The Issue Whether there is probable cause for petitioner to bring an action against respondents for violation of the Florida Deceptive and Unfair Trade Practices Act?
Findings Of Fact About seven o clock on the morning of May 23, 1983, Michael S. Boyden telephoned the Pensacola offices of Shear Concrete Products, Inc. (Shear Concrete), and asked that 20 cubic yards of concrete be delivered to a construction site at 438 Creary Street. Under construction there was the house Mr. Boyden was building for himself and his family. (He has since finished it and moved in.) During the first conversation, somebody told him the concrete would arrive at half past ten. At eleven, with no concrete in sight, Mr. Boyden again telephoned; Danny Woods or Terry Knowles told him the concrete was on the way. In fact, it was at least five minutes before one before the first Shear Concrete truck was loaded, and this truck reached the site about two in the afternoon. Thirty-five or forty minutes later, the first truck had been emptied of concrete. The second Shear Concrete truck was loaded at quarter past one, but reached the construction site within minutes of the time the first arrived. Mr. Boyden, a concrete finisher and three other men he had hired were all present at the time the second truck arrived. At the finisher's direction, water was added to the concrete in the second truck; and its contents were also eventually emptied, wheelbarrow by wheelbarrow. By half past three, it was clear that a greater quantity of concrete would be needed; but it was evening before the finisher, Caesar Johnson, told Mr. Boyden that the concrete from the second truck was not setting up properly. Once cement, sand, water and gravel are mixed in a concrete mixer, a reaction begins that runs its course regardless of whether the mixture is poured in time. (The time this reaction takes depends on, among other things, how hot the day is.) If mixing is still going on when the concrete "gets hot," the elements of the mixture do not cohere and the batch is no longer useful as concrete. Adding water retards the reaction to the extent it acts as a cooling agent, but it does not reverse the process. By the time the mixture was poured into the Boydens' foundation, it was no longer suitable for its intended use. The other concrete had hardened by the next day, but concrete from the second truck, the one driven by Ronald Lane Thompson, was soft and friable. Mr. and Mrs. Boyden incurred expense in removing the miscongealed concrete. They ordered and received a replacement load on May 31, 1983, which was satisfactory. They have never paid for this load, even though Shear Concrete has billed them and given them a "notice to owner" in an effort to preserve its rights under the mechanics' lien law. Petitioner's proposed findings of fact have been considered and adopted, in substance, for the most part. To the extent they have been rejected, they have been deemed unsupported by the weight of the evidence, immaterial, conclusive or subordinate.
The Issue The issues in this case are whether Respondent failed to secure workers' compensation coverage for its employees, as Petitioner alleges; and, if so, whether a penalty based upon the unpaid premium should be assessed against Respondent.
Findings Of Fact Petitioner Department of Financial Services, Division of Workers' Compensation ("DFS" or the "Department"), is the state agency responsible, among other things, for the enforcement of the workers' compensation insurance coverage requirements established in chapter 440, Florida Statutes. Respondent Ameribuild Construction Management, Inc. ("Ameribuild"), is a Florida corporation having its principal office in Boca Raton, Florida. Brandon L. Roth ("Roth") is the owner and qualifier, and a corporate officer, of Ameribuild. At all relevant times, Ameribuild was licensed to engage in construction activity in the state of Florida. In the instant case, DFS alleges that Ameribuild, as the general contractor for a construction project in Miami, failed to secure workers' compensation insurance for Roth and six employees (the "Workers") of CJ Meeko, LLC ("CJM"), a business which, DFS alleges, was a subcontractor of Ameribuild on the project in question. In its defense against this allegation of noncompliance, Ameribuild raises two disputes of material fact, asserting that, contrary to DFS's preliminary determinations, (i) Roth did not perform services for remuneration for Ameribuild, and (ii) CJM was not Ameribuild's subcontractor but was, rather, in a direct contractual relationship with Prestige Imports Outparcel LLC ("Prestige"), the owner of the project. Based on these exculpatory (but disputed) factual allegations, Ameribuild argues that, as a matter of law, neither Roth nor any of the Workers was a statutory "employee" (a term of art in this context) of Ameribuild, and thus, to the point, Ameribuild was not obligated to secure compensation for these individuals. Of the material facts in dispute, the question of whether CJM was a subcontractor of Ameribuild is by far the most significant, as the Workers account for $132,593.32 (or 96 percent) of the $137,719.54 penalty that DFS seeks to impose. The Department, which has the burden of proving the affirmative of this crucial question, relies largely (although not entirely) on the hearsay statements of Roth and Eugene Parker ("Parker"), the latter an employee of Ameribuild at all material times who was foreman or superintendent of the subject project. These statements are admissible as substantive evidence under the "admissions" exception to the hearsay rule.1/ DFS introduced the statements of Roth and Parker through its investigator, Anthony Vinci, to whom (according to Mr. Vinci) the statements were made. Mr. Vinci also testified about statements made to him by Jack Rosales, the owner of CJM (and one of the six Workers mentioned above). To the extent offered for the truth of the matters asserted, Mr. Rosales's out-of-court statements to Mr. Vinci constitute hearsay that does not fall within any recognized exception. The undersigned has not made any findings of fact based, in whole or in part, on Mr. Rosales's hearsay statements.2/ Roth and Mr. Rosales testified at hearing. Both men denied that CJM had been Ameribuild's subcontractor, contradicting the section 90.803, Florida Statutes, admissions to which Mr. Vinci attested. Because the resolution of this particular dispute turns on credibility determinations, the undersigned will discuss the testimony itself in somewhat more detail than is usually warranted. On May 31, 2017, Mr. Vinci performed a random worksite inspection at 15050 Biscayne Boulevard, North Miami Beach, Florida, where an automobile dealership was being constructed on a site that had been occupied by a drugstore. He immediately observed several men performing drywall work and debris removal. The first person to whom Mr. Vinci spoke was Mr. Rosales, who identified himself as the owner of CJM and confirmed that the five laborers presently at work were CJM's employees. Mr. Vinci immediately conducted on online database search and discovered that Mr. Rosales did not have an active exemption for himself or workers' compensation coverage for any of CJM's employees at the worksite. Parker, the Ameribuild employee, was present at the worksite, too, when Mr. Vinci arrived. As the project foreman, his duties included coordinating the job and making sure that the work flow continued. Parker told CJM's employees what to do. He opened and closed the worksite daily, coordinated all the subcontractors, and kept a log of persons entering and leaving the area. Parker, in short, was "in charge" on site. Mr. Vinci interviewed Parker, who acknowledged being an employee of Ameribuild and identified CJM as Ameribuild's subcontractor. Parker named Roth as Ameribuild's owner and gave Mr. Vinci Roth's name and number. Before calling Roth, Mr. Vinci went to his car and conducted an online search of Ameribuild's records. He learned that Ameribuild had workers' compensation coverage through a leasing company, which showed coverage for Parker. The leasing roster, however, did not cover Roth or any of CJM's employees. Mr. Vinci then got Roth on the phone to notify him that Ameribuild had not secured workers' compensation coverage for all of its employees and that, consequently, the Department would enforce compliance, including through the issuance of a Stop-Work Order ("SWO"). At hearing, Roth denied having spoken to Mr. Vinci at this time.3/ Mr. Vinci's contemporaneous notes, however, corroborate his recollection of the discussion at issue, and, equally important, the conversation fits comfortably into the undisputed chain of events, whereas its nonexistence would be harder, albeit not impossible, to reconcile with the parties' subsequent conduct. The undersigned finds that, in fact, Mr. Vinci and Roth spoke on the telephone on the afternoon of May 31, 2017. As recounted by Mr. Vinci, the ensuing discussion was, for the most part, about what you'd expect. After introducing himself, Mr. Vinci asked Roth about CJM and whether its Workers were covered. When Roth replied that Mr. Rosales had an exemption from workers' compensation, which he (Roth) had seen, Mr. Vinci informed him that, actually, Mr. Rosales did not have one. Asked whether he (Roth) had an exemption, Roth answered that he would need to check. In response to another of Mr. Vinci's inquiries, Roth told the investigator (according to the latter's contemporaneous notes) that he (Roth) did not receive any remuneration from Ameribuild. According to Mr. Vinci, whose testimony in this regard is hotly disputed, Roth stated that he had hired Mr. Rosales's company, CJM, as Ameribuild's subcontractor on the project in question. Armed with this information, DFS prepared a SWO for issuance to Ameribuild, which commanded Ameribuild to cease all business operations at the worksite and assessed a monetary penalty (exact amount to be determined) equal to two times the premium Ameribuild would have paid to provide the required coverage during the preceding two years. Mr. Vinci called Roth to tell him about the SWO and make arrangements for the service thereof. (Roth's denial of his participation in this conversation is rejected as unpersuasive.) Roth was informed of the requirements for obtaining a conditional release from the SWO so that Ameribuild could resume operations at the worksite pending a final release upon compliance and payment in full of the assessed penalty. Roth agreed to meet Mr. Vinci the following day at the Department's Miami office. That meeting took place as scheduled. Mr. Vinci personally served Roth with the SWO and a Request for Production of Business Records for Penalty Assessment Calculation ("BRR"). Roth then paid $1,000.00 towards the penalty, which had yet to be calculated, and delivered a signed "reduction-of-workforce" letter, i.e., a sworn statement, on Ameribuild letterhead, promising DFS that "Ameribuild Construction Management will no longer permit CJ Meeko LLC or his employees [to] work on the jobsite @ 15050 Biscayne Blvd., North Miami Beach, FL 33132 until CJ Meeko LLC is in compliance with Florida State Law." Upon receipt of Ameribuild's check and reduction-of-workforce letter, the Department executed an Agreed Order of Conditional Release from Stop-Work Order, which authorized Ameribuild to resume operations at the worksite. There is no evidence suggesting that, during this meeting on June 1, 2017, Mr. Vinci or anyone else interrogated Roth, who could have remained silent and refused to comment on DFS's allegations, given that it would be DFS's burden to prove the charges, were Ameribuild to request a hearing. Roth, however, volunteered his opinion that if CJM lacked coverage (as DFS alleged), then Mr. Rosales must have made an "honest mistake" because he (Roth) sincerely believed that Mr. Rosales had applied for and obtained an exemption. The point of this statement, obviously, was not to deny the violation, but to minimize it as having been neither knowing nor intentional. Roth, it appears, was offering up facts that he probably hoped would mitigate the penalty. Regardless, more telling is what Roth——in responding to the accusation that Ameribuild was responsible for its subcontractor's (CJM's) failure to secure compensation——did not say. If CJM really were not Ameribuild's subcontractor, it would be expected that Roth would protest the Department's misunderstanding of this basic fact, and state that, in fact, CJM was Prestige's contractor. While Roth's silence in this regard perhaps does not rise to the level of an evidentiary admission,4/ the undersigned finds that his failure then (or later) to inform the Department of the "true" contractual relationships is suspiciously inconsistent with Ameribuild's current litigating position. If Ameribuild did not have a contract with CJM, then Roth, if he were not going to keep quiet, should have been making that point early and often. In the months that followed, Ameribuild provided documents to DFS responsive to the BRR, which DFS deemed insufficient for purposes of determining Ameribuild's payroll for the audit period of June 1, 2015, through May 31, 2017. In such situations, where the records are insufficient to establish actual payroll, the Department is authorized to base its penalty assessment upon an "imputed payroll." Consequently, using the methodology specified in section 440.107(7)(d)1. and (e) and Florida Administrative Code Rule 69L-6.027, DFS determined (for the entire audit period) Ameribuild's imputed payroll, which is the compensation that Ameribuild is deemed to have paid the Workers and Roth. It is unnecessary in this case to make detailed findings regarding the assumptions behind Ameribuild's imputed payroll figures because Ameribuild does not dispute them or the amount of the resulting penalty ($137,719.54), which was set forth in an Amended Order of Penalty Assessment served on November 6, 2017. Rather, Ameribuild maintains that DFS has failed to prove the alleged violations, meaning there can be no penalty, which makes the imputed payroll irrelevant. If, on the other hand, Ameribuild were found to have violated a duty to secure compensation for Roth and Workers, which Ameribuild of course believes should not happen, then Ameribuild would concede that the imputed payroll and concomitant penalty are correct. As mentioned above, it is Ameribuild's contention that the Workers were not "employees" of Ameribuild for workers' compensation purposes because CJM was under contract, not to Ameribuild, but to the owner of the project, Prestige. Both Roth and Mr. Rosales testified about this purported contract; under the CJM-Prestige agreement as they described it,5/ the Workers might not have been Ameribuild's employees.6/ Ameribuild sought to introduce a copy of the contract as proof of the fact that CJM was Prestige's contractor. The Department objected because Ameribuild had not disclosed the contract as an exhibit until a few days before the hearing, long past the deadline established in the Order of Pre-hearing Instructions. Ameribuild could provide no explanation for the late disclosure. Wanting to avoid the exclusion of evidence that could be dispositive, but unwilling to countenance the prejudice DFS might suffer if the surprise exhibit were admitted, the undersigned ruled that the document would be received on the condition that the hearing be recessed for a reasonable, but brief, period so that DFS could depose the appropriate person(s) at Prestige about the purported CJM-Prestige agreement, and then supplement the record with the deposition(s). Ameribuild, however, elected to withdraw the exhibit to prevent the Department from obtaining Prestige's testimony about the alleged contract. Thus, Ameribuild neither offered (nor proffered) the purported CJM-Prestige agreement, which, accordingly, is not in the evidentiary record. The undersigned probably would be permitted to draw an adverse inference from Ameribuild's counterintuitive failure to introduce the written agreement, which was obviously available and within Ameribuild's immediate control, and which (if genuine) would be, if not dispositive, certainly persuasive exculpatory evidence directly rebutting the Department's case-in-chief. The undersigned reasonably could infer from the totality of the circumstances that Ameribuild had reason to believe Prestige would not recognize and authenticate the purported contract if asked about it under oath in deposition, which reason being (need it be said?) that the purported contract is a fake. The undersigned declines to draw such an inference. Instead, the undersigned finds that, without the contract as corroborating evidence, Ameribuild has failed to present proof sufficient to undermine the strength of the Department's prima facie case. DFS has carried its burden of proving, by clear and convincing evidence, that CJM was Ameribuild's subcontractor. On the question of whether Roth was an employee of Ameribuild for compensation purposes during the period when his name did not appear on the coverage roster, however, the undersigned finds that the Department failed to carry its burden of proof. Roth testified at hearing that he had received no remuneration from Ameribuild during the months in 2016 and 2017 when he was not included in the company's compensation coverage, which testimony was consistent with his prior statement to Mr. Vinci in this regard. Other documentation in evidence shows that in 2015, when Roth received remuneration from Ameribuild, he was also provided workers' compensation coverage, through South East Personnel, Inc., a leasing company. While the evidence fails clearly to establish that Roth did not receive remuneration from Ameribuild, it fails clearly and convincingly to prove that he did. It is determined, therefore, that Roth was not an uncovered employee during the audit period. The proposed penalty must be adjusted to remove the amount attributable to Roth——$5,126.22. Ameribuild's penalty for noncompliance, based on the Workers' imputed payroll, should be $132,593.32.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order finding Ameribuild Construction Management, Inc., in violation of its obligation to secure workers' compensation and imposing a penalty of $132,593.32 for such noncompliance. DONE AND ENTERED this 6th day of September, 2018, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of September, 2018.
Findings Of Fact The Respondent, Richard M. Woodley has two inactive contracting licenses numbered CB CA 17970 and CB CO 17970, and was so licensed in 1986. The Respondent's license CB CA 17970 qualified "Woodley Builders, Inc." with the Florida Construction Industry Licensing Board. At the time of the hearing, the Respondent was no longer in the construction contracting business as a licensed contractor. With respect to case number 87-2809, on December 15, 1985, the Respondent, on behalf of Woodley Builders, Inc., entered into a contract with Catherine M. Richardson and Jonathan P. Richardson to build a residence in or near Orlando, Florida. The contract price was $90,000, with $20,000 attributable to the land. The contract specified that payments would be made to Woodley Builders, Inc. "in accordance with the disbursement schedule set forth by the construction lender." P. Ex. 1, paragraph 7. Woodley Builders, Inc. also agreed in the contract to furnish to the Richardsons lien waivers as required by the construction lender for disbursements. The construction lender disbursed the following amounts on the indicated dates: $10,200 March 17, 1986 $10,200 March 19, 1986 $17,000 March 27, 1986 $17,000 April 24, 1986 To induce these disbursements, a total of $54,400, the Respondent signed lien waivers stating that all bills for labor and materials used had been paid in full. P. Ex. 5. At the time of signing, the Respondent told the construction lender that he had paid all bills due to that time, but had not paid bills not yet presented. T. 89. Thus, the lien waivers were intended to be a certification of the partial completion and payment for the work billed to the date of the waiver, and a promise to pay other bills for work already completed as such bills were presented. Six claims of liens were filed by subcontractors. The Richardsons hired a lawyer, and the lawyer was able to defend against two of the liens for failure to properly comply with procedures for mechanic's liens. Four liens for the following amounts and for work beginning on the dates indicated ultimately had to be satisfied by the Richardsons: $ 2,851.45 March 19, 1986 $13,462.34 March 7, 1986 $ 1,944.57 April 8, 1986 $ 785.01 April 9, 1986 These liens were for work commenced before the last lien waiver was signed on April 24, 1986. Thus, the Respondent failed to comply with the oral representations he made at the time of signing the lien waivers. The Richardsons were forced to execute a second mortgage in excess of $17,000 to pay off the unpaid liens. The Richardsons terminated the contract with Woodley Builders, Inc. when subcontractors quit working for lack of payment by Woodley Builders, Inc. Some money was obtained from family loans. It cost the Richardsons about $30,000 to have the house finished, which has added about $325 per month to their mortgage obligations. The Respondent and Woodley Builders, Inc. have not paid anything on these liens. Woodley Builders, Inc. filed bankruptcy. The Richardsons sued the Respondent as trustee for Woodley Builders, Inc. and obtained a default judgment for $149,839, which was a judgment of $32,380 in compensatory damages, trebled, plus costs, interest, and attorney's fees. With respect to case number 87-2810, on June 11, 1986, Woodley Builders, Inc. entered into a contract with Tom Jamieson to construct an addition to his residence in Orlando, Florida. The price of the work was $18,500. The contract specified that the price was a cash price, and that draws were to be made according to a schedule stated in the contract. Mr. Jamieson paid to Woodley Builders, Inc. about $11,700 of the contract price. At some time before completion of the addition, the owner, Mr. Jamieson, evidently became dissatisfied with the Respondent's work. Mr. Jamieson was given the Respondent's copy of the contract and refused to return it to the Respondent. Mr. Jamieson then owed the Respondent a draw of $3500, but refused to give it to him, and refused to have it put in escrow for the payment of subcontractors. The date that this occurred is not in evidence. T. 35-36, 39. Since Mr. Jamieson had taken back the contract, the Respondent thought that he (the Respondent) no longer had any legal proof of the contract (either scope of work or amount due), and thus had no contract to complete the work. He also did not receive the draw that was due. The Respondent thus ceased work on the addition for fear that he would not be paid without a copy of his contract. T. 36-37. The Respondent offered to complete the work. T. 51. The drywall contractor, Rick's Drywall, Inc., filed a lien for $465 for work done from August 12, 1986 and August 20, 1986. The Respondent would have paid this lien had Mr. Jamieson not terminated the contract and refused to give the Respondent a draw still due of $3500. T. 49-50. There may be a claim for unpaid electrical work in July, 1986, see P. Ex. 15, but it is impossible to tell if this occurred before or after Mr. Jamieson terminated the contract, or whether the Respondent had received draw money that should have paid this claim. The only evidence is that the Respondent had an agreement with the electrical subcontractor to pay that subcontractor at the time of the final draw, a draw never received as discussed above. T. 53. P. Ex. 11 is insufficient evidence that there were unpaid claims for roof trusses. Moreover, it cannot be determined whether the Respondent received a draw before contract termination which should have been used to pay for roof trusses. The Respondent had been a contractor for eight years before he began to have financial difficulties resulting in the problems with the Richardson's residence. There is no evidence of any prior discipline.
Recommendation It is recommended that the Construction Industry Licensing Board enter its final order finding in case number 87-2809 that the Respondent, Richard M. Woodley, violated sections 489.129(1)(m), 489.129(1)(j), and 489.119, Fla. Stat. (1986), misconduct in contracting by diversion of funds, and failure to supervise as a qualifying agent, and in case number 87-2810, dismissing the administrative complaint for failure of proof by clear and convincing evidence. It is further recommended for the violation set forth above that the license of the Respondent be suspended for one year. DONE and ENTERED this 22nd day of July, 1988. WILLIAM C. SHERRILL, JR. 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 22nd day of July, 1988. COPIES FURNISHED: Richard M. Woodley 2521 Tuscaloosa Trail Maitland, Florida 32751 David Bryant, Esquire 1107 East Jackson, Suite 104 Tampa, Florida 33602 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Nonroe Street Tallahassee, Florida 32399-0750 Fred Seely, Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32201
Findings Of Fact Julio Batista is a licensed general contractor holding license No. CG C001094 issued by the Florida Construction Industry Licensing Board to Julio G. Batista, d/b/a Goba Construction Company. Goba Construction Company became the licensed general contractor on a construction project known as Solimar Condominiums for which the building permit identified as Exhibit 2 was obtained. Julio Batista took over the construction of the Solimar Apartments on June 12, 1973, several months after the original permit was obtained. Coastal Mortgage Company and Goba Construction Company entered into a note and mortgage for a building loan of $1,100,000 on or about June 26, 1973. Notice of this commitment by Coastal Mortgage was given to Batista by letter on June 4, 1973. In June, 1975, Coastal Mortgage Company failed financially, and was unable to provide the balance of the financing originally obligated to Goba Construction Company. Goba Construction Company commenced construction on the Solimar Condominiums after June 12, 1973 and worked on the project from June, 1973 until early 1975. In early 1975, active construction on the project slowed to all but a halt. During this time the construction project was inspected by Sarasota building officials who pointed out and requested correction of conditions which were contrary to the building code of Sarasota and to the plans and drawings submitted to the building officials for construction of the building. Copies of the ordinance adopting the Southern Standard Building as the official building code of Sarasota and a copy of the Southern Standard Building Code were submitted as Exhibit 1 and Exhibit 1A, late filed. Testimony and evidence was introduced that steel reinforcing rods used within reinforced concrete were in some instances not completely covered. It was further demonstrated that certain aspects of the construction as built did not conform with the plans originally submitted for the project. Specifically, it was determined that the balconies were flush with the interior floors instead of having a short step down to the balcony. In addition, the stairs in the stairwells were not constructed plumb, level, with treads of the correct width and height, and with treads encroaching upon the landings. Julio Batista was made specifically aware of the violations and advised to have them corrected by the building authorities of Sarasota. Towards the latter portion of 1975, Coastal Mortgage sued Goba Construction Company and Batista in a foreclosure action on the Solimar Condominiums project. Goba Construction Company and Batista counter-sued seeking damages as the result of Coastal's breach of the contract for financing of the project. These suits were eventually settled by Goba Construction Company and Coastal Mortgage, with Goba Construction and Batista being released from all obligations on the mortgage and note, and paid $15,000 by Coastal Mortgage. As a part of the settlement, Goba and Batista conveyed any interest which they had in the Solimar project to Coastal Mortgage. Julio Batista testified stating that he is willing and has been willing to correct the deficiencies existing in the Solimar Condominiums; however, that the failure of Coastal Mortgage, through no fault of his, prevented him from obtaining the financing necessary to complete the project to include correcting the deficiencies. Prior to the commencement of the proceedings in this case, the building authorities of Sarasota had ordered a halt to all further construction until the deficiencies were corrected. Until the officials ordered work ceased, efforts were continuing to complete the project and to complete the deficiencies existing, although this work was at a very slow pace.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Florida Construction Industry Licensing Board take no action against the license of Julio G. Batista as a general contractor. DONE AND ORDERED this 29th day of August, 1977, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Telephone: (904) 488-9675 COPIES FURNISHED: Barry Sinoff, Esquire 1010 Blackstone Building Jacksonville, Florida 32202 John Patterson, Esquire Livingston & Patterson, P.A. 46 North Washington Boulevard Sarasota, Florida 33577 Mr. J. K. Linnan Executive Director Florida Construction Industry Licensing Board Post Office Box 8621 Jacksonville, Florida 32211
The Issue The issue is whether Respondent undertook to act as a contractor without a license as charged in the Administrative Complaints, and if so, what disciplinary action should be taken.
Findings Of Fact Pursuant to Section 20.165, the Division of Professions is a subordinate unit of the Department of Business and Professional Regulation (the Department). The Department provides administrative support, including prosecutorial support to the Construction Industry Licensing Board (the Board), which is also located within the Department. Mr. Grandmont is not currently licensed as a State Registered or State Certified Contractor in this state, nor has he ever been licensed by the Board. Mr. Grandmont's last known address is 355 China Berry Circle, Davenport, Florida. He was provided notice of the hearing at that address, and at 7733 Park Road, Charlotte, North Carolina 28210, which is the address he used when demanding a hearing on disputed facts in two of these cases. In DOAH Case No. 06-3279, he provided no address in his demand for a hearing. All attempts by U. S. Mail to notify Mr. Grandmont of the hearing, were returned. Mr. Grandmont is deemed to have known of the time, date, and place of the hearing, and is deemed to have waived his appearance at the hearing. On November 11, 2005, subsequent to Hurricane Wilma, Robert L. Coe, of Lake Worth, Florida, was contacted by Mr. Grandmont, who offered to repair his damaged mobile home. He provided a written estimate of $10,500. The estimate contained a list of 11 items requiring repair, and stated that he would accomplish the repair of them. He demanded a $4,200 down payment, which Mr. Coe provided in a draft drawn on Fidelity Cash Reserves, and dated November 11, 2005. Mr. Coe never saw Mr. Grandmont again. The repairs set forth in the written estimate were not accomplished. The draft, however, was negotiated by Mr. Grandmont. On November 12, 2005, subsequent to Hurricane Wilma, Joseph Webster, of Lake Worth, Florida, was contacted by Mr. Grandmont, who offered to repair his damaged residence. Mr. Grandmont discussed charging $13,500 in return for repairing Mr. Webster's residence. After negotiations, Mr. Grandmont agreed to do it for $11,500. No written estimate or contract was prepared. Mr. Grandmont demanded $5,750 payment in advance. Mr. Webster rounded off the down payment to $6,000 and presented Mr. Grandmont an official check of the Taunton Federal Credit Union, of Taunton, Massachusetts, for that amount. The check was negotiated by Mr. Grandmont, but the promised repairs were not accomplished. On November 4, 2005, subsequent to Hurricane Wilma, Ella Arseneau, of Lake Worth, Florida, was contacted by Mr. Grandmont, who offered to replace her roof. He provided an estimate of $5,500 in return for repairing Ms. Arseneau's residence. He demanded that she pay $3,500 in advance, which Ms. Arseneau provided by presenting Mr. Grandmont a check for $3,500, drawn on an account in Wachovia Bank. The check was negotiated by Mr. Grandmont, but the roof was not repaired as promised. Mr. Coe is 78 years of age, Mr. Webster is 85, and Ms. Arseneau is 77.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation impose a fine upon Clifford Grandmont in the amount of $30,000. DONE AND ENTERED this 28th day of November, 2006, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER 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 28th of November, 2006. COPIES FURNISHED: Brian A. Higgins, Esquire Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Clifford Grandmont 7733 Park Road Charlotte, North Carolina 28210 Nancy S. Terrel, Hearing Officer Office of the General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Simone Marstiller, Secretary Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Josefina Tamayo, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether disciplinary action should be taken against Respondent’s license to practice contracting, license number CGC 060878, based on violations of Subsection 489.129(1), Florida Statutes (2005)1, as charged in the three-count Administrative Complaint filed against Respondent in this proceeding. Whether Respondent violated Subsection 489.129(1)(g)2., Florida Statutes (Count I) by committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer; Subsection 489.129(1)(j), Florida Statutes (Count II) by abandoning a construction project in which the contractor is engaged or under contract as a contractor, and Subsection 489.129(1)(m), Florida Statutes (Count III) by committing incompetency or misconduct in the practice of contracting. And, if so, what discipline should be imposed, pursuant to Section 489.129, Florida Statutes, and Florida Administrative Code Rule 61G4-17.002.
Findings Of Fact Based on the evidence and testimony of the witnesses presented and the entire record in this proceeding, the following facts are determined: At all times material, Respondent was a certified general contractor, having been issued license number CGC 060878 by the Florida Construction Industry Licensing Board (CILB). At all times material, Respondent was the qualifier of Epic Building and Development Corporation, a Florida Corporation, with its principal place of business in the Fort Myers area. On February 22, 2005, Respondent entered into a contract with Edward Dueboay to rebuild a house owned by Dueboay and his wife, located at 22299 Laramorre Avenue, Port Charlotte, Florida, which had been distroyed some months earlier by Hurricane Charlie. The price of the contract was $150,000.00. On or about March 24, 2005, Dueboay gave Respondent a check in the amount of $3,500 payable to Contractors Marketing America, Inc. (CMA, Inc.), for the engineering plans. On May 6, 2005, Dueboay paid Respondent $5,000, as an advance on the contract. Respondent did not obtain the building permit from the Charlotte County Building Department until December 12, 2005, and work on the project did not start until January 2006. Because of the enormous damage caused by the hurricane, contractors in the area were flooded with jobs, and significant shortages in building materials also occurred. On January 13, 2006, Respondent billed Dueboay $11,000.00 for land clearing and filling, $750.00 for permit fees, and $3,200.00 for a temporary electric pole. The bill gave credit for the $5,000.00 Dueboay paid on May 6, 2005, and showed a balance due of $10,000.00. On January 20, 2006, Dueboay paid the above-mentioned invoice, by check to Respondent, in the amount of $10,000.00. Respondent paid $4,600.00 to the sub-contractor who performed the lot clearing and filling, but billed Dueboay $11,000.00. However, the contract provided for a $2,500.00 allowance for clearing and filling, and a $750.00 allowance for permit fees. Section 11.c of the contract also provided that Respondent shall provide and pay for all materials and utilities and all other facilities and services necessary for the proper completion of the work on the project in accordance with the contract documents. To pay for the remainder of the contract, Dueboay negotiated and obtained a loan in the total amount of $153,000.00 from Suncoast Schools Federal Credit Union (Credit Union). On March 21, 2006, Dueboay and the Credit Union signed the construction loan agreement. On March 21, 2006, Respondent was paid $18,235.00 by the Credit Union for the pre-cast walls used in the erection of the structure. On May 11, 2006, Respondent finished Phase I of the project. On May 15, 2006, Respondent received $11,350.00 as the first draw by the Credit Union. On June 20, 2006, Respondent finished Phase II of the project. On June 20, 2006, Respondent was paid $26,335.00 as the second draw by the Credit Union. From June 2006 to November 2006, Respondent performed no work on the house under the Dueboay contract. Because the roof was not completed, mold appeared on and in the house. On August 21, 2006, Dueboay paid $109.95 to America’s Best Cleaning and Restoration, Inc., for mold removal. On or before September 13, 2006, Dueboay hired an attorney to clarify billing charges related to lot filling, permit fees and the temporary electric pole, and to prompt Respondent to resume work abandoned since June 2006. Under the Credit Union Loan Agreement, after several extensions, the completion of the Dueboay home should have taken place on or before October 17, 2006. On October 18, 2006, the Loan Agreement extension expired, and Dueboay was required to pay mortgage and interest on the loan, even though construction of the house was not completed. On November 10, 2006, Dueboay’s attorney sent Respondent a third letter advising him that the project was stagnating; that after eighteen months since the signing of the contract, the roof of the house was not yet completed; and that, under the contract, Respondent was obligated to substantially complete all work in a reasonable time after construction had started. On or about December 1, 2006, the building permit expired and had to be renewed. At some point after November 10, 2006, Respondent resumed work and finished Phase III on March 8, 2007, with the exception that some doors were not installed, including the garage door. Respondent submitted a sworn Contractor’s Affidavit stating that all subcontractors had been paid, and that there are no liens against Dueboay’s property. However, Dueboay had to pay Charlotte County Utilities $224.93 on October 29, 2007, and $240.00 to Pest Bear, Inc., on May 7, 2008, to avoid two liens being recorded against his property. From March 8, 2007, until July 2007, Respondent performed no work under the contract. David Allgood, another general contractor, was hired by Respondent to complete some of Respondent’s projects in the Port Charlotte area, including the Dueboay house. However, Dueboay was not informed of this arrangement. There was no contract directly between Dueboay and Allgood. On September 4, 2007, relying on advice from his attorney, Dueboay changed the locks to the house, with the intent to keep Respondent and his employees off his property. Shortly thereafter, employees of general contractor David Allgood broke the front lock and entered the property in September 2007, without Dueboay’s permission. Dueboay, again, following advice from this attorney, called law enforcement to eject Allgood’s employees from his property. Allgood attempted to invoice Dueboay for installing some doors on the house that Respondent had previously paid for, and which Respondent should have installed. However, following advice from his attorney, Dueboay resisted Allgood’s request to pay him for the doors. Respondent was paid a total of $122,246.03 for the Dueboay project, before the contract was cancelled. Respondent did not complete work from Phases IV and V, with the following exceptions: he did some work on the driveway, painted the interior, did some cabinet work, exterior trim and soffit, siding, stucco, and some interior trim. Therefore, Respondent completed, at best, three out of seven operations from Phase IV (interior and exterior paint, interior trim and doors, and exterior trim and soffits) and worked on, but did not complete, stucco and some cabinets. From Phase V, Respondent only worked on the driveway and sidewalks, which had to subsequently be repaired. Dueboay hired Storybook Homes, Inc. (Storybook), to complete work abandoned by Respondent from Phases IV and V. Storybook was hired to complete work as follows: install cabinets and vanities, install ceramic tiles, repair stucco, install custom tub, all electrical and plumbing per code, complete exterior paint, install hardware, sinks and faucets in the baths and showers, complete floors, install all appliances, complete air conditioning and heat, and obtain the certificate of occupancy. The amount of $122,246.03 paid to Respondent at the time when Respondent abandoned the Dueboay project represents 81 percent of the total contract price of $150,000.00. Respondent completed, at best, 75 percent of the job by completing only three out of seven operations of Phase IV and working on some additional operations that needed to be redone, like the driveway, sidewalks and stucco. Due to Respondent’s failure to perform work on time, Dueboay incurred $5,116.42 in additional expenses, as follows: $109.95 on August 21, 2006 (mold removal), $360.00 on November 23, 2006 (legal fees), $175.00 on June 4, 2007 (legal fees), $375.00 on September 4, 2007 (legal fees), $224.93 on October 29, 2007 (to satisfy lien), $668.34 on November 3, 2007 (legal fees), $200.00 on April 4, 2008 (legal fees), $1,151.05 on May 7, 2008 (to correct work performed deficiently by Respondent), $390.00 on May 7, 2008 (to repair driveway), $240.00 on May 7, 2008 (to avoid lien), and $412.00 on May 12, 2008 (to install safe room door that Respondent failed to install). The total investigative costs of this case to Petitioner, excluding costs associated with any attorney’s time, for Petitioner’s case no. 2005-028129 was $276.18.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Board render a Final Order as follows: Finding Respondent guilty of having violated Subsection 489.129(1)(g)2., Florida Statutes, as alleged in Count I of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $1,500. Finding Respondent guilty of having violated Subsection 489.129(1)(j), Florida Statutes, as alleged in Count II of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $2,500. Finding Respondent guilty of having violated Subsection 489.129(1)(m), Florida Statutes, as alleged in Count III of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $1,500. Respondent’s license to practice contracting (CGC 060878) be suspended for a period of three months, followed by a period of probation for two years, upon such conditions as the Board may impose, including the payment of costs and restitution. Requiring Respondent to pay financial restitution to the consumer, Edward Dueboay, in the amount of $5,116.42 for consumer harm suffered due to payment of additional expenses. Requiring Respondent to pay Petitioner’s costs of investigation and prosecution, excluding costs associated with an attorney’s time, in the amount of $276.18. DONE AND ENTERED this 21st day of July, 2009, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE 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 21st day of July, 2009.
Findings Of Fact Respondent is a registered residential contractor, having been issued license number RR 0032366. On March 29, 1979, Respondent, doing business as Bert Kinast Construction Co., entered into a contract with Gary and Harriet Nelson to construct a residence for the sum of $65,122. On April 15, 1979, Respondent signed an affidavit stating that all bills for materials and labor performed as of that date for the construction of the Nelson residence had been paid. Respondent signed the affidavit for the express purpose of obtaining a draw payment for construction performed and, as a result of the affidavit, did receive a draw payment of $9,765.30. At the time Respondent signed the affidavit, Panama Machinery & Supply Co. was owed $193.98 for material furnished to Respondent for the construction of the Nelson residence. On June 4, 1979, Respondent signed an affidavit stating that all bills for materials and labor performed as of that date for the construction of the Nelson residence had been paid. Respondent signed the affidavit for the purpose of receiving a draw payment for construction performed and, as a result of the affidavit, did receive a draw payment of $22,792.70. At the time Respondent signed the affidavit, he owed Panama Machinery & Supply Co. $1,249.94. During August, 1979, Respondent signed an affidavit stating that all bills for materials and labor performed for the construction of the Nelson residence had been paid. At the time Respondent signed the affidavit, certain materialman and subcontractors who furnished labor and material for the Nelson construction project were not paid, to wit: Panama Machinery & Supply Co., Coastal Insulation, West Florida Natural Gas Company, Culligan Water Services, Inc., Dixie Window Co. and Rachel's Lighting & Home Accessories. Respondent violated Section 1115.7 of the 1979 Edition of the Standard Building Code by not providing adequate head room in the stairwell at the Nelson residence. On or about August 3, 1979, Respondent entered into a contract with John C. and Barbara L. McHaffie to construct a residence for the sum of $105,475. On or about October 11, 1979, Respondent endorsed an instrument, specifically a check, acknowledging that all bills for labor and materials furnished for the McHaffie residence had been paid in full. Respondent endorsed the check to obtain payment for construction he had performed to that date. At the time Respondent signed the check containing that acknowledgment, certain material-men and subcontractors were unpaid, to wit: Buckley's Plumbing, Moore Concrete Products, William Smith and Panama Machinery & Supply Co. On or about November 20, 1979, Respondent endorsed an instrument, specifically a check, acknowledging that all bills for labor and materials furnished for the McHaffie residence had been paid in full. Also on November 20, 1979, Respondent signed an affidavit entitled "Partial Release of Lien on Progress Payment," stating that all bills for labor and materials furnished for the construction of the McHaffie residence were paid in full. Respondent endorsed the check and signed the affidavit in order to obtain a construction draw and did, as a result, obtain the construction draw for labor and materials used in the construction of the McHaffie residence. At the time that Respondent endorsed the check and signed the affidavit, certain materialmen and subcontractors were not paid, to wit: Parker Heating & Cooling, Culligan Water Services, Inc. , Moore Concrete Products, Overhead Door Company of Panama City, Inc., Coastal Insulation, Panama Machinery & Supply Co., G & H Building Materials and William Smith. Respondent received $50,937.50 which was to be used by Respondent to pay for materials and/or labor provided by various materialmen and/or subcontractors for the construction of the McHaffie residence. Certain materialmen and/or subcontractors were not paid from the monies received by Respondent for that purpose, to wit: Parker Heating & Cooling, Culligan Water Services, Inc., Buckley's Plumbing, Moore Concrete Products, Overhead Door Company of Panama City, Inc., Coastal Insulation, Hodges Lumber, Panama Machinery & Supply Co., G & H Building Materials and William Smith. On August 17, 1979, Respondent obtained permit number 5260 from Bay County, Florida, to perform the McHaffie construction. Respondent represented on the application for the above-referenced permit that his estimate of the building costs for the McHaffie residence was $57,250. Since the contract for the McHaffie residence was for $105,475, the price of the building permit would have been nearly $160 more since Bay County charges $3 permit cost per every $1,000 construction cost. During his construction of the McHaffie residence, Respondent violated Sections 1603 and 1706.8(1) of the 1979 Edition of the Standard Building Code in that the concrete floor in some areas was less than three and a half inches thick and caulking or flashing was not installed around the sliding glass doors. On or about November 25, 1981, Respondent was convicted of passing a worthless check, in violation of Section 832.05, Florida Statutes. Respondent's worthless check was given by Respondent to West Building Materials on or about March 25, 1981, as payment for building materials.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding the Respondent guilty of the allegations contained within the Administrative Complaint, suspending Respondent's license as a registered residential contractor; for a period of three years, imposing an administrative fine against Respondent in the amount of $1,000 and placing Respondent on probation for three years upon reinstatement of his license, with the terms and conditions thereof to be set by the Board. DONE and RECOMMENDED this 8th day of March, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, 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 8th day of March, 1983. COPIES FURNISHED: John O. Williams, Esquire J. K. Linnan, Executive Director 547 North Monroe Street, Construction Industry Licensing Suite 204 Board Tallahassee, Florida 32301 Post Office Box 2 Jacksonville, Florida 32201 Mr. Berthold Kinast 1244 Airport Road Panama City, Florida 32401 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue presented for decision herein is whether or not the Respondent, Morton Schultz, failed to supervise, direct, inspect and control all work on a construction project for which he was the qualifying agent and whether he made misleading and deceptive representations in contracting in violation of Sections 489.129(4)(c), (d) and (j), Florida Statutes.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, Respondent's written response filed herein and the entire record compiled, I hereby make the following relevant factual findings. By its Administrative Complaint dated September 17, 1981, Petitioner seeks to take disciplinary action against Respondent as licensee and against his licenses as both a registered general contractor and registered pool contractor. During times material herein, Respondent was the qualifying agent for National Builders, Inc., and is the holder of license number CG C001944. On September 15, 1980, Respondent, as qualifying agent for National Builders, Inc., contracted to build a five-story condominium in Miami Beach, Dade County, Florida, with Joel Amstell d/b/a Amstell, Inc. Pursuant to the contract, Mr. James Rosen was to be the on-site supervisor for National Builders. (Petitioner's Exhibit 2) Mr. Rosen is not a registered or licensed contractor. The contract price for the construction of the condominium herein was $328,000 including all labor and materials. Additionally, the job was to be bonded and the premium for issuance of the bond was to be borne by National Builders, Inc. (Petitioner's Exhibit 2, paragraph, 3) Pursuant to the contract, the entire job will be finished six months after the pilings are in place. If the job takes longer, the interest charge paid by the developer to the lender will be deducted from the amount due National Builders, Inc. If the job is finished in less than six months, half the interest the developer saves will be paid to National Builders, Inc. (Petitioner's Exhibit 2, page 2) The pilings were completed and erected at the end of January, 1981. The project was not completed at the end of July, 1981 as is set forth in the contract. Mr. Amstell made repeated requests for Respondent to spend some time on this project to supervise or otherwise see that the project was completed as agreed. Despite Mr. Amstell's repeated prodding of Respondent, Respondent refused to spend any time on the project and demanded an increase in the contract price to complete the project. At that point, Mr. Amstell attempted to get the bonding company to complete the construction for the building and, at that point, found that the project was not bonded as Respondent agreed pursuant to the contract. (Testimony of Amstell, TR. p. 13) Respondent failed to perform the duties required of a qualifying agent in that he failed to supervise, direct, inspect and control the progress of the work on this project. (TR. pp. 15-18 and 34-38) To complete construction of the project, owner Amstell expended an additional $108,000. This figure was not caused by any changes or other deviations from the drawings and plans which were submitted to Respondent and which he (Respondent) agreed to perform. Supervisor Rosen left the project during June of 1981. From the period January through June of 1981, supervisor Rosen saw Respondent on the construction site no more than three times. Supervisor Rosen concluded that Respondent failed to provide him with the guidance and assistance he needed to complete this project as agreed. At the time that Respondent left the project, the beams and walls were not properly aligned as agreed and owner Amstell had to expend monies to paint the building adjacent to his building due to the fact that concrete had spilled on the property next door and was never cleaned as promised by Respondent.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED that Respondent's registered general contractor's license number CG C001944 be REVOKED. RECOMMENDED this 25th day of January, 1985, in Tallahassee, Florida. JAMES E. BRADWELL 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 25th day of January, 1985.
Findings Of Fact The certified residential contractors license number CRC001528 issued to Hampton is currently inactive. On June 21, 1977, Jay Hampton Construction, Inc. , entered into a contract with Francis Merceret to enclose a carport for a total price of $7,500.00. Hampton had made application to change his contractors license to a corporate license but since the paper work was not complete, such request was never processed. The work done on the Merceret residence was done under Hampton's individual license. Construction on the project was completed in August, 1977, and Merceret paid the full amount of the contract price to representatives of Jay Hampton Construction, Inc. There are outstanding bills in the amount of $183.76 due to Best Iron Works and $273.30 due to M. P. S. Industries, which monies are owed for work done or materials furnished for the Merceret enclosed carport. Hampton satisfied another claim of lien filed by Cling Electric, Inc., for unpaid bills resulting from the work on the Merceret residence. Merceret made a total of three payments to Jay Hampton Construction, Inc. The first two payments were made to the company. After that time, Hampton called Merceret and requested that the third and final payment be made directly to him because of problems Hampton was having with his partner. Hampton agreed to put the money in escrow until the problems were worked out and lienors were satisfied. Notwithstanding these precautionary instructions, Merceret made the final payment to one Murrary Lash, who was associated with Hampton. Hampton never saw the money again nor was it properly allocated to subcontractors or material men who had not been paid. This occurred, notwithstanding Hampton's request that Merceret not pay anyone until all releases were obtained.
