STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 93-6523

)

JOSEPH W. KAMINSKY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on July 22, 1994, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: John David Ashburn, Esquire

Department of Business and Professional Regulation

Division of Regulation

3932 RCA Boulevard, Suite 3210 Palm Beach Gardens, Florida 33410

Diane Perera, Esquire Department of Business and

Professional Regulation

401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128

For Respondent: Peter Mineo, Jr., Esquire

8220 State Road 84

Fort Lauderdale, Florida 33324 STATEMENT OF THE ISSUE

The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint filed against him, and, if so, what disciplinary action should be taken, if any.

PRELIMINARY STATEMENT

Petitioner issued an Administrative Complaint alleging that Respondent had violated the laws regulating his conduct as a certified general contractor, and Respondent timely requested a formal hearing regarding those allegations. This cause was thereafter transferred to the Division of Administrative Hearings to conduct the formal proceeding.

At the commencement of the final hearing in this cause Petitioner voluntarily dismissed Count VI of the Administrative Complaint with prejudice.

Petitioner presented the testimony of William R. DeFreitas, Patricia DeFreitas, Glenn Owen, and Ronald Lewis. The Respondent Joseph W. Kaminsky testified on his own behalf and presented the testimony of William R. DeFreitas. Additionally, Joint Exhibit numbered 1, Petitioner's Exhibits numbered 1-21, and Respondent's Exhibits numbered 1-9 were admitted in evidence.

Although both parties requested leave to file post-hearing proposed findings of fact, only Petitioner did so. A specific ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Respondent has been a certified general contractor in the state of Florida, having been issued license number CG C027718. At all times material hereto, Respondent has been the qualifying agent for Classic Design Builders.

   
   

2. William R. DeFreitas describes himself as a broker of building materials for third world countries. His wife is also employed in that same business. They had their office building constructed for them. When they subsequently determined to add an addition to their residence, they solicited bids from that contractor and from two other persons.

   
   

3. Aaron Ware, who held himself out to be an architect and the president of a company known as L. A. Designs, Inc., was one of the persons from whom the DeFreitases solicited a bid.

   
   

4. He submitted a bid dated April 26, 1990, and a draw schedule on May 3, 1990. The extent of the work to be performed was finalized on June 6, 1990, when Mr. DeFreitas initialed the changes to the initial bid. The construction project contemplated under that contract was the addition of a family room, a laundry room, a shower off the master bath, and a small bath at the front of the house. The June 6, 1990, contract also called for replacement of the garage door and "painting of some interior doors." The total contract price was

   $50,000.

   
   

5. While Ware was negotiating with the DeFreitases, he was also discussing with Respondent entering into a joint venture agreement between Classic Design Builders and L.A. Designs for the DeFreitas construction project. Their verbal agreement was memorialized in a written agreement dated June 18, 1990. Thereafter, Respondent did not advise Petitioner that he had entered into a joint venture agreement and, similarly, did not qualify the joint venture as a separate business entity for licensure purposes.

   
   

6. Pursuant to instructions from Ware, Mr. DeFreitas directed a letter to the City of Boca Raton advising the building department that he had entered into a contract to construct an addition to his residence with "L.A. Designs/ Classic Designs." On July 2, 1990, Respondent on behalf of Classic Design Builders obtained a building permit from the City of Boca Raton for the DeFreitas addition. On July 6, Ware began work on the addition.

7. Ware worked on the project from July of 1990 through the end of that year. During the course of that construction, the DeFreitases made many changes in the scope of the work contemplated by the original contract, which increased the contract price to above $56,000. Additional work was performed, which was not covered by the contract and which the DeFreitases agreed to pay for directly to the supplier or subcontractor.

   
   

8. On February 4, 1991, the DeFreitases directed a letter to Ware advising him that the construction was close to completion and that it was time for them to "settle our account" as to the extras for which the DeFreitases had not paid. In that letter, the DeFreitases also offered to produce the invoices for materials and labor that they had agreed to pay to finish the job.

   
   

9. In July of 1991 the DeFreitases complained to the City of Boca Raton. Respondent, as the holder of the building permit, was contacted and advised that the DeFreitases were alleging that their contractor had failed to complete the project. Respondent immediately went to the DeFreitases' business, met with Mr. DeFreitas, inspected the home, and prepared a punch list of items to be completed, many of which were not covered by the construction contract but were done by Respondent in an attempt to achieve customer satisfaction. Respondent completed the project, obtained the final inspections, and presented the DeFreitases with a warranty and release of lien. The DeFreitases refused to accept the warranty or release of lien.

   
   

10. As a result of the DeFreitases' complaints, Respondent and Ware were charged with violating local ordinances. In those prosecutions, as well as in this case, the DeFreitases have attempted to obtain $11,000 from Respondent as "restitution" for moneys they have had to spend or will have to spend to complete the work envisioned by their contract with L.A. Designs, Inc. Most of the items listed as components of the claim for restitution are not even part of the construction contract. Of those few items covered by the contract, the money claimed is not. For example, the contract allocated $500 to be expended on the bathroom cabinets. The DeFreitases spent $1,670 on the cabinets and, surprisingly, are claiming that Respondent should pay them the difference because they spent more than their contractual allowance. Finally, they have claimed the cost of replacing inferior building materials provided by them, such as wood French doors.

    
    

11. The DeFreitases paid to Ware approximately $4,000 less than they had promised to pay him as a result of the work completed by L.A. Designs. Rather than suffering a loss, the DeFreitases have actually received a windfall.

    
    

12. At no time material hereto was either Ware or L.A. Designs licensed in the state of Florida as a contractor, architect, professional engineer, or landscape architect. Respondent knew that Ware and L.A. Designs were not licensed.

    
    

13. At the time that Classic Design Builders and L.A. Designs entered into their written joint venture agreement and at all other times material hereto, Respondent was not an officer, director, stockholder, or employee of L.A. Designs, and Ware was not an officer, director, stockholder, or employee of Classic Design Builders.

    
    

14. When Ware approached Respondent about entering into a joint venture for the DeFreitas project, Respondent had already suffered a minor heart attack and two mini-strokes. The joint venture agreement itself recites Respondent's need to limit his activities due to health reasons. In July of 1990 Respondent

    additionally tore an Achilles tendon in his left leg and was in a cast until Christmas of 1990. Due to his immobility during that time period, Respondent delegated all of his construction jobs to others, understanding that he was ultimately responsible for those projects since he was the contractor of record on them. In the same way, he delegated to Ware the day-to-day responsibility for the DeFreitas project.

    
    

15. Other than "pulling the permit" for the DeFreitas project, Respondent's only other involvement in the job until the time that he was contacted as a result of the DeFreitases' complaints to the City of Boca Raton in July of 1991, was right after the job was commenced regarding some problem concerning the lot line. He was able to resolve that problem with the City of Boca Raton by telephone.

    
    

16. The DeFreitases did not know that Respondent was the contractor for their construction project and ultimately responsible for that work. Although Ware had advised them that a "buddy" would somehow be involved in the construction, and although Mr. DeFreitas referred to both L.A. Design and Classic Design Builders in his letter to the City of Boca Raton authorizing a building permit to be issued, the evidence is clear that had the DeFreitases known of Respondent's responsibility, they would have been insisting that he perform services months earlier.

    
    

17. In 1987 Respondent was charged with abandoning a construction project and/or failing to timely complete it. Respondent entered into a settlement stipulation admitting that fact and agreeing to pay a fine to the Construction Industry Licensing Board in the amount of $1,000. A Final Order Approving Settlement Stipulation was entered on June 8, 1988.

    
    

18. Respondent received no money from the DeFreitases or from Ware for the work Respondent performed on the DeFreitas addition. Respondent's out-of-pocket expenses for labor and materials on the DeFreitas residence between July of 1991 and June of 1992 total $1,747.50.

    
    

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes.

    
    

20. The Administrative Complaint filed in this cause contains seven counts. At the commencement of the formal hearing Petitioner dismissed with prejudice Count VI.

    
    

21. Count I alleges that Respondent has violated Section 489.129 (1)(e),

    Florida Statutes, which prohibits

    
    

    (e) Performing any act which assists a person

    or entity in engaging in the prohibited uncertified and unregistered practice of contracting, if the certificate-holder or registrant knows or has reasonable grounds to know that the person or entity was uncertified and unregistered.

    Petitioner has met its burden of proving that Respondent has violated this statutory prohibition. Respondent entered into a joint venture agreement with an unlicensed person or entity, failed to qualify the joint venture, obtained a building permit, and permitted the unlicensed person or entity to perform the construction project. The evidence reveals that Respondent was not significantly involved in the job from shortly after the job commenced until a year later. Respondent offered no evidence that he believed that Aaron Ware and/or L.A. Designs were certified or registered to engage in the practice of contracting in Florida. Further, it is reasonable to conclude that Respondent knew that Ware and L.A. Designs were not licensed since the absence of licensure would explain why Ware agreed to split his profits from the DeFreitas job with Respondent.

    
    

22. Count II charges Respondent with violating Section 489.129(1)(f), Florida Statutes, which reads as follows:

    
    

    (f) Knowingly combining or conspiring with an uncertified or unregistered person by allowing his certificate or registration to be used by

    the uncertified or unregistered person with intent to evade the provisions of this part. When a certificate holder or registrant allows his certi- ficate or registration to be used by one or more business organizations without having any active participation in the operations, management, or control of such business organizations, such act constitutes prima facie evidence of an intent to evade the provisions of this part.

    
    

    Petitioner has met its burden of proof as to Count II of the Administrative Complaint. The evidence is uncontroverted that neither Respondent nor Classic Designs had any involvement in the operations, management, or control of L.A. Designs.

    
    

23. Section 489.129(1)(c), Florida Statutes, prohibits a contractor from violating any provision of Chapter 455. Section 455.227(1)(a), Florida Statutes, prohibits a licensee from making misleading, deceptive, untrue, or fraudulent representations in the practice of his profession. Count III alleges that Respondent has violated Section 489.129(1)(c) by violating Section 455.227(1)(a). Petitioner argues that Respondent applied for a building permit showing he was the contractor on the project but that Respondent did not have a contract with the DeFreitases and did not serve as the contractor. Although Petitioner is correct that Respondent had no contract with the DeFreitases, he had a contract with L.A. Designs and L.A. Designs had a contract with the DeFreitases. Further, Respondent did act as the contractor on the job: he obtained the building permits, resolved a problem at the beginning of the project, completed the project, obtained the final inspections, and gave the DeFreitases a warranty and a release of lien. Since Petitioner has failed to identify any misrepresentation made by Respondent, Petitioner has failed to meet its burden as to Count III of the Administrative Complaint.

    
    

24. Section 489.129(1)(k) provides as follows:

    
    

    (k) Abandoning a construction project in which the contractor is engaged or under contract as a contractor. A project is to be considered abandoned after 90 days if the

    contractor terminates the project without just cause or without proper notification to the prospective owner, including the reason for termination, or fails to perform work without just cause for 90 consecutive days.

    
    

    The evidence reveals that Ware was on the job at least through February of 1991 when Mr. DeFreitas wrote to Ware that the construction was nearing completion. That letter also references some type of agreement between Ware and the DeFrietases as to who was responsible for completion of aspects of the job and requests a final contractor's release of lien. Petitioner has failed to enunciate when it alleges the project was abandoned. The evidence is clear, however, that when Respondent was advised there were allegations that the work was not completed he immediately responded by contacting the DeFrietases, preparing a punchlist, and performing the work requested by them through the obtaining of final inspections and offering them a warranty. Petitioner has failed to prove that Respondent abandoned the project, as alleged in Count IV.

    
    

25. Count V of the Administrative Complaint alleges that Respondent has violated Section 489.129(1)(h), Florida Statutes, by committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer. Petitioner has failed to meet its burden as to this Count. Not only have the DeFreitases not been harmed financially, the evidence shows that they paid as little as $4,000 and as much as $6,000 less than they agreed to pay for the work that was performed. They admitted during the final hearing that most of the items for which they were claiming "restitution" were not even covered by the contract and the calculations concerning their alleged losses were "grossly unfair." Lastly, the evidence indicates that the DeFreitases received much more than they paid for. Since Respondent caused no financial harm to the DeFreitases, he has not violated Section 489.129(1)(h), Florida Statutes, as alleged in Count V of the Administrative Complaint.

    
    

26. Count VII alleges that Respondent is guilty of violating Section 489.129(1)(m), Florida Statutes. That Subsection prohibited, at the time material hereto, committing fraud, deceit, gross negligence, incompetency, or misconduct in the practice of contracting. Petitioner has proven that Respondent's involvement with L.A. Designs on the DeFreitas project without qualifying the joint venture as a separate legal entity constitutes misconduct in the practice of contracting.

    
    

27. Respondent argues that he was not assisting in helping Ware and L.A. Designs to engage in the practice of contracting without benefit of registration or licensure because he was engaged in a joint venture with L.A. Designs and a joint venture is permissible under the statutes and rules regulating the practice of contracting. Respondent is correct that both Section 489.119(2), Florida Statutes, and Rule 61G4-15.0022, Florida Administrative Code, provide that a certified contractor can enter into a joint venture with an uncertified business organization. Respondent, however, overlooks the requirement that the joint venture itself must be qualified in accordance with the rules of the Construction Industry Licensing Board, and Respondent did not do that.

    
    

28. Respondent also argues that Ware and L.A. Designs were exempt from the contractor licensing statutes due to the exemption available to architects and engineers who are rendering "design-build" services. That exemption, however, is only available to persons who have been licensed, certified, or registered as

    architects, landscape architects, or engineers by the state of Florida. The evidence is uncontroverted that neither Ware nor L.A. Designs was so licensed, registered, or certified.

    
    

29. One of Petitioner's exhibits admitted in evidence at the final hearing is an affidavit that at that time the costs of prosecution in this case amounted to $1,221. That affidavit was admitted without objection except as to relevancy if the Respondent prevailed in this proceeding. Petitioner also submitted with its proposed recommended order an undated affidavit which is not properly notarized and which alleges that the costs of prosecution in this case total

    $3,508.80. That second affidavit is not considered herein due both to its legal deficiencies and to its submittal post-hearing without either the agreement of Respondent or obtaining leave to submit evidence subsequent to the conclusion of the final hearing.

    
    

30. Petitioner has also submitted post-hearing correspondence suggesting that Respondent has been discharged in bankruptcy subsequent to the date of the final hearing and that any debts therefore have been discharged. Petitioner has not, however, suggested the impact, if any, of that discharge in bankruptcy on any assessment of prosecution costs which the Petitioner claimed prior to Respondent being discharged in bankruptcy.

    
    

31. In its proposed recommended order, the Department suggests that the appropriate penalty to be assessed is revocation of Respondent's license, an administrative fine in the amount of $5,000, restitution to the DeFreitases in the amount of $11,236.17, and reimbursement of Petitioner's costs of $3,508.80. However, Respondent has not been found guilty of all of the allegations brought against him by the Department. Further, the statutory violations committed by Respondent, although they appear to be multiple violations, all arise out of the same act of Respondent: forming the joint venture with Aaron Ware and L.A. Designs and failing to have that joint venture qualified as a separate entity. Respondent did, however, consider himself ultimately responsible for the DeFreitas project since he was the general contractor who obtained the building permit and Respondent did assume responsibility as soon as he was advised there was a problem. He met with the DeFreitases on a number of occasions; he corrected all deficiencies related to the construction project, personally paying the expense of doing so although he had received no money from the job; and he obtained the final inspections from the City of Boca Raton. No credible evidence was presented that the consumer suffered any financial harm as a result of the project. On the other hand, the DeFreitases have already received the benefit of the $1,747.50 which Respondent paid for materials and supplies without reimbursement in his attempt to complete the project to their satisfaction.

    
    

32. The range of penalties set forth in Rules 61G4-17.001 et seq., Florida Administrative Code, is broad, especially considering the number of statutory violations committed by Respondent's singular conduct. A harsh penalty is not appropriate in this case where Respondent's prohibited conduct was failure to qualify the joint venture as a separate business entity. There is no reason to believe that Respondent would engage in such behavior again. It is more appropriate that Respondent pay an administrative fine in the amount of $1,000 by a date certain and that his license be placed on probation for a period of two years.

RECOMMENDATION

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

1. Finding Respondent guilty of Counts I, II and VII of the Administrative Complaint filed against him;

   
   

2. Finding Respondent not guilty of Counts III, IV, and V of the Administrative Complaint filed against him;

   
   

3. Requiring Respondent to pay an administrative fine in the amount of

   $1,000; and

   
   

4. Placing Respondent's license number CG C027718 on probation for a period of two years.

DONE and ENTERED this 16th day of November, 1994, at Tallahassee, Florida.

LINDA M. RIGOT

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 16th day of November, 1994.

APPENDIX TO RECOMMENDED ORDER

1. Petitioner's proposed findings of fact numbered 2-10, 16-20, and 22 have been adopted either verbatim or in substance in this Recommended Order.

2. Petitioner's proposed findings of fact numbered 11-15, 21, and 24 have been rejected as not being supported by the weight of the evidence in this cause.

3. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting a finding of fact but rather as constituting a conclusion of law.

4. Petitioner's proposed finding of fact numbered 23 has been rejected as being subordinate.

COPIES FURNISHED:

John David Ashburn, Esquire Department of Business and

Professional Regulation

3932 RCA Boulevard, Suite 3210 Palm Beach Gardens, Florida 33410

Diane Perera, Esquire Department of Business and

Professional Regulation

401 N.W. 2nd Avenue, Suite N-607 Miami, Florida 33128

Peter Mineo, Jr., Esquire 8220 State Road 84

Fort Lauderdale, Florida 33324 Copies furnished, continued

Richard Hickok, Executive Director Construction Industry Licensing Board 7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

Jack McRay, Esquire Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

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 BUSINESS AND PROFESSIONAL REGULATION CONSTRUCTION INDUSTRY LICENSING BOARD

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION,

Petitioner,

Case No: 91-10077

vs. License No: CG C027718

DOAH Case No. 93-6523

JOSEPH W. KAMINSKY,

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), Florida Statutes, on January 12, 1995, in Palm Beach Gardens, Florida, for consideration of the Recommended Order (a copy of which is attached hereto and incorporated herein by reference). The Petitioner was represented by Cathleen

1. O'Dowd. The Respondent was neither present nor represented by counsel at the proceedings.

   
   

   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 except where they are in conflict with Petitioner's Exceptions to the Recommended Order.

   
   

3. Petitioner's Exceptions to the Recommended Order are hereby approved, adopted and incorporated herein by reference.

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

   
   

5. The penalty recommended by the Hearing Officer is hereby approved with the exception of the requirement of two (2) years probation. Further, Respondent is ordered to pay costs associated with investigation and prosecution of this matter, as requested in Petitioner's Exceptions to the Recommended Order.

   
   

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

THEREFORE, IT IS HEREBY ORDERED AND ADJUDGED:

Counts III, IV, V, and VI of the Administrative Complaint are hereby DISMISSED.

Respondent shall pay a fine of One Thousand dollars ($1,000) and costs of Five Thousand One Hundred Ninety-One dollars and Twenty-Seven cents ($5,191.27) to the Board, within thirty (30) days of the filing of this Order.

To assure payment of the fine and costs, it is further ordered that all of Respondent's licensure to practice contracting shall be suspended with the imposition of the suspension being stayed for thirty (30) days. If the ordered fine and costs are laid within that thirty (30) day period, the suspension imposed shall not take effect. Upon payment of the fine and costs after the thirty (30) days, the suspension imposed shall be lifted. If the licensee does not pay the fine and costs within said period, then immediately upon expiration of the stay, the licensee shall surrender the license to the Department of Business and Professional Regulation or shall mail it to the Board office.

In addition, the Respondent will be required to pay interest on fines due to the Board at a rate of 18 percent per annum, beginning on the thirty-first

(31) day after the issuance of this Order.

Pursuant to Section 120.59, Florida Statutes, the Parties are hereby notified that they may appeal this Order by filing one copy of a Notice of Appeal with the Clerk of the Department of Business and Professional Regulation, Northwood Centre, 1940 North Monroe Street, Suite 60, 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 Business and Professional Regulation.

DONE AND ORDERED this 26th day of January, 1995.

ANDREA SERRAES, Chair

Construction Industry Licensing Board

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been provided via certified mail to Joseph W. Kaminsky, 8201 Cassia Trail, Tamarac, Florida 33321 and via U.S. Mail to Peter Mineo, Esquire, 8220 State Road 84, Ft. Lauderdale, FL 33324 and to the Board Clerk, Department of Business and Professional Regulation and its counsel, Northwood Centre, 1940 North Monroe Street, Suite 60, Tallahassee, Florida 32399-0792 this 30th day of January, 1995.

DONNA C. KIRK

Deputy Agency Clerk

Docket for Case No: 93-006523

Orders for Case No: 93-006523