STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

) CASE NO. 90-2524

vs. )

)

EDWARD W. MacALISTER, )

)

Respondent. )

)

RECOMMENDED ORDER

The final hearing in this case was held on November 14, 1990, in Palm Beach Gardens, Florida, before Donald D. Conn, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Robert B. Jurand, Esquire

1940 North Monroe Street Suite 60

Tallahassee, FL 32399-0792

For Respondent: David J. Chesnut, Esquire

215 South Federal Highway Suite 200

Stuart, FL 34994 STATEMENT OF THE ISSUE

The issue in this case is whether disciplinary action should be taken against the license of Edward W. MacAlister (Respondent) based upon violations of Sections 489.129(1)(h) and (m), Florida Statutes, as alleged in the Administrative Complaint filed against Respondent in this case.

PRELIMINARY STATEMENT

At the hearing, the Department of Professional Regulation (Department) called five witnesses to testify, and introduced nine exhibits. One exhibit offered by the Department was rejected. The Respondent testified on his own behalf, and called one additional witness. Five exhibits were received on behalf of the Respondent.

The transcript of the final hearing was filed on December 13, 1990, and thereafter, the parties requested an extension of time within which to file their proposed recommended orders. A ruling on each timely filed proposed finding of fact included in the parties' proposed recommended orders is included in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Respondent has been a registered general contractor and registered roofing contractor in Florida, having been issued licenses numbered RG-0025491 and RC-0046293. Respondent has been a registered general contractor in the State of Florida since 1976, and there is no evidence in the record of any prior license disciplinary action involving Respondent.

   The Department is the state agency with responsibility to file and prosecute administrative complaints alleging violations of Chapters 455 and 489, Florida Statutes, in accordance with Chapter 120, Florida Statutes.

   
   

2. On or about March 15, 1988, the Respondent executed a contract and agreement with Fred and Patricia Rogerson for the construction of a residence to be located at 9800 Indian River Drive (Lot 10, Block 6), Hobe Sound, Florida. The contract amount for this job was stated to be $70,000, and the time of completion was specified to be 15 weeks from commencement on April 11, 1988. While Respondent did redraw and improve the structural adequacy of the construction plans which the Rogersons provided, the contract amount and time of completion stated in his contract with the Rogersons were never modified by change order.

   
   

3. Based upon the expert testimony offered by John Fix, called on behalf of the Department, and Donald Corbett, called on behalf of the Respondent, the true price to construct the Rogerson's residence in 1988 would have been between

   $105,000 and $114,700. There is no possibility that Respondent, or any other general contractor, could have completed this residence for the $70,000 contract price. The evidence clearly establishes that he substantially underbid this job, and that underbidding a job to the extent that Respondent did in this case constitutes incompetence in contracting.

   
   

4. It is the responsibility of the general contractor to complete a job for the contracted amount, or to obtain written change order approval from the owner, prior to performing any work which will result in an increase to that contract price. This finding is based upon the expert testimony of Fix and Corbett presented at hearing.

   
   

5. Respondent began work on the Rogerson residence in July, 1988, and proceeded until January, 1989, when the Rogersons terminated their contract with him. At the time of that termination, Respondent had not completed work on their residence, but he testified at hearing that if the Rogersons had continued to work with him, he could have completed the job at less cost to them than they subsequently had to pay in order to obtain a certificate of occupancy in March, 1989. During the course of construction, the Respondent complained to the Rogersons that the job was costing him more than he had estimated. When they brought apparent deficiencies and problems in construction to his attention, Respondent complained of not having enough money to complete the job, and that if he had known what he was getting into with this job, he would have submitted a higher bid.

   
   

6. Despite the fact that Respondent contracted with the Rogersons to complete their residence for $70,000 within 15 weeks from a stated commencement date of April 11, 1988, he fulfilled none of these commitments under his contract with the Rogersons. Therefore, his assertion that he could have completed this job for less than the Rogersons subsequently had to pay is not credited.

7. The Rogersons had paid a total of $45,732.20 to Respondent at the time of his termination in January, 1989. In addition, their bank had disbursed

   $10,710.80 to subcontractors and suppliers for work and supplies provided for this job. Subsequent to terminating Respondent, the Rogersons have spent an additional $18,981.31 for materials and supplies to complete additional work on their residence in order to obtain a certificate of occupancy. Specifically, they have repoured the driveway, replaced insulation batting, installed drywall, finished the siding sub-barrier, applied siding, restapled roofing, finished plumbing, and installed appliances. The Rogersons have also paid $4,894 for legal fees and to satisfy liens placed against their property by suppliers who were not paid by the Respondent. Thus, the Rogersons have had to pay a total of $80,318.31, for which receipts were introduced in evidence, for work on their residence. In addition, they credibly testified that they have also spent

   $5,000 for supplies for which they have no receipts, and that there are an additional $8,000 to $9,000 in outstanding liens which have been placed against their property.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the parties, and the subject matter in this cause. Section 120.57(1), Florida Statutes. Since this is a case in which the Department is seeking to discipline the Respondent's license, and could thereby adversely affect his ability to continue to perform residential contracting, the Department has the burden of establishing the basis for license disciplinary action by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). In order to meet this clear and convincing standard, "The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of conviction, without hesitancy, as to the truth of the allegations sought to be established." Evans Packing Co. v. Department of Agriculture and Consumer Services, 550 So.2d 112,

   116 at n.5 (Fla. 1st DCA 1989), citing Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983).

   
   

9. The Department has charged Respondent with violating Sections 489.129(1)(h) and (m), Florida Statutes, which provide in pertinent part, as follows:

   
   

   Section 489.129 Disciplinary proceedings.--

   
   

   1. The board may (discipline the license of) 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; . . . 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.

      
      

      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 contol 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.

      
      

      (m) Being found guilty of fraud or deceit or

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

      
      

10. The Department has proven by clear and convincing evidence that Respondent violated Section 489.129(1)(h), Florida Statutes, in that his actions resulted in the placing of several liens against the Rogersons' property, some of which they have had to satisfy with their own funds and some of which remain outstanding. Additionally, the evidence clearly establishes that the Rogersons have had to pay substantially more than the $70,000 price for which they contracted with Respondent. The Respondent seeks to excuse this fact by arguing that the Rogersons have gotten a better home than they originally would have with the plans they originally gave to the Respondent, and that the market value of their home exceeds $100,000. Nevertheless, the Rogersons did not contract with the Respondent for a price exceeding $70,000. Simply because they have been able to use additional funds, which they originally did not intend to use for their home, to complete work on their residence and to obtain a certificate of occupancy, does not relieve the Respondent of his responsibilities under his contract with them. The Respondent's actions constitute mismanagement and misconduct because they required the Rogersons to expend their own funds in excess of the contracted amount to complete work on their home after the Respondent totally failed to complete this job in a timely fashion, leaving them without a certificate of occupancy and with significant liens having been placed against their property.

    
    

11. It was also established that the Respondent's actions in this case constitute incompetence and misconduct in the practice of contracting in violation of Section 489.129(1)(m), since he failed to submit a realistic and reasonable bid on this job. When he realized that his bid was too low, he simply complained to the Rogersons about this and attempted to justify his untimely performance as being due to his lack of funds to complete this job. He did not obtain any written change order approval from the Rogersons, and was, therefore, obligated to perform in accordance with the strict terms of his contract with the Rogersons.

    
    

12. In recommending the appropriate penalty for the violation of Chapter 489, Florida Statutes, the nature of Respondent's violation must be considered, along with the disciplinary guidelines established by the Construction Industry Licensing Board in Rules 21E-17.001 through 21E-17.003, and Rule 21E-17.007, Florida Administrative Code. The Board is authorized to require a licensee to make financial restitution to a consumer for violations of Chapter 489, pursuant to Section 489.129(1), Florida Statutes.

RECOMMENDATION

Based upon the foregoing, it is recommended that the Construction Industry Licensing Board enter a Final Order imposing an administrative fine on the Respondent in the amount of $3,000 and suspending his licenses for a period of six months, or until such time sooner as the Respondent makes full and complete restitution to the Rogersons for all funds which they have expended in excess of

$70,000 in order to complete this residence and to remove liens placed against this property.

DONE AND ENTERED this 29th day of January, 1991 in Tallahassee, Florida.

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Filed with the Clerk of the Division of Administrative Hearings this

29th day of January, 1991.

APPENDIX

Rulings on the Department's Proposed Findings of Fact:

Rulings on the Respondents' Proposed Findings of Fact:

(Note that the Respondent included two paragraphs numbered 5 and the rulings shown below follow in the sequence of the Respondents' Proposed Findings of Fact.)

1. This is an introduction and not a proposed finding.

2. Adopted in Findings of Fact 2 and 3.

3. Adopted, in part, in Finding of Fact 7.

4. Adopted, substantially, in Findings of Fact 2 and 5.

5. Adopted, in part, in Findings of Fact 5 and 7.

1. Rejected in Finding of Fact 7, and as irrelevant and immaterial.

2. Adopted in Finding of Fact 2, but otherwise Rejected as not based upon competent substantial evidence.

3. Adopted in Finding of Fact 3.

COPIES FURNISHED:

Robert B. Jurand, Esquire 1940 North Monroe Street Suite 60

Tallahassee, FL 32399-0792

David J. Chesnut, Esquire

215 South Federal Highway Suite 200

Stuart, FL 34994

Jack McRay, Esquire General Counsel

1940 North Monroe Street Suite 60

Tallahassee, FL 32399-0792

Daniel O'Brien, Executive Director Construction Industry Licensing Board

1. O. Box 2 Jacksonville, FL 32202

   
   

   NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

   
   

   All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the Final Order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

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

   AGENCY FINAL ORDER

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

   
   

   STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION CONSTRUCTION INDUSTRY LICENSING BOARD

   
   

   DEPARTMENT OF PROFESSIONAL REGULATION,

   
   

   Petitioner,

   
   

   vs CASE NO.: 89-01108

   DOAH CASE NO.: 90-2524

   EDWARD W. MACALISTER, LICENSE NO.: RG 0025491,

   RC 0046293

   
   

   Respondent.

   /

   
   

   FINAL ORDER

   
   

   THIS MATTER came before the Construction Industry Licensing Board (hereinafter referred to as the "Board") pursuant to Section 120.57(1)(b)(9), Florida Statutes, on July 11, 1991, in Fort Lauderdale, Florida, for consideration of the Recommended Order (a copy of which is attached hereto and incorporated herein by reference). The Petitioner was represented by Wellington Meffert. 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, and the exceptions filed, the Board makes the following:

   
   

   FINDINGS OF FACT

   
   

   1. The Hearing Officer's Findings of Fact are hereby approved and adopted in toto.

      
      

   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. Respondent is guilty of violating Section 489.129(1)(h) and (m), Florida Statutes.

4. The penalty recommended by the Hearing Officer is rejected for those reasons cited in Petitioner's Exceptions to Recommended Order which is hereby approved and adopted and incorporated herein by reference.

   
   

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

THEREFORE, IT IS HEREBY ORDERED AND ADJUDGED:

As to license RC 0046293 the Respondent shall pay a fine of three thousand dollars ($3,000.00) and all of Respondent's licensure shall be suspended until Respondent both pays said fine and pays full restitution to the customers for damages incurred as a result of those actions of the Respondent alleged in the Administrative Complaint filed in this cause.

As to license RG 0025491, said license shall be suspended with said suspension stayed for one hundred eighty (180) days. If Respondent pays the above referenced fine and ($3,000.00) of the above referenced restitution at a minimum of five hundred dollars ($500.00) per month within that period the stay shall continue for an additional twenty one (21) months provided Respondent continues to pay the above referenced restitution at a minimum of five hundred dollars ($500) per month. Should at any time Respondent fail to make the minimum monthly restitution payment or the referenced fine, the stay shall be lifted and the suspension imposed. If after the suspension is imposed the Respondent should pay said fine and the amount of restitution accrued the suspension shall again be stayed pending the payment of the remainder of the restitution at the pace specified. Upon completion of the `specified payments the suspension shall be concluded.

Respondent shall be on probation in this case for two and one half years, and in connection therewith shall appear before the Board's Probation Committee, to stand for and answer questions from the Department and the Board, at the Board's regularly scheduled monthly meetings in the months of February 1992, August 1992, February 1993, August 1993, and February 1994, wherever said meetings shall be held; provided Respondent's license is in good standing.

Should Respondent's license be suspended or go inactive the probation period shall similarly go inactive and shall be reactivated for the remainder of the specified time upon reactivation of said license. The first probation appearance to be six months after said license is reactivated with subsequent probation appearances every six months until the original probation period is completed.

In connection with each probation appearance, Respondent will provide such information and documentation as the Department or Board shall request, within the time constraints set by the Department, said documentation to include, but not be limited to, monthly bank statements, financial statements, permit applications, contracts, and operations questionnaires. The burden shall be solely upon Respondent to remember the requirement for said appearance, and to take the necessary steps in advance of said appearances to contact the Board office and ascertain the specific time, date, and place of said appearance, the Respondent will not rely on getting notice of said appearances from the Board or Department. It shall be considered misconduct under Section 489.1129(1)(m) for Respondent to violate any condition of this probation.

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, Northwood

Centre, 1940 N. Monroe Street, Tallahassee, Florida 32399-0792, 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 14th day of August, 1991.

EDWIN M. GREEN, JR., 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 U.S. Mail to

Edward W. MacAlister David J. Chestnut, Esq., 5654 S.E. Orange Blossom Trail 215 S. Federal Highway 1 Hobe Sound, Fl 33455 Suite 200

Stuart, Fl 34994

and by hand delivery/United States Mail to the Board Clerk, Department of Professional Regulation and its Counsel, Northwood Centre, 1940 North Monroe Street, Tallahassee, Florida 32399-0792, on or before 5:00 p.m., this 14th day of August 1992.

Docket for Case No: 90-002524

Orders for Case No: 90-002524