A formal hearing was held on November 3, 2008, by video teleconference at sites in Lauderdale Lakes and Tallahassee, Florida, before Administrative Law Judge Eleanor M. Hunter of the Division of Administrative Hearings.
O. E. Total Services, Inc.:
The issues are whether Respondent violated Subsection 489.127(1)(f), Florida Statutes (2008), for the reasons stated in the Administrative Complaints and, if so, what, if any, penalty should be imposed.
On February 29, 2008, Petitioner filed an Administrative Complaint against Respondent Frank Clardy, alleging that he engaged in the unlicensed practice of contracting in connection with a contract to install hurricane shutters for Ivan Rubin.
On March 3, 2008, Petitioner filed a second Administrative Complaint against Respondents Frank Clardy and O. E. Total Services, Inc., alleging that they engaged in the unlicensed practice of contracting in connection with the proposed installation of hurricane shutters at the home or Herbert and Daisy Green. Respondent Clardy's requests for administrative hearings were forwarded to the Division of Administrative Hearings ("DOAH") and, at the request of the Petitioner, DOAH Case Nos. 08-1084 and 08-1108 were consolidated on April 8, 2008.
The cases were set initially for hearing on May 5, 2008. Requests for continuances by Petitioner on April 10, 2008, by Respondent Clardy on May 12, 2008, and on September 3, 2008, and again by Petitioner on September 10, 2008, were granted. On
October 21, 2008, Respondent Clardy filed a Motion to Dismiss Charges of Contracting without a License based on an Incident/Investigation Report by the Coconut Creek Police Department and a supplemental report by the same agency on fraud and theft charges that recited, in relevant part, "Clardy presented himself as a Sales and Service representative . . ." working for Onel Eschevarria. The Motion was also based on the disposition of a Broward County Court case in which Mr. Clardy was the named defendant, an Order of Dismissal with Leave to Amend that was entered in his favor, and the fact that funds reportedly were recovered in that case from a general contractor, Herbert Neff. On October 30, 2008, the Motion to Dismiss was denied.
At the formal hearing on November 3, 2008, Petitioner presented the testimony of Daisy Green, Ivan M. Rubin, Eileen Rubin, Herbert J. Neff, Frank Clardy, and Jamie Gray.
Petitioner's Exhibits 1 through 10 were received into evidence. Respondent Clardy appeared pro se and presented his Evidence (Exhibits) Numbered 1, 2, 4 through 9, and 10 (pages 8 and 9 only) through 17 that were received into evidence. The exhibits included a court record that had been the subject of Respondent Clardy’s Motion to Compel Judicial Notice, on which ruling was reserved at the beginning of the hearing. No one appeared to represent Respondent, O. E. Total Services, Inc.
The one-volume Transcript of the hearing was filed November 17, 2008. Petitioner’s Proposed Recommended Order was filed on December 2, 2008. Following the granting of an extension of time, Respondent Clardy’s Answers to Proposed Recommended Order was filed on January 6, 2009.
Petitioner, the Department of Business and Professional Regulation (DBPR), is the state agency charged with regulating the practice of contracting in the State of Florida. It also has jurisdiction over the unlicensed practice of contracting pursuant to Section 455.228, Florida Statutes (2008). DBPR has filed two administrative complaints charging Respondent Frank Clardy with violating Subsection 489.127(1)(f), Florida Statutes (2008), by engaging in the business of, or acting as a contractor without a license.
Mr. Clardy, was not a state certified or registered contractor licensed to engage in the practice of contracting pursuant to Part I, Chapter 489, Florida Statutes, at any time relevant to this proceeding. He maintains he did not need a license, because he was acting as a salesman and not himself engaging in the business of, or acting as a contractor.
The other named Respondent charged in the complaint in DOAH Case No. 08-1108, O. E. Total Services, Inc. ("O.E."), is a Florida corporation with Onel Eschevarria as its registered
officer/director. The state investigator assigned to this case testified that O.E. was listed as an inactive entity by the State Division of Corporations, so she did not check to see if
O.E. was a general contractor licensed by DBPR. The testimony of two witnesses, Mr. Clardy and Herbert Neff, support a finding that, at all relevant times, Onel Eschevarria, the owner of O.E., was not a licensed general contractor. Therefore, O.E. could not have been an entity registered and qualified to use his license number.
Daisy Green and her late husband, Herbert Green, entered into a contract listing O.E. as the corporate entity, signed by Frank Clardy, as salesman and officer, to pay $9,351 for the installation of hurricane shutters for 17 openings in their home in Boca Raton, Florida. The license numbers on the contract were CGC A23836 and CCC 057010, and belonged to Carlos Fulmann. According to Mr. Clardy, Mr. Fulmann notified O.E. that he was unable to work with O.E. at that time, and O.E. was looking to affiliate with another licensed contractor. Nevertheless, Mr. Clardy took the measurements for the shutters at the Greens' home and accepted a check for a deposit of
$3740.40. The check, dated April 11, 2006, was payable to O.E. and was deposited in the account of O.E. The shutters were never delivered and the money has not been refunded. DBPR's
investigator confirmed that no permit was ever issued for the installation of shutters at the Greens’ residence.
On April 18, 2006, Mrs. Green wrote a check in the amount of $1700 made payable to Frank Clardy personally, with "Deposit Shutters" on the line indicating the purpose for the check. Mr. Clardy cashed that check. That brought the total amount paid by the Greens, apparently in connection with the contract for hurricane shutters, to $5440.40. At the hearing, Mrs. Green testified that she and her husband paid $7240 of the total contract amount of $9351, leaving a balance due of $2111, as indicated by handwritten notes made on the contract. No one was sure who made the notes and there was no other evidence of additional payments arguably for hurricane shutters over and above the two checks that total $5440.40. Mrs. Green could not explain the discrepancy between the total amount of the two checks and the note on the contract.
There was also conflicting testimony over the purpose for the $1700 check. Mrs. Green testified that Mr. Clardy said that the first check (for $3740.40) had been a deposit and he needed the second one (for $1700) for materials, but that contradicts her note on the check that it was inexplicably a second deposit for shutters. Mr. Clardy testified the $1700 check was paid for him to hire two crews to perform other work for the Greens, including replacing a side door in the garage
with a hurricane door, repairing woodwork around the door, repairing cement in the garage, replacing and painting fascia boards, and installing a pool rail. Mr. Clardy testified that he had a written contract for this work but was unable to find
it.
Mrs. Green testified that she and her husband paid $250
to Mr. Clardy to fix the side door to their garage, and that they also separately paid someone he recommended to install handrails for the pool. Mrs. Green's testimony appears to be more likely truthful than Mr. Clardy’s based on a handwritten and signed receipt that Mr. Clardy apparently gave the Greens that reads:
Paid in full
Side door facia boards
hand rail to pool
$250.00
Mr. Clardy acknowledged that his signature was on the receipt but claimed it was altered after he signed it. In support of his position, Mr. Clardy pointed out that his name, as printed on the receipt as "Claridy" is misspelled. Based on his acknowledgement of his signature, his claim that the receipt does not accurately represent work he performed for $250 is rejected.
Ivan M. Rubin entered into a contract with Mr. Clardy on June 27, 2006, to pay $5600 for the installation of hurricane shutters at his home in Boynton Beach. The corporate entities listed on the Rubin contract were Access-Ability, Inc. (Access- Ability) & O. E. Total Services, Inc. Frank Clardy signed as salesman and officer. The license number on the contract was CGC 051895, which is registered with the State as the certified general contractor license number for Herbert John Neff and Access-Ability as a qualified business.
Mr. Rubin gave Mr. Clardy a check for the deposit in the amount of $2600, made payable to Access-Ability. That check was given by Mr. Clardy to Mr. Neff at Access-Ability. Soon after, Mr. Rubin had additional questions about the shutters and called the telephone number on the contract. When he was unable to reach Mr. Clardy, Mr. Rubin stopped payment on the check. Although he remembered that the amount of the check was for
$2500, not $2600, Mr. Neff acknowledges that he received the check from Mr. Rubin on which the bank payment was stopped.
On July 11, 2006, Mr. Clardy explained, according to Mr. Rubin, that he had been in the hospital and had paid for the materials for the shutters from his personal funds. So,
Mr. Rubin wrote another check for $2600 made payable to Frank Clardy personally. At hearing, Mr. Clardy admitted having never paid for shutters for the Rubins. Both Mr. and Mrs. Rubin said
Mr. Clardy told them he owned O.E. and that they believed it because he signed the contract as “salesman” and "officer."
Mr. Clardy testified that he ordered the hurricane shutters for the Green and Rubin projects, and that, as he had done with the Greens' deposit, he cashed Mr. Rubin's second check and gave the money to Onel Eschevarria, who took it and is now in jail. As a result of not being paid by O.E., the manufacturer refused to deliver the products. The Rubins did not receive the shutters and have not received a refund. There was never a permit application filed for the Rubin project.
After not receiving the shutters and not getting help contacting Mr. Clardy after talking to his mother and stepfather, Mr. Rubin checked the license number, found it was issued to Mr. Neff, and contacted him. Mr. Neff told Mr. Rubin that he could find Mr. Clardy in the card room of a casino in Coconut Creek. Mr. Rubin went there to look for him, but
Mr. Clardy was not there.
Mr. Neff testified that he has been a licensed general contractor in Florida since 1990, that the only company he qualified for the use of his license was Access-Ability, and that he knew it was unlawful for an unlicensed person to subcontract with a licensed contractor. Mr. Neff was never qualified by the state to use his license to secure permits for O.E., nor for Access-Ability and O.E. as a joint venture.
Mr. Neff confirmed that he and Mr. Clardy discussed a business proposal in which Mr. Clardy would get the business and arrange for the installation of shutters, and Mr. Neff would get the building permits. According to Mr. Neff, Mr. Clardy told him that he was a salesman for O.E., that O.E. was a licensed contractor, and that he was negotiating to acquire O.E.
Mr. Neff testified that he never entered into a contract with Mr. Clardy and "[t]he arrangements we were making were just left up in the air because we couldn't conclude it."
Mr. Neff's testimony is rejected as totally inconsistent with the evidence. He contradicted his claim that Mr. Clardy led him to believe that O.E. was licensed, when he also testified that he remembered reading a proposal from
Mr. Clardy, and saying ". . . I couldn't sign it because it contained a built-in violation of my license," because O.E. was not licensed and was not owned by Mr. Clardy. At the hearing, he said it looks like his signature, that "it looks like he did" sign the following agreement:
Date: Feb 20, 2006
To: ACCESS-ABILITY, INC
Attn: Mr. HerbNeff 610 E. Sample RD
Pompano Beach, FL 33064 Mr. Neff:
We have decided to use your services of installing shutters and pulling permits for the clients we sign up with 0. E. Total Services, Inc. Our company will be the sales company for Access -Ability, Inc.
This is the way we are going to work with your company. We will sign up the client take the deposit wait for the check to clear the bank and then issue you a cashiers check for the amount of the deposit. We will pay your company
$3 .00 per square foot to install the HV Bertha shutters and pull the necessary permits.
You will then issue O.E. a cashier's check back for the amount minus the $3.00 a square foot to install the HV Bertha Shutters and pull the permits needed for each job.
Once the job is signed up and you issue us a cashier's check for that job, O.E. will order the material from our supplier(s) and give you a copy of the purchase order placed to our supplier with the date the product will be in stock for that particular job. Also O.E. will give Access-Ability a form that gives the clients name and address with the square footage of that job. It will also state the deposit of the job and the date the job should be installed.
If Access - Ability, Inc. agrees on these terms please sign the bottom of this letter and return it back to us as soon as possible.
I think this will be a profitable venture for both companies and look forward to working with you and your company.
Respectfully and Sincerely,
The letter was signed by Frank Clardy, as Vice President of Sales for
O.E. Total services, Inc., and Herbert J. Neff, as Authorized Representative for Access-Ability, Inc.
Mr. Neff agreed, regarding the letter, that [i]t provided [for] me to pull permits and then have someone else collect the money, and you're not allowed to do that. Now, the only way that could have been done is if Mr. Clardy had become licensed -- had a license, if O. E. Total Services was actually licensed. . . ." He acknowledged further that he knew ". . . they never had a license.
. ."
Mr. Neff testified that he never received any money for the work that was supposed to have been done for the Greens and the Rubins. He admitted having created a spreadsheet to keep track of money paid to him by O.E. to get permits for their customers, but claimed the money was not tied to or derived from any particular customer. According to Mr. Neff, funds were paid to him in advance by O.E. and held until O.E. provided him a permit application package to file. In addition to the checks, Mr. Neff admits having received cash from O.E. and from Mr. Clardy. The evidence, including his admissions, completely contradicts his claim of not having an illegal agreement with O.E. Mr. Neff’s testimony that he was not aware of the Green and Rubin contracts until they complained that their shutters had not been delivered is also rejected as inconsistent with the evidence. On his spreadsheet, Mr. Neff listed the name "Herb Green" with $500 in the column headed "Fee" and $100 in the column headed "Permit & NOC” (meaning notice of commencement), and Mr. Neff
admitted that he received the check on which Mr. Rubin later stopped payment.
Mr. Clardy placed advertisements soliciting business for Access-Ability, with Mr. Neff's license number on them and
Mr. Clardy's telephone number as the contact for customers seeking free estimates. He signed an exhibit agreement and set up a booth at a shopping mall to promote sales for Access-Ability. Mr. Neff's claim that he was unaware of the advertisements is contradicted by his statement that he called Mr. Clardy to complain that the first advertisement violated the law, by having both the names of Access- Ability and O.E. on it. He testified that only the name of the company that was qualified to use his license number, Access-Ability should have appeared on the advertisements.
Mr. Neff testified that Mr. Clardy told him that he would be setting up a mall kiosk, but unpersuasively claimed that he did not know that he would be advertising for Access-Ability until he arrived at the mall. Mr. Neff claimed he never authorized Mr. Clardy to use 4100 Power Line Road as his address, yet he used the same address in a notice of commencement after acknowledging, in a written proposal to install shutters that he submitted to a homeowner ". . . to complete and comply with the contract signed . . . with Frank Clardy."
The evidence, including the contradictions by Mr. Neff, support Mr. Clardy's claim that O.E. and Mr. Clardy were authorized
to use Mr. Neff's license number on contracts, advertisements, and business cards. Mr. Clardy testified that he worked as a salesman for Access-Ability, based on their agreement. He also worked, he claimed, as a salesman for O.E., from February to August 2006, when
O.E. stopped paying him. He compared his role to that of any salesperson employed by a home improvement store.
DBPR's investigator confirmed that neither Frank Clardy nor
O.E. and Access-Ability as a joint venture is a state-licensed general contractor or a registered qualified business.
DBPR's investigative costs were $280.62 for the Green case and $333.56 for the Rubin case.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and parties to this proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2008).
Petitioner DBPR is responsible for regulating the practice of construction contracting, including unlicensed construction contracting, pursuant to Section 20.165, and Chapters 455 and 489, Florida Statutes (2008).
DBPR has the burden of proving by clear and convincing evidence the allegations against Respondent. Subsection 120.57(1)(h), Fla. Stat. (2008); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); and Department of Banking and Finance v.Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996); Evans Packing Co. v. Department of Agriculture and
Consumer Services, 550 So. 2d 112, 116, Fn. 5 (Fla. 1st DCA 1989) provides the following guidance regarding the clear and convincing evidence standard:
[C]lear and convincing evidence requires that evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the evidence 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 the firm belief of 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 administrative complaints allege that Respondents Clardy and O.E. have violated Subsection 489.127(1)(f), Florida Statutes (2008), that provides:
(1). No person shall:
* * *
(f) Engage in the business or act in the capacity of a contractor or advertise himself or herself or a business organization as available to engage in the business or act in the capacity of a contractor without being duly registered or certified or having a certificate of authority;
. . .
In Subsection 489.105(3), Florida Statutes (2008), a contractor is defined as:
. . . the person who, for compensation, undertakes to, submits a bid to, or does himself or herself or by others construct, repair, alter, remodel, add to, demolish, subtract from, or improve any building or structure, including related
improvements to real estate, for others or for resale to others . . . (Emphasis added.)
Contracting is defined in Subsection 489.105(6), Florida Statutes (2008), as follows:
"Contracting" means, except as exempted in this part, engaging in business as a contractor and includes, but is not limited to, performance of any of the acts as set forth in subsection (3) which define types of contractors. The attempted sale of contracting services and the negotiation or bid for a contract on these services also constitutes contracting. If the services offered require licensure or agent qualification, the offering, negotiation for a bid, or attempted sale of these services requires the corresponding licensure. (Emphasis added.)
The requirements for an entity engaged in contracting are set forth in Subsection 489.119(2), Florida Statutes (2008), providing that:
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.
Respondent Clardy claimed his activities came within an exemption because he was a salesperson or, arguably, the equivalent of an employee of a licensed business. The requirements for an exempt employee are set forth in Subsection 489.103(2), Florida Statutes (2008), as follows:
Any employee of a certificate holder or registrant who is acting within the scope of the
license held by that certificate holder or registrant and with the knowledge and permission of the license holder. However:
If the employer is not a certificate holder or registrant in that type of contracting, and the employee performs any of the following, the employee is not exempt:
Holds himself or herself or his or her employer out to be licensed or qualified by a licensee;
Leads the consumer to believe that the employee has an ownership or management interest in the company; or
Performs any of the acts which constitute contracting.
The legislative intent of this subsection is to place equal responsibility on the unlicensed business and its employees for the protection of the consumers in contracting transactions.
For the purpose of this part, "employee" is defined as a person who receives compensation from and is under the supervision and control of an employer who regularly deducts the F.I.C.A. and withholding tax and provides workers' compensation, all as prescribed by law. (Emphasis added).
There is also an exemption in Subsection 489.113(2), Florida Statutes (2008), that is, in relevant part, as follows:
No person who is not certified or registered shall engage in the business of contracting in this state. However, for purposes of complying with the provisions of this chapter, a person who is not certified or registered may perform construction work under the supervision of a person who is certified or registered, provided that the work is within the scope of the supervisor's license and provided that the person being supervised is not engaged in construction work which would require a license as a contractor under any of the categories listed in s. 489.105(3)(d)-(o). (Emphasis added.)
That exemption was considered in Full Circle Dairy LLC v. McKinney, 467 F. Supp. 2d 1343, 1350 (M.D. Fla. 2006). The court explained the case in the following excerpts:
This dispute arises out of the construction of a multi-million dollar fully functional dairy facility in Madison County, Florida. Under the Agreement between the parties, defendants were required to construct for plaintiff commodity barns, a mechanic's shop, a fuel depot, a milking center, four barns and two travel lanes.
* * * Defendants assert that if the Court
characterizes them as general or roofing contractors, they nevertheless were not required to hold a license because they worked under plaintiff's supervision.
Defendants' argument fails because the statute clearly requires that the supervisor (plaintiff) hold a license. Plaintiff was not "registered", "certified" or "licensed". Id. at 1349.
Respondent Clardy's claim of an exemption in contracting with Herbert Green fails because, as he knew, his "supervisor" Onel Eschevarria was not licensed and his supervisor's company, O.E., was not registered or qualified under the license number used on the Green contract. Petitioner has proven by clear and convincing evidence that Respondent Clardy violated Subsection 489.127(1)(f), Florida Statutes (2008), as alleged in the Administrative Complaint in DOAH Case No. 08-1108.
Petitioner has proven by clear and convincing evidence that Respondent O.E. was not registered as a qualified entity in violation of Subsection 489.127(1)(f), Florida Statutes, as alleged in the Administrative Complaint in DOAH Case No. 08-1108. Petitioner has not recommended the imposition of any penalties against O.E., presumably because it is an inactive organization.
The requirements for an agreement, like the one between O.E. and Access-Ability are set forth in Subsection 489.119(2)(c), Florida Statutes (2008), that is, in relevant part:
A joint venture, including a joint venture composed of qualified business organizations, is itself a separate and distinct organization that must be qualified and obtain a certificate of authority in accordance with board rules.
The Rubin contract and the advertising that Respondent Clardy did for Access-Ability, are consistent with the February 20, 2006, letter of agreement with Herbert Neff. As the licensed general contractor, Mr. Neff would have had to serve as the primary qualifying agent, as defined in Subsection 489.105(4), Florida Statutes (2008), which reads:
(4) "Primary qualifying agent" means a person who possesses the requisite skill, knowledge, and experience, and has the responsibility, to supervise, direct, manage, and control the contracting activities of the business organization with which he or she is connected; who has the responsibility to supervise, direct, manage, and control construction activities on a job for which he or she has obtained the building permit; and whose technical and
personal qualifications have been determined by investigation and examination as provided in this part, as attested by the department.
Mr. Neff would have also assumed other duties, as explained in Subsection 489.1195(1), Florida Statutes (2008):
(a) 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.
Nr, Neff’s culpability for assisting an unlicensed person and other possible misconduct is not at issue in this proceeding. The issues are limited to those charged in the Administrative Complaint. See Fox v. fla. State Bd. of
Osteopathic Medical Examiners, 366 So. 2d 515 (Fla. 1st DCA 1979).
Assuming Mr. Clardy thought that Mr. Neff had registered the joint entity, allowing him to enter the Rubin contract on behalf of the joint venture by using Mr. Neff’s license number, he exceeded the scope of an employee by accepting personal compensation from Ivan Rubin and by signing the Rubin contract as both salesman and officer.
Petitioner has proven by clear and convincing evidence that Respondent Clardy violated the provisions of Subsection 489.127(1)(f), Florida Statutes (2008), as charged in the Administrative Complaint in DOAH Case No. 08-1084.
Subsection 455.28(1), Florida Statutes (2008), provides, in relevant part, that:
. . . the department may impose an administrative penalty not to exceed $5,000 per incident pursuant to the provisions of chapter 120...
Subsection 455.227(3)(a), Florida Statutes (2008), provides, in relevant part, that:
In addition to any other discipline imposed pursuant to this section or discipline imposed for a violation of any practice act, the board, or the department when there is no board, may assess costs related to the investigation and prosecution of the case excluding costs associated with an attorney's time.
The evidence that investigative costs are $333.56 in DOAH Case No. 08-1084, and $280.62 in DOAH Case No. 08-1108, is undisputed.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent Frank Clardy guilty of violating Section 489.127(1)(f), Florida Statutes (2008); imposing an administrative fine in the amount of $5,000 and requiring the payment of investigative costs in the amount of $333.56 in DOAH Case No. 08-1084 (DBPR Case No. 2006-062380); and imposing an administrative fine in the amount of $5,000 and requiring the
payment of investigative costs in the amount of $280.62 in DOAH Case No. 08-1108 (DBPR Case No. 2006-053353).
DONE AND ENTERED this 18th day of February, 2009, in Tallahassee, Leon County, Florida.
ELEANOR M. HUNTER
Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 2009.
G. W. Harrell, Executive Director Construction Industry Licensing Board Department of Business and
Nancy S. Terrel, Hearing Officer Office of the General Counsel 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.
