STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

LICENSING BOARD, )

)

Petitioner, ) Case No. 98-3305

)

vs. )

)

WILLIE J. BATTLE, )

)

Respondent. )

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

LICENSING BOARD, )

)

Petitioner, ) Case No. 98-3306

)

vs. )

)

WILLIE J. BATTLE, )

)

Respondent. )

)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, conducted the final hearing in Fort Myers, Florida, on December 1, 1998.

APPEARANCES

For Petitioner: Paul F. Kirsch

Senior Attorney

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-0792

For Respondent: P. Michael Villalobos

Sussman Law Group, P.A.

1375 Jackson Street, Suite 201 Fort Myers, Florida 33901

STATEMENT OF THE ISSUES

The issues are whether Respondent is guilty of making misleading, deceptive, or fraudulent representations in or related to the practice of contracting, in violation of Section 289.129(1)(c), Florida Statutes; mismanagement or misconduct in the practice of contracting that causes financial harm to a customer, in violation of Section 489.129(1)(h)2, Florida Statutes; failing to comply with any of the provisions of Chapter 489, Part I, or a rule or lawful order of the Construction Industry Licensing Board, in violation of Section 489.129(1)(j), Florida Statutes; abandoning a construction project, in violation of Section 489.129(1)(k), Florida Statutes; committing fraud or deceit in the practice of contracting, in violation of Section 489.129(1)(m), Florida Statutes; two counts of committing incompetency or misconduct in the practice of contracting, in violation of Section 489.129(1)(n), Florida Statutes; and failing to satisfy, within a reasonable time, a civil judgment obtained against him, or a business entity that he has qualified, and related to the practice of contracting, in violation of Section 489.129(1)(r), Florida Statutes. If Respondent is guilty of any of these violations, an additional issue is what penalty should be imposed.

PRELIMINARY STATEMENT

Petitioner commenced DOAH Case No. 98-3305 by filing an Administrative Complaint dated February 21, 1997, alleging that Respondent was a certified residential contractor and was the qualifier for Dunbar Development, Inc.

The Administrative Complaint alleges that Dunbar Development, Inc., entered into a contract with Mr. and Mrs. Prevatt for the construction of a single-family residence. The Administrative Complaint alleges that Respondent failed to include his certification number on the contract, in violation of Section 489.119(5)(b), Florida Statutes.

The Administrative Complaint alleges that the contract price was $80,795, of which Dunbar Development, Inc., accepted $1500 on August 19, 1994, and $17,000 on June 6, 1995. The Administrative Complaint alleges that Respondent represented to the Prevatts that the contract price covered a Lee County impact fee of $2719, a water and sewer connection fee of $550, a water and sewer tap fee of $2000, a sidewalk cost of $500, and a driveway culvert cost of $695. However, Palm Beach County, in which the property was allegedly located, allegedly did not require these fees on constructed homes.

The Administrative Complaint alleges that Dunbar Development, Inc., represented that it had filed the building applications in September 1995, but the applications were actually not filed until December 1995.

The Administrative Complaint alleges that Dunbar Development, Inc., failed to commence construction and failed to return the Prevatts' money, even though Dunbar Development, Inc., was not entitled to retain this money.

The Administrative Complaint alleges that Respondent is guilty of making misleading, deceptive, or fraudulent representations in or related to the practice of contracting, in violation of Section 289.129(1)(c), Florida Statutes; mismanagement or misconduct in the practice of contracting that causes financial harm to a customer, in violation of Section 489.129(1)(h)2, Florida Statutes; failing to comply with any of the provisions of Chapter 489, Part I, or a rule or lawful order of the Construction Industry Licensing Board, in violation of Section 489.129(1)(j), Florida Statutes; abandoning a construction project, in violation of Section 489.129(1)(k), Florida Statutes; committing fraud or deceit in the practice of contracting, in violation of Section 489.129(1)(m), Florida Statutes; and committing incompetency or misconduct in the practice of contracting, in violation of Section 489.129(1)(n), Florida Statutes.

Petitioner commenced DOAH Case No. 98-3306 by filing an Administrative Complaint dated April 23, 1998, alleging that Respondent was a certified residential contractor and was the qualifier for Dunbar Development, Inc.

The Administrative Complaint alleges that Dunbar Development, Inc., entered into a contract with Yvonne Bushnell for the construction of a single-family residence. The Administrative Complaint alleges that Ms. Bushnell paid Dunbar Development, Inc., $2800.

The Administrative Complaint alleges that Ms. Bushnell obtained a default judgment against Dunbar Development, Inc., in the amount of $2800. The Administrative Complaint alleges that the judgment remains unsatisfied ten months after the entry of the judgment. The Administrative Complaint alleges that Rule 61G4-17.001(23), Florida Administrative Code, defines 90 days as the "reasonable time" within which a contractor shall satisfy judgments.

The Administrative Complaint alleges that Respondent is guilty of failing to satisfy, within a reasonable time, a civil judgment obtained against him or the business entity that he has qualified and related to the practice of contracting, in violation of Section 489.129(1)(r), Florida Statutes; and committing incompetency or misconduct in the practice of contracting, in violation of Section 489.129(1)(n), Florida Statutes.

Neither Respondent nor his counsel appeared at the final hearing. Petitioner called five witnesses and offered into evidence 19 exhibits: Petitioner Exhibits 1, 3.2, 4-8, 9.1, 9.2,

9.4, 10.1, 10.2, 10.3, 10.4, 12, 13, 14.1. 14.2, and 15.

By Order Granting Motion for Reconsideration entered January 22, 1999, the Administrative Law Judge granted Respondent's Motion for Reconsideration and/or Rehearing, in the absence of any objection from Petitioner. The order allows Respondent to cross-examine by deposition any of the five witnesses who testified and to call additional witnesses. The order gives Respondent until March 15, 1999, to file the

transcripts of its depositions. The order gives Petitioner until March 22, 1999, to file a notice of intent to submit rebuttal evidence. The order also gives the parties until April 20, 1999, to file proposed recommended orders.

Upon request of Respondent without objection of Petitioner, the Administrative Law Judge extended Respondent's filing deadline to March 29, 1999, for Respondent to file the deposition transcripts. Respondent filed the deposition transcripts of Carla Prevatt and Deborah Fletcher. Petitioner filed the transcript of the deposition of Yvonne Bushnell.

The court reporter filed the Transcript on January 25, 1999.

FINDINGS OF FACT

1. Respondent is a certified general contractor, holding certificate number CR C016649. He has been continuously certified since 1980 and has been licensed since 1988 as the qualifier of Dunbar Development, Inc.

2. On August 19, 1994, Carla and Vernon Prevatt entered into a contract with Dunbar Development, Inc., for the

   construction of a residence. The contract calls for Dunbar Development, Inc. (Dunbar), to construct the "Horizon" model home on two platted lots for the sum of $73,395 plus an additional

   $7400 for Addendum 2.

   
   

3. The contract permits Dunbar to cancel the contract if the Prevatts timely apply for a mortgage, but are denied. However, in such event, the contract requires Dunbar to return to the Prevatts all of their money.

4. The contract acknowledges that the Prevatts paid Dunbar the sum of $1500 at the time of entering into the contract. A handwritten note states: "June 06, 1995—Rec'd $17,000.00 ck no. 16655 to initiate construction application for permits & building." Although the contract was originally signed by John Danzy, as "authorized representative" for Dunbar, this handwritten note bears the initials, "WB."

1. The contract does not contain Respondent's certificate number. The contract does not contain a completion date. The contract provides that Dunbar will "commence construction . . . after full down payment and mortgage financing is received" and "will complete the same as soon as practicable, subject to the availability of labor and supplies [and] delays not within the control of [Dunbar]." Another clause in the contract states that Dunbar shall complete construction within two years of the date of the contract.

2. On August 30, 1994, the Prevatts applied for a construction mortgage loan with the First Bank of Clewiston. The bank processed the loan application without any delays or problems. However, there was a substantial delay not attributable to the Prevatts or Respondent in obtaining an appraisal. The appraiser completed the appraisal before March 5, 1995, but probably not much prior to that date.

3. By letter dated March 5, 1995, from Dunbar's financial officer to the Prevatts, Dunbar acknowledged the receipt of the appraisal and proposed a draw schedule totaling $80,795. The first payment under the draw schedule was $18,500 for "applicable fees and permits, plus, the plylon engineered foundation and engineered septic field construction initiation."

4. The policy of First Bank of Clewiston is to match the value of the work to the payments to the contractor. The first payment due under Dunbar's draw schedule called for a payment substantially in excess of the value of the goods and services rendered. However, the bank acceded to the schedule and delivered a check dated June 6, 1995, in the amount of $17,000 payable jointly to the Prevatts and Dunbar.

5. As Dunbar had done with the $1500 down payment received at the time of the execution of the contract, Dunbar deposited the $17,000 check and received payment of these funds.

6. On behalf of Dunbar, Respondent hired Johnson-Prewitt & Associates, Inc., in early November 1995, to prepare the

   engineering drawings for the septic tank and foundation. These materials are specific to the Prevatts' homesite. By invoice dated November 13, 1995, Johnson-Prewitt & Associates, Inc., invoiced Respondent at Dunbar a total of $1700 for the completed work. After a credit of $700, the outstanding balance was $1000, which remains unpaid.

7. From 1994 through 1995, Respondent, on behalf of Dunbar, provided information to Alpha Engineering, which was retained to prepare the plans for the Horizon model that the Prevatts were building. Most of this work was for the prototype Horizon home, but the work reflected by an invoice dated

   March 16, 1996, was exclusively for the home to be built for the Prevatts. Respondent and Dunbar never paid this invoice and never picked up the plan revisions that were the subject of this invoice.

8. In fact, Respondent and Dunbar never commenced construction of the Prevatts' home and refused to return any portion of the $18,500 that the Prevatts paid to Dunbar. Although the bank never made any additional disbursements, the Prevatts nevertheless owed the bank the $17,000 disbursed as the first draw and, at the time of the hearing, had paid the sum of

   $6522.96 in interest and closing costs on this loan.

   
   

9. With two checks totaling $2800 that, in June 1995, Yvonne Bushnell delivered to Respondent, on behalf of Dunbar,

   Ms. Bushnell entered into a contract with Dunbar for the construction of a residence.

10. After Dunbar declined to construct a house or return the money, Ms. Bushnell filed an action against Respondent and Dunbar in Lee County Court on January 31, 1997. On March 12, 1997, the court entered a default judgment against Dunbar Developing, Inc., for the sum of $2800 and costs of $79.50.

11. Following entry of the judgment, on September 14, 1998, Ms. Bushnell and Respondent agreed to settle the matter with the payment of $1600. However, upon payment of only $800, Respondent obtained Ms. Bushnell's signature on a letter dated September 14, 1998, to Petitioner acknowledging the full settlement of the case. Respondent then proceeded to obtain court issuance of a satisfaction when Ms. Bushnell refused to sign a satisfaction, absent payment of the remaining $800.

12. By Order to Set Aside Settlement Agreement entered November 24, 1998, the court reinstated the original judgment. The judgment remains unsatisfied.

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the subject matter. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes. All references to Rules are to the Florida Administrative Code.)

14. Petitioner must prove the material allegations by clear and convincing evidence. Department of Banking and Finance v.

    Osborne Stern and Company, Inc., 670 So. 2d 932 (Fla. 1996) and Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

15. Section 489.129(1) provides that the Board may take disciplinary action, including revocation, suspension, probation, restitution, an administrative fine of $5000 per violation, and costs, against a certificate if "the contractor, financially responsible officer, or business organization for which the contractor is a primary qualifying agent" is found guilty of any of the following acts (with the current alphabetical subsections):

    (c) Violating any provision of part I of chapter 455.

    
    

    (g) Committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer. Financial mismanagement or misconduct occurs when:

    * * *

    2. The contractor has abandoned a customer's job and the percentage of completion is less than the percentage of the total contract price paid to the contractor as of the time of abandonment, unless the contractor is entitled to retain such funds under the terms of the contract or refunds the excess funds within 30 days after the date the job is abandoned[.]

    
    

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

(j) Abandoning a construction project in which the contractor is engaged or under contract as a contractor. A project may be presumed abandoned after 90 days if the contractor terminates the project without just cause or without proper notification to the owner, including the reason for

termination, or fails to perform work without just cause for 90 consecutive days.

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

   
   

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

(q) Failing to satisfy within a reasonable time, the terms of a civil judgment obtained against the licensee, or the business organization qualified by the licensee, relating to the practice of the licensee's profession.

For the purposes of this subsection, construction is considered to be commenced when the contract is executed and the contractor has accepted funds from the customer or lender.

1. Petitioner has proved that Respondent is guilty of several overlapping violations in connection with the Prevatt transaction and two independent violations in connection the Bushnell transaction.

2. In the Prevatt transaction, the violation is best described by Subsection 489.129(1)(l) due to the amount of money involved, Respondent's refusal to make a refund, the size of the loss suffered by the Prevatts, and Respondent's failure to explain why Dunbar failed to refund the customers' money.

3. In the Bushnell transaction, the violations are, as alleged, of Subsections 489.129(1)(m) and (q).

4. Under Rule 61G4-17.001(13)(b), the penalty range for the first violation of the prohibition against fraud or deceit,

   accompanied by monetary loss, is a fine of $500 to $2000 and suspension or revocation.

5. Under Rule 61G4-17.001(14)(d)3, the penalty range for the first violation of the prohibition against misconduct or incompetency in the practice of contracting is a fine of $250 to

   $1000 and/or probation.

   
   

6. Under Rule 61G4-17.001(18), the penalty range for the first violation of the prohibition against failing timely to satisfy a civil judgment is a fine of $500 to $1000 and/or proof of satisfaction of the judgment.

7. The acts and omissions of Respondent in these two transactions evidenced a blatant disregard of his professional and legal obligations. The existence of several violations, while not constituting a second or third violation, nevertheless is an aggravating factor.

RECOMMENDATION

It is

RECOMMENDED that the Construction Industry Licensing Board enter a final order revoking Respondent's certificate as a general contractor and imposing an administrative fine against him of $4000.

DONE AND ENTERED this 6th day of May, 1999, in Tallahassee, Leon County, Florida.

ROBERT E. MEALE

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 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings This 6th day of May, 1999.

COPIES FURNISHED:

Paul F. Kirsch, Senior Attorney Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

P. Michael Villalobos Sussman Law Group, P.A.

1375 Jackson Street, Suite 201 Fort Myers, Florida 33901

William Woodyard, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Rodney Hurst, Executive Director Construction Industry Licensing Board Department of Business and

Professional Regulation

7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

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 must be filed with the agency that will issue the final order in this case.

Docket for Case No: 98-003305

Orders for Case No: 98-003305