The Issue The issue in this case is whether Petitioner is entitled to attorney's fees and costs under Section 57.111, Florida Statutes, the Florida Equal Access to Justice Act.
Findings Of Fact On or about July 12, 1984, a probable cause panel of the Construction Industry Licensing Board met to receive and review an investigative report resulting from complaints received from Carl Mayer Forrest Morgan, and Walter Booth concerning certain activities of Ronald D. Nutt, Petitioner. The panel found probable cause that Petitioner's activities had violated applicable statutory and rule provisions, and subsequently, on or about July 19, 1984, a five-count Administrative Complaint was issued against Petitioner charging him with disregarding an applicable building code, abandoning a construction project, making misleading and false representations, and engaging in fraud and misrepresentation in the practice of contracting. Petitioner disputed the allegations contained in the Administrative Complaint and requested a hearing. The case was sent to the Division of Administrative Hearings to conduct an evidentiary hearing and to issue a Recommended Order based thereon. The matter was given Division of Administrative Hearing's Case Number 84-2920, and a hearing was held on March 27, 1985 before R. T. Carpenter, Hearing Officer. At the hearings one count arising from the Booth complaint was voluntarily dismissed. On June 13, 1985, a Recommended Order was issued in Case Number 84-2920 which recommended that the Construction Industry Licensing Board issue a Final Order dismissing the Administrative Complaint filed against Ronald D. Nutt. On or about July 11, 1985, the Board considered the Recommended Order, and after a review of the complete record adopted the findings of facts, conclusions of law and recommendation contained in the Recommended Order. The Board issued its Final Order dismissing the Administrative Complaint in Case Number 84-2920 on August 7, 1985. In pertinent part, the following facts were found in Case Number 84-2920 by both the Hearing Officer and the Construction Industry Licensing Board: The principal disagreement (between Nutt, who was the Respondent in this prior case, and Mayer, the complaining witness) concerned the roof design, which Respondent contends was improper. Mayer initially refused to agree to modifications suggested by Respondent and would not retain an architect to clarify his intended design. Other disagreements led to Mayer's withholding of scheduled draw payments. Mayer refused to pay the first draw on completion of the foundation, even though it had been approved by the Melbourne Building Department. By August, 1983, Respondent's firm had completed work to the approximate point of the third draw, but had still received no draw payments. By this time Mayer had retained an attorney, and several unproductive meetings had been held regarding difficulties in completing the project. Mayer subsequently contacted the Melbourne Building Department to complain that the roof was being constructed according to plans not filed with the Building Department. This complaint was verified and a stop work order was placed on the project on August 10, 1983. The evidence adduced at the hearing established that Respondent had changed Mayer's roof design to one he believed was correct, but had failed to obtain Mayer's approval or file the change with the Building Department. The change made by Respondent was, according to his testimony, necessary to correct Mayer's design deficiency. Mayer's testimony to the contrary is rejected. Mayer refused to retain an architect as suggested by Respondent, and demonstrated no expertise in building design. Respondent's testimony on this point is, therefore, accepted. Further efforts to resolve disputes were unsuccessful. On February 1, 1984, Hallmark Builders, Inc. filed a claim of lien on the Mayer property for $28,559. Mayer counter-claimed, and the suits were ultimately settled through payment of $21,000 by Mayer to Hallmark Builders, Inc. Based upon these findings of fact, the following conclusion of law was reached by the Hearing Officer and Board in Case Number 84-2920: Respondent is guilty of violating a local building code by failing to file his change in plans prior to commencing construction under the change. He acknowledged this, but believed it was sufficient com- pliance to file such plans before the next inspection. This violation is not a serious one, and no disciplinary action was taken by local authorities other than the stop work order. Therefore, the charge under Subsection 489.129(1)(d), F.S., should be dismissed. The parties stipulated that at the conclusion of the Department of Professional Regulations Construction Industry Licensing Board's case-in-chief in Case Number 84-2920, Nutt moved for a directed verdict on the four counts remaining in the Administrative Complaint on which evidence was presented and this motion was denied by the Hearing Officer. Petitioner herein has established that his reasonable and necessary attorney fees and costs associated with Case Number 84- 2920 were $13,153.28. Petitioner has established that he is a "small business party" as defined in Section 57.111(3)(d), Florida Statutes, since he operated as a professional practice and also a corporation with his principal office in Florida, and did not have more than 25 full-time employees or a net worth of more than two million dollars when the action in Case Number 84-2920 was initiated by the Department of Professional Regulation, Construction Industry Licensing Board on or about July 12, 1984 with the finding of the probable cause panel. Petitioner has established that he was a prevailing small business party in Case Number 84-2920 since the Board's Final Order dismissing the charges in the Administrative Complaint was clearly in his favor and was not appealed. Petitioner has not established that the actions in Case Number 84-2920 of Respondent herein constituted unreasonable governmental action. This prior proceeding was therefore substantially justified at the time it was initiated on July 12, 1984 with the finding of the probable cause panel.
The Issue Whether respondent signed a statement falsely indicating that payment had been made for all subcontracted work, labor and material, which resulted in a financial loss to the owner of the home constructed by respondent, in violation of Section 489.129(1)(l), Florida Statutes (1981).
Findings Of Fact Respondent is now and was at all times material to the complaint licensed by the State of Florida as a certified general contractor holding License No. CG C004216. On July 23, 1980, respondent entered into a contract with Mr. and Mrs. James Stillman to construct a geodesic dome house for a contract price of $65,900. The contract price did not include certain work and materials that were to be provided by the owner pursuant to Article 2 of the contract. In mid-August of 1981, respondent completed his work on the house. On August 31, 1981, about two weeks after the house was finished, respondent presented Mr. Stillman with a list of extras, which totalled $3,620, that respondent thought the Stillmans owed him. Although Mr. Stillman disputed that the entire amount was for extras, he agreed that he owed respondent for some of the items listed. However, Mr. Stillman also felt that he had paid for certain work that should have been performed by respondent under the contract. After the discussion with Mr. Stillman, respondent was under the impression that they had resolved the dispute and that Mr. Stillman would pay him $2,000 the following day to settle the matter. The following day, September 1, 1981, the respondent and the Stillmans went to the bank to complete the paperwork necessary for respondent to receive the final payment on the construction loan. Before respondent was given the final payment, the bank asked respondent to sign a Contractor's Affidavit stating that all subcontractors and suppliers had been paid. Although respondent was aware that certain suppliers and subcontractors had not been paid, he signed the affidavit because he intended to pay those suppliers and subcontractors as soon as he received the final payment from the bank and the $2,000 payment from Mr. Stillman. After signing the affidavit, the bank presented respondent with the check for the final payment on the construction loan. However, the bank had deducted from the final payment $1,584.42 for interest owed by the Stillmans on the loan. In other words, respondent received $1,584.42 less than the amount owed him under the terms of the contract. Further, Mr. Stillman apparently did not think any agreement had been reached concerning the amount owed for extras and, therefore, refused to pay respondent any additional money. As a result of the foregoing, respondent received about $3,500 less than he had anticipated receiving when he signed the affidavit. Due to his financial condition, respondent was unable to pay the suppliers and subcontractors as he had intended. Ultimately, Mr. Stillman paid the money that was owed to the suppliers and subcontractors for materials and services provided in constructing the house. Mr. Stillman paid Holiga Glass Company $112.21, Ornamental Iron Company $725, and Arthur Schleman Plumbing Company $1,016. All of the money paid by Mr. Stillman to the suppliers and subcontractors was for materials and services contracted for by respondent in connection with the construction of the house. None of the suppliers or subcontractors had filed a claim of lien or timely served a Notice to Owner. At the hearing, Mr. Stillman admitted that he owes respondent $2,473.92, which includes the $1,584.42 which was withheld by the bank from the final payment. However, Mr. Stillman claims that respondent owes him $2,518.21, which includes the $1,853.21 Mr. Stillman paid the subcontractors and suppliers. The money the Stillmans owed to respondent was for extras and the money withheld from the bank. Thus, this money was due to respondent on September 1, 1981. Mr. Stillman admitted that when the Stillmans paid the suppliers, one of which was not paid until some time in 1982, the Stillmans "took it as a credit" against the money they admittedly owed respondent. (T-45). Obviously, the $2,473.92 admittedly owed by the Stillmans to respondent is greater than the $1,853.21 that the Stillmans paid the suppliers and subcontractors. Thus, the Stillmans did not suffer a financial loss by virtue of respondent's stating that he had paid all suppliers and subcontractors. Indeed, Mr. Stillman's complaint to the Department of Professional Regulation was not based on respondent's failure to pay the suppliers or subcontractors but was due to problems he was having with the roof. Respondent has been a licensed contractor since 1972, and he has had no complaints other than the instant one. At the hearing, Mr. Stillman admitted that respondent built a "super house" (T-23) and stated, "if I could get the darn roof to get fixed, I would still say [respondent was] the best builder in Florida." (T-42).
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing the Administrative Complaint filed against respondent. DONE AND ENTERED this 24th day of February, 1988, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS 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 24th day of February, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 83-2129 Petitioner's Proposed Findings of Fact: 1-14. Accepted generally. COPIES FURNISHED: David Swanson, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Mr. J. Kenneth Yolman 1009 Southeast Tenth Court Deerfield, Florida 33441 Mr. Fred Seely Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32201 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
Findings Of Fact Petitioner is the state agency charged, in conjunction with the Construction Industry Licensing Board, with the responsibility for prosecuting Administrative Complaints pursuant to chapters 455 and 489, and the rules promulgated thereunder. In September, 1983, license number CR C012950 was issued to Respondent, David A. Taylor, as the qualifying agent for Energywise Homes, Inc., 3305 S.W. 1st Court, Deerfield Beach, FL 33441. License number CR C01295p remained in effect until June 30, 1987. License number CR C012950 was delinquent and invalid from July, 1987, through May 10, 1988. In July, 1987, license number CR C012950 was placed on a delinquent status for non-renewal and considered invalid. On April 19, 1988, Respondent applied for renewal and reinstatement of license number CR C012950. Respondent's application for renewal and reinstatement was approved May 11, 1989. At that time, license number CR C012950 was changed from a qualifying business to an individual license. In April, 1988, Respondent applied to the City of Sebastian, Florida Construction Board (the "City") for an occupational license in order to obtain building permits for jobs he had contracted in that jurisdiction. License number CR C012950 was delinquent and invalid at the time Respondent applied to the City for an occupational license and permits. Respondent presented an altered license to Ms. Kathryn Nappi, the person responsible for issuing occupational licenses for the City in April, 1988, for the purpose of obtaining building permits from the City. The typeface on the license presented by Respondent to Ms. Nappi does not match either that used on the bottom portion of the same license or the copy of the licenses admitted as Respondent's Exhibit 1. Further, the date used on the altered license is not a date normally used by the Construction Industry Licensing Board. Finally, the license presented by Respondent to Ms. Nappi indicated the license was held by Respondent individually rather than as qualifying agent for Energywise Homes, Inc. The testimony of the witnesses for Petitioner was consistent and credible. The procedures followed by Ms. Nappi and her supervisor, Mr. Bruce Cooper, Director of Community Development and Building Official for the City of Sebastian, were customary procedures followed in the ordinary course of their business. Neither witness had any discernible motive for fabricating the events to which they testified. Respondent presented the altered license to Ms. Nappi sometime in April, 1988, for the purpose of obtaining building permits for the five homes to be constructed in the City. Ms. Nappi noticed that the type on the top of the license submitted by Respondent did not match the bottom portion. She brought the discrepancy to the attention of Mr. Cooper. Mr. Cooper confirmed with the Department of Professional Regulation that the license submitted to Ms. Nappi by Respondent had been altered. Mr. Cooper set up a meeting between himself, Respondent, and two detectives to ascertain Respondent's position concerning the altered license. Mr. Cooper did not believe Respondent's position and placed the matter on the agenda for the May 3, 1988, meeting of the Sebastian Construction Board (the "Board") 3/ Respondent and the owner of the five homes for which permits were being sought appeared at the May 3, 1988, meeting of the Board. The Board voted to approve the building permits subject to the issuance of a valid license by the Department of Professional Regulation. The owner requested issuance of the permits because delay was causing his investment to dwindle. The Board also considered the fact that the properties were becoming an eyesore in the City. The Board voted to approve the permits, subject to Respondent obtaining a valid license, and leave the issue of the altered license to the Department of Professional Regulation. Respondent's testimony that he did not present an altered license for the purpose of obtaining building permits from the City, and that he had never previously seen the altered license, is rejected as not credible. Such testimony is inconsistent with statements by Respondent to Mr. Cooper and at the May 3, 1988, meeting of the Board, which were admitted in evidence as exceptions to hearsay under Section 90.8C3(18). Respondent's testimony is also inconsistent with the greater weight of evidence. Financial pressures caused by previous delays in obtaining permits provided a motive for Respondent to present an altered license to obtain building permits for the five homes to be constructed in the City. Previous attempts by others to obtain building permits for five homes to be constructed in the City had been unsuccessful. Respondent made several further attempts to obtain building permits for the five homes to be constructed in the City. The delays in obtaining the permits had caused the investment of the owner of the homes to dwindle. Furthermore, the homes were becoming an eyesore for the City. Respondent committed an act of fraud, deceit, and misconduct in April, 1988, when Respondent intentionally presented an altered license to Ms. Nappi to obtain building permits for the five homes to be constructed in the City. No evidence has been presented to support a finding that Respondent altered the license presented to Ms. Nappi. However, Respondent knew or should have known that the license submitted by him had been altered, and Respondent submitted the altered license for the purpose of obtaining the needed building permits. Even without the requisite intent for fraud, deceit, and misconduct, Respondent is not exonerated. Inadvertently presenting an altered license to Ms. Nappi in April, 1988, at a time when Respondent knew his license was delinquent and invalid constitutes gross negligence and incompetence in the practice of contracting.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent be found guilty of fraud, deceit, gross negligence, incompetency, or misconduct in the practice of contracting in violation of Section 489.129(1)(m). Florida Administrative Code Rule 21E-17.001 provides in relevant part: "The following guidelines Shall be used in disciplinary cases, absent aggravating or mitigating circumstances and subject to the other provisions of this Chapter. (emphasis added) * * * (19) 489.129(1)(m): Gross negligence, incompetence, and/or misconduct, fraud or deceit. (a) Causing no monetary harm to licensee's customer, and no physical harm to any person. First violation, $250 to $750 fine; repeat violation, $1,000 to $1,500 fine and 3 to 9 month suspension. Florida Administrative Code Rule 21E-17.002, describes aggravating and mitigating circumstances which may be considered in determining the penalty to be imposed in a particular proceeding. Petitioner produced no evidence of any aggravating circumstances other than the alleged violations of Sections 489.113 and 489.115. There was no evidence of monetary or other damage to the licensee's customer, actual job site violations, repetitive offenses, the number of complaints filed against Respondent, or actual damage to the licensee's customer. See Fla. Admin. Code Rule 21E-17.002(1),(2),(s),(6), and (8). Considering the absence of any aggravating factors, the length of time Respondent has practiced contracting without any complaint, the de minimis danger to the public, and the fact that the Board approved the permits sought by Respondent because of the beneficial effect the permits would have on the owner and the City, it is recommended that Respondent be fined $250. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 26th day of February, 1990. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1990.
