STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, )

)

Petitioner, )

)

vs. ) CASE NOS. 87-2003

) 87-3023

ERIC AGER, )

)

Respondent. )

)

RECOMMENDED ORDER

For Petitioner: W. D. Beason, Esquire, of Tallahassee For Respondent: Eric Ager, of Safety Harbor, pro se

In this case, the Respondent, Eric Ager, a licensed contractor, is charged with falsely certifying that all subcontractors on two different contracts had been paid, resulting in the filing of mechanic's liens against the property which the Respondent had contracted to improve. The Petitioner, the Department of Professional Regulation, charges that Respondent's alleged conduct violates subsections (j) (failure to supervise) and (m) (gross negligence, incompetence, misconduct, fraud or deceit in the practice of contracting) of Section 489.129(1), Florida Statutes (1985).

A formal administrative hearing on the charges was held in Clearwater on August 21, 1987. The parties were given ten days from the filing of the transcript of the hearing in which to file proposed recommended orders. The transcript having been filed on September 2, 1987, the deadline for proposed recommended orders was September 12, 1987. However, no proposed recommended orders were filed.

FINDINGS OF FACT

1. Respondent, Eric Ager, is a registered residential contractor in Florida, having been issued license number CR CA11771. Respondent held the license at all times referred to in these Findings Of Fact.

   
   

   1. Background

      
      

2. While licensed and doing business as Ager Construction Company and Ager Homes, Inc., the Respondent has built 700 homes in Florida since 1975. There was no evidence of any prior disciplinary proceedings against him.

   
   

3. Before 1983, the Respondent qualified and did business as Ager Construction Company. At about that time, the Respondent decided to retire and was given an opportunity to get his money out of the business when his older brother, Irwin, a Michigan licensed contractor since the early 1960's, offered to buy and operate the business. The Respondent agreed and sold his company to

   Ager Homes, Inc., the company his brother, Irwin, formed for this purpose.

   Since Irwin was not licensed in Florida, the Respondent agreed to stay on as the qualifying agent for Ager Homes, Inc., but his role was to be gradually phased out and eventually terminated when Irwin could replace him.

   
   

4. Irwin was the sole shareholder and director of Ager Homes, Inc. He also was the president. The Respondent acted as vice-president for a time but later served only as resident agent for purposes of service of process for the company (as well as qualifying agent.)

   
   

5. As qualifying agent for Ager Homes, Inc., the Respondent saw it as his job to be in the field and do the actual building. He and Irwin consulted before Irwin estimated a job, but otherwise all financial matters were handled exclusively by Irwin.

   
   

6. When permanent financing on a job the Respondent was working on closed, Irwin would prepare an affidavit of no liens and an affidavit of no unpaid invoices. The affidavit of no liens also stated that "there have been no . . . services or material furnished to the property for which a valid lien could be filed, nor has there been material or services furnished to, or labor performed on said property for which there are unpaid bills." The Respondent generally did not sign or even see these affidavits.

   
   

   1. The DeSantis

      
      

7. On July 6, 1985, Ager Homes, through Irwin, entered into a contract to sell the DeSantis an $89,000 house to be built on a lot in a subdivision called Coventry. The sales price included a swimming pool and screened pool area enclosure.

   
   

8. On or about October 17, 1985, Ager Homes, through its foreman, Randy Martin, subcontracted with National Screen & Aluminum, Inc., for the screen enclosure. The original contract price was $4,169. Later, on Martin's recommendation, the DeSantis requested that the screen enclosure be enlarged and the roof gabled. Martin entered into an addendum for the additional work by National Screen, at an additional cost of $622.

   
   

9. National Screen's work was completed the morning of the closing on October 30, 1985. Irwin left a signed affidavit of no liens and affidavit of no unpaid bills with the closing agent (along with the other papers he had to sign), and the transaction closed as scheduled. In accordance with the practice of Ager Homes, the Respondent knew nothing about the affidavits but assumed that they would be given at the closing, as usual.

   
   

10. In fact, National Screen had not been paid in full, and there was still a balance due of $3,399 as of April 1986. National Screen filed a claim of lien, and its successor, Design Aluminum, sued in February 1986, to foreclose the lien. The DeSantis hired legal counsel, and a judgment was entered in the DeSantis' favor in May 1987, based on the technicality that National Screen's November 5, 1985, notice to owner was too late.

    
    

11. The Respondent knew nothing about either the National Screen subcontract or the affidavits until after March 1986. In the fall of 1985, Irwin had begun to have financial difficulties. They stemmed from the development of the Coventry subdivision. Muck and ground problems required the unforeseen expenditure of $100,000 to $200,000. Irwin was unable to maintain a healthy cash flow. By March 1986, Irwin also had begun to have personal

    problems, including a death in the family. During the week of March 15, 1986, Irwin left Florida and abandoned Ager Homes. Irwin left the Respondent 70 to 80 unpaid invoices to deal with. The Respondent operated the business for some time and tried to get Ager Homes' bills paid.

    
    

12. In the case of the National Screen lien, the Respondent believed the title company would pay the lien and sue Ager Homes far reimbursement, but the title company refused to pay on the ground that the lien was not a covered title defect. After this became apparent, the Respondent still did not arrange to have the debt paid. He vaguely understood from Irwin that the job had cost more than it should have, but he never investigated to learn the true facts and never denied that the debt was valid.

    
    

    1. The Schultzes

    
    

13. On June 21, 1985, Ager Homes, through Irwin, contracted with the Schultzes to build a house on a lot in Coventry for a price of $115,000.

    
    

14. On the Schultz job, there was a difficulty with the air conditioning. The air conditioning would not operate effectively. After much experimenting, it was decided that an additional unit would be necessary. The transaction closed on November 7, 1985, before the additional air conditioning unit was added. Irwin signed and provided an affidavit of no liens and affidavit of no unpaid invoices at the closing. In accordance with the practice of Ager Homes, the Respondent knew nothing about the affidavits but assumed they would be given at the closing, as usual.

    
    

15. Ager Homes subcontracted the air conditioning system to Airtron, Inc. The original price was $2500. With the additional unit added after the closing, the total due to Airtron was $2781. This amount never was paid. In February 1986, the Respondent and Irwin gave Airtron a promissory note for $12,000, which included the $2,781 on the Schultz job. In April 1986, Airtron filed a claim of lien on the Schultz property. By August 1986, Irwin had left, and the Respondent had not kept Ager Homes current on new billings by Airtron. On August 7, 1986, the Respondent signed another promissory note to Airtron for the balance due, which by then had grown to $26,000. On October 31, 1986, the Schultzes paid the $2781 lien when they closed the resale of their house in Coventry. The Respondent has paid a total of approximately $5000 on the debt, leaving $18,600 due and owing.

    
    

16. At first, the Respondent thought the title company would pay Airtron and sue Ager Homes for reimbursement. Eventually, it became apparent that the title company would not pay.

    
    

    CONCLUSIONS OF LAW

    
    

17. Section 489.129(1), Florida Statutes (1985), provides in pertinent part:

    
    

    The [Construction Industry Licensing Board] may revoke, suspend, or deny the issuance or renewal of the certificate or registration of a contractor and impose an administrative fine not to exceed $5,000, place a contractor on probation, or reprimand or censure a contractor if the contractor, or if the business entity or any general partner,

    officer, director, trustee, or member of a business entity for which the contractor is a qualifying agent, is found guilty of any of the following acts:

    * * *

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

    * * *

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

    
    

18. Section 489.119(2), Florida Statutes (1985), provides in pertinent part:

    
    

    If the applicant proposes to engage in contracting as a partnership, corporation, business trust, or other legal entity, the applicant shall apply through a qualifying agent . . . . Such application shall also show that the qualifying agent is legally qualified to act for the business organization in all matters connected with its contracting business and that he has authority to supervise construction undertaken by such business organization.

    
    

19. Section 489.105(4), Florida Statutes (Supp. 1986), sets out this definition:

    
    

    "Qualifying agent" means a person who possesses the requisite skill, knowledge, and experience, and has the responsibility, to supervise, direct, manage, and control the contracting activities of the business entity with which

    he is connected; who has the responsibility to supervise, direct, manage, and control construction activities on a job for which he has obtained the building permit; and whose technical and personal qualifications have been determined by investigation and examination

    as provided in this act, as attested by the department.

    
    

20. Under these statutes, the Respondent, Eric Ager, as "qualifying agent" for Ager Homes, Inc., is responsible for the contracting activities of the company in connection with the DeSanti and Schultz projects. See Gatwood v. McGee, 475 So.2d 720 (Fla. 1st DCA 1985); Hunt v Department of Professional Regulation, 444 So.2d 997 (Fla. 1st DCA 1983); Alles v. Department of Professional Regulation, 423 So.2d 624 (Fla. 5th DCA 1982). This includes responsibility for Irwin's and Ager Homes' failure to pay subcontractors National Screen and Airtron in full, allowing liens to be placed on-the property of the DeSantis and Schultzes, and falsely swearing that all subcontractors, labor and material men had been paid before the DeSanti and Schultz closings, in violation of Section 489.129(1)(m) (although there is no evidence that the

Respondent himself was guilty of fraud or any intentional misconduct.) The Respondent also failed to meet his statutorily imposed duty to supervise the DeSanti and Schultz projects, in violation of Section 489.129(1)(j).

RECOMMENDATIONS

Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Construction Industry Licensing Board enter a final order:

(1) suspending the residential contractor license of the Respondent, Eric Ager, until such time as he has paid Design Aluminum and Airtron, Inc., in full on the outstanding accounts of Ager Homes, Inc., and reimbursed the Schultzes what they paid to clear the Airtron lien from their property, up to a maximum suspension of two years; and (2) after the suspension, either (a) reinstating the license, subject to a one year probation, if the Respondent can demonstrate good faith, diligent efforts to pay the debts, or (b) revoking the license for failure to make good faith, diligent efforts to pay the debts.

RECOMMENDED this 24th day of September 1987, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON 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 24th day of September 1987.

COPIES FURNISHED:

W. D. Beason, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, FL 32399-0750

Eric Ager

3041 Xevlyn Ct.

Safety Harbor, Florida 33572

Fred Seely Executive Director

Construction Industry Licensing Board

Department of Professional Regulation

P. O. Box 2

Jacksonville, Florida 32201

Tom Gallagher, Secretary Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Joseph A. Sole, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION CONSTRUCTION INDUSTRY LICENSING BOARD

DEPARTMENT OF PROFESSIONAL REGULATION,

Petitioner,

vs. CASE NO. 67993, 70329

DOAH CASE NO. 87-2003, 87-3023

ERIC L. AGER,

License No. CR C011771

CR CA11771

Respondent.

/

FINAL ORDER

THIS MATTER came before the Construction Industry Licensing Board pursuant to Section 120.57(1) (b) (9), Florida Statutes, on August 11, 1988, in Longboat Key, Florida for consideration of the Recommended Order (a copy of which 15 attached hereto and incorporated herein by reference) issued by the hearing officer the above styled case. The Petitioner was represented by Douglas A. Shropshire. The Respondent was present with counsel at the Board meeting.

Upon consideration of the hearing officer's Recommended Order, the exceptions filed, and the arguments of the parties and after a review of the complete record in this matter, the Board makes the following findings:

FINDINGS OF FACT

1. The hearing officer's findings of fact are hereby approved and adopted.

2. There is competent, substantial evidence to support the hearing officer's findings of fact.

CONCLUSIONS OF LAW

1. The Board has jurisdiction of this matter pursuant to the provisions of Section 120.57(1), and Chapter 489, Florida Statutes.

   
   

2. The hearing officer's conclusions of law, are hereby approved and adopted in toto.

   
   

3. The hearing officer's recommended disposition was rejected for those reasons specified on the record at the board meeting.

   
   

4. The exceptions to the Recommended Order filed by the Respondent in this cause are rejected as unsupported by the record and for those reasons specified on the record at the board meeting.

   
   

5. There is competent substantial evidence to support the Board's findings and conclusions.

WHEREFORE, IT IS HEREBY ORDERED AND ADJUDGED: Respondent shall pay an administrative fine in the amount of one thousand five hundred dollars ($1500.00) to the Florida Construction Industry Licensing Board. Said fine shall be paid within 120 days.

Respondent shall be on probation from the date of the Final Action herein, through September, 1989. Respondent shall make probation appearances before the Board in the months of March and September. At said appearance Respondent shall stand for questions from the Board as to his firm's operations and finances, and shall supply the Board with such financial reports and other papers as the Board may require. Further, Respondent shall report on the status of the Promissory Notes given to Anthony De Santi and Carl Schultz of Safety Harbor, Florida.

To assure payment of the fine, it is further ordered that all of Respondent's licensure to practice contracting shall be suspended with the imposition of the suspension being stayed for 120 days. If the ordered fine is paid within that 120 day period, the suspension imposed shall not take effect. Upon payment of the fine after the 120 days, the suspension imposed shall be lifted. If the licensee does not pay the fine within said period, then immediately upon expiration of the stay, he shall surrender his licensure to she investigator of the Department of Professional Regulation or shall mail it to the Board offices.

Pursuant to Section 120.59, Florida Statutes, the Parties are hereby notified that they may appeal this Order by filing one copy of a Notice of Appeal with the Clerk of the Department of Professional Regulation, 130 North Monroe Street, Tallahassee, Florida 32301, and by filing the filing fee and one copy of the Notice of Appeal with the District Court of Appeal within thirty

(30) days of the effective date of this Order.

This Order shall become effective upon filing with the Clerk of the Department of Professional Regulation.

E. E. Simmons, Chairman

Construction Industry Licensing Board

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been provided by certified mail to

Eric L. Ager

3041 Kevlyn Court

Safety Harbor, FL 33572

and by hand delivery/United States mail to the Board Clerk, Department of Professional Regulation and its Counsel, 130 North Monroe Street, Tallahassee, Florida 32301, on or before 5:00 p.m., this 29th day of September 1988.

Docket for Case No: 87-002003

Orders for Case No: 87-002003