. 86-4808

)

JOSEPH RENTZ, )

)

Respondent. )

)

RECOMMENDED ORDER

The final hearing in this case was held at Gainesville, Florida on July 10 and August 25, 1987, before Thomas C. Oldham, Hearing Officer.

APPEARANCES

For Petitioner: G. Vincent Soto, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

For Respondent: James W. Sibrey, Esquire

410 Southeast 4th Avenue Gainesville, Florida 32606-1164

ISSUE

This case arises on an amended administrative complaint filed by the Petitioner which seeks to have Respondent's contractor licenses disciplined for alleged violations of Chapter 489, Florida Statutes, incident to the construction of a residence near Melrose, Florida.

The case originally was scheduled to be heard on July 10, 1987, but after the hearing was convened, Respondent's counsel sought a continuance based on Respondent's health problems which were supported by a doctor's statement. The motion was granted and the hearing was continued until August 25, 1987.

At the hearing, Petitioner presented the testimony of Evans Starke, Marion

1. Uhl, and Robert H. Adams. Petitioner submitted eight exhibits in evidence, including the depositions of Respondent and Matthew M. Gordon. Respondent testified in his own behalf and submitted three exhibits in evidence. However, Respondent's exhibit three, which was a house plan, was retained by Respondent and a copy thereof was to be filed within 10 days after the hearing. Additionally, Respondent was provided a period of 10 days after the hearing to submit a deposition of James A. Taylor However, the deposition was not filed within the required period nor was Respondent's exhibit three. Respondent's post-hearing motion to extend the time for filing the deposition was denied.

   The parties were provided a period of ten days from the filing of the hearing transcript in which to file proposed recommended orders. Neither party made a timely submission. However, Respondent's post-hearing motion to extend the time period was granted. The proposed Findings of Facts submitted by both parties were considered and substantially incorporated herein.

   
   

   FINDINGS OF FACT

   
   

   1. Respondent Joseph Rentz is licensed as a registered building contractor, roofing contractor, and mechanical contractor, and was so licensed at all times pertinent to this proceeding. In addition, he is the qualifying contractor for Alachua Association Builders. (Petitioner's exhibits 2-3)

      
      

   2. In March 1985, Evans Starke of Miami, Florida entered into an oral agreement with Respondent for the construction of a residence near Melrose, Florida. Respondent agreed to build the house on a cost-plus basis and estimated that the cost would be approximately $27.00 per square foot or less. Respondent told Starke that he would be satisfied with 10 percent of the cost of construction for his fee. The arrangement was that Starke would Periodically provide money to his aunt, Lenora Peterson, and that Respondent could make draws from that source as required to progress with construction. Starke also asked Respondent to open a checking account from which he would pay the bills for materials and labor. (Testimony of Starke)

      
      

   3. The original construction plans provided to the Respondent by Starke were for a house of approximately 4,000 square feet, but since Starke wished to expand the size of the house considerably, he informed Respondent of the various modifications which resulted in Respondent obtaining revised plans from a draftsman for a house of approximately 10,000 square feet. (Testimony of Starke, Respondent)

      
      

   4. Respondent obtained a building permit in his name and commenced construction. As work progressed, Respondent would inform Lenora Peterson of the need for progress payments for materials and labor on a weekly basis. She would then provide the necessary money in cash to Respondent and obtain a signed receipt from him. During the period March through September, 1985, Respondent signed receipts amounting to $121,360. Respondent had several checking accounts in the name of "J. & L. Properties", into which some of the draws were deposited and checks drawn thereupon to pay materialmen, subcontractors, and workmen. In other instances, Respondent paid cash to workmen, but obtained no receipts therefor. Starke visited the project site usually on a biweekly basis during the initial months of construction. On several occasions, he met Respondent midway between Gainesville and Miami to deliver cash for construction costs. Some of this money given to Respondent was not evidenced by a receipt of Respondent.

      
      

   5. Starke testified that on one occasion, he gave Respondent $3,000 to pay for the installation of a well, but Respondent had only given the well-digger

      $1,000, and Starke later found that he still owed the balance, plus a 25 percent rise in cost. Starke also claimed that he spent $1,000 to put a drain under the driveway to the basement because Respondent had forgotten to do so. He further stated that he had given Respondent $5,000 to purchase shingles for the house, but Respondent bought only enough to cover the garage. Consequently, Starke was obliged to expend further sums to obtain the remaining shingles. (Testimony of Starke, Respondent, exhibits to deposition of Rentz (Petitioner's Exhibit 2), (Petitioner's composite Exhibit 6)

   6. During Starke's periodic visits to the job site, he requested that Respondent show him the bills and receipts for the purchase of construction material and labor payments, but Respondent evaded such request by saying that his wife was handling the business matters, and that she was ill and unable to show him the records. Eventually, Starke became more concerned because of the discrepancies in the expenditures of funds, and therefore made a special trip in October 1985 to meet with Respondent and go over the project accounts. At that meeting, Respondent's wife provided Starke with a number of canceled checks on the J. & L. Properties account, which failed to identify any specific payments for the Starke project, but which consisted mostly of apparent payments of Respondent's personal bills. (Testimony of Starke, Respondent, Petitioner's Exhibits 2,6)

      
      

   7. Subsequent to the October meeting, Respondent asked Starke for the sum of $1,500 for his own services, which was paid. This was the last payment made by Starke to Respondent and the last contact that he had with him. Respondent performed no further work and left the project about the third week of November 1985. Although Starke attempted to get in touch with him during the intervening period, he was unsuccessful in doing so. (Testimony of Starke, Respondent, Petitioner's Exhibit 2)

      
      

   8. On January 31, 1986, Starke obtained a new building permit to complete his residence, and hired Marion C. Uhl, a certified residential contractor, at an hourly rate to supervise the remaining work. Uhl found at that time that the house consisted of a shell with some interior partitions erected and doors in place, but without any electrical or plumbing work, except for a garage bathroom. It took him approximately ninety days to correct previous construction errors before it was ready for subcontractor work. Specifically, he found that the partition walls were out of plumb and that some of the doors were not framed properly. It was necessary for him to tear them out and redo the work. He found no backing (dead wood) for the ceilings and walls which should have been in place before the roof was sheathed. He had to take out all the windows which were out of plumb and reinstall them. It was necessary to frame out the gables of the house in order that water wouldn't accumulate in vacant areas. Water had accumulated in the garage basement due to a failure to install proper drain fields under the house. Additionally, it was discovered that there was no concrete in the tie beams which supported the floor above and could cause it to sag eventually. In Uhl's opinion, which is accepted, these problems would not have occurred if the job had been properly supervised. (Testimony of Starke, Uhl)

      
      

   9. Robert H. Adams, an expert in the residential contracting field, who owns a building inspection firm, inspected the Starke premises on May 18, 1987 at the request of Petitioner. Based upon his examination of the house, he found the following deficiencies, which had existed at the time Respondent left the project:

      
      

      1. In some areas, the brick veneer exterior walls were not properly supported on the footing in that the brick veneer

         protruded beyond the outside edge of the footing. Also the footing was at grade rather than being below grade.

      2. Failure to utilize solid concrete walls or pouring of concrete into concrete

         blocks which formed walls supporting a steel I-beam. This deviation from the

         plans could result in failure of the foundation walls.

      3. Improper splicing of girders under the house. Girders were butt-spliced rather than spliced with either a shep or a diagonal cut. The joints were not over

         a supporting pier. Settling from the

         floor above could cause the house floor to sag.

      4. The exterior brick roll-out window sills were level instead of being at a slight

         angle to permit water to flow away from the bottom of windows, thus causing the

         potential of water intrusion into the house.

      5. Front entry brick steps were not centered with the door opening by approximately 18 inches.

      6. An exterior garden hose bib Produced hot water instead of cold at left front of

         the garage. This was caused by "mis- plumbing" the cold and hot water lines.

      7. Block wall of the garage was out of plumb approximately 7/8 of an inch over a 4 foot vertical distance.

      8. One of the garage roll doors had only 9 foot, 3 inch clearance instead of 10

         feet as called for by the plans.

      9. Uneven coursing of brick veneer at the ceiling of the right rear porch.

      10. Waferboard was used on roof decking rather than plywood as called for by the plans. Waferboard is not as strong as plywood.

      11. Water intrusion into the garage- basement.

          
          

   10. In Adams' opinion, which is accepted, the deficiencies noted by his inspection reflected very poor workmanship and gross negligence, in that the fundamentals of construction as practiced in the construction trade were not observed by Respondent in major areas. They were gross deviations from good building practices and a competent contractor properly supervising the job would have been aware of the deviations from good contracting practice. In addition, it is incumbent upon a contractor to keep accurate and complete financial records for a particular project. (Testimony of Adams, Petitioner's Exhibit 7)

       
       

   11. In January 1986, Starke employed Universal Engineering Testing Company, a structural engineering firm, to ascertain the cause of groundwater leaking into the garage-basement of his house and to provide remedial recommendations. Professional engineers of the firm inspected the premises and observed that groundwater was leaking at the wall-floor joint around most of the garage. They found that although a drainage system had been installed during construction, soil and groundwater conditions at the site limited the effectiveness of the existing system, due to hydrostatic pressure build up under the garage floor. It was determined that, unless the pressure was dissipated with under-slab drainage, the slab would heave, crack, and leak at the wall-slab joint They found that the situation could only be remedied by installing an under drain grid after removal of the existing slab. In their professional

       opinion, which is accepted, the failure of the existing slab had been caused by excessive water pressure build up and improper construction techniques. (Testimony of Gordon, Petitioner's Exhibit 1)

       
       

   12. At the hearing, Respondent admitted that he had never constructed a house of the scope and size of the Starke residence, but that he had attempted to build what Starke desired in accordance with the plans and numerous changes required by Starke during the course of construction. Such changes, in his view, caused the difficulty in centering the brick work at the front of the house since this work was called for after the front door had already been installed. He claimed that he had waterproofed the garage-basement and put in French drains, but that water couldn't go out, and it was necessary to install a tank under the driveway to pump the water from the basement. Respondent also conceded that he did not maintain continuing records during the course of construction as to the financial aspects of the project, but intended to recapitulate all costs and payments when construction was completed. He acknowledged that receipts from the project were commingled with other funds in his bank accounts and he was unable to show the disposition of proceeds from the project. As to leaving the job, Respondent said that he left because he was threatened by Starke and also because of ill health caused by the stressful situation which came from continuing complaints by Starke concerning the workmanship, and also by the numerous changes to the construction plans. Although Respondent claimed that he notified Starke by letter of January 14, 1986, that he intended to remove his permit no later than January 27, 1986, because it appeared that Starke had decided to take charge of completing the construction, Starke denied receiving such a letter and there is no credible evidence that it was delivered. (Testimony of Respondent, Petitioner's Exhibit 2, Respondent's Exhibit 1)

       
       

   13. On two prior occasions in 1985 and 1986, Respondent was disciplined by the Construction Industry Licensing Board pursuant to settlement stipulations of administrative complaints filed by Petitioner against Respondent. In those stipulations, Respondent admitted violations of Chapter 489, Florida Statutes, as alleged in the complaints, and administrative fines of $250 and $400 were imposed. (Petitioner's Exhibits 4-5)

       
       

       CONCLUSIONS OF LAW

       
       

   14. The amended administrative complaint charges Respondent with the following violations of Section 489.129, Florida Statutes:

       
       

       1. Subsection 489.129(1)(g). Acting in the capacity of a contractor under any certificate or registration issued here- under except in the name of the certificate- holder or registrant as set forth on the issued certificate or registration.

          
          

   15. Respondent placed funds received from Starke into two bank accounts under the name of "J. & L. Properties" and admittedly used such bank accounts for payments in connection with the project. Respondent did not qualify "J. &

       L. Properties" under Chapter 489, nor did that name appear on his state licenses. Accordingly, it is concluded that grounds for discipline exist under the pertinent statutory provision.

       
       

       1. Subsection 489.129(1)(h). Diversion of funds or property received for prosecution or

          completion of a specific 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.

          
          

   16. At the hearing, Petitioner through counsel withdrew this charge.

       
       

       1. Subsection 489.129(1)(j). Failure in any material respect to comply with the provisions of this act.

          
          

   17. Petitioner apparently predicates this violation on a violation of Section 489.119 which requires a licensed contractor to qualify the legal entity in which he is engaging in contracting. Here, although Petitioner used the bank accounts "J. & L. Properties" in connection with the Starke contract, the building permit was issued in Respondent's name. Petitioner has failed to show by clear and convincing evidence that Respondent was contracting under a name other than that in which he was registered.

       
       

       1. Subsection 489.129(1)(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 the project without notification to the prospective owner and without just cause.

          
          

   18. The evidence establishes that Respondent did, in fact, terminate the Starke project without notification to the owner and without just cause. Although Respondent claimed that Starke threatened him in some unspecified manner, the evidence fails to support this allegation. Similarly, the Respondent's co-intention that he was ill and could not proceed further because of the stressful situation was not supported by medical evidence nor was this purported cause communicated to Starke. By his own admission, Respondent took no action between October and January to advise Starke of his intention to terminate work on the project and thus it must be concluded that he did abandon the same.

       
       

       1. Subsection 489.129(1)(m). Upon proof that the licensee is guilty of fraud or deceit or of gross negligence, incompetency, or misconduct in the practice of contracting.

       
       

   19. The evidence establishes that Respondent was grossly negligent and incompetent in the work performed on the Starke residence, as shown in the foregoing findings of fact. Many of the construction deficiencies were fundamental failures to perform or properly supervise the construction work. Several involved a failure to follow the contract specifications in material respects. Further, Respondent's failure to maintain complete and accurate financial records made it impossible to accurately determine the cost of the project or to verify receipts and payments to workmen, subcontractors, and material-men.

       
       

   20. In assessing an appropriate penalty for Respondent's violations as recited above, consideration should be given to the difficulties to be expected

in attempting to construct an unusually large house without a formal written contract, the numerous changes imposed by the owner during the course of construction, and Respondent's inexperience in undertaking a project of such scope. Nevertheless, such factors did not excuse Respondent's derelictions, and the situation is aggravated by the fact that he had been previously disciplined on two occasions for violations of Chapter 489. It is therefore concluded that his license to practice contracting should be suspended for a period of six months, and that he should be thereafter placed on probation for a period of one year under such terms as the board may determine to be appropriate. It is, therefore

RECOMMENDED:

That the Construction Industry Licensing Board issue a final order suspending Respondent's license to Practice contracting for a period of six months, and placing him on probation for a period of one year under appropriate terms, for the established violations of Chapter 489, Florida Statutes.

DONE AND ENTERED this 14th day of October, 1987, at Tallahassee, Florida.

THOMAS C. OLDHAM, 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 14th day of October, 1987.

COPIES FURNISHED:

Tom Gallagher, Secretary G. Vincent Soto, Esquire Department of Professional Department of Professional

Regulation Regulation

130 North Monroe Street 130 North Monroe Street Tallahassee, Florida 32399-0750 Tallahassee, Florida

32399-0750

Fred Seely

Executive Director James W. Sibrey, Esquire

Construction Industry Post Office 1164 Licensing Board Gainesville, Florida

Post Office Box 2 32602-1164

Jacksonville, Florida 32201

Docket for Case No: 86-004808

Orders for Case No: 86-004808