STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, )

)

vs. ) Case No. 97-0076

)

EDWARD CRIDLAND, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on July 30, 1997, at Okeechobee, Florida , before J. D. Parrish, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: William S. Cummins

Senior Attorney and

Anthony Mutthler Senior Attorney

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399

For Respondent: Edward Cridland, pro se

306 Northeast 3rd Street Okeechobee, Florida 34972

STATEMENT OF THE ISSUES

Whether Respondent, Edward Cridland, committed the violations alleged in the Administrative Complaint and, if so,

what penalty should be imposed.

PRELIMINARY STATEMENT

This case began on December 30, 1996, when the Petitioner, Department of Business and Professional Regulation (Department), issued a Corrected Administrative Complaint against the Respondent, Edward G. Cridland. The complaint alleged that Respondent had violated provisions of Chapter 489, Florida Statutes. More specifically, the complaint charged that Respondent had committed misconduct or mismanagement in the practice of contracting by causing financial harm to a customer since a valid lien was recorded against the customer's property and since the customer was required to pay more for the contracted job than agreed. Further, the complaint alleged that Respondent was incompetent or had committed fraud or deceit or gross negligence in the practice of contracting.

Respondent executed an Election of Rights that disputed the allegations of fact and requested an administrative hearing. The matter was forwarded to the Division of Administrative Hearings for formal proceedings on January 9, 1997.

At the hearing, the Department presented testimony from Anthony Thomas Young, a customer for whom Respondent contracted to build a residence; Janis LeVin, a bank officer who handled the construction loan for the Young residence; Craig Edwards, the business manager for a lumber company that supplied materials to the Young construction project; Ronald O. Walton, an electrical subcontractor; Allen Aldridge, a roofing contractor; Leeland Lynn

Cover, a master plumber; and Weyman B. Arthur, a tile subcontractor. The Department's Exhibits numbered 1 through 18 were admitted into evidence. Respondent testified in his own behalf, and Respondent's Exhibit numbered 1 was also admitted into evidence. The transcript of the proceeding was filed on August 21, 1997. Both parties filed proposed recommended orders which have been considered.

FINDINGS OF FACT

1. At all times material to the allegations of this matter, Respondent, Edward Cridland, was licensed by the Department as a certified general contractor, license number CG C004342.

2. The Department is the state agency charged with the responsibility of regulating licensed certified general contractors in the State of Florida.

3. On or about December 2, 1989, the Respondent entered into a contract with Mr. and Mrs. Anthony Young to construct a single family residence for them on property located in Okeechobee County, Florida.

4. Pursuant to the terms of the contract, Respondent was to receive payments totaling $148,860 which were payable as follows: 5% upon signing of the contract, 15% upon foundation being in place, 30% upon the framing inspection, 30% upon the finished dry wall installation, and 20% upon final inspection.

5. In order to finance the home construction, the Youngs obtained a loan from SunTrust. Because Respondent was not on

   SunTrust's list of approved contractors, the bank required that draws on the loan be made to the subcontractors and to Respondent.

6. To reduce the construction indebtedness, Mr. Young intended to pay $25,000 of the costs from his savings. As he put it, Mr. Young acted "as his own banker" for that amount.

7. Accordingly, during the construction of the residence, payments were made to Respondent and his subcontractors from both the owner and the lender.

8. The building permit for the Young residence was issued on January 11, 1990.

9. For the period February 26, 1990, through August 7, 1990, SunTrust issued checks to Respondent's subcontractors on the Young project totaling $46,499.76.

10. For the period July 9, 1990, through January 22, 1991, Young issued checks to Respondent's subcontractors totaling

    $26,198.45 of which $22,030.00 was owed by Respondent pursuant to the contract.

11. For the period February 5, 1990, through June 7, 1990, SunTrust issued checks to Respondent totaling $62,846.72.

12. For the period January 9, 1990 through July 27, 1990, Young issued checks to Respondent totaling $18,474.00.

13. In August 1990, the Young residence was substantially completed. The Youngs were anxious to convert their construction loan to permanent financing and to obtain a certificate of occupancy. To that end, Mr. Young contacted the building department. Respondent delivered the certificate of occupancy to Mr. Young on or about August 24, 1990.

14. Respondent never gave the Youngs an affidavit as to costs or expenses being paid on their home and never attempted to close out the construction loan with the bank.

15. Although Respondent would have been due 20% upon final inspection of the home, the lender held only $14,513.52, which was paid to the Youngs when the construction account was closed on September 17, 1990.

16. As it turned out, the $14,513.52 was inadequate to pay all subcontractors who sought compensation for this project. Mr. Young settled the subcontractor claims as best he could but did not have the funds to satisfy everyone.

17. For example, Respondent owed W & W Lumber of Okeechobee, Inc., $31,773.49 of which $19,371.92 remained unpaid on November 7, 1990, when a valid lien was filed against the Youngs' property. Other subcontractors who did not file liens went unpaid or received less than the amounts claimed.

18. Respondent owed all of the subcontractors who testified at the hearing for the Young project. All had made attempts to find Respondent during the relevant time frame. All had failed to locate him. The bank officer also tried without success to locate Respondent.

19. In order to satisfy the lien against their home, the Youngs paid W & W Lumber of Okeechobee, Inc., $19,371.92 on January 16, 1991.

20. Respondent's claim that change orders or upgrades for

    the home resulted in the discrepancy between monies owed for the project and contract amount has not been deemed persuasive.

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

22. The Department bears the burden of proof in this case to establish, by clear and convincing evidence, the allegations against this Respondent. It has met that burden.

23. Section 489.129(1)(h), Florida Statutes (1989), in effect at the time of the alleged violations, provided, in pertinent part:

    (h) Committing 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.

    
    

    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 customer, or was otherwise permitted by the terms of the contract between the contractor and the customer.

24. In this case, the Department has established that the Respondent underestimated the cost of construction for the Young home. As a result, expenses associated with the home were greater than anticipated, and the construction loan proceeds together with the Youngs' contributions were inadequate to cover the final amounts owed to a supplier and subcontractors. As a consequence of Respondent's inept management of this project, a valid lien was placed on the Youngs' home which they were required to satisfy.

25. Additionally, since Respondent failed or otherwise refused to remit monies owed to subcontractors and to the supplier of materials for the home, the Youngs were required to pay more for the contracted job than they had originally agreed. While it is undisputed that the Youngs were required to remit additional funds for change orders that increased costs for the home, such changes did not amount to the total unpaid expenses Respondent left on this project.

26. It is concluded that the Department has established, by clear and convincing evidence, that the Respondent committed mismanagement or misconduct in the practice of contracting which caused financial harm to a customer.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Construction Industry Licensing Board enter a Final Order against the Respondent imposing an

administrative fine in the amount of $2500, assessing costs of the investigation of this matter as may be allowed by law, requiring Respondent to make restitution to the customer, and suspending Respondent's license until such amounts have been paid.

DONE AND ENTERED this 30th day of September, 1997, in Tallahassee, Leon County, Florida.

J. D. PARRISH 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 30th day of September, 1997.

COPIES FURNISHED:

Rodney Hurst, Executive Director Construction Industry Licensing Board 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

William S. Cummins, Esquire Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Edward Cridland

306 Northeast 3rd Street Okeechobee, Florida 34972

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: 97-000076

Orders for Case No: 97-000076