STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 94-6449

)

FREDERICK S. SCHUMNK, III, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on February 23, 1995, in Fort Pierce, Florida.

APPEARANCES

For Petitioner: Gary L. Asbell, Esquire

Senior Attorney

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

For Respondent: Frederick S. Schmunk, III, pro se

3730 Northwest 67th Street Coconut Creek, Florida 33073

STATEMENT OF THE ISSUES

Whether Respondent, a licensed general contractor, committed the offenses set forth in the Administrative Complaint or is responsible for the offenses set forth in the Administrative Complaint and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

Respondent is a certified general contractor in the State of Florida (license number CG CO31547) who served as the licensed qualifying agent for A.A. Home Improvement Company, Inc., at the times pertinent to this proceeding.

Petitioner filed a four-count administrative complaint that contained certain factual allegations and, based on those allegations, charged Respondent with having violated certain laws regulating the practice of general contracting in the State of Florida. By Count I, Respondent was charged with proceeding on a job without obtaining applicable building permits and inspections in violation of Section 489.129(1)(n), Florida Statutes. By Count II, Respondent was charged

with contracting work beyond the scope of his license in violation of Sections 489.129(1)(j) and 489.115(1)(b), Florida Statutes. By Count III, Respondent was charged with failing to supervise all contracting operations of the business organization for which he was the qualifying agent in violation of Sections 489.105(4), 489.129(1)(j), and 489.1195(1), Florida Statutes. By Count IV, Respondent was charged with committing fraud or deceit or of gross negligence, incompetency, or misconduct in the practice of contracting in violation of Chapter 489.129(1)(m), Florida Statutes, by failing to correct deficient work.

The Respondent challenged the allegations of the Administrative Complaint and this formal proceeding before the Division of Administrative Hearings followed.

At the formal hearing, Petitioner called two witnesses and introduced nine exhibits, each of which was accepted into evidence. Respondent presented no exhibits and no testimony.

At the formal hearing, Petitioner was granted leave to file a post-hearing motion to supplement the record with an affidavit of certain costs incurred by Petitioner in prosecuting this matter. Petitioner asserted at the formal hearing that the assessment of costs should be included as part of the penalty to be assessed against Respondent. This assertion was not contained in the Administrative Complaint. Petitioner thereafter filed a post-hearing affidavit, which will remain a part of the record, that purports to set the costs incurred in investigating and prosecuting this proceeding at the sum of $2,879.72.

A transcript of the proceedings has been filed. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the filing of the transcript. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 60Q-2.031, Florida Administrative Code. The findings of fact submitted on behalf of the Petitioner are adopted in material part by this Recommended Order. Respondent did not file a post-hearing submittal.

FINDINGS OF FACT

1. At all times pertinent to this proceeding, Respondent was a certified general contractor and the holder of license number CG C031547 issued by the Florida Construction Industry Licensing Board.

   
   

2. At all times pertinent to this proceeding, Respondent was the licensed qualifying agent for A.A. Home Improvement Company, Inc. (A.A.), 4101 North Andrews Avenue, Fort Lauderdale, Florida, and as such qualifying agent was responsible for all its contracting activities.

   
   

3. On August 25, 1990, A.A. contracted with Anthony Williams, Sr., and Janice Williams, 1/ as the owners, to re-roof and perform internal renovations on the owners' house located at 2804 Avenue H, Fort Pierce, Florida, for a contract price of $6,900.00. The contract provided that all repairs and improvements would be done and completed in a substantial and workmanlike manner.

   
   

4. The contract between the parties was an installment loan contract that provided for a mortgage on the house and property that was the subject of the contract.

5. On August 25, 1990, Mr. and Mrs. Williams and Ethel Nelson gave A.A. a mortgage on the property to secure payment of the amount of the contract.

   
   

6. A.A. assigned the mortgage to Union Mortgage Company, Inc. on August 29, 1990.

   
   

7. Subsequent to the assignment of the mortgage to Union Mortgage Company, Inc., Janice Williams and Anthony Williams, Sr., consolidated certain debts through a loan from Metropolitan Mortgage Company of Fort Pierce, Florida. With the proceeds of the Metropolitan loan, Mr. and Mrs. Williams paid off the mortgage that had been given to A.A. on August 25, 1990, and assigned to Union Mortgage Company on August 29, 1990. To secure payment of the Metropolitan loan, Mr. and Mrs. Williams gave Metropolitan a mortgage on the subject property. The Williams were still paying off the Metropolitan mortgage at the time of the formal hearing.

   
   

8. The contract between A.A. and the owners required A.A. to remove the existing roof of the subject property and to replace the roof with a twenty-year fiberglass roof, repair the ceilings of three rooms with sheetrock, seal off holes in two walls (these holes resulted after two air conditioning units were removed), install a vinyl floor in the dining room, renovate a bathroom to 90 percent completion, and make certain unspecified minor repairs.

   
   

9. A.A. is not certified or registered as a roofing contractor.

   
   

10. Respondent is not certified or registered as a roofing contractor.

    
    

11. The repair of the roof on the subject property was work that should be performed only by a certified or registered roofing contractor.

    
    

12. Workmen from A.A. were present at the job site for approximately a week.

    
    

13. After the work was performed, including the roofing work, the owners began having problems with the work performed by A.A. Water began to leak through the walls where the air conditioning units had been. This leaking resulted because A.A. did not properly seal the holes in the wall. Instead,

    A.A. merely nailed pieces of plywood over the holes where the air conditioning units had been.

    
    

14. The roof leaked and caused damage to interior panelling.

    
    

15. A.A. did none of the work on the bathroom that had been contracted.

    
    

16. Mr. and Mrs. Williams attempted to get A.A. to come back and finish the work or to correct defective work on two occasions. On two separate occasions, a representative of A.A. promised to return to the job site to complete the work and to correct defective work. A.A. did not return to the job site and made no further effort to complete or correct the work on the subject property.

    
    

17. Mr. and Mrs. Williams will have to expend approximately $6,000 to repair the roof and interior of the house as a result of A.A.'s failure to perform its contractual duties.

18. In negotiating the contract with A.A., the owners dealt with Christine McDonough, who was a corporate officer of A.A. and who had the authority to bind

    A.A. as a party to the contract.

    
    

19. A building permit was required by the City of Fort Pierce Building Code for the construction contemplated by the subject contract. No permit was obtained by A.A.

    
    

20. The Respondent did not supervise any of the work performed on the subject property by A.A.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

22. Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. See Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

    
    

23. Section 489.129(1), Florida Statutes, authorizes the Petitioner to discipline general contractors in the State of Florida and provides, in pertinent part, as follows:

    
    

    1. The board may take any of the following actions against any certificate holder or registrant: place on probation or reprimand the licensee, revoke, suspend, or deny the issuance or renewal of the certificate or registration, require financial restitution

to a consumer, impose an administrative fine not to exceed $5,000 per violation, require

continuing education, or assess costs associated with investigation and prosecution, if the contractor . . ., or business organization for which the contractor is a primary qualifying agent . . . is found guilty of any of the following acts:

* * *

(j) Failing in any material respect to comply with the provisions of this part or violating a rule or lawful order of the board.

* * *

1. Committing fraud or deceit in the practice of contracting.

2. Committing incompetency or misconduct in the practice of contracting.

1. Section 489.105(4), Florida Statutes, provides as follows:

   
   

   (4) "Primary qualifying agent" means a person who possesses the requisite skill, knowledge, and experience, and has the responsibility, to supervise, direct, manage, and control the contracting activities of the business organiza- tion with which he is connected; who has the

   responsibility to supervise, direct, manage, and control construction activities on a job for which he has obtained the building permit; and whose technical and personal qualifications have been determined by investigation and examination in this part, as attested by the department.

   
   

2. Section 489.1195(1), Florida Statutes, provides, in pertinent part, as follows:

   
   

   1. A qualifying agent is a primary qualifying agent unless he is a secondary qualifying agent under this section.

      1. All primary qualifying agents for a business organization are jointly and equally responsible for supervision of all operations of the business organization; for all field work at all sites; and for financial matters, both for the organization in general and for each specific job.

         
         

3. As the qualifying agent for A.A., Respondent is responsible for all construction and contracting activities of A.A., including the contract that is the subject of these proceedings.

   
   

4. By Count I, Respondent was charged with proceeding on a job without obtaining applicable building permits and inspections in violation of Section 489.129(1)(n), Florida Statutes. Petitioner established by clear and convincing evidence that the work required under the subject contract required a building permit from the City of Fort Pierce, Florida, and that A.A. proceeded with the work without obtaining a permit. As the qualifying agent of A.A., the Respondent is responsible for A.A.'s failure to obtain a building permit. It is concluded that Petitioner established the violation alleged in Count I of the Administrative Complaint against Respondent by clear and convincing evidence.

   
   

5. By Count II, Respondent was charged with contracting work beyond the scope of his license in violation of Sections 489.129(1)(j) and 489.115(1)(b), Florida Statutes. Pursuant to Section 489.113(3), Florida Statutes, A.A. was required to subcontract the re-roofing portion of the contract because it is not certified as a roofing contractor. Section 489.113(3), Florida Statutes, requires that a general contractor subcontract all roofing work unless such contractor holds a state certificate or registration as a roofing contractor. The work performed on the roof of the subject property was required to be done by a certified or registered roofing contractor. Petitioner established by clear and convincing evidence that Respondent committed the offenses alleged in Count II by establishing that the company for which Respondent is the qualified agent performed this roofing work without being a certified or registered roofing contractor.

   
   

6. By Count III, Respondent was charged with failing to supervise all contracting operations of the business organization for which he was the qualifying agent in violation of Sections 489.105(4), 489.129(1)(j), and 489.1195(1), Florida Statutes. Petitioner established the violations alleged in Count III by establishing by clear and convincing evidence that Respondent completely failed to supervise the activities of A.A. as to the subject contract.

7. By Count IV, Respondent was charged with committing fraud or deceit or of gross negligence, incompetency, or misconduct in the practice of contracting in violation of Chapter 489.129(1)(m), Florida Statutes, by failing to correct deficient work. Petitioner established this violation by clear and convincing evidence by establishing that the work on the subject property was deficient and by establishing that A.A. failed to correct these deficiencies despite being requested to do so.

   
   

8. Rule 61G4-17.001, Florida Administrative Code, provides guidelines that are pertinent to this proceeding. Rule 61G4-17.002, Florida Administrative Code, provides for certain aggravating or mitigating factors.

   
   

9. While Section 489.129(1), Florida Statutes and Section 61G4- 17.001(19), Florida Administrative Code, authorize the Petitioner to assess costs of investigation and prosecution against the Respondent, the Administrative Complaint does not seek that penalty. Petitioner should not be permitted to seek at the formal hearing a penalty that is not requested in the Administrative Complaint. See, Williams v. Turlington, 498 So.2d 468 (Fla. 3d DCA 1986). The post-hearing affidavit reflecting Petitioner's costs in the sum of $2,879.92 is hearsay evidence that cannot be used as the sole basis for the finding of a fact in this proceeding. See, Section 120.58(1)(a), Florida Statutes, and Rule 60Q-2.6026(3), Florida Administrative Code.

   
   

10. Section 489.129(1), Florida Statutes, and Section 61G4-17.001(20), Florida Administrative Code, authorizes the Petitioner to order the Respondent to pay an administrative fine and restitution to the owners.

    
    

11. In its post-hearing submittal, Petitioner argues that an appropriate penalty to be assessed against Respondent is an administrative fine in the amount of $2,250.00, a requirement of restitution to the owners in the amount of

$6,000.00, and an assessment of costs. For the reasons stated above, the assessment of costs should not be permitted in this proceeding. The other penalties Petitioner seek are authorized by statute and are within the disciplinary guidelines adopted by Petitioner.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent be ordered to pay a fine in the amount of

$2,250.00 to the Florida Construction Industry Licensing Board and pay restitution to Janice Williams and Anthony Williams, Sr., in the amount of

$6,000.

DONE AND ENTERED this 28th day of April, 1995, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway Tallahassee, Florida

Docket for Case No: 94-006449

Orders for Case No: 94-006449