STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 93-6438

)

AGNES SANGSTER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on May 5, 1994 in Miami, Florida before J. Stephen Menton, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Theodore R. Gay

Senior Attorney

Department of Business and Professional Regulation

401 North-West Second Avenue, Suite N-607 Miami, Florida 33128

For Respondent: Agnes Sangster, pro se

9925 North-West 25th Avenue Miami, Florida 33147

STATEMENT OF THE ISSUE

The issue in this case is whether disciplinary action should be taken against Respondent's contractor's license based upon the alleged violations of Sections 489.129(1)(h) and (m), Florida Statutes, set forth in the Administrative Complaint.

PRELIMINARY STATEMENT

In a two count Administrative Complaint dated March 18, 1991, Petitioner charged Respondent with violating Sections 489.129(1)(h), Florida Statutes, due to alleged mismanagement or misconduct in the practice of contracting that caused financial harm to a customer and Section 489.129(1)(m), Florida Statutes, as a result of "fraud or deceit or gross negligence, incompetency, or misconduct in the practice of contracting." Respondent disputed the allegations contained in the Administrative Complaint and requested a formal administrative hearing.

The case was transferred to the Division of Administrative Hearings ("DOAH") to conduct a hearing pursuant to Section 120.57, Florida Statutes. The case was assigned DOAH Case No. 93-6438.

This case was initially assigned to Hearing Officer Michael Parrish. As set forth in an Order entered on May 12, 1994, Hearing Officer Parrish consolidated this case with a second proceeding initiated by Petitioner against Respondent. The second case involved an Administrative Complaint dated July 21, 1991 and was pending before DOAH as Case No. 93-6439. The consolidated cases were scheduled for hearing on May 5-6, 1994. On May 3, 1994, Petitioner filed a Motion to Sever, To Cancel Hearing, and To Hold Case in Abeyance with respect to Case No. 93-6439. Ruling on the Motion was deferred pending commencement of the hearing on May 5, 1994. At the hearing, both parties stated that they have reached a settlement in principal regarding the allegations in Case No. 93-6439. Consequently, Petitioner's Motion to Sever, To Cancel Hearing, and To Hold Case in Abeyance was granted as set forth in the May 12, 1994 Order. The hearing proceeded as scheduled on the allegations contained in the first Administrative Complaint (DOAH Case No. 93-6438). Subsequently, the settlement regarding the Case No. 93-6439 fell through and that case has been rescheduled for hearing in November, 1994.

At the May 5, 1994 hearing, Petitioner presented the testimony of six witnesses: Gerald Delancy, Meky Manresa, Dennis Poin, Jose Lopez, Delores Graham and Tom McCarthy, an investigator for Petitioner. Petitioner offered eighteen exhibits into evidence, all of which were accepted without objection. Petitioner's Exhibit 3 was a copy of the Respondent's Responses to Petitioner's Request for Admissions. The parties stipulated that numbers 10-15 of those Responses were irrelevant and should not be considered. The parties also stipulated that the Response to number 5 should be changed to "denied" and that the Response to number 7 should be amended to reflect Respondent's contention that she was unaware of the judgement referenced in that item.

Respondent testified on her own behalf and also presented the testimony of Carnell Golden. Respondent offered one exhibit into evidence which was accepted without objection.

Petitioner recalled Gerald Delancy to testify in rebuttal.

No transcript of the proceedings has been filed. At the conclusion of the hearing, both parties were advised that they had an opportunity to submit proposed findings of fact and conclusions of law and a schedule for submitting such proposals was established. Petitioner timely submitted a proposed recommended order. No post-hearing submittals have been received from Respondent. A ruling on each of Petitioner's proposed findings of fact is included in the Appendix attached to this Recommended Order.

FINDINGS OF FACT

Based upon the oral and documentary evidence adduced at the hearing and the entire record in this proceeding, the following findings of fact are made.

1. At all times pertinent to this proceeding, Respondent was licensed by the Construction Industry Licensing Board (the "Board") as a certified general contractor having been issued License No. CG C024612. Respondent has been a licensed contractor since 1983. On May 3, 1991, the Board filed a Final Order in Board Case Nos. 89-009986 and 89-013330 imposing a reprimand against

   Respondent. The Final Order was issued as part of the settlement of an amended administrative complaint filed against Respondent by Petitioner regarding certain unrelated transactions.

   
   

2. Respondent was the qualifying agent for Willie William Construction Company, Inc. until October 1985. At that time, as a result of a corporate name change, Respondent became the qualified agent for Ashar Construction Company.

   
   

3. On February 21, 1985, the Unsafe Structures Board of the Building and Zoning Department for Dade County advised Ruby Delancy that a hearing would be conducted on March 12, 1985 to determine whether a one story framed residence that Mrs. Delancy owned at 1005 NW 58th Street in Miami (the "House" or the "Property") should be demolished. The Notice indicated that the structure was "open, vacant, vandalized, filled with combustible materials; posing a serious fire hazard. Structure is a danger to human life and public welfare." The Notice estimated the present value of the building at $16,080 and the estimated cost of repairs at $51,120. The County's records indicate that a Notice of Violation regarding the Property had been issued to the owner on October 31, 1984.

   
   

4. Facing imminent demolition of the House, Mrs. Delancy began to investigate possible ways to get the House repaired. She filed an application with the City of Miami for a low income, low interest loan that was funded through Federal HUD Community Development Funds. Her efforts to obtain funding to repair the House, delayed the proceedings that had been initiated to demolish the structure.

   
   

5. In September of 1985, the City approved Mrs. Delancy for a grant of

   $10,000 and loan of $20,000 to repair the House.

   
   

6. Mrs. Delancy has no other funds to pay for repairs to the Property other than the $30,000 she was obtaining through the City Program.

   
   

7. Under the City's program, Mrs. Delancy was responsible for selecting a contractor. Mrs. Delancy contacted Respondent, who inspected the Property and prepared a construction estimate which was submitted to the City.

   
   

8. Respondent entered into a contract (the "Contract") dated September 20, 1985 with Mrs. Delancy for home improvement work on the House. The total contract price was $29,870, which was to be paid in two installments: $10,835 on or before December 31, 1985 and a final payment of $19,035 on or before March 3, 1986.

   
   

9. The evidence established that Respondent was initially reluctant to enter into the Contract and at least two other contractors refused to undertake the work given the limited funds available. However, Respondent agreed to take the job because of Mrs. Delancy's insistence and because of Respondent's sympathy for Mrs. Delancy's desperate situation in view of the imminent demolition of the House.

   
   

10. The evidence also established that Mrs. Delancy requested Respondent to undertake additional work and/or services that were beyond the scope of the Contract. Among the extra items undertaken by Respondent was replacement of the floor in the family room. Additional expenses were also incurred because of unanticipated problems encountered during the renovation. For example one side of the house gave way during the renovation work. Upon investigation, it was discovered that there was no footing. Respondent was required to shore up that

    side of the House. In addition, the electrician was unable to get a meter because there was an outstanding electric bill for the Property. Respondent paid the old bill in order to get the meter connected. Similarly, she paid the gas company to get the stove hooked up. It does not appear Respondent received any additional compensation for the extra work. Except for $345 that Respondent paid for utilities on behalf of Mrs. Delancy, the evidence at the hearing was insufficient to place a dollar value on these extra services and expenses.

    
    

11. The first installment under the Contract of $10,835 was paid to Respondent on or about December 31, 1985. In approximately January of 1986, Mrs. Delancy's son, Gerald Delancy, who had been living out of the state, returned to Miami and became involved in overseeing the construction on behalf of his mother. Gerald Delancy was not pleased with the quality of the construction and a great deal of tension developed between Gerald Delancy and Respondent.

    
    

12. The final payment request form was submitted on February 20, 1986. Mrs. Delancy signed a document (the "Certificate of Completeness") indicating that the work was completed and the final payment was made to Respondent by the City on March 3, 1986.

    
    

13. Gerald Delancy was present when his mother signed the Certificate of Completeness. She signed this Certificate against the advice of her son. At the time the document was signed, Respondent agreed in principal to complete any remaining work.

    
    

14. The City Inspection Form which was posted on the project fails to indicate that a final inspection approval was obtained from the City. In addition, the evidence established that required roof inspections were not obtained prior to the final structural inspection.

    
    

15. Gerald Delancy prepared a punch list of items which he felt were incomplete and submitted it to Respondent. It does not appear that this list was prepared until July of 1986. Because of the dispute between Respondent and Gerald Delancy as to what was required under the Contract, a copy of the punch list was also sent to the City.

    
    

16. The punch list prepared by Gerald Delancy included a number of items which were beyond the scope of the Contract. For example, with respect to the plumbing, the complaints included the following: the water pressure was to low on the water line, the kitchen sink was too small, and the bathroom vanity was substandard. The Contract did not provide for a bathroom vanity. There were also complaints about ants and roaches and "missing shower rods and towel racks" even though these items were not specifically included within the Contract between Respondent and Mrs. Delancy.

    
    

17. The City sent its estimator to the House to review the punch list items. The City's estimator felt that Respondent should provide another coat of paint and should complete some other minor repair work, but the estimator did not concur in many of Gerald Delancy's complaints. The City's rehabilitation estimator met with Respondent and Gerald Delancy at the House on July 15, 1986. At that meeting, Respondent agreed to correct certain matters and asked for one month to complete the work. On August 1, 1986, the work was not completed and Respondent requested an additional 30 days. On August 13, 1986, Respondent stated that she did not have the money to complete the work. According to the City's estimator, the cost to repair the construction deficiencies he noted would be approximately $2,500 to $3,000 as of the date of the hearing.

18. During this period in August, Respondent did send some workers back to the house to complete some additional work. A dispute arose between those workers and Gerald Delancy. The exact nature and reasons for this dispute are not clear. Ultimately, Gerald Delancy refused to allow the workers to perform any work because he did not feel he received adequate answers to his inquiries as to the nature of the work they intended to perform.

    
    

19. After the City refused to concur in all of his complaints, Gerald Delancy hired a building inspection company. He paid that company $534 and it rendered a report dated August 4, 1986 which detailed many other deficiencies in the construction. It is not clear whether this report was ever presented to Respondent.

    
    

20. On or about November 3, 1986, Mrs. Delancy, at the urging of her son, filed a lawsuit against Respondent. On or about August 8, 1989, Mrs. Delancy obtained a final default judgement against Respondent in the amount of $65,000 plus costs of $102.50. Respondent claims that she was unaware of the lawsuit and the default final judgement until Petitioner's investigator questioned her about it on September 25, 1990. As of the date of the hearing in this case, Respondent has not appealed the judgement nor has she attempted to have it set aside or vacated.

    
    

21. In addition to alleged construction defects, the default judgement included claims against Respondent for allegedly mishandling certain household goods and other property owned by Mrs. Delancy. The evidence presented in this case was confusing and inconclusive as to the nature and justification for these claims by the Delancys for property which Respondent was allegedly storing for Mrs. Delancy. Apparently, Respondent agreed to assist Mrs. Delancy by moving some of the furniture out of the house and placing it in storage during construction. The contract did not require Respondent to provide any moving or storage services and there is no evidence that Respondent was paid for this work.

    
    

22. Some or all of the property that was moved out of the house was lost, stolen or destroyed. There is a dispute between the parties as to circumstances surrounding the loss of this property. The evidence presented in this case was insufficient to establish what happened to the property, who was responsible for it and/or how much it was worth. It does appear that the default judgement against Respondent includes a very high assessment for the property involved. However, as noted above, that judgement has not been vacated or appealed.

    
    

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.

    
    

24. Pursuant to Section 489.129, Florida Statutes, (1985) the Construction Industry Licensing Board (the "Board") is empowered to revoke, suspend or otherwise discipline the license of a registered contractor who is found guilty of any of the grounds enumerated in the Section 489.129(1), Florida Statutes.

    
    

25. Petitioner has the burden of proof in this license discipline case and must prove the allegations set forth in the Administrative Complaint by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla 1987); Evans

    Packing Company v. Department of Agriculture and Consumer Services, 557 So.2d 112, 116 (Fla 1st DCA 1989); Pascale v. Department of Insurance, 525 So.2d 922 (Fla 1st DCA 1988).

    
    

26. The evidence must be of such weight "that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." Slomowitz v. Walker, 429 So.2d 797, 800 (Fla 4th DCA 1983). Furthermore, the disciplinary action taken may be based only upon the offenses specifically alleged in the administrative complaint. See, Sternberg v. Department of Professional Regulation, Board of Medical Examiners, 465 So2d 1324, 1325 (Fla 1st DCA 1985); Kinney v. Department of State, 501 So.2d 129, 133, (Fla 5th DCA 1987); Hunter v. Department of Professional Regulation, 458 So.2d 842, 844 (Fla 2d DCA 1984).

    
    

27. The Administrative Complaint in this case charges Respondent with violating Sections 489.129(1)(h) and (m), Florida Statutes.

    
    

28. In its proposed recommended order, Petitioner cites to Section 489.129(1)(r), Florida Statutes (1993) which became effective May 28, 1991. That subsection provides that the Board can discipline a contractor for:

    
    

    (r) Failing to satisfy within a reasonable time, the terms of a civil judgement obtained against the licensee, or the business organization qualified by the licensee, relating to the practice of a licensee's profession.

    
    

29. The Administrative Complaint in this case does not formally charge Respondent with violating Section 489.129(1)(r) nor can that new statutory provision be retroactively applied to Respondent.

    
    

30. At the time of the transactions in this case, Section 489.129(1), Florida Statutes (1985), provided as follows:

    
    

    1. The Board may revoke, suspend... impose an administrative fine not to exceed $5,000, place a contractor on probation, or reprimand or censure a contractor if the contractor, or

       if the business entity or any general partner, officer, director, trustee or member of a business entity for which the contractor is a qualifying agent, is found guilty of any of the following acts:

       * * *

       (h) Diversion of funds or property received for prosecution or completion of a specified construction project or operation when as a result of the diversion the contractor is or will be unable to fulfill the terms of his obligation or contract.

       * * *

       (m) Upon proof that the licensee is guilty of fraud or deceit or of gross negligence, incompetency, or misconduct in the practice of contracting.

31. In 1987, Section 489.129(1)(h), Florida Statutes, was amended to read as follows:

    
    

    * * *

    1. Financial 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 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.

       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.

    
    

32. While Respondent's actions in this case arguably fall within the scope of subsection (h) of the 1987 statute, the 1985 version of the statute does not appear to be applicable. It is axiomatic Petitioner cannot discipline Respondent for a violation of a Statute enacted after the complained of actions. Respondent can only be disciplined for those actions which contravene the statute in effect at the time of the actions. Consequently, Count I of the Administrative Complaint should be dismissed.

    
    

33. The evidence in this case was sufficient to establish that Respondent was guilty of incompetency and/or misconduct within the meaning of Section 489.129(1)(m), Florida Statutes, by failing to complete the punch list items which she had agreed to perform in July of 1986. While there is no doubt that the strained relationship between Respondent and Gerald Delancy hindered the completion of the work, Respondent was required to make "reasonable efforts" to insure that the work she had contracted to do, including the punch list items she acknowledged in July, were completed. Respondent was also guilty of incompetency and/or misconduct of failing to obtain the necessary inspections for the job. The evidence was not sufficient to establish misconduct on the part of Respondent with respect to the property that was allegedly lost or stolen.

34. The Statute in effect at the time this case was initiated did not authorize the Department to require restitution or a settlement of the civil judgement as part of the penalty imposed by the Board. See, Boneski v. Department of Professional Regulation, 562 So.2d 441 (Fla 4th DCA 1990).

    
    

35. Although they were not adopted until October 26, 1986, Rules 21E-

    17.001 and 17.002 , Florida Administrative Code, provide useful guidance in determining what penalty is appropriate in this case. Those Rules provide, in pertinent part, as follows:

    
    

    21E-17.001 Normal Penalty Ranges. The following guidelines shall be used in disciplinary cases, absent aggravating or mitigating circumstances and subject to other provisions of this Chapter.

    * * *

    (8) 489.129(1)(h): Mismanagement or misconduct causing financial harm to the customer. First violation, $750 to $1,500 fine and/or probation; repeat violation

    $1,500 to $5,000 fine and/or probation, suspension, or revocation.

    * * *

    (14) 489.129(1)(n): Being found guilty of incompetency or misconduct in the practice of contracting.

    1. Misconduct by failure to honor warranty. First violation, $500 to $1,000 fine; repeat violation, $1,000 to $2,000 fine and/or probation, suspension, or revocation.

    2. Violation of any provision of Chapter 21E, Florida Administrative Code. First violation, $500 to $1,000 fine; repeat violations, $1,000 to $5,000 fine and/or probation, suspension or revocation.

    3. Any other form of misconduct or incompetency. First violation, $250 to

    $1000 fine and/or probation, suspension or revocation.

    * * *

    21E-17.002 Aggravating and Mitigating Circumstances. Circumstances which may be considered for the purposes of mitigation

    or aggravation of penalty shall include, but are not limited to, the following:

    1. Monetary or other damage to the licensee's customer, in any way associated with the violation, which damage the licensee has not relieved, as of the time the penalty is to be assessed. (This provision shall not be given effect to the extent it would contravene federal bankruptcy law).

    2. Actual job site violations of building codes, or conditions exhibiting gross negligence, incompetence, or misconduct by the licensee, which have not been corrected as of the time the penalty is being assessed.

    3. The severity of the offense.

    4. The danger to the public.

    5. The number of repetitions of offenses.

    6. The number of complaints filed against the licensee.

    7. The length of time the licensee has practiced.

    8. The actual damage, physical or otherwise, to the licensee's customer.

    9. The deterrent effect of the penalty imposed.

    10. The effect of the penalty upon the licensee's livelihood.

    11. Any efforts at rehabilitation.

    12. Any other mitigating or aggravating circumstances.

    
    

36. Applying those aggravating factors to this case, it appears that Respondent's failure to complete the punch list items has resulted in suffered monetary damage to the Delancy's of at least $2,500 as measured by the city's estimator; Respondent failed to obtain a satisfactory final inspection as required by the building code; and Respondent was reprimanded by the Construction Industry Licensing Board in a prior disciplinary matter. In fact, Petitioner has submitted a certification that probable cause has been found in six complaints against the Respondent. Two of those cases apparently resulted in the reprimand of Respondent noted in paragraph 1 of the Findings of Fact. This case and Case No. 93-6439, which was previously consolidated with this case, are two of the other probable cause findings. No evidence was presented as to the remaining two cases. In view of the earlier reprimand issued in a case charging Respondent with misconduct, this present case should be considered a repeat violation for penalty purposes.

    
    

37. In mitigation, it appears that Respondent undertook the job, at least in part, out of sympathy for Mrs. Delancy because of the pending demolition of the House. At the time Respondent undertook the job, it should have been apparent that the available funds were not likely to be sufficient to complete the work. It does appear that Respondent provided some additional work and services to Mrs. Delancy beyond the scope of the contract. These gratuitous actions do not, however, excuse the shoddy performance of some of the work and the failure to make a more significant effort to complete the punch list items.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Count I of the

Administrative Complaint, finding the Respondent guilty of having violated

Section 489.129(1)(m), Florida Statutes, as alleged in Count II of the Administrative Complaint, and imposing the following disciplinary action against the Respondent:

1. Imposition of an administrative fine of $1,000.

2. Suspension of the Respondent's license for a period of one year, followed by two years probation under such terms as may be imposed by the Board.

DONE and ENTERED this 22nd day of August, 1994, at Tallahassee, Florida.

J. STEPHEN MENTON 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 22nd day of August, 1994.

APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 93-6438

Only Petitioner submitted a proposed recommended order. The following rulings are made with respect to the proposed findings of fact submitted by Petitioner.

The Petitioner's Proposed Findings of Fact

1. Adopted in substance in Findings of Fact 1.

2. Adopted in substance in Findings of Fact 2.

3. Adopted in substance in Findings of Fact 7 and 8.

4. Adopted in substance in Findings of Fact 4, 11, and 12.

5. Adopted in substance in Findings of Fact 3 through 9.

6. Adopted in substance in Findings of Fact 10.

7. Subordinate to Findings of Fact 14 through 18.

8. Subordinate to Findings of Fact 18.

9. Subordinate to Findings of Fact 16 through 18.

10. Subordinate to Findings of Fact 17.

11. Adopted in substance in Findings of Fact 20.

12. Subordinate to Findings of Fact 20.

13. Adopted in substance in Findings of Fact 20.

14. Adopted in substance in Findings of Fact 20.

15. Rejected as unnecessary.

16. Adopted in substance in Findings of Fact 21 and 22.

17. Subordinate to Findings of Fact 21.

18. Subordinate to Findings of Fact 22.

19. Subordinate to Findings of Fact 21 and 22.

20. Subordinate to Findings of Fact 21 and 22.

21. Adopted in substance in Findings of Fact 1.

COPIES FURNISHED:

Theodore R. Gay, Esquire Dept. of Bus. and Prof. Reg.

401 NW 2nd Ave., Ste N-607 Miami, FL 33128

Agnes Sangster 9925 NW 25th Ave.

Miami, FL 33147

Jack McRay

Acting General Counsel

Dept. of Bus. and Prof. Reg. 1940 N. Monroe St.

Tallahassee, FL 32399-0792

Richard Hickok, Exec. Dir. Construction Industry Licensing 7960 Arlington Expressway, Ste 300

Jacksonville, FL 32211-7467

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: 93-006438

Orders for Case No: 93-006438