STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT PO PROFESSIONAL )

REGULATION, )

)

Petitioner, )

)

vs. ) CASE NO. 89-2586

)

ADDISON L. BAUREIS, )

)

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 November 15, 1989, in Rockledge, Florida.

APPEARANCES

For Petitioner: Larry G. McPherson, Jr., Esquire

and

Wellington H. Meffert, Esquire Dept. of Professional Regulation

194 N. Monroe Street, Suite 60 Tallahassee, Florida 32399-0792

For Respondent: Mark S. Peters, Esquire

775 D. Merritt Island Causeway Suite 310

Merritt Island, Florida 32952 STATEMENT OF THE ISSUES

The February 14, 1989, Administrative Complaint in this proceeding alleged certain violations of Chapter 489, F.S., in Respondent's handling of a contracting job in Cape Canaveral, Florida. Specifically, the issues for determination are whether Respondent is guilty of financial mismanagement or misconduct in violation of Sections 489.129(1)(h) and (m), F.S.; whether Respondent committed gross negligence, incompetence, misconduct or deceit, in violation of Sections 489.129(1)(m), and (j), F.S., 489.119, F.S. and 489.105(4), F.S.; and whether Respondent failed to properly supervise the job site, in violation of Section 489.129(1)(m), F.S.

If violations are found, it is necessary to recommend an appropriate discipline.

PRELIMINARY STATEMENT

Addison L. Baureis responded to the administrative complaint with a request for formal hearing.

The hearing date was set for September 14, 1989, but was continued, for good cause, on the request of Respondent.

At the hearing, Petitioner presented the testimony of Donald Lippert, Marion Lippert and Stanton M. Alexander. Petitioner's exhibits #1-22 were received in evidence.

Respondent testified in-his own behalf and presented the testimony of James

1. Morgan, Richard Van Gore, Jerry Hunt, Hank Lemerise, Robert D. Hoag, and David A. Sawyer. Respondent's exhibits #1-7 and #9-14 were received in evidence. Respondent's exhibit #8 was withdrawn.

   
   

   After the transcript was filed, both parties submitted proposed findings of fact. Specific rulings on those proposed findings are included in the attached appendix.

   
   

   FINDINGS OF FACT

   
   

   1. At all times material, Addison Baureis has been a registered residential contractor, having been issued license number RR 0012163, by the State of Florida.

      
      

   2. Sometime prior to November 1987, Don and Marion Lippert solicited a bid from Respondent for building a single family home in Cape Canaveral, Florida. The customers provided Respondent a plan of the home, prepared by a draftsman, and a list of specifications.

      
      

   3. Subsequently, Respondent was awarded the bid and a contract was entered on November 7, 1987, between Addison Baureis and the Lipperts, for construction of the home for $102,045.

      
      

      The contract is a standard construction contract form, provided and filled in by Addison Baureis. The contract provides for payment through bank draws; both the contract and the estimate sheet completed by Baureis require that any changes to the specifications be approved, in advance in writing. The contract also provides for completion within six months, except for delays occasioned by inclement weather or the inability to obtain materials through no fault of the contractor.

      
      

      Some of the work items under the contract were left to be performed by the Lipperts. These included painting, panelling, wallpaper and landscaping.

      
      

   4. The plans provided by the Lipperts lacked certain details; specifically they failed, to include plumbing and electrical risers, heating and air conditioning (HVAC) detail, or a site plan which could be approved by the city building department. It is common that HVAC specifications are excluded, and in such cases these details are left to the professional judgement of the contractor. Baureis obtained a drawing for the risers and the site plan.

      
      

   5. The permit was issued and work commenced in December 1987.

      All subcontractors, with the exception of the painters, were under contract with Addison Baureis.

      
      

   6. This was to be the Lipperts' "dream home". Mrs. Lippert was an interior decorator and had planned the details of the home, even to the point of providing manufacturers' specification numbers and brochures describing the products she wanted. There were, however, certain items that she had questions on, and she consulted Baureis and his subcontractors as building progressed.

      She drove over from Orlando two or three times a week to check on the house.

      
      

   7. During the course of the work by Baureis and his subcontractors, a substantial number of changes were made. Instead of a brick exterior, stucco and flagstone were substituted; a lower-grade, lighter weight roof shingle was installed; an exterior bay window was not extended to the roofline, as desired by the Lipperts; and the upstairs wooden flooring and ceiling were reversed. Because of the lack of plans regarding placement of heating and air conditioning duct work, soffits had to be constructed to accommodate the ducts. Changes in the entrance way had to be made to accommodate a 400-pound chandelier that was not included in the plans. Web floor joists were substituted for wood I-beams,, between the first and second story.

      
      

   8. The evidence is inconclusive as to discussions and agreements regarding these changes, but it is undisputed that they, and myriad smaller changes, were never reduced to writing nor agreed to in writing, as required by the contract.

      
      

   9. Baureis received draws from the bank totalling approximately

      $87,000.00, for the Lippert job. In May 1988, claims of liens were filed by two of Baureis' subcontractors: Babcock Building Supply, Inc., and Sawyer Plumbing, Inc., for materials and work related to the Lippert contract. At that point the bank refused to release further funds. The draws Baureis had received included funds for the plumbing.

      
      

   10. Some work was done on the home in May 1988, but by June the work stopped. The parties were at a standoff, as the bank refused to release further funds and neither Baureis nor the Lipperts satisfied the liens. The bank initiated foreclosure action against the Lipperts.

       
       

       In August 1988, the Lipperts discharged Baureis for nonperformance and hired their own subcontractors to finish the house.

       
       

   11. Baureis admits that he was negligent in failing to obtain written change orders. He also admits that substantial changes were made. Several of those changes were blamed on the inadequacy of the plans and specifications provided by the Lipperts, but he submitted his bid based on those submittals and did not question the requirements at that time.

       
       

       Change orders are not only required by the parties' contract; they are standard, essential practice in the industry.

       
       

   12. Baureis denies that he failed to supervise the job. His supervision was undermined by Mrs. Lippert's involvement with his subcontractors. She directed them to make changes and hired them to do special tasks. She tried to tell them how to do their job and created a morale problem at the site. Dispute as to the customer's role was a factor in the Lippert's discharge of their contractor.

   13. Addison Baureis' license was disciplined previously in 1984, when he admitted falsifying the value of a contract on a building permit application and abandoned a job. The case was resolved by stipulation and payment of a $750.00 fine.

       
       

       CONCLUSIONS OF LAW

       
       

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

       
       

   15. Petitioner has the burden of proving the allegations of its complaint by clear and convincing evidence. Ferris v. Turlington, 510 So2d 292 (Fla 1987).

       
       

   16. Section 489.129(1), F.S., provides in pertinent part:

       
       

       489. 129 Disciplinary proceedings.

       (1) The board may revoke, suspend,

       or deny the issuance or renewal of the certificate or registration of a contractor, require financial restitution to a consumer, impose an administrative fine not to exceed

       $5,000, place a contractor on probation, require continuing education, assess costs associated with investigation and prosecution, or reprimand or censure a contractor if the contractor, or if the business organization for which the contractor is a primary qualifying agent or is a secondary qualifying agent responsible under S. 489.1195, is found guilty of any of the following acts:

       (h) Committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer. Financial mismanagement or misconduct occurs when:

       1. Valid liens have been recorded against the property of a contractor's customer for supplies or services ordered by the contractor for the customer's job; the contractor, has received funds from the customer to pay for the supplies or services; and the contractor has not had the liens removed from the property, by payment or by bond, within 30 days after the date of such liens.

       2. The contractor has abandoned a customers job and the percentage of completion is less than the percentage of the total contract price paid to the contractor as of the time of abandonment, unless the contractor is entitled to retain such funds under the terms of the contract or refunds the

          excess funds within 30 days after the date the job is abandoned.

       3. The contractor's job has been completed, and it is shown that the customer has had to pay more for the contracted job than the original contract price, as adjusted for subsequent change orders, unless such increase in cost was the result of circumstances beyond the control of the contractor, was the result of circumstances caused by the customer, or was otherwise permitted by the terms of the contract between the contractor and the customer.

       (j) Failing in any material respect to comply with the provisions of this part.

       * * *

       (m) Being found guilty of fraud or deceit or of gross negligence, incompetency, or misconduct in the practice of contracting.

       (emphasis added)

       
       

   17. Respondent's financial mismanagement, evidenced by the liens, was clearly proven, as was Respondent's gross negligence in failing to obtain any written change orders. These violations do not automatically infer failure to supervise, and that violation was not proven.

       
       

   18. In recommending a penalty, the disciplinary guidelines found in Chapter 21E-17, F.A.C. (rules of the Construction Industry Licensing Board) have been considered.

RECOMMENDATION

Based on the foregoing, it is hereby, RECOMMENDED

That a final order be entered finding Addison Baureis guilty of violations of Sections 489.129(1)(h) and (m), F.S., and assessing the penalty of $1,000. fine and one year suspension.

DONE AND RECOMMENDED this 23rd day of February, 1990, 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 23rd day of February, 1990.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-2586

The following constitute rulings on the parties' proposed findings of fact. Findings Proposed by Petitioner

1. Adopted in paragraph 1.

2. Adopted in paragraph 2.

3. Adopted in paragraph 3.

4. Adopted in substance in paragraph 11.

5. and 6. Adopted in paragraph 3.

7. and 8. Adopted in paragraph 11.

9. A. Rejected as unsupported by the weight of evidence. The testimony by Mr. Lippert regarding actual costs was not clear.

1. Adopted in substance in paragraph 7.

2. Rejected as contrary to the weight of evidence (as to the supervision). substandard work was not alleged

   in the administrative complaint and is not at issue.

3. Adopted in substance in-paragraph 9. 10. Rejected as unsupported by competent evidence. 11. Adopted in paragraph 13.

Findings Proposed by the Respondent

1. Adopted in paragraph 4.

2. Adopted by implication in paragraph 6.

3. Adopted in part in paragraphs 3, 7 and, 11; otherwise rejected as unnecessary.

4. Rejected as unnecessary.

5. Rejected as irrelevant.

6. Rejected as unnecessary.

7. Adopted in substance in paragraph 9.

8. Adopted by implication in paragraph 10

9. Rejected as contrary to the evidence.

10. and 11. Rejected as unnecessary.

12. Adopted in paragraph 7.

COPIES FURNISHED:

Larry G. McPherson, Jr., Esquire Wellington H. Meffert, II, Esquire Dept. of Professional Regulation 1940 N. Monroe St., Suite 60

Tallahassee, FL 32399-0792

Mark S. Peters, Esquire

775 D. Merritt Island Causeway, Suite 310 Merritt Island, FL 32952

Fred Seely, Executive Director

DPR-Construction Industry Licensing Board

P.O. Box 2 Jacksonville, FL 32202

Kenneth D. Easley, General Counsel Dept. of Professional Regulation 1940 N. Monroe St., Suite 60

Tallahassee, FL 32399-0792

Docket for Case No: 89-002586

Orders for Case No: 89-002586