STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) Case No. 98-1265

)

CARLOS MOREJON, )

)

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 June 9, 1998, by video teleconference.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Department of Business and Professional Regulation

401 Northwest Second Avenue Suite N-607

Miami, Florida 33128

For Respondent: David M. Caveda, Esquire

Barnett Tower

701 Brickell Avenue, Suite 2150

Miami, Florida 33131 STATEMENT OF THE ISSUE

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

PRELIMINARY STATEMENT

By Administrative Complaint dated June 19, 1997, Petitioner charged that Respondent, a certified building contractor and registered residential contractor,1 violated the provisions of Section 489.129(1)(e), Florida Statutes, by assisting "a person

. . . in the prohibited uncertified and unregistered practice of contracting."2

Respondent filed an election of rights whereby he contested the material facts alleged in the Administrative Complaint and requested a formal hearing. Consequently, on March 6, 1998, the Petitioner forwarded the matter to the Division of Administrative Hearings for the assignment of an administrative law judge to conduct the hearing Respondent had requested.

At hearing, Petitioner called as witnesses: Fernando Arias, Henry Moreno, and Guillermo Tejeda. Petitioner's Exhibits 1 through 3, 6 through 8, and 10 through 23 were received into evidence. Respondent testified on his own behalf, but offered no additional proof.

The transcript of hearing was filed July 13, 1998.

Consequently, consistent with the order of July 2, 1998, the parties were accorded until July 31, 1998, to file proposed recommended orders. Under such circumstances, the parties waived the requirement that a recommended order be rendered within 30 days after the transcript has been filed. Rule 28-106.216(2), Florida Administrative Code. Petitioner elected to file such a

proposal, and it has been duly considered.

FINDINGS OF FACT

Preliminary matters

1. At all times material hereto, Respondent, Carlos Morejon, was licensed by Petitioner, Department of Business and Professional Regulation, Construction Industry Licensing Board (Department), as a certified building contractor and as a registered residential contractor, having been issued license numbers CB C056745 and RR 0066530, respectively.3

2. In early 1993, following the landfall of Hurricane Andrew, Respondent and Sergio Casiano, a family friend, resolved to "start a company" to engage in contracting. At the time, Casiano was not certified or registered to engage in contracting, a circumstance known to Respondent; however, he apparently had years of experience in the construction trade. Conversely, Respondent, although certified and registered, was lacking in experience. According to Respondent, both he and Casiano would bid or contract jobs, and Casiano (variously described by Respondent as his field manager, superintendent, supervisor, or foreman) would actually oversee the construction, subject to Respondent's supervision "as much as my abilities" allowed.4

   The Moreno job

   
   

3. Pertinent to this case, Henry and Ester Moreno own, and have owned since approximately 1986, a single-family residence located at 8361 Southwest 47th Street, Miami, Dade County, Florida. As sited, the home is located in unincorporated Dade

   County.

4. In early October 1993, the Morenos were driving in their neighborhood when they observed a house being re-roofed with a clay roof tile of a color and style they wanted installed on their home. The Morenos stopped and inquired of the owner regarding the contractor, and the owner advised them he would have the contractor contact them. That evening, Casiano telephoned the Morenos and arranged to meet with them at their home.

5. At the meeting, the Morenos explained that they wanted to replace their existing shingles with clay roof tiles, and discussed price with Casiano; however, no agreement was reached. Before he left, Casiano gave them his business card. The card identified Casiano as the "manager" of a business described as follows:

   C.M.

   STATE BUILDING CONTRACTOR ROOFING CONTRACTOR

   CC# 19424 / CBC # 056745

   
   

   Between Respondent and Casiano, "C.M." was understood to stand for Carlos Morejon.

6. In August 1994, the Morenos finally resolved to have their home re-roofed, and they telephoned Casiano at the telephone number displayed on his business card. Casiano met with the Morenos on or about August 26, 1994, at which time they entered into a written agreement to remove and replace their existing roofing material. The agreement named Carlos Morejon as the contractor and Henry and Ester Moreno as the owners. Type of

   construction was noted as residential; project location was noted as 8361 S.W. 47th Street, Miami, Florida; and the owners' telephone number was noted as (305) 226-0503. Contract price was

   $6,200. The agreement was signed by Mr. and Mrs. Moreno, as owners, and Sergio Casiano, as project supervisor.5

7. Upon execution of the agreement, and consistent with its terms, the Morenos gave Casiano a check for fifty percent of the contract price ($3,100). The check, at Casiano's direction, was made payable to his order. Under the terms of the agreement, the balance of the contract price was to be paid as the work progressed.

8. On August 30, 1994, with information provided by Casiano regarding the Moreno project, Respondent completed and signed a permit application, and submitted it to the Metropolitan Dade County Building and Zoning Department. The application identified the job address as 8361 S.W. 47th Street; the improvement as re-roofing, with a value of $6,000; and the owners' name and address as "Henry Moreno & Esther," 8361 S.W. 47th Street, Miami, Florida, with a telephone number of 226-0503. The application was also signed by Esther Moreno, as owner. The application was approved and the permit (number 94148351) was issued on August 31, 1994.6

9. Consistent with the terms of the agreement, the old roof material was removed, and the roof prepared to accept the new tile; however, cement roof tile was delivered instead of clay

   tile as requested by the Morenos. When advised of the error, Casiano removed the cement tiles from the job site, and on January 20, 1995, ordered clay tile from Metro Roof Tile, Inc. (Metro Roof), a local manufacturer of roof tiles. The clay tile was promptly delivered and installed. Up to that date, the Morenos had paid Casiano $5,650 of the contract price,7 with the balance of $550 due on final inspection.

10. Casiano neglected to pay Metro Roof for the clay tile installed on the Moreno property, and on February 24, 1995, Metro Roof served the Morenos with a Notice to Owner stating that it had furnished materials for improvement of the property upon the order of Casiano. Subsequently, on April 5, 1995, Metro Roof filed a claim of lien against the property for the value of the clay tiles ($1,061.42), and served a copy of the claim of lien on the Morenos.

11. Notwithstanding the pending claim of lien, as well as the lack of a final inspection, the Morenos met with Casiano on September 11, 1995, and inexplicably tendered to him the final payment ($550) that was due under the contract. Subsequently, the last inspection of the roof noted ten to fifteen loose tiles, and the project failed inspection.

12. On November 22, 1995, Metro Roof, having failed to receive satisfaction of its lien, filed a civil action to foreclose its lien. The Morenos were duly served with a copy of the civil action, and on December 20, 1996, a "Final Judgment for

    Construction Lien Foreclosure" was rendered. The amount awarded was $1,234.42, and represented principal ($1,061.42), filing fee ($129.00), and service of process fee ($44.00). The Morenos satisfied the judgment by payment of the full amount awarded.

    The costs of investigation and prosecution

    
    

13. At hearing, Petitioner offered proof, without objection, that its costs of investigation and prosecution, excluding costs associated with any attorney's time, totaled

    $701.96, as of April 23, 1998. (Petitioner's Exhibit 10). Previous disciplinary action

14. On March 28, 1995, Petitioner issued a Uniform Disciplinary Citation against Respondent imposing an administrative fine of $500 for failure to provide proof, in response to a random audit, of having completed all required continuing education requirements before renewing his license. (Petitioner's Exhibit 11).

    CONCLUSIONS OF LAW

    
    

15. 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.

16. 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).

17. Regardless of the disciplinary action sought to be taken, it 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). Moreover, 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).

18. Pertinent to this case, Section 489.129, Florida Statutes (1993), provides:

    1. 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 for financial harm directly related to a violation of a provision of this part, 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, financially responsible office, or business organization for which the contractor is a primary qualifying agent, a financially responsible officer, or a secondary qualifying agent responsible under s.489.1195 is found guilty of any of the following acts:

       * * *

       
       

       (e) Performing any act which assists a person or entity in engaging in the prohibited uncertified and unregistered practice of contracting, if the certificate- holder or registrant knows or has reasonable grounds to know that the person or entity was uncertified or unregistered.

       
       

19. In resolving whether Respondent assisted Casiano to engage in the prohibited uncertified and unregistered practice of contracting, the following definition should be considered:

    (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(6), Florida Statutes.

    
    

20. Subsection 489.105(3), Florida Statutes, defines the

    following types of contractors:

    
    

    (3) "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.

    * * *

    
    

    (e) "Roofing contractor" means a contractor whose services are unlimited in the roofing trade and who has the experience, knowledge, and skill to install, maintain, repair, alter, extend, or design, when not prohibited by law, and use materials and items used in the installation, maintenance,

    extension, and alteration of all kinds of roofing, waterproofing, and coating, except when coating is not represented to protect, repair, waterproof, stop leaks, or extend the life of the roof.

    
    

21. Also pertinent to this case, Section 489.113(3), Florida Statutes (1993), imposes the following restriction on a general or residential contractor's practice:

    (3) A contractor shall subcontract all electrical, mechanical, plumbing, roofing, sheet metal, swimming pool, and air conditioning work, unless such contractor holds a state certificate or registration in the respective trade category . . .

    
    

    (g) No general, building, or residential contractor certified after 1973 shall act as, hold himself or herself out to be, or advertise himself or herself to be a roofing contractor unless he or she is certified or registered as a roofing contractor.

    (Emphasis added).

    
    

22. Finally, Section 489.103, Florida Statutes (1993), provides the following exemption from the licensure requirements of Chapter 489, Part I, Florida Statutes:

    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 his 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.

    
    

    For the purpose of this part, "employee" is defined as a person who receives compensation from and is under the supervision and control of an employer who regularly deducts the

    F.I.C.A. and withholding tax and provides workers' compensation, all as prescribed by law.

    
    

23. Given the facts, as found, it cannot be subject to serious debate that, with regard to the Moreno project, Casiano engaged in contracting, and that Respondent assisted or abetted that activity by procuring the building permit for the project. Consequently, unless Casiano's activities were exempt from the certification and registration requirements of Chapter 489,

    Part I, Florida Statutes, Respondent is guilty of having violated Section 489.129(1)(e), Florida Statutes, as alleged in Count I of the Administrative Complaint.

24. Here, it must be resolved that the exemption provided by subsection 489.103(2) is not applicable for two reasons. First, had Casiano been acting within the scope of Respondent's license (which did not include roofing) his activities would not have been exempt because he was not operating "under the supervision and control" of Respondent and, therefore, was not an "employee" as that term is defined by subsection 489.103(2). Second, since Respondent was not a certified or registered roofing contractor, Casiano's activities were not exempt because he held Respondent out to be a qualified roofing contractor, he

    led the Morenos to believe that he had a management interest in Respondent's business, and he practiced contracting, as that term is defined by Subsection 489.105(6), Florida Statutes.

    Consequently, Respondent is guilty of assisting Casiano to "engag[e] in the prohibited uncertified and unregistered practice of contracting."

25. Having reached the foregoing conclusions, it remains to resolve the appropriate penalty that should be imposed.

    Pertinent to this issue, Rule 61G4-17.001, Florida Administrative Code, provides the following guidelines to be used in disciplinary cases under Chapter 489, absent aggravating or mitigating circumstances:

    (5) 489.129(1)(e): Assisting unlicensed person to evade provision of Chapter 489. First violation, $500 to $2,500 fine; repeat violation, $2,500 to $5,000 fine and/or probation, suspension, or revocation.

    
    

    * * *

    
    

    1. For any violation occurring after October 1, 1989, the board may assess the costs of investigation and prosecution. The assessment of such costs may be made in addition to the penalties provided by these guidelines without demonstration of aggravating factors set forth in rule 61G4- 17.002.

    2. For any violation occurring after October 1, 1988, the board may order the contractor to make restitution in the amount of financial loss suffered by the consumer. Such restitution may be ordered in addition to the penalties provided by these guidelines without demonstration of aggravating factors set forth in rule 61G4-17.002, and to the extent that such order does not contravene federal bankruptcy law.

26. According to Rule 61G4-17.002, Florida Administrative Code, the circumstances which may be considered in mitigation or aggravation of the penalty include, but are not limited to, the following:

    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. (This provision shall not be given effect to the extent it would contravene federal bankruptcy law.)

    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.

27. Petitioner's proposed recommended order suggests, as a penalty for the violation found, the imposition of a $1,500 administrative fine; assessment of the reasonable costs of investigation and prosecution; restitution to the consumer in the amount of $1,234.42; and, corrective action (consistent with Section 455.227(2)(g), Florida Statutes) by requiring proof that

the Moreno roof has successfully passed a final inspection. These proposals are consistent with the provisions of Sections 455.227(2) and 489.129(1), Florida Statutes, the penalty guidelines established by Rule 61G4-17.001, Florida Administrative Code, and the mitigation and aggravation factors

established by Rule 61G4-17.002, Florida Administrative Code, and are accepted as appropriate under the circumstances of this case.

RECOMMENDATION

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

RECOMMENDED that a Final Order be entered finding Respondent guilty of the violation alleged in Count I of the Administrative Complaint, and imposing, as a penalty for such violation, an administrative fine in the sum of $1,500; assessing costs of investigation and prosecution in the sum of $701.96; ordering the payment of $1,234.32 to Henry and Esther Moreno as restitution; and requiring Respondent to furnish the Construction Industry Licensing Board with proof that the Moreno roof work has successfully passed a final inspection.

It is further RECOMMENDED that the Final Order dismiss Count II of the Administrative Complaint.

DONE AND ENTERED this 10th day of August, 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 10th day of August, 1998.

ENDNOTES

1/ At the commencement of hearing, Petitioner's motion to amend paragraph 2 of the Administrative Complaint to reflect that Respondent was also licensed as a registered residential contractor (license number RR 0066530) was granted.

2/ At the commencement of the hearing, Petitioner voluntarily dismissed Count II of the Administrative Complaint.

3/ Respondent passed the state examination for licensure as a certified building contractor in October 1992, and was initially licensed as an individual with an inactive status. On March 31, 1993, a change of status was approved from inactive to active. On September 1, 1996, Respondent's certified building contractor license was placed on delinquent status. Respondent was licensed as an individual, registered residential contractor with an active status on June 23, 1993. On September 1, 1993, his license was placed on delinquent status.

4/ If the instant case was typical, Respondent merely pulled the permit, and provided no supervision.

5/ Inadvertently, a provision in the contract calling for cement roof tiles instead of clay roof tiles went unnoticed; however, when subsequently brought to his attention, Casiano acknowledged the oversight.

6/ Given the detailed information Respondent was able to include on the permit application regarding the Moreno project, as well as the signature of Mrs. Moreno on the application, it is apparent that Respondent was fully aware of the contract Casiano had entered into on his behalf and, given Respondent's submission of the permit application for the project, it is also apparent that Casiano was authorized to contract on Respondent's behalf. Any suggestion by the Respondent to the contrary is inherently improbable and unworthy of belief.

7/ On September 3, 1994, the Morenos paid Casiano $1,550 with two checks (one for $1,150 and one for $400), and on January 8, 1995, they paid Casiano an additional $1,000 by check.

COPIES FURNISHED:

Theodore R. Gay, Esquire Department of Business and

Professional Regulation

401 Northwest Second Avenue Suite N-607

Miami, Florida 33128

David M. Caveda, Esquire Barnett Tower

701 Brickell Avenue, Suite 2150

Miami, Florida 33131

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

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: 98-001265

Orders for Case No: 98-001265