Findings Of Fact William O. Boyd is licensed as a general contractor with the Construction Industry Licensing Board and was so registered at all times here relevant as the qualifying licensee for B & J Harris, Inc. In 1978 Respondent, as trustee of Kings Point Subdivision in Kissimmee, Florida, was looking for someone to do construction in the subdivision and was approached by Harris, who was not licensed. B & J Harris, Inc. was formed, with apparently little capitalization, and with Harris, his wife and son as officers of the corporation. In his application for 1978/1979 Competency/Registration Card (Exhibit 1) dated 9/7/78 Respondent showed he was employed with Empire Builders, Inc., the same firm with which he was affiliated for the previous 12-15 years. Fidelity Bond dated 3-17-78 (Exhibit 2) issued to B & J Harris, Inc. shows Respondent as qualifying general contractor for B & J Harris, Inc. B & J Harris, Inc. entered into a contract with Charles and Connie Arnold (Exhibit 4) to construct a residence on Lot 128, Kings Point Subdivision, obtained Building Permits (Exhibit 3) and commenced construction. Financing for the construction was arranged by Harris and Respondent did not participate in this project in any manner. B & J Harris, Inc. was paid the full contract price by the lending institution and the Arnolds (Exhibits 5 and 15) prior to the scheduled March 7, 1979 closing date. When advised on 7 March 1978 that closing was scheduled that day, Respondent called Mrs. Arnold to advise her that the closing could not proceed as scheduled because B & J Harris, Inc. could not convey clear title to Lot 128 as Harris had not paid Respondent for this lot. Respondent was advised by the lending agency that no other liens existed and Respondent, in consideration of a note secured by a mortgage on Harris' residence, conveyed title to Lot 128 to Harris. The closing took place on 7 March 1978 with the lending institution holding the funds and deed in escrow pending the clearance of the title. Harris executed a Certificate of No Lien on 7 March 1978 (Exhibit 7) and presented a Waiver of Lien form (Exhibit 15) executed by numerous subcontractors. At least two of the signatures on this Waiver of Lien form were denied by the persons whose signature they purported to be. Several subcontractors filed mechanics liens against the property on Lot 128 after the closing, and others filed affidavits and presented testimony that they had not been paid. (Exhibit 10-12). On 23 March 1979 B & J Harris, Inc. filed Petition for Voluntary Bankruptcy (Exhibit 14).
Findings Of Fact At all times pertinent to the allegations contained herein, Respondent was licensed by the State of Florida as a registered real estate broker under license #0001869, which was issued to him as a broker in care of American Heritage Realty, Inc., 102 East Leeland Heights Boulevard, Lehigh, Florida 33936. At all times pertinent to the allegations contained herein, Respondent owned American Heritage Builders, Inc. (AHB). Rudolph L. Ferster, a certified contractor, served as vice-president in charge of construction for American Heritage Builders, Inc., from August 1978 until October 13, 1984. As a licensed contractor, he qualified American Heritage Builders as a residential contractor in the State of Florida. During the time he was with AHB, he supervised the construction of nearly 100 houses for the company. Most of these houses were one of four basic models. When Mr. Ferster left his association with AHB, another contractor, Warren Fuller, had been hired by Respondent to work with the company. He does not know whether Mr. Fuller ever qualified AHB or not. On January 23, 1983, employees of the Respondent entered into a contract with William D. Thomas for the construction and purchase of a lot and house to be constructed thereon by AHB. Contract price was $30,737 for the entire package and Mr. Thomas put down a $4,000 deposit. The balance of $26,737 was to be paid at the start of construction which, in the contract, was stated to be April 15, 1983. The Administrative Complaint alleges that Respondent delayed construction of the Thomas property for over two years and then abandoned it, causing a $6,000 plus loss to Mr. Thomas. The Thomas property was contracted initially to be a shell home. Mr. Thomas was going to do much of the work himself. When Respondent could no longer do the work due to the lack of licensure status, Mr. Thomas contracted with Fred D. Elliott, a certified residential contractor to complete the property which at the time was 50 percent done. Respondent took Mr. Elliott to Mr. Thomas with whom Elliott made an agreement directly. At that time, Mr. Thomas still owed approximately $8,000 on the work agreed upon in the original contract. The additional $6,000 alleged in the Administrative Complaint was for work agreed upon by Mr. Thomas over and above that called for in the initial contract and was in no way connected to the work left undone by Respondent. On January 30, 1984, employees of the Respondent entered into a similar contract with Clarence and Lillian Tap for the construction and purchase of a house and lot in Lehigh Acres to be built by AHB. Mr. Tap intended to pay cash for his purchase and agreed to the construction of a residence on a particular lot which had been shown to him by Respondent's employees. Several days after signing the contract, however, Respondent's employees telephoned him telling him that though the lot he had selected was not available, he could have the lot next door. Since the lot he had selected was a corner lot and the lot subsequently offered was an interior lot, he rejected this offer and Respondent's employees offered to show him other lots with the caveat that if the new lot he selected was more expensive than the original, he would have to pay the difference. Mr. Tap agreed and selected a new lot for an additional cost of $2,500. The original contract was for a total purchase price of $34,995 with $18,250 to be paid down at start of construction on March 1, 1984, and three additional payments to be made periodically at various stages of construction. When the new lot was decided upon, however, a new contract was drawn up and signed by the parties which reflected the new purchase price. It also called for Mr. Tap to apply for a mortgage in the amount of $8,500 with appropriate adjustments to other cash payments. At the time, Mr. Tap was not sure he would be able to make the total cash payment called for since his prior owned mobile home had not yet sold. Because of this development regarding the application for mortgage, Respondent included this parcel in the security given for his half million dollar line of credit with Florida Federal Savings and Loan. As Mr. Tap was not going to make the total cash payment, Respondent would need to secure a fund draw from Florida Federal in order to complete construction. This created a substantial problem not only for Respondent, but for Tap as well. The Taps did not have to take out a mortgage after all, but were able to pay cash for the entire property when it was completed. However, because of financial difficulties that had come up between Respondent and Financial Federal by that time, the lending institution was unwilling to release the Tap property from its security agreement even though Respondent was willing to pay the entire amount due on that property. When the Taps could get no satisfaction from Respondent, they hired an attorney who got him to sign a warranty deed in favor of the Taps, transferring title to the property in question. At the time, Respondent and the Taps' attorney both knew that there was still a security interest in the property in the hands of Florida Federal but Respondent was of the opinion, based on conversations and correspondence he had with the institution, that they were going to release the Tap property. As a result, he signed the warranty deed and advised the Taps at the time that they should receive their copy of the deed within four to six weeks. This time was supposedly sufficient to allow payment of the outstanding obligation to Florida Federal and Florida Federal's recordation of the deed from AHB to the Taps. However, Florida Federal refused to release the Taps' property and has subsequently initiated foreclosure action against it to recover the $30,400 they claim to be due and owing on that section of the line of credit. Mr. Tap has offered to pay the entire $30,400 to Florida Federal in addition to the full amount of the contract price he has already paid to Respondent, but Florida Federal refuses to accept any partial payment. Instead, it insists upon satisfaction of the entire line of credit which now is approximately $200,000. On April 17, 1984, employees of the Respondent entered into a contract with Davis and Reba Williamson as purchasers of a new house to be constructed by AHB on a lot already owned by the Williamsons which they had purchased separately from the Lehigh Corporation for $8,000. Mr. Williamson paid AHB approximately $12,000 down payment on a home to cost $34,245. The house was not completed until October 1985, at which time the Williamsons took possession. They noticed that mechanics' liens had been placed on the property but these were satisfied by the Respondent with funds coming from Financial Federal prior to the Williamsons taking possession. It would appear that the liens were the result of the failure of the actual building contractor, Mr. Price, of New Homes of Lee County, to pay suppliers and subcontractors. When Mr. Williamson looked at the permit posted outside the construction, he first learned AHB was not actually doing the construction. Prior to that time, though Respondent, Mr. Anglickis had not so represented, Williamson had assumed AHB was the actual constructor. When Mr. Williamson spoke with Mr. Price about the liens, he was advised that the construction had stopped because Respondent owed Price money. Respondent denies this and there is no evidence presented by either side to establish the truth of that allegation. The house was subsequently completed by Mr. Williamson acting as his own contractor and hiring subcontractors to do the actual work through the assistance of Mr. Ohlhausen, the DPR investigator, to whom he had complained previously. The materialmen and subcontractors were paid by Mr. Anglickis who issued funds from the construction loan. No additional funds were required of Mr. Williamson. Respondent did not do the final construction to complete the property because, not being a licensed contractor, he could not lawfully do so. On July 26, 1984, the employees of the Respondent entered into a contract with Samuel J. and Dorothy Sapp to construct a house on a lot already owned by the Sapps for a total price of $56,347. The contract called for the Sapps to apply for a mortgage in the amount of $36,000. To facilitate the transaction, the Sapps conveyed the lot they owned to AHB. Respondent admits the home was not built even though the lot was conveyed and Mr. Sapp paid in a deposit of $21,324. When the property was not constructed, Respondent reimbursed Mr. Sapp in the amount of $20,000 which constituted his deposit minus certain expenses incurred for such things as survey fee, attorney fee, mortgage fees and the like. Respondent claims that prior to 1978 when Mr. Ferster came on board, there had always been a licensed contractor to qualify AHB. Initially, upon first purchasing the business, Respondent used all licensed contractors who had worked for the corporation when it was owned by Lehigh Corporation. Respondent assumed that the contractors he utilized were doing the same thing for him as the owner of the corporation in order to keep matters legal as they had done when the corporation was owned by Lehigh Corporation, and for many years this was the case. Mr. Ferster maintained AHB as a qualified contractor until he left in 1984. It was at point that the new contractors utilized by Respondent, Mr. Price in particular, failed to qualify the corporation with their licenses. However, Respondent contends, and the evidence seems to establish, that at no time did Respondent ever represent himself as a licensed contractor to the buyer of the homes in question here. In fact, he did not even speak with them until well after the contracts were signed by the purchasers and his signature appearing thereon in each case is an ex post facto action on his part. The problems which confront Respondent herein deal with his relationship with Florida Federal with whom he had established a half million dollar line of credit. Just about the time these current houses were coming up for construction, Respondent's relationship with Florida Federal deteriorated. It well may be that his financial arrangements with the institution were less than satisfactory. Evidence of this was not forthcoming from either party. However, it has been shown that each of the properties in question was made a part of the security for Respondent's line of credit which had fallen delinquent. Florida Federal indicated its intention to foreclose and, with few exceptions, took the position that the mortgage which it held on Respondent's properties did not provide for releases of individual parcels. Though this may have been the case, and the mortgage was not introduced, Respondent testified, and there is no reason to disbelieve him, that prior to the time in question, as a practice, Florida Federal did release individual parcels upon payment of the amount represented as the construction loan in each case. Respondent assumed that this practice would continue but in the case of the Sapps' property, it did not. Respondent has, from the very beginning, made a good faith effort to secure the release of the Taps' property which should not have been made a portion of the security in the first place. The Williamson property was released and they acquired a clear title to it. When the Tap property was completed and ready for closing, Mr. Tap brought the $8,500 still outstanding with him to the closing. Florida Federal, however, would not accept this money because it was not the full payoff on Respondent's construction loan. While Respondent brought with him the amount he thought was due, the figure was wrong and Florida Federal would not accept the amount offered since both his amount and the $8,500 Tap payment still did not constitute the full amount due under the construction loan. Thereafter, Florida Federal would not accept the correct amount due on this particular property even though Respondent offered and had available to him sufficient funds to make the full payment. The $500,000 line of credit was not renewed by the Respondent at his own choice when it became time for the rollover. However, because there were still four homes still in work, Respondent offered to roll over a lesser amount, $161,000, which was agreed upon by Florida Federal by letter dated March 14, 1985. At the time of this letter, Mr. Tap's property had been completed three months previously and Respondent had given Tap a warranty deed. Respondent asked Florida Federal on an almost daily basis for the payoff on the Tap loan so that he could have that portion of the mortgagee released. However, he was never given it. At the time, Respondent was working with Florida Federal to get as many properties released as he could and though Florida Federal verbally agreed to work with Respondent, it appears he never got any cooperation. In fact, by letter dated April 3, 1985, Financial indicated that if the unpaid principal balance was not paid in full by April 13, 1985, foreclosure action would be initiated. When Respondent received this letter he immediately called Florida Federal. He was advised orally that he could have a second chance and that papers would be forwarded for him to sign, but he never received them. Instead, on April 18, 1985, he received a letter stating that he had failed to meet the terms and conditions of the previous offer and that it was rescinded. Respondent wrote back on April 24 protesting the decision and alleging a mistake. Nothing was done until July 17, almost three months later, when he was again advised in writing that the bank would consider a proposal from him. Respondent responded quickly and on August 27, received a reply from the bank apologizing for the failure to respond to his proposal and indicating that the matter was still open for negotiation. Nonetheless, Mr. Tap has still not been given the opportunity to pay off his property. Florida Federal refuses to accept any pay off for individual homes unless the entire line of credit is paid in full. During the period of these negotiations, Florida Federal accepted two other loans for Respondent's line of credit but has refused to advance any funds under these loans. One of these is the Sapp house. Florida Federal took the Sapp lot previously deeded to AHB as security for the line of credit and refuses to release it though no funds have been advanced for any construction on that lot. Respondent, in addition to reimbursing Mr. Sapp $20,000 of his deposit, has offered payment for the lot or an exchange of lots, but Mr. Sapp has declined. With regard to the Tap house, covered by a $30,400 construction loan, Respondent has offered Florida Federal $50,000 in cash to release this property but the institution refuses insisting that the full line of credit be paid off. Respondent contends that he has never received a complaint from Mr. Williamson or any of the other individuals listed in the Administrative Complaint. This is so found. Charles Matheny, assistant to the President of Lehigh Corporation, the developer of Lehigh Acres, has known the Respondent for nearly 19 years, having first met him when Respondent worked for the corporation in advertising and promotion. Respondent left Lehigh Corporation at some point in the interim. When he did so, he purchased certain assets of the corporation which included the name American Heritage Builders, Inc., and the model site owned by the corporation. At that point, Respondent went in business for himself and started American Heritage Realty in order to market the property and homes he built. According to Mr. Matheny, Respondent was active in little league in years past though he had, at the time, no children of his own, and when doing so, was instrumental in molding the character of the children who played for him for the better. Respondent has also been active in the junior Chamber of Commerce and reportedly was President of the statewide organization. He has also been active in other community activities such as the local Chamber of Commerce and the Community Day Care Center. He is known to be quite charitable and devotes a considerable amount of time and money to charitable activities. As Mr. Matheny knows it, Respondent's reputation for truth and honesty in the community is good. He has never heard any reports to the contrary. Respondent was interviewed by Mr. Ohlhausen in 1984 in regard to a complaint filed by the Construction Industry Licensing Board relating to Respondent serving as a contractor without a license. When Ohlhausen advised Respondent he was operating in violation of the law, Respondent appeared not be to aware of this. When so advised, he immediately agreed to sign a cease and desist agreement and stopped all further construction activity. He cooperated fully with efforts of the Department to get the properties completed and in the hands of the owners.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is, therefore: RECOMMENDED that the Administrative Complaint against Respondent herein be dismissed. RECOMMENDED in Tallahassee, Leon County, Florida, this 20th day of April, 1988. ARNOLD H. POLL0CK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 (904) 488-9765 Filed with the Clerk of the Division of Administrative Hearings this 20th day of April, 1988. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 87-2619 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. By the Petitioner 1 - 4. Accepted and incorporated herein. Accepted and incorporated herein. Rejected as contra to the weight of the evidence. Accepted and incorporated herein. Rejected as contra to the weight of the evidence. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Irrelevant. By the Respondent Not a Finding of Fact. Not a Finding of Fact - more a comment on the pleadings. 3 - 4. Accepted and incorporated herein. 5a. Accepted and incorporated herein. 5b. Accepted and incorporated herein. 5c. Accepted and incorporated herein. 5d. Accepted and incorporated herein. 5e. Accepted and incorporated herein. 5f. Accepted and incorporated herein. 5g. Accepted and incorporated herein. 6. Accepted and incorporated herein. COPIES FURNISHED: James H. Gillis, Esquire DPR, Division of Real Estate Post Office Box 1900 Orlando, Florida 32801 Howard Anderson, Esquire Post Office Box 767384 Roswell, Georgia 30076-7384 Darlene F. Keller Acting Executive Director DPR, Division of Real Estate Post Office Box 1900 Orlando, Florida 32801 William Bilenky, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue The primary factual issue was whether the company which the Respondent had qualified was in fact the contractor on the job from which the allegations in the Amended Administrative Complaint arose. The Petitioner submitted post hearing findings of fact in the form of a proposed recommended order. To the extent that the proposed findings of fact have not been included in this order, they are specifically rejected as being irrelevant, not being based upon the most credible evidence, or not being findings of fact.
Findings Of Fact The Respondent, Edward Ryan, is a certified building contractor holding license number C3 C006481 and was the qualifying agent for Behr Contracting, Inc. (thereafter "Behr Contracting"), at all times relevant to the allegations of the Amended Administrative Complaint. Behr Contracting was, and is a business engaging in, contracting, selling building materials, and mortgage brokerage. Its operations as a mortgage broker are now carried on under a separate corporation; however, at the time involved in these proceedings, its mortgage brokerage operation was carried out in the name of Behr Contracting, Inc. Willie Mae Williams resides at 1451 Northwest 92nd Street, Miami, Florida. In 1980, Ms. Williams had extensive modifications made to her house at the foregoing address. With regard to the work on her house, Ms Williams' initial contact was with S. J. (Jerome) Farmer. Farmer was an independent contractor who was doing home repairs in early 1980 to several homes close to the Williams home. He was not doing these jobs as an employee of Behr Contracting, and no evidence was introduced that at said time he was an employee of Behr Contracting. After he had already begun working on the Williams home, Farmer approached the Respondent and requested Respondent's assistance in helping him estimate additional repairs and modifications to Ms. Williams' home and assistance in obtaining the financing for this job. Farmer was not affiliated in any manner with Behr Contracting. The Respondent arranged for an estimator to assist Farmer in estimating the cost of the project and in obtaining financing for the project. (Testimony of Ryan, Tr. 58 et seq.) This estimator had two contract forms signed by Ms. Williams, one for financing and one for construction. These documents were identified by Ms. Williams and were received into the record. (See Petitioner's Exhibits 2 and 3.) Petitioner's Exhibit 2 is the contract between Behr Contracting and Ms. Williams for the financing of the modifications to the Williams house. Financing for the project was obtained through the mortgage brokerage operation of Behr Contracting and the money funneled through Behr Contracting to pay for materials purchased through Behr's building materials operation. Ms. Williams has made payments and is making payments as required under said contract to the finance company, Uni Credit of Jacksonville, Florida. Behr Contracting provided cabinets, windows and certain appliances, to include a dishwasher. The Respondent was at Ms. Williams' house approximately three times prior to the delivery of building materials from Behr Contracting. (Testimony of Ryan, Tr. 23.) On none of these occasions was the Respondent there as a building contractor qualifying Behr Contracting. At all times, Farmer was in charge of the project. (See testimony of Williams, Tr. 184.) Farmer was the contractor in fact. Subsequent to installation of the dishwasher, the Respondent was present at the Williams house often because of Ms Williams' complaints about the dishwasher. The Respondent replaced this dishwasher and had Ms. Williams' septic tank pumped in order to solve the drainage problem which was causing the dishwasher to malfunction. This was done to honor the warranty on the dishwasher. (Supra, Tr. 45-51.) A salesman for Behr Contracting gave Ms. Williams an estimate on both the contracting and on the financing for the modifications and remodeling of the Williams house. Under its business practices, Behr Contracting disapproved or rejected the contract for construction, yet approved the financing contract. Approval of a construction contract in the amount of the instant contract, over $11,000, would have required an officer's approval. (See testimony of Stanley Weiss, Tr. 21-28.) Although Ms. Williams identified her signature on the purported construction contract (Petitioner's Exhibit 3), she could not identify the signature appearing on the lefthand side of the page at the bottom of the contract in the area of "Agent" and "Officer." This signature also could not be identified by Stanley Weiss or Margaret Behr, officers of Behr Contracting. It was not the signature of Weiss, Ms Behr or the Respondent, who were the only officers of the corporation authorized to approve a contract of this amount at the time that this contract was prepared. This contract (Petitioner's Exhibit 3) was never accepted by Behr Contracting (See testimony of Weiss, Tr. 35.) Although a copy of Petitioner's Exhibit 3 was discovered by Weiss in the files of Behr Contracting, this was a photo copy given to Weiss by the Respondents who had received it from the Board's investigators when the Respondent first spoke to them about this case. (See page 8, deposition of Ryan taken September 17, 1982; see pages 3, 4 and 8, deposition of Weiss; testimony of Ryan, Tr. 70-75; testimony of Weiss, Tr. 10-12.) The Respondent's involvement in this matter was "limited to providing gratuitous advice to Farmer at Farmer's request on one occasion, concerning a broken major waste drain, and representing Behr Contracting who was a major supplier of materials and appliances for the job. It is specifically found that the Petitioner failed to establish the existence of a construction contract between Ms. Williams and Behr Contracting. Regarding the allegations that the Respondent abandoned the job, the Respondent caused the dishwasher supplied by Behr Contracting to be replaced under warranty service. The septic tank at the Williams house was pumped and cleaned at the request of Uni Credit in an attempt to solve the problem. Finally, over a year after the job had begun, the Respondent had the septic tank and drainfeild rebuilt and solved Ms. Williams' drainage problems. This last action was taken under threat of prosecution by the Board's investigators and was done in spite of the fact, which is uncontroverted, that the construction did not address modifications to the plumbing in the house. After the Respondent had taken these actions, Ms. Williams than wanted the cabinets and other work, which had been done by Farmer, replaced because of water damage caused by the drainage problem.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Amended Administrative Complaint against the Respondent, Edward Ryan, be dismissed. DONE and RECOMMENDED this 20th day of September, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 20th day of September, 1983 COPIES FURNISHED: Michael J. Cohen, Esquire Kristin Building, Suite 101 2715 East Oakland Park Boulevard Fort Lauderdale, Florida 32206 Mr. Edward Ryan 19762 Bel Aire Drive Miami, Florida 33138 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 James Linnan, Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32202
Findings Of Fact These proceedings were set for final hearing by a Notice of Hearing dated July 8, 1983 addressed to the parties, including Respondent at 488 Esther Lane, Altamonte Springs, Florida, 33596. 2/ The Notice of Hearing was not returned to the Division of Administrative Hearings as undelivered. At the time and place noticed for the final hearing the Hearing Officer waited until 9:16 a.m., to commence the proceedings, which concluded at 11:08 a.m. At no time has the Respondent contacted the Hearing Officer concerning a continuance or explained his failure to appear as noticed. At all times material to this proceeding Mr. McIntee has been licensed as a certified building contractor under license number CB C015923. He was also the qualifying agent pursuant to Section 489.119, Florida Statutes, for Delco, Incorporated. At no time has he ever attempted to qualify or otherwise notify the Construction Industry Licensing Board that he intended to affiliate with or do business as Earth Shelter Corporation of Florida, Inc. On July 30, 1980 Earth Shelter Corporation of Florida, Inc. (Earth Shelter) entered into a contract with Mr. and Mrs. William Sweet to construct an earth shelter single family residence in Lake County, Florida. The estimated cost of the project was to be $57,000 and was guaranteed not to exceed $60,000. The contract was negotiated by Respondent acting as president of Earth Shelter. Mr. McIntee was the contractor who pulled the building permit on behalf of Earth Shelter. The project was financed by First Family Federal Savings and Loan Association of Eustis, Florida. In order to obtain payments from the Association, Respondent periodically executed affidavits which stated in part: Affiant says further that all the subcon- tractors, materialmen or any other persons performing labor and furnishing materials used in the construction of the building, or improvements to the premises or appur- tenances thereof, have been fully paid in- cluding all extras. As the result of executing these affidavits Respondent received draws totaling $49,079.26 on the dates of September 30, 1980, October 31, 1980, December 3, 1980, February 4, 1981 and July 10, 1981. These affidavits were false. At the time the affidavits were executed all the subcontractors had not been paid by Respondent. As an example, Frank Wagner Excavating, Inc. performed subcontracting services at the Sweet project on June 4 and 5, 1981 at a cost of $1,451. This was billed to Respondent on June 6, 1981. He sent Wagner Excavating a check dated June 6, 1981, in the amount of the invoice, but the check was returned to Wagner for lack of sufficient funds at Respondent's bank. Before Respondent's check bounced, but subsequent to invoicing the work done on June 4 and 5, 1981, Mr. Wagner performed additional earth moving work at the Sweet project on July 3, 8, 9 and 10, 1981. That work was invoiced on July 10, 1981 for $1,378.75. No attempt was made by Respondent to pay for the second invoice. Eventually Wagner Excavating was paid by Mr. Sweet personally and by an additional payment directly to Wagner Excavating by First Family Federal Savings and Loan Association in order to satisfy Wagner's lien. In order to protect himself, Wagner had filed a lien against the Sweet property on August 17, 1981. Because of structural defects in the construction of Mr. Sweet's home performed by Respondent, Mr. Sweet filed a complaint with the Lake County Board of Examiners against Respondent. Notice of that complaint was given to Respondent on August 18, 1981. He was informed that on September 1, 1981 the Lake County Board of Building Examiners would take testimony concerning the allegations contained in the complaint. Respondent was urged to attend the meeting and to be represented by counsel if he so desired. Mr. McIntee did appear at that meeting. An investigation of the complaint followed. Respondent was subsequently noticed for a second meeting of the Board of Examiners to be held on October 6, 1981 concerning the Sweet complaint, but he failed to appear. At that time the results of the investigation were reviewed and the Lake County Board of Examiners revoked Respondent's license as a contractor in Lake County for abandonment and code violations related to his work on Mr. Sweet's residence. On September 19, 1980 Earth Shelter through Respondent entered into a contract with James V. Migliorato to construct a residence in Seminole County, Florida. The contract price was $48,500. During the course of the work performed by Mr. McIntee, liens in the amount of approximately $9,500 were filed by third parties who provided materials and services under subcontract to Earth Shelter in the construction of Mr. Migliorato's residence. By March of 1981 Respondent had abandoned the project without cause. Mr. Migliorato later met with him at which time Respondent explained that he had run out of money and was not going to finish the job. In August of 1981 Mr. Migliorato and his counsel met with Respondent and his counsel. During their discussions Respondent stated that the money which he had been paid for work on the Migliorato home had been diverted by him for use on the Sweet residence mentioned above. The liens outstanding against Mr. Migliorato's property were never satisfied by Respondent and had to be paid by the homeowner. An example of the outstanding liens was that filed by Superior Distributors, Inc. which supplied and installed a kitchen and bathroom cabinet at the Migliorato residence. The work was completed on June 30, 1981 and invoiced on the same date for $2,128. This invoice has never been paid by Respondent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Construction Industry Licensing Board enter a Final Order revoking Respondent's license as a certified building contractor in the State of Florida. DONE and RECOMMENDED this 14th day of October, 1983, in Tallahassee, Florida. MICHAEL P. DODSON 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 14th day of October, 1983.
The Issue Did respondent fail to properly supervise, direct and manage the contracting activities of the business of which he is the qualifier, and if so, what disciplinary action should be taken against respondent's contracting license?
Findings Of Fact At all times material to this proceeding the respondent was a certified building contractor licensed by the State of Florida and the qualifying agent for Custom Concrete of Naples, Inc. (Custom Concrete). Rodney Velez was the president of Custom Concrete and licensed only in concrete--concrete forming, placing and finishing. Susan Velez, Rodney Velez's wife, was an officer of Custom Concrete. On April 23, 1983, Custom Concrete, by and through Rodney Velez, entered into a contract with Mark and Penny Paterson to construct a home for $38,550.00. Mrs. Paterson had previously met Rodney Velez in the course of her work, and Velez had told her that he was a builder. Mrs. Paterson had suggested that Velez look at a floor plan that she and her husband had, and after certain negotiations, including a change of floor plan, the contract was entered into. During the course of the negotiations Mrs. Paterson never talked to the respondent and was unaware that the respondent was involved or would be involved in the construction of the home. Mrs. Paterson believed that Rodney Velez was the "builder"; however, the construction of the Paterson home was beyond the scope of Velez's concrete license. The respondent signed the application to secure the building permit for the Paterson residence, although he did not personally appear to procure the building permit. The clerk of the contractor's licensing section of the building code compliance department relied on the signature on the application because it was notarized. The notary was Susan Velez. Respondent did not supervise or direct the construction of the Paterson home. Neal Jackson, president of the company who did the electric work on the home, was unaware that respondent was involved in the project until well after the house was finished. Although it is usual for a supervisor or superintendent to be at the job site some of the time, Jackson never saw the respondent or Velez at the job site. Jeff Allain, the carpenter who did the framing and certain other work, was on the job site five or six days and saw the respondent once during the framing of the structure "just generally looking around." The respondent didn't say anything to Allain. David Isom did drywall work on the house. He had no contact with the respondent and did not see him at the construction site. Mrs. Paterson went by the construction site quite often and realized that the job was not being properly supervised. Velez was rarely there, and Mrs. Paterson never saw the respondent. The workmen on the site would ask the Patersons when Velez would be there because they had questions concerning the work. Neither of the building inspectors saw anyone supervising at the job site, although usually no one is at the job site when an inspection is made. Two days after the Patersons moved into their house, they compiled a "punch list" of the items that needed to be completed or corrected. The list was given to Velez, but the work was not corrected to the Paterson's satisfaction. Although Velez did not give the "punch list" to respondent, Velez discussed the problems with the respondent. Respondent did not take any steps to remedy the problems and said he thought "a lot of it was nonsense." Velez told respondent that he, Velez, would take care of it. Because of the unresolved problems with the house, Mrs. Paterson finally called the licensing board to file a complaint against Rodney Velez. At that time, she was informed that Rodney Velez was not the contractor; the contractor was the respondent. This was the first time that Mrs. Paterson was aware that the respondent was involved with the construction of the house. All of the Patersons dealings had been with Velez, and all checks for construction payments were made out to Velez personally. 2/ Even though the Patersons had not received satisfaction from Custom Concrete for the problems with the house, they signed the closing papers because Velez threatened to evict them. At closing the Patersons received a lien release from Custom Concrete which released all work prior to March 9, 1984. Subsequently, Velez filed a claim of lien against the Paterson property for work completed on February 9, 1984.
Recommendation Based upon the foregoing findings of fact and conclusions of law it is recommended that respondent be found guilty of violating Section 489.129(j), Florida Statutes, that he be fined $1,000.00, and that his license be suspended for 60 days from the date the Construction Industry Licensing Board enters its final order in this case. DONE and ORDERED this 30th day of January, 1985, in Tallahassee, Florida. DIANE A. GRUBBS 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 30th day of January, 1985.
Findings Of Fact At all times pertinent to the allegations contained in the Administrative Complaint, Respondent John G. Gordon, Jr. was licensed by the State of Florida as a registered roofing contractor by License No. RC-0032501, first issued to Respondent, qualifying as an individual in 1978 and continually renewed as such since then. On June 4, 1981, Respondent was called by Ms. Allene S. Gilbert to give her an estimate on re-roofing the two flat portions of her house roof. When he went to the house, he went up on the roof by himself to look and, when he came down, he gave her an estimate of $1,400 to re-roof the two flat sections on either side of the gabled center section. He did not then, or any time thereafter, prior to doing the work, indicate there was anything wrong with the siding which connected down from the gabled roof to the flat roof. After making his inspection and giving the estimate which Ms. Gilbert accepted, he entered into an oral contract with her which, when reduced to unsigned memo form, provided that he would tear off the old roof down to the deck and replace it with a 15-year built up roof consisting of a total of five layers. He also agreed to replace the rock and all metal around the edges of the house. He specifically stated that the work he did, both materials and his workmanship, was guaranteed for 15 years against leaks. Respondent indicates he found that the metal flashing along the side of the house where the flat roof joins the siding was rusted out and he replaced it. He contends that this rust was due to the deteriorated (rotten) condition of the lap siding above the flat roof which allowed water to get in behind the flashing. In any case, during the first rain after the completion of the work, the preexisting leaks in the bedroom which prompted the roof replacement were worse and additional leaks developed inside the house. The leakage was so severe, the bathroom ceiling caved in. Ms. Gilbert called Respondent many times to get him to come out and repair the leaks, but never was able to speak with him personally. Each time she called, she would leave a message with whomever answered the phone, requesting that he come out or call, and was assured that these messages were getting relayed to Respondent, but he never returned any call and, to the best of her knowledge, he never came to her house again. However, she works during the day and would not know if he was there or not. No neighbor told her they saw someone there, and she received no note or other indication that the Respondent had come. Respondent admits that having once responded to her earlier call and seeing that the leaking was caused by the condition of the siding for which he was not responsible and about which he had previously done nothing, he was satisfied that his work was done properly and he did not call back or ever respond to any of Ms. Gilbert's other calls. He contends that the problem was not caused by him or a part of the work he had done. Therefore, he was not responsible for it. Ms. Gilbert contends, after trying to get Respondent to honor his guarantee for six months, she gave up and had someone else to do the job. The leaks are now repaired and the siding which Respondent stated was rotten, though painted once since then, has not been replaced or repaired. Respondent having entered into the contract with Ms. Gilbert, began and completed the entire project without either (1) having an occupational license as required by Section 14-39, Ordinance of the City of Fort Walton Beach; or, (2) securing a permit for the repair as required by Section 106.1, Standard Building Code, incorporated into the Ordinance of the City of Fort Walton Beach.
Recommendation Based on the foregoing, therefore, it is RECOMMENDED that Respondent pay an administrative fine of $250 and that he be placed on probation for six (6) months. DONE AND ENTERED this 9th day of May 1984 in Tallahassee, Florida. ARNOLD H. POLLOCK 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 9th day of May 1984. COPIES FURNISHED: Douglas A. Shropshire, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. John G. Gordon Post Office Box 498 Destine, Florida 32541 James Linnan, Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32202 Fred M. Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
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.
The Issue Whether Respondent committed the offenses set forth in the Administrative Complaints and Amended Administrative Complaints and, if so, what action should be taken.
Findings Of Fact At all times material hereto, Respondent was licensed by Petitioner as a certified residential contractor, having been issued license number CR C040917. He has been licensed since March 16, 1987. Respondent was the qualifying agent of KM Homes, Inc. (KMH) from June 10, 1995 through March 13, 1997, more than one year but less than two years. On or about February 3, 1997, KMH filed a voluntary bankruptcy petition under Chapter 7 in the U.S. Bankruptcy Court, Southern District of Florida, Case No. 97-30498, with an estimate of assets of less than $50,000.00 and an estimate of liabilities of between $1 million and $10 million. The petition was signed by Kenneth H. Maltz, as president of KMH. On or about February 4, 1997, the next day, Kenneth H. Maltz and his wife, Susan Maltz, filed a joint voluntary bankruptcy petition under Chapter 7. Case No. 01-3827PL On or about April 28, 1996, KMH contracted with Daniel L. Simons and Carol L. Stefanski for the sale of a lot to Simons and Stefanski and for construction of a house on the lot. The contract price for the lot was $45,000.00 and for the construction of the home was $141,000.00, totaling $186,000.00. Respondent's license number did not appear in the contract. In accordance with the contract, Simons and Stefanski made the following payments to KMH: on or about April 28, 1996, $5,000.00; on or about August 21, 1996, $40,000.00; and on or about August 30, 1996, $42,229.60 and $747.00, through their lender, First Federal Savings of the Palm Beaches, pursuant to an August 21, 1996, mortgage loan of $128,000.00. The payments totaled $100,976.60. KMH applied for a building permit from Martin County to build the home for Simons and Stefanski. Respondent's license number appeared on the application. The building permit was never obtained. Beginning on or about August 27, 1996, and at various times thereafter, until approximately January 9, 1997, the lot was cleared and fill was delivered to the lot by KMH's subcontractor, Tideway Construction Company, Inc. (Tideway). The work by Tideway was the only work performed by KMH pursuant to the contract with Simons and Stefanski. KHM did not pay Tideway and Tideway recorded a lien on the lot for $4,084.00. KMH failed to remove Tideway's lien. On or about November 23, 1997, Tideway filed suit to foreclose its lien. Sometime in May 1998, Tideway released the lien in exchange for payment from Simons and Stefanski in the amount of 65 percent of the lien amount. Simons and Stefanski's lender paid the 65 percent from additional funds the lender loaned to Simons and Stefanski to enable them to complete their home. Tideway wrote off the remaining 35 percent. KMH never explained to Simons and Stefanski why it did not complete their home. KMH's trustee in the bankruptcy never offered to complete the work. Simons and Stefanski never fired KMH, never denied KMH access to the property to perform work, and never refused to pay KMH monies due under the contract. Simons considered KMH to have abandoned the job. Simons and Stefanski filed a proof of claim in KMH's bankruptcy for an unsecured non-priority claim in the amount of $58,000.00. They received nothing from the bankruptcy action. In the latter part of 1998, Simons and Stefanski had their home completed by another contractor, Murex, for $143,270.00. The house that Murex completed for Simons and Stefanski was essentially the same house that KMH was to construct, except that the roof structure was different and the garage and back porch were a little larger. KMH never provided Simons and Stefanski with notification of the Construction Industries Recovery Fund. Simons and Stefanski never had any direct dealings with Respondent personally. They attempted to sue Respondent but were unsuccessful. As of November 15, 2001, Petitioner's costs of investigation and prosecution for Case No. 01-3827PL, excluding costs associated with an attorney's time, totaled $457.88. Case No. 01-3828PL On or about June 6, 1996, KMH contracted with Carol Morris for construction of a house on a lot owned by Morris. The contract price for the construction of the house was $287,940.00. Respondent's license number did not appear in the contract. In accordance with the contract, Morris made the following payments to KMH: on or about February 28, 1996, $1,000.00; on or about June 10, 1996, $27,000.00; and on or about August 2, 1996, $109,240.00. The payments totaled $137,240.00. Morris obtained a mortgage loan in the amount of $150,000.00 from First Bank of Florida to finance part of the contract price. On or about September 17, 1996, KMH applied for a building permit from Palm Beach Gardens to construct the home for Morris. Respondent's license number appeared on the application. On or about September 26, 1996, the building permit was approved and issued, bearing building permit number 28644. From approximately September to December 1996, KMH performed work pursuant to the contract and thereafter, did not perform any more work on the home. KMH failed to complete the construction of Morris' home. KMH never explained to Morris why it did not complete her home. KMH's trustee in the bankruptcy never offered to complete the work. Morris never fired KMH, never denied KMH access to the property to perform work, and never refused to pay KMH monies due under the contract. Morris considered KMH to have abandoned the job. KMH's subcontractors/material suppliers recorded liens on Morris' property. The subcontractors/material suppliers recorded liens were as follows: on December 12, 1996, Tideway for $8,438.00; on January 16, 1997, Buckeye Plumbing, Inc. (Buckeye Plumbing) for $3,676.00; on January 22, 1997, Tarmac Florida, Inc. (Tarmac) for $6,296.40; on January 23, 1997, Electrical Express, Inc. (Electrical Express) for $450.00; on February 13, 1997, E. M. Brandon, Inc. (Brandon) for $2,164.00; on February 18, 1997, Tom Rawn Masonry, Inc. (TR Masonry) for $16,454.00; and on April 3, 1997, Spacerace Enterprises, Inc. (Spacerace) for $7,850.00. Morris paid KMH for all the work or materials pertaining to the liens. KMH failed to remove any of the liens. Morris never paid any monies directly to the lien holders to remove any of the liens. However, Morris' lender, First Bank of Florida, assisted her with the resolution of the liens, including allowing its attorney to act as Morris' representative in resolving the liens. In May 1998, Tideway released its lien in exchange for payment by Morris' lender in the amount of 65 percent of the lien amount. Tideway wrote off the remaining 35 percent. The evidence is unclear as to whether Morris was obligated to repay the lender. Buckeye Plumbing, Electrical Express, TR Masonry, Inc., and Spacerace never received any money on their liens and the entire amount of their liens was a complete loss. Tarmac sued to foreclose on its lien, but ultimately dismissed its lawsuit and wrote off the amount of its lien as a bad debt. No testimony was presented regarding the final result of the lien held by Brandon. Morris obtained the services of another contractor, Home Work Group, Inc. (Home Work), to complete the construction of her home. Morris used the original mortgage loan of $150,000.00, a shortfall loan from the same lender in the amount of $45,000.00, and her savings of approximately $43,000.00, to pay Home Work. On or about September 1998, Home Work completed the construction of Morris' house, which was essentially the same as the house which was to be constructed by KMH. Morris received notification of KMH's bankruptcy by mail. She filed a complaint with the bankruptcy court objecting to KMH's discharge. The bankruptcy court eventually dismissed Morris' complaint. Sometime during the year 2000, Morris received $900.00 from KMH's bankruptcy. KMH never provided Morris with notification of the Construction Industries Recovery Fund. During the transaction between KMH and Morris, she knew Respondent as the construction manager for KMH. As of November 15, 2001, Petitioner's costs of investigation and prosecution for Case No. 01-3828PL, excluding costs associated with an attorney's time, totaled $478.70. Case No. 01-3829PL On or about February 23, 1996, KMH contracted with Fred W. Connell, Jr., and his wife, Celia M. Connell, for construction of a house on a lot that the Connells would purchase separately, not as a part of the contract. The contract price for the construction of the house was $258,870.00, which included $18,000.00 for a swimming pool. Respondent's license number did not appear in the contract. In accordance with the contract, the Connells made the following payments to KMH: on or about February 23, 1996, $5,000.00; on or about February 29, 1996, $30,000.00; on or about November 7, 1996, $8,687.00; on or about November 25, 1996, through their lender, First Bank of Florida, pursuant to a mortgage loan, $33,541.00; and on or about December 16, 1996, $24,393.00. The payments totaled $101,621.00. KMH applied for a building permit from the City of North Palm Beach to construct the home for the Connells. Respondent's name and license number appeared on the application. On or about November 5, 1996, the building permit was approved and issued, bearing building permit number 96-01386. From approximately November to December 1996, KMH performed work pursuant to the contract and thereafter, did not perform any more work on the home. KMH failed to complete the construction of the Connells' home. In December 1996, the City of North Palm Beach issued a stop work order due to voids in the concrete walls that made, according to the City of North Palm Beach, the structure of the house unsafe. After the issuance of the stop work order, KMH failed to resume work on the house. KMH never explained to the Connells why it did not complete their home. The Connells fired KMH only after they received notification of KMH's filing for bankruptcy. KMH's trustee in the bankruptcy never offered to complete the work. The Connells considered KMH to have abandoned the job. KMH's subcontractors/material suppliers recorded liens on the Connells' property. The subcontractors/material suppliers and recorded liens were as follows: on January 16, 1997, Palm Beach Masonry (PB Masonry) for $12,125.00; on January 17, 1997, Sasso Air Conditioning, Inc. (Sasso Air) for $550.00; on January 22, 1997, Tarmac for $4,239.21; on January 28, 1997, CPS Construction, Inc. (CPS Construction) for $2,580.00; on January 31, 1997, Gulf Stream Lumber Company (Gulf Stream Lumber) for $19,461.00; and on March 24, 1997, Waste Management of Florida, Inc. (Waste Management) for $276.50. The Connells paid KMH for all the work or materials pertaining to the liens. KMH failed to remove any of the liens. The Connells paid its lender, First Bank of Florida, $25,000.00 in exchange for the lender's assistance in resolving the liens. PB Masonry and Waste Management never received any money on their liens and the entire amount of their liens was a complete loss. On or about August 4, 1997, Sasso Air gave a partial release of its lien in return for payment in the amount of $275.00. Tarmac's notice to owner was untimely, so it chose to not pursue foreclosure proceedings and instead wrote the amount of its lien off as a bad debt. On or about November 11, 1997, Gulf Stream Lumber released its lien in return for payment of $5,000.00 from First Bank of Florida. On May 13, 1997, CPS Construction released its lien in exchange for payment from the Connells in the amount of $2,500.00. On or about April 22, 1997, the Connells obtained the services of another contractor, Villafranca Design and Development, L.C. (Villafranca Design), to complete the construction of their home for $221,000.00. The Connells, through their lender, paid Villafranca Design. Their home was completed shortly before Christmas 1997. The house completed by Villafranca Design was essentially the same as the house which was to be constructed by KMH. Because KMH failed to complete the Connells' home, the Connells, their two children and their two dogs were forced to live on the Connells' boat and to store their furniture for almost a year. During that year, the Connells had to pay dockage fees to live on their boat and storage fees for their furniture. The Connells estimate that the difference in the contract price of their home with KMH and what they eventually paid for their home was conservatively $100,000.00. The Connells did not receive any money from KMH's bankruptcy. KMH never provided the Connells with notification of the Construction Industries Recovery Fund. During the transaction between KMH and the Connells, the Connells knew Respondent as someone who worked in the KMH office. As of November 15, 2001, Petitioner's costs of investigation and prosecution for Case No. 01-3829PL, excluding costs associated with an attorney's time, totaled $519.43. Case No. 01-3830PL On or about September 19, 1996, KMH contracted with William and Iceline Chang for the construction of a house on the lot owned by the Changs. The contract price for the construction of the home was $205,620.00. Respondent's license number did not appear in the contract. In accordance with the contract, the Changs made the following payments to KMH: on or about September 16, 1996, $10,000.00; and on or about October 10, 1996, $10,620.00. Pursuant to a change order for additional site preparation and fill, on or about October 7, 1996, the Changs paid KMH $9,400.00. On or about December 16, 1996, KMH applied for a building permit from Palm Beach County to build the Changs' home. Respondent's license number and Respondent's name as the qualifying agent for KMH appeared on the application. The building permit was never obtained due to KMH's failing to submit the construction plans to Palm Beach County's building department. On December 13, 16, and 19, 1996, the Changs' lot was cleared and fill was delivered to the lot by KMH's subcontractor, Tideway. The work by Tideway was the only work performed by KMH pursuant to the contract with the Changs. KHM did not pay Tideway and Tideway recorded a lien on the lot for $10,900.00. KMH failed to remove Tideway's lien. On or about June 6, 1997, Tideway agreed with the Changs to release the lien in exchange for payment from them in the amount of $9,810.00. The Changs paid Tideway in six monthly installments, June through November 1997, of $1,635.00. On or about November 26, 1997, Tideway gave the Changs a release of its lien. KMH never explained to the Changs why it did not complete their home. KMH's trustee in the bankruptcy never offered to complete the work. The Changs never fired KMH, never denied KMH access to the property to perform work, and never refused to pay KMH monies due under the contract. The Changs considered KMH to have abandoned the job. The Changs had their home completed by another contractor, Villafranca Design, for $203,500.00. Villafranca Design submitted the same construction plans to Palm Beach County's building department that KMH was to use to construct the Changs' home. On or about May 7, 1997, a building permit was issued, bearing permit number B97012080. The house that Villafranca Design completed for the Changs was essentially the same house that KMH was to construct. On or about February 26, 2000, the Changs received $643.29 from KMH's bankruptcy. KMH never provided the Changs with notification of the Construction Industries Recovery Fund. The Changs never had any direct dealings with Respondent personally. As of November 15, 2001, Petitioner's costs of investigation and prosecution for Case No. 01-3830PL, excluding costs associated with an attorney's time, totaled $714.11. Case No. 01-3831PL On or about July 30, 1996, KMH contracted with Harold and Jean Bell to sell them a lot and construct a house on the lot. The contract price for the lot was $53,000.00 and the construction of the home was $186,000.00, totaling $239,000.00. Respondent's license number did not appear in the contract. In accordance with the contract, on or about August 1, 1996, the Bells paid a deposit of $5,000.00 to KMH. On September 19, 1996, the Bells paid, as closing costs, $67,147.63 to Universal Land Title, Inc., which included the cost for the lot and an additional deposit toward construction in the amount of $13,600.00. Subsequently, the Bells received a deed to the lot. KMH never obtained a building permit to construct the house. On or about December 11, 1996, the Bells' lot was cleared and fill was delivered to the lot by KMH's subcontractor, Tideway. The work by Tideway was the only work performed by KMH pursuant to the contract with the Bells. KHM did not pay Tideway, and Tideway recorded a lien on the lot for $3,688.00. KMH failed to remove Tideway's lien. Tideway never received any money on its lien and the entire amount of its lien was a complete loss. KMH never explained to the Bells why it did not complete their home. KMH's trustee in the bankruptcy never offered to complete the work. The Bells never fired KMH, never denied KMH access to the property to perform work, and never refused to pay KMH monies due under the contract. The Bells considered KMH to have abandoned the job. The Bells had their home, with extras, completed by another contractor, Villafranca Design, for approximately $208,000.00. On or about August 2, 2000, the Bells received $996.95 from KMH's bankruptcy. KMH never provided the Bells with notification of the Construction Industries Recovery Fund. On October 1, 2002, Mr. Bell obtained a civil judgment against KMH in the amount of $24,199.64, plus costs of $264.75; prejudgment interest of $21,664.88; and attorney's fees of $2,395.00, totaling $48,524.27. The Bells never had any direct dealings with Respondent personally. As of November 15, 2001, Petitioner's costs of investigation and prosecution for Case No. 01-3831PL, excluding costs associated with an attorney's time, totaled $305.84. Case No. 01-3832PL On or about May 26, 1996, KMH contracted, in a revised contract, with Erol and Yildiz Aksoy for the sale of a lot and construction of a house on a lot. The contract price for the lot was $58,000.00 and construction of the house was $242,000.00, totaling $300,000.00. The revised contract entered into evidence at hearing was incomplete. No determination could be made as to whether Respondent's license appeared in the revised contract. In accordance with the contract, the Aksoys made the following payments to KMH: on or about October 28, 1994, $1,000.003; on or about June 5, 1996, $23,000.00; on or about August 14, 1996, $12,545.00; on or about October 4, 1996, $21,800.00; on or about October 17, 1996, $1,323.00; on or about November 2, 1996, $21,800.00; on or about November 20, 1996, $7,123.00 and $21,800.00; on or about November 22, 1996, $21,800.00; on or about December 13, 1996, $21,800.00; and on or about January 2, 1997, $21,800.00 and $5,000.00. The payments totaled $180,791.00. On or about July 26, 1996, KMH executed and delivered a deed to the Aksoys for the lot. KMH performed work pursuant to the contract, but only performed 55 percent to 60 percent of the construction contracted for. After January 1997, KMH failed to perform any further work on the Aksoys' home. KMH failed to complete the construction of Aksoys' home. KMH never explained to the Aksoys why it did not complete their home. KMH's trustee in the bankruptcy never offered to complete the work. The Aksoys never fired KMH, never denied KMH access to the property to perform work, and never refused to pay KMH monies due under the contract. The Aksoys considered KMH to have abandoned the job. The Aksoys filed a proof of claim in KMH's bankruptcy for an unsecured non-priority claim in the amount of $85,000.00. Sometime in the years 2000 or 2001, they received $918.00 from the bankruptcy action. KMH's subcontractors/material suppliers recorded liens on the Aksoys' property. The subcontractors/material suppliers and recorded liens were as follows: on January 8, 1997, Buckeye Plumbing for $2,570.00; on January 14, 1997, J. W. Hodges Drywall Textures, Inc. (Hodges Drywall) for $3,500.00; on January 15, 1997, Griffin & Wilson Stucco, Inc. (GW Stucco) for $6,040.00; on January 16, 1997, Gallina Electric, Inc. (Gallina Electric) for $3,732.00; on January 17, 1997, Sasso Air for $2,925.00; on January 21, 1997, K. D. Installation, Inc. (KD Installation) for $2,789.00; and on February 5, 1997, Macshmeyer Concrete Company of Florida, Inc. (Macshmeyer Concrete) for $5,814.00. The Aksoys paid KMH for all the work or materials pertaining to the liens. KMH failed to remove any of the liens. The Aksoys paid the lien holders to remove the liens, as follows: on or about February 18, 1997, $2,570.00 to Buckeye Plumbing; on or about April 7, 1997, $1,400.00 to Hodges Drywall, with the remaining unpaid amount ($2,100.00) being a loss for the company; on or about August 6, 1997, $7,760.10 to GW Stucco, which included additional monies for attorney's fees; on or about March 12, 1997, $1,866.00 to Gallina Electric; on or about April 7, 1997, $2,975.00 to Sasso Air; $1,500.00 to KD Installation (date of payment unknown); on or about March 12, 1997, $2,616.00 to Macshmeyer Concrete. The Aksoys also paid for work for which another KMH subcontractor, Spacerace Enterprises, Inc., claimed that KMH had failed to pay. On or about February 18, 1997, the Aksoys obtained the services of another contractor, Villafranca Design, to complete the construction of their home. The Aksoys paid Villafranca Design $145,250.00. In or around May 1997, Villafranca Design completed the construction of the Aksoys' house, which was essentially the same as the house which was to be constructed by KMH. KMH never provided the Aksoys with notification of the Construction Industries Recovery Fund. The Aksoys never had any direct dealings with Respondent personally. As of November 15, 2001, Petitioner's costs of investigation and prosecution for Case No. 01-3828PL, excluding costs associated with an attorney's time, totaled $606.48. Case No. 01-3833PL On or about December 11, 1995, KMH contracted with Milo and Jerolene Glass for construction of a house on a lot owned by the Glasses. The contract price for the construction of the house was $395,795.00. Respondent's license number did not appear in the contract. In accordance with the contract, the Glasses made the following payments to KMH: on or about November 13, 1995, $1,000.00; and on or about December 11, 1995, $39,079.00. The payments totaled $40,079.00. On or about May 21, 1996, KMH applied for a building permit from Palm Beach County to construct the home for the Glasses. Respondent's name as the qualifying agent for KMH and license number appeared on the application. Sometime thereafter in 1996, the building permit was approved and issued, bearing building permit number B96019588. From approximately November 1996 to January 1997, KMH performed work pursuant to the contract, but thereafter, did not perform any further work on the home. KMH failed to complete the construction of the Glasses' home. At the time KMH stopped working on the Glasses' home, a substantial amount of work remained to be completed. Furthermore, much of KMH's work had to be repaired or corrected. KMH never explained to the Glasses why it did not complete her home. KMH's trustee in the bankruptcy never offered to complete the work. The Glasses never fired KMH, never denied KMH access to the property to perform work, and never refused to pay KMH monies due under the contract. The Glasses considered KMH to have abandoned the job. KMH's subcontractors/material suppliers recorded liens on the Glasses' property. The subcontractors/material suppliers and recorded liens were as follows: on January 17, 1997, Sasso Air for $925.00; on January 23, 1997, Electrical Express for $750.00; and on January 28, 1997, R J G Masonry, Inc. (RJG Masonry) for $8,353.99. KMH failed to remove any of the liens. The evidence is unclear as to whether the Glasses paid KMH for all the work or materials pertaining to the liens. The Glasses paid to remove the liens. The Glasses paid the following: $925.00 to Sasso Air for which they received a final waiver of lien dated July 8, 1999; on or about February 14, 1997, $750.00 to Electrical Express for which they received a release of lien dated June 2, 1997; and on or about January 24, 1997, $8,353.99 to RJG Masonary. The Glasses did not obtain the services of another contractor to complete the construction of their home. Contractors whom they approached were very reluctant or unwilling to take over the project. Finally, the Glasses, who had prior experience as owners of other construction projects, became their own contractors and completed their home. They also received the assistance of a contracting firm, but the Glasses handled all the disbursements of funds to the suppliers for labor and materials. By September 2000, the Glasses had substantially completed their home and were living in it. At the time of the hearing, they had sold the house and moved to another location in Florida. The Glasses estimate that they expended $1,239,487.78 in the construction of their home. They maintain that this cost does not include approximately $80,000.00 that the Glasses claim that their original lender paid to KMH without their authorization. The amount paid by the Glasses exceeds the contract price because (1) KMH underbid the job; (2) the Glasses spent substantial sums to repair or correct KMH's work, which the Glasses estimate conservatively to be more than $200,000.00; and (3) the Glasses spent substantial sums on upgrades of contract allowance items. The Glasses received approximately $1,000.00 from KMH's bankruptcy. KMH never provided the Glasses with notification of the Construction Industries Recovery Fund. After the bankruptcy, Mrs. Glass contacted Respondent and requested the construction plans for the home. Respondent indicated that he did not have the plans. Mrs. Glass contacted Respondent again and he indicated that he may be able to locate the plans. Subsequently, Respondent contacted the Glasses and indicated that he had located the plans. The Glasses went to Respondent's place of business to retrieve the plans. After providing the plans, Respondent requested the Glasses to hire him to complete their home. The Glasses declined Respondent's offer because they considered Respondent's cost estimate to be too high and because of Respondent's association with KMH. As of November 15, 2001, Petitioner's costs of investigation and prosecution for Case No. 01-3833PL, excluding costs associated with an attorney's time, totaled $628.33. Case No. 01-3834PL On or about December 8, 1995, KMH contracted with Suzanne Beck for construction of a house on a lot that Beck would acquire at a later date (in 1996), not as a part of the contract. The contract price for the construction of the house was $133,500.00. Respondent's license number did not appear in the contract. In accordance with the contract, Beck made the following payments to KMH: on or about December 8, 1995, $5,000.00; on or about July 31, 1996, $8,350.00 and 5,643.09; on or about August 7, 1996, $5,030.88; on or about September 4, 1996, $12,051.05; on or about September 18, 1996, $12,051.05; on or about October 1, 1996, $12,051.05; on or about October 11, 1996, $12,051.05; on or about November 7, 1996, $12,051.05; and on or about November 26, 1996, $12,051.05 and $12,051.05. The payments totaled $108,381.32. KMH applied for a building permit from the Town of Jupiter to construct the home for Beck. Respondent's name and license number appeared on the application as the contractor. On February 12, 1996, the building permit was approved and issued, bearing building permit number 96-29588. From approximately August to December 1996, KMH performed work pursuant to the contract and thereafter, did not perform any more work on the home. KMH failed to complete the construction of the Beck's home. KMH never explained to Beck why it did not complete her home. Around the end of December 1996 or in January 1997, Beck notified KMH that she was taking over the project. Progress by KMH had been slow and Beck discovered that KMH had closed the doors of its business for a second time and was not paying its subcontractors. Beck considered KMH to have abandoned the job. She obtained an owner's building permit and completed the project, making payments directly to the suppliers of labor and materials. On February 7, 1997, Beck obtained a certificate of occupancy from the Town of Jupiter. KMH's subcontractors/material suppliers recorded liens on the Beck's property. The subcontractors/material suppliers and recorded liens were as follows: on January 6, 1997, American Aluminum and Insulation FireProofing Company, Inc. (American Alum.) for $385.00; on January 6, 1997, Buckeye Plumbing for $2,625.00; on January 14, 1997, Hodges Drywall for $8,280.00; on January 14, 1997, Rizzo Tile & Marble, Inc. (R Tile & Marble) for $1,870.70; on January 15, 1997, James M. Webster d/b/a Rain Flow of South Florida (Rain Flow) for $75.00; on January 17, 1997, K. D. Installation, Inc. (KD Installation) for $520.40; on January 17, 1997, Q. C. Cabinet Systems, Inc. (QC Cabinets) for $3,207.00; on January 17, 1997, Paul Temple Painting (PT Painting) for $2,534.75; on January 17, 1997, Sasso Air for $3,360.00; on January 28, 1997, James Velix Bobcat Service (Bobcat Service) for $1,450.00; on February 4, 1997, Tideway for $279.00; on February 7, 1997, Florida Builder Appliances, Inc. (Builder Appliances) for $2,936.20; on February 7, 1997, Mc D Sprinklers, Inc. (McD Sprinklers)for $1,275.00; on February 11, 1997, Builder Direct Carpet Sales (Direct Carpet) for $1,959.26; and on February 12, 1997, Pollard Electric, Inc. (Pollard Electric) for $3,640.00. Beck paid KMH for all the work or materials pertaining to the liens. KMH failed to remove any of the liens. Beck paid to remove the liens as follows: on or about June 18, 1997, $2,625.00 to Buckeye Plumbing; on or about March 9, 1999, $10,125.00 to PT Painting, Hodges Drywall, R Tile & Marble, and Direct Carpet; and on or about October 19, 1999, $3,360.00 to Sasso Air. Hodges Drywall released its lien for $4,000.00 and the remaining amount of its lien was not paid, which represents a loss to the company. Builder Appliances, Rain Flow, McD Sprinklers, QC Cabinets, and Tideway did not receive payment from any source and the entire amounts of their liens were complete losses. After Beck took over construction of her home from KMH, she spent $19,203.00 to complete the home. Beck did not receive any money from KMH's bankruptcy. KMH never provided Beck with notification of the Construction Industries Recovery Fund. During the transaction between KMH and Beck, she met with Respondent at the job-site on one occasion to discuss some aspects of the project with which she was dissatisfied. Beck had expressed her dissatisfaction in a letter to KMH's owner. As of November 15, 2001, Petitioner's costs of investigation and prosecution for Case No. 01-3834PL, excluding costs associated with an attorney's time, totaled $534.57.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Construction Industry Licensing Board enter a final order: Dismissing the following counts: Count I of Case Nos. 01-3828PL, 01-3831PL, and 01-3833PL. Count IV of Case No. 01-3832PL. Finding that Glenn L. Mustapick committed all other violations in the counts of Case Nos. 01-3827PL, 01-3828PL, 01-3829PL, 01-3830PL, 01-3831PL, 01-3832PL, 01-3233PL, and 01-3834PL. Imposing a $25,000.00 administrative fine. Requiring Respondent to pay restitution not exceeding $25,000.00. Assessing $4,245.34 in costs for investigation and prosecution, excluding costs associated with an attorney's time, by the Department of Business and Professional Regulation, Construction Industry Licensing Board. Revoking the certified residential license, CR C040917, of Glenn L. Mustapick. DONE AND ENTERED this 3rd day of May, 2002, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 3rd day of May, 2002.
