STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, CONSTRUCTION ) INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 88-5203

)

HUGH M. HOLT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing in the above- styled case on April 26, 1989, in Orlando, Florida.

APPEARANCES

For Petitioner: John E. Jordan, Esquire

Woolfolk, Estes and Keough, P.A.

131 Park Lake Street Post Office Drawer 3751 Orlando, Florida 32802

For Respondent: Hugh M. Holt, Pro se

6320 Ravinnia Drive

Orlando, Florida 32809 STATEMENT OF THE ISSUES

The issue for determination is whether Respondent committed the violations alleged in an Administrative Complaint dated June 27, 1988, and, if so, what discipline is appropriate.

The complaint charges that Respondent violated Sections 489.129(1)(m) and (j), Section 489.119, and Section 480.105(4), F.S., by committing gross negligence, incompetence or misconduct, and failing to properly supervise activities in a residential construction job undertaken by a company with which he was associated.

PRELIMINARY STATEMENT

In response to the Administrative Complaint, Respondent made a timely request for a formal administrative hearing.

The hearing was continued twice, once at the request of Petitioner and once at the request of the Respondent.

At the commencement of the hearing Respondent filed a motion to dismiss the complaint. The motion was taken under advisement as it included factual issues in defense which needed to be proven in the evidentiary hearing.

In support of the charges against Respondent, Petitioner presented the testimony of Jack Deprima, Sandra Delayne Deprima, Bernard S. Verse, and Charles

1. Adelman. Petitioner's exhibits A through H were received into evidence.

   
   

   Respondent testified on his own behalf, and his exhibits #1 and #2 were received into evidence.

   
   

   After the hearing, the transcript was prepared and Petitioner submitted a proposed recommended order. Respondent submitted argument in support of his motion to dismiss the complaint. The motion to dismiss is denied for reasons discussed in the conclusions of law. Petitioner's proposed findings of fact are adopted in substance in the findings reflected below.

   
   

   FINDINGS OF FACT

   
   

   1. At all times relevant, Respondent, Hugh M. Holt, was licensed in Florida as a registered residential contractor, under license number RR-0034385. He was also licensed as an electrical contractor.

      
      

   2. A-I Carpenters Contractor, Inc. (A-I) was a company primarily involved in residential remodeling work. In 1984 and 1985, Jack and Sandra Delayne Deprima were President and Vice President, respectively.

      
      

   3. On May 30, 1984, Hugh Holt, his wife, Joan Holt, and the Deprimas executed a stockholders' agreement in which Hugh Holt was assigned 166 2/3 shares of stock, out of a total of 666 2/3 outstanding shares, in exchange for services to the corporation.

      
      

      Those services included his supervision of construction work undertaken by the corporation and the pulling of necessary permits. It was agreed that Hugh Holt would receive an additional $300.00 to $400.00 for each building permit taken out in his name with respect to work done by the corporation.

      
      

   4. Papers were prepared for filing an application to qualify Hugh Holt as agent for A-I Carpenters Contractor, Inc., pursuant to Section 489.119, F.S. Hugh Holt never filed those papers and the corporation was not registered or certified in his name.

      
      

   5. After the stockholders' agreement was executed, permits were pulled at the Orange County Building Department for the corporation in Hugh Holt's name. The applications were signed in advance by Hugh Holt, and an employee from the corporation used a power of attorney from Hugh Holt to obtain the permits at the local building department office.

      
      

      About twenty-five permits were obtained in this manner. Holt was paid by the corporation for those permits and in some instances appeared at the job site to supervise the work.

      
      

   6. In August 1985, Jack Deprima negotiated and entered into a contract on behalf of A-I with C.J. and Mary Lou Adelman, to construct an addition to their home at 5632 Pitch Pine Drive, in Orlando, Florida. The addition was a 16x38 feet porch enclosure involving the extension of an existing floor slab,

      installing a roof extension with skylights, a block wall with a window, and support for a built-in spa.

      
      

   7. On August 19, 1985, an Orange County building permit was obtained for the Adelman job in Hugh Holt's name.

      
      

      Cathy Davis, an employee of A-I, took a letter of authorization dated August 19, 1985, and purportedly signed by Hugh Holt, to the building department and obtained the permit. Hugh Holt denies signing the authorization but admits that the letter was prepared by his daughter. He claims that the letter was for an electrical permit for the Adelman job, but no electrical permit was obtained. Sandra Deprima, the bookkeeper for A-I, paid Hugh Holt $300.00 for the Adelman permit.

      
      

   8. Hugh Holt never appeared at the Adelman job site, nor did he supervise the work.

      
      

      In August 1985 he was the only individual associated with A-I who could serve as qualifying agent or pull permits. Sandra Deprima was granted a Florida residential contractors license in 1985, but did not have her license in hand in August 1985 when the Adelman job commenced.

      
      

   9. Charles Adelman paid A-I approximately $9600.00 for the work on his addition.

      
      

      During and after construction serious problems developed. The roof leaked because it was not properly tied to the existing structure, and the skylights leaked because they were not properly installed. The concrete wall began settling and cracking. A wooden wall set into the ground began rotting and the spa structural support collapsed.

      
      

      Jack Deprima attempted to make some corrections, but eventually the Adelmans had to hire another roofing company and other contractors to make repairs. Some masonry cracking still exists.

      
      

      The Adelmans have spent substantial sums above their contract amount with A-I to fix the problems.

      
      

   10. On December 23, 1985, Hugh Holt and his wife relinquished their shares of A-I Carpenters Contractor, Inc. and resigned from the corporation. The document they executed, titled "Transfer of Stock Interest, Release and Resignation", states that they had agreed to the surrender at such time when Sandra Deprima obtained her contractor's license and qualified the corporation.

       
       

   11. After the department initiated its investigation against A-I and the Deprimas, it learned of Hugh Holt's involvement through a questionnaire response provided by Sandra Deprima, and it informed Mr. Holt of the complaint.

       
       

       CONCLUSIONS OF LAW

       
       

   12. The Division of Administrative Hearings has jurisdiction in this proceeding, pursuant to Section 120.57(1), F.S. and Section 455.225(4), F.S.

       
       

   13. Section 489.129(1), F.S. provides that the Construction Industry Licensing Board may revoke, suspend or deny the renewal of a certificate or registration of a contractor, or impose an administrative fine or take other

       disciplinary action when the contractor is found guilty of, among other violations,

       
       

       (j) Failure in any material respect to comply with the provisions of [Chapter 489].

       * * * fraud or deceit or of gross

       negligence, incompetency, or misconduct in the practice of contracting.

       
       

   14. Section 489.119, F.S. requires that business organizations engaging in contracting must be registered through a qualifying agent, legally authorized to act for the entity and authorized to supervise construction undertaken by the organization. The qualifying agent for such organization is responsible for applying for certification and the agent must himself be certified in the area in which the organization is qualified.

       
       

       Section 489.105(4), F.S. defines "Qualifying Agent" as the person with the skill, knowledge and experience to supervise the contracting activities of the business entity with which he is connected and who has the responsibility to supervise, direct and control construction activities on a job for which he has obtained the building permit.

       
       

   15. The department must prove by clear and convincing evidence that the Respondent committed the alleged violations in order to discipline his license. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

       
       

   16. Hugh Holt claims in his motion to dismiss that he cannot be prosecuted because A-I and the Deprimas were the only subjects of the original complaint made to the department.

       
       

       Section 455.225(1), F.S. provides in pertinent part:

       
       

       Unless a complaint has been filed with

       the department, or the department has been specifically authorized by statute, the department may not initiate an investigation unless it has reasonable cause to believe that a licensee or a group of licensees has violated a Florida Statute, a rule of the department, or a rule of a board. When an investigation of any person is undertaken, the department shall notify him of the investigation and inform him of the substance of any complaint filed against him...

       
       

       Although the Adelmans did not know of Hugh Holt's involvement, the agency obtained information regarding him from Sandra Deprima.

       
       

   17. Hugh Holt also claims that he knew nothing about the permit for the Adelman job and was not the qualifying agent for A-I.

       
       

       The testimony of the Deprimas and corporate documents established clearly that Hugh Holt was a stock holder and performed the duties of a qualifying agent regularly.

       Holt's failure to follow through with the paperwork to properly qualify the corporation cannot be used as a defense, nor can his disavowal of any knowledge of the Adelman job. At the time he was the only individual who could qualify the corporation; he acted as the qualifying agent; and he was legally responsible for the day to day supervision of the contracting work of the organization.

       
       

       These same defenses raised by Hugh Holt have been unequivocally rejected by the Construction Industry Licensing Board, and its orders have been affirmed on appeal in Alles v. Department of Professional Regulation, Construction Industry Licensing Board, 423 So.2d 624 (Fla. 5th DCA 1982), Stoner v. Department of Professional Regulation, 429 So.2d 27 (Fla. 5th DCA 1983) and Hunt v. Department of Professional Regulation, 444 So.2d 997 (Fla. 1st DCA 1983).

       
       

   18. The Department met its burden of proving that Hugh Holt is guilty of misconduct and failure to fulfil his obligations as qualifying agent as to work performed on the Adelman job by A-I Carpenters Contractor, Inc.

RECOMMENDATION

Based on the foregoing, it is hereby RECOMMENDED:

That the Construction Industry Licensing Board issue its final order, finding Hugh Holt guilty of the violations as charged, and assessing an administrative fine of $1,000.00, which fine is within the range of penalties found in the Board's disciplinary guidelines in Rule 21E-17.001, F.A.C.

DONE and ORDERED this 21st day of August, 1989, in Tallahassee, Leon County, Florida.

MARY CLARK

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 21st day of August, 1989.

COPIES FURNISHED:

John E. Jordan, Esquire Kenneth E. Easley Woolfolk, Estes and Keough, P.A. General Counsel

131 Park Lake Street Dept. of Professional

Post Office Drawer 3751 Regulation

Orlando, Florida 32802 1940 N. Monroe St.

Suite 60

Hugh M. Holt, pro se Tallahassee, Florida 32399 6320 Ravinnia Drive

Orlando, Florida 32809

Fred Seely Executive Director Post Office Box 2

Jacksonville, Florida 32202

Docket for Case No: 88-005203

Orders for Case No: 88-005203