STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

v. ) CASE NO. 90-6655

)

ROBERT L. FOUNTAIN, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on March 1, 1991, in Tallahassee, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.

APPEARANCES

For Petitioner: G.W. Harrell, Senior Attorney

Department of Professional Regulation

1940 North Monroe Street Suite 60

Tallahassee, Florida 32399-0792

For Respondent: Robert L. Fountain, Pro Se

2124 Shady Oaks Drive Tallahassee, Florida 32303

STATEMENT OF ISSUES

The issue is whether the contractor's license of Respondent, Robert L. Fountain, Jr., (Fountain) should be revoked or otherwise penalized based on the acts alleged in the Administrative Complaint.

PRELIMINARY STATEMENT

Petitioner, Department of Professional Regulation (DPR), presented the testimony of Joseph L. Webster, Sr., and had Petitioner's Exhibits 1-9 admitted in evidence. Fountain presented his own testimony and had Respondent's Exhibits 1-7 admitted in evidence.

The parties stipulated to all of the facts alleged in the Administrative Complaint except the third sentence of paragraph 4, which states: "Webster was then denied financing from his financial institution, thereby being unable to pay for the construction of his home."

The transcript of the hearing was filed on March 28, 1991, and the parties timely filed their proposed findings of fact and conclusions of law. All proposed findings of fact and conclusions of law have been considered. A specific ruling on each proposed finding of fact is made in the Appendix attached hereto and made a part of this Recommended Order.

FINDINGS OF FACT

1. Robert L. Fountain, Jr., is a certified building contractor in the State of Florida, license no. CB C022113.

   
   

2. On or about May 22, 1987, Fountain contracted with Joseph L. Webster for the construction of a custom home for a price of $206,469.00. Webster paid Fountain a deposit of $20,646.

   
   

3. Webster was denied financing for the construction of the home. Even though Fountain maintains that financing was available, he presented no credible evidence in this regard to rebut the testimony of Webster.

   
   

4. Webster requested that the deposit be returned to him. Fountain refused to refund the deposit.

   
   

5. Fountain maintains that he does not have to repay the deposit because it represents compensation for the time he spent on the project before and after the contract was signed and for the profit he would have received on the job. Except for receipts totaling $1,553.70, Fountain has no documentation to establish the amount of time allegedly spent, the expenses incurred or the value of the time spent on the Webster project. Financing was never secured and construction never commenced.

   
   

6. Because of Fountain's refusal to refund the deposit, Webster sued Fountain for the money. A Final Judgment was entered in Case No. 89-46, in the Circuit Court of the Second Judicial Circuit for Leon County, Florida, on January 31, 1991. The Final Judgment found for Webster and ordered Fountain to pay Webster $20,646.90, plus interest of 12% from January 4, 1988, in the amount of $7,622.70, and costs of $327.50. Fountain has not satisfied that judgment.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction of the parties to and subject matter of these proceedings. Section 120.57(1), Florida Statutes.

   
   

8. As charged in the Administrative Complaint, Section 489.129(1), Florida Statutes, provides for disciplinary action against a contractor found guilty of:

   
   

   (h) Committing mismanagement or misconduct in the practice of contracting that causes finan- cial harm to a customer. Financial mismanage- ment or misconduct occurs when:

   
   

   * * *

   
   

   2. The contractor has abandoned a customer's 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.

   
   

   * * *

   
   

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

   
   

9. DPR concedes in its proposed order that no evidence was presented to show a violation of 489.129(1)(h) and that charge should be dismissed. However, Fountain is guilty of misconduct in the practice of contracting based on his failure to refund what was clearly a refundable deposit. No where does the contract specify that the deposit was non-refundable. In fact the attainment of financing by the owner was a condition precedent to the formation of the contract.

   
   

10. Fountain argues that he is entitled to keep the deposit as compensation for the time he spent on the project (primarily before the contract was even signed) and for his profit. This argument is essentially one of quantum meruit or "unjust enrichment." The theory behind the doctrine of unjust enrichment is that a person who knowingly and voluntarily accepts the benefits of another's services will pay reasonable compensation. However, unjust enrichment is not an independent remedy, but arises as a doctrine to be applied in a contract dispute. Construction of a contract at the midst of a contract dispute lies in the jurisdiction of the Circuit Court. Further, unjust enrichment is an equitable remedy and Circuit Courts are the courts of equity in Florida. The remedy available under the unjust enrichment doctrine involves imposition by the court of an equitable lien for the value of the services rendered and subrogation of the plaintiff's claim to the rights of the equitable lien holder. In the present case, Fountain could have raised his claim of unjust enrichment in the Circuit Court case brought by Webster under the contract. If he had proven the unjust enrichment claims, Fountain would have been awarded an equitable lien against the deposit for the services he rendered to Webster and Webster's claim for the refund of the deposit would have been subrogated to the equitable lien awarded to Fountain. In other words, Fountain would have been allowed to keep compensation for the services he rendered to Webster and Fountain would only have a judgment entered against him for the amount of the deposit that was over and above the value of his services. Either Fountain failed to raise these issues in the Circuit Court case or the court there implicitly found no entitlement by Fountain to compensation. In either case, the entry of the Final Judgment forecloses Fountain's opportunity to raise these claims and they cannot now be raised in the administrative forum.

    
    

11. Having concluded as a matter of law that Fountain cannot raise these claims here, it must be concluded that he is guilty of misconduct for failure to refund the deposit to Webster.

    
    

12. The applicable disciplinary guidelines in Section 21E-17.002, Florida Administrative Code, provide for a fine of up to $1,500 for a first offense of causing monetary harm to a licensee's customer. The same section further provides that aggravating or mitigating circumstances to be considered include the monetary damage to the customer as a result of the violation which have not been relieved as of the time the penalty is to be assessed. Having considered

these guidelines and the aggravating factor that Fountain has failed to satisfy the Final Judgment which arose from his misconduct, the following recommendation is made.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Construction Industry Licensing Board enter a Final Order and therein:

1. Find Robert L. Fountain, Jr., guilty of violating Section 489.129(1)(m) by committing misconduct in the practice of contracting.

   
   

2. Impose a fine of $1,000.

   
   

3. Suspend the license of Robert L. Fountain, Jr., until the damage suffered by Joseph L. Webster, Sr., as reflected by the Circuit Court's Final Judgment, has been relieved.

RECOMMENDED this 18th day of April, 1991, in Tallahassee, Florida.

DIANE K. KIESLING

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18th day of April, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-6655

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case.

Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Department of Professional Regulation

1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2-6(1-6).

   
   

2. Proposed finding of fact 1 is unnecessary.

Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Robert L. Fountain, Jr.

1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2-4(1&2).

2. Proposed finding of fact 1 is unnecessary.

   
   

3. Proposed finding of fact 5 is unsupported by the competent and substantial evidence.

COPIES FURNISHED:

G. W. Harrell, Senior Attorney Department of Professional Regulation 1940 North Monroe Street

Suite 60

Tallahassee, FL 32399-0792

Robert L. Fountain, Jr. 2124 Shady Oaks Drive Tallahassee, FL 32303

Jack McRay General Counsel

Department of Professional Regulation 1940 North Monroe Street

Tallahassee, FL 32399-0792

Daniel O'Brien Executive Director

Construction Industry Licensing Board Post Office 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.

Docket for Case No: 90-006655

Orders for Case No: 90-006655