STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, )

)

vs. ) Case No. 96-4148

)

GONZALO VEGA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on February 13 and 26, 1997, in Miami, Florida, before Patricia Hart Malono, a duly designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Diane Snell Perera

Senior Construction Attorney Department of Business and

Professional Regulation

401 Northwest 2nd Avenue, Number N607 Miami, Florida 33128

For Respondent: Jorge L. Fors, Esquire

Jorge L. Fors, P.A.

1108 Ponce De Leon Boulevard Coral Gables, Florida 33134

STATEMENT OF THE ISSUES

Whether the Respondent committed the violations alleged in the Administrative Complaint, and, if so, the penalty that should be imposed.

PRELIMINARY STATEMENT

In an Administrative Complaint dated February 9, 1995, the Department of Business and Professional Regulation ("Department") charged Gonzalo Vega with three violations of Section 489.129(1), Florida Statutes (1993), arising out of a contract to elevate and rebuild a hurricane damaged home in Miami, Florida, owned by Mr. and Mrs. David M. Hudson. In Count I, the Department charged that Mr. Vega assisted an unregistered or uncertified person in engaging in the practice of contracting because he subcontracted the work on the project to an unlicensed subcontractor, a violation of Section 489.129(1)(e). In Count II, the Department charged that Mr. Vega willfully or deliberately violated applicable building codes or laws of the state or any municipality or county in the state because he did not perform the work on the project in accordance with the approved plans and because he did not obtain product approvals before installing various materials into the structure, a violation of Section 489.129(1)(d). In Count III, the Department charged that, based on the violations alleged in Counts I and II, Mr. Vega committed incompetency or misconduct in the practice of contracting, a violation of Section 489.129(1)(g).

Mr. Vega timely requested a formal administrative hearing on the charges, and the Department forwarded the request to the Division of Administrative Hearings for the assignment of an administrative law judge. The case was assigned DOAH Case Number 96-4148, and a formal hearing was scheduled for January 9 and 10, 1997. Upon motion, the case was continued and the formal hearing rescheduled for February 13, 1997; a continuation of the formal hearing was held on February 26, 1997. 1/

At the hearing, the Department presented the testimony of David Hudson, the homeowner; Diane Robie, formerly a construction investigator with the Department; Rose Bostick, a housing specialist for Project Teamwork, Inc.; 2/ David LaShey, an independent licensed general contractor who works with Project Teamwork; Jose Mitrani, an expert in structural engineering and construction; and Frank Abbott, an expert in architecture and construction. Petitioner's Exhibits 1 through

15 were offered and received into evidence. Gonzalo Vega testified in his own behalf through an interpreter, and Respondent's Exhibits 1 and 2 were offered and received into evidence. The Department presented the testimony of Jose Mitrani and Frank Abbott in rebuttal.

A transcript of the hearing was filed with the Division, and the parties timely submitted proposed findings of fact and conclusions of law, which have been duly considered.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:

1. The Department of Business and Professional Regulation is the state agency responsible for investigating and prosecuting complaints involving violations of the requirements of Chapter 489, Part I, Florida Statutes. Sections 489.131(7)(e) and 455.225, Florida Statutes. Pursuant to Section 489.129(1), the Construction Industry Licensing Board ("Board") is the entity responsible for imposing discipline for any of the violations set out in that section.

   
   

2. At all times material to this case, Mr. Vega was a certified general contractor operating under a license issued by the Construction Industry Licensing Board, numbered CG C046448. Mr. Vega has been a licensed general contractor in Florida since 1989, and since 1994, he has been the licensed qualifying agent for Group Construction South Florida, Inc.

   
   

3. The residence of David M. Hudson, located at 19801 Southwest 84th Avenue, Miami, Dade County, Florida, was severely damaged in August, 1992, by Hurricane Andrew. In a letter dated October 13, 1992, Mr. Hudson, who holds a doctorate in biology and is the laboratory manager for the University of Miami Chemistry Department, proposed to Mr. Vega that he prepare plans for reconstructing the Hudson residence.

   
   

4. On December 23, 1992, Mr. Hudson and Mr. Vega executed a contract for construction work to be performed on the Hudson residence. The parties contemplated that Mr. Vega would complete the work in accordance with the drawings and original blueprints prepared by Jose A. Sanchez, a structural engineer, at Mr. Vega's direction and based on preliminary plans approved by Mr. Hudson. Specifically, Mr. Hudson understood that the major elements of construction included in the December 23 contract were elevation of the house from one story to two stories, construction of a new living area on the second floor, and construction of a basement on the first floor to serve as a "bare bones storage area."

5. The contract price specified in the December 23 contract was $146,338.33, with ten percent due upon acceptance of the proposal, ten percent due at completion of each of eight items of construction specified in the contract, and ten percent due upon completion of the project. The eight items of construction specified in the contract were "demolition work, rising work, tie beams, roof, doors & windows, plaster & tile, pool & fence, finish work and paint."

   
   

6. On February 1, 1993, Metropolitan Dade County Building and Zoning Information Department issued Permit Number 93119957 to Mr. Vega for the Hudson project. The building permit was based on the original plans for the project submitted by Mr. Vega on January 19, 1993, together with some items that were added to the plans at the county's request.

   
   

7. Mr. Vega began work on the project on February 1, 1993, the day the permit was issued.

   
   

8. Mr. Vega hired Ruben Armas to act as foreman for the project, and his duties included hiring and supervising day laborers and procuring materials needed for construction. At the time, Mr. Armas was not licensed, registered, or certified by either Dade County or the State of Florida.

   
   

9. Mr. Vega had an arrangement with Mr. Armas whereby he paid Mr. Armas periodic advances on a lump sum payment that Mr. Armas was to receive when the Hudson project was complete. Mr. Vega did not deduct FICA or withholding tax from the payments made to Mr. Armas under this arrangement.

   
   

10. Mr. Vega dealt directly with Mr. and/or Mrs. Hudson regarding the project, although they would occasionally leave messages for him with Mr. Armas.

    
    

11. Mr. Vega directly supervised Mr. Armas and gave him instructions on the work that was to be performed and the way it was to be done. Mr. Vega was routinely at the job site at least two or three times a day to inspect the work that had been done. Mr. Vega was present at the site during the entire time that cement was poured for footings or other structural elements.

    
    

12. Mr. Vega arranged for various subcontractors to work on the project, including electricians, plumbers, air conditioning workers, roofers, carpenters, and drywall hangers.

13. On April 14, 1993, a Department investigator conducted an inspection of the Hudson project during a "hurricane task force sweep." When she and the other members of the task force arrived on the job site, she observed Mr. Armas and two other men "inside working," but she did not observe them working or see the type of work they were doing. Mr. Armas walked out to meet the inspector and gave her a card that contained his name and phone numbers and the words "General construction & roof repair." Mr. Armas told the Department investigator that, when she arrived, he was "working on the footing for the elevation of the house."

    
    

14. On April 21, 1993, Mr. Vega signed a Cease and Desist Agreement in which he acknowledged that the Department was investigating allegations that he had "engaged in the practice of aiding and abetting unlicensed contractor Ruben Armas." By signing the agreement, Mr. Vega agreed to cease "engaging in this activity," but he did not admit that the Department's allegations were true.

    
    

15. The Department investigator was at the Hudson job site on April 14, 1993, for thirty minutes to an hour, during which time Mr. Vega did not appear at the site. This was the only time she was at the job site while work was being done.

    
    

16. As the work progressed on the project, everything appeared to be going well, and Mr. Vega felt that he enjoyed a very good working relationship with Mr. and Mrs. Hudson.

    
    

17. Mr. Hudson paid Mr. Vega a total of $116,400.00, or eighty percent, of the original contract price of $146,338.33, in ten percent increments as provided in the contract. By check dated December 23, 1992, Mr. Hudson paid the down payment of

    $14,633.38. By check dated February 5, 1993, Mr. Hudson paid

    $14,600.00 upon completion of the demolition work. By check dated March 5, 1993, Mr. Hudson paid $14,633.00 upon completion of raising the structure to two stories. By check dated March 24, 1993, Mr. Hudson paid $14,633.00 upon completion of the tie beams. By check dated April 19, 1997, Mr. Hudson paid

    $14,633.00 upon completion of the roof. By check dated May 13, 1993, Mr. Hudson paid $14,633.00 which should have been paid upon completion of the doors and windows but which he paid even though the installation of the doors and windows was not complete. By check dated June 23,1993, Mr. Hudson paid

    $12,000.00 of the $14,633.00 draw because, in his opinion, the project was not being completed on schedule. Finally, by check dated July 2, 1993, Mr. Hudson paid $17,000.00 to bring the

    payments up to the amount consistent with the contract schedule for completion of the pool and fence.

    
    

18. In a letter to Mr. Vega dated June 7, 1993, Mr. Hudson stated that he wanted to make "a major change" in the plans. Specifically, Mr. Hudson wanted to eliminate the swimming pool, which he estimated would save $20,000.00 of the $146,633.00 contract price, and use the money saved "to completely finish the downstairs to be a nice guest area," to "install the better quality carpet we want, complete wooden fence, air conditioning in 1st floor, plumbing ~ electric in 1st floor, [and] indoor wooden shutters for all windows." Mr. Hudson went on to state that he wanted certain enumerated appliances, which would cost

    $4,108.00, and new furniture, which he estimated would cost

    $6,000.00, for a total of $10,108.00. According to Mr. Hudson's proposal, Mr. Vega should be able to "finish off the 1st floor the way we want it, install the nice carpet and tile, and do all the other jobs previously listed (fence, plumbing, etc., for 1st floor) for about $10,000.00." The basement area which Mr.

    Hudson wanted to finish as a "nice" living area consisted of approximately 2,000 square feet and had originally been designed as a storage area, with concrete floor and walls.

    
    

19. Mr. Vega and Mr. Hudson discussed the proposal and the costs of the changes, but they did not reach an agreement on the cost of the additional work. 3/

    
    

20. Mr. Hudson asked Mr. Vega to leave the job site and cease work on the project on or about July 3, 1993, and Mr. Vega did not perform any work on the Hudson residence after this time. Mr. Hudson terminated Mr. Vega from the project solely because of the dispute with Mr. Vega over the cost of the changes he had requested in his June 7 letter. Mr. Hudson did not complain to Mr. Vega about the quality of the work that had been completed, and, although he thought that the project was getting behind schedule, Mr. Hudson issued a check dated July 2, 1993, which brought the total payments to eighty percent of the original contract price.

    
    

21. When Mr. Vega stopped work on the project, the structure contained deviations from the original plans. 4/ Some of the deviations were items shown in the original blueprints which had not been incorporated into the structure; some were items that were not shown in the original blueprints but were incorporated into the structure at the request of, or with the approval of, Mr. and/or Mrs. Hudson; some were deviations in the size of openings to accommodate doors and in

    the location and size of windows; most were minor deviations in the placement of electrical switches and receptacles or other similar deviations. The construction was, however, generally consistent with the original plans. 5/

    
    

22. There were three items that were significant deviations from the original plans. The most serious deviation concerned the changes made in the dimensions of the structural slab that formed the floor of the second floor balcony off the family room, kitchen, and dining room and the roof of the first floor terrace.

    
    

23. The original plans included a second floor balcony with a width of six feet. The Hudsons asked Mr. Vega to increase the width of the balcony, and Mr. Vega called Mr. Sanchez, the structural engineer who had prepared the original plans, and asked if the width of the slab could be increased. Mr. Sanchez approved an extension from the original six feet to eight feet, eight inches, and he advised Mr. Vega of the additional reinforcement that would be needed to accommodate the increased width. On the basis of Mr. Sanchez's approval, Mr. Vega incorporated the additional reinforcement specified by Mr. Sanchez and poured the slab to the requested width of eight feet, eight inches.

    
    

24. Even though Mr. Vega consulted a structural engineer, he did not submit revised blueprints to the building department and obtain approval for the structural change before doing the alteration. He was aware that the building code required approval before such a change could be incorporated into a structure and that his actions violated the code. 6/

    
    

25. The second significant deviation from the original plans was Mr. Vega's failure to construct the fireplace shown in the original plans. According to the plans, a fireplace was to be constructed in the living room, on the second floor. Although the roof was completed and the drywall installed, no accommodation had been made for the fireplace in either the wall or the roof. Mr. Vega intended to construct the fireplace and would have done so had he not been told to cease work on the project.

    
    

26. The third significant deviation from the original plans concerns the windows installed in the structure. No window permits or product approvals were contained in the permit file for the Hudson project. In addition, some of the windows were not the size specified in the original plans, some were too

    deep, and some were placed lower than the thirty inch sill height specified in the original plans.

    
    

27. Many of the items identified as "deviations" were actually items not shown on the original plans but incorporated into the structure at the request of, or with the approval of, Mr. and/or Mrs. Hudson. Neither the requests for the additional items nor the costs of the items were reduced to writing by Mr. Hudson or Mr. Vega.

    
    

28. At the time Mr. Hudson directed him to cease work on the project, Mr. Vega had contracts with subcontractors to provide the labor and materials specified in the original contract. He was prepared to complete the project in accordance with the original plans and for the original contract amount, with adjustments for the extras that had already been incorporated into the project at the request of, or with the approval of, Mr. and/or Mrs. Hudson. He was also prepared to correct all deficiencies and code violations in the structure.

    
    

29. After he was terminated from the project, Mr. Vega continued to negotiate with Mr. Hudson's attorney to arrive at an agreement for completion of the project that would be satisfactory to Mr. Hudson. In a proposal submitted to Mr. Hudson's attorney in the fall of 1993, Mr. Vega offered to complete the project in seven weeks in accordance with the original plans, as modified to incorporate the changes and upgrades Mr. Hudson had requested in the June 7 letter and the changes and upgrades that had already been incorporated into the project at the request of, or with the approval of, Mr. and/or Mrs. Hudson. The total price for completion proposed by Mr. Vega was $56,750.00, which included the cost of the upgrades and extras and the $29,572.00 balance owing under the original contract.

    
    

30. Mr. Hudson did not accept this proposal. Instead, he eventually hired a contractor named Robert Krieff, who did some work on the project. In February, 1994, Mr. Hudson took over the building permit himself and hired various subcontractors to work on the project. According to Mr. Hudson, in addition to the $116,400.00 he paid Mr. Vega, he has paid approximately

    $50,000.00 for work done after he terminated Mr. Vega, and he anticipates spending another $35,000.00 before a Certificate of Occupancy is issued.

    
    

31. Mr. Hudson paid off a lien on his property for work done pursuant to his contract with Mr. Vega. A Claim of Lien in

    the amount of $4,712.00 was filed by Luis A. Roman on October 5, 1993, for drywall hung and finished at the Hudson residence under an arrangement with Mr. Vega. Summary of the evidence.

    
    

32. The evidence presented by the Department is sufficient to establish that Mr. Vega willfully violated the building code with respect to the alteration of the width of the second

    floor balcony. Mr. Vega admitted that he knew he was violating the building code when he extended the width of the second floor balcony beyond the width specified in the original blueprints before submitting revised engineering plans to the county and receiving approval to make the alteration. This violation is one of procedure only, however, and there was no competent evidence presented to establish that Mr. Vega failed to include adequate reinforcement to compensate for the additional width prior to pouring the slab or that there were structural problems with the slab. 7/

    
    

33. The evidence presented by the Department is sufficient to establish that Mr. Vega violated the building code because the work completed by Mr. Vega on the Hudson project contained deviations from the original approved plans. 8/ On the other hand, the evidence presented by the Department is sufficient to establish that this violation is a minor one. The Department's experts testified that the construction done on the Hudson residence by Mr. Vega was generally consistent with the approved plans and that it was commonplace for contractors in Dade County to deviate from the approved plans and later submit revised plans for approval.

    
    

34. The evidence presented by the Department is sufficient to establish that Mr. Vega did not file product approvals or obtain window permits prior to windows being installed in the Hudson project. The evidence presented by the Department is not sufficient, however, to establish that these omissions on Mr. Vega's part constituted a violation of section 204.2 of the South Florida Building Code, as alleged in the Administrative Complaint. Although there was some testimony that the building code requires that product approvals be filed and window permits obtained before windows are installed, the applicable code and section were not identified by the Department's witnesses or otherwise made a part of the record. Thus, there is no evidence of the precise obligations imposed on Mr. Vega by the code that was applicable at the time of the Hudson project. As a result, it is not possible to determine whether Mr. Vega fulfilled his obligations under the code.

35. The evidence presented by the Department is not sufficient to establish that Mr. Vega assisted Mr. Armas in engaging in the unregistered or uncertified practice of contracting. There is no evidence in the record that Mr. Armas performed any work on the Hudson project that could be performed only by a licensed contractor. 9/

    
    

36. Notwithstanding the opinions stated by the Department's experts, the evidence presented by the Department is not sufficient to establish that Mr. Vega is guilty of incompetence or misconduct in the practice of contracting as a result of the work done on the Hudson project.

    
    

37. The evidence presented by the Department is sufficient to establish that Mr. Hudson suffered financial loss in the amount of $4,712.00, which is the amount Mr. Hudson paid to clear the lien placed on his property by Luis A. Roman. Although this loss is attributable to Mr. Vega's failure to pay Mr. Roman for hanging and finishing drywall in the Hudson residence, the evidence presented by the Department is not sufficient to establish that Mr. Hudson suffered financial loss as a result of the violation with which Mr. Vega was charged and of which he was proven guilty.

    
    

    CONCLUSIONS OF LAW

    
    

38. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to section 120.569 and .57(1), Florida Statutes (Supp. 1996).

    
    

39. Because the Department filed an administrative complaint in which it asked for sanctions against Mr. Vega's license, including revocation or suspension, and the imposition of an administrative fine, it has the burden of proving by clear and convincing evidence that he committed the violations alleged in the Administrative Complaint. See Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Co., 670 So. 2d 932 (Flat 1996); Ferris v. Turlington, 510 So. 2d 292 (Flat 1987).

    
    

40. Clear and convincing evidence has been defined as follows:

    
    

    [C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses

    testify must be distinctly remembered; the evidence must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of [sic] conviction, without hesitancy, as to the truth of the allegations sought to be established.

    
    

    Slomowitz v. Walker, 429 So 2d 797, 800 (Flat 4th DCA 1983)

    . . .

    
    

41. Section 489.129(1), Florida Statutes (1993) authorizes the Construction Industry Licensing Board to discipline contractors in the State of Florida and provides as follows:

    
    

    The board may take any of the following actions against any certificateholder 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 . . . is found guilty of any of the following acts:

    * * *

    1. Knowingly violating the applicable building codes or laws of the state or of any municipalities or counties thereof.

       
       

    2. 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.

       * * *

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

42. Based on the facts found herein, the Department has met its burden of proving by clear and convincing evidence that Mr. Vega is guilty of violating section 489.129(1)(d) because he knowingly violated the applicable building code. First, Mr. Vega extended the width of the second floor balcony beyond the width specified in the original blueprints, without submitting revised engineering plans to the county and receiving approval to make the alteration. Second, the work completed by Mr. Vega on the Hudson project contained a number of deviations from the original approved plans that had not been incorporated into revised plans and presented to the county for approval and issuance of a revised permit.

    
    

43. Section 489.129(1)(e) prohibits a licensee from assisting a person to engage "in the practice of contracting." "Contracting," as defined in section 489.105(6), Florida Statutes (1993),

    
    

    means, except as exempted in this part, engaging in business as a contractor and includes, but is not limited to, performance of any of the acts as set forth in subsection

    (3) which define types of contracting. The attempted sale of contracting services and the negotiation or bid for a contract on these services also constitutes contracting. If the services offered require licensure or agent qualification, the offering, negotiation for a bid, or attempted sale of these services requires the corresponding licensure.

    
    

44. "Contractor," as defined in section 489.105(3), means the person who is qualified for, and shall only be responsible for, the project contracted for and means, except as exempted in this part, the person who, for compensation, undertakes to, submits a bid to, or does himself or by others construct, repair, alter, remodel, add to, demolish, subtract from, or improve any building or structure, including improvements to real estate, for others or for resale to others; and whose job scope is substantially similar to the job scope described in one of the subsequent paragraphs of this section.

    
    

45. Section 489.113(2), Florida Statutes (1993), provides:

    
    

    No person who is not certified or registered shall engage in the business of

    contracting in this state. However, for purposes of complying with the provisions of this chapter, a person who is not certified or registered may perform construction work under the supervision of a person who is certified or registered, provided that the work is within the scope of the supervisor's license and provided that the person being supervised is not engaged in construction work which would require a license as a contractor under any of the categories listed in s. 489.105(3)(d)(o). . . .

    
    

46. The categories of contracting listed in section 489.105(3)(d)

    
    

    1. are sheet metal contractor, roofing contractor, class A, B, and C air conditioning contractor, mechanical contractor, commercial and residential pool/spa contractor, swimming pool/spa servicing contractor, plumbing contractor, underground utility and excavation contractor, and solar contractor.

    
    

47. Based on the facts as found herein, the Department has not met its burden of proving by clear and convincing evidence that Mr. Vega is guilty of violating section 489.129(1)(e). Although Mr. Vega was aware that Mr. Armas was not a licensed contractor, the Department did not prove that Mr. Armas engaged in the practice of contracting with respect to his work on the Hudson project.

    
    

48. Based on the facts found herein, the Department has not met its burden of proving by clear and convincing evidence that Mr. Vega is guilty of violating section 489.129(1)(n). Nothing Mr. Vega did with respect to the Hudson project demonstrated incompetency in contracting, and none of his actions constituted misconduct.

    
    

49. Normal penalty ranges for violations of Chapter 489, Part I, are set out in rule 61G-17.001, Florida Administrative Code. The normal penalties for the violation of section 489.129(1)(d), knowingly violating applicable laws or building codes, are the imposition of an administrative fine ranging from

    $500 to $2,500 for the first violation, the imposition of an administrative fine ranging from $1,250.00 to $5,000 for a

    repeat violation, and/or license revocation or suspension or probation. Rule 61G-17.001(4), Florida Administrative Code. Because Mr. Vega has not previously had any disciplinary action taken against him, his violation is considered a first violation pursuant to the definition of "repeat violation" found in rule 61G4-17.003(1), Florida Administrative Code.

    
    

50. Rule 61G-17.002 sets out aggravating and mitigating factors that may be considered in determining the appropriate penalties to be imposed for violations as follows:

    
    

    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.

    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.

    
    

51. These penalty guidelines and aggravating and mitigating factors have been evaluated in light of the facts found herein in determining the recommended penalty.

    
    

52. In its Proposed Recommended Order, the Department requests that Mr. Vega be ordered to make restitution to Mr. and Mrs. Hudson in the amount of $23,800.00. Restitution is not appropriate in this case for two reasons. First, although

    Section 489.129(1), Florida Statutes authorizes the Department to require restitution for financial losses, the Department did not seek that penalty in its Administrative Complaint. The Department 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 (Flat ad DCA 1986).

    
    

53. Secondly, although rule 61G-17.001(20) provides that "[f]or any violation occurring after October 1, 1989, the board may order the contractor to make restitution in the amount of financial loss suffered by the consumer," given the findings of fact and the conclusions of law herein, the Department has not proven that Mr. Hudson suffered any financial loss as a result of Mr. Vega's violation of section 489.129(1)(d). 10/

    
    

54. In its Proposed Recommended Order, the Department requests that the expenses of investigation be assessed against Mr. Vega in addition to an administrative fine and restitution. As with restitution, the assessment of investigation expenses in this case is not appropriate for two reasons. First, although Section 489.129(1), Florida Statutes, and Section 61G4- 17.001(19), Florida Administrative Code, authorize the Department to assess costs of investigation and prosecution, the Department did not seek that penalty in its Administrative Complaint. Again, the Department 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 (Flat 3d DCA 1986).

    
    

55. Secondly, the Department has done nothing more to establish the amount of investigation expenses than attach to its Proposed Recommended Order a document entitled "COMPLAINT COST SUMMARY" which reflects $1,214.00 in investigation costs as of April 11, 1997. This document is hearsay evidence that cannot form the basis for a finding of fact in this proceeding. See Section 120.57(1)(c), Florida Statutes (Supp. 1996).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Construction Industry Licensing Board issue a Final Order dismissing Counts I and III of its Administrative Complaint, finding that Gonzalo Vega is guilty of violating section 489.129(1)(d), Florida Statutes (1993), and imposing an administrative fine in the amount of $1,000.00.

DONE AND ENTERED this 3rd day of July, 1997, in Tallahassee, Leon County, Florida.

PATRICIA HART MALONO

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of July, 1997.

ENDNOTES

1/ In an Administrative Complaint dated January 23, 1995, the Department of Business and Professional Regulation charged Gonzalo Vega with five violations of Section 489.129(1), Florida Statutes (1993), arising out of a contract to enclose a Florida room and install windows in a home in Florida City, Florida. Mr. Vega timely requested a formal administrative hearing on the charges, and the Department forwarded the request to the Division of Administrative Hearings for the assignment of an administrative law judge. This case was assigned DOAH Case Number 96-4147. By order dated October 18, 1996, DOAH Case Number 96-4147 was consolidated with DOAH Case Number 96-4148.

At the hearing, the Department made an ore tenus Motion to Sever DOAH Case Number 96-4147 from DOAH Case Number 96-4148 and an ore tenus Motion to Relinquish Jurisdiction in DOAH Case Number 96-4147 to the Department. Mr. Vega had no objection to these motions, and the motions were granted. The hearing proceeded on DOAH Case Number 96-4148, and a separate Order Severing Cases and Closing File in DOAH Case Number 96-4147 has been issued.

2/ The testimony of Ms. Bostick was admitted over an objection as to relevance. Upon consideration of her testimony, it is clear that Ms. Bostick's testimony and the contents of Petitioner's Exhibit 12 are not relevant to the issues which must be resolved in this case. Accordingly, Ms. Bostick's

testimony and Petitioner's Exhibit 12 have not been considered in preparing the findings of fact and conclusions of law herein.

3/ Mr. Hudson offered testimony to the effect that he believed that Mr. Vega had agreed to do the extra work he had requested in his June 7 letter, and he produced at the hearing a document which he identified as a proposal from Mr. Vega confirming the cost of the additional work. The document, which was received into evidence as Petitioner's Exhibit 14, is dated June 21, 1993, and was prepared by Mr. Vega in response to Mr. Hudson's June 7 proposal.

It is clear on the face of the document that Mr. Vega did not include costs for all of the additional items and did not establish a total price for completion of the project. Rather, the notations written on the document and identified as estimates and the calculations deriving the "final price" were not in Mr. Vega's handwriting. Mr. Vega's testimony that Mr.

Hudson added the "estimates" and calculated the "final price" included on the document is accepted. Any testimony to the contrary by Mr. Hudson is specifically rejected as not credible.

4/ The deviations were noted in a critique of the work done by Mr. Vega prepared by an architect hired by Robert Krieff, a contractor hired by Mr. Hudson in the fall of 1993 to work on the project. This document was identified by Mr. Hudson and received into evidence without objection.

The architect prepared the critique by comparing the original blueprints with the work actually incorporated into the project as of October, 1993. The architect found 184 deviations from the original blueprints. Of these 184 deviations, the Department's expert in architecture and construction considered about 50 to be valid and generally considered the critique to be of limited value with respect to actual deficiencies. Nonetheless, both the expert and Mr. Vega used this document as a basis for their testimony.

5/ Mr. Hudson invited a contractor named Dave Davis to bid on completion of the project after Mr. Vega was terminated. In a letter to Mr. Hudson dated August 24, 1993, Mr. Davis expressed his initial impression of the work done on the Hudson residence. This letter was identified by Mr. Hudson and received into evidence as Petitioner's Exhibit 9, subject to a hearsay objection. This document did not supplement or explain other evidence presented at the hearing, and the Department did not establish that this exhibit would be admissible over objection

in a civil action. The document cannot, therefore, form the basis for a finding of fact. See Section 120.57(1)(c), Florida Statutes (Supp. 1996).

6/ Jose Mitrani, the Department's expert in structural engineering, considered the slab extension extremely significant because it increased the width of the slab by forty-five percent, thereby increasing the load on the slab and its supporting structure by forty-five percent; it increased the bending stress on the slab by 200 percent; and it increased the deflection of the slab by almost 450 percent. According to Mr.

Mitrani, additional reinforcement of the slab would be necessary to accommodate the increased width, without which the increase would pose a serious safety hazard. Mr. Mitrani did not, however, testify that Mr. Vega failed to include adequate reinforcements to compensate for the increased width of the slab.

It should also be noted that Mr. Mitrani based his opinion on the seriousness of this deviation in part on observations made in a report prepared by Vipin Tolat, an engineer, at the request of Mr. Krieff. The report was identified by Mr. Hudson and admitted into evidence as Petitioner's Exhibit 10, subject to a hearsay objection. The report did not supplement or explain other evidence presented at the hearing, and the Department did not establish that this exhibit would be admissible over objection in a civil action. The document cannot, therefore, form the basis for a finding of fact. See Section 120.57(1)(c), Florida Statutes (Supp. 1996). Accordingly, any opinions offered by Mr. Mitrani that are based exclusively on the contents of the Tolat report are rejected as lacking a proper foundation.

7/ There was some reference made in the testimony of Diane Robie, the Department investigator involved in the Hudson matter, that a county inspector had told her in February, 1994, that the "problem" with the slab had been corrected. This testimony constitutes hearsay that does not satisfy the requirements of section 120.57(1)(c), Florida Statutes, and, therefore, cannot form the basis for a finding of fact.

The Department did not offer the applicable code and section into evidence or request that they be officially recognized. Consequently, the Department did not establish that such deviations constituted a violation of Section 304.4(b) of the South Florida Building Code, as alleged in the Administrative Complaint. However, Mr. Vega and the Department's experts

assumed in their testimony that such deviations violated the building code.

9/ The representations made on Mr. Armas's business card cannot be attributed to Mr. Vega.

10/ The Department has proven by clear and convincing evidence that Mr. Hudson paid $4,712.00 to clear a lien filed by a subcontractor engaged by Mr. Vega to do work on the Hudson's residence and, therefore, that Mr. Hudson suffered financial loss attributable to Mr. Vega's failure to pay the subcontractor. This financial loss cannot, however, be attributed to any violation committed by Mr. Vega in this case. The Department could have, but did not, charge Mr. Vega with a violation of section 489.129(1)(h), Florida Statutes (1993), which defines as a violation 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 75 days after the date of such liens; . . .

COPIES FURNISHED:

Diane Snell Perera, Esquire Department of Business and

Professional Regulation

401 Northwest 2nd Avenue Suite N-607

Miami, Florida 33128

Jorge L. Fors, Esquire

1108 Ponce De Leon Boulevard Coral Gables, Florida 33134

Rodney Hurst, Executive Director Department of Business and

Professional Regulation

7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

Lynda L. Goodgame, General Counsel 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 within

15 days from the date of 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: 96-004148

Orders for Case No: 96-004148