Judges: VERONICA E. DONNELLY
Agency: Department of Business and Professional Regulation
Latest Update: Feb. 06, 1989
Summary: Licensed contractor engaged in misconduct when he failed to pay subcontractor liens with available funds and failed to notify owner
88-3308.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, CONSTRUCTION )
INDUSTRY LICENSING BOARD, )
)
Petitioner, )
)
vs. ) CASE NO. 88-3308
)
ROBERT MENSCHING, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in this case on December 7, 1988, at Fort Myers, Florida, before Veronica E. Donnelly, a duly designated Hearing Officer of the Division of Administrative Hearings. Appearances for the parties at the hearing were as follows:
For Petitioner: Elizabeth Alsobrook, Esquire
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32399-0750
For Respondent: Robert Mensching, pro se
1504 Southwest 58th Street Cape Coral, Florida 33914
The DEPARTMENT OF PROFESSIONAL REGULATION, Petitioner, filed an Administrative Complaint before the Construction Industry Licensing Board alleging that the Respondent, ROBERT MENSCHING, violated state law in the following manner: by failing to perform the Mangiardi contracting job in a timely manner or abandoning the job; by failing to properly supervise the finances on the job; and otherwise exhibiting financial mismanagement, misconduct, or diversion.
By letter dated April 12, 1988, the Respondent disputed the allegations of fact contained in the Administrative Complaint and requested a formal hearing.
During the hearing, the Petitioner presented two witnesses and submitted seven exhibits which were accepted into evidence. The Respondent testified in his own behalf. Although the Respondent did not bring any exhibits to the hearing, he was given leave to file any post hearing exhibits. The Petitioner was given ten days to file any objections to the exhibits. One exhibit was submitted by the Respondent, and was admitted into evidence without objection.
The Petitioner's expert witness did not appear for hearing. An oral motion was made to allow the expert to testify at a later date. The Respondent objected to the granting of additional time to the Petitioner to present its
case. As the original hearing was rescheduled to the present date because of the expert's schedule, and no good cause was shown for his absence, the request for additional time to present the witness is denied.
A transcript of the proceedings was filed with the Division of Administrative Hearings on January 6, 1989. The Respondent waived his opportunity to file Proposed Findings of Fact and Conclusions of Law. The Petitioner filed a Proposed Recommended Order on January 17, 1989. Rulings on the Proposed Findings of Fact are contained in the Appendix of the Recommended Order.
FINDINGS OF FACT
At all times material to these proceedings, the Respondent, ROBERT MENSCHING, was a certified residential building contractor in Florida, and held license number CR C020166. Mr. Mensching was the owner and qualifying agent for Robert Mensching Homes.
On or about July 10, 1986, a written proposal was submitted by the Respondent to Mr. and Mrs. Mangiardi for the construction of a single family dwelling in Cape Coral, Florida. The construction price was $60,000.00, with an additional $500.00 for the purchase of the house plans. Mr. and Mrs. Mangiardi paid for the plans on the date of the proposal.
Revisions to the proposal were submitted to the Mangiardis in September, 1986. The purchase price and the payment schedule remained the same. The proposal was accepted by the Mangiardis, and the down payment of $5,000.00 required by the contract to start construction, was given to the Respondent.
Construction commenced in November 1986.
By March 26, 1987, the Respondent had been paid $53,750.00 of the total construction contract price. This included the fourth draw on a five draw payment schedule. Only $6,250.00 remained to be paid by the purchasers for the last phase of construction.
In April 1987, the Respondent informed Mr. Mangiardi that he would not complete the final phase of construction. The Respondent informed Mr. Mangiardi that he would pay him $5,000.00. An accounting was not given to the purchasers of the monies disbursed by the Respondent pursuant to the construction schedule.
After the Respondent left the project, the Mangiardis were given notice of an outstanding lien in the amount of $963.80, which was owed to Kirkland Electric, Inc. Another Notice to Owner was filed by Wallcrafters, another subcontractor, for $5,272.50. The work completed by both subcontractors was performed during the Respondent's term as the prime contractor on the project. These two subcontractors were never paid by the Respondent out of the draws received by him for that purpose.
The Respondent did not pay the $5,000.00 he told Mr. Mangiardi he would pay in April of 1987. The evidence is unclear as to whether this amount of money was a payment of liquidated damages for the breach, the balance of funds entrusted to the contractor which had not been disbursed in the preceding construction phases, or the amount of unpaid liens known to the contractor at the time of breach.
The Respondent filed for bankruptcy after a judgment was entered against him in a civil action by the Mangiardis for breach of contract.
A Notice of Aggravation was not submitted during the formal hearing regarding the actual damage to the licensee's customers as a circumstance to be considered in aggravation of the penalty to be assessed. A copy of the Florida Construction Industry Licensing Board's previous letter of reprimand was not presented at hearing so that the hearing officer and the Board could use the prior violation for aggravation purposes.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.
Section 489.129, Florida Statutes, empowers the Florida Construction Industry Licensing Board to revoke, suspend, or otherwise discipline the license of the Respondent if he is found guilty of any of the acts enumerated in Section 489.129, Florida Statutes.
Section 489.129(1), Florida Statutes, as it applies to the Respondent, reads as follows in pertinent part:
The 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 $5,000.00, place a contractor on probation, or reprimand or censure a contractor if the contractor, or if the business entity...for which the contractor is a qualifying agent, is found guilty of any of the following acts:
. . .
(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.
. . .
Failure in any material respect to comply with the provisions of this act.
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.
. . .
(m) Upon proof that the licensee is guilty of fraud or deceit or of gross negligence, incompetency or misconduct in the practice of contracting.
A proceeding to discipline a license is penal in nature. Bach v. Florida Board of Dentistry, 378 So.2d 34 (Fla. 1st DCA 1980). In such contests, the Petitioner has the burden of proof and must prove by clear and convincing evidence that the Respondent committed the violations set forth in the administrative complaint. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987)
In paragraph five of the administrative complaint, the Respondent is charged with having violated Section 489.129(1)(m), Florida Statutes, for failing to perform in a reasonably timely manner. In the alternative, he is charged with having violated Section 489.129(1)(k), Florida Statutes, for abandoning the Mangiardi construction project.
During the formal hearing, the Petitioner was unable to establish by clear and convincing evidence that this particular project did not proceed in a timely manner. The purchasers were out of state during construction. They managed their own financing, and they did not have a local representative who could view and inspect the project on their behalf on a periodic basis. Without any direct evidence to support the allegation that the project did not proceed in a timely manner, the Respondent cannot be found guilty of this violation. Therefore, the charge should be dismissed for insufficient evidence.
It is alleged that the Respondent abandoned the project. Under the statutory provision which describes this type of violation, project abandonment occurs when the prospective owner has not been notified within 90 days of the contractor's termination of the project. According to Mr. Mangiardi's testimony, the Respondent told him that he would not continue with the project in April, 1987. Mr. Mangiardi had inspected the project and had paid a draw on March 26, 1987. Even if the project had been terminated the very next day, the prospective owner was notified in less than 90 days. As a result, the contractor should be found not guilty of the alternative charge of abandonment set forth in paragraph five of the administrative complaint.
The second charge is set forth in paragraph six of the administrative complaint. It is alleged that the Respondent exhibited financial mismanagement, misconduct, or diversion of funds, in violation of Sections 489.129(1)(h) and (1)(m) , Florida Statutes. The evidence adduced at hearing revealed that the Respondent did not provide the Mangiardis with an accounting of the project funds and that he did not notify them of two outstanding subcontractor liens in the amount of $6,236.30. The Respondent received funds from the Mangiardis which were to be used to pay for materials and work completed during the time period when the work of these subcontractors was performed. As a result, the Respondent is guilty of the violation charged in paragraph six of the administrative complaint.
The final charge, which is set forth in paragraph seven of the administrative complaint, alleges that the Respondent failed to properly supervise the finances on the job, in violation of Sections 489.129(1)(m) and (1)(j); and 489.105(4), Florida Statutes. The evidence presented regarding the two subcontractor liens demonstrates that the finances were not properly supervised. The testimony of Mr. Mangiardi revealed that he paid specific amounts of money at various stages in the project for construction which was specifically described in the draw schedule. This testimony supports the allegation of improper supervision of finances. The Respondent should have paid the subcontractors out of the monies given to him for that purpose.
Accordingly, the Respondent is guilty of this violation.
Rule 21E-17.001, Florida Administrative Code, provides in pertinent part:
The following guidelines shall be used in disciplinary cases, absent aggravating or mitigating circumstances and subject to other provisions of this Chapter.
. . .
(10) 489.129(1)(h): Diversion of funds. First violation, $750 to $1500 fine; repeat violation, revocation.
Rule 21E-17.002, Florida Administrative Code, sets forth circumstances which may be considered for purposes of mitigation or aggravation of penalties assessed against a contractor. The circumstances which were presented at hearing which may be used in aggravation of the underlying penalty in this case are as follows:
. . .
(8) The actual damage, physical or otherwise, to the licensee's customer.
Although the Respondent has received a letter of guidance on a past license violation, the Hearing Officer was not provided with an authenticated copy of the Board's determination. Rule 21E-17.006, Florida Administrative Code, requires the Petitioner to submit aggravating factors to the Hearing Officer at formal hearing. When such evidence is not presented during the hearing, the Board will not hear aggravating evidence at the final hearing. No other aggravating or mitigating factors were submitted to the Hearing Officer.
Based upon the foregoing, it is RECOMMENDED:
That the charge alleging that the Respondent violated Section 489.129(1)(m), Florida Statutes, be dismissed.
That the Respondent be found not guilty of having violated Sections 489.129(1)(k), Florida Statutes.
That the Respondent be found guilty of having violated Sections 489.129(1)(h) and (1)(m) , Florida Statues.
That the Respondent be found guilty of having violated Sections 489.129(1)(m), (1)(j); and Section 489.105(4), Florida Statutes.
That the Respondent pay a fine of $1,500.00, as set forth in Rule 21E-
(10), Florida Administrative Code.
DONE AND ENTERED this 6th day of February, 1989, at Tallahassee, Florida.
VERONICA E. DONNELLY, Hearing Officer Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 6th day of February, 1989.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-3308
Petitioner's proposed findings of fact are addressed as follows:
Accepted.
Accepted. See HO#1.
Accepted. See HO#1.
Rejected. See HO#2.
Rejected. The contract is the best evidence of the agreement between the parties.
Rejected. See HO#2.
Accept that the proposal was revised. A contract did not exist until the $5,000.00 was given to the contractor to start construction. See HO#3.
Accepted. See HO#4.
Rejected. Improper summary. See Respondent's exhibit. See also HO#3.
Rejected. See HO#4.
Rejected. Conclusionary. Opportunity to know and ability to establish not proved at hearing. Substantial evidence to the contrary presented at hearing.
Rejected. See HO#5.
Rejected. Hearsay.
Rejected. Irrelevant to charges set forth in complaint.
Accepted. See HO#6.
Accepted.
Rejected. Contrary to competent evidence presented at hearing.
Accepted. See HO#7.
Accepted.
Rejected. Biased conclusion, which was self serving.
Accepted.
Rejected. Improper opinion testimony. Irrelevant to specific charges set forth in the complaint.
Rejected for the same reasons set forth in preceding paragraph.
Rejected. Irrelevant to charges.
Accepted.
Accepted. See HO#9.
Accepted. See HO#7.
Accepted. See HO#7.
Accepted. See HO#6.
Rejected. Irrelevant. Contrary to law.
Rejected. See HO#10.
Rejected. Irrelevant. Contrary to law.
COPIES FURNISHED:
Elizabeth Alsobrook, Esquire Department of Professional Regulation
123 North Monroe Street Tallahassee, Florida 32399-0750
Robert Mensching
1504 Southwest 58th Street Cape Coral, Florida 33914
Fred Seely, Executive Director Construction Industry Licensing Board Post Office Box 2
Jacksonville, Florida 32201
Bruce Lamb, 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.: 90688
DOAH CASE NO.: 88-3308
ROBERT MENSCHING,
LICENSE NO.: CR C020166,
Respondent.
/
FINAL ORDER
THIS MATTER came before the Construction Industry Licensing Board pursuant to Section 120.57(1)(b)(9), Florida Statutes, on April 13, 1989, in Tampa, Florida, for consideration of the Recommended Order (a copy of which is attached hereto and incorporated herein by reference). The Petitioner was represented by Douglas A. Shropshire. The Respondent appeared pro se at the Board meeting.
Upon consideration of the hearing officer's Recommended Order, and the arguments of the parties and after a review of the complete record in this matter, including the exceptions filed, the Board makes the following:
FINDINGS OF FACT
The hearing officer's findings of fact are hereby approved and adopted in toto.
There is competent, substantial evidence to support the hearing officer's findings of fact.
CONCLUSIONS OF LAW
The Board has jurisdiction of this matter pursuant to the provisions of Section 120.57(1), and Chapter 489, Florida Statutes.
The hearing officer's conclusions of law are hereby approved and adopted except where they are contradicted by the Petitioner's exceptions to the Hearing Officer's Recommended Order which is hereby approved and adopted and incorporated by reference as it relates to the Hearing Officer's Recommended Conclusions of Law.
Respondent is guilty of violating Section 489.129(1)(h), (k), (j) and (m), Florida Statutes.
The penalty recommended by the Hearing Officer is hereby rejected as is the recommended penalty of the Petitioner cited in his exceptions for those reasons stated at the aforementioned board meeting the record of which is approved an adopted and fully incorporated herein by reference.
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 of five hundred dollars ($500.00) within thirty (30) days.
Pursuant to Section 120.59, Florida Statutes, the Parties are hereby notified that they may appeal this Final Order by filing one copy of a Notice of Appeal with the Clerk of the Department of professional Regulation, 130 N. 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.
DONE AND ORDERED this (unreadable) day of May , 1989.
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 forwarded by U.S. Mail to
Mr. Robert Mensching 1504 S. W. 58th Street Cape Coral, Florida 3391
and by hand delivery/United States mail to the Board Clerk, Department of Professional Regulation and its Counsel, 130 North Monroe Street, Tallahassee, Florida 32399-0750, on or before 5:00 p.m., this 23rd day of May, 1989.
F I L E D
Department of Professional Regulation Florida Construction Industry Licensing Board
BOARD CLERK
CLERK DATE May 23, 1989
Docket for Case No: 88-003308
Orders for Case No: 88-003308
| Issue Date |
Document |
Summary |
|
Feb. 12, 1989 |
Agency Final Order
|
|
|
Feb. 06, 1989 |
Recommended Order
|
Licensed contractor engaged in misconduct when he failed to pay subcontractor liens with available funds and failed to notify owner
|
