STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, )

)

vs. ) Case No. 98-5064

)

ALLEN FADER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case before Administrative Law Judge Michael M. Parrish, of the Division of Administrative Hearings, on March 4, 1999, in Miami, Florida.

APPEARANCES

For Petitioner: Diane Snell Perera, Esquire

Department of Business and Professional Regulation

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

For Respondent: Mitchell J. Olin, Esquire

1290 East Oakland Park Boulevard Fort Lauderdale, Florida 33334

STATEMENT OF THE ISSUE

This is a license discipline case in which the Petitioner seeks to take disciplinary action against the Respondent on the basis of allegations of misconduct set forth in a four-count

Administrative Complaint. The Administrative Complaint charges the Respondent with violation of the following statutory provisions: Sections 489.129(1)(g), 489.129(1)(h)2, 489.129(1)(k), and 489.129(1)(n), Florida Statutes (1996 Supp.).

PRELIMINARY STATEMENT

Following service of the Administrative Complaint, the Respondent filed a timely Election of Rights form in which he requested an evidentiary hearing on disputed issues of material fact. The Election of Rights form specifically identified the following as disputed issues of material fact:

The amounts attributable to the value of services and materials provided and performed. The amount of claimed refund due. Manner in which Allen Fader/Gold Coast Construction Services, Inc., is authorized to do business. Further, Fader preserves the right to submit supplemental responses upon review of discovery.

In due course, the matter was referred to the Division of Administrative Hearings for assignment to an administrative law judge. A final hearing was conducted in this case on March 4, 1999, at which time Petitioner presented the testimony of two witnesses and offered nineteen exhibits. Seventeen of Petitioner's exhibits were received in evidence; two were not.1 At the request of Petitioner, official recognition was taken of Chapter 494, Florida Statutes, and Section 489.126, Florida Statutes. Respondent testified on his own behalf and also presented the testimony of one other witness. Respondent also offered four exhibits, two of which were received in evidence.2

At the conclusion of the final hearing on March 4, 1999, the parties were allowed ten days from the filing of the transcript to file their respective proposed recommended orders. The transcript of the final hearing was filed with the Division of Administrative Hearings on April 14, 1999. On April 23, 1999, the Petitioner filed a timely Proposed Recommended Order.

On April 27, 1999, the Respondent filed a motion requesting an extension of time within which to file his proposed recommended order. The Respondent was allowed until May 14, 1999, within which to file his proposed recommended order. On May 4, 1999, Respondent filed his Proposed Recommended Order.3

FINDINGS OF FACT

1. The Respondent, Allen Fader, is, and has been at all times material, a licensed Certified General Contractor, having been issued license number CG C007504 by the State of Florida.

2. At all times material, the Respondent was licensed to contract as an individual.

3. The Respondent, by virtue of his license, advertised construction services for Gold Coast Construction Services, Inc., during 1997.

4. The Respondent presented a business card, with the name of Gold Coast Construction Services, Inc., to Ruby M. Shepherd, a customer, in April of 1997.

5. On April 14, 1997, the Respondent, doing business as Gold Coast Construction Services, Inc., contracted with Ruby M.

   Shepherd to enclose a patio and to install hurricane shutters at Ms. Shepherd's residence located at 12325 Northwest 19th Avenue, Miami, Florida. The contract was conditioned on Ms. Shepherd being able to obtain financing to pay for the construction described in the contract. The exact amount Ms. Shepherd was required to pay under the original April 14, 1997, contract cannot be determined from the evidence in this case.4

6. The Respondent assisted Ms. Shepherd in obtaining a loan for the financing of the construction work described in the contract. It took several months to obtain a loan. Ultimately, through the efforts of the Respondent, and of a person engaged by the Respondent to help obtain a loan, Ms. Shepherd received a loan through Town and Country Title Guaranty and Escrow. The check from Town and Country Title Guaranty and Escrow was in the amount of twelve thousand nine hundred seventy-nine dollars and fifteen cents ($12,979.15). The check was made payable to

   Ms. Shepherd and to Gold Coast Construction Services, Inc.

   
   

7. At the request of the man who helped obtain the loan, Ms. Shepherd endorsed the loan check and agreed for the check to be delivered to the Respondent. The Respondent, doing business as Gold Coast Construction Services, Inc., negotiated the loan check and received all of the proceeds in the amount of twelve thousand nine hundred seventy-nine dollars and fifteen cents ($12,979.15). The Respondent received the proceeds of the loan on or about September 12, 1997.

8. The Respondent did not take any action on Ms. Shepherd's construction project until November 14, 1997. On that day, the Respondent placed an order for the material for the hurricane shutters on Ms. Shepherd's project. Nothing more was done on Ms. Shepherd's project for quite some time. Towards the end of February of 1998, the Respondent had some health problems, which caused him to be unable to work for several weeks. Eventually, the Respondent attempted to pick up the shutter materials he had ordered for Ms. Shepherd's project. As a result of the delay, those materials had been returned to stock and had been sold to someone else. The Respondent ordered the materials again. Eventually, in June of 1998, the Respondent had the shutter materials delivered to Ms. Shepherd's residence, and began the process of installing the hurricane shutters.

9. In the meantime, from September of 1997 until January of 1998, the Respondent did not contact Ms. Shepherd. During this period of time, Ms. Shepherd called the Respondent's office numerous times and left numerous messages asking the Respondent to return her calls. From September of 1997 until January of 1998, the Respondent did not return any of Ms. Shepherd's calls.

10. In January of 1998, Ms. Shepherd was finally able to speak with the Respondent. From January of 1998 until the installation work began in June of 1998, Ms. Shepherd spoke to the Respondent on numerous occasions in an effort to find out when the Respondent was going to begin work or return the money

    he had been paid. During this period of time, the Respondent repeatedly made false assurances to Ms. Shepherd that the work would be performed within two weeks.

11. On or about June 12, 1998, the Respondent obtained a building permit for Ms. Shepherd's project from the Miami-Dade Department of Planning, Development, and Regulation.

    Installation of the hurricane shutters began that same week. The installation process was delayed because some of the materials did not fit and had to be returned to the manufacturer for modifications. Following the modifications, the installation process resumed. After a few more days, the Respondent told

    Ms. Shepherd the hurricane shutter work was finished and that he was not going to do the patio construction work, because the loan Ms. Shepherd had received was not enough money to pay for both projects. After the Respondent told Ms. Shepherd that the installation of the hurricane shutters was complete, the Respondent never did any further work on Ms. Shepherd's construction project.

12. The hurricane shutters installed at Ms. Shepherd's property by the Respondent were not installed correctly. Several of the hurricane shutters will not open and close properly. Several of the hurricane shutters are insufficiently fastened. A necessary shutter over the storage room door was never installed. The problems with the subject hurricane shutters can be corrected. The cost of the corrections necessary to make the

    shutters operate properly and to fasten them securely is approximately one thousand dollars ($1,000).

13. The Respondent never called for an inspection of the installation of the hurricane shutters at Ms. Shepherd's residence. In their present condition, those hurricane shutters will not pass inspection, because they were installed improperly. If corrections are made, those hurricane shutters will pass inspection.

14. By reason of the facts stated in paragraphs 12 and 13 above, the Respondent failed to properly and fully complete the hurricane shutter portion of the contracted work. The Respondent never did any work on the patio portion of the contracted work.

15. At some point in time between September of 1997 and June of 1998, Ms. Shepherd and the Respondent agreed to a modification of their original contract due to the fact that the proceeds of the loan obtained by Ms. Shepherd were insufficient to pay for both the hurricane shutters and the enclosure of the patio. The essence of their modified agreement (which was never reduced to writing) was that the Respondent would not do the patio enclosure portion of the contracted work; the Respondent would do the hurricane shutter portion of the contracted work; the Respondent would be paid for the hurricane shutter portion of the contracted work; and any remaining balance of the loan proceeds that had been paid to the Respondent would be paid back to Ms. Shepherd. Implicit, but apparently unstated, in this

    modified agreement, was the notion that the Respondent would charge a fair price for the hurricane shutter portion of the contracted work.

16. A fair price for the hurricane shutter portion of the contracted work at Ms. Shepherd's residence, including all materials, labor, overhead, and profit, would be approximately four thousand dollars ($4,000).5 The price of four thousand dollars presupposes properly installed hurricane shutters that will pass inspection. As previously mentioned, it will cost approximately one thousand dollars ($1,000) to make the corrections to the subject hurricane shutters which are necessary for the shutters to function properly and pass inspection. Accordingly, the fair value of the work performed by the Respondent at Ms. Shepherd's residence is three thousand dollars ($3,000).

17. Ms. Shepherd has paid $12,979.15 to the Respondent, doing business as Gold Coast Construction Services, Inc. The fair value of the work performed by the Respondent at

    Ms. Shepherd's residence is $3,000. Therefore, the Respondent has been paid $9,979.15 more than he is entitled to keep. As of the date of the final hearing, the Respondent has not paid back any money to Ms. Shepherd.

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this

    proceeding. Section 120.57(1), Florida Statutes.

    
    

19. The Petitioner has the burden of proof in a case of this nature, and must prove the charges contained in the Administrative Complaint by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Evans Packing Company v. Department of Agriculture and Consumer Services,

    557 So. 2d 112, 116 (Fla. 1st DCA 1989); Pascale v. Department of Insurance, 525 So. 2d 922 (Fla. 1st DCA 1988). The Petitioner's 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). In addition, the disciplinary action taken may only be based upon the offenses specifically alleged in the Administrative Complaint. See Sternberg v. Department of Professional Regulation, Board of Medical Examiners, 465 So. 2d 1324, 1325 (Fla. 1st DCA 1985); Kinney v. Department of State, 501 So. 2d 129, 133 (Fla. 5th DCA 1987); Hunter v. Department of Professional Regulation, 458 So. 2d 842, 844 (Fla. 2d DCA 1984).

20. Section 489.129, Florida Statutes (Supp. 1996), authorizes the Construction Industry Licensing Board to take disciplinary action against licensed contractors who are found to have committed various acts described in the statute. The acts described in the statute which are material to this case are:

    1. Acting in the capacity of a contractor under any certificate or registration issued

       hereunder except in the name of the certificateholder or registrant as set forth on the issued certificate or registration, or in accordance with the personnel of the certificateholder or registrant as set forth in the application for the certificate or registration, or as later changed as provided in this part.

    2. 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 75 days after the date of such liens; 2. The contractor had 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; or 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 price, as adjusted for subsequent change orders, unless such increase in cost was the result of circumstances beyond the control of the contractor, was the result of circumstances caused by the customer, or was otherwise permitted by the terms of the contract between the contractor and the customer.

       * * *

       
       

       (k) 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.

       
       

       * * *

       
       

       (n) Committing incompetency or misconduct in the practice of contracting.

       
       

21. Count I of the Administrative Complaint charges that the Respondent has violated Section 489.129(1)(g), Florida Statutes (Supp. 1996). The Petitioner has met its burden of proving that the Respondent violated Section 489.129(1)(g), Florida Statutes. The evidence clearly and convincingly reveals that the Respondent, although licensed to contract in his individual name, conducted business as Gold Coast Construction Services, Inc. The Respondent advertised as Gold Coast Construction Services, Inc., entered into a contract with

    Ms. Shepherd as Gold Coast Construction Services, Inc., and presented a business card to Ms. Shepherd which identified himself as President and CEO of Gold Coast Construction Services, Inc. At no time material hereto, was the Respondent the licensed qualifier of Gold Coast Construction Services, Inc., nor did that name appear on his certificate. Therefore, the Respondent is guilty of the violation charged in Count I of the Administrative Complaint.

22. Count II of the Administrative Complaint charges that the Respondent has violated Section 489.129(1)(n), Florida Statutes (1996 Supp.). The Petitioner has met its burden of clearly and convincingly proving that the Respondent violated

    this statutory prohibition by committing misconduct in the practice of contracting. The evidence establishes that the Respondent assisted Ms. Shepherd in obtaining a loan to finance the construction provided for in the contract. The Respondent instructed Ms. Shepherd to sign the entire proceeds of the loan check over to himself, doing business as Gold Coast Construction Services, Inc. The Respondent accepted the full amount of the loan proceeds in September 1997, and failed to commence any of the work provided for under the contract until June 1998.

    Section 489.126, Florida Statutes, requires that a contractor who receives a construction deposit of more than ten percent of the contract price must apply for the necessary permit within 30 days, and commence work on the project within 90 days of receiving such deposit. Respondent accepted far more than ten percent of the contract price and, after repeated complaints from Ms. Shepherd, finally commenced work on the project nine months after being paid a substantial sum of money. Such conduct constitutes misconduct in the practice of contracting.

    Therefore, the Respondent is guilty of the violation charged in Count II of the Administrative Complaint.

23. Count III of the Administrative Complaint charges that the Respondent has violated Section 489.129(1)(k), Florida Statutes (Supp. 1996). The Petitioner has proved by clear and convincing evidence that the Respondent abandoned a construction project without just cause or notice to the owner. The

    Respondent failed to properly and fully complete the portion of the contract with Ms. Shepherd that pertained to the purchase and installation of hurricane shutters. The shutter for one door was never installed, several shutters failed to close properly, several shutters were not fastened properly, and none of the shutters were ever inspected. The Respondent's failure to complete the hurricane shutter portion of the contracted work constitutes abandonment of a construction project.6 Therefore, the Respondent is guilty of the violation charged in Count III of the Administrative Complaint.

24. Count IV of the Administrative Complaint charges that the Respondent has violated Section 489.129(1)(h)2, Florida Statutes (Supp. 1996). The Petitioner has proved by clear and convincing evidence that the Respondent abandoned Ms. Shepherd's project, and that at the time of abandonment "the percentage of completion [was] less than the percentage of the total contract price paid to the contractor as of the time of abandonment." There is no credible evidence that the Respondent was entitled to retain any excess funds, and the clear and convincing evidence establishes that the Respondent has not refunded the excess funds, and that more than 30 days have passed since the job was abandoned. Therefore, the Respondent has committed misconduct in the practice of contracting that causes financial harm to a customer, and the Respondent is guilty of the violation charged in Count IV of the Administrative Complaint.

25. The Petitioner has incurred costs in its investigation and prosecution of the Respondent. The Petitioner, pursuant to Rule 61G4-17.001(19), Florida Administrative Code, promulgated pursuant to Chapter 489, Florida Statutes, is entitled to recover costs for investigation and prosecution. Rule 61G4-17.001(19) provides:

    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.

26. In accordance with Rule 61G4-17.001, Florida Administrative Code, promulgated pursuant to Section 489.129, Florida Statutes, the following guidelines shall be used in disciplinary cases:

    489.129(1)(g), Florida Statutes: acting in name other than that appearing on license.

    $100.00.

    
    

    489.129(1)(n): incompetence, and/or misconduct in the practice of contracting: First violation, $500 to $1,000 fine; repeat violation, $1,000 to $2,000 and/or probation, suspension or revocation.

    
    

    489.129(1)(k), Florida Statutes: abandonment: First violation $500 to $2,000; repeat violation, revocation and $5000.

    
    

    489.129(1)(h): Mismanagement or misconduct causing financial harm to the customer.

    First violation, $750 to $1,500 fine and/or probation; repeat violation, $1,500 to $5,000

    fine and/or probation, suspension, or revocation.

    
    

27. In addition, Rule 61G4-17.002, Florida Administrative Code, promulgated pursuant to Section 489.129, Florida Statutes, provides that:

    Circumstances which may be considered for the purposes of mitigation or aggravation of penalty shall 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 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.

28. Rule 61G4-17.001(20), Florida Administrative Code, promulgated pursuant to Section 489.129, Florida Statutes, provides that:

For any violation occurring after October, 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.

RECOMMENDATION

On the basis of the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be issued in this case concluding that the Respondent is guilty of the violations charged in each of the four counts of the Administrative Complaint, and imposing the following penalties:

1. For the violation of Section 489.129(1)(g), Florida Statutes (1996 Supp.), an administrative fine in the amount of

   $100.00.

   
   

2. For the violation of Section 489.129(1)(k), Florida Statutes (1996 Supp.), an administrative fine in the amount of

   $2,000.00.

   
   

3. For the violation of Section 489.129(1)(n), Florida Statutes (1996 Supp.), an administrative fine in the amount of

   $1,000.00.

   
   

4. For the violation of Section 489.129(1)(h), Florida Statutes (1996 Supp.), an administrative fine in the amount of

$1,500.00, and placement of the Respondent on probation for a period of one year.

It is further RECOMMENDED that the final order require the Respondent to pay restitution to Ms. Shepherd in the amount of

$9,979.15, and to pay costs of investigation and prosecution in the amount of $266.55.

DONE AND ENTERED this 9th day of September, 1999, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

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 9th day of September, 1999.

ENDNOTES

1/ Objections to Petitioner's Exhibits 3 and 19 were sustained. Those two exhibits are included in the record as rejected exhibits.

2/ Objections to Respondent's Exhibits 1 and 2 were sustained. Those two exhibits are included in the record as rejected exhibits.

3/ The Proposed Recommended Orders filed by both parties have been carefully considered during the preparation of this Recommended Order. The findings and conclusions proposed by the Petitioner are to a large extent consistent with the findings and conclusions reached in this Recommended Order. Portions of Petitioner's proposals have been incorporated into the text of this Recommended Order.

4/ There is a great deal of conflict in the evidence in this case. Further, with regard to the original contract price, some of the evidence on behalf of the Petitioner is approximate and incomplete and some of the evidence on behalf of the Respondent is not worthy of belief. The Respondent and Ms. Shepherd discussed prices on April 14, 1997, but it is not clear that they

agreed on an exact price that day, because when Ms. Shepherd signed the contract, there were no price numbers on the contract.

5/ There is a great deal of conflict in the evidence on the subject of the fair price of a hurricane shutter project of the type installed at Ms. Shepherd's house. The Respondent contends that a fair price for the work he did for Ms. Shepherd is in excess of $13,000. His testimony and evidence in support of that price are not worthy of belief. The Respondent's testimony on this and other issues lacks credibility. A number of the Respondent's statements are inconsistent with other statements he made. A number of the Respondent's statements are implausible or are in conflict with other reliable evidence. And, most seriously, a number of the Respondent's statements appear to be intentionally misleading, and others appear to be entirely false. The price of $4,000 is based on the testimony of the Petitioner's expert witness, Professor Mitrani.

6/ The Petitioner argues in its Proposed Recommended Order that the Respondent is also guilty of abandonment by reason of his failure to ever do any work on the patio enclosure portion of the contracted work. The Petitioner's argument in this regard is not supported by the evidence because, as noted in paragraph 15 of the findings of fact, Ms. Shepherd and the Respondent agreed to a modification of the original contract. Nevertheless, the allegations of Count III encompass the Respondent's failure to fully and properly complete the hurricane shutter portion of the work, and that failure is a violation of Section 489.129(1)(k), Florida Statutes (Supp. 1996).

COPIES FURNISHED:

Diane Snell Perera, Esquire Department of Business and

Professional Regulation Suite N-607

401 Northwest Second Avenue Miami, Florida 33128

Mitchell J. Olin, Esquire

1290 East Oakland Park Boulevard Fort Lauderdale, Florida 33334

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

Professional Regulation

7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

William Woodyard, General Counsel Department of Business and

Professional Regulation Northwood Centre

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: 98-005064

Orders for Case No: 98-005064