STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

)

Petitioner, )

)

vs. ) Case No. 97-5888

)

EDWARD IRONS, d/b/a IRONS )

CONTRACTING, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Administrative Law Judge, William J. Kendrick, held a formal hearing in the above-styled case on

May 7, 1998, in Miami, Florida.

APPEARANCES

For Respondent: Theodore R. Gay, Esquire

Department of Business and Professional Regulation

401 Northwest Second Avenue, Suite N-607 Miami, Florida 33128

For Respondent: Edward Irons, pro se

125 Northeast 23rd Avenue Gainesville, Florida 32609

STATEMENT OF THE ISSUES

At issue in this proceeding is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should imposed.

PRELIMINARY STATEMENT

By an eight-count Administrative Complaint, Petitioner charged that Respondent was guilty of violating various provisions of Section 489.127, Florida Statutes, which it alleged subjected Respondent to the imposition of administrative fines under the provisions of Section 455.228, Florida Statutes.

Pertinent to this case, Counts I and II of the Administrative Complaint alleged that Respondent committed the following acts, which it alleged constituted a violation of Section 489.127, Florida Statutes:

Count I

* * *

1. On or about December 29, 1993, Respondent contracted with SALLY STERN ("Victim") for improvement of real property then owned by Victim located at 10452 S.W. 114th Street, Miami, Dade County, Florida. .

   . . [A copy of the contract is appended to Petitioner's Exhibit 1 (the Deposition of Sally Stern)]. Respondent was doing business in Florida at this time with an address of 2514 N.W. 107 Avenue, Sunrise, Florida

   33322.

   
   

2. Pursuant to the contract Victim paid the sum of $35,000 to Respondent.

   
   

3. Section 489.105(3), Florida Statutes, provides in part that "Contractor" is defined as 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.

4. Section 489.105(6), Florida Statutes, provides in part that contracting is defined as engaging in business as a contractor and includes, but is not limited to, performance of any of the acts set forth in subsection

   1. which defines types of contractors.

      
      

5. Section 489.127(1)(f), Florida Statutes, provides in part that no person shall engage in the business or act in the capacity of a contractor without being duly registered or certified or advertise himself or a business organization as available to engage in the business or act in the capacity of a contractor without being duly registered or certified.

   
   

6. Respondent's actions in entering into this contract constitute contracting pursuant to Section(s) 489.105(3) and (6), Florida Statutes.

   
   

7. At no time material hereto was Respondent or the company registered, certified, or otherwise licensed to engage in contracting pursuant to Chapter 489, Florida Statutes.

   
   

8. Respondent's actions in entering into this contract violated Section 489.127(1)(f), Florida Statutes. Section 455.228, Florida Statutes, provides that the department may impose an administrative fine not to exceed

   $5,000 per incident for violations of Chapters 455 and 489, Florida Statutes.

   
   

   Count II

   
   

9. Petitioner realleges and reaffirms Paragraphs 1-12 and further alleges the following.

   
   

10. Respondent also violated Section 489.127(1)(h), Florida Statutes, in that he commenced work under this contract without obtaining the required building permit.

11. Pursuant to Section 455.228, Florida Statutes, the Department may impose an administrative fine of up to $5,000 for this violation.

As for the remaining counts (Counts III through VIII), Petitioner conceded (in its Proposed Recommended Order, at paragraph 25) that, consistent with the proof or lack thereof, the evidence was insufficient to sustain those charges. Under such circumstances, no useful purpose would be served by addressing the matters raised in those counts. Consequently, without further comment, a recommendation will follow, consistent with Petitioner's proposed recommendation, that a final order be entered "[f]inding the Respondent not guilty of Counts III through VIII of the Administrative Complaint." (Petitioner's Proposed Recommended Order, at page 13).

At hearing, Petitioner called Joseph N. Sheingold and Dale Bowlin as witnesses, and its Exhibits 1 through 6, and 8 through 12, were received into evidence. Petitioner's Exhibit 7, although offered, was rejected. Respondent testified on his own behalf, and Respondent's Exhibit 1 was received into evidence.

The transcript of the hearing was not ordered.

Consequently, at the conclusion of the hearing the parties were advised that they were accorded ten days from the date of hearing to file proposed recommended orders. Petitioner elected to file such a proposal and it has been duly considered.

FINDINGS OF FACT

Preliminary matters

1. Petitioner, Department of Business and Professional Regulation (Department), is a state agency charged with the responsibility, inter alia, of regulating the practice of contracting and, pertinent to this case, prosecuting administrative complaints for the unlicensed practice of contracting, pursuant to the laws of the State of Florida, in particular Section 20.165, Florida Statutes, and Chapters 120, 455, and 489, Florida Statutes, and the rules promulgated pursuant thereto.

2. Respondent, Edward Irons, is not now, nor was he ever, licensed by the Department to engage in the business or profession of contracting in the State of Florida.

   Irons Contracting

   
   

3. For some time prior to August 1992, Respondent's brother, Gerry Irons, was engaged in the business of contracting in the State of New York. At the time, Gerry Irons was licensed by the State of New York as a contractor, and did business as Irons Contracting. Respondent was not present in New York State during that period, and had no interest or involvement with his brother's business.

4. Following the landfall of Hurricane Andrew in August 1992, and the opportunities it presented to the construction industry, Gerry Irons relocated to Fort Lauderdale, Florida.

   There he engaged in construction related activities under the name Irons Contracting, and, when joined by Respondent as discussed infra, he was engaged by Tank Mangoya, a licensed contractor, to assist in the repair of residential damage caused by Hurricane Andrew. At no time was Gerry Irons or Irons Contracting licensed or certified as a contractor by the State of Florida.

   The Respondent and his involvement with Irons Contracting

   
   

5. Respondent, Edward Irons, was born December 13, 1948, and completed his formal education with graduation from high school. His training and experience post-high school, to the extent it appears of record, was shown to include boat repair (painting and varnishing), but not construction related activities (until his employment by his brother, discussed infra, in or about August 1993). At the time of hearing, Respondent was engaged in reconditioning (washing, waxing, and buffing) automobiles. Personally, Respondent presents as a well, if soft- spoken gentleman, who is pleasant, candid, and credible.

6. At or about the time Gerry Irons relocated to southeast Florida, Respondent was residing in Venezuela with his family, aboard his boat, and had so resided for approximately one year. Previously, Respondent and his family had resided in the Bahamas for approximately five years.

7. In or about August 1993, about a year after Hurricane Andrew struck southeast Florida, the Irons family began their

   return voyage to the United States. At some point during the voyage they encountered a storm, which severely damaged their boat. Fortunately, Respondent was able to run the boat aground on an island; however, the boat, as well as the family's possessions, were lost. Lacking insurance, Respondent's family was rendered homeless, and without any means of support.

8. Responding to his brother's call, Gerry Irons offered the family accommodations at his home, and sent them money and airplane tickets for their return. Upon their return, Respondent's family resided with Gerry Irons for about six months, after which they relocated to South Carolina. In the interim, Gerry Irons employed Respondent to work in his business (Irons Contracting).

9. At the time of Respondent's initial employment, Gerry Irons was engaged by Tank Mangoya, a licensed contractor, to assist him in repairing residential damage suffered by Hurricane Andrew. Under his arrangement with Mangoya, Gerry Irons included Respondent's time in his billings to Mangoya. Mangoya would pay the bill submitted by Gerry Irons, and Gerry Irons would pay Respondent for his labors.

10. Toward the end of 1993, Mangoya laid-off Gerry Irons and, consequently, Respondent. At the time, or immediately prior, Irons Contracting had been working under Mangoya repairing a home for the Chasner family in southwest Dade County. The Chasner family was apparently satisfied with the work performed

    because when asked by a neighbor, Ms. Sally Stern, they recommended Irons Contracting.

11. At the time, Ms. Stern was renting a home in the neighborhood, having been displaced from her residence at 10452 Southwest 114th Street, Miami, Florida, because of damage caused by Hurricane Andrew. Apparently, she had employed a number of contractors to work on the home, and at the time she

    approached the Irons was dissatisfied with the progress made by the current contractor.

12. Following discussions with Ms. Stern, Gerry Irons, who was no longer employed by or working under a licensed contractor (Mongoya), approached a friend of his, Terry Klob, a licensed contractor. While not privy to the entire conversation, it was Respondent's impression that Mr. Klob agreed to be the contractor on the job and Gerry Irons (Irons Contracting) would do the actual work.1

13. Subsequently, Gerry Irons met with Ms. Stern to inspect the property and negotiate the scope of work to be performed, and then prepared a proposal for the repair of Ms. Stern's home at 10452 Southwest 114th Street, Miami, Florida. The proposal named Irons Contracting as the contractor, and the proposed contract price was $118,093.75.

14. On December 29, 1993, Gerry Irons and the Respondent met with Ms. Stern, and she acknowledged her acceptance of the

    proposal by affixing her signature to the agreement. Signing on behalf of Irons Contracting were Gerry Irons and the Respondent.

15. Notably, it was not customary for the Respondent to sign documents on behalf of Irons Contracting; however, in this instance, Gerry Irons prepared the contract to include Respondent as a signatory to assure Ms. Stern, who had apparently developed a sympathetic concern for Respondent's loss, that he would be employed to work on her house. At no time was Ms. Stern led to believe, nor did she ever believe, that Respondent was a licensed contractor. Rather, it was always her understanding that

    Gerry Irons was the licensed contractor.

    
    

16. Not only was it not customary for Respondent to sign on behalf of Irons Contracting, it had never occurred before and never occurred again. Notably, Irons Contracting was Gerry Irons' business, and he exercised primary control over its operations. Gerry Irons operated the business from his home; owned all the tools and other equipment used in the business; conducted all negotiations with Irons Contracting customers or potential customers; signed contracts, proposals, correspondent, and all other documents on behalf of Irons Contracting; and paid the bills or debts of Iron Contracting, including Respondent's pay, by check.2 Respondent's association with Irons Contracting was strictly as an employee,3 who was paid on an hourly basis for the work he did on Irons Contracting jobs. On an average week, Respondent would usually earn approximately $400.

17. During part of the period following the signing of the contract and April or May 1994 when work ceased,4 Respondent worked as a day laborer on Ms. Stern's house,5 as well as other Irons Contracting projects. During that period, Ms. Stern made payments totaling $35,000. Each payment was by check payable to Irons Contracting, and each check was endorsed by Gerry Irons. Respondent, apart from being compensated for his daily labors, did not share in any of the proceeds Gerry Irons received from Ms. Stern.

    The costs of investigation and prosecution

    
    

18. At hearing, Petitioner offered proof, without objection, that its costs of investigation and prosecution, excluding costs associated with an attorney's time, as of April 23, 1998, totaled $663.88. (Petitioner's Exhibit 8).

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Sections 120.569, 120.57(1), and 120.60(5), Florida Statutes.

20. Where, as here, the Department proposes to take punitive action against a licensee, it must establish grounds for disciplinary action by clear and convincing evidence. Section 120.57(1)(h), Florida Statutes (1997), and Department of Banking and Finance v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996). That standard requires that "the evidence must be found to be

    credible; the facts to which the witnesses testify must be distinctly remembered; the testimony 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 a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

21. Moreover, the disciplinary action taken may be based only upon the offenses specifically alleged in the administrative complaint. See Kinney v. Department of State, 501 So. 2d 129 (Fla. 5th DCA 1987); Sternberg v. Department of Professional Regulation, Board of Medical Examiners, 465 So. 2d 1324 (Fla. 1st DCA 1985); and Hunter v. Department of Professional Regulation,

    458 So. 2d 844 (Fla. 2d DCA 1984). Finally, in determining whether Respondent violated the provisions of section 475.25(1), as alleged in the Administrative Complaint, one "must bear in mind that it is, in effect, a penal statute. . . . This being true, the statute must be strictly construed and no conduct is to be regarded as included within it that is not reasonably proscribed by it." Lester v. Department of Professional and Occupational Regulations, 348 So. 2d 923, 925 (Fla. 1st DCA 1977).

22. Pertinent to this case, Section 455.228(1), Florida Statutes, authorizes the Department to impose an administrative

    fine not to exceed $5,000 per incident, where it has been shown that a person, not licensed by the Department or the appropriate regulatory board, has violated any provision of Chapter 455 or any statute that relates to the practice of a profession regulated by the Department.

23. Among the professions requiring licensure is the practice of contracting. Chapter 489, Part I, Florida Statutes. Pertinent to this case,6 that chapter provides that no person shall:

    (f) Engage in the business or act in the capacity of a contractor or advertise himself or herself or a business organization as available to engage in the business or act in the capacity of a contractor without being duly registered or certified or having a certificate of authority;

    
    

    * * *

    
    

    (h) Commence or perform work for which a building permit is required pursuant to an adopted state minimum building code without such building permit being in effect. . . .

    
    

    Section 489.127(1), Florida Statutes.

    
    

24. In resolving whether Respondent acted in the capacity of a "contractor," the following definitions should be considered:

    1. "Contractor" 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 herself or by others construct, repair, alter, remodel, add to, demolish, subtract from, or improve any building or structure, including related

       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 subsection. . . .

       1. "General contractor" means a contractor whose services are unlimited as to the type of work which he or she may do, except as provided in this part.

       2. "Building contractor" means a contractor whose services are limited to construction of commercial buildings and single-dwelling or multiple-dwelling residential buildings, which commercial or residential buildings do not exceed three stories in height, and accessory use structures in connection therewith or a contractor whose services are limited to remodeling, repair, or improvement of any size building if the services do not affect the structural members of the building.

       3. "Residential contractor" means a contractor whose services are limited to construction, remodeling, repair, or improvement of one-family, two-family, or three-family residences not exceeding two habitable stories above no more than one uninhabitable story and accessory use structures in connection therewith.

    * * *

    
    

    (6) "Contracting" 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 contractors. 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. . . .

    Section 489.105(3), Florida Statutes.

25. Also pertinent to this case, Section 489.103, Florida Statutes, provides the following exemption from the licensure requirements of Chapter 489, Part I, Florida Statutes:

    489.103 Exemptions.--This part does not apply to:

    
    

    * * *

    
    

    1. Any employee of a certificateholder or registrant who is acting within the scope of the license held by that certificateholder or registrant and with the knowledge and permission of the licenseholder. However:

       1. If the employer is not a certificateholder or registrant in that type of contracting, and the employee performs any of the following, the employee is not exempt:

          1. Holds himself or herself or his or her employer out to be licensed or qualified by a licensee;

          2. Leads the consumer to believe that the employee has an ownership or management interest in the company; or

          3. Performs any of the acts which constitute contracting.

       2. The legislative intent of this subsection is to place equal responsibility on the unlicensed business and its employees for the protection of the consumers in contracting transactions. (Emphasis added.)

26. Applying the foregoing provisions of law to the facts, as found, compels the conclusion that Respondent violated the provisions of subsection 489.127(1)(f), as alleged in Count I of the Administrative Complaint, as well as the provisions of subsection 489.127(1)(h), as alleged in Count II of the Administrative Complaint.

27. Having resolved that Respondent committed a violation of subsections 489.127(1)(f) and (h), and, therefore, subsection

    455.228(1), as alleged, it remains to determine the appropriate penalty to be imposed.

28. Normally, the first step in assessing an appropriate penalty is a consideration of an agency's disciplinary or penalty guidelines. Section 455.2273(5), Florida Statutes. Gadsden State Bank v. Lewis, 348 So. 2d 343 (Fla. 1st DCA 1977) (Agency must honor its own rule until amended or abrogated).

    Cf. Williams v. Department of Transportation, 531 So. 2d 994 (Fla. 1st DCA 1988) (Agency is required to comply with its disciplinary guidelines in taking disciplinary action against its employees). However, notwithstanding the provisions of Section 455.2273, Florida Statutes, the Department has failed to establish, by rule, any penalty guidelines. Consequently, the only guidance for the crafting of an appropriate penalty is that afforded by Subsection 455.228(1), Florida Statutes. That subsection authorizes the Department "to impose an administrative penalty not to exceed $5,000 per incident."

29. Here, considering that Gerry Irons, and not Respondent, controlled Irons Contracting, Respondent's lack of familiarity with the law governing contracting (while not excusing the violations given the expectation that Respondent should know and abide the law), and Respondent's evident good faith, the imposition of a total fine of $300 is appropriate. Additionally, consistent with the provisions of Section 455.227(3), Florida

Statutes, the Department is entitled to recover costs for investigation and prosecution in the sum of $663.88.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Petitioner enter a Final Order:

1. Finding the Respondent guilty of Counts I and II of the Administrative Complaint;

2. Finding the Respondent not guilty of Counts III through VIII of the Administrative Complaint;

3. Imposing an administrative penalty of $300.00; and

   
   

4. Requiring, pursuant to Section 455.227(3), Florida Statutes, that the Respondent pay Petitioner's costs of investigation and prosecution, excluding costs associated with an attorney's time, in the amount of $663.88.

DONE AND ENTERED this 11th day of June, 1998, in Tallahassee, Leon County, Florida.

WILLIAM J. KENDRICK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 11th day of June, 1998.

ENDNOTES

1/ The arrangement apparently bore a resemblance to Respondent's impression. In this regard, the proof demonstrates that, thereafter, Irons Contracting entered into two contracts, one with Ms. Stern and thereafter with a James Wolf (Ms. Stern's boyfriend). Mr. Klob pulled the permit for Wolf project, but not for the Stern project. Apparently Mr. Klob did not pull a permit for the Stern project because of delays encountered in getting the prior contractor to sign a release. Mr. Klob did not, however, provide any supervision on either project, but, apparently, operated as a convenience for Gerry Irons in pursuing the contracts. Respondent was not, however, aware of the subtleties of Gerry Irons' arrangement with Terry Klob, or its impropriety.

2/ When Respondent was first employed by Irons Contracting, his brother was the sole signatory on the business account.

Respondent was subsequently added as a signatory to assure that the account would still be accessible, if Gerry Irons should be injured or meet with other mishap. Respondent was not, however, shown to have ever exercised his signatory authority.

3/ Gerry Irons apparently had business cards made for Irons Contracting, that included his and Respondent's name. The cards did not, however, contain any statement or other reference that would suggest either Gerry Irons, Respondent, or Irons Contracting, were licensed by the State of Florida.

4/ The precise reason that Irons Contracting did not complete the work does not appear clearly from the record, but may have been related to the fact that the cost of the project, as requested by Ms. Stern, exceeded her insurance proceeds.

5/ There were, of course, others engaged on the jobs, including Gerry Irons and, occasionally, Respondent's minor son and daughter.

6/ Count I of the Administrative Complaint charges that Respondent's conduct violated the provisions of Section 489.127(1)(f), Florida Statutes, and Count II that his conduct violated Section 489.127(1)(h), Florida Statutes.

COPIES FURNISHED:

Theodore R. Gay, Esquire Department of Business and

Professional Regulation

401 Northwest Second Avenue Suite N-607

Miami, Florida 33128

Edward Irons

125 Northeast 23rd Avenue Gainesville, Florida 32609

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: 97-005888

Orders for Case No: 97-005888