The Issue The issue for consideration in this case is whether Respondent's certification as a roofing contractor in Pinellas County should be disciplined because of the matters alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issues herein, Petitioner, Pinellas County Construction Licensing Board, was the county agency responsible for certifying the competence of practitioners in the construction trades in Pinellas County, and for the regulation of the construction industry in that county. Respondent was certified as a roofing contractor by Petitioner under certificate number C-7779 (RC0067087). On April 19, 1999, Vivian P. Campbell, representative of the Bay Pines Apartments Unit Four Association (Association), a condominium association which owns the apartment building at 4600 98th Way, North in St. Petersburg, executed a proposal by Respondent to perform roofing services at the facility for a contract price of $39,050.00. The proposal, accepted by the Association, called for Respondent to install insulation board to existing deck after sweeping away all rock and debris; to install other material; to reseal all gutters and install rain diverters; and to install wood nailers for all perimeters of the roof. No completion date was established or stated in the agreement. The contract called for a complete price of $39,050 for the work but no time for completion was mentioned in the document. Within the first 30 days of signing the contract, the Association made two payments to Respondent; one on April 19, 1999, in the amount of $9,000, and another on May 13, 1999, in the amount of $4,000, for a total of $13,000. On May 3, 1999, Respondent removed some gravel from the roof. Respondent also caused some materials to be delivered to the site, erected a sign identifying himself as the contractor, and installed a porta-pottie at the site. However, aside from the initial gravel removal, Respondent did little more roof work than was called for in the contract. On June 20, 1999, he repaired one of several leaks in the building roof, but that repair was a small part of the contract work. All attempts by the Association and the apartment manager to contact Respondent were unsuccessful. As a result, the Association contacted its attorney who wrote to Respondent on July 6, 1999, demanding he commence work within five days of the letter or the contract would be considered terminated. Respondent did not do so. However, on July 26, 1999, he wrote to the building manager, apologizing for being slow in starting the work, and offering to deduct $5,000 from the contract price if he could start work. As a result of this letter, the building manager met with Respondent on August 21, 1999, to re-negotiate the contract. At this meeting, the parties agreed that Respondent would do the work for an additional $11,000 beyond the $13,000 which had already been paid to him. The additional funds were to be paid in two installments; one on August 19, 1999, and one on August 27, 1999. A contract incorporating those terms was drawn up and forwarded to Respondent for his signature but he did not sign the amended contract, did not do any of the work called for in the contract, and did not return any of the funds paid to him under the contract. On October 29, 1999, Ms. Campbell met with Respondent and the consumer protection offices of Pinellas County of the Circuit Court. At this meeting, Respondent volunteered to pay back all sums he had received for the work he had agreed to do. He left the meeting room, promising to return with the money within one hour. The other parties went to lunch, and while they were having their meal, Respondent called the consumer protection officer and related he could not raise the money he had promised. There was no further contact from Respondent from that point until the hearing. Respondent admits that a majority of the complaint of the Association is true. He contends, however, that the delay in starting work was due to the need to obtain the necessary materials for the job and the heavy rains which occurred during the period in question. This was a completely flat roof which had no pitch to it at all and Respondent claims he could not install the new roof if there was any standing water at the site. Respondent also agrees there was a meeting with the building manager during which he indicated his desire to go ahead with the work, but contends he wanted a statement in the supplemental agreement to the effect his license would not be revoked. Any decision on the issue of Respondent's licensure was not within the authority of the Association, which had no authority to bind the licensing officials to any particular disciplinary decision. Respondent also contends he had planned to make the agreed reimbursement payment worked out by the consumer protection officer but could not do so because he was not paid for another job. Then, he contends, before the second payment was due, he was advised of the filing of the disciplinary complaint against his license. When that happened he decided not to pay back any funds as long as discipline was being taken, regardless of what he did. Respondent's defenses are unpersuasive. The amount of work done by Respondent on the contract was far less than the percentage of payment he received under the contract.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED: That the Pinellas County Construction Licensing Board enter a final order in this case directing Respondent to reimburse Bay Pines Apartment Unit Four Association all funds paid by it to him for work not accomplished as called for in the contract between them on April 19, 1999; that it revoke Respondent's certification as a roofing contractor in Pinellas County but suspend the execution of the revocation upon Respondent's full and complete repayment; and that it place his certification on probation for a period of one year. DONE AND ENTERED this 12th day of April, 2000, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK 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 April, 2000. COPIES FURNISHED: William J. Owens, Executive Director Pinellas County Construction Licensing Board 11701 Belcher Road, Suite 102 Largo, Florida 33773-5116 Raymond J. Mowery, Jr. Post Office Box 60002 St. Petersburg, Florida 33714
Findings Of Fact Respondent holds certified residential contractor's license number CR C018843, which was issued to him in February, 1981. He was not licensed before that time. In 1979 and 1980, prior to his licensure, Respondent operated as a building contractor in one or more businesses known as Associated Building Contractors, Associated Building Contractors of Altamonte Springs, Inc., and Associated Building Contractors Sales, Inc. Neither Respondent nor any other individual was registered as a qualifying agent with Petitioner on behalf of any of these companies. However, a licensed general contractor, Robert Evans, was affiliated with Respondent from approximately February to October, 1979, and believed he qualified Associated Building Contractors during that period. Respondent's contracting activities in 1979 and 1980 included the contracting for and construction of a residential house in Seminole County for Robert K. and Debra A. Good. This home is located on Lot 273 in the Barclay Woods Subdivision. Respondent signed the contract with the Goods on November 27, 1979, as seller. On May 20, 1980, Respondent signed an affidavit as president of Associated Building Contractors of Altamonte Springs, Inc., certifying there were no unpaid bills or security interests in the Good property. Respondent signed this affidavit in order to obtain disbursement of funds from the lender. Respondent's affidavit was false, there being outstanding unpaid bills to subcontractors and materialmen as of May 20, 1980. These debts included over $2,000 due on the Good project to a carpet business owned by John Polk (Carpet Service Unlimited and its successor, Design Flooring, Inc.). This debt has never been paid and is currently an unsatisfied judgment against Respondent or his company. The law suit was instituted by Polk's complaint filed in the Seminole County Court, apparently on September 22, 1980. See Petitioner's Exhibit 16. Respondent, or his company, also owed Overhead Door Company of Orlando, Inc., $612 for services on the Good house as of Nay 20, 1980. The Overhead Door bill was settled in October, 1980. Additionally, Respondent, or his company, owed Schilke Enterprises, Inc., a window and door business, $1,558 which was billed to the Good project and was the subject of a law suit filed December 2, 1981. Respondent, or his company, owed Castle Custom Cabinets $1,777 for work on the Good house as of April, 1980. This bill was finally settled in June, 1981. Respondent applied for a contractor's license in December, 1980. Petitioner's application form included the question: Are there now any unpaid past-due bills or claims for labor, materials, or services, as a result of the construction operations of [the applicant] or any organization in which any such person was a member of the personnel? Respondent answered "No" to this question, when in fact he and/or his organizations owed several past due bills relating to the construction operations discussed above. The application form contained a similar question regarding liens, judgments or pending law suits, to which Respondent also answered "No." However, with the possible exception of the Polk suit, the evidence did not establish that any pending law suits, liens or judgments were in effect at the time Respondent answered this question. A further question on Petitioner's license application form asked: Has [the applicant] ever been convicted of any offense . . . other than traffic violations? Respondent answered "No" to this question. There was no evidence that this answer was improper, although on January 5, 1979, Respondent was placed on five years probation, adjudication of guilt withheld, by the Circuit Court of Orange County. The charge was second degree grand theft, a felony, to which Respondent had entered a plea of nolo contendere.
Recommendation From the foregoing, it is RECOMMENDED: That Petitioner enter a Final Order finding Respondent guilty of violating Subsection 489.129(1)(a), Florida Statutes (1979) , and revoke his license as a certified residential contractor. DONE and ENTERED this 15th day of April, 1983, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of April, 1983. COPIES FURNISHED: John O. Williams, Esquire 547 North Monroe Street, Suite 204 Tallahassee, Florida 32301 Kenneth M. Meer, Esquire Post Office Drawer 30 Winter Park, Florida 32790 James Linnan, Executive Director Florida Construction Industry Licensing Board Department of Professional Regulation Post Office Box 2 Jacksonville, Florida 32202 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue in this case is whether Respondent violated Section 475.25(1)(b), Florida Statutes (1995) (hereinafter, "Florida Statues"), by engaging in dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction.
Findings Of Fact Petitioner is the state agency responsible for regulating the practice of real estate. Respondent is licensed as a real estate sales person pursuant to license number 0590475. Respondent was last licensed as an inactive sales person located at 6752 Longmeade Lane, Orlando, Florida 32822. In 1993, Mr. Efrain and Mrs. Luz Rivera (the "Riveras") approached Respondent to represent them in purchasing a house. Respondent agreed to represent the Riveras as a buyer's agent. The Riveras are not related to Respondent. While Respondent was representing the Riveras as a buyer's agent, Respondent asked the Riveras for a loan. Respondent wanted the loan to assist him in the establishment and publication of a real estate magazine entitled, La Casa. Respondent had gained the Riveras' trust while representing them as their real estate agent. The Riveras loaned Respondent $2,500 from the money they needed for a down payment on the house they sought to purchase. Respondent published La Casa for a brief period. Then the business closed. Respondent paid the Riveras $250 as a partial payment on the loan. Respondent has not paid the Riveras any other amounts. The Riveras were unable to purchase a house without the $2,500 they loaned to Respondent. In January 1995, the Riveras filed suit to recover the money they loaned Respondent. The court entered a final judgment of $3,598.98. Respondent has not satisfied any portion of the final judgment against him.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a Final Order finding Respondent guilty of violating Section 475.25(1)(b) and suspending Respondent's license for three years from the date of this Recommended Order.RECOMMENDED this 5th day of May, 1997, in Tallahassee, Florida. COPIES FURNISHED: Henry M. Solares, Director Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 DANIEL MANRY Administrative Law Judge Division of Administrative Hearings 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 Hearings this 5th day of May, 1997. Lynda Goodgame, General Counsel Department of Business and Professional Regulation Northwood Center 1940 North Monroe Street Tallahassee, Florida 32399-0792 Daniel Villazon, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jorge Rivera, Jr., pro se 6752 Longmeade Lane Orlando, Florida 32822
The Issue The issues presented are whether Respondent, Smallwood Design Group/Smallwood Landscape, Inc. (Smallwood or the company), owes Petitioner $12,817.17 for agricultural products and, if so, whether the surety is liable for any deficiency.
Findings Of Fact Petitioner is a Florida corporation licensed by the Department as a “dealer in agricultural products,” within the meaning of Subsection 604.15(2), Florida Statutes (2006) (agricultural dealer).1 The license number and business address of Petitioner are 68954 and 3930 14th Street North, Naples, Florida 34103. Smallwood is a Florida corporation licensed by the Department as an agricultural dealer pursuant to license number 68513. The sole shareholder and registered agent for Smallwood is Ms. JoAnn Smallwood. The business address for Smallwood is 2010 Orange Blossom Drive, Naples, Florida 34109. Hartford Fire Insurance Company (Hartford) is the surety for Smallwood pursuant to bond number 21BSBCI1473 issued in the amount of $100,000 (the bond). The term of the bond is December 9, 2005, through December 9, 2006. Petitioner conducts a garden center business that, in relevant part, sells agricultural products, defined in Subsection 604.15(1). Petitioner sells products at wholesale and retail to businesses and consumers in the Naples area. Smallwood purchased agricultural products from Petitioner from 1983 until sometime in 2006. The purchases were made in the ordinary course of Smallwood's architectural landscape construction and horticultural management business (landscape business). The terms of purchase required payment from Smallwood within 30 days. Any monthly balance that remained unpaid after 45 days was subject to interest at a monthly rate of 1.5 percent and an annual rate of 18 percent.2 With one exception, Smallwood paid Petitioner within 60 days of delivery. The exception to Smallwood's payment history with Petitioner is the subject of this proceeding. From May 11 through September 26, 2006, Smallwood did not pay Petitioner $12,817.17 for 66 invoices involving 440 items (pallets or pieces) of sod that Petitioner delivered to Smallwood.3 The sod consisted of varieties identified in the record as: Floratam, Seville, Zoysia, Croton, and Fountain Grass.4 Smallwood does not deny that Petitioner should be paid $12,817.17. However, Smallwood alleges that Petitioner has filed its claim against the wrong party. Smallwood alleges that, on June 13, 2006, another corporation purchased the assets of Smallwood, including the right to conduct the landscape business in the name of Smallwood, and assumed Smallwood's liability to Petitioner for any prior purchases. Subsequent purchases are allegedly the obligation of the successor corporation. Ms. Smallwood filed a Response to Amended Claim with the Department on January 7, 2007 (the Response). The Response identifies the successor corporation as Spartan Partners, Inc., an Illinois corporation, located at 350 Pfingsten Road, Suite 109, Northbrook, Illinois 60062 (Spartan), and alleges that Petitioner’s claim is not valid because: [Smallwood] sold its assets and has not been engaged in business since June 13, 2006. Specifically, pursuant to an Asset Purchase Agreement, [Smallwood] sold its assets (including its name) to Spartan . . . , and thereafter, Spartan continued operating the business for a period of time and then sold some of the assets and ceased operations. (emphasis supplied) Smallwood . . . does not have knowledge of the accounts of Spartan, which continued doing business under the Smallwood name after the sale of assets on June 13, 2006. If items purchased from [Petitioner] have not been paid for, Spartan is the responsible and liable party. (emphasis supplied) The Response filed in January of 2007 was not the first time Petitioner had seen the Smallwood defense. Smallwood sent Petitioner a form letter, dated September 14, 2006, that: contained a salutation addressing “All Vendors of [Smallwood],” referenced the "Termination of Credit Arrangements and Guaranties," and was signed by Ms. Smallwood on behalf of Smallwood (notice letter). The notice letter provided in relevant part: The purpose of this letter is to advise you that the assets of [Smallwood], including the company name, were sold to Spartan . . . as of June 13, 2006. Since [Smallwood] sold all of its assets, that corporate entity is no longer actively engaged in any business. The business known as [Smallwood] is now conducted by [Spartan]. (emphasis supplied) As a result of the sale of assets and the fact that [Smallwood] is no longer actively engaged in business, the relationship or agreement you had with that particular corporate entity is hereby terminated and of no further force and effect. If you are continuing to do business with [Spartan], you should, if you have not done so already, make or confirm your business arrangements with that entity. Furthermore, if I signed any document that could be construed as a personal guaranty of payment for any obligations of [Smallwood], please consider this letter to be a formal revocation, cancellation and termination of any such document. (emphasis supplied) Petitioner's Exhibit 3 (P-3). Part of the Smallwood defense is supported by the evidence. Smallwood did sell its assets to Spartan. The Asset Purchase Agreement between Smallwood and Spartan was admitted into evidence as Petitioner’s Exhibit 2 (P-2). The Agreement shows that Spartan purchased the assets of Smallwood on June 13, 2006, for $1.030 million, of which $883,602.11 was allocated to accounts receivable due the seller. The seller is identified in the Asset Purchase Agreement as Ms. Smallwood and the company. The seller received $895,500.00 in cash at the closing. The remaining part of the Smallwood defense involves two allegations. First, Smallwood alleges that Spartan assumed a liability of $3,834.43 for 23 purchases of sod by Smallwood from May 11 through June 13, 2006. Second, Smallwood alleges that Spartan owes Petitioner $8,982.74 for 43 purchases of sod from June 14 through September 26, 2006. If the evidence were to support both allegations, the result may effectively deprive Petitioner of an administrative remedy. The corporate documents attached to the Asset Purchase Agreement do not show that Spartan complied with the bond and license requirements in Subsection 604.19 prior to conducting the landscape business in the name of Smallwood. Spartan sold the assets needed to satisfy a judgment against Spartan, Spartan is a foreign corporation, and Spartan no longer conducts the landscape business in Florida. It would be unnecessary to determine whether Smallwood or Spartan is liable for the $12,817.17 if: the terms of the bond were to allow an assignment of the bond to Spartan, and the Asset Purchase Agreement were to show that the bond was one of the contracts assigned to Spartan or one of the assets purchased by Spartan. The bond would cover both Smallwood and Spartan in such a case, and a determination of which shell hid the proverbial pea would be moot. A copy of the bond did not find its way into the record. Petitioner did not submit a copy of the bond for admission into evidence, and the Department did not transmit a copy of the bond when the agency referred the matter to DOAH. The copy of the Asset Purchase Agreement admitted into evidence does not include a schedule of the contracts assigned to Spartan or a schedule of the assets sold to Spartan. A finding that Spartan expressly assumed Smallwood's liability to pay Petitioner $3,834.43 for sod delivered from May 11 through June 13, 2006, is not supported by the evidence. In relevant part, the Asset Purchase Agreement provides: At Closing, Purchaser shall assume those liabilities of Company specifically defined and listed on the Schedule 1.6(b) attached hereto (“Assumed Liabilities”), and Purchaser shall not assume, incur, guarantee, or be otherwise obligated with respect to any liability whatsoever of Company other than as so stated. . . . (emphasis not supplied) Purchaser shall cause Stockholder [Ms. Smallwood] to be released as guarantor or obligor under the Assumed Liabilities. . . . P-2 at 2. Schedule 1.6(b) is missing from the copy of the Asset Purchase Agreement that was admitted into evidence. Even if a complete exhibit were to show that Spartan assumed Smallwood's liability to Petitioner, neither of the respondents submitted evidence or cited legal authority to support a finding that such an assumption released Smallwood from its obligation to Petitioner or otherwise extinguished that obligation. Nor is there any evidence that Petitioner acquiesced in an assumption by Spartan or otherwise released Smallwood from the obligation to pay Petitioner for sod delivered prior to June 13, 2006. The remaining allegation in the Smallwood defense is that Spartan, rather than Smallwood, purchased the sod Petitioner delivered between June 13 and September 26, 2006. It allegedly is Spartan that owes Petitioner $8,982.74. The remaining allegation implicitly argues that, after June 13, 2006, Smallwood was no longer a viable corporation with the legal capacity to purchase sod from Petitioner because the asset sale resulted in what courts describe as a “de facto merger” of Smallwood into Spartan or a “mere continuation of business” by Spartan. The law pertaining to these two doctrines is discussed in the Conclusions of Law, but certain factual findings are relevant to both doctrines. The Smallwood defense is a mutation of the doctrines of "de facto merger" and "mere continuation of business," either of which have been utilized by courts to hold a successor corporation liable for the obligations of the corporate predecessor. The Smallwood defense takes the relevant judicial doctrines a step further. The defense implicitly assumes that if a "de facto merger" or "mere continuation of business" occurred as a result of the asset sale, Smallwood "merged" into Spartan, and Smallwood was no longer a viable corporate entity with the legal capacity to purchase sod from Petitioner. Two facts preclude the application of either judicial doctrine to the sale of Smallwood's assets. First, there is no commonality or continuity of ownership interests between Smallwood and Spartan. Spartan did not acquire some or all of the stock of Smallwood, and Ms. Smallwood did not become a shareholder in Spartan. The two corporations do not share common directors or officers. The second fact involves the purchase price paid for the Smallwood assets. The purchase price does not suggest a cozy relationship between Smallwood and Spartan that otherwise may have persuaded a court to disregard the separate corporate existence of Smallwood after the asset-sale. No evidence suggests that the price paid was not the fair market value of the Smallwood assets negotiated at arms length between a willing buyer and a willing seller. Smallwood remained in existence as a viable Florida corporation after the asset-sale on June 13, 2006. No legal impediment prevented Smallwood from purchasing sod from Petitioner, and Smallwood had the legal capacity to do so. The purchases may have breached the terms of the Asset Purchase Agreement, but the legal capacity of Smallwood to purchase sod from Petitioner is not driven by contractual arrangements between Smallwood and private third parties. Smallwood remained in existence as a Florida corporation at least through January 7, 2007, when Ms. Smallwood filed the Response with the Department. The Response does not allege as a factual matter that Smallwood had been liquidated and was no longer in existence as a Florida corporation; or that the $895,500 the seller received for the sale of assets was not in corporate solution and available to pay invoices submitted by Petitioner. The Response merely states that Smallwood was not actively engaged in the conduct of business. Smallwood was actively engaged in the landscape business after June 13, 2006. Smallwood maintained its customary banking account; continued to issue checks imprinted with the company name; paid Petitioner for goods that Petitioner delivered to Smallwood before May 11, 2006; accepted without objection or disclaimer 43 invoices totaling $8,982.74 that were billed to the company for sod delivered to the company at the company's business address; issued the notice letter to its creditors; and purported to terminate credit agreements and guarantees. Prior to receiving the notice letter, Petitioner had no reason to believe that Smallwood was not conducting the landscape business. The face of Smallwood remained unchanged. Ms. Smallwood continued to operate the landscape business pursuant to a long-term employment contract with Spartan. Spartan signed Mr. Keith Whipple, another key employee of Smallwood, to a similar contract. Copies of the employment contracts are attached to the Asset Purchase Agreement.5 Between June 13 and September 14, 2006, Ms. Smallwood continued to sign Smallwood checks imprinted with the company name and issued on the Smallwood business account. Ms. Smallwood signed the checks as the authorized representative of Smallwood. Smallwood accepted 35 invoices issued to the company for $7,007.13 and deliveries of the sod at the company's customary business address. The notice letter was dated September 14, 2006, but Petitioner received the letter on or about September 26, 2006. Between September 14 and 26, 2006, Smallwood accepted eight invoices for sod purchased for $1,975.61. The evidence does not show when Smallwood actually mailed the notice letter, and Petitioner did not stamp the notice letter with the date it was received. The chief operating officer for Petitioner testified at the hearing but does not recall the date Petitioner actually received the notice letter. However, the witness testified that Petitioner stopped all sales to Smallwood immediately upon receipt of the notice letter to allow time for Petitioner to complete a credit check of Spartan. The trier of fact finds the relevant testimony to be credible and persuasive. The failure to timely disclose the identity of Spartan as a successor entity operating in the name of Smallwood misled Petitioner, if not other creditors.6 Between June 13 and September 26, 2006, Petitioner extended credit for purchases of $8,982.74 before Petitioner had the opportunity to ensure the credit worthiness of Spartan and, if desired, to obtain a written guarantee from the individual officers and shareholders.7 Smallwood, rather than Spartan, purchased sod from Petitioner from May 11 through September 26, 2006. Smallwood owes Petitioner $12,817.17. Hartford does not claim that the terms of the bond do not ensure payment of the purchases made by Smallwood. Hartford’s sole objection in its PRO is that the bond proceeds must be paid directly to the Department rather than to Petitioner. Hartford correctly cites Subsection 604.21(8) in support of its objection.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order directing Smallwood to pay $12,817.17 to Petitioner, and, in accordance with Subsection 604.21(8), requiring Hartford to pay over to the Department any amount not paid by Smallwood. DONE AND ENTERED this 15th day of August, 2007, 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 15th day of August, 2007.
The Issue At issue in this proceeding is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact Petitioner, Department of Business and Professional Regulation, Construction Industry Licensing Board (Department), is a state government licensing and regulatory agency charged with the duty and responsibility to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Sections 20.165, Florida Statutes, Chapters 120, 455, and 489, Florida Statutes, and the rules promulgated pursuant thereto. At all times material hereto, Respondent, Todd J. Jonas, was licensed by the Department as a certified general contractor, having been issued license number CG C014823, and was the qualifying agent for Mello Concrete Service, Inc. Moreover, at all such times, Respondent was licensed as a registered architect, pursuant to Chapter 481, Florida Statutes. In August 1992, consequent to the forces of Hurricane Andrew, Lee and Hanna Munson suffered damage to their residence at 1710 Tigertail Avenue, Miami, Florida. Subsequently, Mr. Munson employed Respondent to repair some of that damage. The scope of the repairs Respondent was to undertake was set forth in a written proposal, dated May 12, 1993, from "Todd Jay Jonas Architect" to Mr. Munson, which provided: Repair storm damaged stucco. Repair storm damaged windows. Repair storm damaged doors. Repair storm damaged shutters. Repair storm damaged cabinets. Repair storm damaged walls. Repair storm damaged interior partitions. Replace existing Tigertail wood gate with iron. Landscaping-replacing shrubs for same. Clean-up. Painting. (Petitioner's Exhibit 4.) According to Respondent, "Todd Jay Jonas Architect" was, at the time, a fictitious name under which he practiced architecture. Mr. Munson apparently accepted the proposed repair list, and agreed to pay Respondent for labor and materials (the contract cost), plus 20 percent. (Respondent's Exhibit 6, page number 97.) On May 19, 1993, Respondent filed an application for a building permit with the City of Miami to repair the Munson residence. The application named Respondent as the contractor and architect, and included a copy of the May 12, 1993, proposal, as the repairs that were to be made to the residence. The application was signed by Respondent as "Qualifier," and he acknowledged that: "In signing this application, I am responsible for the supervision and completion of the construction in accordance with the plans and specifications and for compliance with all federal, state, and county laws applicable." The City of Miami approved Respondent's application, and on May 21, 1993, issued its Building Permit No. 93-5010807. The permit named Mello Concrete Service, Inc. (Mello Concrete), as the contractor, and Respondent as the qualifier. The approved repairs were limited to those contained on the proposal of May 12, 1993, which was submitted with the application. Following permitting, the business Respondent had qualified, Mello Concrete, undertook needed structural and other repairs to the residence. Pertinent to this case, these repairs required the removal of a large portion of the interior plaster on the residence. Consequently, to repair the interior wall surfaces and ceilings, and to provide an interior plaster finish, Respondent solicited a proposal from MACTEC Construction, Inc. (MACTEC). At the time, MACTEC was apparently authorized to conduct business as a certified general contractor, license number CG C027670, and Jorge A. Machado was its president. On June 23, 1993, Mr. Machado, on behalf of MACTEC, submitted the following proposal to Respondent: Mr. Todd J. Jonas Todd Jay Jonas Architects 7275 Southwest 55th Avenue Miami, FL 33143 Re: Munson Residence 1710 Tigertail Avenue Miami, FL 33133 Dear Todd: Pursuant to several field inspections of the property in reference, I am pleased to submit the following Proposal for your consideration. Due to the unique nature of the job and existing field conditions, several alternatives to structuring this bid were considered and we feel that a Time & Materials Contract would be the most effective approach. Please note that the scope of work which follows is based the application of "Woncote" interior plaster finish over the existing Lath and Plaster walls and celings [sic] and the installation of "Blueboard" where needed in lieu of standard joint compound and gypsum wallboard assemblies. The work described herein will require the skill of our most experienced plasters. Less costly alternatives are available which will result similar in appearance once finished, but which lack the quality, durability and compatibility with the materials and assemblies that compose this home. SCOPE OF WORK: Patch and repair existing interior wall surfaces and ceilings. Skim coat all wall and ceiling surfaces to a smooth uniform finish ready for paint. * * * UNIT PRICES Labor: 3 man crew @ $ 105.00 per hour. ESTIMATED DURATION Four Weeks. ( Based on 40 hr./ week.) MATERIALS Cost Plus Ten Percent. ( Estimated materials cost: $ 3,000.00 ). * * * PAYMENT SCHEDULE Payment in full of previous week's work by the following Thursday of each week. Time sheets and invoices shall be submitted to General Contractor no later than Monday of each week to allow for review and processing. . . . On July 8, 1993, Respondent signed the proposal, noting his acceptance of its terms; however, Respondent had apparently agreed to the proposal earlier, since MACTEC began to provide labor and materials to the residence on June 25, 1993. As the work progressed, MACTEC, consistent with its agreement, submitted to Respondent an invoice, as well as a time and materials control sheet, on a weekly basis. The invoices read "SOLD TO: TODD JAY JONAS ARCHITECTS," and the time and materials control sheets read "CLIENT: TODD JAY JONAS ARCHITECTS." Respondent, periodically, remitted payment to MACTEC on the account, and nothing unusual occurred with regard to their financial relationship until early August 1993. On August 9, 1993, Respondent tendered to MACTEC a check in the sum of $9,000 for payment on account of labor and materials furnished through August 9, 1993.2 MACTEC deposited the check to its account at SunBank Miami on August 10, 1993; however, when presented to the payor's bank, payment was refused because of insufficient funds. In explanation, Respondent contends that at the time the check was issued there were sufficient funds in the account to cover the check; however, unbeknownst to him, on the day the MACTEC check was presented for payment, a check previously deposited to the account was returned as uncollectable. Consequently, according to Respondent, the bank debited the account, reducing the available funds to less than $9,000, and refused payment. (Petitioner's Exhibit 10 and Respondent's Exhibit 8.) Respondent's bank statement (Respondent's Exhibit 8) facially supports his contention that at the time the check was written there were sufficient funds in the account to honor the check. However, bank statements are maintained on an accrual basis, and the balance shown is not, as evidenced by the returned item in this case, representative of cleared or available funds. Notwithstanding, no evil purpose or other impropriety has been shown or can be attached to Respondent's conduct with regard to this transaction. On August 16, 1993, Respondent gave Mr. Machado a check for $9,000 as a replacement for the check that was returned for insufficient funds, and on August 19, 1993, a check for $3,500 as payment on account for additional labor and materials furnished to the residence. At the time of issuance, Respondent advised Mr. Machado to hold the checks until he had clear or available funds in the account. Mr. Machado abided Respondent's advice until August 30, 1993, when the checks were deposited to MACTEC's account at SunBank Miami. When presented to the payor's bank, payment was refused because Respondent had entered a stop payment order. According to Respondent, Mr. Munson complained regarding the quality of MACTEC's work, as well as theft or damage to property by MACTEC employees, and directed that he make no further payments to MACTEC. Based on this direction from the client, Respondent issued the stop payment order. Under the circumstances, no evil purpose or other impropriety was shown with regard to Respondent's entry of the stop payment orders. While Respondent may have felt justified, based on his client's instructions, to stop payment on the checks he tendered to Mr. Machado, Mr. Machado was not dissuaded from seeking redress. On or about September 20, 1993, in the Circuit Court, Dade County, Florida, MACTEC sued Respondent, Todd J. Jonas, individually. The complaint sought judgment against Respondent in the amount of $17,685.66, plus pre-judgment interest and costs, based on the following allegations: GENERAL ALLEGATIONS At all times material hereto Plaintiff MACTEC CONSTRUCTION, INC. (hereinafter "MACTEC") is and has been a corporation incorporated under the laws of the State of Florida and authorized to do business and doing business in Dade County, Florida. At all times material hereto, Defendant TODD J. JONAS is and has been an individual sui juris residing and doing business in Dade County, Florida. COUNT I This is an action for breach of contract within the jurisdiction of this court. The allegations of Paragraphs 1 and 2 above are realleged and incorporated by reference in full herein. In June, 1993, MACTEC and TODD J. JONAS entered into a contract pursuant to which MACTEC was to perform construction work on a construction project known as the Munson residence, located at 1710 Tigertail Avenue, Miami, Florida (hereinafter referred to as "Project"). A copy of said contract between Plaintiff and Defendant TODD J. JONAS is attached hereto as Exhibit "A" and incorporated by reference in full herein.3 Pursuant to said contract, MACTEC supplied labor and materials to the project in accordance with the contract (Exhibit "A") hereto. MACTEC has substantially performed its obligations pursuant to the contract attached hereto as Exhibit "A". Defendant JONAS is in material breach of his contract with MACTEC (Exhibit "A" hereto) inasmuch as he has failed and refused to pay to MACTEC the sum of $17,685.66 due and owing to MACTEC for labor and materials supplied to the subject project pursuant to said contract. All conditions precedent to the maintenance of this action have occurred, have been performed, or have been waived. * * * COUNT II This is an action on open account within the jurisdiction of this court. The allegations of Paragraphs 1, 2 and 5 set forth above are realleged and incorporated by reference herein. MACTEC and TODD J. JONAS had business transactions between them, and TODD J. JONAS has failed to pay MACTEC for labor performed and materials furnished. TODD J. JONAS owes MACTEC the sum of $17,685.66 plus pre-judgment interest since August 19, 1993 per the attached accounts (Exhibit "B" hereto). Following a three-day trial (April 4, 5, and 6, 1994), the court entered a final judgment for MACTEC and against Respondent. That judgment, dated April 14, 1994, provided that MACTEC recover from Respondent damages of $17,585.66,4 as well as pre-judgment interest of $1,358.30, and reserved jurisdiction to tax costs and attorney's fees. Subsequently, a final judgment was entered for costs of $1,000 and a final judgment for attorney's fees of $7,787.50. At some time between the date of judgment (April 14, 1994) and August 8, 1994, Respondent paid $2,000 in partial satisfaction of the judgment. Other than that payment, there has been no further payment toward satisfaction of the judgment, and no other arrangement for satisfaction of the judgment, by a mutually agreeable payment plan or otherwise, has been made.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be rendered as follows: Finding Respondent not guilty of Count I of the Administrative Complaint. Finding Respondent guilty of Counts II and III of the Administrative Complaint and imposing, as a penalty for such violations, an administrative fine of $1,000 and the assessment of $247.50 as costs. DONE AND ENTERED this 12th day of March, 1998, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK 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 Filed with the Clerk of the Division of Administrative Hearings this 12th day of March, 1998.
The Issue The issue is whether respondent should have an administrative fine levied against him for allegedly performing repossesions without a Class "E" repossessor license.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: On May 15, 1990, Charlotte County deputy sheriff Terry Harbes was dispatched to Maple Leaf Estates in response to a "domestic call". Upon arriving at the subdivision, deputy Harbes found a white male, George Guy, lying on the ground in an incoherent state and bleeding from the face. Guy had been assaulted by respondent, Richard Vee Collier. According to Collier's admission at the scene of the incident, Collier was in the process of repossessing Guy's step van when the assault occurred. Collier further acknowleged that he did not hold a repossessor license issued by petitioner, Department of State, Division of Licensing (Division). This latter admission was confirmed by Division records which show that Collier does not hold a repossessor license, a prerequisite to engaging in the trade of repossessing motor vehicles. Testimony of Arthur D. Morgan, former manager of Time Motor Sales in Charlotte Harbor, Florida, established that Collier worked as an independent contractor for Time Motor Sales during the period from March 23, 1990, through May 15, 1990. During that time period, Collier repossessed nine motor vehicles and was paid fifty dollars per vehicle for his services. It may be reasonably inferred from the evidence that such repossessions occurred as a result of the owners' default in payment for such motor vehicles to the lienholder.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating Subsection 493.319(1)(g), Florida Statutes (1989), and that he pay a $1,000 administrative fine within such a time period as is specified in the final order rendered in this matter. DONE and ENTERED this 29th day of November, 1990, in Tallahassee, Florida. DONALD R. ALEXANDER 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 29th day of November, 1990. COPIES FURNISHED: Henri C. Cawthon, Esquire Division of Licensing The Capitol, M.S. 4 Tallahassee, FL 32399-0250 Mr. Richard Vee Collier 2204 Alton Road Port Charlotte, FL 33952
The Issue An Administrative Complaint dated October 21, 1998, alleges that Respondent committed violations of Chapter 475, Florida Statutes, by dishonest dealing, culpable negligence, or breach of trust; by failing to account for delivering certain funds; and by violating a lawful order of the Real Estate Commission. The issues in dispute are whether those violations occurred and if so, what penalty is appropriate.
Recommendation Based on the foregoing it is, hereby RECOMMENDED: that the Agency enter its Final Order finding Respondent did not commit the alleged violations and dismissing the Administrative Complaint. DONE AND ENTERED this 27th day of April, 1999, in Tallahassee, Leon County, Florida. MARY CLARK 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 27th day of April, 1999. COPIES FURNISHED: Ghunise Coaxum, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street N-308 Post Office Box 1900 Orlando, Florida 32802-1900 Howard Hadley, Esquire 2352 Carolton Road Maitland, Florida 32751-3625 Herbert S. Fecker, Division Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 William Woodyard, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issue presented for decision herein is whether or not Respondent exhibited financial mismanagement, misconduct, diversion, gross negligence or incompetence, failed to properly supervise a construction project in violation of sections 489.129(1)(h), (j) and (m); 489.119 and 489.105(4), Florida Statutes.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I make the following relevant factual findings: At times material herein, Respondent was a certified general contractor in Florida having been issued license number CG C016802. On November 27, 1985, Respondent contracted with Dr. Blaine Woods, a chiropractor, to construct a residence at Lot 188, Whispering Woods Subdivision, 8020 NW 47th Drive, Coral Springs, Florida for a price of $248,307.00. According to the terms of the contract, the construction was to be completed in five months. (Petitioner's Composite Exhibit 16, Article 2) Construction commenced on the Woods' residence during December, 1985. During construction, Dr. Woods made draw payments to Respondent totaling $211,44.00 or approximately 85% of the contract price. The contract provided that the final draw payment, amounting to 15% of the contract price, was to be paid upon issuance of a Certificate of Occupancy (CO). During the latter stages of construction, Respondent frequently was on the job site by himself. On several occasions, Dr. Woods personally assisted Respondent in the construction. Dr. Woods had contracted to sell his home when construction commenced on his new home. He sold it in early August and was forced to move. Based on that fact, a temporary CO was issued on August 1, 1986 and Dr. Woods moved into the new home on August 2, 1986. As of August 2, many of the contract items had not been installed or were defective including: the pool heater, two shower enclosures, cabinets in a game room, spa decking and floor tile at the entrances, three garage door openers, 13 ceiling fans, pantry shelving, a roof that leaks, numerous electrical outlet problems and the pool deck which was not installed as Respondent agreed by the contract. Upon occupying the home, Dr. Woods began receiving phone calls and personal visits from subcontractors and materialmen who had supplied either services or materials, demanding payment. The majority of the subcontractors had been told by Respondent that they could not be paid because Dr. Woods had not paid him. Over the next several weeks, approximately twenty (20) subcontractors and materialmen approached Dr. Woods for payment of invoices totaling $71,451.37. Dr. Woods attempted, unsuccessfully, to have the subcontractors return to the house to finish the work. As a result, Dr. Woods was forced to hire additional subcontractors to complete his home. Dr. Woods spent a majority of the $37,000 final draw reserve completing his home. Eleven liens have been filed against the Woods residence as a result of Respondent's failure to pay subcontractors and/or materialmen. Dr. Woods, through legal counsel, was able to remove most of the liens filed against his home based on legal technicalities. However, in so doing, he incurred legal fees in the amount of $12,791.76. At the time of hearing, four outstanding liens remained on the Woods' residence. Jerry Hicks, a licensed architect and general contractor in Florida, was tendered as an expert in the areas of architecture and contracting. Hicks opined that Respondent significantly underbid the Woods' residence and was therefore grossly negligent or incompetent for entering into a contract which he could not perform. (Deposition of Jerry Hicks, Petitioner's Exhibit 5). Julio Aldecocea, also a licensed architect and general contractor, was tendered as an expert in the fields of architecture and general contracting. Aldecocea also opined that when Respondent found himself unable to pay subcontractors because he underbid the project, he committed gross negligence or incompetence in entering into a contract he could not perform. Aldecocea noted that it is standard procedure for contractors to monitor the progress of a job to ensure that costs are running within budget and to take corrective measures if costs begin to exceed budget. Respondent, by failing to take this step, committed financial mismanagement when he let outstanding bills to subcontractors in the amount of $71,451.37 remain unpaid. During the hearing, Respondent admitted that he expected to make a profit of approximately $24,000.00 on the Woods residence when he entered into the contract. Based on the amount of money outstanding to subcontractors and materialmen, Aldecocea opined that it was misconduct for Respondent to tell the subcontractors and supplies that they cannot be paid because Dr. Woods had not paid the final draw when he had been, in fact, paid. Valid liens have been recorded against Dr. Woods' property for supplies and services ordered by Respondent for the Woods' project. Respondent has received funds from Woods to pay for those suppliers and services. Respondent failed to remove the liens from the Woods' property. Respondent admitted, in a telephone conversation with Dr. and Mrs. Woods, that he could not pay subcontractors because he had made an investment which "went down the tubes". (Testimony of Dr. and Mrs. Woods). Respondent appeared and testified that the Woods' residence was, in his opinion, more than what they had paid for and therefore he was due excess monies for items over and above what he contracted for. In the areas where there deficiencies, Respondent contends that such items were "service items" which were routine in any newly built house and could have been easily repaired if afforded an opportunity. In this regard, Respondent alluded to several areas where the Woods got more than they bargained for. Specifically, he mentioned that the property had to be regraded and needed a retention area and he refused to pay Mr. Allen, manager of Coral Springs Property Services Incorporated, for the additional grading and paving that was needed. Respondent also contends that the pool was larger than what was contracted for and that the Woods ordered several plants and shrubbery from Tropical Trees which was over and above the amount allotted under the contract. Finally, Respondent contends that the driveway was larger than what was called for in the plans and therefore he would not pay the difference which resulted from his having to build a larger driveway. Respondent, as a certified general contractor, was familiar with the manner in which a change order could be instituted in the contract and no change orders were completed respecting the above-referenced items. (Petitioner's Exhibits 11 and 12) Moreover, the Woods made a change in the contract and a change order was written for a brick wall and a sum of $4,941.00 was added to the contract price. Respondent was aware of this procedure and did not avail himself of the opportunity to effect a change order as provided in the contract. Since Respondent knew, or should have known that the proper procedure to be reimbursed for a charge in the plans, which is over and above what was originally included in the contract, is through the use of a change order, his claims that the Woods received more than they bargained for is without merit.
