STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )
)
Petitioner, )
)
vs. )
)
JERRY P. LINKOUS, )
)
Respondent. )
Case No. 01-3864PL
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in this case on December 11, 2001, in Bradenton, Florida, before Lawrence P. Stevenson, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: Michael Martinez, Esquire
Department of Business and Professional Regulation
1940 North Monroe Street, Suite 60
Tallahassee, Florida 32399-1007
For Respondent: E. Cole Fitzgerald, III, Esquire
Fitzgerald, Hawkins, Mayans & Cook Post Office Box 3795
West Palm Beach, Florida 33401 STATEMENT OF THE ISSUES
The issues are whether Respondent violated Sections 489.129(1)(i), (l), (m) and (o); 489.119(2); 489.1195(1)(a); and
489.1425(1), Florida Statutes, for the reasons stated in the Administrative Complaint and, if so, what penalty should be
imposed.
PRELIMINARY STATEMENT
Petitioner filed an Administrative Complaint (the "Complaint") against Respondent on August 29, 2000. Respondent timely requested an administrative hearing. On October 3, 2001, Petitioner forwarded the Complaint to the Division of Administrative Hearings for assignment of an Administrative Law Judge and the conduct of a formal administrative hearing.
The Complaint comprised 65 counts concerning 14 separate contracting jobs undertaken by East Coast Exteriors, Inc. ("ECE"), the company for which Respondent served as a licensed qualifying agent. The common allegations were that Respondent failed to obtain a certificate of authority, failed to explain consumer rights under the Construction Industries Recovery Fund, failed to supervise construction projects, committed incompetence and misconduct in the practice of contracting, and committed fraud and deceit in the practice of contracting.
The hearing was originally scheduled for three days, December 11 through 13, 2001. However, the parties were able to stipulate to many facts and shorten the length of the hearing to one day, December 11, 2001.
At the hearing, Petitioner presented the testimony of Darlene Weinzierl, a former customer of ECE, and Charles W. Leonard, the Florida Department of Law Enforcement ("FDLE") special agent who conducted the investigation of ECE. Petitioner's composite Exhibit 1 was admitted into evidence.
Respondent testified on his own behalf and submitted portions of the deposition testimony of Richard J. Stropp, M.D., and Rodrigo Kuljis, M.D., both of whom testified as to Respondent's medical treatment following an automobile accident and subsequent discovery of a brain tumor. Respondent's Exhibits A through C were admitted into evidence.
A Transcript of the hearing was filed on January 2, 2002. At the hearing, the parties agreed to file proposed recommended orders within 30 days of the filing of the Transcript. Both parties timely filed Proposed Recommended Orders on February 4, 2002.
FINDINGS OF FACT
Based on the oral and documentary evidence adduced at the final hearing, and the entire record of this proceeding, the following findings of fact are made:
Petitioner is the state agency responsible for regulating the practice of contracting in the State of Florida.
At all times material hereto, Respondent was licensed as a certified general contractor in the state, pursuant to
license number CG C008922. Respondent's license is currently inactive. Respondent has been a contractor for nearly 30 years, and has never been subject to disciplinary action against his license until this proceeding.
Respondent was licensed as the licensed qualifying agent for ECE from January 1998 through February 2001, for a fee of $400.00 per month.
As the qualifying agent, Respondent was responsible for all of ECE's contracting activities, in accordance with Section 489.1195(1)(a), Florida Statutes, which states: "All primary qualifying agents for a business organization are jointly and equally responsible for supervision of all operations of the business organization; for all field work at all sites; and for financial matters, both for the organization in general and for each specific job."
Respondent did not obtain a certificate of authority for ECE.
On November 16, 1998, ECE entered into a contract in the amount of $15,577.00 with Carl and Darlene Weinzierl to install aluminum siding at their residence in Terra Ceia, Florida.
The contract specified that ECE would use Reynolds brand siding in the construction. ECE actually used an inferior grade of aluminum siding.
The contract did not contain a notice explaining to the Weinzierls their rights under the Construction Industry Recovery Fund. Such notice is required by Section 489.1425, Florida Statutes.
ECE represented to the Weinzierls that they would receive a mortgage to pay for the aluminum siding and to consolidate their other debts at an interest rate of
6.5 percent. The actual interest rate on the mortgage was
18 percent.
On December 14, 1998, ECE commenced work on the Weinzierls' house. ECE never completed the work.
On January 22, 1999, ECE filed a lien against the Weinzierls' property in the amount of $15,577.00.
Respondent had no knowledge of the project on the Weinzierls' house, of the mortgage arrangement made by ECE, or of the lien filed by ECE against the Weinzierls' property.
On November 5, 1998, ECE entered into a contract in the amount of $3,624.00 with Barbara Lewis to install soffit and fascia at her residence in Bradenton, Florida.
The contract did not contain a notice explaining to Ms. Lewis her rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE represented to Ms. Lewis that she would receive financing to pay for the soffit and fascia at an interest rate
of 11 percent. The actual interest rate of the financing was
18 percent.
ECE performed the work on Ms. Lewis' house in one day.
Respondent had no knowledge of the project at
Ms. Lewis' house or of the financing arrangement made by ECE.
On August 16, 1998, ECE entered into a contract in the amount of $13,250.00 with John Maxwell to install aluminum siding at his residence in Bradenton, Florida.
The contract did not contain a notice explaining to Mr. Maxwell his rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE commenced work at Mr. Maxwell's house on
August 18, 1998, and completed the project on August 27, 1998.
On August 31, 1998, ECE recorded at the Manatee County Circuit Court a mortgage on Mr. Maxwell's property in the amount of $13,427.55 for the installation of aluminum siding.
Mr. Maxwell had signed no documents to place a mortgage on his property, and received a satisfaction of mortgage on May 19, 1999.
Respondent had no knowledge of the project to be completed at Mr. Maxwell's house or of the mortgage recorded by ECE.
On October 10, 1998, ECE entered into a contract in the amount of $3,663.00 with Richard Lanois and Beverly Carroll
to install soffit and fascia on their residence in Bradenton, Florida.
The contract did not contain a notice explaining to Mr. Lanois and Ms. Carroll their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE commenced work at the house on October 13, 1998, and completed the project on October 15, 1998.
ECE recorded a financing statement to obtain a lien on the property of Mr. Lanois and Ms. Carroll with the Manatee County Circuit Court on October 22, 1998. Neither Mr. Lanois nor Ms. Carroll had signed the financing statement that ECE filed at the court.
Respondent had no knowledge of the project at the residence of Mr. Lanois and Ms. Carroll, or of the financing statement filed by ECE to obtain a lien on their property.
On December 2, 1998, ECE entered into a contract in the amount of $5,739.00 with Paul and Linda Porter to install Reynolds brand thermal double pane windows at their residence in Bradenton, Florida.
The contract did not contain a notice explaining to the Porters their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE commenced work at the Porters' house on December 5, 1998, and completed the project on December 17, 1998. ECE installed BetterBilt brand windows rather than Reynolds windows, without the Porters' approval.
On December 17, 1998, ECE recorded at the Manatee County Circuit Court a mortgage on the Porters residence in the amount of $5,775.80. The Porters had signed no documents to allow this mortgage to be placed on their property.
Respondent had no knowledge of the project at the Porters' residence or of the mortgage recorded by ECE on the Porters' residence.
On November 2, 1998, ECE entered into a contract in the amount of $6,426.00 with William C. Roach to install Reynolds thermal double pane windows on his residence in Bradenton, Florida.
The contract did not contain a notice explaining to Mr. Roach his rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE commenced work at the Roach residence on
November 2, 1998, and completed the project on November 3, 1998. ECE installed BetterBilt brand windows instead of Reynolds windows, without Mr. Roach's permission.
ECE represented that Mr. Roach would receive financing to consolidate the cost of the windows, his mortgage, and his
credit card debt. In fact, Mr. Roach received financing only for the cost of the windows.
Respondent had no knowledge of the project at
Mr. Roach's residence or of the financing arrangement that ECE entered into with Mr. Roach.
On November 28, 1998, ECE entered into a contract in the amount of $3,635.90 with Carol Lipp to install Reynolds brand soffit and fascia on her residence in Bradenton, Florida.
The contract did not contain a notice explaining to Ms. Lipp her rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE commenced work at Ms. Lipp's residence on November 30, 1998, and completed the project on December 7, 1998.
ECE recorded a financing statement with the Manatee County Circuit Court in order to obtain a lien against
Ms. Lipp's property. Ms. Lipp had not signed the financing statement.
Respondent had no knowledge of the project at
Ms. Lipp's residence or of the financing statement filed by ECE on Ms. Lipp's residence.
On January 22, 1999, ECE entered into a contract in the amount of $13,504.00 with Shirley G. Bradley to install
11 Reynolds thermal double pane windows and to enclose the lanai and front entry of her residence in Englewood, Florida.
The contract did not contain a notice explaining to Ms. Bradley her rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE commenced work at Ms. Bradley's residence on January 25, 1999, and completed the project on February 9, 1999. ECE installed BetterBilt brand windows instead of Reynolds windows, without Ms. Bradley's permission.
ECE represented to Ms. Bradley that she would receive financing for the project at an interest rate of 16 percent. In fact, ECE obtained a loan for Ms. Bradley at an interest rate of
21 percent.
Respondent had no knowledge of the project to be completed at Ms. Bradley's residence or of the financing arrangement between ECE and Ms. Bradley.
On October 13, 1998, ECE entered into a contract in the amount of $6,511.10 with George Haight to install Reynolds thermal double pane windows on his residence in Bradenton, Florida.
The contract did not contain a notice explaining to Mr. Haight his rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE installed BetterBilt brand windows instead of Reynolds windows, without Mr. Haight's permission.
Respondent had no knowledge of the project to be completed at Mr. Haight's residence.
On December 7, 1998, ECE entered into a contract in the amount of $15,216.00 with Shirley Behen to install Reynolds thermal double pane windows on her residence in Bradenton, Florida.
The contract did not contain a notice explaining to Ms. Behen her rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE represented to Ms. Behen that she would receive financing for the windows that would also consolidate her roof payments and credit card debt. ECE provided none of the promised financing.
ECE installed BetterBilt brand windows instead of Reynolds windows, without Ms. Behen's permission.
On December 15, 1998, ECE recorded a mortgage on Ms. Behen's residence with the Manatee County Circuit Court in
the amount of $10,713.95. Ms. Behen had not signed any document to secure a second mortgage on her property.
Respondent had no knowledge of the project to be completed at Ms. Behen's residence or of the mortgage filed on her property by ECE.
On November 17, 1998, ECE entered into a contract in the amount of $7,845.00 with Debby and Wally Keefe to install Reynolds thermal double pane windows on their residence in Bradenton, Florida.
The contract did not contain a notice explaining to the Keefes their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE represented to the Keefes that they would receive a mortgage to pay for the windows and consolidate their credit card debt at a rate of 6.5 percent. In fact, ECE provided a mortgage with an actual interest rate of 18 percent.
Respondent had no knowledge of the project to be completed at the Keefes' residence or of the mortgage arrangement between the Keefes and ECE.
On September 29, 1998, ECE entered into a contract in the amount of $8,531.00 with Joe and Laura Poulin to install vinyl siding on their three duplexes in Bradenton, Florida.
The contract did not contain a notice explaining to the Poulins their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE recorded a financing statement with the Manatee County Circuit Court, obtaining a lien against the Poulins' property. The Poulins did not sign the financing statement.
Respondent had no knowledge of the project to be completed at the Poulins' residence or of the financing statement filed by ECE.
In August 1998, ECE entered into a contract in the amount of $8,307.00 with Darwin and Joyce Wilson to install
17 Reynolds thermal double pane windows on their residence in Sarasota, Florida.
The contract did not contain a notice explaining to the Wilsons their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE commenced the project on September 5, 1998, and completed the project on September 7, 1998. ECE installed BetterBilt brand windows instead of Reynolds windows, without the Wilsons' permission.
Respondent had no knowledge of the project to be completed at the Wilsons' residence.
Also in August 1998, ECE entered into another contract with the Wilsons, in the amount of $14,000.00, to install Reynolds vinyl siding on their residence.
The contract did not contain a notice explaining to the Wilsons their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE began installing the vinyl siding on October 15, 1998, and completed the project on November 15, 1998.
ECE represented to the Wilsons that they would receive a new first mortgage that would include the price of the windows, the siding, their house payment, and their credit card debt. In fact, ECE provided no such mortgage.
Respondent had no knowledge of the second project to be completed at the Wilsons' residence.
On October 7, 1998, ECE entered into a contract in the amount of $5,171.00 with Derek Campagna to install vinyl siding and fascia on his residence in Bradenton, Florida.
The contract did not contain a notice explaining to Mr. Campagna his rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes.
ECE commenced work on October 8, 1998, and completed the project on October 10, 1998.
On or about January 5, 1999, ECE filed a lien against Mr. Campagna's property in the amount of $5,171.40.
Respondent had no knowledge of the project to be completed on Mr. Campagna's residence or of the lien filed by ECE.
The misrepresentation of the actual interest rate to be charged for financing the above projects was the commission
of fraud or deceit in contracting by ECE and its representatives.
The installation of BetterBilt windows in those houses the owners of which had contracted for Reynolds windows constituted the commission of fraud or deceit in contracting by ECE and its representatives.
Respondent was unaware of ECE's fraudulent activities in the Bradenton/Sarasota area at the time they were occurring. Respondent believed that ECE did business exclusively in Indian River, St. Lucie, and Martin counties on the east coast of Florida. Respondent submitted the proper forms for the relevant permits and actively supervised ECE's construction work on the east coast of Florida.
There was no evidence that ECE used Respondent's license to obtain permits for the projects it undertook in the Bradenton/Sarasota area. The evidence established that ECE pulled no permits at all for those projects.
From all the evidence presented at the hearing, the inference may fairly be drawn that ECE purposely kept Respondent in the dark concerning its activities in the Bradenton/Sarasota area.
Respondent first learned of ECE's activities in Bradenton/Sarasota through a telephone conversation with a friend, Peter Green. Mr. Green was a mortgage broker, and told
Respondent that he was trying to secure financing for some of the ECE clients named above. Mr. Green told Respondent that some of these clients were very upset with ECE, and asked Respondent if he was aware of the problems. Respondent told Mr. Green that he was unaware ECE was doing any work on the west coast of Florida.
Mr. Green gave Respondent the phone number of Darlene Weinzierl, one of the disgruntled ECE customers. Following her own bad experience with ECE, Ms. Weinzierl had undertaken an investigation of the company. She searched courthouse records for liens filed by ECE and contacted all the individuals whose names she found. Ms. Weinzierl heard "horror stories." A woman who could barely speak English told her that ECE had slapped siding over rotting woodwork, sent her a bill for $20,000, then filed a lien on her house. Another woman told Ms. Weinzierl that when she attempted to cancel her contract, the ECE salesman showed up at her door accompanied by a man ostentatiously wearing a gun in a shoulder holster. Other customers told
Ms. Weinzierl that ECE had forged mortgages on their property. Ms. Weinzierl's hearsay testimony is unsupported by other competent substantial evidence and therefore cannot be relied on for the truth of the statements contained therein. However, it is undisputed that Ms. Weinzierl later conveyed this information to Respondent.
Respondent telephoned Ms. Weinzierl on January 23, 1999. Ms. Weinzierl conveyed to Respondent everything she had learned about ECE.
The next day, Respondent spoke with James Pizzo, Jr., one of the principals of ECE. Mr. Pizzo told Respondent that he had a very aggressive salesman who "had made a lot of promises to people," but that he was in the process of responding to the complaints and correcting the situation.
Respondent asked Mr. Pizzo why ECE was doing business on the west coast of Florida. Mr. Pizzo replied that ECE's telemarketing effort had saturated the east coast, and he believed there was a fresh market on the west coast.
Because he had worked with Mr. Pizzo for over a year and had a good working relationship with ECE, Respondent took at face value Mr. Pizzo's promise to correct the problems. Respondent took no action on his own, and continued to act as the qualifying agent for ECE. Respondent did not visit any of the west coast job sites or make any independent effort to contact ECE's victims.
FDLE commenced a RICO investigation of ECE in the spring of 1999. Special Agent Charles Leonard, the FDLE investigator, first interviewed Respondent on May 10, 1999. Respondent was never a target of the investigation, and cooperated fully.
Respondent did not sever his relationship with ECE until February 2001. By this time, 14 complaints had been filed against ECE by customers in the Bradenton/Sarasota area, and ECE had taken no action to address the situation beyond ceasing to do business in the area.
In mitigation of his failure to take any action for two years after he became aware of ECE's fraudulent practices, Respondent pointed to the precarious state of his health. In January 2000, Respondent's car was stopped on I-95 when it was rear-ended by a truck traveling at 50 to 60 miles per hour. Respondent received a concussion and suffered excruciating headaches. His neurologist ordered an MRI and found a brain tumor. The tumor could not be removed entirely. Respondent is also a diabetic.
Respondent continues to have headaches so severe that he requires trigger point injections of pain medication and epidural injections in his neck and upper spine every few months. He regularly takes Tylenol III with codeine. He requires an MRI every six months to monitor his brain tumor. Prior to his brain surgery, Respondent managed his diabetes through oral medication; however, since the surgery he has needed three injections of insulin daily.
At the same time he severed his relationship with ECE, Respondent notified Petitioner that he was transferring his
license to inactive status. Respondent no longer actively practices contracting. However, his current position as a construction project manager for the Broward County School Board requires that he hold at least an inactive general contractor's license. Respondent credibly testified that if he were to lose his current job, and the health insurance that goes with it, he could not pay his medical bills.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause, pursuant to Sections 120.569, 120.57(1), and 455.225(5), Florida Statutes.
License revocation and discipline proceedings are penal in nature. The burden of proof on Petitioner in this proceeding was to demonstrate the truthfulness of the allegations in the Complaint by clear and convincing evidence. Department of Banking and Finance v. Osborne Stern and Company, 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).
The "clear and convincing" standard requires:
[T]hat 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). The findings in this case were made based on the standard set forth in Osborne Stern and Ferris.
Section 489.119(2), Florida Statutes, provides in relevant part:
If the applicant proposes to engage in contracting as a business organization, including any partnership, corporation, business trust, or other legal entity, or in any name other than the applicant's legal name or a fictitious name where the applicant is doing business as a sole proprietorship, the business organization must apply for a certificate of authority through a qualifying agent and under the fictitious name, if any.
Section 489.1195, Florida Statutes, provides in relevant part:
A qualifying agent is a primary qualifying agent unless he or she is a secondary qualifying agent under this section.
All primary qualifying agents for a business organization are jointly and equally responsible for supervision of all operations of the business organization; for all field work at all sites; and for
financial matters, both for the organization in general and for each specific job.
Section 489.129, Florida Statutes, provides in relevant part:
The board may take any of the following actions against any certificate holder or registrant: place on probation or reprimand the licensee, revoke, suspend, or deny the issuance or renewal of the certificate, registration, or certificate of authority, 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 officer, 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:
* * *
(i) Failing in any material respect to comply with the provisions of this part or violating a rule or lawful order of the board.
* * *
Committing fraud or deceit in the practice of contracting.
Committing incompetency or misconduct in the practice of contracting.
* * *
(o) Proceeding on any job without obtaining applicable local building department permits and inspections.
Section 489.1425(1), Florida Statutes, provides:
Any agreement or contract for repair, restoration, improvement, or construction to residential real property must contain a written statement explaining the consumer's rights under the Construction Industries Recovery Fund, except where the value of all labor and materials does not exceed $2,500. The written statement must be substantially in the following form:
CONSTRUCTION INDUSTRIES RECOVERY FUND PAYMENT MAY BE AVAILABLE FROM THE
CONSTRUCTION INDUSTRIES RECOVERY FUND IF YOU LOSE MONEY ON A PROJECT PERFORMED UNDER CONTRACT, WHERE THE LOSS RESULTS FROM SPECIFIED VIOLATIONS OF FLORIDA LAW BY A STATE-LICENSED CONTRACTOR. FOR INFORMATION ABOUT THE RECOVERY FUND AND FILING A CLAIM, CONTACT THE FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD AT THE FOLLOWING TELEPHONE NUMBER AND ADDRESS:
The statement shall be immediately followed by the board's address and telephone number as established by board rule.
As a qualifying agent, Respondent had a statutory duty to supervise projects entered into under his license. Gatwood v. McGee, 475 So. 2d 720, 723 (Fla. 1st DCA 1985); Hunt
v. Dept. of Professional Regulation, 444 So. 2d 997, 999 (Fla. 1st DCA 1983); Alles v. Dept. of Professional Regulation, 423 So. 2d 624, 625 (Fla. 5th DCA 1982). See also Murthy v. N. Sinha Corp., 644 So. 2d 983, 985 (Fla. 1994)(agreeing with the above-cited cases that Chapter 489, Florida Statutes, places a duty on qualifying agents to supervise, but rejecting their
conclusions that Chapter 489 provides a private cause of action for a homeowner against a qualifying agent).
In Alles, the court explained the reasons for placing on a qualifying agent the duty to supervise projects as follows:
The obvious purpose of these statutes allowing a company to act as a contractor through a licensed contractor is to insure that projects undertaken by a company are to be supervised by one certified and licensed by the board. To allow a contractor to be the "qualifying agent" for a company without placing any requirement on the contractor to exercise any supervision over the company's work done under his license would permit a contractor to loan or rent his license to the company. This would completely circumvent the legislative intent that an individual, certified as competent, be professionally responsible for supervising construction work on jobs requiring a licensed contractor.
423 So. 2d at 626.
It is settled that a qualifying agent may not lend his name to a company in order that the company may act as a contractor and then avoid his responsibility by stating that he had nothing to do with the project. Alles, 423 at 627. However, none of the cited cases dealt with the situation presented here, in which the company purposely concealed its activities from its qualifying agent. The evidence established that Respondent did more than merely "rent" his license to ECE. On the projects that he knew about, Respondent filed the proper applications, obtained permits and oversaw the construction.
ECE pulled no permits on the west coast projects, essentially operating a pirate construction business in the Bradenton/Sarasota area, and ensuring that Respondent would not learn of its activities through any official channel.
It could be argued that, had Respondent exercised vigorous supervision over ECE, he would have known about the company's activities in the Bradenton/Sarasota area at the time they were occurring. Under the facts of this case, such an argument would be unreasonable. Until his conversation with Peter Green, Respondent lacked any reason to believe that he was not exercising adequate supervision over ECE. The governing statutes do not require a qualifying agent to assume that his business associates are criminals, absent any basis for suspicion.
By the time Respondent learned of ECE's west coast activities, all but one of the projects under discussion had been completed or abandoned. The contract for Ms. Bradley's house was entered into on January 22, 1999, the date of Respondent's conversation with Peter Green, and the work completed on February 9, 1999. Thus, most of the harm had been done to ECE's customers before Respondent was in any position to address the problem.
While Respondent's failure to act prior to
January 1999 was justifiable, his admitted failure to take any action to ensure that ECE ceased its illegal activities and made amends to the defrauded customers was not. Even after hearing the details of ECE's activities alleged by Ms. Weinzierl, Respondent did nothing beyond placing a call to Mr. Pizzo. He remained as ECE's qualifying agent for another two years.
Respondent cooperated in the FDLE investigation begun in the spring of 1999, but took no other action to remedy ECE's fraud. It must be concluded that through his inaction Respondent furthered ECE's fraudulent activities and delayed ECE's victims obtaining relief.
Respondent's medical condition offers no excuse for his inaction. His injuries occurred in January 2000, a full year after he became aware of ECE's activities.
In summary, it is concluded that Petitioner failed to demonstrate by clear and convincing evidence that Respondent violated Sections 489.119(2), 489.1195(1)(a), 489.129(1)(o), and 489.1425(1), Florida Statutes. The facts as found above established that ECE violated the cited statutes, but also established that ECE concealed its actions from Respondent, who therefore had no opportunity to supervise statutory compliance by the company. The facts also established that Respondent did
comply with the cited statutes for those ECE projects of which he was aware.
It is concluded that Petitioner did establish by clear and convincing evidence that Respondent violated
Section 489.129(1)(l) and (m), Florida Statutes, by his actions after learning of ECE's fraudulent activities on the west coast of Florida. As of January 23, 1999, Respondent was on notice at the very least of a need to inquire into the activities of ECE. Respondent's failure to act or even to dissociate himself from ECE helped perpetuate that company's fraud, and was itself misconduct in the practice of contracting.
Section 489.129(1), Florida Statutes, authorizes Petitioner to suspend or to otherwise discipline the license of a contractor who is found guilty of any of the grounds enumerated in that section. See also Rule 61G4-17.001, Florida Administrative Code. Rule 61G4-17.002, Florida Administrative Code, authorizes the consideration of aggravating and mitigating circumstances, as follows:
Circumstances which may be considered for the purposes of mitigation or aggravation of penalty shall include, but are not limited to, the following:
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.)
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.
The severity of the offense.
The danger to the public.
The number of repetitions of offenses.
The number of complaints filed against the licensee.
The length of time the licensee has practiced.
The actual damage, physical or otherwise, to the licensee's customer.
The deterrent effect of the penalty imposed.
The effect of the penalty upon the licensee's livelihood.
Any efforts at rehabilitation.
Any other mitigating or aggravating circumstances.
The aggravating circumstances in this proceeding are the significant harm to the customers, such as monetary damages and liens and false mortgages filed against the customers' property, and the failure to correct the violations once Respondent became aware of them.
The mitigating factors are: Respondent has practiced his profession for 30 years and not been the subject of prior discipline or complaint; Respondent was not aware of and did not actively participate in the job-site violations; Respondent's license has already been transferred to inactive status; and the effect that a penalty of revocation would have on Respondent's livelihood.
The authorized penalties for a first offense of committing fraud or deceit in the practice of contracting causing harm to the customer are a fine of $500.00 to $2,000.00 and suspension or revocation. The authorized penalties for a first offense of misconduct or incompetency in the practice of contracting are a fine of $250.00 to $1,000.00 and suspension or revocation. Rule 61G4-17.001(13) and (14)(d)3, Florida Administrative Code.
Under the facts of this proceeding, it is concluded that Respondent should be held to have committed a single offense each of fraud or deceit and of misconduct in the practice of contracting, but that the maximum monetary penalty should be imposed for each offense. It is concluded that revocation would be too severe a penalty given Respondent's financial and health circumstances, but that Respondent also should be strongly discouraged from engaging in the active practice of contracting. Thus, it is recommended that
Respondent's license be suspended for a period of three years, but only if Respondent ever transfers his license from inactive to active status.
Petitioner may also assess its investigative costs.
Rule 61G4-17.001(20), Florida Administrative Code. Petitioner offered no evidence of its investigative costs. Should the parties be unable to agree on those costs, Petitioner may file a petition with the Division of Administrative Hearings for a proceeding to determine the assessable amount of its investigative costs.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that Petitioner enter a final order finding Respondent guilty of violating Section 489.129(1)(l) and (m), Florida Statutes, suspending Respondent's license for three years from the date that Respondent re-activates his license, imposing an administrative fine in the amount of $3,000.00, and requiring Respondent to pay costs of Petitioner’s investigation.
DONE AND ENTERED this 12th day of March, 2002, in Tallahassee, Leon County, Florida.
LAWRENCE P. STEVENSON
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 12th day of March, 2002.
COPIES FURNISHED:
Michael Martinez, Esquire Department of Business and
Professional Regulation
1940 North Monroe Street, Suite 60
Tallahassee, Florida 32399-1007
E. Cole Fitzgerald, III, Esquire Fitzgerald, Hawkins, Mayans & Cook Post Office Box 3795
West Palm Beach, Florida 33401
Hardy L. Roberts, III, General Counsel Department of Business and
Professional Regulation Northwood Centre
1940 North Monroe Street Tallahassee, Florida 32399-2202
Suzanne Lee, Executive Director Construction Industry Licensing Board 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.
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 04, 2003 | Agency Final Order | |
| Mar. 12, 2002 | Recommended Order | Respondent, as qualifying licensee, was in no position to supervise projects that contractor purposely concealed from him; nonetheless, Respondent should have acted when he was made aware of these projects by disgruntled customer. |
CONSTRUCTION INDUSTRY LICENSING BOARD vs. ROBERT QUEEN, 01-003864PL (2001)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. K. C. MOORE, 01-003864PL (2001)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. WILLIE F. DANIELS, 01-003864PL (2001)
CONSTRUCTION INDUSTRY LICENSING BOARD vs FREDERICK S. SCHMUNK, III, 01-003864PL (2001)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. RUBEN S. ARES, 01-003864PL (2001)
