Findings Of Fact Randall Labadie owns the corporation, Labadie's, Inc., d/b/a Atlantic Coast Steamatic, a business engaged in interior cleaning and air duct cleaning, with a principal office located at 1599 SW 30th Avenue, Suite 11, Boynton Beach, Florida 33426. Randall Labadie has owned the business in Florida for ten years and has been personally involved in air duct cleaning for approximately 20 years. He holds a State of Florida building contractor's license, but not a sheet metal, air conditioning or mechanical contractor's license. Approximately fifty percent of the company's business is air duct cleaning, with thousands of jobs having been completed over its years of operation. Respondent, the Florida Construction Industry Licensing Board (CILB) is responsible for regulating various professions in the construction industry pursuant to Chapter 489, F.S. On August 8, 1984, CILB Administrative Assistant, Milton Rubin, issued this written opinion in response to an inquiry from the executive director of the Pinellas County Construction Licensing Board: In response to your inquiry for an opinion on the following questions, the answer is in the affirmative: Does a person or firm performing "cleaning" services for air conditioning systems have to be licensed? Yes. If, in the process of "cleaning", a person or firm cuts access openings in existing duct work, does that person or firm require competency licensure? Yes. Does "servicing" in 489.105(h) include cleaning? Yes. (Exhibit #2) * * * The Board did not adopt a rule reflecting its official position on the matter because it felt that the interpretation would have been an unnecessary restatement of the language of Chapter 489, F.S. (Stipulation of the parties filed 11/20/92) On March 13, 1992, the CILB took this official action as reflected in its General Session Minutes: There was a presentation by Mr. Dean Ellis and Jim Hasbrook of Pinellas County regarding a request from two industries. The two industry associations include The Florida Air Conditioning Contractors Association and the Refrigeration and Air Conditioning Contractors Association. The issue concerns duct cleaning and air conditioning system cleaning. This Board had previously taken a position in August of 1984 that this work must be performed by a licensed contractor in one of three categories: air conditioning, mechanical, or sheet metal. At that time the opinion was rendered by Mr. Rubin but included a disclaimer stating that it did not reflect the official position of the Board. These associations now request a formal position from the Board stating that the licensed contractor must perform this work as stated in Mr. Rubin's letter of 1984. Mr. Lopez-Cantera made motion to ratify that position as a policy of the Board. Second by Mr. Manrique. Motion carried. (Exhibit #1) After the Board action was taken, various industry organizations sent notices of the Board's position to their members. The Florida Air Conditioning Contractor's Association "...urge[d] all parties concerned to act on the FCILB decision... [and to] ...report any unlicensed activity through the proper channels." (Exhibit #4) Steamatic, Inc., is engaged in the business of franchising cleaning operations, and has a home office in Fort Worth, Texas. Around 1975, it expanded from fire and water restoration cleaning into other cleaning services, more specifically, air duct cleaning or air conditioning system cleaning. Steamatic, Inc., has approximately 144 franchises in the United States, including 14 in the State of Florida. Prior to March 13, 1992, no Florida franchise was cited for engaging in cleaning activity without a license under Chapter 489, F.S. Since March 1992, at least two franchises, in Jacksonville and in Bradenton, have received notices from Department of Professional Regulation (DPR) investigators that complaints have been filed alleging unlicensed practice of air conditioning contracting. The CILB policy formally adopted in March 1992, has not been adopted as a rule pursuant to Section 120.54, F.S. The CILB has not adopted rules setting acceptable standards for air duct cleaning, and at the March 13, 1992, Board meeting, Board member, Cosmo Tornese stated that there are no accepted standards regarding air duct cleaning. As of March 13, 1992, the National Air Duct Cleaners Association (NADCA) had not adopted standards. The duct cleaning activity conducted by Petitioner and other Steamatic franchisees is nonstructural work only. These companies do not "repair", "maintain", or "adjust" air conditioning systems. They generally obtain access to the ducts through existing openings or the registers, and they vacuum what is accessible. With a low-pressure atomizing gun they apply a germicide treatment and a sealer. In about ten percent of the cases they might cut an opening in the duct in the fogging process and they close it with duct tape. They do not cut sheet metal or disconnect the duct work from the air handler. They do not clean the coils on condensing units or fan blades in the air handler. They only cut fiber duct board, never flex duct. They do not disengage electrical connections. They do residential work only. In contrast, and for more money (base price of $595.00, as opposed to $250-300.00 charged by Steamatic), Dean Ellis' company, Climate Control Services, offers what he prefers to call "air duct sanitizing". (transcript p. 74) Dean Ellis has a Florida class A unlimited air conditioning license. He cleans the air handler coil, evaporator coil, drain pan and interior of cabinets. The components are removed and are chemically cleaned and sprayed. His workers take out the electric heat strips and fan motor. They inspect the ducts and replace duct work that is severely contaminated. They use an air source removal machine that is connected through a large hole cut in the box that fits above the air handler and suctions the entire duct system. They check and adjust freon levels and fan speeds. About five percent of Dean Ellis' business is related to the cleaning of air ducts. He considers his company is in a competitor's relationship with Steamatic. The association of which he is a board member, Florida Air Conditioning Contractors Association, brought its concerns to the CILB and wanted to know if the Board would enforce what the association already considered the law to be. Petitioner, Labadie's, Inc., d/b/a Atlantic Coast Steamatic, is substantially affected by the CILB's response to its regulated industry representatives. (See prehearing stipulation, filed 11/20/92)
The Issue The issue for determination in this proceeding is whether Respondent committed the acts alleged in the Administrative Complaint and, if so, what disciplinary action, if any, should be imposed.
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida. Respondent is now and has been at all times material to this proceeding a licensed real estate salesman in the state, holding license number 0488568. The license was issued %Tequesta Properties, Inc., 169 Tequesta Drive, Tequesta, Florida 33458 ("Tequesta"). On June 29, 1989, Respondent negotiated a contract for the sale and purchase of a single family residence located at 65 Willow Road, Tequesta, Florida (the "contract"). The residence was listed for sale with Tequesta. The sellers were Frank and Hilda Sceusa, and the buyers were Dale and Cathy Favre. The buyers first saw the listed property at an open house. Respondent was present at the open house because the listing agent was busy with another transaction. The contract provided: Inspection, Repair And Maintenance: Seller warrants that as of 10 days prior to closing, the ceiling, roof . . . and exterior and interior walls do not have any VISIBLE EVIDENCE of leaks or water damage and that the septic tank, pool, all major appliances, heating, cooling, electrical, plumbing systems, and machinery, are in WORKING CONDITION. Buyer may, at Buyer's expense, have inspections made of those items by an appropriately Florida licensed person dealing in the construction, repair, or maintenance of those items and shall report in writing to Seller such items that do not meet the above standards as to defects together with the cost of repairing them prior to Buyer's occupancy or not less than 10 days prior to closing whichever occurs first. Unless Buyers report such defects within that time, Buyer shall be deemed to have waived Seller's responsibilities as to defects not reported. . . . Buyer shall be permitted access for inspection of property to determine compliance with this Standard. Respondent failed to give the buyers a reasonable opportunity to inspect the house or to have it inspected by a professional inspector. Buyers requested a pre-closing inspection approximately three or four times. Each time the buyers made their request through Respondent. The buyers asked Respondent to arrange for their access into the property for the purpose of conducting an inspection. Respondent ultimately accompanied the buyers through the premises the night before the closing. Respondent misrepresented the condition of plumbing in the house. During the walk-through the night before the closing, the buyers asked Respondent about a rag covering the goose neck under the kitchen sink. Respondent advised the buyers that the rag was left there after cleaning and that nothing was wrong with the plumbing. Respondent misrepresented the provisions of a warranty that was transferred to the buyers with the sale of the house. The house was sold to the buyers with a home owners warranty ("HOW") purchased by the listing broker. Respondent told the buyers they did not have to worry about the appliances in the house, including the air conditioning, because the entire property was covered by the warranty. Respondent specifically represented that the air conditioning system was in good working order. Respondent never read the HOW contract and did not explain to the buyers exclusions for preexisting conditions, prorations for other conditions, and the requirement that the buyers pay a $100 deductible for each covered defect. Respondent failed to familiarize himself with the house and failed to inquire of the sellers as to any problems that existed in the house. The kitchen sink backed up within a month after the date of closing because it was clogged with sand. The pipe was rusted completely through and there was a three inch gash in the pipe. The rag that had covered the pipe during the walk through concealed the defects in the pipe that otherwise would have been readily visible. The air conditioning system failed after closing. The repairs to the air conditioning system were not covered by the HOW contract. Representatives of HOW determined that the problems with the air conditioning system were preexisting and not covered under the terms of the contract. The air conditioning unit was replaced by the buyers who were reimbursed by the listing broker. The buyers experienced problems with a number of the components in the house. In addition to the previously mentioned air conditioning and plumbing problems, there were electrical problems and all of the appliances had to be replaced. Respondent misrepresented the amount of known repairs. The buyers knew prior to closing that the pool needed to be re-marcited. Respondent represented that the cost of such a repair would be approximately $1,000. The actual cost was approximately $3,000. Some of the problems experienced by the buyers were patent defects and some were latent defects. All of the problems, however, could have been discovered and corrected prior to closing if an inspection had been conducted by a Florida licensed person experienced in the construction, repair, and maintenance of such matters. Respondent failed to carry out his responsibilities as a real estate professional. It is customary practice in the community for the selling agent to arrange for pre-closing inspections done by professional licensed inspectors. The listing agent for the residence asked Respondent the day before the closing if Respondent had scheduled the pre-closing inspection. Respondent admitted that he had forgotten to schedule the inspection. When Respondent scheduled a walk through for the buyers the night before closing, there was insufficient time for the buyers to schedule an inspection by a professional inspector. The buyers relied upon the representations of Respondent with respect to the HOW contract and the condition of the house.
Recommendation Based upon the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that Petitioner should enter a Final Order finding Respondent guilty of misrepresentation and culpable negligence in violation of Section 475.25(1)(b), Florida Statutes, suspending Respondent's license for 90 days, imposing an administrative fine of $600, and placing Respondent on probation for one year. The Final Order should further provide that during the period of probation Respondent should complete 60 hours of post-licensure education. DONE and ENTERED this 22nd day of January, 1992, in Tallahassee, Leon County, Florida. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January 1992.
Findings Of Fact The following findings of fact are based upon the evidence presented, Respondent's admissions and matters deemed admitted due to Respondent's failure to timely respond to Petitioner's Second Request for Admissions: At all times material hereto, Respondent was licensed by the Construction Industry Licensing Board as a registered air conditioning contractor with license number RA-0035721. He was the qualifying agent for Wallace's Air Conditioning and Heating. Respondent's address of record is 4710 Cypress Ridge Place, Tampa, Florida 33624, and it was to this address that notice of the hearing was sent. At no time prior to the hearing did Respondent contact counsel for Petitioner or the undersigned regarding any problem he had with the date scheduled for this hearing. Respondent did not appear, and was not represented at the hearing which commenced at 9:00 a.m. on May 11, 1988. However, at 1:56 p.m. on the day of hearing, a letter from Respondent addressed to Petitioner's counsel was filed at the Division of Administrative Hearings in Tallahassee, Florida. This letter was postmarked on May 9, 1988 and requests rescheduling of the hearing due to his being out of town on "urgent business." By Order entered on May 13, 1988, Respondent's untimely and insufficient motion for continuance was denied for failure to comply with Rule 22I-6.017, Florida Administrative Code, and this case has proceeded to the issuance of this Recommended Order in accordance with the procedures established at hearing. On or about March 18, 1986, Respondent, as qualifying agent for Wallace's Air Conditioning and Heating, entered into a contract with General Engineering and Machine Company for the installation of heating, ventilation and cooling services (HVAC) at the Sebring Square Plaza shopping mall in Sebring, Florida. The work to be performed included the installation of heating, ventilation, air conditioning and temperature control systems for stores in the mall, which included Zayre's Department Store and thirty "strip stores." The contract price for this work was $275,460. Respondent thereafter began work on the mall under this contract. However, he has never held any certificate of competency, occupational license, or registration in the City of Sebring, as required by local ordinance sections 5-18 and 5-19. On or about May, 1986 Respondent entered into a subcontract agreement with Long's Air Conditioning and Heating for sheetmetal duct work, venting of exhaust fans and installation of flex duct and grilles at the Sebring Square Plaza. The original amount of Respondent's contract with Long's Air Conditioning was $69,200, but this was increased by agreement to $72,200. On or about June 19, 1986, work on the thirty "strip stores" was deleted from this subcontract agreement, and the contract price was then reduced by $3,760, making a final contract price of $68,440. Respondent received draw requests totaling $68,440 from Long's Air Conditioning for work performed under this subcontract. Although all contracted work was performed by Long's Air Conditioning, Respondent has only made payments totaling $66,500, leaving an unpaid amount of $1,940. In connection with his work on the Sebring Square Plaza, Respondent purchased equipment and supplies from Florida Air Conditioners, Inc., in the total amount of $122,019.80, but made no payments on this account. On October 6, 1986, Respondent's account with Florida Air Conditioners was paid in full by Highway 27 Associates, the owners of the Sebring Square Plaza, who in turn charged this amount to the general contractor, General Engineering and Machine Company, by reducing the amount they paid to said general contractor on the Sebring Square Plaza. Charles R. Baldwin was the general administrator on this shopping mall job for the general contractor, General Engineering and Machine Company. In accordance with his subcontract agreement with Respondent, if Respondent did not pay his materialmen, the general contractor was responsible, and, in fact, in this case the general contractor was charged for payments made by the mall owner on Respondent's account at Florida Air Conditioners. Respondent failed to regularly attend weekly job site status meetings with Baldwin. When schedules were established, Respondent voiced no objection, but he then frequently failed to complete work in accordance with those schedules. Respondent made little effort to complete his work on time, or to make up for delays. He failed to supervise the work he was performing at the Sebring Square Plaza. On or about June 24, 1986 Respondent walked off the job without completing the work which he had contracted to perform, and this caused further delay in the mall's completion since Baldwin had to find another contractor to complete Respondent's job. Baldwin paid Respondent $174,467.70 on June 18, 1986 in connection with this job after Respondent signed an affidavit certifying that he had paid all his materialmen and subcontractors. The record establishes that said affidavit was false. With the amount Baldwin was charged for Respondent's unpaid account with Florida Air Conditioners, and the amount paid on June 18, 1986, General Engineering and Machine Company paid or was charged approximately $296,000 for work performed by Respondent, although their contract with Respondent was only $275,460. According to Bernard Verse, who was accepted as an expert in commercial construction, Respondent's failure to pay for supplies and equipment, and his failure to complete his contract with General Engineering and Machine Company constitute misconduct in contracting. In addition, Respondent failed to properly supervise the work he was performing, and for which he contracted, on this job.
Recommendation Based upon the foregoing, it is recommended that the Construction Industry Licensing Board enter a Final Order suspending Respondent's license number RA- 0035721 for one (1) year and imposing an administrative fine of $5,000; provided that after the expiration of thirty (30) days from the issuance of the Final Order if Respondent pays said administrative fine in full, his license shall be immediately reinstated. DONE AND ENTERED this 23rd day of May, 1988, in Tallahassee, Florida. DONALD D. CONN 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 23rd day of May, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-5050 Rulings on Petitioner's Proposed Findings of Fact: 1 Adopted in Finding of Fact 1. 2-3 Adopted in Finding of Fact 3. 4 Adopted in Finding of Fact 4. 5 Adopted in Finding of Fact 9 6 Adopted in Finding of Fact 5. 7 Adopted in Finding of Fact 7. 8 Adopted in Findings of Fact 7, 8. 9-10 Adopted in Finding of Fact 6. Adopted in Finding of Fact 10. Adopted in Finding of Fact 6. Rejected as irrelevant and not based on competent substantial evidence. Adopted in Finding of Fact 7. Rejected as irrelevant. COPIES FURNISHED: David L. Swanson, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Frank W. Wallace 4710 Cypress Ridge Place Tampa, Florida 33624 Fred Seely Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32201 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
Findings Of Fact The Petitioner is be Department of Professional Regulation. The Respondent is John Anthony Fantasia, at all times pertinent to these proceedings holder of certified air conditioning contractor license number CA-C024378 and qualifying agent for Fantasia Air Conditioning Refrigeration Appliance Service. Nat Weintraub contracted with Respondent on or about June 25, 1986. Under terms of the contract, Weintraub gave Respondent a $2,500 down payment to have a central air conditioning system installed in the Weintraub home. Weintraub paid Respondent an additional $1,250 when the central air conditioning unit was delivered on or about July 1, 1986. A third and final payment of $1,250 due upon completion of the work set forth in the contract has not been made by Weintraub dub to difficulties he has encountered with the Respondent concerning the quality of work on the project. While he timely commenced work shortly after delivery of the central air unit and receipt of two monetary payments from Weintraub, Respondent damaged a screen covering an opening in an overhanging eave to the Weintraub's flat roofed house. This occurred when he inserted equipment into the opening of the eave in order to place additional insulation between the roof and the ceiling of the home. Weintraub later paid someone else $52 to repair the damage. Respondent made an opening in the roof through which he placed a ventilation pipe. The opening was too large and emitted daylight around the pipe into the closet where the air conditioning unit was installed. As a result, rainwater accumulated in the closet. Weintraub later paid repair costs of $185 to another contractor to seal the opening around the pipe and replace the closet door. While repair of the opening was not a part of the written contract, the Respondent had orally promised to make this correction. A noise problem associated with overly small grillwork on the main air outlet to the air conditioning unit was fixed by another contractor at a cost of $236 to Weintraub. Dry wall covering a soffit containing duct work in the Weintraub living room was not properly finished off. Weintraub has received estimates leading him to believe correction of this deficiency will cost him approximately $510 in repairs. During installation of the air conditioning unit, closure of an existing line supplying natural gas to a heat furnace was required. Respondent "pinched off" the line in an improper manner. Further, Respondent's license does not authorize him to engage in work on heating equipment gas lines. As a result of the manner in which Respondent installed the air conditioning unit, it is extremely inconvenient if not impossible to change the unit's air filters. The job at the Weintraub home was approximately eighty percent completed when the Respondent exhausted his supply of insulation. He left the job site at that time. Later he called Weintraub demanding additional funds. Weintraub refused to pay anything additional until, in accordance with the contract terms, the job was completed. Al Childress is an enforcement officer with the Metro-Dade County Building and Zoning Department. He went to the Weintraub home on December 3, 1986. He noted the air conditioning unit had been installed without a proper permit and issued a citation by certified mail to the Respondent. The Respondent subsequently paid a $50 civil penalty for the citation. William Huckstep was a mechanical inspector for the Metro-Dade County Building and Zoning Department when he was called to the Weintraub home on or about February 3, 1987. He observed the gas line which had been altered by the Respondent. Huckstep subsequently issued a Notice of Violation by certified mail to Respondent for performing such a task without a certificate of competency as required by the Dade County Building Code. On or about April 22, 1987, Huckstep issued a second notice of violation to Respondent for failure to have called for rough and final inspections of the air conditioner installation as required by the Dade County Building Code. To date, these inspections have not been performed by local authorities or requested by the Respondent. Considerably more than 90 days have elapsed since the fall of 1986 when Respondent left the Weintraub project, prior to its completion, without notification, and without just cause to depart. The improper installation of air conditioning equipment, insulation and duct work exhibited gross negligence by the Respondent in the performance of these tasks.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered in this cause assessing the Respondent a fine of $1,500 and placing him on probation for a period of two years upon terms and conditions to be determined by the Construction Industry Licensing Board. DONE AND RECOMMENDED this 17th day of March, 1988, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 17th day of March, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-5602 The following constitutes my specific ruling on the proposed findings of fact submitted by the Petitioner. Those proposed findings consisted of 18 paragraphs. Only the first five paragraphs were numbered. Numbers 6 through 18 were applied to the remaining paragraphs by the Hearing Officer. Included in finding number 2. Included in finding number 3. Included in finding number 12. Included in finding number 13. Rejected as unnecessary. Included in part in findings numbered 3 and 4. Included in findings numbered 13 and 14. Included in findings numbered 6 and 9. Included in finding number 11. Included as to the soffit in finding number 8. The remainder is rejected. Included in finding number 11. Included in finding number 12. Included in findings numbered 11 and 15. Rejected as unnecessary. Included in findings numbered 5, 6, 7, and 8. Included in finding number 13, with the exception of Petitioner's dates which are reflective of the deadline given Respondent on the citations. Included in finding number 13. Included in finding number 14, with exception of hearsay relating to testimony of Bob Wolf which is rejected. COPIES FURNISHED: Lee Sims, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 John Anthony Fantasia 149-10 Northeast Eighth Avenue North Miami, Florida 33161 William O'Neil, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Fred Seely Executive Director Department of Professional Regulation Post Office Box 2 Jacksonville, Florida 32201 =================================================================
The Issue Whether Petitioner's bid was properly rejected as being nonresponsive.
The Issue Whether the Petitioner is entitled to an extension of time of 565 days for the completion of the project which is the subject of this proceeding, as opposed to the 367 days time extension which was granted for completion, and thereby is free from liquidated damages in the amount of $31,680.
Findings Of Fact On February 21, 1973, a contract was entered into between the Petitioner and Respondent for the construction of Phase II, University of North Florida, at Jacksonville, Florida, State Project No. BR-6504/7801-D. The Form of Agreement Between Contractor and Owner For Construction of Buildings, through its Article 4.2 identifies the conditions of liquidated damages. Article 8.5 states the conditions for settlement of claims and disputes. Contained as part of the contract, was standard form AlA Document, A201, American Institute of Architects, General Conditions of the Contract for Construction. Within the document A201, was Article 4.5, warranty of the work by the contractor; Article 8.3.1 discussing the matter of delays and extensions and Article 13.2.1 discussing uncovering and correcting. All these contract conditions are found in Petitioner's Exhibit "A" which was admitted into evidence. In pursuit of the contract obligations, the Petitioner entered into a contract with W. W. Gay, Mechanical Contractor, Inc., 523 Estelle Lane, Jacksonville, Florida. This contract with W. W. Gay as subcontractor contemplated the installation of mechanical parts of the contract work, and the agreement between the Petitioner and W. W. Gay is Petitioner's Exhibit "B", admitted into evidence. Part of the work to be performed by W. W. Gay involved the installation of a hot water piping system. According to Mr. W. W. Gay, President of W. W. Gay, Mechanical Contractor, Inc., 95 percent of the pipe to be used in the Phase II project was already available, having been left over from Phase I of the University of North Florida Project. This pipe had been stored for as long as 16 months, exposed to the weather. The storage itself was in accordance with the conditions of modification to contract document prepared by Reynolds, Smith and Hills, Architects, Engineers and Planners of Jacksonville, Florida. Petitioner's Exhibit "C" sets out the requirements for storing the aforementioned pipe. In addition, Mr. Gay testified that some of the type resin epoxy utilized in the Phase I project was left over and was stored in a facility whose temperatures reached 90 degrees Fahrenheit, although the recommended storage temperature for the substance was 70 degrees Fahrenheit. The piping spoken of was a type manufactured by Ric-wil Manufacturing known as FRP, Dual Gard 250. The pipe was identified in the course of the hearing by Carl Bowles, General Superintendent for W. W. Gay, as being a fiberglass type pipe. This pipe had been selected in lieu of the job specification pipe which is a form of asbestos pipe manufactured by Johns Manville, due to the fact that the Johns Manville pipe had not been approved for release by Johns Manville's quality control department. The substitution of the Ric-wil pipe was approved by the project architect, John Brickert, who was also the project manager and an employee of Reynolds, Smith and Hills. The approval for substitution was on the basis that the Ric-wil pipe was acceptable because it was a non-metallic pipe and the Johns Manville pipe was a non-metallic pipe. Approval for the substitution had been granted in Phase I and carried over into Phase II. In addition to the hot water piping system in Phase II, W. W. Gay installed a chill water system using a PVC type pipe identified as Ric-wil Chil Gard. Prior to the installation of the Ric-wil Dual Gard pipe in Phase I, W. W. Gay had never installed that type piping system. In the course of the installation of the piping system in Phase I, some problems were experienced with the installation which were not similar to the problems that would be experienced in the construction of the Phase II University of North Florida project. Phase I was completed utilizing the Ric-wil Dual Gard pipe. In the beginning of Phase II, W. W. Gay ran the cold water system and hot water system in a common area underground from valve pit one to valve pit six, in order to put into operation buildings 008 and 009 of the University of North Florida. These locations are shown on the engineering drawing which is Petitioner's Exhibit "K", entered into evidence. Installation of the two piping systems commenced in October of 1973. Sometime in the middle part of November, 1973, a test was conducted on the hot and chilled water systems between valve pits one and six. The hot water system passed the test. The chilled water system failed. Later in November, the chilled water system also passed. This successful test opened up the hot and chilled water systems to buildings 008, 009 and 011. Further tests were conducted in early January, 1974 and again the hot and chilled water lines passed. In January, 1974, W. W. Gay began to run the hot water piping system from valve pit six to valve pit seven and in the area of building 010 found that the line would not hold pressure. A decision was made to retest between valve pit one and six, a leek as found in the area of valve pit one. This leak was discovered in late January, 1974. A subsequent test of the hot water piping system was run in early February, 1974, between valve pit one and valve pit six and into the buildings 008, 009 and 011. This test failed. In the middle of February, 1974, a further test was made from valve pit one to the end of the line, to the northwest corner of building 011, and this test failed. For the balance of February, 1974, time was spent trying to repair the leaks in the hot water piping system. These continued failures in the system brought about two meetings to discuss the solution of the problem. These meetings will be discussed subsequently. At the time the subcontractor was experiencing problems with the installation of the hot water system, problems were also being experienced with the chill water system. Throughout March, the chill water system was continuing to be installed and in late March a leak was discovered opposite building 010. This leak was repaired. In mid April a leak was found in the chill water system in the area of valve pit six and an attempt to repair it was unsuccessful. Problems continued until June, 1974, at which time replacement of the water pipe and fittings was begun between valve pit one and six. Further testing showed a failure in the chill water piping. Finally in September, 1974, the chill water system passed. One of the problems with the chill water piping system concerned the couplings for that system which were found to be defective. An example of the problems associated with the couplings in the chill water system is demonstrated through Exhibit "N", by the Petitioner, which is a cross section of one of the couplings which was removed after being installed in the Phase II University of North Florida Project. This cross section shows numerous surface irregularities, which promote leaks. On February 28, 1974, a meeting was held in the offices of Reynolds, Smith and Hills which was attended by the project manager, John Brickert; representatives of the Petitioner; representatives of Ric-wil, Incorporated; representatives of the University of North Florida; representatives of the subcontractor W. W. Gay, and other representatives of Reynolds, Smith and Hills associated with the project. Varying theories were advanced in trying to explain the problems associated with the hot water piping system. From the subcontractor's point of view, expressed by W. W. Gay, this difficulty was not obvious because it was his contention that the pipe was being installed according to the directions of the manufacturer's representative who was on the job site for some 90 percent of the installation. Jack Green, the mechanical construction specialist for Reynolds, Smith and Hills, testified that from his on site observations, which occurred about the general time frame of the meeting of February 28, 1974, that he had seen water in the trenches around the building 010. Furthermore, according to Green, the subcontractor had undercut the ditches and had attempted to install the hot water piping system while the ditch was too wet, using loose soil which was not compacted. In addition Mr. Green stated that he felt that the joints were dirty and moist and had not been sanded properly. Finally, Mr. Green stated that he had stopped the installation of the pipe because of the conditions mentioned. The deposition upon written questions of C. G. Schoor, Service Manager with Ric-wil, said that he had been at the job site on February 11, 1974, and had noticed water leaks in the fringes and couplings of the hot water pipes. He felt that in the area of the flanges there was improper sanding because when the pipe was pulled out, the surface was clean and resin remained in the flange. He also commented in his deposition that there was improper surface sanding and a large area of entrapped air on one of the 10" couplings pulled out between points two and three on the second joint north of two and this occurred during an initial 150 lb. hydro test. In one joint the resin epoxy had not hardened and was still in a plastic state, according to Ben Schoor. In speculating about the plasticity, Schoor said that it could have been promoted by long storage of the material, or contamination of the material which constitutes the resin epoxy or improper mixture of the two components of the epoxy resin on the part of the subcontractor. He felt that this plasticity would probably promote leaks but he observed no such leaks where the resin epoxy was plastic. The deposition on written questions of Ben Schoor was entered into evidence as Respondent's Exhibit "B". Discussion at the February 28, 1974, meeting considered two alternatives: First, to allow for the further installation of the Ric-wil Dual Gard System using the expertise of the Ric-wil employees; second, to substitute the Ric-wil Dual Gard pipe with Ric-wil Hi-Gard Pipe, which is steel. A further meeting on March 4, 1974, was held with representatives of the Petitioner; the subcontractor, W. W. Gay; Reynolds, Smith and Hills, by John Brickert, and other representatives of that firm. It was decided at that meeting, that due to the effect of oil shortages causing the unavailability of the Ric-wil Dual Gard pipe and fittings, the Ric-wil Company would design a pipe system to utilize steel pipes, and the subcontractor would determine the necessary adjustments to use the steel pipe. At this meeting the subcontractor, W. W. Gay, requested some relief from possible liquidated damages, and the minutes of that meeting indicate that consideration of that request was deferred. According to notes from time sheets of Reynolds, Smith and Hills, which was admitted as Respondent's Exhibit "A", installation of the steel piping system was commenced on July 1, 1974, and completed August 21, 1974. Minutes of the meetings of February 28, 1974, and March 4, 1974, are found as Petitioner's Exhibits "E" and "F" respectively, admitted into evidence. After the March 4, 1974, meeting, discussion was continued on the question of liquidated damages in view of the substitution of the type of piping, and conjecture was made about the problems with the piping system. In correspondence of March 22, 1974, Neil A. Porter, Vice President of the Petitioner, makes reference to the liquidated damages question in this letter to John Brickert, and suggests holding the matter in abeyance. This letter enclosed a letter from W. W. Gay dated March 21, 1974, directed to the Petitioner, which sets out the approximate time to complete the system will be 105 days. The Gay letter also states opinions by Mr. Gay as to what was determined in the course of the February 28, 1974, meeting on the subject of the cause of the problems with the Ric-wil Dual Gard piping. Mr. Gay made further comments that he felt that the change in temperature, from 70 degrees to 90 degrees as stored, adversely effects the resin epoxy and that the ultra violet rays of the sun also effected the pipe which was stored outside. Mr. Gay's letter of March 21, 1974 and Mr. Brickert's letter of March 22, 1974 are Petitioner's composite Exhibit "G", which was admitted into evidence. Mr. Brickert responded to Mr. Porter by letter of March 29, 1974, in which he suggests the question of liquidated damages cannot be addressed at present because the amount of delay is unknown, and Reynolds, Smith and Hills is not a part of the contract and cannot accept a stipulation for extension. This letter is Petitioner's Exhibit "H", which was admitted into evidence. On April 19, 1974, a change order was entered by Mr. Brickert which allowed for the substitution of Ric-wil Hi-Gard steel pre-insulated pipe for the Ric-wil Dual Gard 250 plastic pre-insulated pipe. Page three of that change order indicates the rationale for accepting such a substitute and alludes to the possibility of a time extension which is not subject to identification at the moment of the change order, but which will be requested. This change order is Petitioner's Exhibit "I", which was admitted. A further statement on the Chil Gard pipe and the problems with the couplings is found in Petitioner's composite Exhibit "J", a letter of May 29, 1974, with attachments from John T. Brickert to Neil A. Porter. By Change Order #19 and the accompanying letter of explanation from John T. Brickert, addressed to Jack C. Koons, Administrator, Department of General Services; the project manager has denied, and the Respondent has agreed to such denial, of any time extension conditioned upon problems with the piping systems. This denial by the letter of September 8, 1975, is premised on the conclusion that any failure on the system was due to faulty installation or failure of material which was subject to the control of the Petitioner. As a result of Change Order #19, 198 days of time overrun at $160.00 a day have been assessed as liquidated damages, totaling $31,680.00. These items of Change Order #19 and the correspondence alluded to are found in composite Exhibit "D" by the Petitioner, which was admitted into evidence. A review of the evidence offered on the question of the cause of the problems in the hot water system which was being installed as Ric-wil Dual Gard indicates a possible problem associated with the manufacture of Ric-wil Dual Gard pipe; a possible problem with the storage of the Ric-wil Dual Gard pipe at the job site for a period of up to 16 months prior to its installation; possible problems associated with the storage of the resin epoxy at temperatures which would damage the compound; possible contamination of the resin epoxy; possible improper mixture of the resin epoxy and possible improper application of the resin epoxy on the surface of the piping; possible improper sanding of the surfaces of the pipe where it was joined; possible improper preparation of the ditch in which the pipe was being placed, and possible improper installation of the pipe itself. From an examination of the testimony and the evidence offered in support of that testimony, the cause of the problems with the pipe would appear to be a combination of all the factors mentioned above, but it cannot be discerned with reasonable exactness what the percentage of responsibility is in determining the factors which lead to the rejection of the Ric-wil Dual Gard System in favor of the Ric-wil Hi-Gard System. From the testimony and the exhibits offered on the question of the problems associated with the Chil Water System, the testimony points to defective couplings as the responsible agent for the problems associated with that installation. These defective couplings are found to be the primary cause of the problems associated with the Chill Water System. On the question of liquidated damages penalties to be associated with a substitution of the Ric-wil Hi-Gard System for the Ric-wil Dual Gard System testimony was offered, as described before, by W. W. Gay who was under the impression that he was receiving relief from any liquidated damages and thought that relief would be afforded. This testimony is supported by the testimony of Neil Porter, the Vice President of the Petitioner who likewise had such an understanding. It is also supported by the testimony of John Daniel Cheatwood, the President of Petitioner, who was in attendance at the March 4, 1974 meeting at the offices of Reynolds Smith and Hills. In addition, Jack Green, Field Representative Mechanical, for Reynolds, Smith and Hills recalled that W. W. Gay requested relief from any possible liquidated damages for substitution of the pipe and the appearance was given that some consideration would be made of the necessity for extension of time. Mr. Brickert, as spokesman for the owner, felt that the meeting of March 4, 1974, did not commit the owner to grant an extension, and upon ultimate assessment an extension of time associated with the substitution of the pipe was denied. It is found as a matter of fact that the owner through negotiations with the contractor and/or his subcontractor, W. W. Gay, and through the Petitioner's Exhibit "I" agreed to an extension of time for the installation of the Ric-wil Hi-Gard Pipe in substitution for the Ric-wil Dual Gard pipe.
Recommendation It is recommended that the relief requested from the imposition of liquidated damages due to the delays associated with the installation of the hot water system and chill water system, which were assessed as 198 days at a $160.00 per day, for a total of $31,860, be reduced in an amount which would equate to the time necessary to install the substituted hot water system, and be upheld in the amount which would equate to the time necessary to install the chill water system. DONE and ENTERED this 23rd day of June, 1976, in Tallahassee, Florida. CHARLES C. ADAMS, 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 23rd day of June, 1976. COPIES FURNISHED: William S. Stevens, III, Esquire For the Executive Director Department of General Services State of Florida 725 South Calhoun Street Tallahassee, Florida 32304 S. Gordon Blalock, Esquire Suite 2301 Independent Square Building Jacksonville, Florida 32202 ================================================================= AGENCY FINAL ORDER =================================================================
