The Issue The issue in this case is whether Respondent violated provisions of statutes governing licensure of construction contractors and, if so, what penalties should be imposed.
Findings Of Fact The Department is the state agency charged with regulating the practice of construction contracting pursuant to section 20.165, and chapters 455 and 489, Part I, Florida Statutes. Unless specifically stated herein, all references to Florida Statutes will be to the 2014 version. Respondent is not licensed to practice construction contracting in the State of Florida. Neither Respondent nor his putative company, Troche’s Construction, Inc., has an active license as a construction business in this state. On or about October 31, 2012, Respondent entered into a “proposal” with Paul R. Schettino (the “Owner”) to construct a firewall across the Owner’s place of business. The proposal called for Respondent to build “an approx. 48 ft wall, to be firerocked 5/8 drywall on both sides. Studs to be 3 5/8 metal. To be built and ready for paint.” The cost of the work was to be $2,200. (One of the Department’s exhibits indicates a price of $1,650 for the work, but the actual cost is irrelevant.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, finding Respondent, Raul Troche, guilty of engaging in the business of construction contracting without a license. It is further recommended that the final order impose a minimal fine or, in the alternative, issue a notice of noncompliance. DONE AND ENTERED this 8th day of December, 2014, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 8th day of December, 2014. COPIES FURNISHED: Stephen M. Masterson, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 42 Tallahassee, Florida 32399 (eServed) Raul Troche 70 Belleaire Drive Palm Coast, Florida 32137 J. Yvette Pressley, Hearing Officer Department of Business and Professional Regulation 1940 North Monroe Street, Suite 42 Tallahassee, Florida 32399 (eServed) J. Layne Smith, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street, Suite 42 Tallahassee, Florida 32399 (eServed)
Findings Of Fact Respondent is a registered general contractor having been issued license No. RG 0019051. (Stipulation.) At all times pertinent to the charges, respondent engaged in the business of contracting under the name of Atlas Associates, Inc., of which he was the president. (Testimony of Robinson; Stipulation.) Atlas Associates, Inc., however, was not qualified, pursuant to Section 468.107, Florida Statutes (1977), to engage in the business of contracting. (Stipulation.) Respondent's registration authorized him to engage in the business of contracting only in Hillsborough County. He was not qualified to contract in any other county. He knew that he was not authorized to pull building permits in Pasco County. (Tr. 5, 171-172.) (Testimony of Robinson; Stipulation.) II. Atlas Associates, Inc., entered into a contract with Darryl R. Sutphin and his wife to construct a residence in Pasco County at 631 North Shore Drive, Lake Padgett, Florida. Respondent executed and performed under this contract as president of Atlas Associates, Inc. (Stipulation.) Respondent obtained the assistance of his brother-in-law, James Weinman, president of Masterpiece Homes, Inc., which was authorized to engage in contracting and pull building permits in Pasco County. At Mr. Weinman's request, John Weinman, an employee of Masterpiece Homes, Inc., pulled the building permits for the Sutphin job in the name of Masterpiece Homes, Inc. However, neither Salvatore Carollo, its licensed contractor, nor any other licensee employed by Masterpiece Homes, Inc., was involved in or supervised the subsequent construction of the Sutphin residence. (Tr. 71.) (Testimony of Weinman, Robinson, Carollo, Sutphin.) Construction of the Sutphin residence was financed by Fidelity Federal Savings and Loan Association ("Fidelity Federal"). An agreement was entered into between Fidelity Federal, the Sutphins, and Atlas Associates, Inc., whereby Fidelity Federal was to disburse the loan proceeds to Atlas Associates, Inc., in four draws. In conjunction with the payment of each draw, Fidelity Federal required respondent, on behalf of Atlas Associates, Inc., to execute standard no-lien affidavits certifying the following: All the persons, firms, and corporations who have furnished any labor, services and/or materials in connection with the construction or improvements on the real estate [in question]. . .have been paid in full as of the date of this affidavit. . .The undersigned owner further certifies that he has received no notices of unpaid bills or claims affecting the foregoing real estate except as are shown above. (P-5, P-6, P-7.) (Testimony of Hager; P-4, P-5, P-6, P-7.) Atlas Associates, Inc., contracted with Nu-Air Manufacturing Company ("Nu-Air") to install windows and screens at the Sutphin residence. On October 16 and 22, 1979, Nu-Air installed the windows and, except for installing the screens, provided all the services and materials required under the contract. In November, 1979, Nu-Air mailed invoices totaling $700.56 to Atlas Associates, Inc. When the invoices were not paid, Nu-Air's credit manager sought payment by directly contacting a representative of Atlas Associates, Inc. No payment has been made, and the $700.56 remains unpaid. A claim of lien was subsequently filed on January 14, 1980. Yet, on October 19, 1979, and February 14, 1980, respondent executed Fidelity Federal's standard affidavits certifying that there were no unpaid invoices and that all firms who furnished labor or materials in connection with the Sutphin job had "been paid in full as of the date of this affidavit." As a result, Nu- Air suffered financial loss. (Testimony of Boyles; P-6, P-7, P-8, P-9, P-10.) On October 24, 1979, another subcontractor, Nuccio Heating and Air Conditioning ("Nuccio"), contracted with Atlas Associates, Inc., to furnish and install central heating and air conditioning units at the Sutphin job. Nuccio completed installing the units required by the contract on November 4, 1979. An invoice was mailed to Atlas Associates, Inc., by November 6, 1979. When it was not timely paid, Nuccio contacted respondent in December, 1979. Nuccio was never paid for its labor and materials; on July 22, 1980, it filed a claim of lien for a total of $2,927. Since Nuccio subsequently repossessed the condensing units, the amount that is now due and remains unpaid is $1,462. Yet, on February 14, 1980, respondent executed and submitted to Fidelity Federal the required affidavit certifying that there were no unpaid invoices and that all firms furnishing labor and material for the Sutphin job had been fully paid. As a result, Nuccio suffered financial loss. (Testimony of Nuccio; P-7, P-8, P-9, P-12.) On January 2, 1980, another subcontractor, W. W. Drywall, contracted with Atlas Associates, Inc., to install drywall for the Sutphin job. The drywall work was completed in early January, 1980, and an invoice was mailed to Atlas Associates, Inc., on or about January 12, 1980, for $2,591.06. On February 14, 1980, W. W. Drywall received a partial payment of $1,000, but the balance of $1,591.06 remains due and unpaid. W. W. Drywall subsequently filed a claim of lien for this amount. Yet on February 14, 1980, respondent executed and submitted to Fidelity Federal a standard affidavit certifying that there were no unpaid invoices and that all firms furnishing labor and materials for the Sutphin job had been paid. As a result, W. W. Drywall has suffered financial loss. (Testimony of West; P-7, P-13, P-14.) III. Respondent admits that when he executed the first October 19, 1979, affidavit, he knew that there were subcontractors which had not been paid. (Tr. 182-183.) He explains that he intended to pay them with the money he received from the draw. By the time he signed the February 14, 1980, affidavit, subcontractors had begun submitting bills directly to the loan officer of Fidelity Federal. He assumed, without checking or inquiring, that the subcontractors had been paid. (Testimony of Robinson.) Respondent was unaware of the Construction Industry Licensing Law requirement that registered contractors must register the corporate names under which they are doing business. Thus, his failure to qualify Atlas Associates, Inc., was not a willful or intentional violation of the Construction Industry Licensing Law. (Testimony of Robinson.) Between October, 1979, and February, 1980, respondent's working relationship with Mr. Sutphin began to deteriorate for reasons not material here. As a result, Mr. Sutphin began to actively participate in the project and deal directly with the various subcontractors. (Testimony of Robinson, Sutphin.)
Recommendation Based on the foregoing, it is RECOMMENDED: That respondent's license be suspended for a period of two (2) years. DONE AND RECOMMENDED this 11th day of August, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. 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 11th day of August, 1982.
Findings Of Fact The Petitioner is an agency of the State of Florida charged with regulating the licensing of contractors in Florida and regulating the practice of contracting of all types. Specifically, the Petitioner is responsible for enforcing law which prohibits unlicensed persons from engaging in the business of contracting, or advertising themselves or business organizations as available to engage in contracting, without proper licensure. The Respondent is a citizen of the State of Florida, who has embarked on a business of representing owners who desire to construct residences, acting as the agent of those owners in arranging for materials, labor, subcontractors, and the financing of construction. Upon the decision by the owner to construct a residence, the Respondent engages in drafting plans, to some extent, arranging for subcontractors, overseeing the details of the work and any changes or alterations in the work and plans as the project proceeds. The owner in this arrangement does not obtain workers' compensation coverage for the Respondent, as would be the case if the Respondent was an employee of the owner, nor does the owner withhold F.I.C.A. taxes from monies due the Respondent for his services. The Respondent is not licensed as a contractor in the State of Florida. On May 11, 1995, the Respondent signed a contract (hereinafter the "Kassiris Contract") with owner Gus Kassiris, to oversee the erection and construction of a new residence for Mr. Kassiris. The Respondent was to perform the following duties, pursuant to the Kassiris Contract: to make recommendations as to which subcontractor to hire; to inspect progress and review payments; consultations and solutions on construc- tion project; to engage in manpower tracking and coor- dination of resources; monitoring of contract compliance; to provide punch list services; and to engage in the preparation and de- fense of change orders, as well as cost accounting. The "punch list services" mean that the Respondent was to engage in insuring that no work was left undone or done incorrectly at the end of the project. The Respondent admitted that he conducted all inspections on the project and reviewed all requisitions for payment from the subcontractors. The amount he charged for his services was roughly equivalent to the amount a licensed contractor would charge for similar services. The Kassiris Contract did not meet the conditions for a homeowner's exemption, found in Section 489.103(7), Florida Statutes. Specifically, the Kassiris Contract did not provide that the Respondent would work under the supervision of the homeowner. In fact, the Kassiris Contract provided that if the homeowner wanted changes made in the specifications, he could request a change order. The Kassiris Contract also did not provide that the homeowner would deduct F.I.C.A. and withholding taxes from the Respondent's fees or wages, as required in the homeowner's exemption standards. There was no provision requiring that the homeowner provide workers' compensation, as required by the statute, in order to make out the elements of the homeowner's exemption (from the requirement of having a contractor's license). The conditions for exemption from licensure were also not met in the implementation of the Kassiris Contract. Specifically, the homeowner did not act as his own contractor and provide all of the material supervision himself. Although he denies it, in fact, the Respondent negotiated the contracts with the subcontractors and, during the course of performance of the Kassiris Contract, the Respondent approved plan changes for the project, without the involvement or consultation of the owner. The Respondent acted in the capacity of a contractor in the implementation of the contract by overseeing most details of construction of the residence. He performed the on-site inspections, dealt with subcontractors, approved the manner in which work was being performed, approved payment of subcontractors, and, in general, closely managed all details of the contracting effort. Practically, the only involvement the owner had, other than being present on the site frequently, was that the owner actually wrote the checks to pay the subcontractors and delivered them to the Respondent, who, in turn, delivered them to the subcontractors. The owner obtained the building permit at the commencement of the project. The Respondent advertised in the Citrus County Chronicle, a newspaper of general circulation, on or about June 25, 1995, that he offered services for hire as a construction consultant and for project management. On or about June 27, 1995, he entered into a contract with Paul and Valerie Stamper (hereinafter the "Stamper Contract"). The Respondent was thus charged with overseeing the erection and construction of a residence located at Lot 15 of Laurel Oak Estates Subdivision in Citrus County, Florida. He acted in the capacity of a contractor in the negotiation and formulation of this contract. According to the Stamper Contract, the Respondent's responsibilities were to include the following: make recommendations as to which subcon- tractor to hire; conduct progress inspections and payment reviews; consult concerning construction problems and arrive at solutions; engage in manpower and tracking and coor- dination of resources; monitor contract compliance; provide "punch list" services; prepare and defend any change orders; engage in cost accounting. The terms of the Stamper Contract indicate that the residence to be constructed was to be purveyed to the owner, rather than a case of the owner being the contractor actually creating the product. In order for the above- referenced exemption to apply, the homeowner must be the party functioning as a contractor on his own behalf. It is noteworthy in this regard that the Stampers gave the Respondent a $3,000.00 deposit. The Stampers later decided that they did not wish to proceed with the contract and requested return of that deposit. The Respondent refused to return the deposit money, although acknowledging that the Stamper Contract was no longer in effect. In his letter to the Stampers, responding to their request for return of the deposit, he proposed, instead, that they continue to proceed with the contract and the construction of the residence, which the Stampers no longer wished to own and occupy, in order that they could sell it. The intention to construct a residence for sale to another party directly belies the possibility that the homeowner can be his own contractor, constructing a residence for his own use in compliance with the homeowner-exemption law. It shows an intention to engage in contracting by the Respondent. The existence of facts supporting this exemption is also belied because the Respondent, in his contract with the Stampers, did not contract to have F.I.C.A. or income taxes withheld from any paychecks due him from the Stampers, nor did the Stampers contract to provide workers' compensation coverage for the Respondent. The contract also did not provide that the owners, the Stampers, would act as their own contractors and provide all material supervision themselves. In fact, the Respondent was to provide supervision. The Petitioner is responsible for enforcing the prohibition against unlicensed contracting in order to protect the public. There are frequent problems with unlicensed contractors in Florida in terms of their competence to provide quality work and their willingness to do so, as well as outright fraud and harm to the public. The contracts which unlicensed contractors enter into are illegal and unenforceable. Homeowners who contract with unlicensed contractors are not eligible for recovery under the Construction Industry Licensing Recovery Fund. On July 2, 1995, the Respondent again advertised in the Citrus County Chronicle, advertising himself as available to manage the construction of residences. Based upon this notice and other information, the Petitioner issued a Notice to Cease and Desist to the Respondent, ordering him to cease and desist the unlicensed practice of contracting. The Respondent contends that he is not a contractor and that he is, instead, a project manager or consultant and, therefore, not governed by the statutory provision authorizing the Notice to Cease and Desist.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is RECOMMENDED that a Final Order be entered imposing an administrative fine in the amount of $5,000.00 against the Respondent. DONE AND ENTERED this 23rd day of February, 1996, in Tallahassee, Florida. P. MICHAEL RUFF, 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 23rd day of February, 1996. APPENDIX TO RECOMMENDED ORDER CASE NO. 95-4534 Petitioner's Proposed Findings of Fact 1-9. Accepted. 10. Rejected, as constituting a conclusion of law. 11-14. Accepted. 15. Rejected, as being irrelevant. 16-17. Accepted. 18. Accepted, except for the next to the last sentence, which constitutes a conclusion of law. 19-20. Accepted. 21. Rejected, as constituting a conclusion of law. 22-31. Accepted. Respondent's Proposed Findings of Fact 1-2. Accepted. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as contrary to the unrefuted evidence and as subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as not in accordance with the greater weight of the evidence and as subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as constituting a conclusion of law, but to the extent it might be a proposed finding of fact, as not in accord with unrefuted evidence of record and as subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as not representative of the unrefuted evidence of record and as subordinate to the Hearing Officer's findings of fact on this subject matter and as not itself being dispositive of material issues. Rejected, as contrary to the greater weight of the evidence and as not being materially dispositive. Rejected, as contrary to the greater weight of the evidence and as subordinate to the Hearing Officer's findings of fact on this subject matter and as, in part, being a conclusion of law and not a proposed finding of fact. 10-12. Rejected, as constituting a conclusion of law. COPIES FURNISHED: Donna Bass, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0750 Mr. Mark P. Stanish 6041 Town Court Springhill, FL 34606 Richard Hickok, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation 7960 Arlington Expressway, Suite 300 Jacksonville, FL 32211-7467 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue Did Respondent violate Section 489.129(1)(h), Florida Statutes, and, if so, what discipline should be imposed?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida vested with statutory authority to regulate the practice of contracting under Chapters 455 and 489, Florida Statutes. Respondent is a licensed certified residential contractor in the State of Florida. Respondent's license number, as certified by Julie Odom, Department's Alternate Records Custodian, is CRC 20166. However, the Administrative Complaint alleges the license number to be CR C020166. Respondent's licensure status is "Delinquent, Active." On May 18, 1989, the Department entered a Final Order in DOAH Case No. 88-3308 wherein Respondent was found guilty of violating Section 489.129(1)(h),(j),(k), and (m), Florida Statutes. On September 27, 2000, the City of Cape Coral, Florida, Contractor's Regulatory Board (Board) entered into a Settlement Agreement (Agreement) with Respondent, in regard to a complaint, Case No. 00-01, wherein Respondent was charged with violating the following Sections of the City of Cape Coral Code of Ordinances: 6-10.1:, To make misleading, deceptive, untrue, or fraudulent representations in the practice of his contracting profession; 6-10.8: Diversion of funds or property received for prosecution or completion of a specified construction project or operation when as a result of the diversion, the contractor is or will be unable to fulfill the terms of his obligation or contract; 6-10.10: Failing in any material respect to comply with the provisions of the Code; 6-10.11: Abandoning of a construction project in which the contractor is engaged or under contract as a contractor. A project is to be considered abandoned after 90 days if the contractor terminates the project without notification to the prospective owner and the City and without just cause; and 6-10.13: Being found guilty of fraud or deceit or of gross negligence, incompetence, or misconduct in the practice of contracting. The Agreement provided that Respondent was pleading No Contest to the charges that he violated the aforementioned sections of the City of Cape Coral's Code of Ordinances and that Respondent's plea did not act as an admission of guilt as to the above mentioned charges. The Agreement provided for Respondent's permit pulling privileges to be revoked for a period of 90 days starting August 23, 2000. By an Order dated December 29, 2000, the Board, after hearing and discussing the charges made against Respondent, voted to accept and approve the Agreement. By this Agreement, Respondent's contracting license was disciplined by the City of Cape Coral. The total investigative and prosecution costs to the Department, excluding costs associated with any attorney's time, is $967.09.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, and a review of Chapter 61G4-17, Disciplinary Guidelines, Florida Administrative Code, with consideration for the repeat violation of Section 489.129(1)(h), Florida Statutes, it is RECOMMENDED that the Department enter a final order finding Respondent, Robert Mensching guilty of violating Subsection 489.129(1)(h), Florida Statutes, and for such violation: (a) impose an administrative fine in the amount of $5,000.00; (b) assess costs in the amount of $967.09; and (c) revoke Respondent's Certified Residential Contractor's License. DONE AND ENTERED this 21st day of March, 2003, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 21st day of March, 2003. COPIES FURNISHED: Kimberly V. Clark, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Robert Mensching 1719 Northeast 23rd Terrace Cape Coral, Florida 33909 Robert Crabill, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulations Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
