The Issue The issues in each case are whether, pursuant to Sections 489.141 and 489.143, Florida Statutes (2003), a claimant is entitled to payment from the Construction Industries Recovery Fund, and, if so, whether, pursuant to Section 489.143(7), Florida Statutes (2003), Respondent may automatically suspend the residential contractor's license of Petitioner until Petitioner reimburses Respondent for the paid claim.
Findings Of Fact Petitioner is licensed as a certified residential contractor, holding license number CRC 013599. Respondent first issued a residential contractor's license to Petitioner in 1978, and Petitioner has been continually licensed since that time. Petitioner has never been disciplined by Respondent or any local governmental agency. On January 29, 2004, Respondent transmitted to the Division of Administrative Hearings seven files containing administrative complaints alleging disciplinary breaches against Petitioner for many of the transactions covered in the nine subject cases. These seven new cases have not yet been heard, and Respondent has not yet entered any restitution orders against Petitioner. In the past, Petitioner has placed his residential contractor's license with various corporations to qualify them to perform residential construction. In February 1999, Petitioner met with Lori Thomson, president of Thomson Homes, Inc., to discuss placing his license with her residential construction company. Now inactive, Thomson Homes, Inc., had been in the residential construction business since at least 1994, operating out of an office in Palm Beach County, which is also the location of all but one of the residential construction jobs that are the subject of these cases. Since 1994, Thomson Homes, Inc., had used the general contractor's license of Ms. Thomson's husband, Steven Thomson, to qualify to perform residential construction. During the time that his license qualified Thomson Homes, Inc., Mr. Thomson believed that he and his wife owned the corporation equally and that she served as the president and he served as the vice-president. In the summer of 1998, Mr. Thomson filed for divorce from Ms. Thomson. In February 1999, Ms. Thomson fired Mr. Thomson from Thomson Homes, Inc. Shortly thereafter, Mr. Thomson learned that Ms. Thomson had caused all of the stock to be issued to her when the corporation was formed, and that she had assumed all of the officer and director positions. In early March 1999, Mr. Thomson cancelled all of the building permits that he had obtained on behalf of Thomson Homes, Inc., and withdrew his general contractor's license from Ms. Thomson's corporation, effective March 20, 1999. When Mr. Thomson withdrew his license from Thomson Homes, Inc., it was in the process of building or preparing to build about ten homes. At no time during Petitioner's discussions with Ms. Thomson was he aware that Thomson Homes, Inc., was actively involved in construction. Eventually, Ms. Thomson and Petitioner agreed that Petitioner would place his residential contractor's license with Thomson Homes, Inc., and would supervise the corporation's construction activities. In return, Thomson Homes, Inc., would pay Petitioner $500 weekly and 35 percent of the profits. After filing the necessary documentation in April 1999, Petitioner qualified Thomson Homes, Inc. effective April 22 or 26, 1999. Petitioner advised Ms. Thomson that he had other work to do for another month, so he could not start with Thomson Homes, Inc. immediately. Ms. Thomson told him that she had to get financing arranged for several signed contracts and did not have any construction taking place at the time. The record is unclear whether this delay took place after the initial agreement between Petitioner and Ms. Thomson or after Petitioner formally placed his license with Thomson Homes, Inc. However, in either event, from the date that Petitioner formally placed his license with Thomson Homes, Inc., he never had a substantive conversation with Ms. Thomson about any construction activities of Thomson Homes, Inc. Not hearing from Ms. Thomson, Petitioner eventually called her to learn when he would start work. At first, Ms. Thomson took Petitioner's calls and kept explaining that the financing paperwork had been delayed. She promised to call Petitioner when construction was ready to proceed. However, Ms. Thomson never contacted Petitioner, and she later stopped taking or returning Petitioner's calls. In early August 1999, Petitioner called Thomson Homes, Inc., and learned that its telephone had been disconnected. He visited the office of Thomson Homes, Inc., but found it closed and the premises vacated. In fact, Thomson Homes, Inc., discontinued business on or about August 1, 1999. Between the date that Petitioner had qualified Thomson Homes and the point at which Thomson Homes ceased doing business, Thomson Homes, Inc., had entered into construction contracts, taken deposits and draws on construction loans, and performed residential construction--all unknown to Petitioner. Also unknown to Petitioner was the fact that Thomson Homes, Inc., had failed to perform its obligations under many, if not all, of its construction contracts during that period. The record is unclear when Petitioner withdrew his license from Thomson Homes, Inc. Petitioner sent Respondent a letter on August 30, 1999, advising of the withdrawal of his license from Thomson Homes, Inc. Later advised that he needed to file another form to effect the withdrawal, Petitioner did so in March 2000. The difference is not important in these cases. At no time did Petitioner receive any money from Thomson Homes, Inc., or any of the claimants who contracted with Thomson Homes, Inc. At no time did Petitioner enter into any contracts with any of the claimants. Only after Thomson Homes, Inc., had taken the claimants' money and abandoned work or failed to commence work did Petitioner learn that Thomson Homes, Inc., had done construction business under his license. DOAH Case No. 03-3540 involves the claim of Sandra Harvey. Ms. Harvey entered into a construction agreement with Thomson Homes, Inc., on September 9, 1998. Pursuant to the agreement, Ms. Harvey agreed to pay Thomson Homes, Inc., $25,500 for a lot and $115,260 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. After pouring the slab, constructing the shell, and completing the rough plumbing, air conditioning, and electrical, Thomson Homes, Inc., stopped work on Ms. Harvey's home in early 1999. Ms. Harvey learned of the problem when Mr. Thomson called her in early 1999 and said that he could not finish the home because Ms. Thomson had taken over the business. This call probably took place no later than late March 1999, when Mr. Thomas withdrew as the qualifier for Thomson Homes, Inc. The record does not reveal the extent of payments from Ms. Harvey or her lender or the extent of completed work at the time that Thomson Homes, Inc., abandoned the job. Although the complaint is not part of this record, Ms. Harvey commenced a legal action against Thomson Homes, Inc., but not Petitioner. She obtained a default final summary judgment against Thomson Homes, Inc., on March 30, 2001, for a total sum of $46,267.32, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant breached its contract by accepting Plaintiff's deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and/or materialmen for their labor, services and material provided. As a result of Defendant abandoning the project, Plaintiff was compelled to retain a new contractor to complete her home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, the misapplication of construction funds and financial mismanagement Plaintiff has been forced to borrow additional funds from the construction lender. On May 3, 2001, Ms. Harvey filed a claim with the Construction Industries Recovery Fund (Recovery Fund). In response to a question asking if she had made a diligent effort to collect payment from the contractor, Ms. Harvey answered "yes," explaining she had "filed lawsuit." Ms. Harvey probably filed her claim within two years of when Thomson Homes, Inc., abandoned her job. By the end of March 1999, Mr. Thomson informed Ms. Harvey that his wife had fired him, so he could not work on her home anymore. A change in qualifier does not mean that Thomson Homes, Inc., would necessarily abandon the job, but, as noted in the Conclusions of Law, abandonment presumptively arises upon the expiration of 90 days without work. No work took place on Ms. Harvey's home after Mr. Thomson withdrew as qualifier, so presumptive abandonment took place by the end of June 1999--after May 3, 1999, which is two years prior to the date on which Ms. Harvey filed her claim. By letter dated June 5, 2001, from James Brogan of WEI Consulting Group to Ms. Harvey, Mr. Brogan states that he had investigated the assets of Thomson Homes, Inc. Mr. Brogan found no bankruptcy filing by Thomson Homes, Inc., in Bankruptcy Court in the Southern District of Florida. Thomson Homes, Inc., was a party to 282 legal actions and owed tangible personal property taxes on furniture in a model home, but the furniture was no longer available. On February 28, 2003, Respondent issued an Order approving Ms. Harvey's claim of $25,000 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that Ms. Harvey is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On March 17, 2003, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Ms. Harvey and Respondent, contests the payment to Ms. Harvey and the automatic suspension of Petitioner's license. The petition contests the payment of Ms. Harvey's claim because she had made insufficient efforts to satisfy the judgment; she had failed to submit all required exhibits with her claim; her judgment is against Thomson Homes, Inc., and not Petitioner; her judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Additionally, the petition contests the automatic suspension because the payment to Ms. Harvey is not authorized, her claim is incomplete, and her judgment is not against Petitioner. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3541 involves the claim of John and Kathleen Whitesides. The Whitesides, who lived at the time in Juno Beach, Florida, entered into a construction contract with Thomson Homes, Inc., on February 7, 1999. Pursuant to the agreement, the Whitesides agreed to pay Thomson Homes, Inc., $154,094 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. After the Whitesides paid Thomson Homes, Inc., $5000 and secured a construction loan, Thomson Homes, Inc., never commenced construction. In a complaint filed April 3, 2000, the Whitesides commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to any construction," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction. The Whitesides obtained a default final judgment against Thomson Homes, Inc., on December 21, 2000, for a total sum of $20,146.67, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: "Defendant is in breach of the Contract dated February 7, 1999, and has received unjust enrichment from Defendant's failure to fulfill the terms of the Contract to build a home for Plaintiffs." On August 9, 2001, David Tassell, the Whitesides' attorney in the circuit court action against Thomson Homes, Inc., stated, in an acknowledged statement, that he had performed "numerous" real property searches in Palm Beach and Martin counties' public records and determined that Thomas Homes, Inc., "owns no real property in Martin County." The omission of Palm Beach County in the statement is unexplained. Mr. Tassell's statement adds that he has retained a private investigator, who confirmed that Thomson Homes, Inc., owns no boats, planes, or automobiles. On August 10, 2001, the Whitesides filed a claim with the Recovery Fund. In response to a question asking if they had made a diligent effort to collect payment from the contractor, the Whitesides answered "yes," but did not supply an explanation in the following blank. The completed questionnaire accompanying the claim states that the Whitesides discovered the violation in September 1999 and that it occurred in July to August 1999. On September 17, 2002, Respondent issued an Order approving the Whitesides' claim of $18,526.67 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the Whitesides are the Petitioners, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. The Whitesides probably filed their claim within two years of when they reasonably should have discovered that Thomson Homes, Inc., had wrongfully failed to commence construction, as is required for reasons set forth in the Conclusions of Law. As noted in the Conclusions of Law, presumptive abandonment arose when Thomson Homes, Inc., after entering the contract, performed no work for 90 days. Six months elapsed from the signing of the contract to the date that is two years prior to the filing of the claim. Although the record is not well-developed on the point, it is more likely than not that due diligence did not require that the Whitesides discover the abandonment within the first 90 days after it had presumptively arisen. The Whitesides' judgment is probably based on a violation of Section 489.129(1)(g), (j), or (k), Florida Statutes, as is required for reasons set forth in the Conclusions of Law. Although the record is not well-developed on this point either, it is more likely than not that the judgment is based on Thomson Homes' abandonment after entering into the contract. The judgment does not state this basis explicitly, but the complaint, on which the judgment is based, alleges abandonment. On December 23, 2002, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Respondent and the Whitesides' attorney in the circuit court action against Thomson Homes, Inc., contests the payment to the Whitesides and the automatic suspension of Petitioner's license. The petition contests the payment of the Whitesides' claim because they did not file certified copies of the final judgment and levy and execution documents and their judgment did not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes. Additionally, the petition contests the automatic suspension because Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes; Petitioner received no notice of the hearing that resulted in the Order to pay the Whitesides and suspend Petitioner's license; the Whitesides' claim is incomplete; and the Whitesides' judgment is not against Petitioner. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3542 involves the claim of Richard and Kathleen Beltz. The Beltzes entered into a construction contract with Thomson Homes, Inc., on July 13, 1999. Pursuant to the agreement, the Beltzes agreed to pay Thomson Homes, Inc., $35,500 for a lot and $140,500 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. After the Beltzes paid Thomson Homes, Inc., $17,283.70, Thomson Homes, Inc., never appeared at the closing, which had been scheduled for August 10, 1999. Nor did Thomson Homes, Inc., ever commence construction. The record does not disclose the extent, if any, to which Thomson Homes, Inc., completed construction. The Beltzes' discovery of Thomson Homes' failure to commence construction was hampered by the fact that they resided in California at the time. However, the Beltzes had obviously discovered the wrongful acts and omissions of Thomson Homes, Inc., by September 29, 1999, when they sent a letter to Petitioner demanding that he return the money that they had paid Thomson Homes, Inc. On October 19, 1999, the Beltzes signed a claim under the Recovery Fund, but the record contains no indication when the claim was filed. The completed questionnaire attached to the claim does not ask if the claimants had made a diligent effort to collect payment from the contractor. For reasons set forth in the Conclusions of Law, a claim must follow a judgment, so, the Beltzes could not file a valid claim until they had obtained a judgment. Two years from September 29, 1999, at which point the Beltzes obviously knew of a violation, requires that they file the claim, on an already- secured judgment, prior to September 29, 2001. In a complaint filed February 4, 2002, the Beltzes commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to any construction" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The Beltzes obtained a default final summary judgment against Thomson Homes, Inc., on May 22, 2002, for a total sum of $23,280.20, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant performed some work on the project. However, Defendant breached its contract by accepting deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and materialmen for their labor, services and material provided. As a result of Defendant failing to pay Lienors who provided labor, service and materials to Plaintiffs [sic] real property, Construction Liens were recorded against same, which Plaintiffs had to satisfy. As a result of Defendant abandoning the project, Plaintiffs were compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay Lienors, the misapplication of construction funds and financial mismanagement, Plaintiffs were forced to borrow additional funds from their construction lender. By unacknowledged statement dated August 23, 2002, Ms. Beltz declared that someone at the Florida Department of State advised her that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. She also declared that she had found on the internet two pieces of real property owned by Thomson Homes, Inc., but they had been transferred within the past year. Ms. Beltz stated that she searched the database of the "Department of Motor Vehicles in Palm Beach County" in May 2000 and found no vehicles or boats registered to Thomson Homes, Inc. Lastly, she reported that she contacted the "Federal Aviation Association" at an unspecified time and found no "airplanes" registered to Thomson Homes, Inc. On November 26, 2002, Respondent issued an Order approving the Beltzes' claim of $17,222.78 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the Beltzes are the Petitioners, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On December 27, 2002, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on the Beltzes and Respondent, contests the payment to the Beltzes and the automatic suspension of Petitioner's license. The petition contests the payment of the Beltzes' claim because they did not submit all of the necessary exhibits with their claim; their judgment is against Thomson Homes, Inc., and not Petitioner; and their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes. Additionally, the petition contests the automatic suspension because Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes; the Beltzes' claim is incomplete; and the Beltzes' judgment is not against Petitioner. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3543 involves the claim of Keith and Karen Deyo. The Deyos entered into a construction contract with Thomson Homes, Inc., on October 31, 1998. Pursuant to the agreement, the Deyos agreed to pay Thomson Homes, Inc., $25,500 for a lot and $123,400 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. Although the Deyos clearly suffered damages from the acts and omissions of Thomson Homes, Inc., the record does not disclose how much they paid the company, how much they had to pay unpaid suppliers and laborers, and how much construction the company completed before abandoning the job. Thomson Homes, Inc., began construction on the Deyos' home about 30-45 days after the parties signed the contract, but all work stopped in July 1999. In an undated complaint, the Deyos commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment] of the project prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The Deyos obtained a final summary judgment against Thomson Homes, Inc., on March 15, 2000, for a total sum of $55,458.64, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant partially performed work under the Contract. However, it breached its contract by accepting deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and materialmen for their labor, services and material provided. As a result of Defendant failing to pay lienors who provided labor, services and materials to Plaintiffs [sic] residence, construction liens were recorded against same, which Plaintiffs had to satisfy. As a result of Defendant abandoning the project, Plaintiffs were compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienor's [sic], the misapplication of construction funds and financial mismanagement Plaintiffs have been forced to borrow additional funds from their construction lender. On April 27, 2000, the Deyos signed a claim under the Recovery Fund, but the record contains no indication when the claim was filed. A cover letter dated May 8, 2000, suggests that the Deyos mailed their claim a couple of weeks after signing it, so it was probably filed in mid-May 2000, although their questionnaire bears a revision date of November 2001, which would be beyond two years after the violation. In the questionnaire, the Deyos did not respond to the question asking if they had made a diligent effort to collect payment from the contractor. By an undated and unacknowledged statement, Mr. Deyo declared that someone at the Florida Department of State advised him that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. He also declared that he had found on the internet two pieces of real property owned by Thomson Homes, Inc., but they had been transferred within the past year. Mr. Deyo stated that he searched the database of the "department of motor vehicles in Palm Beach County" in on April 14, 2000, and found no motor vehicles or boats registered to Thomson Homes, Inc. Lastly, he reported that he contacted the "Federal Aviation Association" on April 21, 2000, and found no "airplanes" registered to Thomson Homes, Inc. On January 22, 2003, Respondent issued an Order acknowledging the Deyos' claim of $55,458.64, approving the payment of the statutory limit of $25,000 against the Recovery Fund, and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that Mr. Deyo is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On February 3, 2003, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Respondent and the Deyos' attorney who represented them in the action against Thomson Homes, Inc., contests the payment to the Deyos and the automatic suspension of Petitioner's license. The petition contests the payment of the Deyos' claim and suspension of Petitioner's license because Petitioner did not receive notice of the hearing at which Respondent entered the Order; the Deyos did not satisfy all requirements for payment from the Recovery Fund; their claim was not accompanied by certified copies of the levy and execution documents; their judgment is against Thomson Homes, Inc., and not Petitioner; their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3544 involves the claim of Sylvia Reinhardt. Ms. Reinhardt entered into a construction contract with Thomson Homes, Inc., on October 14, 1998. Pursuant to the agreement, Ms. Reinhardt agreed to pay Thomson Homes, Inc., $45,000 for a lot and $147,150 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. After Ms. Reinhardt paid Thomson Homes, Inc., $144,769, directly and indirectly, by way of her construction lender, the house was little more than half complete when Thomson Homes, Inc., abandoned the job. Thomson Homes also failed to pay various suppliers that filed liens, so Ms. Reinhardt had to pay $8550.41 to RTS Roofing, $882 to Palm Beach Garage Door, and $3421.32 to Woodworks, Inc. In an undated complaint filed in 1999 (actual date illegible), Ms. Reinhardt commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiff's residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. Ms. Reinhardt obtained a final summary judgment against Thomson Homes, Inc., on March 28, 2000, for a total sum of $61,471.15, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant performed work under the Contract. However, it breached its contract by accepting deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and materialmen for their labor, services and materials provided. As a result of Defendant failing to pay lienors who provided labor, services and materials for the construction of Plaintiff's residence, construction liens were recorded against same, which Plaintiff had to satisfy. As a result of Defendant abandoning the project, Plaintiff was compelled to retain a new contractor to complete their [sic] home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienor's [sic], the misapplication of construction funds and financial mismanagement Plaintiff has been forced to borrow additional funds from her construction lender. On April 17, 2000, Ms. Reinhardt filed a claim with the Recovery Fund. In response to a question asking if she had made a diligent effort to collect payment from the contractor, Ms. Reinhardt answered "yes" and explained: "Telephone calls were unanswered. Certified mail requesting response were [sic] never answered. Our attorney made written and personal contact with the owner and there was no intention to pay." The claim states that the violation took place in July 1999. By acknowledged statement dated July 21, 2000, Ms. Reinhardt declared that she had completed a "reasonable search and inquiry" and had not found any property or assets against which to satisfy her judgment. Ms. Reinhardt stated that someone at the Florida Department of State advised her that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. She also declared that she had found one parcel of property owned by Thomson Homes, Inc., and valued at $115,387, but this had been sold to "Joan Thomson" on February 1, 2000. Ms. Reinhardt stated that she had found tangible personal property worth $5000. She added that she had not found any motor vehicles registered with the Department of Highway Safety and Motor Vehicles, nor had she found anything registered with the "FAA." On November 26, 2002, Respondent issued an Order acknowledging Ms. Reinhardt's claim of $58,661.44, approving the payment of the statutory limit of $25,000 against the Recovery Fund, and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that Ms. Reinhardt is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On December 24, 2002, Petitioner served a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Ms. Reinhardt and Respondent, contests the payment to Ms. Reinhardt and the automatic suspension of Petitioner's license. The petition contests the payment of Ms. Reinhardt's claim and suspension of Petitioner's license because Ms. Reinhardt did not submit certified copies of the levy and execution documents; her judgment is against Thomson Homes, Inc., and not Petitioner; her judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3545 involves the claim of Louis and Ann Mahoney. The Mahoneys entered into a construction contract with Thomson Homes, Inc., on June 28, 1999, for the construction of a home in Martin County. Pursuant to the agreement, the Mahoneys agreed to pay Thomson Homes, Inc., $32,000 for a lot and $149,000 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 150 days from the date of slab pour. After the Mahoneys paid Thomson Homes, Inc., $14,500, directly and indirectly, by way of their construction lender, they suffered damages due to the acts and omissions of Thomson Homes, Inc., although, again, the record does not describe specifically how Thomson Homes caused them damage. In an undated complaint that bears no filing date, the Mahoneys commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The Mahoneys obtained a final summary judgment against Thomson Homes, Inc., on April 13, 2000, for a total sum of $43,084.49, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant breached its contract by accepting Plaintiffs' deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and/or materialmen for their labor, and/or services provided. As a result of Defendant failing to pay lienor's [sic] who provided labor, services and materials for the construction of Plaintiffs [sic] residence, a construction lien was recorded against Plaintiffs' property, which Plaintiffs will have to satisfy. As a result of Defendant abandoning the project, Plaintiffs were compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienor's [sic], the misapplication of construction funds and financial mismanagement Plaintiffs have been forced to borrow additional funds from their construction lender. On April 30, 2000, the Mahoneys signed a claim under the Recovery Fund. Although the claim form bears no filing date, the completed questionnaire attached to the claim was filed on May 3, 2000, so that is the likely filing date of the claim. In response to a question asking if they had made a diligent effort to collect payment from the contractor, the Mahoneys answered "yes" and explained: "This is explained in General Allegations, enclosed with this paperwork." Evidently, the reference is to a copy of the circuit court complaint. By acknowledged statement dated April 8, 2002, Mr. Mahoney declared that he had completed a "reasonable search and inquiry" and had not found any property or assets against which to satisfy his judgment. Mr. Mahoney stated that someone at the Florida Department of State advised him that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. He also declared that an internet search had disclosed no property owned by Thomson Homes, Inc. Mr. Mahoney stated that the "department of motor vehicles in Palm Beach County" found no motor vehicles or boats registered to Thomson Homes, Inc., and that the "FAA" had found nothing registered to Thomson Homes, Inc. On February 28, 2003, Respondent issued an Order acknowledging the Mahoneys' claim of $38,185, approving the payment of the statutory limit of $25,000 against the Recovery Fund, and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the Mr. Mahoney is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On March 17, 2003, Petitioner served a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on the Mahoneys and Respondent, contests the payment to the Mahoneys and the automatic suspension of Petitioner's license. The petition contests the payment of the Mahoneys' claim and suspension of Petitioner's license because they did not submit all of the required exhibits; their judgment is against Thomson Homes, Inc., and not Petitioner; their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3546 involves the claim of Dennis and Carolyn DeStefanis. The DeStefanises entered into a construction contract with Thomson Homes, Inc., on April 7, 1999. Pursuant to the agreement, the DeStefanises agreed to pay Thomson Homes, Inc., $137,455 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 150 days from the date of slab pour. After the DeStefanises paid Thomson Homes, Inc., $15,765, directly and indirectly, by way of their construction lender, Thomson Homes, Inc. never did any work, except to contract with a surveyor, who, unpaid, filed a claim of lien against the DeStefanises's lot. In an undated complaint bearing no filing date, the DeStefanises commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The DeStefanises obtained a final summary judgment against Thomson Homes, Inc., on March 15, 2000, for a total sum of $36,701.87, including attorneys' fees and costs. The judgment states, in part: Subsequent to entering . . . into the above referenced contract, Defendant, [sic] breached its contract by accepting Plaintiffs [sic] deposits and construction loan disbursements and thereafter abandoning the project. [sic] As a result of Defendant abandoning the project, Plaintiffs were compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, the misapplication of construction funds and financial mismanagement Plaintiffs have been forced to borrow additional funds from their construction lender. On April 19, 2000, the DeStefanises filed a claim with the Recovery Fund. In response to a question asking if they had made a diligent effort to collect payment from the contractor, the DeStefanises answered "yes" and explained: "Went to DBPR Investigative Services, hired Attorney Barry W. Taylor [attorney in circuit court action], got Final Summary Judgment against Thomson Homes, Inc." On March 20, 2003, Respondent issued an Order acknowledging the DeStefanises' claim of $34,965.52, approving the payment of $15,765 against the Recovery Fund, and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the DeStefanises are the Petitioners, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On April 7, 2003, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on the DeStefanises and Respondent, contests the payment to the DeStefanises and the automatic suspension of Petitioner's license. The petition contests the payment of the DeStefanises' claim and suspension of Petitioner's license because they did not submit all of the required exhibits; their judgment is against Thomson Homes, Inc., and not Petitioner; their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. The petition contests the suspension of Petitioner's license on the additional ground that he was not the qualifier for Thomson Homes, Inc., when it and the DeStefanises entered into the construction contract. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3547 involves the claim of James and Donna Barr. The Barrs entered into a construction contract with Thomson Homes, Inc., on September 12, 1998. Pursuant to the agreement, the Barrs agreed to pay Thomson Homes, Inc., $30,000 for a lot and $140,900 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. The Barrs paid Thomson Homes, Inc., $8500 in the form of a down payment. They or their construction lender paid Thomson Homes, Inc., considerably more money and suffered the imposition of claims of lien by unpaid subcontractors and suppliers, but, after negotiating with the bank, emerged from the transaction having lost only the $8500 down payment. Thomson Homes, Inc., obtained permits in April 1999 and started construction in May 1999. Before abandoning the job, Thomson Homes, Inc., worked on the home in May, June, and July of 1999. The Barrs and their lender did not make additional payments after the Barrs found the Thomson Homes, Inc., office empty on August 1, 1999. In a complaint filed October 6, 1999, the Barrs commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The Barrs obtained a final summary judgment against Thomson Homes, Inc., on May 8, 2000, for a total sum of $45,435.62, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, partially performed work under the Contract. However, Defendant breached the contract by accepting Plaintiffs [sic] deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and/or materialmen for their labor services and materials provided. As a result of Defendant failing to pay lienors who provided labor, services and materials for the construction of Plaintiffs [sic] residence, construction liens were recorded against same, which Plaintiffs will have to satisfy. As a result of Defendant abandoning the project, Plaintiffs will be compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienors, the misapplication of construction funds and financial mismanagement Plaintiffs will be forced to borrow additional funds from their construction lender. On June 2, 2000, the Barrs filed a claim under the Recovery Fund. In response to a question asking if they had made a diligent effort to collect payment from the contractor, the Barrs answered "yes" and explained: "I have looked into the assets of Thomson Homes Inc. and they do not have any. My affidavit is attached." The completed questionnaire states that the Barrs discovered the violation on August 11, 1999. They therefore failed to file their claim within two years of the discovery of the violation. By acknowledged statement dated May 23, 2000, Ms. Barr declared that she had completed a "reasonable search and inquiry" and had not found any property or assets against which to satisfy her judgment. Ms. Barr stated that someone at the Florida Department of State advised her that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. She also declared she had found no property owned by Thomson Homes, Inc., in Palm Beach County. Ms. Barr stated that the Department of Highway Safety and Motor Vehicles found no motor vehicles or boats registered to Thomson Homes, Inc., and that the internet site of the "FAA" had revealed nothing registered to Thomson Homes, Inc. On November 26, 2002, Respondent issued an Order approving the payment of the Barrs' claim of $8500 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the Barrs are the Petitioners, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On December 27, 2002, Petitioner served a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on the Barrs and Respondent, contests the payment to the Barrs and the automatic suspension of Petitioner's license. The petition contests the payment of the Barrs' claim and suspension of Petitioner's license because they did not submit a certified copy of the levy and execution documents; their judgment is against Thomson Homes, Inc., and not Petitioner; their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3633 involves the Joanne Myers. Ms. Myers entered into a construction contract with Thomson Homes, Inc., on February 7, 1999. Pursuant to the agreement, Ms. Myers agreed to pay Thomson Homes, Inc., $29,500 for a lot and $125,400 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. Ms. Myers directly or indirectly paid Thomson Homes, Inc., $12,840. According to Ms. Myers' claim, Thomson Homes, Inc., never commenced construction before going out of business in August 1999. In an undated complaint bearing no filing date, Ms. Myers commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiff's residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. Ms. Myers obtained a final summary judgment against Thomson Homes, Inc., on May 31, 2000, for a total sum of $28,307.77, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering . . . into the above referenced contract, Defendant breached the contract by accepting Plaintiff's deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and/or materialmen for their labor services and materials provided. As a result of Defendant failing to pay lienor's [sic] who provided labor, services and/or materials for the construction of Plaintiff's residence, construction liens were recorded against same, which Plaintiff will have to satisfy. As a result of Defendant abandoning the project, Plaintiff will be compelled to retain a new contractor to complete her home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienor's [sic], the misapplication of construction funds and financial mismanagement Plaintiff will be forced to borrow additional funds from her construction lender. On September 18, 2000, Ms. Myers filed a claim with the Recovery Fund. In response to a question asking if she had made a diligent effort to collect payment from the contractor, Ms. Myers answered "yes" and explained: "Contractor closed corporate office--would not answer telephone calls." By letter dated November 30, 2000, from James Brogan of WEI Consulting Group to Ms. Myers, Mr. Brogan states that he had investigated the assets of Thomson Homes, Inc. Mr. Brogan found no bankruptcy filing by Thomson Homes, Inc., in the Southern District of Florida. Thomson Homes, Inc., was a party to 282 legal actions and owed tangible personal property taxes on furniture in a model home. On February 28, 2003, Respondent issued an Order approving the payment of Ms. Myers' claim of $14,080.66 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that Ms. Myers is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On March 17, 2003, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Ms. Myers and Respondent, contests the payment to Ms. Myers and the automatic suspension of Petitioner's license. The petition contests the payment of Ms. Myers' claim and suspension of Petitioner's license because she did not submit evidence of a diligent search for assets; she did not submit all of the required exhibits; her judgment is against Thomson Homes, Inc., and not Petitioner; her judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. On January 4, 2004, Ms. Myers died. However, the probate court of Lancaster County, Pennsylvania, issued letters testamentary on her estate to James W. Myers III, in whose name Ms. Myers' claim is now being prosecuted. At the hearing, Petitioner contended that most, if not all, of the claims failed because the claimants had not exercised reasonable diligence in searching for assets, although Petitioner has dropped this contention in its proposed recommended order. In his petitions for hearing, Petitioner raised this contention only as to Ms. Myers. Ms. Myers, as well as the remainder of the claimants, made or caused to be made a reasonable search and inquiry for the assets of Thomson Homes, Inc. It is obvious that Thomson Homes, Inc., had no assets by the first letter from Mr. Brogan, dated November 30, 2000, nor did it have assets when Mr. Brogan issued his later letter on June 5, 2001, or when the attorney issued his affidavit on August 9, 2001. What is reasonable, in terms of a search, is dictated here by the fact that Thomson Homes, Inc., had no discoverable assets against which it could be made to answer for the considerable fraud that it perpetrated against these nine claimants. Respondent provided all of the parties, including Petitioner, with notice of its hearings at which it entered Recovery Fund orders. The petitions contend that Petitioner received no such notice in the Whitesides and Deyos cases. Although not litigated at the hearing, the presumption of notice, pursuant to the recitations set forth in each of Respondent's orders, results in a finding that Petitioner received timely notice in all cases.
Recommendation It is RECOMMENDED that Respondent enter a final order dismissing the claims against the Recovery Fund of the Beltzes and Barrs; paying the claims against the Recovery Fund of the remaining claimants, pursuant to the provisions of the orders of Respondent already issued in these cases and pursuant to the provisions of Section 489.143(1)-(6), Florida Statutes; and dismissing Respondent's request for the automatic suspension of Petitioner's license, pursuant to Section 489.143(7), Florida Statutes, without prejudice to any separate disciplinary proceedings that Respondent has commenced or may commence against Petitioner or others for the acts and omissions involved in these nine cases. DONE AND ENTERED this 17th day of February, 2004, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of February, 2004. COPIES FURNISHED: Bruce G. Kaleita Law Office of Bruce G. Kaleita, P.A. 1615 Forum Place, Suite 500 West Palm Beach, Florida 33401 Adrienne C. Rodgers Assistant General Counsel Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-1023 Tim Vaccaro, Director Construction Industry Licensing Board Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
Findings Of Fact Respondent is licensed as a real estate broker and was so licensed at all times relevant hereto. He has taught real estate salesman courses at Hillsborough Junior College for about eight years. In February, 1982, Thomas E. Webb and Johnnie M. Webb, husband and wife, signed an offer to purchase real estate owned by Ruby Carline (Exhibit 1). This document was prepared by Respondent as broker and signed by him as witness and escrow agent. The offer was not accepted by the seller. Respondent had a listing agreement (Exhibit 6) on property owned by Ruby Carline in Seffner, Florida, giving him exclusive right to sell this property until June 12, 1982, at a price of $65,800, with buyer assuming an existing mortgage of $27,000 at ten (10) percent. There was also a second mortgage on the property in the amount of $10,000 at eighteen (18) percent. Shortly after Exhibit 1 was not accepted by Carline, the Webbs' trailer burned and they needed a residence quickly. Respondent inquired of Carline how much she would take to move out of her house and she told him $10,000, but needed $2,000 to actually relocate her furniture. On March 5, 1982, Respondent acknowledged receipt of $2,000 from Webb (Exhibit 7). Shortly thereafter, this money was paid to Carline and she vacated her house. Webb moved in during the latter part of March and commenced paying rent. Following this, Respondent prepared an updated contract for sale and purchase which was signed by Thomas Webb and Ruby Carline in early May (Exhibit 3). This contract provided for a purchase price of $59,900, with 7,000 deposit held in escrow by Respondent, and the balance of the purchase price comprising the existing first mortgage of $27,000 to be assumed by the buyer; a purchase money mortgage in the amount of $15,900 to be obtained; and the second mortgage in the amount of $10,000. Special Clause XII provided: Buyer shall rent property for $560 per month with an option to purchase by June 12, 1982, which shall be extended an additional 90 days at time of purchase. Buyer shall assume first mortgage and pay balance to seller. At the time this contract was executed Webb had paid Respondent $7,000. The additional $5,000 cashier's check was given to Respondent by Webb on April 27, 1982 (Exhibit 7) and Exhibit 3 was thereafter prepared. The $5,000 was not placed in escrow but in Respondent's operating account. By check dated May 1, 1982, Respondent disbursed $2,666 to Carline from the proceeds of this down payment plus some rent moneys collected from Webb and claimed the balance of $3,594 as commission on the sale of the property. Carline testified that she received only $1,000 from Respondent in the form of a check when she moved out of the house. Respondent actually paid her $2,000, of which $1,000 was in cash. In her letter to Respondent dated January 1, 1983 (Exhibit 11), Carline acknowledged the $2,000 as a gratuitous payment to her vacating the property and resettling elsewhere. Webb was expecting fire insurance money on his trailer which was to provide funds necessary to pay off the second mortgage. They expected to get additional financing either from a bank or from the seller, or both. When it became evident Webb was experiencing difficulty obtaining financing, Respondent prepared Exhibit 2, another contract for sale and purchase, executed by seller October 22, 1982, which, in Special Clause XII stated: This is a lease option contract, buyer has 30 days to close on property. Rent shall be $560 per month until property is transferred. Property is being purchased "as is". Commission has been paid by seller. This contract also provided for purchase price of $59,900. Deposit (paid to owner-seller Ruby Carline) of $7,000, buyer to assume existing first mortgage of $27,000, the second mortgage to General Finance Corporation in the amount of $10,000 to be paid off and balance to close of $25,900. Clause III provided that if any part of the purchase price is to be financed by third party loan, the contract is contingent upon the buyer obtaining a firm commitment for said loan within 30 days at a rate not to exceed 18 percent for 15 years in the principal amount of $25,000. At the time this contract was signed, all parties knew the buyer needed additional financing to close. While the Webbs occupied the house, Respondent collected the rent, usually in cash, and remitted same to Carlile in the manner received. By the time the closing date of September 12, 1982, arrived, it became evident Webb was having difficulty obtaining financing and would be unable to close. Webb demanded return of the $7,000 deposit from Respondent and Carline. Carline demanded Respondent pay her all of the moneys received by him from Webb; and Respondent claimed a set-off of fees paid by him for appliance repairs, for the institution of eviction proceedings against Webb and for services in collecting the rent for Carline. Respondent paid Webb some $1,200 and attempted to get Carline to release him from liability for further payment to Carline (Exhibit 15). Carline reported the incident to the Real Estate Commission.
Findings Of Fact At all material times, Respondent has been a certified general contractor, holding license number CG CA19293. In September 1983, he was, according to a form filed with Petitioner, "legally appointed to act for [Ebbtide Construction & Development, Inc.] in all matters connected with its contracting business, and given authority to supervise construction undertaken by the business organization." Ebbtide was engaged in the home construction business. Paul Gregg purchased Ebbtide in 1988. Respondent still served as an employee and primary qualifying individual for the corporation. Erroneously believing that at least three persons were required by law to serve as officers of the corporation, Mr. Gregg appointed Respondent and a third person to serve as officers and directors with Mr. Gregg, who owned all of the stock of the company. On August 27, 1991, Mr. Gregg, on behalf of Ebbtide, entered into a construction contract with Richard and June Cote, who were neighbors of Mr. Gregg in Connecticut. The contract calls for the Ebbtide to construct a certain style of home for the Cotes. In return, the Cotes would pay Ebbtide a total of $72,500. The contract intentionally omits the location of the homesite because, at the time of the execution of the contract, neither party knew where the house would be built. The contract inadvertently fails to require Ebbtide to purchase a lot for the Cotes, but the total contract price was to include a lot. The contract was contingent on financing. If the Cotes failed to obtain financing, "either party may cancel this Contract." The contract does not provide that Ebbtide could retain any part of the money paid by the Cotes in the event of cancellation for the Cotes' failure to obtain financing, nor did the parties so intend. On November 1, 1991, the parties executed a new contract. The new contract was identical to the original contract, except that a $15,000 pool had been added and the cost of the house increased $5000. The total was now $92,500. The contract reflects the fact that the Cotes had now paid Ebbtide a total of $18,500 in deposits. At the time of the execution of the November 1 contract, the parties still had not identified a lot on which Ebbtide could build the home. Sometime in early 1992, the Cotes found a lot with Mr. Gregg's assistance. The Cotes applied for a mortgage loan, contemplating a closing during the summer. The Cotes were approved for the loan on April 27, 1992, but were unable to close due to a title problem with the lot. Respondent had nothing to do with the location of the lot. Mr. Gregg was the only person on behalf of Ebbtide involved with this aspect of the transaction. Later, Mr. Gregg, on behalf of Ebbtide, located another lot, in which he owned an interest. For some reason, however, this lot also proved unsuitable. When the second lot fell through in March 1993, the Cotes demanded of Mr. Gregg that Ebbtide return their money, which had been deposited in Ebbtide's general account and used for general overhead. Mr. Gregg did not do so, and months went by without any progress. Mr. Gregg showed real interest in the problem only after the Cotes complained to Petitioner. Without denying liability for the deposit, Mr. Gregg has not returned any of the money, nor has he worked out a repayment plan. Although Respondent was a signatory on the company's checking account, he only became involved in financial matters when a construction account was set up for a house for which construction had actually started. Otherwise, Respondent did not involve himself in financial matters and limited himself strictly to the supervision of construction. When Mr. Gregg purchased the company in 1988, Respondent was a salaried employee. Respondent remained a salaried employee, without commissions or bonuses, until he left the company. In fact, his salary was never increased. Worried about the financial condition of Ebbtide, Respondent withdrew his license from the company on December 9, 1993.
Recommendation It is RECOMMENDED that the Construction Industry Licensing Board enter a final order dismissing the Administrative Complaint. ENTERED on March 27, 1995, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on March 27, 1995. APPENDIX Rulings on Petitioner's Proposed Findings 1: adopted or adopted in substance. 2: rejected as irrelevant. 3-5: adopted or adopted in substance. 6: rejected as unsupported by the appropriate weight of the evidence. 7-15: adopted or adopted in substance. 16-19: rejected as subordinate. 20: adopted or adopted in substance. 21-23: rejected as subordinate. 24-26: adopted or adopted in substance. 27: rejected as subordinate and irrelevant. 28-29: adopted or adopted in substance. 30-35: rejected as irrelevant. 36-37: rejected as unsupported by the appropriate weight of the evidence. Rulings on Respondent's Proposed Findings 1-5: adopted or adopted in substance. 6-11: rejected as irrelevant. COPIES FURNISHED: Daniel O'Brien Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, FL 32202 Kelly Anne Cruz Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 David J. Hayes 17131 Pleasure Rd. Cape Coral, FL 33909 Linda Goodgame, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue Whether the Department of Corrections (DOC) acted arbitrarily or illegally in selecting ARC Developmental Companies, Inc. (ARC) as the intended lessee under a proposed lease, Lease No. 700:0606? Whether, as DOC now advocates in its proposed recommended order, DOC should award the lease to LFFO because ARC's proposal is non-responsive? Whether DOC's interests would be best served by starting over?
Findings Of Fact In a single headquarters complex in Tallahassee, DOC has decided to consolidate administrative offices now scattered among various buildings. To that end, DOC's RFP for Lease No. 700:0606 seeks 56,154 square feet of office space by January 1, 1994, and (after other current leases expire) an additional 149,651 square feet of adjoining office space for occupancy on March 31, 1995. The RFP requires that DOC have the right to renew for each of two successive five-year terms, after an initial ten-year term. ARC has an option to purchase land on which it proposes to build all the office space it would lease to DOC. The RFP assumes that the office buildings to be leased do not yet exist, and requires only that "turn key" facilities be available at the times specified in the RFP. LFFO owns one of the buildings housing DOC offices now, and proposes to borrow money at commercial rates to finance construction of additional office space on adjacent land it already owns. After evaluating the competing proposals, DOC concluded that they were both responsive to the RFP, and assigned each points. ARC received a score of 97.66 points and LFFO received a score of 96.66 points. Over the initial ten- year term, ARC's proposal would require DOC to pay $30,175,129.10, while LFFO's proposal calls for payments aggregating $30,718,454.30 over the initial ten-year term. Joint Exhibit No. 4. Problematic Undertaking The RFP calls for some form of monetary assurance that a proposer will contract with DOC, if selected. Specifically, Paragraph IV(L) states: All Proposals shall include a Proposal Security Fee which may be in the form of cash, a Cashier's Check or Proposal Bond, and shall be in the amount of Ten Thousand Dollars ($10,000), payable to the Department of Corrections. The agency reserves the right to reject any security tendered. The Proposal Security fee ties [sic] will be returned with[in] thirty (30) calendar days after the agency and the accepted proposer have executed a written lease. Joint Exhibit No. 1 at 32. The purpose in requiring a security fee or a proposal bond was to satisfy DOC of the proposers' good faith, "that they intended to enter into a contract" (T.72) with DOC, if given the opportunity. LFFO met the security fee requirement with a $10,000 cashier's check, while ARC submitted a bond issued by Highlands Insurance Company of Houston, Texas (Highlands), at the behest of Brown & Root Building Company (Brown & Root). Designated as principal on the bond, Brown & Root and, in the event of Brown & Root's default, Highlands, as surety, are obligated to pay DOC $10,000, on conditions stated in the bond, which, however, could never arise, because Brown & Root did not submit a proposal to DOC. The bond specifies the undertaking: [I]f the Obligee [DOC] shall accept the bid of the Principal [Brown & Root] and the Principal shall enter into a contract with the Obligee in accordance with the terms of such bid, and give such bond or bonds as may be specified in the bidding or contract documents with good and sufficient surety for the faithful performance of such contract and for the prompt payment of labor and material furnished in the prosecution thereof, or in the event of the failure of the Principal to enter such contract and give such bond or bonds, if the Principal shall pay to the Obligee the difference not to exceed the penalty hereof between the amount specified in said bid and such larger amount for which the Obligee may in good faith contract with another party to perform the work covered by said bid, then this obligation shall be null and void, otherwise to remain in full force and effect. Joint Exhibit No. 2. Signed by the president of Brown & Root and an attorney in fact for Highlands, the bid bond submitted with the ARC proposal misidentifies Brown & Root as the bidder for DOC's "State Headquarter Building," a reference to proposed Lease No. 700:0606. Joint Exhibit No. 2. Brown & Root is a general contractor named in ARC's proposal as a member of the "ARC Team." Joint Exhibit No. 2 at 41, and section entitled "Construction Phase Management Plan"; T.72, 239. But ARC is the bidder, the offeror making ARC's proposal, as Mr. Arthur R. Collins, the sole officer, director and shareholder of ARC, has clearly and consistently stated. Deposition of Collins, at 44-45. This is also clear from the four corners of the ARC proposal itself. There is no partnership or joint venture agreement between ARC and Brown & Root. Deposition of Collins, p. 42; T. 59-60, 255. Mr. Collins testified that a letter to ARC from Brown & Root constitutes "a letter agreement" between ARC and Brown & Root, which "essentially gives ARC Developmental Companies all rights to market and represent Brown & Root Building Company specifically as relates to this particular project." Deposition of Collins, p. 44. Otherwise stated, ARC and Brown & Root have an "agreement in principle" (T.239) under which Brown & Root is "responsible for design, build and finance, all three components." (T.240) There are, however, "ongoing negotiations as to some of the details" (Deposition of Collins, p. 44) and the "final terms and conditions are under negotiation," (T.255) or were at the time of the hearing. ARC's proposal did not contain the letter said to embody the agreement in principle between it and Brown & Root, nor did the letter come in evidence at hearing. Apparently nobody has ever signed anything on behalf of ARC purporting to bind ARC to any agreement, even in principle, between ARC and Brown & Root. Whether or not ARC contemplated that Brown & Root would perform all financing, designing and building, it is ARC to whom DOC had to look to accept responsibility to perform as DOC's contractor. The RFP specifies that the successful proposer cannot assign or transfer the contract "or his power to execute such contract" to any person without prior written consent of the agency. Joint Exhibit No. 1, p. 34, IV(T). The RFP also provides that a "transfer shall not be requested prior to completion of the facility and acceptance by the agency." Joint Exhibit No. 1, p. 34, IV(T). DOC would not have accepted a proposal without a security fee or proposal bond. T. 138. DOC concluded that the bid bond furnished with ARC's proposal provided the assurance the RFP sought. T. 138-139. But the bid bond does not assure that DOC will receive $10,000, in the event that ARC refuses to execute a lease, if its proposal is accepted. Although the bid bond represents ARC's effort to fulfill the security deposit requirement set out in paragraph IV(L) of the RFP, (Deposition of Collins at 42, 43), the bid bond does not purport to bind ARC in any way. The bid bond submitted with ARC's proposal makes no mention of ARC Developmental Companies, Inc. Joint Exhibit No. 2; T. 75. While LFFO suffered a detriment in submitting its security deposit: loss of use of $10,000 for a period already lasting several months; and the proposal bond ARC submitted cost it nothing (although Brown & Root presumably paid the premium), it is not clear that ARC enjoyed a material competitive advantage, as a result. But the RFP security requirement also sought to protect DOC's investment of time and money in evaluating proposals it solicited. The security deposit requirement cannot, under DOC policy not called into question here, be waived; and ARC's proposal is not responsive to the requirement. DOC's determination that the bid bond constitutes good security cannot withstand scrutiny. DOC's conclusion that the bond was sufficient was based on the bid bond itself, and on nothing else. T. 138-139. Construing the bid bond to meet the RFP's "earnest money" requirement is an arbitrary distortion of its terms. The purpose of requiring a security deposit or a proposal bond -- to provide the contracting agency some assurance that the successful bidder would in fact enter into a contract with the agency (T.72) -- was frustrated. The bid bond submitted by ARC provides no security whatsoever to DOC that ARC will enter into a contract with the agency. Ability, Financial Resources, History and References Paragraph V(H) of the RFP indicated that an evaluation committee would review all proposals to determine, among other things, the [c]omposition of the group submitting the proposal and their financial resources available to accomplish this project. Joint Exhibit No. 1, pp. 44-5. The RFP also speaks of financial criteria that the proposer itself must meet: S. Qualification of Proposers: Each proposer shall be required, before the award, to show to the complete satisfaction of the agency that he has the necessary facilities, ability and financial resources, to furnish the service and facilities as specified herein in a satisfactory manner, and he may also be required to show past history and references which will enable the agency according to the foregoing requirements and will justify the agency in assessing his the proposal. Joint Exhibit No. 1, p. 34, IV (strike through and emphasis in original). The RFP states that time is of the essence, which may account for the concern it evinces over the financial ability of proposers. ARC has furnished DOC no balance sheet, audited or otherwise. In its proposal, information ARC provided relating to its financial resources consisted of a single credit report dated September 22, 1992, which disclosed only: NO PUBLIC RECORDS OR OTHER INFORMATION IN FILE VER INC 01-13-92, NO CREDIT REFS GIVEN Joint Exhibit No. 2. The testimony at hearing did not establish what financial resources ARC has acquired, if any, since its incorporation last year. ARC is involved with one other project, for which financing is currently being sought (T.249-252), but otherwise has no real estate development experience. T.254. Among things lenders who finance real estate development consider are "the history and the experience of the borrower or borrowing entity, . . . their numbers, . . . their financial capacity . . . what type of equity injection [they] are going to put into the deal, whether it be cash or hard land . . . ." T.153. ARC did not demonstrate its ability to "inject" any equity into this project. Tax-Exempt Financing Proposed ARC's proposal contains a September 18, 1992, letter from the Donaldson, Lufkin & Jenrette Securities Corporation, addressed to Brown & Root, the body of which states in its entirety: Regarding the issuance of tax-exempt debt to finance the proposed facility to be leased to the Florida Department of Corrections, as their state headquarters office building. Donaldson, Lufkin & Jenrette is pleased to participate in the successful development of the proposed project. Based upon current market conditions and the procurement of credit enhancement or an investment grade rating for the issue, we are confident that we can successfully underwrite a public offering of tax-exempt bonds. Joint Exhibit No. 2. This is not a firm commitment, only an undertaking to use "best efforts." Deposition of Shirey, p.24. After receiving the proposals, DOC solicited additional financial information from LFFO and from ARC by letters dated October 19, 1992, which state: The request for proposal stipulated that additional information pertaining to your capabilities to perform the project to our satisfaction may be necessary. The Chief of the Bureau of Finance and Accounting is charged with gathering the necessary information for determining if your group can realistically perform the project. This is considered a pass/fail criteri[on]. Joint Exhibit No. 8. The letters instructed both proposers to "[p]rovide a plan to finance both the construction and subsequent operation of the facility," including detailed information on all financing arrangements, specifically: A description of all financing arrangements (i.e. - debt, equity, lease agreement, etc.). A description of the proposed sources of financing for the construction and operation of the facility. Documentation should include specific commitment statements from financiers. The principal amount of debt to be issued or equity to be committed to finance the project. The annual interest rate for each debt component. A debt amortization schedule. An analysis of projected cash flow for both the construction period and the term of the lease. A description and value of all collateral to be pledged. Joint Exhibit No. 8. DOC anticipated that the proposers would respond with the financing plan they actually intended to use to finance construction of the project. Deposition of Biddy, p. 18; T. 98. In response to DOC's October 19, 1992, letter, ARC submitted a second letter from Donaldson, Lufkin & Jenrette, dated October 22, 1992. Joint Exhibit No. 11. The second Donaldson, Lufkin & Jenrette letter stated, in part: The final amount of the debt will be dependent on the final plan and specifications provided by the contractor and architect and negotiations with the ultimate investor. The final debt amount will be made available prior to the closing. The financing will provide 100 percent of the funds necessary to construct the project. The final interest rate or rates. (See Number 3 above). Debt Ammorization schedule. (See numbers 3 & 4 above). An accompanying Memorandum of Terms summarized some of the RFP requirements, gave a brief description of the property on which ARC has an option, and stated: FINANCING: Construction/Permanent financing will be obtained by selling tax exempt certificates of participation (the "Certificates") in the Lease Agreement. Proceeds from the sale of the Certificates will fund construction and provide permanent financing for the Facility. . . . It is anticipated that the Certificates will be rated or credit enhanced by a policy of municipal bond insurance. SECURITY: Certificate holders will be secured by an undivided interest in payments received pursuant to the Lease. Certificate holders will be additionally secured by a deed on the Property recorded in the name of the trustee on behalf of Certificate holders. Joint Exhibit No. 11. DOC was evidently satisfied with LFFO's response to its letter of October 19, 1992. Joint Exhibit No. 11. Following ARC's October 22, 1992, response to DOC's October 19, 1992 letter, however, DOC wrote ARC requesting still more financial information. DOC's letter stated: Thank you for responding so promptly to our letter of October 19, 1992 concerning the financial viability of the proposal submitted by ARC Development Companies, Inc. However, we do not see in your response the level of detail that is necessary to alleviate the concerns we have. Joint Exhibit No. 14. In response to this letter, ARC wrote DOC a letter dated November 6, 1992. Joint Exhibit No. 15. The response included a cash flow analysis, which assumed a bond issue of $27 million repayable over 20 years, with interest at 8 3/4 percent; along with a resolution from the City of Midway, purporting to authorize the creation of a nonprofit corporation to issue some $29 million worth of revenue bonds to finance the construction of the project (in Tallahassee). Joint Exhibit No. 15. The cash flow analysis assumed $170,000 would be borrowed from some other, unidentified source, and did not indicate how cash flow shortfalls projected for 1994 and 1995 were to be covered. At ARC's October 23, 1992, oral presentation to DOC officials, Mr. Collins emphasized that ARC's proposal was based on tax-exempt financing. Joint Exhibit No. 7, pp. 9, 27, 60, 72-73. ARC's post-submittal correspondence with DOC concerning financial arrangements reiterated reliance on tax exempt financing. Joint Exhibits Nos. 11, 14, 17 and 18. Mr. Collins' testimony at hearing assumed tax exempt financing would be available to ARC to build and operate the proposed headquarters. Contingent Award On December 18, 1992, DOC announced its decision to award Lease No. 700:0606 to ARC, contingent upon ARC's "providing to the Department within 45 days of this notice, and to the Department's satisfaction, sufficient commitments to ensure ARC's ability to finance construction of the project as presented in their proposal." Joint Exhibit No. 16. The December 18, 1992, award letter shows on its face that the Department was not "completely satisfied" with ARC's financing proposal at the time it made the award. Mr. Kronenberger admitted as much in his testimony. T. 146. At hearing DOC's Mr. Kronenberger also testified that the award was made contingent so that DOC could satisfy itself that ARC's proposal did not contemplate a lease-purchase and that tax-exempt financing was appropriate for this project. T. 131-132. The contingent award letter made no reference, however, either to a lease-purchase or to the tax-exempt nature of the proposed financing. Joint Exhibit No. 16; T. 145, 147. Before December 18, 1992, ARC's proposed financing involved the City of Midway's authorizing a nonprofit corporation to issue bonds. Joint Exhibit No. 14. Mr. Collins' testimony at hearing suggested that ARC has now abandoned efforts to involve the City of Midway with financing the project. To allow ARC to substitute another financing proposal at this juncture would afford ARC a competitive advantage over LFFO, and would constitute an arbitrary departure from prescribed procedure. DOC's letters of inquiry during the proposal evaluation process were intended to elicit from the proposers "the financing plan" they actually intended to use. Deposition of Biddy, p. 18; T.98. Allowing ARC 45 additional days to submit an acceptable financing proposal gave it a material competitive advantage over LFFO. ARC could "shop around" for financing as the intended awardee, and not merely as a bidder. "[I]f a developer . . . had an award in hand, he would be in a very advantageous situation to shop [for] the best deal he could get . . . considering rate, term, structure, price, so forth " T.154. Governmental Lessee ARC's proposal to use tax-exempt financing raises "two types of concerns. One is the ability to get the tax opinion and do the deal, and then there's the issue of state law." Deposition of Kubik, p. 50. Unless reputable tax counsel are of the opinion that (possibly imputed) interest paid from lease payments to holders of bonds or certificates of participation sold (to raise the money needed to build DOC's headquarters building) as tax-exempt qualify for tax exemption under the Internal Revenue Code, the paper cannot be marketed as tax- exempt. The purpose of the pertinent Internal Revenue Code provisions is to subsidize state and local governments, not private developers, by allowing governmental borrowing at lower rates. Certain financing arrangements involving private developers may, however, entail issuance of tax-exempt securities where state or local government is, in economic effect, borrowing money, legal technicalities notwithstanding. Deposition of Piemont, p. 40. One such arrangement involves state or local government as a lessee under a lease including an agreement to purchase, so that the governmental entity is "building equity" (T.23) (or, if the facility depreciates, bearing the loss.) Certificates of participation in the stream of lease payments, or bonds to be retired by applying lease payments, are then sold as tax-exempt securities. The test is "that the income derived from the obligations be from the payment of governmental lessees to provide essential function facilities." Deposition of Arnspiger, p. 9 Brown & Root's financial consultant contemplates a lease under which DOC would have the option to purchase the property, after ten years, for "the amount remaining on the indebtedness." Deposition of Arnspiger, p. 14. In the twentieth year, the price "would be a dollar." Id. "For tax purposes the owner of the facility would be the lessee." Deposition of Harris, p. 11. A lease under which a governmental tenant expressly agrees to purchase the premises may be economically equivalent to a lease with an option to purchase at a nominal price so low as to be "irresistible." Florida law limits the circumstances under which state agencies can borrow money and pledge the state's taxing power to repay the debt. T.136. Section 255.25(1)(b), Florida Statutes (1992 Supp.) provides: (1)(b) When specifically authorized by the Appropriations Act and in accordance with s. 255.2501, if applicable, the Division of Facilities Management may approve a lease-purchase, sale-leaseback, or tax-exempt leveraged lease contract or other financing technique for the acquisition, renovation, or construction of a state fixed capital outlay project when it is in the best interest of the state. Specific authorization in an earlier Appropriations Act authorized the Division of Facilities Management to approve a tax-exempt financing technique for acquisition of office space for DOC, but that authorization expired unused. Here the RFP solicited offers by lessors to execute a standard state lease on a form drafted by the Department of General Services and attached as an appendix to the RFP. Under the standard state lease, the lessor retains ownership of the building at all times. The lessee is not obligated to file a form 8038 with the Internal Revenue Service or to monitor for compliance with arbitrage restrictions imposed by Section 148 of the Internal Revenue Code, both of which would be necessary if tax-exempt obligations were sold to finance the building. Deposition of Piemont, pp. 16-22. ARC's proposal amounts to an offer to employ a financing technique for the acquisition and construction of a state fixed capital outlay project that the legislature has not approved. ARC's proposal is not responsive to the RFP because the method of financing the proposal contemplates cannot be accomplished if the parties execute a standard state lease, as contemplated by the RFP.
Recommendation It is, accordingly, RECOMMENDED: That DOC reject ARC's proposal as nonresponsive and consider seeking the necessary approvals to draw an RFP soliciting proposals for a headquarters building that would eventually belong to the State of Florida. DONE AND ENTERED this 5th day of May, 1993, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of May, 1993. APPENDIX Petitioner's proposed findings of fact Nos. 1-6, 8, 11, 13-17, 19-36, 39- 41, 43, 44 and 46 have been adopted, in substance, insofar as material. With respect to petitioner's proposed finding of fact No. 7, DOC's determination of responsiveness was tentative, free-form action. Petitioner's proposed findings of fact Nos. 9, 10, 18, 38, 47, 48, 49 and 52 pertain to subordinate matters. With respect to petitioner's proposed finding of fact No. 12, the undertaking assumed Brown & Root had submitted a proposal. Petitioner's proposed finding of fact No. 37 pertains to an immaterial matter. With respect to petitioner's proposed finding of fact No. 42, the issuance of certificates can defeat tax exemption if certain requirements are not observed. With respect to petitioner's proposed finding of fact No. 45, the distinction between a lease including an agreement to purchase and a lease with the option to purchase is not necessarily dispositive for tax purposes. With respect to petitioner's proposed findings of fact Nos. 50 and 51, ARC's proposal contemplates a lease with an option to purchase. With respect to petitioner's proposed finding of fact No. 53, Mr. Piemont testified that one of the requirements for "on behalf of" financing "is that the governmental entity gets actual ownership." Deposition of Piemont, p. 41. Respondent's proposed findings of fact Nos. 1-11, 13, 14, 16, 17, 18, 20, 23, 25, 26, 27, 28, 30, 37, 38, 44-49, 58, 60, 64 and 65 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 12, the exact cause of the differential was not proven. Respondent's proposed findings of fact Nos. 15, 32-36, 39-42, 51, 61, 62, 71, 72, 73 and 74 pertain to subordinate matters. Respondent's proposed findings of fact Nos. 19, 21, 22, 43, 63, 75 and 76 have been rejected as contrary to the weight of the evidence. With respect to respondent's proposed findings of fact Nos. 24 and 29, DOC witnesses testified that absent a bond the proposal would have been rejected as non-responsive; the bond ARC submitted was the equivalent of no bond at all. With respect to respondent's proposed finding of fact No. 31, the award letter shows on its face DOC's misgivings about ARC's ability to finance the project. With respect to respondent's proposed findings of fact Nos. 50, 52--57, 67, 68, 69 and 70 the proposed findings are correct only in the sense that "purchase", "ownership", and the like are understood to mean "for tax purposes." With respect to respondent's proposed finding of fact No. 66, if a government entity is lessee, a non-governmental lessor may issue certificates of participation in the lease payments. Intervenor's proposed findings of fact Nos. 1-4, 7, 9, 10, 13, 14, 19, 21, 23, 26 and 28 have been adopted, in substance, insofar as material. With respect to intervenor's proposed finding of fact No. 5, it is not clear what Brown & Root's contractual obligations are. With respect to intervenor's proposed finding of fact No. 6, the bond does not constitute an offer or proposal. Intervenor's proposed findings of fact Nos. 8 and 25 have been rejected as contrary to the weight of the evidence. Intervenor's proposed findings of fact Nos. 11, 12, 15, 16, 17, 22, 29, 30 and 31 pertain to subordinate matters. With respect to intervenor's proposed findings of fact Nos. 18 and 20, ARC's financing proposal was non-responsive, whether or not such an approach might be viable, if responsive to the RFP and otherwise lawful. With respect to intervenor's proposed finding of fact No. 24, insofar as it is not predicated on hearsay, there was no showing that any rating agency, insurer or bond fund is aware of applicable Florida law. With respect to intervenor's proposed finding of fact No. 27, what is required for tax purposes does not depend on whether the lessee has a legal right to forgo the purchase. COPIES FURNISHED: M. Christopher Bryant, Esquire Oertel, Hoffman, Fernandez & Cole, P.A. Post Office Box 6507 Tallahassee, FL 32314-6507 Stephen Ferst, Esquire Florida Department of Corrections 2601 Blair Stone Road Tallahassee, FL 32399-2500 Martha Harrell Chumbler, Esquire Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A. 215 South Monroe Street, #500 Tallahassee, FL 32301 Harry K. Singletary, Jr. Secretary Department of Corrections 2601 Blair Stone Road Tallahassee, FL 32399-2500 Louis A. Vargas, Esquire General Counsel 2601 Blair Stone Road Tallahassee, FL 32399-2500
Findings Of Fact The Respondent has at all times material to this matter been licensed by the Board of Real Estate as a real estate broker-salesman. For approximately the past year, she has been employed as a broker-salesman with Century 21 Realtors in Fort Walton Beach. Previously, for a period of approximately 18 months, she was employed with Kruse Realty, Fort Walton Beach, Florida, in the same capacity. During November, 1979, Mr. and Mrs. L. C. Lyons visited Kruse Realty. The Lyonses were seeking to purchase a lot upon which they could build a house. They were introduced to the Respondent. The Lyonses advised the Respondent that they had been approved for a loan by the Farmers Home Loan Administration (FHLA) for the financing of construction. They advised the Respondent that they would be able to spend only $6,000 for a lot and that the property would need to qualify for FHLA financing. The Respondent told the Lyonses that she had lots available that had been approved for FHLA loans. One of them was located in Wynn Haven Beach, and the other was owned by a Mr. Jack Piediscalzi. The Lyonses visited the Wynn Haven Beach property and decided to purchase a lot. This resulted in a contract for sale being signed by the Lyonses. The Lyonses specifically requested that the contract be made contingent upon their securing financing from FHLA. After the Lyonses executed the contract, Mrs. Lyons' father visited the lot. He observed some low-lying areas that he felt would cause building problems. Mrs. Lyons' father also visited the Piediscalzi property and urged that it would provide a better building site. The Lyonses decided to follow this advice, and they asked the Respondent if they could cancel their contract to purchase the Wynn Haven Beach property, and purchase one of the Piediscaizi lots. The Respondent requested that the Wynn Haven Beach property owner cancel the contract, which he did. Thereafter, the Lyonses entered into a contract to purchase a lot from Mr. Piediscalzi. The contract was executed on November 19, 1973. The Lyonses advised Respondent that they would pay for the lot with cash, but that they would be financing home construction through the FHLA loan. They inquired as to whether the contract should be made contingent upon FHLA approval. The Respondent advised the Lyonses that such a contingency clause would not be necessary because FHLA had already approved loans for construction of houses on the Piediscalzi lots. The day after they executed the contract to purchase one of the Piediscalzi lots, the Lyonses presented a loan approval package to FHLA. The FHLA representative immediately advised the Lyonses that the property would not qualify for FHLA financing because the road on which the lot fronted was merely an easement, not a county road as required by FHLA regulations. The FHLA representative advised the Lyonses that they were the first people to present a proposal for FHLA financing of one of the Piediscalzi lots. Mrs. Lyons called the Respondent later that same day. The Respondent's response was, "Well honey, what are you going to do with two lots?" The Respondent indicated that she would speak to her employer. Later, Mrs. Lyons spoke to Mr. Chamberlin, a real estate salesman who is also employed at Kruse Realty. Mr. Chamberlin advised that FHLA financing could be secured and that he would call her back within three days. He did not call her back in three days, and Mrs. Lyons contacted him. He advised that the property had not been approved, but that he would take steps to accomplish it. Mrs. Lyons also spoke to Mr. Kruse, the owner of Kruse Realty. Time was critical to the Lyonses because their FHLA loan package needed to be approved before available loan funds were distributed to other qualified purchasers. The steps that would need to be taken to secure FHLA financing were never accomplished, and the Lyonses did not secure the financing that they were seeking. Kruse Realty did not offer to compensate the Lyonses in any manner. Mrs. Lyons ultimately turned the property over to her father, who sold it. Mrs. Lyons filed a complaint with the Board of Real Estate, and with the Fort Walton Beach Board of Realtors. Mr. Chamberlin from Kruse Realty contacted Jack Piediscalzi sometime prior to November, 1979, about the prospects of Mr. Piediscalzi subdividing and selling his property. Mr. Piediscalzi decided that he would like to sell the property in parcels, and he signed an exclusive contract with Kruse Realty to handle the sales. Mr. Piediscalzi left details of dividing the property to Kruse Realty. Kruse Realty decided to sell the property through "meets and bounds sales" rather than by subdividing the property into lots as required by local planning and zoning regulations. A road was constructed through the property, and efforts were made to dedicate the road to Okaloosa County. The County did not, however, accept the road. Mr. Piediscalzi dealt primarily with Mr. Chamberlin at Kruse Realty. He did not deal directly with the Respondent. The Respondent was advised by Mr. Chamberlin and Mr. Kruse that they had talked to personnel at FHLA and that the property would qualify for FHLA loans. The Respondent saw two building permits that had been issued for lots on the property. The Respondent inquired of Mr. Kruse whether the property met local subdivision requirements, but she was assured that because it was being sold by "meets and bounds," it was not within subdivision requirements. The Piediscalzi-Lyons transaction was the first transaction in which the Respondent had dealt with an FHLA loan. The Respondent did not know specific FHLA requirements. She was not aware that the road through the Piediscalzi property had not been dedicated to Okaloosa County, nor that such dedication was required. The Respondent ceased dealing with the Lyonses after they advised her that FHLA had not approved their loan. Thereafter, the Lyonses dealt with Mr. Chamberlin and Mr. Kruse. The Respondent sought to cancel the Lyons-Piediscalzi contract, and she returned the $240 commission that she had received for the sale to Kruse Realty in January, 1980. She sought to get Kruse Realty to buy the property back, and she was willing to by up to one-third of it. Her employer was not, however, willing to purchase the property, nor to rescind the contract or refund commissions.
The Issue The issue is whether Respondent violated Subsections 489.129(1)(g)2., (j), and (m), Florida Statutes (2005),1 by allegedly engaging in financial mismanagement or misconduct in the practice of contracting that causes financial harm to a customer, abandoning a construction project, or committing misconduct or incompetence in the practice of contracting.
Findings Of Fact Petitioner is the state agency responsible for regulating the practice of contracting in the state. Respondent is licensed in the state as a certified general contractor pursuant to license number CGC59204. Respondent is the qualifier of South West Florida Development Corporation (South West) doing business as Back Bay Homes (Back Bay). On February 7, 2006, Respondent executed a contract with Gail and Gary Veith to build a residential home on a vacant lot located at 3218 Southwest 11th Place, Cape Coral, Florida. The contract price was $276,983.00 (the initial contract). The initial contract provided for the construction of a sea wall at a cost of $17,257.00 in addition to the contract price of $276,983.00. On February 7, 2006, Respondent entered into a second contract with Mr. and Mrs. Veith. The only difference between the initial and second contracts was the contract price of each contract. The second contract price was $289,686.00, excluding the sea wall cost of $17,257.00. Mr. and Mrs. Veith secured payment of the construction project with a construction loan from Market Street Mortgage Corporation (Market Street) in the original approximate amount of $412,000.00. The total loan amount was intended to be sufficient to cover the second contract price of $289,686.00 and the amount contracted by Mr. and Mrs. Veith for acquisition of the vacant lot (construction site), which was $128,000.00.2 Clear and convincing evidence shows that Respondent engaged in financial mismanagement or misconduct in the practice of contracting that caused financial harm to his customers in violation of Subsection 489.129(1)(g)2. Clear and convincing evidence also shows that Respondent committed incompetence and mismanagement in the practice of contracting. The percentage of completion of the residence, which was zero, was less than the percentage of the contract price paid to Respondent, which was 29 percent. Respondent received approximately $84,655.00 in construction loan proceeds from Market Street in two draws. Market Street paid the first draw at closing on May 5, 2006, in the amount of $42,901.20 and paid the second draw to Respondent on June 26, 2006, in the amount of $41,754.00. However, Respondent never commenced construction of the residence. Respondent reported a profit of $48,637.72 on the Veith property and completed only the sea wall at a cost of $17,257.00. Respondent paid the cost of the sea wall and other expenses on the Veith property to keep the net profit at $48,637.72. Other expenses included $420.00 for surveys, $34.34 for blue prints, $1,707.75 for plan drafts, $350.00 for septic engineering, and $3,138.19 for construction loan interest. Respondent was not entitled by the terms of the contract to retain the funds paid to Respondent by Market Street. The loan agreement provided that draws were to be made at the discretion of Market Street based on work completed and materials incorporated into improvements. Respondent never commenced construction of the residence. Respondent did not obtain permits for the job. Mr. Winston testified that when Market Street transferred a single, lump sum deposit to his company in the amount of $41,754.00 on June 26, 2006, he did not know that he was appropriating funds he was not entitled to under the contract. When that testimony is weighed against evidence that the work Mr. Winston had performed was limited to a sea wall costing only $17,257.00, the testimony is persuasive evidence to the trier of fact that Respondent engaged in mismanagement.3 Respondent billed Market Street for payment of the sea wall when Respondent completed the sea wall. However, the draw schedule in the loan documents does not provide a draw payment for the sea wall. Respondent stopped paying construction interest that Respondent was obligated to pay under the terms of the construction loan. Thereafter, Mr. and Mrs. Veith paid construction interest of approximately $13,800.00. Clear and convincing evidence shows that Respondent abandoned the construction project within the meaning of Subsection 489.129(1)(j). Respondent failed to perform any work on the residence for 90 consecutive days without just cause. Respondent did not notify Mr. and Mrs. Veith that Respondent had abandoned the project. Rather, Mr. and Mrs. Veith started receiving requests for payment of construction loan interest. Respondent failed to conduct any construction activity on the project site for more than 90 consecutive days. On May 13, 2008, Mr. and Mrs. Veith received notice that their loan had been assigned from Market Street to Gulf Coast Bank & Trust Company (Gulf Coast). Gulf Coast sent Mr. and Mrs. Veith repeated demands for payment of the construction loan principal and interest. Mr. and Mrs. Veith entered into a transaction identified in the record as a "short sale" in which they sold the construction site, which they originally purchased for $128,000.00, for $20,000.00. The $20,000.00 sale proceeds were paid to Gulf Coast. Mr. and Mrs. Veith have been financially unable to make payments to Gulf Coast. They remain liable for the full amount of the loan, including delinquent principal and interest. Mr. and Mrs. Veith brought a civil action against Respondent. They were unable to sustain the action because they could not afford the attorney fees. Petitioner incurred investigative costs in this matter of $204.26. The investigative costs do not include attorney time.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner enter a final order finding that Respondent is guilty of the violations alleged in the Administrative Complaint; imposing the fines enumerated in paragraph 24 of this Recommended Order; requiring Respondent to pay investigative costs in the amount of $204.26; and requiring Respondent to make full restitution to Mr. and Mrs. Veith in the amount of $61,747.72. DONE AND ENTERED this 12th day of July, 2010, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 July, 2010.
Findings Of Fact Petitioner is a state governmental licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.30, F.S., Chapters 120.455 and 475, F.S., and the rules promulgated pursuant thereto. Respondent is now and at all times material hereto was a licensed real estate salesman in the State of Florida having been issued License No. 0418629, in accordance with Chapter 475, F.S. The last license issued was as a salesman with a home address of 594 Andrews Street, Ormond Beach, Florida, 32075. From April 8, 1987, until September 11, 1987 he was on inactive status. From September 11, 1987 until at least November, 1987, he was on active status. His license expired March 31, 1988 and has not been renewed. Respondent and the owners (Goldsmiths) of certain property at 49 Sea Island Drive, North Ormond Beach, Florida, entered into an equity sharing agreement on October 1, 1986. Thereafter, Respondent was half owner of the property, and acted as agent for himself and the Goldsmiths for management and rental of the property. Sometime in early 1987, Respondent's former wife contacted Richard M. Dow of Watson Realty Corporation concerning Watson Realty Corporation's assuming management and rental authority over the property. Mr. Dow gave Respondent's wife a packet of information which included several types of material, including but not limited to, a blank standard lease form which had been stamped at the top with the name WATSON REALTY CORPORATION 425 S. YONGE STREET [U.S. 1] ORMOND BEACH, Florida 32074 The name "Watson Realty" was also printed in the body of the lease as agent for the premises, which, like all other crucial information was left blank. No agreement was ever reached by which Watson Realty Corp. or Mr. Dow were to take over management of the premises. On or about April 1, 1987, while still on active license status, the Respondent negotiated a six month lease of the premises at 49 Sea Island Drive, North Ormond Beach, Florida, with Sidney and Edythe Hirsch. By filling out the blank lease form obtained from Watson Realty Corp., Respondent entered into the six-month lease on behalf of himself and the Goldsmiths. He filled out the blank spaces with his name as lessor and the Hirsches as lessees, and crossed out the "Watson Realty Corp." in the body of the lease, substituting his own name therefor. He failed to cross out the stamped Watson Realty Corp. name and address at the top of the page. At the time of the signing of the lease, Respondent advised Mr. Hirsch that he was a licensed real estate agent because he had been taught he must make such disclosures in personal dealings so as not to take advantage of laymen. At formal hearing, he denied ever representing himself as an agent of Watson Realty Corp. or of Mr. Dow. Mr. Hirsch likewise testified that no such representation was made, only that Respondent said something like, "I work with them." Both Respondent and Mr. Hirsch concur that Respondent represented himself as the owner of the property in question without mentioning the Goldsmiths' interest. Hirsch knew and agreed to the scratching through of the Watson corporate name in the body of the contract, and to the substitution of Respondent's name therefor, but no one thought to cross through the stamped Watson name and address at the top of the page. In connection with the lease, Mr. Hirsch gave to the Respondent a $600 security deposit. Respondent shared the rent proceeds with the Goldsmiths even though he did not include their names on the lease or specifically advise the Hirsches of the Goldsmiths' interest in the property. Although the better course of action would have been for Respondent to make a fuller disclosure and to accurately make out the lease agreement with regard to the Goldsmiths' interest, no fraud or intent to defraud either the Goldsmiths or the Hirsches was demonstrated in Respondent's omissions in this regard. At no time alleged herein was Respondent registered as a real estate salesman in the employ of Watson Realty Corp. and at no time was the Respondent employed by Watson Realty Corp. in any capacity. Upon the termination of the lease period, the Hirsches vacated the house and made demands upon the Respondent for the return of their $600 security deposit. The Respondent refused to return the deposit because of substantial damage to the property in three rooms of the house. Hirsches' attorney and Respondent met to attempt to resolve the issue and then had a trial date set. Respondent appeared on the originally scheduled trial date but the case was continued. Respondent separated from his wife and moved to a different address without maintaining contact with the Hirsches' attorney, the court, the Department of Professional Regulation, or the Florida Real Estate Commission (FREC). Over a period of time, he lived at several addresses and eventually moved out of state. Although he was still living in the State of Florida at the time, he did not appear for trial on the security deposit demand, and on January 14, 1988, the Hirsches obtained a civil judgment against Respondent for payment of the $600 security deposit. Respondent had not satisfied the judgment as of the date of the filing of the Administrative Complaint herein and did not do so up through the date of formal hearing. Although Respondent expended a great deal of effort at formal hearing attempting to establish that he never received actual notice of the trial date for the $600 civil damages suit due to his frequent change of addresses during the course of his divorce, that is immaterial because the law presumes notice once suit is filed and properly served as apparently occurred in that case. Unless set aside, the judgment against Respondent was final and Respondent owed Hirsch the money due under it. However, under the circumstances, it is found that Respondent did not fail to pay Hirsch on the judgment through any intent to defraud, but merely through a misunderstanding as to the effect of the judgment. Mr. Hirsch eventually sought and obtained reimbursement of the $600 judgment amount from the FREC client security fund. The fund paid after significant unsuccessful attempts had been made to find Respondent. Respondent also maintained that he did not know about the reimbursement proceedings instituted by FREC until four days before formal hearing and he made offers at formal hearing to pay off this amount. He was not charged in the pending Administrative Complaint in this proceeding with any fraud with regard to his failure to respond to service in the FREC client security fund reimbursement proceeding.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint. DONE and ENTERED this 30th day of May, 1989, in Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-6331 The following constitute specific rulings pursuant to Section 120.59(2), F.S., upon the parties' respective Proposed Findings of Fact (PFOF): Petitioner' s PFOF: Petitioner filed no PFOF. Respondent' s PFOF: 1,13,14 Accepted in part; the remainder is rejected as subordinate to the facts as found. 2-5 Rejected as subordinate to the facts as found. 6-12 Rejected as immaterial and as referencing and relying upon matters outside the record as created at formal hearing. 15,16 Rejected in part as subordinate to the facts as found and in part as cumulative and otherwise as mere argument. COPIES FURNISHED: Arthur R. Shell, Jr. Senior Attorney Division of Real Estate Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Mr. Frederick A. Bentley 402 Daytona Avenue Holly Hill, Florida 32017 Darlene F. Keller, Director Division of Real Estate 400 W. Robinson Street Tallahassee, Florida 32802 Kenneth Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0750
Findings Of Fact At all times relevant hereto John Young was registered as a real estate salesman by the Florida Real Estate Commission. On October 2, 1985 Respondent and William Kelly, D.O. entered into a contract to jointly purchase a condominium from Concord Developers Inc. (Exhibit 1). The contract provided for a down payment of $2,000 with an additional earnest money deposit of $3690 to be paid on or before November 4, 1985. Respondent and Kelly each gave the seller a check for $1000 at the signing of the contract and this $2000 was deposited in escrow with the escrow agent. Kelly met Respondent through Respondent's wife who worked in Kelly's office. At the time Kelly was looking for income tax shelters and this purchase appeared to qualify for that purpose. On November 9, 1985, Kelly made out a check payable to John Young in the amount of $1845 which represented Kelly's half of the additional $3690 earnest money deposit. This check was either cashed by Young or deposited in Young's bank account (Exhibit 2). The additional earnest money deposit was not made to the seller, as required by the contract, Exhibit 1. Young notified Bayside Federal Savings and Loan Association, who was to finance the sale, that the loan application was withdrawn, the transaction was cancelled, and two checks in the amount of $1000 each were returned to the seller by the escrow agent (Exhibit 6). The customary practice of the seller in such a situation was to return the down payment to the buyer by check drawn on the seller's account. While no witness could recall this specific transaction, the usual practice would be to return the deposit to the buyer. In this case, the deposit would normally have been returned to Young. Young acknowledged that he received the return of his $1000 deposit but not the $1000 that represented Kelley's portion of the down payment. When Kelley gave Young the check for $1845 he inquired if it was necessary for him (Kelley) to attend the closing and Young advised him it was not. When Kelley subsequently learned that the transaction did not close, he demanded the return of his money. To date he has received none of the monies he deposited to purchase this property. Evidence was presented that in December 1985, Young closed on a condominium he and his wife had contracted to purchase in this same development, and subsequently moved into this unit. While this indicates Young had the opportunity to convert Kelley's contribution to the purchase of the condominium by Young and his wife, no credible evidence was presented that he did so. The evidence that was presented regarding this transaction was that Young was able to move into that unit with a total cash outlay of less than $500. Young accounted for the $1845 check from Kelley as payment of a bet between him and Kelley on one football game. In rebuttal Kelley testified that not only did he not bet with Young on any matter, but also he has never gambled on a football game in his life. Young's testimony that a $1845 bet was made on a football game is so unbelievable that it taints all of his testimony.
Recommendation That the Real Estate license of John Young be revoked. Entered this 2nd day of June, 1989, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 1989. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Post Office Box 1900 Orlando, Florida 32801 Robert H. Dillinger, Esquire 5511 Central Avenue St. Petersburg, Florida 33701 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Bruce D. Lamb General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0729
