STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 90-1710

)

LEROY A. DECKER, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on June 25, 1990, in Fort Myers, Florida.

APPEARANCES

For Petitioner: Robert B. Jurand, Esquire

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0792

For Respondent: Leroy A. Decker, Jr., pro se

618 S.W. 57th Street Cape Coral, Florida 33914

STATEMENT OF THE ISSUES

The issue is whether respondent's license as a certified building contractor should be disciplined for the reasons stated in the administrative complaint.

PRELIMINARY STATEMENT

In an administrative complaint filed on July 7, 1989, petitioner, Department of Professional Regulation, Construction Industry Licensing Board, charged that respondent, Leroy A. Decker, Jr., licensed as a certified building contractor, had violated certain provisions within: Chapter 489, Florida Statutes (1987). More specifically, the complaint alleged that respondent, while doing business as Aladdin Homes, Inc., failed to pay a subcontractor for services and materials rendered on a project, and that even though the subcontractor filed a lien on the property, respondent signed an affidavit stating that all labor, materials, and services had been paid in full.

Petitioner alleges that the foregoing conduct constituted a violation of Subsections 489.129(1)(1) and (m), Florida Statutes (1987). Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes (1989). The matter was referred by petitioner to the Division of Administrative Hearings on March 19, 1990, with a request that a

hearing officer be assigned to conduct a formal hearing. By notice of hearing dated April 4, 1990, a final hearing was scheduled on June 25, 1990, in Fort Myers, Florida.

At final hearing petitioner presented the testimony of Ruth Hogrefe, Buddy

1. Dennis, and Joseph Cerniglia. Also, petitioner offered petitioner's exhibits 1-18. All exhibits were received in evidence. Respondent testified on his own behalf.

   
   

   The transcript of hearing was filed on July 18, 1990. Proposed findings of fact and conclusion of law were filed by petitioner on August 2, 1990. A ruling on each proposed finding has been made In the Appendix attached to this Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   Based upon all of the evidence, the following findings of fact are determined:

   
   

   1. At all times relevant hereto, respondent, Leroy A. Decker, Jr., held certified building contractor license number CB CO40724 issued by petitioner, Department of Professional Regulation, Construction Industry Licensing Board (Board). When the events herein occurred, respondent was doing business as Aladdin Homes, Inc. (Aladdin) located at 921 S.EA. 15th Avenue, Cape Coral, Florida, and was its registered qualifying agent.

      
      

   2. In 1987 respondent, acting as qualifying agent for Aladdin, began a business relationship with Designers Showcase of Cape Coral, Inc. (DSCC), a firm specializing in the sale and installation of furniture, carpeting and draperies. Under that relationship, DSCC acted as a subcontractor and installed various floor coverings in new homes constructed by respondent.

      
      

   3. Under a typical contract for the construction of a new home, the builder agrees to include within the sales price an allowance for floor coverings such as carpet. If a home buyer decides to purchase floor coverings that exceed the allowance, the buyer is responsible for any overage. Under this arrangement, the contractor normally pays the supplier for the amount of allowance prescribed in the contract while the buyer pays the supplier for any overage. From the outset of respondent's relationship with DSCC until it ended, the specifications in respondent's contracts, with certain exceptions, generally called for a floor covering allowance in the range of $1,500.

      
      

   4. Beginning in March 1988 several of respondent's new home customers became dissatisfied with the quality of floor furnishings provided by DSCC. Because of this, some buyers refused to pay respondent for the value of the floor furnishings provided by that subcontractor. This In turn engendered a dispute between respondent and DSCC and culminated in respondent, with a few exceptions, refusing to pay any moneys owed to DSCC after March 1988.

      
      

   5. In early 1988 respondent entered into a contract with one Joseph Cernlglia to construct a new home for Cerniglia in Cape Coral, Florida. Pursuant to the contract specifications, respondent gave Cerniglia a $1,500 allowance for floor coverings. Cerniglia opted to use DSCC as the carpet vendor and was well satisfied with the quality of DSCC's workmanship and materials.

      After the carpet was installed, respondent requested that Cerniglia sign an affidavit (letter of acceptance) so that respondent could receive his final draw from the bank. However, respondent did not advise Cerniglia that DSCC had not

      yet been paid for its services. Shortly thereafter, respondent signed an affidavit swearing that all suppliers on the Cerniglia project had been paid. Cerniglia later discovered that a $1,500 lien had been filed against his property by DSCC on June 30, 1988. The lien still remains outstanding.

      
      

   6. In early 1988 respondent entered into a contract to construct a new home for Buddy H. Dennis in Cape Coral, Florida. The contract specifications called for a $2,500 allowance for floor coverings. Before DSCC would install the floor coverings, it demanded payment from respondent for what it believed was the normal $1,500 builder's allowance. After this amount was paid, DSCC furnished, pursuant to the owner's request, $2,500 worth of labor and materials. DSCC attempted to collect the other $1,000 from Dennis but learned that the contract allowance was $2,500 rather than $1,500. Although DSCC invoiced respondent for the additional $1,000, and made numerous oral and written requests for payment to respondent, the remaining $1,000 was never paid. On September 12, 1988, a lien was placed on the property by DSCC. Prior to the lien being recorded, respondent executed a final affidavit and release of lien on August 22, 1988 in which he swore that all subcontractors had been paid. Dennis eventually paid the $1,000 himself in order to obtain clear title to his property.

      
      

   7. In addition to the Dennis and Cerniglia properties, respondent still owes DSCC $11,654.14 (without interest) for goods and services rendered on other projects. These bills were incurred for goods and services provided after March 1988, when the dispute between respondent and DSCC arose. Whether respondent executed affidavits in connection with those debts is not of record. Because of those and the two above debts, DSCC filed with the Board a complaint against respondent.

      
      

   8. Respondent justified his actions on the ground he was advised to do so by his attorney and not pay DSCC any money while his complaints regarding poor quality and workmanship were unresolved. As to the Cerniglia property, respondent contends that, just prior to completing the home, he determined that it was necessary to add (a) a stem wall and (b) extra fill dirt to raise the septic tank drainfield. According to respondent, these two items cost around

      $1,500. Because the dispute with DSCC was then ongoing, respondent did not pay DSCC the $1,500 owed as an allowance and instead, based upon his attorney's advice, decided to use that amount as leverage in his dispute with DSCC. However, respondent did not advise Cerniglia that $1,500 was added to the contract price and that it was Cerniglia's responsibility to pay DSCC for the builder's allowance still owed. Moreover, Cerniglia denied that the additions were ever satisfactorily completed or that their value equated to $1,500. As to the Dennis property, respondent contended, without corroboration, that the real estate office which sold the home increased the builder's allowance on the specifications from $1,500 to $2,500 without advising him. Even if this was true, respondent refused to pay the additional $1,000 after he learned of his increased allowance responsibility under the specifications.

      
      

      CONCLUSIONS OF LAW

      
      

   9. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes (1989).

      
      

   10. Since respondent's professional license is at risk, petitioner bears the burden of proving by clear and convincing evidence that the allegations in the complaint are true. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987)

   11. Respondent is charged with violating Subsections 489.129(1)(1) and (m), Florida Statutes (1987). Those subsections authorize the Board to take disciplinary action against a licensee for the following acts:

       
       

       1. Signing a statement with respect to a project or contract falsely indicating that the work is bonded; falsely indicating that payment has been made for all subcontracted work, labor and materials which results in a financial loss to the owner, purchaser, or contractor; or falsely indicating that worker's compensation and public liability insurance are provided. (Emphasis added)

          * * *

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

          * * *

          
          

          According to the complaint, respondent "failed to pay . a subcontractor (DSCC)

          $18,724.13 for services and materials rendered, . . (and) on or about August 22, 1988 . . signed an affidavit stating that all labor, materials and services had been paid in full. By doing so, it is alleged that respondent is guilty of fraud, deceit and misconduct in the practice of contracting as well as falsely indicating that payment had been made for all subcontracted work.

          
          

   12. Although the dollar amount alleged in the complaint ($18,724.13) does not conform with the proof ($14,154.14), and the remaining charges are inartfully drawn, there is clear and convincing evidence that respondent signed two affidavits falsely indicating that payment had been made for all subcontracted work on the Dennis and Cerniglia projects. This in turn caused Dennis and Cerniglia to suffer financial harm to the extent that such liens were not paid thereby constituting a violation of subsection 489.129(1)(1). The illicit conduct also equates to fraud, deceit and misconduct in the practice of contracting as proscribed by subsection 489.129(1)(m).

       
       

   13. In reaching the above conclusions, the undersigned has considered respondent's contentions that (a) he was in a dispute with DSCC over the quality of goods furnished on other projects, and (b) the $1,500 owed `DSCC on the Cerniglia project was offset by additional work performed by respondent which had an equivalent value. These contentions are deemed to be unavailing. To begin with, the evidence shown that Cerniglia was not advised that the value of the additional work would be offset against his floor covering allowance, and the statute does not authorize a contractor's final affidavit and release of lien to be executed until the contractor knows that all subcontractors have been paid. Secondly, respondent's dispute with DSCC, even If valid, does not excuse him from complying with his statutory responsibilities.

       
       

   14. Rule 21E-17.001, Florida Administrative Code (1989) sets forth the suggested penalties to be imposed on licensees found guilty of violating statutes or rules. For a first time violation of subsection 489.129(1)(1), the rule calls for a monetary fine ranging from $250 to $750. For a first time violation of subsection 489.129(1)(m), the rule calls for a monetary fine ranging from $500 to $1,500. In his proposed order, petitioner's counsel recommends that respondent be fined $6,000, or more than the suggested guidelines, on the theory that aggravating circumstances are present, namely,

the customers suffered monetary damages and respondent is guilty of multiple violations. Although aggravating circumstances are present, an administrative fine in the amount of $3,000 appears to be a more appropriate penalty.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating Subsections

489.129(1)(1) and (m), Florida Statutes (1987) and that he be fined $3,000, to

be paid within thirty days after the Board enters its final order.

DONE and ENTERED this 20th day of August, 1990, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 20th day of August, 1990.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 90-1710

Petitioner:

1-3. Partially adopted in finding of fact 1.

1. Partially adopted in findings of fact 2 and 3.

2. Partially adopted in finding of fact 6.

3. Partially adopted in finding of fact 5.

Note - Where a proposed finding has been partially used, the remainder has been rejected as being irrelevant, unnecessary, subordinate, not supported by the evidence, or a conclusion of law.

COPIES FURNISHED:

Robert B. Jurand, Esquire

1940 North Monroe Street, Suite 60

Tallahassee, FL 32399-0792

Mr. Leroy A. Decker, Jr. 618 S.W. 57th Street Cape Coral, FL 33914

Kenneth E. Easley, Esquire

1940 North Monroe Street, Suite 60 Tallahassee, FL 32399-0792 Fred Seely Executive Director

Post Office Box 2 Jacksonville, FL 32202

Docket for Case No: 90-001710

Orders for Case No: 90-001710