The Issue Whether Respondent committed the violations alleged in the administrative complaint; and, if so, what penalty should be imposed.
Findings Of Fact At all times material to the allegations of this complaint, the Respondent, Joseph Marcelin, was a certified residential contractor, license number CR C028352. Respondent’s place of business and residence are in Dade County, Florida. The Petitioner is the state agency charged with the responsibility of regulating and disciplining licensed contractors. On May 14, 1988, the Construction Industry Licensing Board entered a final order approving a settlement stipulation regarding Case no. 74860 against this Respondent. This final order directed Respondent to adhere to and abide by all of the terms and conditions of the stipulation. The stipulation required the Respondent to not violate the provisions in Chapters 455 and 489, Florida Statutes, in the future; required Respondent to honor a settlement in a civil matter; required Respondent to pay a fine in the amount of $500.00; suspended Respondent’s license for thirty days; and required Respondent to affirmatively demonstrate compliance with the stipulation in order to have his license reinstated. A second final order entered by the Board on May 14, 1988, approved a settlement stipulation regarding Case no. 77499. This final order also directed Respondent to comply with the stipulation applicable to that case. In Case no. 77499, the stipulation required Respondent to abide by a civil settlement; imposed a fine in the amount of $500.00; suspended Respondent’s license for thirty days; and placed the burden on Respondent to demonstrate he had met the terms of the stipulation. As to both cases referenced above, Respondent admitted the allegations of the administrative complaints which, in pertinent part, claimed Respondent had assisted an unlicensed person or entity to perform contracting services thereby aiding and abetting an unlicensed person to evade the provisions of Chapter 489, Florida Statutes. On April 2, 1993, Respondent executed a certification change of status form which was submitted to the Department. Such form was completed for the purpose of qualifying as an individual for licensure and sought to reinstate a delinquent license or change from inactive to active. In the course of completing the change of status form Respondent was required to answer a series of questions by checking either the “yes” or “no” column. In response to the question as to whether Respondent had “been charged with or convicted of acting as a contractor without a license, or if licensed as a contractor in this state or any other state, had a disciplinary action (including probation, fine or reprimand) against such license by a state, county or municipality?,” he answered “no.” Such answer was false. Further such answer was made under with the following affirmation: I affirm that these statements are true and correct and I recognize that providing false information may result in a FINE, SUSPENSION, OR REVOCATION of my contractor’s license. [Emphasis in original.] Thereafter, the Department notified the Respondent that his license would not be issued as he had failed to demonstrate satisfaction of a civil judgment and had not submitted an explanation of the disciplinary action from 1988. Respondent eventually resolved issues of licensure with the Department and, on September 15, 1993, was authorized to practice contracting. Prior to his license being reinstated, Respondent performed the following: on April 7, 1993, Respondent obtained a building permit for construction work at the home of Eduardo Bovea. This permit, no. 93181501, indicated Respondent as the contractor of record for the project. On the permit application Respondent represented himself as the licensed building contractor for the Bovea project to the Metropolitan Dade County building and zoning department. Respondent did not have a contract with Bovea for the construction work to be performed on the Bovea home. In fact, the contract was between Bovea and Lou Greene Construction. The Boveas paid monies to Rodney Salnave, who claimed to be a representative for Lou Greene Construction. Rodney Salnave was not Respondent’s employee, and was not licensed as a contractor. The Respondent did not talk to the Boveas regarding the contract, the scope of the work to be done, or the contract price for the work. All discussions regarding the work at their home (and payments for same) were between Rodney Salnave and the Boveas. The permit for the Bovea project represented the amount of the work to be $2,000.00. In fact, the contract price for the work was $4,500.00. Respondent misrepresented the value of the work for the Bovea project. As of September 26, 1993, Respondent admitted he was involved with seventeen contracting jobs. Just eleven days after having his license reinstated, and while being employed in a full-time (8:00 a.m. to 5:00 p.m.) job with Dade County, Respondent had contracting responsibility for seventeen jobs. In reality, Respondent had made a deal with an unlicensed person, Denis Joseph, to pull permits for him. The jobs were for persons who, in some instances, Respondent had never met. For example, Mr. Joseph pulled a permit for work to be performed on a home owned by Ed Davis. The contract for the work was between Mr. Davis and a Mr. Sutton, an unlicensed contractor, but with the approval of Respondent, Mr. Joseph obtained a permit for the Davis job. A second job was for Bertha Joseph. In this instance, Mr. Joseph completed the permit application which Respondent signed thereby allowing Mr. Joseph to obtain the permit for the project. By signing the permit, Respondent represented himself to be the contractor for the job. In truth, the homeowner had contracted with Denis Joseph for the work to be done, but the project was completed by Emanuel Gideon, an unlicensed contractor. Respondent admitted receiving payments from Denis Joseph. Respondent admitted he was not actively involved with the Bertha Joseph project. In September, 1993, Eric Wardle, an investigator with the Dade County building and zoning department, interviewed Respondent regarding claims that he was obtaining permits for unlicensed contractors. According to Mr. Wardle, Respondent admitted he pulled permits for unlicensed contractors after Hurricane Andrew because they were trying to make a living. At hearing Respondent disputed the accuracy of Mr. Wardle’s investigation but admitted he would have told him “anything just for him to get away from me.” Respondent’s explanation at hearing was not persuasive.
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 revoking Respondent’s contractor license and imposing an administrative fine in the amount of $8,500.00. DONE AND ENTERED this 16th day of May, 1997, in Tallahassee, Florida. J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 COPIES FURNISHED: Bruce M. Pasternack, Esquire Raymond L. Robinson, P.A. 1501 Venera Avenue, Suite 300 Coral Gables, Florida 33146 Joseph Marcelin 16561 Southwest 144th Court Miami, Florida 33177 Filed with the Clerk of the Division of Administrative Hearings this 16th day of May, 1997. Rodney Hurst, Executive Director Department of Business and Professional Regulation/CILB 7960 Arlington Expressway, Suite 300 Jacksonville, Florida 32211-7467 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street, Northwood Centre Tallahassee, Florida 32399-0792
The Issue The issue in this case is whether Respondent violated provisions of statutes governing licensure of construction contractors and, if so, what penalties should be imposed.
Findings Of Fact The Department is the state agency charged with regulating the practice of construction contracting pursuant to section 20.165, and chapters 455 and 489, Part I, Florida Statutes. Unless specifically stated herein, all references to Florida Statutes will be to the 2014 version. Respondent is not licensed to practice construction contracting in the State of Florida. Neither Respondent nor his putative company, Troche’s Construction, Inc., has an active license as a construction business in this state. On or about October 31, 2012, Respondent entered into a “proposal” with Paul R. Schettino (the “Owner”) to construct a firewall across the Owner’s place of business. The proposal called for Respondent to build “an approx. 48 ft wall, to be firerocked 5/8 drywall on both sides. Studs to be 3 5/8 metal. To be built and ready for paint.” The cost of the work was to be $2,200. (One of the Department’s exhibits indicates a price of $1,650 for the work, but the actual cost is irrelevant.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, finding Respondent, Raul Troche, guilty of engaging in the business of construction contracting without a license. It is further recommended that the final order impose a minimal fine or, in the alternative, issue a notice of noncompliance. DONE AND ENTERED this 8th day of December, 2014, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of December, 2014. COPIES FURNISHED: Stephen M. Masterson, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 42 Tallahassee, Florida 32399 (eServed) Raul Troche 70 Belleaire Drive Palm Coast, Florida 32137 J. Yvette Pressley, Hearing Officer Department of Business and Professional Regulation 1940 North Monroe Street, Suite 42 Tallahassee, Florida 32399 (eServed) J. Layne Smith, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street, Suite 42 Tallahassee, Florida 32399 (eServed)
The Issue The issue in this case is whether Respondent materially understated payroll and thus should be deemed to have failed to secure payment of workers' compensation, which is a sanctionable offense.
Findings Of Fact Petitioner Department of Financial Services ("Department") is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers' compensation for the benefit of their employees. Respondent Bicon, Inc. ("Bicon") is a corporation domiciled in Florida and engaged in the business of hauling construction debris, which is considered a non-construction activity for the purposes of workers' compensation coverage requirements. Bicon's workers' compensation carrier from October 1, 2003 to May 4, 2005 (the "Focal Period") was Bridgefield Employers Insurance Company ("Bridgefield"). Bridgefield's Policy Number 830-29266 (the "Policy") initially covered Bicon for the period from May 11, 2002 to May 11, 2003. Bridgefield renewed the Policy twice, each time for a one-year period. The premium for the Policy was based on Bicon's payroll. Before the beginning of each policy period, Bicon provided Bridgefield an estimate of its payroll for the upcoming period.2 Bridgefield then established an estimated premium for the period, which Bicon was expected to pay in installments. After the policy period had ended, Bridgefield audited Bicon's records to determine actual exposures. Once the audit had been completed, the estimated premium was adjusted as necessary, upward or downward, to reflect actual exposures for the policy period. The audit covering the first renewal period (May 11, 2003 to May 11, 2004) caused Bridgefield to conclude that there existed a premium shortfall of $274,281.66, for which sum Bridgefield billed Bicon on May 2, 2005.3 Given that the estimated premium for the period had been $22,634.44,4 this was a significant upward adjustment. The premium increase was attributed to exposure arising from Bicon's use of an alleged uninsured subcontractor, which exposure Bridgefield's auditor valued at $816,231.00. Bridgefield's Audit Summary Sheet contains the following instructions pertaining to uninsured subcontractors: If no evidence of coverage is submitted to the insured for a subcontractor and only labor is provided, the auditor must include either payroll of the subcontractor's employees or the Total Contract Price. If the labor and material portions of the contract are not broken down in the Insured's records, the auditor must include the Total Contract Cost prorated according to manual rules. No persuasive or convincing evidence was offered establishing whether the auditor calculated the subcontractor exposure for the first renewal period based on the subcontractor's payroll or, alternatively, on the contract price. Bicon paid $53,091.40 against the audit adjustment, leaving a balance of $221,190.26, which remained outstanding as of the final hearing. Bicon has disputed the findings of Bridgefield's audit, but the record does not disclose the nature and grounds of its objections. The estimated premium for the second renewal period (May 11, 2004 to May 11, 2005)——which had been calculated in March 2004, apparently before the findings from the audit of the first renewal period were available——was $20,097.48.5 The retrospective audit convinced Bridgefield that the estimated premium had fallen short by the amount of $186,653.88, for which Bridgefield billed Bicon on September 13, 2005. This shortfall was attributed to Bicon's use of five alleged uninsured subcontractors, which the insurer claimed gave rise to an exposure appraised at $718,462.00. No persuasive or convincing evidence was offered to establish whether the auditor calculated this exposure based on the subcontractors' respective payrolls or, alternatively, on the contract prices. Bicon disputed these audit findings, and as of the final hearing had not paid any part of the audit adjustment. The record does not disclose the nature and grounds of Bicon's objections to this audit. The Department's case against Bicon is premised on the liability for workers' compensation that attaches to a contractor who engages a subcontractor to perform any part of the contractor's contractual obligations to a third party. In such a situation, if the subcontractor is uninsured, then the contractor is obligated to provide workers' compensation to all of the subcontractor's employees. The Department alleges that, during the Focal Period, Bicon sublet work to the following uninsured subcontractors: Precision Equipment Fabricators & Repair, Inc.; S&S National Waste, Inc.; Mickelson Enterprises, Inc.; and Wheeler Employee Leasing, Inc. The Department alleges further that, in its dealings with Bridgefield, Bicon materially understated the amounts of its uninsured subcontractors' payrolls——a practice that, the Department contends, is deemed by statute to constitute a failure to secure the payment of workers' compensation. Despite these allegations, the Department did not elicit any direct evidence that Bicon's alleged subcontractors were performing jobs or providing services that Bicon was contractually obligated to carry out for third parties. Rather, in this regard, the Department's investigator testified (via affidavit) as follows: [T]he vast majority of the work being performed [by Bicon's alleged subcontractors] was the hauling of debris by truck drivers, which is a non-construction activity. However, the duties performed by the employees of Precision Equipment Fabricators & Repair Inc., were construction in nature, specifically, the installing/erecting of debris chutes at construction sites. Aff. of J. Turner at 3. Notably absent from the investigator's account is any testimony that the alleged subcontractors were performing Bicon's contract work. There is, however, some circumstantial evidence that Bicon sublet part of its contract work to other entities. In its application for workers' compensation insurance, for example, Bicon described its business operations as follows: "haul[ing] clean recyclable construction materials (sand, gravel, concrete, wood) from construction sites to waste management locations." The Department accepts this description, for in its Proposed Recommended Order, the Department requested a finding that "Respondent is . . . engaged in the business of hauling construction debris, which is a non-construction activity." The undersigned so found above. It is reasonable to infer, from the basic undisputed facts about Bicon's business, that Bicon provided hauling services to third parties (its clients or customers) to whom it was contractually bound. The inference is sufficiently strong that the undersigned is convinced, and finds, that such was the case. The evidence shows that Bicon considered various entities, including S&S National Waste, Inc. ("S&S"); Mickelson Enterprises, Inc. ("Mickelson"); and Wheeler Employee Leasing, Inc. ("Wheeler"), to be its "subcontractors." Indeed, at the Department's request, Bicon produced one of its subcontracts, which is in evidence, wherein Mickelson was designated the "subcontractor." The undersigned is convinced, and finds, that Bicon did, in fact, enter into subcontracts, express or implied, with S&S, Mickelson, and Wheeler. It is undisputed, moreover, that these three companies——S&S, Mickelson, and Wheeler——performed the work of hauling construction debris, which happens to be Bicon's core business. Therefore, it is reasonable to infer, and the undersigned finds, that, to some extent, S&S, Mickelson, and Wheeler provided hauling services to Bicon's customers. None of the aforementioned subcontractors had workers' compensation insurance in place during the Focal Period. The evidence is insufficient to prove that Precision Equipment Fabricators & Repair, Inc. ("Precision") was a subcontractor of Bicon that performed Bicon's contract work. On the contrary, Mr. Turner's testimony, which was not contradicted, shows that Precision was engaged in a different business from Bicon's——one involving construction activities (i.e. installing debris chutes) as opposed to the non- construction work of hauling. There is no persuasive or convincing evidence in the record establishing that Bicon was contractually obligated to anyone to perform such construction services. There is no persuasive or convincing direct evidence that Bicon ever understated the payroll of S&S, Mickelson, or Wheeler in communicating with Bridgefield. There is, indeed, no evidence in the record of any statement made by or on behalf of Bicon, to Bridgefield, concerning either the subcontractors' payrolls or the amounts that Bicon had paid, expected to pay, or owed its subcontractors pursuant to the subcontracts that it had made with them.6 The Department's theory, which is implicit (though unstated) in its litigating position, is that Bicon must have understated the subcontractors' payrolls because: (a) during the audits following the first and second renewal periods, Bridgefield picked up additional exposure, which it attributed to uninsured subcontractors; and (b) no other explanation accounts for the large discrepancies between the estimated premiums and the audited premiums.7 The flaw in this theory is that the incriminating fact which the Department urges be inferred (material understatement of payroll) is plainly not the only possible cause of the known effect (audit findings relating to uninsured subcontractors). Without being creative, the following possibilities, all of which are reasonable and consistent with the proved facts of this case, spring readily to mind: Estimating its anticipated exposures, Bicon told Bridgefield that it estimated its payments to uninsured subcontractors would be $X, and in fact, Bicon had estimated that it would pay uninsured subcontractors $Y——a materially greater sum than $X. Or: in fact, Bicon truly had estimated that its payments to uninsured subcontractors would total $X, but its estimate turned out to be low, and the actual aggregate of such payments was $Y, a materially greater sum. Bicon said nothing to Bridgefield about its payments to uninsured subcontractors until the audits because: prior to the audits, Bridgefield had never asked Bicon to disclose such information. Or: prior to the audits, Bridgefield had asked Bicon an ambiguous question about its estimated payroll exposures, which Bicon reasonably had understood as not inquiring about payments to uninsured subcontractors. Or: although, prior to the audits, Bridgefield had asked Bicon a clear and unambiguous question calling for Bicon to disclose such information, Bicon had remained silent on the issue. Bicon told Bridgefield about its payments to uninsured subcontractors, but Bridgefield, which knew that the actual amount of such exposure would be included at audit in determining the final premium, declined to use the information in calculating the estimated premium. The Department failed to prove, by any standard, that something like 1.a. occurred in fact. Further, the Department failed to exclude numerous hypotheses of innocence——such as 2.a., 2.b., and 3.——which are reasonable and consistent with the evidence. Accordingly, the undersigned declines to infer, from the proved facts, that, in its communications with Bridgefield, (the existence of which must be inferred, for there is no direct evidence of such communications), Bicon materially understated either the amounts of its subcontractors' payrolls or the amounts Bicon paid or owed to its subcontractors for the work they performed for Bicon's customers pursuant to subcontracts. Consequently, it is determined, as a matter of ultimate fact, that Bicon is not guilty of materially understating payroll——and hence failing to secure payment of workers' compensation——as charged under Section 440.107(2), Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order rescinding the Stop Work Order and exonerating Bicon of the charge of failing to secure the payment of workers' compensation by materially understating payroll. DONE AND ENTERED this 16th day of March, 2006, 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 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of March, 2006.
The Issue Whether the Respondent, a registered general contractor, violated Section 489.129(1)(e), Florida Statutes, (1979), by aiding and abetting an unlicensed person to evade the provisions of Part II, Chapter 468, Florida Statutes. Whether the Respondent violated Section 489.129(1)(f), Florida Statutes (1979), by knowingly combining or conspiring with an unlicensed person by allowing his license to be used by an unlicensed person. Whether Respondent violated Section 489.129(1)(g), Florida Statutes (1979), by acting in the capacity of a contractor under a name other than that listed on his license. Whether Respondent violated Section 489.129(1)(d) Florida Statutes (1979), by failing to properly qualify his company pursuant to Section 489.119(2) and (3), Florida Statutes (1979).
Findings Of Fact Respondent holds currently active registered general contractor's license No. RG0005734 in the name of "Clarence O. Nielsen." On June 9, 1978, Respondent entered into a written Joint Venture Agreement with Walter J. Howard with respect to a dwelling on property owned by Mr. Howard in Volusia County, Florida. This agreement provided as follows: For proposed construction on a lot owned by Mr. Walter Howard at 200 Howard Ave. N.S.B. This construction to be undertaken as a joint venture between Walter Howard and C. O. Nielsen. Division of any profits from this venture to be shared as follows; [sic] A ten percent profit on total sale to Mr. Howard based on total cost of lot and loan costs and all material and labor (including Mr. Howard's salary). Should any profit remain from sale of property it shall be divided equally between Mr. Howard and Mr. Nielsen. On June 28, 1978, Walter Howard signed and filed with the Clerk of the Circuit Court of Volusia County, Florida, a Notice of Commencement indicating construction of improvements which were the subject of the aforementioned Joint Venture Agreement. On July 10, 1978, Volusia County Building Permit No. 16379B was issued to Respondent, and listed "Nielsen Construction Company" as the contractor on the project to be constructed on Mr. Howard's property as aforesaid. As previously mentioned, Respondent is licensed only in the name of "Clarence O. Nielsen." Respondent admitted, however, that he had registered the name "Nielsen Construction Company" as a fictitious name in compliance with Section 865.09(2)(b) Florida Statutes, although no evidence of such compliance was furnished to Petitioner. It is uncontradicted in the record of this proceeding that Respondent was on the job site which is the subject matter of this proceeding from two to three times a week during the course of construction. Respondent supervised work while it was in progress, and called for periodic inspections to be made by the Volusia County Department of Building. Respondent was in fact observed to be on the job site by officials of the Volusia County Department of Building on at least two of the several occasions when they made periodic inspections. These inspections were made by officials of the Volusia County Department of Building on July 11, 1978; July 20, 1978; July 25, 1978; August 3, 1978; October 9, 1978; and December 29, 1978. Although Mr. Howard was frequently on the job site; signed the Notice of Commencement; obtained financing from First Federal Savings and Loan Association in New Smyrna Beach, Florida; made draw requests to that financial institution; and submitted an affidavit on December 29, 1978, indicating that all outstanding liens concerning the project had been satisfied, there is absolutely no direct, credible evidence of record in this proceeding to contradict Respondent's assertion that he took an active part as a contractor in the construction of the improvements on the property. Sometime in either October or November of 1978 Mr. Howard was contacted by the eventual purchaser of the home. Negotiations between Mr. Howard and the purchaser culminated in a down payment being made on the home in early December of 1978. The purchaser moved into the home on December 19, 1978, and later experienced problems with the construction of the house. The purchaser lodged complaints concerning the construction of the house with the Volusia County Department of Building, which apparently ultimately led to these charges being filed against Respondent.
