Findings Of Fact The certified residential contractors license number CRC001528 issued to Hampton is currently inactive. On June 21, 1977, Jay Hampton Construction, Inc. , entered into a contract with Francis Merceret to enclose a carport for a total price of $7,500.00. Hampton had made application to change his contractors license to a corporate license but since the paper work was not complete, such request was never processed. The work done on the Merceret residence was done under Hampton's individual license. Construction on the project was completed in August, 1977, and Merceret paid the full amount of the contract price to representatives of Jay Hampton Construction, Inc. There are outstanding bills in the amount of $183.76 due to Best Iron Works and $273.30 due to M. P. S. Industries, which monies are owed for work done or materials furnished for the Merceret enclosed carport. Hampton satisfied another claim of lien filed by Cling Electric, Inc., for unpaid bills resulting from the work on the Merceret residence. Merceret made a total of three payments to Jay Hampton Construction, Inc. The first two payments were made to the company. After that time, Hampton called Merceret and requested that the third and final payment be made directly to him because of problems Hampton was having with his partner. Hampton agreed to put the money in escrow until the problems were worked out and lienors were satisfied. Notwithstanding these precautionary instructions, Merceret made the final payment to one Murrary Lash, who was associated with Hampton. Hampton never saw the money again nor was it properly allocated to subcontractors or material men who had not been paid. This occurred, notwithstanding Hampton's request that Merceret not pay anyone until all releases were obtained.
Findings Of Fact On September 29, 1975 Respondent, R. J. Hunt Construction Company, through its President and qualifying general contractor, Richard J. Hunt, entered into a contract with Richard McCarty to construct two Second Story Additions to Palm Ocean Villas, Pompano Beach, Florida for a price of $53,700. The contract provided that the contractor would complete the building within 8 weeks of the issuance of a building permit and, if not completed, a 5 percent penalty would be deducted until December 10, 1975 and thereafter, if not complete, an additional 5 percent of the contract price would be deducted each week until complete. Building permits were issued on October 3 and 6, 1975 and work proceeded satisfactorily until the end of the 8 weeks contract period on December 1, 1975 when the project was 90 percent to 95 percent complete. At this time the contractor stopped work on the project and transferred his employees to another job. One of the contract provisions not completed was the application of waterproofing on a deck. Despite Hunt's assurances that he would get a subcontractor to complete this waterproofing, it still had not been completed by Christmas and McCarty employed a contractor to apply the waterproofing material in early January for which he paid $1,000 allowed by the contract. Subsequent thereto McCarty received notice of liens filed against his property from 4 subcontractors. These were American Metal Products Company, J. P. Electric Company, Ole Eds Construction, and Margate Plumbing. In order to get a certificate of occupancy it was necessary for McCarty to pay some of these subcontractors. American Metal Products installed an aluminum railing around the balcony for which they filed a notice of lien for $1,200 and subsequently filed a petition in bankruptcy. The present status of this lien was not ascertained. J. P. Electric Company had split their draw into three parts and they were paid by Hunt $700 for the initial work. When they refused to allow final inspection Hunt asked McCarty to pay them and take it off his last draw. McCarty paid $2,000 to J. P. Electric, leaving a balance owed of $781.92. Hunt also asked McCarty to pay Margate Plumbing and take this payment off the draw. Margate had been paid $1,000 upon completion of the rough work. In order to get occupancy McCarty paid Margate $1,800 which satisfied the lien of Margate. Ole Ed installed the septic tank and drain field for which they have filed a lien for $2,500 which is unpaid to date. Numerous miscellaneous items included in the contract for which McCarty advanced funds to keep work progressing amounted to $671.54. Hunt also requested McCarty to order the appliances which were included in the contract price since he (McCarty) could get them at contractor's price. For these appliances (stoves, air conditioners and refrigerators) McCarty expended $2,373.28. Total expenditures made by McCarty are as follows: McCarty paid to Hunt in draws $48,400.00 McCarty paid to J. P. Electric 2,000.00 McCarty paid to Margate Plumbing 1,800.00 McCarty paid for waterproofing deck 1,000.00 Misc. items paid for by McCarty 671.54 Appliances for which McCarty paid 2,373.28 Total paid by McCarty under contract $56,244.82 Balance owed to subcontractors. American Metals Corporation $ 1,200.00 J. P. Electric 781.92 Ole Ed's Construction 2,500.00 Total cost of project $61,736.74 At the time licensee stopped work on the project the railing around the balcony had not been installed, top decking had not been approved by building inspectors and waterproofing of deck had not been done. Extra costs not included in the contract price which were agreed to by McCarty included $300 to $500 extra for larger electric wire and $400 to $500 for larger septic tank than contract called for. These costs totaled approximately $800 which would bring the total contract price to $54,500. The working foreman on the job for the first three or four weeks of the contract, who testified on behalf of Respondent, was unfamiliar with all terms of the contract or with the finances of Hunt. When the existing roof was removed for the second floor addition to be added, conduits had to be replaced and some 2 x 12 joists had to be replaced. This work unexpectedly increased the cost of the contract to the contractor. The septic tank could not be placed where originally intended, and as a result, about 100 fee of sidewalk had to be torn up and replaced. Further, a larger septic tank than originally planned had to be installed. This latter increase was agreed to and paid for by McCarty. One character witness testified that Richard J. Hunt enjoys a good reputation in the construction industry.
Findings Of Fact Petitioner is the Department of Professional Regulation. Respondent is Denfield Lionel Kirby, at all times pertinent to these proceedings holder of certified general contractor license CG-C024695, issued by Petitioner. His address of record is Miami, Florida. In 1985, Fitzgerald McCoy and his wife had plans prepared by an architect for construction of a second story addition to their home in Miami, Florida. On October 31, 1985, a building permit for construction was obtained in the name of McCoy's wife, who is the owner of the house. Commencement of construction was stymied because the McCoy's contractor of choice was unlicensed. They eventually met and began discussions with the Respondent. On April 16, 1986, Respondent prepared and signed an agreement with the wife, Gwendolyn G. McCoy. The agreement provided that Respondent would build the addition to the single family dwelling for a total sum of $57,048. Further, the agreement provided construction would be in accordance with the owner's previously drawn architectural plans as revised by an architect named Edna L. Mingo, an acquaintance of Respondent. Payment terms of the agreement provided Respondent would be paid one third of the total amount at the beginning of construction and one third when the roof to the addition was "dried in" and installation of windows completed. The final one third of the total contract amount would be paid to the Respondent upon the completion of the project. This payment schedule was abandoned by mutual parol agreement of the parties when, upon execution of the agreement, the McCoys were unable to provide the initial one third payment required by the contract to start construction. At that time, the parties orally agreed that Respondent would commence work on the project upon payment of $5,000 to him by Mr. and Ms. McCoy. They made this payment on April 16, 1986, the same date the written agreement was executed. Construction activities commenced shortly thereafter pursuant to the building permit previously issued in the name of Ms. McCoy. Respondent eventually had this permit transferred to his name in May, 1986. The McCoys continued to live in the residence while construction was in progress. During this time, Respondent generally appeared at the work site merely to ascertain if workmen were present. After making this check, he would leave. As the building process continued, extensive damage occurred to portions of the existing structure from rainwater which blew into the residence. On one occasion, the ceiling to the McCoy's bed room caved in on them. The water damage was the direct result of the Respondent's failure to provide adequate protection to the existing structure from rainstorms during construction of the second floor roof over a portion of the residence. At one point in the construction activity, workmen discovered the presence of termites in the rafters to the original roof of the McCoy dwelling. One of the rafters was replaced and the others were braced with new wood. After receipt of payments totalling approximately $35,233.19, the Respondent took a respite from the project. His departure, due to the inability of the McCoys to provide further construction funds at the time, occurred around August 15, 1986. Eventually, the McCoys acquired more funds and, on October 20, 1986, gave the Respondent a check for $20,000. After receipt of the $20,000 payment, the Respondent's workmen were involved in minimal activities on the site in October and December of 1986. Because of proximity to the Christmas season, both parties evidenced very clear recollections of activities on the job around December 15, 1986. At that time, the Respondent requested, and received, another check for $3,000 from the McCoys. He received another check for $1,500 on January 20, 1987. Work by Respondent on the McCoy project after receipt of this payment was sporadic and the relationship between the parties steadily deteriorated. By Respondent's own admission, it is established that his last expense payment or other involvement in the project occurred in May, 1987. During the process of construction, the McCoys wrote successive checks to Respondent in varying amounts which he accepted. Those checks and dates of issuance are as follows: May 2, 1986 $ 4,000 May 21, 1986 $11,000 June 11, 1986 $ 5,000 June 20, 1986 $ 5,000 August 26, 1986 $ 5,233.19 October 20, 1986 $20,000 December 15, 1986 $ 3,000 January 20, 1987 $ 1,500 Per stipulation of the parties at hearing, the foregoing amounts plus the original payment of $5,000 resulted in a grand total of payments to Respondent in the amount of $59,733.17. Respondent's request for the payments, and the McCoy's acquiescence in making them, constituted a continuing parol amendment of the payment terms and amount of the original contract. At time of hearing, a milieu of tasks required by the original agreement to be performed by the Respondent, inclusive of requirements set forth in the plans referenced in that document, either remained unaccomplished, or had been accomplished by the McCoys at additional expense with third parties. Among those tasks were: Installation of mirrors in bath rooms. Installation of wood base boards. Installation of closet rods and shelving. Installation of guard rail to the stairway. Painting of the house's interior and exterior. Completion of plastering of the bathrooms. Although the project was approximately eighty percent complete upon the cessation of all work, testimony of the Petitioner's expert, James Rodgers, establishes that much of the construction completed by Respondent's workmen was not in accordance with the requirements of the plans referenced in the agreement. Among such items are: Substitution of glass panes for glass blocks. Improper construction of the upper level overhang. Stairway risers are not uniform in height. All walls of the second floor addition are uneven and out of plumb. The bedroom floor in the northwest corner of the second floor slants excessively toward the northwest corner. Wood exterior paneling is slanted at a 10 degree angle instead of the required 45 degree angle. The stair landing is six inches less in width than required by plans. Further, the landing (5 ft. 10 in. x 2 ft. 6 in.) is dangerous in that it is supported with only one joist at each end, instead of one every 24 inches. The testimony of Petitioner's expert also established that an expenditure of approximately $51,205 would be required to simply repair or correct improper construction in order to have a final product which is in accordance with the plans referenced in the initial agreement. The McCoys paid certain expenditures for which Respondent, under terms of the agreement, was to have assumed financial responsibility. Included in these items are: Bathroom tiles. Plumbing expenses. Painting expenses. The record is devoid of any evidence that the Respondent conducted any examination of the existing structure prior to contracting with the McCoys or initiation of construction on the project. Further, by the Respondent's own admission, it is established that he did not see the plans referenced in the written contract between the parties until several weeks after the construction was initiated. He proceeded with construction activities on the basis of a "concept". Based on the demeanor of the Respondent, his testimony that the McCoys agreed to pay for "extras" resulting from the plans which were revised by Edna Mingo is not credited. The original written agreement between the Respondent and Ms. McCoy, executed on April 16, 1986, incorporated these revised plans. By his own admission, the Respondent had completed these "extras" before the middle of August of 1986. He did not discuss this problem with the McCoys until sometime between November of 1986 and January of 1987. The Respondent did not espouse a total cost amount attributable to the "extras" until the final hearing held in this cause. Further, Respondent's testimony that the McCoys agreed to pay additional costs resulting from the plans was not supported by testimony of any other witness. The plans, as revised by Edna Mingo, depicted existing centers in the ceiling of the original structure as being 12 inches apart, when, in reality, they were 28 inches apart. These centers were required, by the revised plans, to be extended in order to support the overhang of the second floor addition. The Respondent discovered the disparity regarding the spacing of centers in the course of construction, but he failed to correct the problem with the result that the overhang will eventually sag. At hearing, the Respondent confirmed that numerous punch list items had not been completed. He stated his willingness to have these tasks completed if the McCoys would allow entry to the premises for personnel performing these tasks.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Construction Industry Licensing Board enter a final order finding the Respondent guilty of the commission of gross negligence in the practice of contracting in violation of subsection 489.129 (1)(m), Florida Statutes. The penalty of permanent revocation suggested by the Petitioner is outside the maximum range set forth in subsection 21E-17.001 (19), Florida Administrative Code, and also appears overly harsh in view of the informal atmosphere which surrounded the contractual arrangements in this case. This is particularly so in view of the apparently previously unblemished record of the Respondent. The nature and extent of neglect in this case does, however, dictate imposition of a firm penalty. As required by subsections 21E-17.002(1) and (2), Florida Administrative Code, the aggravating circumstances in this situation, namely the additional cost to be endured by the owners to correct errors by the Respondent, justify the recommendation that the Respondent's license be suspended for a period of three years and that he be assessed an administrative penalty of $2,500. DONE AND RECOMMENDED this 28th day of April, 1988, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of April, 1988. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. PETITIONER'S PROPOSED FINDINGS Petitioner's proposed findings consisted of 2 numbered paragraphs and 14 unnumbered paragraphs. Two of the unnumbered paragraphs have multiple numbered subdivisions. Numbers 3-14 have been applied to the unnumbered paragraphs and the numbered sub-paragraphs are redesignated with arabic letters. Included in finding number 2. Included in finding number 11. Included in part in findings numbered 4, 5, and 17. The remainder is rejected as unnecessary for the result reached. Included in findings 11 and 17. Rejected as unnecessary for the result reached. Included as to amount of pay in finding number 11. Remainder rejected as not supported by the weight of the evidence. There appears to be a typographical error in this proposed finding by Petitioner. As to an amount of $15,000 in extras claimed by the Respondent, this proposed finding is treated in finding number 18. Rejected as not necessary for the result reached. Rejected as not necessary. Included in finding number 18. Rejected as not necessary for the result reached. Rejected as unnecessary. Included in findings numbered 14 and 15. Included in finding number 14. a) rejected as unnecessary. rejected as unnecessary. included in finding number 7. rejected, these were not the Respondent's responsibility. included in finding number 19. included in finding number 14. rejected as redundant. Included in finding number 15. Included in part in finding number 20. Remainder rejected as redundant. RESPONDENT'S PROPOSED FINDINGS Included in finding number 2. Included in finding number 3. Included in finding number 3. Included in finding number 3. Included in finding number 3 and 4. Rejected as unnecessary to result reached. Included in finding number 4. Included in finding number 4. Included in part in finding number 17, Remainder Rejected as unnecessary. Rejected as unnecessary. Included in findings numbered 5 and 9. Included in finding number 5 as to permit transfer. Included in finding number 9. Rejected as unnecessary for the result reached. Included in finding number 9 as to payment amount, remainder rejected as unnecessary to result reached. Rejected as unnecessary. Included in finding number 11. Included in finding number 10. Included in finding number 11. Included in finding number 10. Rejected as unnecessary. Included in part in findings numbered 14 and 15. Included in finding number 20. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. COPIES FURNISHED: Lee Sims, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 R. Daniel Koppen, Esquire 700 Northeast 90th Street Miami, Florida 33138-3206 William O'Neil, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Fred Seely Executive Director Department of Professional Regulation Post Office Box 2 Jacksonville, Florida 32201 =================================================================
The Issue Whether the Respondent, a licensed general contractor, committed the offenses alleged in the three administrative complaints and the penalties, if any, that should be imposed.
Findings Of Fact Petitioner is the state agency charged with regulating the practice of contracting pursuant to Section 20.165, Florida Statutes, and Chapters 455 and 489, Florida Statutes. At all times pertinent to this proceeding, Respondent has been licensed as a general contractor by the Petitioner. Respondent was issued license number CG C010162 in 1975 and has held that licensure ever since. The first complaint against Respondent’s licensure, like the three complaints at issue in this proceeding, arose from a post-Hurricane Andrew contract. That complaint was resolved by stipulation of the parties. Respondent did not admit to wrongdoing in his stipulation. Respondent was financially unable to comply with the terms of the settlement. Consequently, his license was suspended at the time of the formal hearing. There was no explanation as to why this complaint, which occurred at approximately the same time as the three contracts at issue in this proceeding, was prosecuted separately. At all times pertinent to this proceeding, Respondent was the qualifier for Allstate Construction Management, Inc. (Allstate), a Florida corporation. THE RODRIGUEZ CONTRACT (DOAH CASE 96-4580) On March 17, 1993, Allstate entered into a contract with Anthony Rodriguez to build a garage at 15525 SW 209th Avenue, Miami, Florida. The contract price was $16,250.00, which included “plans, permit and cleanup.” Allstate was paid the sum of $4,062.50 on March 17, 1993. Allstate obtained the Dade County building permit for the project on March 26, 1993. Allstate was paid the sum of $5,593.75 on April 5, 1993, after the concrete blocks were installed. On April 8, 1993, Allstate requested a tie beam/reinforcing inspection from the Dade County building department. In response to that request, Antonio Varona inspected the project on April 12, 1993. The inspector noted that the project was not ready for inspection because no truss plans were available. Respondent testified, credibly, that he had to construct the roof conventionally because of the difficulty in obtaining pre-fabricated trusses; however, that testimony does not explain why there were no truss plans available for inspection. Appropriately engineered truss plans are required for a roof to pass inspection. Despite the failure of the project to pass inspection, Mr. Rodriguez accepted the roof and paid Allstate $4,968.75 on May 21, 1993. As of May 21, 1993, there remained a final payment of $1,625 on the contract. After May 21, 1993, Respondent and Allstate left the Rodriguez job. There was a dispute in the evidence as to whether Mr. Rodriguez fired Allstate or whether Allstate abandoned the project. This dispute is resolved by finding that the evidence was insufficient to establish by clear and convincing evidence that Allstate abandoned the Rodriguez project. When Allstate left the Rodriguez job, there were sufficient funds remaining unpaid to complete the project. Because he had obtained the initial building permit, it was incumbent upon Respondent to either obtain a final inspection of the project or notify the building department that his company had been terminated by the owner. Respondent did neither. THE ELLIS CONTRACT (DOAH CASE 96-4581) At the times pertinent to this proceeding, William R. Ellis owned the Arleen House, which is an apartment building located at 2191 N.E. 168th Street, North Miami Beach, Florida. This building suffered damages from Hurricane Andrew. On September 11, 1992, Respondent and Mr. Ellis inspected the building and Respondent prepared an estimate as to the items that had been damaged by the hurricane and other non-hurricane related repairs that should be made. The mansard roof for this building had been damaged by Hurricane Andrew to the extent that it contained gaping holes. Shortly after that inspection, Mr. Ellis met with his insurance adjuster who gave him a check in the amount of $13,000 to repair the roof. It was necessary to dry in the roof and repair the mansard as soon as possible to avoid additional damage to the building from rains. While there was a dispute as to the extent of the services Allstate was to provide Mr. Ellis, the record is clear that Respondent, on behalf of Allstate, agreed to undertake the roof repair for the sum of $13,000. Respondent told Mr. Ellis that his company had a roofing crew ready to begin work on the roof repairs as soon as Mr. Ellis paid the sum of $13,000. Between September 11 and September 15, 1992, Mr. Ellis gave Allstate a check in the amount of $13,000 with the understanding that the check he had received from the insurance company had to clear before his bank would honor the check he was giving to Allstate. Immediately thereafter1 Allstate sent a roofing crew to the project for the purpose of temporarily covering exposed areas. Despite having been told by Mr. Ellis that the check he was giving Allstate would not be good until after the check for the insurance proceeds had cleared, Allstate did not wait to deposit Mr. Ellis’ check. Respondent was promptly notified that the check Mr. Ellis had given him would not be honored by Mr. Ellis’ bank. Respondent immediately thereafter withdrew the roofing crew from the project. The roofing crew had made only minor repairs at the time they were withdrawn from the project. Respondent knew, or should have known, that the building was vulnerable to further damage from rain. On September 15, 1992, Mr. Ellis gave Respondent a second check in the amount of $13,000. This check cleared the banking process on September 18, 1992. Mr. Ellis made repeated efforts to have Allstate send a crew to repair the roof. After it withdrew the crew that had been sent to the property when Allstate received the first check, Allstate did not take action to protect the property by repairing the exposed areas of the roof. Towards the end of September 1992, a heavy rainstorm caused additional damages to Mr. Ellis’ building. Allstate did not send a crew to the project again until October 6, 1992. Mr. Ellis hired this crew away from Allstate. He testified he did so because the crew complained about Allstate not paying for the materials they were using to repair the roof and because the workmen were threatening to file liens against the property. Mr. Ellis paid this crew the sum of $3,400 to temporarily repair the roof. He then entered into a contract with another contractor to complete the roofing repairs for the sum of $17,500. Mr. Ellis demanded the return of the $13,000 he paid to Allstate, but, as of the time of the formal hearing, he had not been repaid. THE KUCHENBACKER CONTRACT (DOAH CASE 96-4582) On November 6, 1992, Allstate entered into a contract with Carl F. Kuchenbacker to repair his residence at 18500 SW 88th Road, Miami, Florida. Mr. Kuchenbacker’s residence had been damaged by Hurricane Andrew. The initial contract price was $33,375.00. Respondent secured the building permit and Allstate began work on the project. During the course of the work, additional work was added to the contract, which raised the total contract price to $38,015.00. In late February or early March, 1993, Allstate abandoned the project without just cause and without notice to the owner. At the time it abandoned the project, Allstate had been paid the sum of $26,620.00. Allstate failed to pay all of the subcontractors and materialmen who had performed work or provided material for the Kuchenbacker job. As a result of that failure, valid liens were recorded against Mr. Kuchenbacker’s property. The following liens were recorded: Rite-Way Plumbing and Plastery, Inc. in the amount of $3,520.00; Commercial Lighting and Maintenance, Inc., in the amount of $1,835.00; and Scott Bornstein Plumbing, Inc., in the amount of $798.00. Allstate had received sufficient funds from the owner to pay these liens, but neither Respondent nor Allstate paid these liens. Mr. Kuchenbacker and Petitioner’s expert witness testified that the value of the work performed by Allstate before it abandoned the job was $21,000.00. Mr. Kuchenbacker also testified as to the items that remained undone and as to the percentage of the work that had been completed. From that testimony and from the testimony as to the estimated costs of completing the job, it is found that the sum of $11,395.00, which was the difference between the total contract price and the total amount that was paid to Allstate, was sufficient to complete the project and pay off the liens on the property. Respondent did not call for a final inspection of the property and he did not advise the Dade County Building Department that he was abandoning the project. Allstate abandoned the Kuchenbacker project because it went out of business.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that that Petitioner enter a final order that adopts the findings of fact and conclusions of law contained herein. It is further recommended that Petitioner impose fines totaling $5,000 against Respondent’s licensure as follows: For the violation established by Count I of DOAH Case 96-4580, an administrative fine in the amount of $500. For the violation established by Count II of DOAH Case 96-4580, an administrative fine in the amount of $500. For the violation established by Count IV of DOAH Case 96-4580, an administrative fine in the amount of $250. For the violation established by DOAH Case 96-4581, an administrative fine in the amount of $500. For the violation established by Count I of DOAH Case 96-4582, an administrative fine in the amount of $750. For the violation established by Count II of DOAH Case 96-4582, an administrative fine in the amount of $2,000. For the violation established by Count III of DOAH Case 96-4582, an administrative fine in the amount of $500. IT IS FURTHER RECOMMENDED THAT in addition to the fines recommended for the violations found in DOAH Case 96-4581, Respondent’s licensure be suspended for two years. IT IS FURTHER RECOMMENDED THAT in addition to the fines recommended for the violations found DOAH Case 96-4582, Respondent’s licensure be suspended for two years, to run concurrently with the suspension recommended for DOAH Case 96- 4581. DONE AND ENTERED this 23rd day of May, 1997, in Tallahassee, Leon County, Florida. Hearings Hearings CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative this 23rd day of May, 1997
The Issue Whether Respondent committed the offenses described in the administrative complaint? If so, what disciplinary action should be taken against him?
Findings Of Fact Based upon the record evidence, the following Findings of Fact are made: Respondent is now, and has been since 1982, a general contractor licensed to practice in the State of Florida. He holds license number CG C020528. At all times material hereto, Respondent has been licensed as an individual general contractor, rather than as a qualifying agent for any business entity. 1/ Respondent is now, and has been at all times material hereto, the President of Michelle Construction Corp. (MCC). On or about November 29, 1987, MCC, through Respondent, entered into a written contract with Henry Rodriguez and his wife Patricia, in which MCC agreed, for $30,000.00, to remodel the Rodriguez residence located at 9139 S.W. 69th Court in Miami, Florida. The work to be performed by MCC included, among other things, renovating the residence's two bathrooms, replacing most of the existing roof, doubling the size of the kitchen, and adding to the residence a back porch, living room, dining room, and master bedroom with a bathroom and walk-in closet. Respondent was to prepare the plans for the project. The $30,000.00 contract price was exceptionally low for the type of work that was the subject of the contract. On December 12, 1987, Respondent, using his general contractor's license, obtained a building permit from the Metro-Dade County Building and Zoning Department to perform the work specified in the contract. Shortly thereafter, work began on the project. Although he hired Paulino Hernandez to serve as the project foreman, Respondent retained overall supervisory responsibility for the project and visited the worksite on various occasions. Work on the project proceeded slowly. Changes had to be made to the plans originally prepared by Respondent because they were infeasible. Furthermore, the project was underfinanced, notwithstanding that Mr. and Mrs. Rodriguez made payments in accordance with their contractual obligations. MCC last performed work on the Rodriguez residence on August 25, 1988. At the time it stopped working on the project, the project was not complete. To this date, it remains unfinished, despite Mr. Rodriguez's efforts to have MCC fulfill its obligations under the contract. Among those portions of the project that MCC failed to complete was the roofing work described in the contract. Following MCC's abandonment of the project, Mr. Rodriguez contracted with Trans Continental Coating Co., Inc., to install over the entire residence a "Foamed-In-Place Urethane Insulated Roof and an elastomeric coating system" for $10,000.00. The work that MCC and/or its subcontractors did perform in furtherance of its contract with Mr. and Mrs. Rodriguez was, at least in part, shoddily done in a manner reflecting either gross negligence or incompetence on the part of the workers who performed the work and those that supervised them. For example, the floors in the dining room and living room additions to the house were not level. Neither were the ceilings in the new master bedroom. Furthermore, the tiles that MCC installed were irregular and had depressions in them. Moreover, the dining room addition was several inches out of square. The paint that had been applied to the exterior of the Rodriguez home as part of the project was already peeling off at the time MCC abandoned the project. Mr. and Mrs. Rodriguez had it repainted by Transcon Painting Co. at a cost of $1,900.00. Mr. and Mrs. Rodriguez had paid MCC in excess of $30,000.00 at the time of MCC'S abandonment of the project. Initially payments were made to MCC or Respondent. Subsequently, in an effort to expedite the completion of the project, Respondent authorized Mr. and Mrs. Rodriguez to make payments directly to the job foreman, Hernandez, which they did. Hernandez was to use the money he received from Mr. and Mrs. Rodriguez to pay for the labor and supplies necessary for the project. Although Mr. and Mrs. Rodriguez paid the contract price in full, MCC and Respondent lost money on the project. Respondent has not been the subject of any prior disciplinary action by the Construction Industry Licensing Board.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Construction Industry Licensing Board enter a final order finding Respondent guilty of the violations of Section 489.129, Florida Statutes, charged in the instant administrative complaint and suspending Respondent's license for a period two months and imposing upon him a fine in the amount of $3,000.00 for having committed these violations. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 28th day of November, 1990. STUART M. LERNER 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 day of November, 1990.
The Issue DOAH Case No. 11-5494TTS: The issue is whether Respondent, Joseph Fayed (Fayed), committed the violations alleged, and, if so, what penalty should be imposed. DOAH Case No. 11-5495TTS: The issue is whether Respondent, Walt Petters (Petters), committed the violations alleged, and, if so, what penalty should be imposed.
Findings Of Fact The Parties Petitioner is a district school board created by Article IX, section 4, of the Florida Constitution. As such, Petitioner’s authority and responsibilities extend to personnel matters, and include the power to hire, suspend, and dismiss Board employees. At all times material to these cases, Petitioner’s organizational structure designated Maintenance as the department responsible for repairs and upkeep to all School District property. Maintenance was charged to budget for and complete repairs and improvements to hundreds of school sites and other Board properties. At all times material to these cases, Petitioner kept a list of vendors who could be called upon by Maintenance to complete work that could not be performed by Board personnel. Maintenance’s system allowed it to assign work previously approved or contemplated by the budget to a vendor and then submit a purchase order to the Board’s purchasing department so that the vendor would be paid at the conclusion of the work. At all times material to the allegations of this matter, Respondent Fayed was employed by the Board on an annual contract and served as supervisor of central services in the Maintenance Department. Fayed oversaw maintenance work performed within his service area. It is undisputed that the annual contract held by Fayed could be non-renewed without cause. Therefore, at the conclusion of the 2011-2012 school year (presuming his contract ended concurrent with the school year), Petitioner was not obligated to retain Fayed. By history, Fayed worked for Petitioner for well over 30 years, completed his DROP time, and separated from the School District. After remaining out of the system for some period of time, Fayed returned to work for the School District and continued to do much of the same type of work he had done prior to retirement. At all times material to the allegations of this matter, Respondent Petters was employed by Petitioner on an annual contract. Petters was the director of Maintenance. His responsibilities required him to supervise all employees within the School District’s Maintenance Department. Fayed served under Petters’ supervision. As director of Maintenance, Petters oversaw all of the geographical service areas for the School District. All outside vendors who performed maintenance work for School District properties were directly tied to Petters’ department. The Controversy Prior to August 15, 2011, Board employees raised concerns of improprieties committed by Petters and Fayed in connection with the performance of their duties in the Board’s Maintenance Department. An internal investigation of the School District’s maintenance department suggested that there were 25 separate instances of improper activity. Based upon the investigation, Petitioner procured an independent audit to be performed by RSM McGladrey, Inc. (McGladrey). McGladrey was tasked to review the 25 claims, review all pertinent records of the Maintenance Department, and present a detailed report to the School District’s Superintendent. That report, dated September 23, 2011, formed the basis for the charges against Petters and Fayed. The McGladrey report was attached to letters from the Superintendent dated October 5, 2011, that advised Petters and Fayed that their employment with the School District would be recommended for termination at the Board’s October 11, 2011, meeting. At that meeting, Petters and Fayed were terminated subject to their administrative rights to contest the action. Respondents timely sought a formal administrative hearing in connection with the charges of misconduct, willful neglect of duty, and/or being incompetent. The Vendors SMG SMG Coatings, Inc. (SMG), is a painting company operated by Tim Tillotson (Mr. Tillotson). Although, technically owned by Mrs. Tillotson, the company’s day-to-day field operations are directed and supervised by Mr. Tillotson. At all times material to the allegations of these cases, SMG routinely bid on contracts for the School District. It also competed for the “primary contractor” designation. Petitioner used two methods of procurement for maintenance work to be performed by outside vendors. One method, “primary contractor,” was for minor projects that did not exceed $5,000.00, in value. Vendors designated as the “primary contractor” were utilized to do these minor jobs without additional bidding. When a job exceeded $5,000.00, all vendors on a list of approved vendors were allowed to bid on the project. These vendors are known as “continuing contract” holders in this record. Vendors on the “continuing contract” approved list were to receive notice of the job and be given an opportunity to successfully bid the work. Although the threshold amount was later raised, and the method of evaluating contractors was later changed from an hourly rate to a unit measure for the type of painting work, the underlying concerns regarding how SMG received the Board’s work remain the same. At all times material to these cases, SMG was a “primary contractor” on the approved “continuing contract” vendor list. The allegations of these cases aver SMG received preferential treatment not afforded other vendors doing business with the School District. Sena-Tech Sena-Tech, LLC (Sena-Tech), is an electrical contractor that first became authorized to do School District work during 2008. Steve Terry (Mr. Terry) is the president of Sena-Tech. The allegations of these cases aver Sena-Tech received preferential treatment not afforded other electrical vendors doing business with the School District. The Relationships Petters and Fayed are long-term employees of the School District, who have forged friendships with each other and with vendors doing business with the Board. Specific to these cases are the friendships between Petters, Mr. Tillotson, and Mr. Terry. It is undisputed that at all times relevant to the allegations of these cases, Petters and Mr. Tillotson ate lunch together many times a month. Petters vacationed with Mr. Tillotson on one or more occasions. Petters and Mr. Tillotson made no effort to hide their close friendship. Similarly, Fayed is friends with Mr. Tillotson. Although they are not as close as Petters and Tillotson, it is undisputed that Fayed also lunched with Mr. Tillotson on a regular basis. Given his work history, Fayed is familiar with painting contractors doing business in the school district. There is no evidence that Fayed made any effort to encourage other painting vendors to compete with SMG for the Board’s business. Fayed has also known Steve Terry for years. Mr. Terry has been to Fayed’s home in the past and considers Fayed a friend. Petters and Mr. Terry are also well known to one another. Mr. Terry has joined Fayed and Petters for lunch. Neither Fayed nor Petters acknowledged that forging friendships with vendors doing business with the School District gave the appearance of impropriety to persons looking at the situation from outside of the Maintenance Department. The Jobs Sena-Tech Prior to 2008, Sena-Tech did not have standing as a “continuing contractor” or vendor approved to do work for the School District. Nevertheless, Sena-Tech received jobs and was paid for work done prior to its inclusion on the list. Purchase Orders (POs) were approved by Petters for payment to Sena-Tech in connection with nine specific jobs. Petters was required to sign-off on jobs and to submit POs so that the vendor would be paid. A purchase order is the written document formalizing the transaction between the Board and the vendor. In this case, all POs were initiated by Maintenance and paid by Petitioner’s Purchasing Department. The weight of the credible evidence confirms that nine jobs given to Sena-Tech prior to 2008 were electrical in nature and should have gone to a contractor on the approved list or, if not technically “electrical” due to the voltage of the work, should have been given to a vendor that successfully bid the jobs. In either instance without competent supporting documentation, Sena-Tech would not have automatically received the work. There is inadequate evidence that the work performed by Sena-Tech resulted in a higher cost to the Board, however, because the process, by which work should have been distributed to vendors, was circumvented in connection with the nine Sena- Tech POs approved by Petters. There is no evidence that Petters personally benefitted from the work given to Sena-Tech. There is insufficient evidence to establish that Fayed was personally involved in the disputed Sena-Tech POs, or that he participated in the selection of that company for the disputed work. There is no evidence that Fayed personally benefitted from the work given to Sena-Tech. SMG The weight of the credible evidence established that SMG circumvented the Board’s bidding process by submitting false information. SMG obtained work based upon unrealistically low hourly rates. To calculate the labor cost for a job required a simple formula: hourly rate multiplied by the number of hours to complete the job. Theoretically, all vendors would take the same amount of time to complete a job. Because the hourly rate would be multiplied by the number of hours the job required, the job labor cost would be correct. In these cases, that did not happen. Instead, SMG inflated the number of hours for the job and thereby assured itself a payment greater than its hourly rate would have afforded had the rate been applied to the actual hours worked for the job. In some instances, SMG billed the job at a higher hourly rate than its contract allowed. According to Fayed and Petters, so long as the bottom line (the ultimate cost to the School District) was reasonable, the process was adequate and had long been in place. Fayed and Petters did not acknowledge that the method used by SMG might have resulted in a higher cost to the Board. Based upon their professional experience in the Maintenance Department, both Respondents claimed that the amounts charged by SMG and paid for by Petitioner were appropriate. In truth, the process was not appropriate because vendors who bid actual (as opposed to illusory) hourly rates did not have the opportunity to obtain jobs. Vendors who bid the hourly rates that would be applied to the real hours of work could not compete with SMG’s unrealistically low rate. SMG was assured of “primary contractor” status without meaningful competition so long as its hourly rate was less than its competitors. At all times material to these cases, SMG was the preferred painting vendor. Fayed and Petters knew the system was flawed. In fact, Petters claimed that he told superiors that the system should be changed. When the threshold amount of jobs was increased from $5,000.00, to $20,000.00, the hourly rate method was still used. More important, neither Petters nor Fayed required SMG to bill only its actual hours for a job. There are a number of ways to track time on a given painting job. Outside vendors could be required to sign in and out at a job location. A site supervisor could verify the daily hours worked at a given location. No reasonable effort to verify the actual hours spent on a job was used when it came to SMG. Petters and Fayed knew or should have known that the hours submitted by SMG were false. Whether the Board could have or should have paid less for the SMG jobs is unknown. Another vendor working fewer hours at a higher rate might have cost the School District the same amount. Because the hours billed by SMG were false, it is impossible to calculate what the jobs should have cost. For the jobs that SMG billed a higher hourly rate than their contract allowed, it would be possible for the Board to calculate an overpayment. At the heart of this matter is the indifference displayed by Fayed and Petters to hold SMG accountable for the actual hours worked. The dispute might have been avoided if SMG had either bid fair hourly rates or billed actual hours worked. SMG did neither. Petters knew what was going on and did not intervene to stop the fiction. Recapping Board payments made to SMG, pursuant to the 2004-2005 paint contract, shows that of the $772,467.13, spent for painting jobs, only $8,200.00, went to a vendor other than SMG. Of the projects that exceeded $5,000.00, $276,614.68 went to SMG without meaningful bids from other vendors on the approved list. All approved paint vendors were entitled to submit proposals for the projects that exceeded $5,000.00. Of the ten projects that met the $5,000.00 threshold, a competing vendor was able to submit a proposal on only three of the jobs. When the threshold was raised to $20,000.00 in 2008, SMG’s competition had fewer opportunities to obtain work from the School District. As the primary vendor (again using a false hourly rate), SMG was able to capture more jobs because the Maintenance Department did not have to offer work to another vendor unless the amount exceeded $20,000.00. Fayed and Petters supported the higher threshold and Fayed lobbied for its approval. Board payments made during the 2008 paint contract requested by the Maintenance Department totaled $1,246,184.37. The entire amount went to SMG. Whether the Board could have obtained the work for a lesser amount is unknown. A review of the 2008 paint jobs established that no bids were obtained for work that exceeded the $20,000.00 threshold. No serious effort was made to secure outside bids or vendors to compete against SMG. Had Petters or Fayed brought the lack of competition to the Board’s attention (or to any supervisor in the school system), it is unknown whether SMG would have obtained the volume of work it was paid for during this time. The Other Claims SMG was allowed to use Board equipment and fuel without cost. It is unknown whether other vendors could have saved these expenses when presenting their bids for School District work. Arguably, Petters and Fayed would have let other successful vendors use Petitioner’s equipment and fuel. As SMG secured the work, the question cannot be resolved. Petitioner’s policy allows personnel to use School District transportation when their work duties require travel to more than one work-site. Fayed’s duties required travel to job sites throughout the central area. Vehicles provided for official business may not be used for personal activities. The weight of the credible evidence established that Fayed used his School District vehicle to attend to personal matters such as doctor visits, stops at his personal residence, and a trip to Patrick Air Force base. See Policy 8651. Petitioner’s ethics policy is designed to create a culture of honesty and integrity. See Policy 4210. Fayed and Petters ignored the reality that their close friendship with a vendor caused the honesty and integrity of the Maintenance Department to be brought into question. Petters defiantly insisted that SMG retain “primary contractor” status when another company prevailed on the 2010 paint contract.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter Final Orders as follows: As to DOAH Case No. 11-5494TTS, finding there is just cause to terminate the employment of Joseph Fayed effective October 11, 2011. As to DOAH Case No. 11-5495TTS, finding there is just cause to terminate the employment of Walt Petters effective October 11, 2011. DONE AND ENTERED this 6th day of September, 2012, in Tallahassee, Leon County, Florida. S J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of September, 2012. COPIES FURNISHED: Joseph R. Lowicky, Esquire Glickman, Witters and Marrell, P.A. The Centurion, Suite 1101 1601 Forum Place West Palm Beach, Florida 33401 Mark S. Levine, Esquire Levine and Stivers, LLC 245 East Virginia Street Tallahassee, Florida 32301 Dr. Brian Binggeli, Superintendent Brevard County School Board 2700 Judge Fran Jamieson Way Viera, Florida 32940-6601 Lois Tepper, Interim General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400 Pam Stewart, Interim Commissioner Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400
