DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )
vs. )
JOSEPH D. SLOBODA, )
Respondent. )
Case No. 07-2556PL
Pursuant to notice, a final hearing was held in this case on August 8, 2007, by video-teleconference between Ft. Myers and Tallahassee, Florida, before Carolyn S. Holifield, designated Administrative Law Judge of the Division of Administrative
Hearings.
The issues in this case are whether Respondent violated Subsections 489.129(1)(j) and (m), Florida Statutes (2004),1/ and, if so, what penalty should be imposed.
On May 8, 2007, the Department of Business and Professional Regulation ("Department") filed a two-count Administrative Complaint before the Construction Industry Licensing Board (Petitioner) alleging that Respondent, Joseph D. Sloboda, violated Subsection 489.129(1)(j), Florida Statutes, by abandoning a construction project in which the contractor was under contract as a contractor and Subsection 489.129(1)(m), Florida Statutes, by committing incompetency or misconduct in the practice of contracting. Respondent disputed the allegations and requested a formal hearing. The case was forwarded to the Division of Administrative Hearings on June 8, 2007, for assignment of an Administrative Law Judge to conduct the hearing.
At the hearing, Petitioner presented the testimony of three witnesses: Amy Larissa Vaughn, Ronald Posey, and Antonia Longoria. Petitioner offered and had 14 exhibits admitted into evidence. Respondent testified on his own behalf. Respondent offered and had six exhibits admitted into evidence.
A Transcript of the final hearing was filed on August 24, 2007. The Department filed its Proposed Recommended Order on September 4, 2007, and Respondent filed a Memorandum of Law on September 12, 2007. The post-hearing submittals of the parties have been considered in preparation of this Recommended Order.
At all times relevant to this proceeding, Respondent was a certified general contractor, having been issued License No. CGC 1506043 by the Florida Construction Industry Licensing Board ("Board" or "Construction Industry Licensing Board") and was the primary qualifying agent for Rankor Corporation.
The Board is the state agency charged with regulating the practice of contracting in the State of Florida pursuant to Chapters 455 and 489, Florida Statutes.
At all times relevant, Rankor Corporation was a contractor-qualified business in the State of Florida, having been issued License No. QB 26667. The officers of the Rankor Corporation were as follows: Tina M. Despin, president; Stephen Despin, Sr., executive vice president; Jerold S. Bakelman, vice president and treasurer; and Eldora Bakelman, secretary. The directors of the Rankor Corporation were Respondent,
Mr. Bakelman and Mr. Despin.
Jerold Bakelman was licensed as a financially responsible officer by the Board from August 27, 2003, to January 7, 2005. Mr. Bakelman's license number was FRO 711.
Transactions Related to Longoria Property
In December 2004, Antonia Longoria met with Tina Despin and Stephen Despin, Sr., about replacing the roof and performing other repairs at a house owned by Ms. Longoria located at 4716 Nottingham Drive, Ft. Myers, Florida ("Nottingham Drive house" or "Nottingham Drive property").2/
On or about December 7, 2004, Ms. Longoria entered into a contract with Rankor Corporation to remove and replace the roof and to make the other repairs at the Nottingham Drive house (hereinafter referred to as "Contract No. 1" or "December 7, 2004, Contract"). The cost for the scope of work in Contract No. 1, including the cost of obtaining permits was $32,690.00. Pursuant to the terms of the contract, one-third of the contract amount, $10,896.67, was due when the contract was signed;
one-third of the contract amount was due when the trusses were delivered; $8,396.67 was due when the job was completed; and
$2,500.00 was due after the final inspection of the job was completed.
The December 7, 2004, Contract was signed by Tina Despin on behalf of Rankor Corporation and by Ms. Longoria.
On or about December 7, 2004, Ms. Longoria paid Rankor Corporation, by personal check, a payment in the amount of
$10,896.67 for the work to be done pursuant to Contract No. 1. Ms. Longoria made the check out to Rankor Corporation and gave it to Ms. Despin.
On or about December 17, 2004, about ten days after Contract No. 1 was executed, Ms. Longoria entered into a second contract with Rankor Corporation to do additional work at the Nottingham Drive house (hereinafter referred to as "Contract No. 2" or "December 17, 2004, Contract").
Under the terms of the December 17, 2004, Contract, Rankor Corporation was required to relocate the entrance to the house from the side to the front of the house. The cost for the scope of work under this contract was $10,770.00, with payments to be made in three installments. Pursuant to the terms of Contract No. 2, one-third of the contract amount, $3,590.00, was due when the contract was signed; one-third was due when the trusses were delivered; and the remaining one-third was due upon completion of the project.
Contract No. 2 was signed by Tina Despin on behalf of Rankor Corporation and by Ms. Longoria on or about December 17, 2004. Two days later, on or about December 19, 2004,
Ms. Longoria paid Mr. Despin, Sr., by personal check, a payment in the amount of $3,590.00 for the project under this contract.
The check was made out to "Stephen E. Despin" and not to Rankor Corporation.
Ms. Longoria paid the $3,590.00 to Mr. Despin, Sr., as a representative of Rankor Corporation.
The scope of work under both Contract No. 1 and Contract No. 2 required permits from the City of Ft. Myers Building Department before work could commence. However, after the two contracts were executed, Rankor Corporation never applied for the permits necessary to commence work under those contracts.
At or near the end of January 2005, Ms. Longoria began calling Mr. Despin, Sr., to find out when he would begin the project at the Nottingham Drive house. After several unsuccessful attempts by Ms. Longoria to reach Mr. Despin, Sr., he returned her call in February or March, but Rankor Corporation never performed any of the work required under Contract No. 1 and Contract No. 2.
No one from Rankor Corporation ever performed any work on Ms. Longoria's Nottingham Drive house.
Notwithstanding its failure to perform any of the work required under the December 7, 2004, Contract and the
December 17, 2004, Contract, Rankor Corporation did not return Ms. Longoria's two payments made pursuant to the terms of those contracts. The total of these two payments was $14,486.67.
In or about March 2005, the City of Ft. Myers Code Enforcement unit posted a notice on the Nottingham Drive property advising Ms. Longoria that the subject property was in violation of the city code. The notice gave Ms. Longoria, as owner of the property, 30 days to have the repairs done to bring the house into compliance with the code. The violations cited in the notice were related to damages the Nottingham Drive house sustained from Hurricane Charlie.
On or about April 19, 2005, Ms. Longoria entered into a contract with Roofmaster of South Florida, Inc. ("Roofmaster") to repair the roof at the Nottingham Drive house in order for the roof to be in compliance with the City of Ft. Myers code. The scope of work under the contract with Roofmaster was smaller than the scope of work under the December 7, 2004, Contract between Ms. Longoria and Rankor Corporation. The contact price for the project with Roofmaster was $9,500.00.
In or about May 2005, Roofmaster commenced and completed work under its contract with Ms. Longoria. For this work, Ms. Longoria paid Roofmaster the contract price of
$9,500.00.
At no point in time until May 2005, the time at which Roofmaster commenced work under the contract with Ms. Longoria, did Ms. Longoria prevent Rankor Corporation from commencing and
completing the work projects under the December 7, 2004, Contract and the December 17, 2004, Contract.
Respondent's Attempts to be Removed as Qualifying Agent
On January 5, 2005, Respondent wrote a letter to Mr. Bakelman memorializing Respondent's and Bakelman's conversation concerning Mr. Bakelman's decision to no longer serve as the financially responsible officer for Rankor Corporation. In the letter, Respondent recounted that during that conversation, he (Respondent) had "executed documents supplied by you [Bakelman] from the State of Florida Construction Industry Licensing Board releasing you [Bakelman] from said position with immediate effect."
By letter dated January 5, 2005, Respondent forwarded a copy of his January 5, 2005 letter to Mr. Bakelman to the secretary of the Construction Industry Licensing Board in Tallahassee, Florida. Respondent requested that the letter be recorded and filed with pertinent information maintained by that office for "the business qualified by me [Respondent], known as Rankor Corporation.
Apparently concerned about Mr. Bakelman's stepping down as Rankor Corporation's financially responsible officer, Respondent contacted the Department's Customer Service section on January 5, 2005, about the situation. At that time, a person in that section told Respondent that he should inform the
company officers that they had an obligation to secure a new financially responsible officer, and if they did not, he was obligated either to act in that position or to terminate his position as qualifying representative.
On January 7, 2005, Bakelman was properly removed as the financially responsible officer for Rankor Corporation and, thereby, ceased being the financially responsible officer for Rankor Corporation.
Upon Mr. Bakelman's being properly removed as the financially responsible officer, Respondent, as the qualifying agent, became responsible for the duties and obligations related to Rankor Corporation's financial matters.
By letter dated February 7, 2005, Respondent advised Stephen and Tina Despin (Stephen and Tina) that he was terminating his position as the primary qualifying agent for Rankor Corporation. In this letter, Respondent recounted a January 5, 2005, letter to the Despins in which he indicated that in light of Mr. Bakelman's resignation, he (Respondent) was requiring them to secure a financially responsible officer within two weeks. According to the letter, the reason Respondent was terminating his position with the company was that the Despins had failed to do so.
In addition to advising the Despins that he was terminating his position as qualifying agent for Rankor Corporation, Respondent's letter provided the following:
Pursuant to guidelines of CILB [Construction Industry Licensing Board], it is required that no new contracts or construction endeavors requiring the use of my license be undertaken, this includes, but is not limited to, the "pulling" of permits.
Furthermore, my license number is to be removed form any signage or advertising immediately, which would serve to give the impression that Rankor is acting as a certified general contractor. The only work you are permitted to perform is to conclude projects already underway, and I was advised by the board [Construction Industry Licensing Board] that you should secure another qualifier as soon as possible. I will advise the local building departments of the change of status as well.
Respondent sent the February 7, 2005, letter to the Despins by certified mail. According to the return receipt, Tina Despin signed for and received the letter on February 8, 2005.
Respondent also sent a copy of his February 7, 2005, letter to the Despins to the Construction Industry Licensing Board.
On February 7, 2005, Respondent sent a letter to the Board informing the Board of Respondent's termination as the primary qualifying agent for Rankor Corporation and requesting the appropriate documents to be removed as the primary
qualifying agent for Rankor Corporation. The letter provided, in relevant part, the following:
Construction Industry Licensing Board Department of Business and Professional
Regulation
1940 North Monroe Street Tallahassee, Fl [sic] 32399
Re.: Termination of Acting as Qualifier for Rankor Corporation
Dear Sirs or Mesdames:
As per attached letter I with immediate effect remove myself as qualifier for Rankor Corporation, QB 26667[.]
Please provide me with any forms required to effect completion of the same, this should not be considered in any manner a renunciation or modification of my termination as qualifier. This act is irrevocable and immediate.
I am a certified General Contractor, [sic] [M]y license number is CGC 1506043.
The "attached letter" referred to in Respondent's letter to the Board, quoted in paragraph 30, is Respondent's February 7, 2005, letter to the Despins.
Larissa Vaughn has been the administrative assistant for the executive director of the Board since February 2005. As an administrative assistant, Ms. Vaughn is familiar with the licensure process for construction contractors.
Ms. Vaughn testified that the Board never received Respondent's February 7, 2005, letter to the Board, which
informed the Board of Respondent's termination as the primary qualifying agent for Rankor Corporation and requested that he be sent appropriate documents to be removed as the primary qualifying agent for Rankor Corporation. The reason the Board never received the letter is not clear. However, Ms. Vaughn testified that a letter, such as Respondent's February 7, 2005, letter to the Board, would not have necessarily been received.
According to Ms. Vaughn, "[a] lot of letters like this are received and [when] there is a request for forms, it goes to our customer contact center."
Ms. Vaughn testified that even if the Board had received Respondent's February 7, 2005, letter, that correspondence would not have been sufficient in itself to remove Respondent as the primary qualifying agent for Rankor Corporation. According to Ms. Vaughn, the Department requires that to be removed as the primary qualifying agent for a contractor-qualified business in the State of Florida, a licensed contractor must submit to the Board a properly completed change of status application.
Ms. Vaughn testified that a change of status application can be requested and received from the Department by phone, e-mail, or internet.3/
On September 13, 2005, Respondent submitted a change of status application to the Board. Almost two years later,
Respondent's change of status application remains open and has not been approved by the Board.
Respondent's efforts to terminate his status as the qualifying agent for Rankor Corporation were unsuccessful for the reasons stated above. In this case, even if Respondent's February 7, 2005, letter had effectively terminated his status as qualifying agent, the fact remains that he was the qualifying agent in December 2004 when Rankor Corporation entered into the two contracts with Mrs. Longoria. Moreover, Respondent became responsible for Rankor Corporation's financial matters after Mr. Bakelman was properly released as the company's financially responsible officer.
There is no evidence that Respondent has been previously cited for violations under Chapter 489, Florida Statutes.
The total investigative costs of this case to Petitioner, excluding costs associated with any attorney's time, for Department Case No. 2005-028129 was $408.37 (four hundred eight dollars and thirty seven cents).
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. §§ 120.569 and 120.57, Fla. Stat. (2007).
Petitioner is the agency charged with regulating the practice of contracting pursuant to Section 20.165 and Chapters
455 and 489, Florida Statutes.
Respondent, as a certified general contractor and the primary qualifying agent for Rankor Corporation, is charged with the responsibility of complying with the provisions of
Chapter 489, Part I, Florida Statutes, and all applicable rules adopted pursuant thereto.
Pursuant to Section 489.129, Florida Statutes, the Board is empowered to revoke, suspend or otherwise discipline the license of a contractor who is found guilty of any of the prohibitions enumerated in Subsection 489.129(1), Florida Statutes.
The Administrative Complaint alleges that Respondent is guilty of acts in Subsections 489.129(1)(j) and (m), Florida Statutes, which provides:
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, 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:
* * *
(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.
* * *
(m) Committing incompetency or misconduct in the practice of contracting.
Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent alleged in the Administrative Complaint. Dept. of Banking and Finance
v. Osborne, Stern, and Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292, 294 (Fla. 1987).
Subsection 489.1195(1)(a), Florida Statutes, states:
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.
The clear and convincing evidence established that Respondent was the primary qualifying agent for Rankor Corporation at all times relevant to this proceeding. As the primary qualifying agent for Rankor Corporation, Respondent is jointly and equally responsible for the supervision of all operations of the business, for all field work at all sites, and for financial matters for the organization and for each specific job. See § 489.1195(1)(a), Fla. Stat. Therefore, Respondent is deemed responsible for and guilty of any offenses committed by Rankor Corporation, the organization for which he serves as the primary qualifying agent.
Petitioner established by clear and convincing evidence that Respondent violated Subsection 489.129(1)(j), Florida Statutes.
The undisputed evidence established that Rankor Corporation never commenced work under Contract No. 1 or Contract No. 2 from the dates of the December 2004 contract until May 2005, when Ms. Longoria contracted with another contractor. The undisputed evidence above established that Rankor Corporation failed to work on the project for 90 consecutive days without just cause and without proper notification to Ms. Longoria. Therefore, it is established by clear and convincing evidence that Respondent violated Subsection 489.129(1)(j), Florida Statutes.
Petitioner has established by clear and convincing evidence that Respondent violated Subsection 489.129(l)(m), Florida Statutes, by committing misconduct in the practice of contracting. Based on factual allegations in the Administrative Complaint, the alleged "misconduct in the practice of contracting" is Rankor Corporation's accepting payment of
$10,896.67 for Contract No. 1 and accepting payment of $3,590.00 for Contract No. 2 from Ms. Longoria without performing any work on the contracts.
The alleged misconduct in this case is addressed in Subsection 489.129(1)(g), Florida Statutes, which provides, in pertinent part, the following:
(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;
or . . . .
The undisputed evidence established that Ms. Longoria paid Rankor Corporation $14,486.67 as the initial payment for
work to be performed pursuant to Contract No. 1 and for Contract No. 2. Furthermore, the undisputed evidence established that, despite Rankor Corporation’s failure to perform any of the work required under those contracts, the company did not return the money it received from Ms. Longoria.
Subsection 455.2273(5), Florida Statutes, states that the Administrative Law Judge, in recommending penalties in any recommended order, must follow the penalty guidelines established by the board or department and must state in writing the mitigating or aggravating circumstances upon which the recommended penalty is based.
Florida Administrative Code Rule 61G4-17.0014/ provides the guidelines for the violations alleged in this case.
The range of penalties for a first violation of Subsection 489.129(1)(j), Florida Statutes, is a $1,000.00 to
$5,000.00 fine and/or probation. Fla. Admin. Code R. 61G4-17.001(1)(j).
The violation of Subsection 489.129(1)(m), Florida Statutes, in this case relates to misconduct in the practice of contracting that caused financial harm to a customer. See
§ 489.129(1)(g)2., Fla. Stat. The range of penalties for a first violation of such misconduct as contemplated by Subsection 489.129(1)(m), Florida Statutes, is a $1,000.00 to $2,500.00 fine. Fla. Admin. Code R. 61G4-17.001(1)(m)4.b.
Florida Administrative Code Rule 61G4-17.002 provides, in pertinent part, the following:
Circumstances which may be considered for the purpose 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 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 danger to the public.
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.
There is no evidence that supports mitigation or aggravation of the prescribed penalty range for the violations established in this case.
There is no evidence that Respondent has been previously disciplined for any violations under Chapter 489, Florida Statutes. Therefore, the guidelines that should be used are those specified for the first violation.
Pursuant to Florida Administrative Code Rule
61G4-17.001(5), the Board is required to order the contractor to make restitution in the amount of the financial loss suffered by the consumer.
Subsection 455.227(3)(a), Florida Statutes, provides that the Board may assess costs related to the investigation and prosecution of cases, excluding costs associated with an attorney's time. Also see § 489.129(1), Fla. Stat.
RECOMMENDED that Petitioner, Department of Business and Professional Regulations, Construction Industry Licensing Board, enter a final order: (1) finding that Respondent, Joseph D. Sloboda, violated Subsections 489.129(1)(j) and (m), Florida Statutes; (2) imposing a $1,000 fine for each violation;
in the amount of $14,486.67; and (4) requiring Respondent to pay investigative costs associated with this case of $408.37.
DONE AND ENTERED this 30th day of November, 2007, in Tallahassee, Leon County, Florida.
CAROLYN S. HOLIFIELD
Filed with the Clerk of the Division of Administrative Hearings this 30th day of November, 2007.
1/ All references are to 2004 Florida Statutes, unless otherwise indicated.
2/ All the allegations in this case relate to the house located at 4716 Nottingham Drive in Ft. Myers, which is rental property owned by Ms. Longoria. However, the Administrative Complaint mistakenly refers to the address of Ms. Longoria’s personal residence.
3/ The Department presented no evidence regarding how requests for a change of status application are processed when such requests are made in a letter such as the one sent to the Board by Respondent.
4/ All references are to 2004 Florida Administrative Code, unless otherwise indicated.
G.W. Harrell, Executive Director Construction Industry Licensing Board Department of Business and
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.
