Findings Of Fact At all times pertinent to the issues herein discussed, Respondent Wallace W. Stewart was licensed as a registered air conditioning contractor by the Florida Construction Industry Licensing Board under License No. RA 0022169. Since at least October 1979, Respondent has been qualifying agent for the contracting firm "Stewart's Solar Energy, Inc.," with the Florida Construction Industry Licensing Board. In September 1979, Fred Johnson was acting as real estate agent for his son, Don F. Johnson of Ponte Vedra, Florida, a licensed general contractor who at the time had several residences for sale in the area. During that period, Mr. Fred Johnson engaged in a discussion with the Respondent concerning the possibility of installing a solar cooling, heating and hot water system in the house that Mr. Johnson proposed to have his son, Don, build for him in St. Johns County, Florida. Pursuant to these discussions, on September 10, 1979, Respondent prepared a proposal for Mr. and Mrs. Fred Johnson for the installation of a complete cooling and heating system and solar collectors for the purpose of domestic hot water in the said residence. Before this proposal was accepted, Mr. Fred Johnson's son, Don, discussed the terms of the proposal with the Respondent. Specifically discussed was that portion of the proposal wherein Respondent proposed to include the following: Necessary piping for circulating chilled and hot water system, perimeter heat, storage tanks for hot and cold water, necessary heat exchangers, refrigeration equipment, circulating pumps, duct system, thermostats, heat exchanger (fireplace), also piping and controls for the hot water heater. Before allowing his father to sign this proposal and accept it, Don Johnson asked Respondent exactly what he proposed to provide regarding the fireplace and was told that Mr. Stewart would provide a firebox interior, which consisted of a steel box shaped like a fireplace, to protect the heat exchanger that was to go with it. At that time, Mr. Stewart took Don Johnson into his workshop and showed him an outfit which he indicated would be similar to, if not identical to, that which he intended to install in the senior Johnson's home. It was understood that Respondent would supply the firebox and heat exchanger, but the builder was to do the masonry work and the chimney. Thereafter, based upon that understanding, Don Johnson recommended to his father that he accept the proposal, which was accomplished on or about the September 10, 1979, date; and both Fred Johnson and his wife, Christine, did so, agreeing to pay, for the complete system, the sum of $5,483 in accordance with a schedule set forth in the proposal sheet. Construction was begun and progressed to the time it was appropriate to install the firebox. At that point, Respondent told Don Johnson, the builder, he was unable to provide the firebox at that time. Since the state of construction was such that a delay in providing the firebox would hold up the continuance of construction, Respondent asked Don Johnson if he, Don, could provide the standard firebox into which Respondent would put his heat exchanger and thereafter give a credit against the purchase price. In response to this suggestion, Don Johnson told Respondent the cost would be between $400 and $500, to which sum Respondent agreed. As a result, Don Johnson put in the firebox that he procured, and Respondent thereafter put in the heat exchanger unit. Construction on the house continued until such time as, in April 1980, the house was considered sufficiently complete for Mr. and Mrs. Fred Johnson to move in. In the interim, however, in order to get the duct work done for the air conditioning and heating system he installed, Respondent, who was not licensed to perform heating and air conditioning installation in St. Johns County, Florida, arranged with Mr. Everett Masters, owner of Masters Heating and Air Service of St. Augustine, Florida, to do the duct work for the Johnson home. A building mechanical permit is not required to do duct work, and Mr. Masters did the duct work without a permit, even though he was not satisfied that the installation called for in the drawings was sufficient to accomplish the purpose of heating and cooling for a house that size. According to Mr. Masters, he did the work according to the specifications given to him, but protested to a representative of Mr. Stewart, Respondent, that the ducts were too small. In response, he was told to put the ducts in as called for in the specifications, which he did, but was never paid for the work he provided. St. Johns County Ordinance No. 76-20, an ordinance regulating contractors and the business of contracting within that county, at Section 4 thereof requires that air conditioning contractors be certified in order to conduct that business within the county. The contract involved here for the construction of Mr. Johnson's house would have required the contractor, Respondent, to have a local license to complete the air conditioning work. Respondent does not have a license in St. Johns County and never has had one. As a matter of fact, before the work was done, Mr. Don Germain, an assistant building official for St. Johns County, told Respondent in 4Z. Germain's office that he, Respondent, would need a county license at the time Respondent had come to the office prior to installing the air conditioning unit in the Johnson house. At this point, Mr. Germain discussed the project, including the rough drawing Respondent had with him, and advised Respondent at that time what permits and what licensing provisions must be fulfilled. At that time, solar heating and hot water systems did not require the license. However, the other work called for in this contract, such as the installation of the air conditioning system, would require a type of license which Respondent did not have. Germain and the Respondent had an extensive discussion on this. As it appeared to Mr. Germain, Respondent could not seem to understand why a license would be needed. A mechanical permit was issued on April 23, 1950, to Masters Heating and Air for a part of the system. A part did not include the entire installation permit. This permit applied for by Mr. Masters was acquired at the request of Don Johnson, the contractor, who pleaded with him to do so because, according to Mr. Johnson, the only way he could get final approval of the construction in order to get the elec- tricity turned on in the house was if this permit was applied for and issued. The permit in question was issued for something other than the duct work accomplished by Mr. Masters. Mr. Masters did not install the air conditioning equipment, only the ducting. The permit, if legitimate, would allow final approval of the installation of the entire air conditioning system. The information contained on the permit was provided to Mr. Masters by Respondent. According to Mr. Germain, Respondent never did get final approval of the building inspector on the total installation. The equipment was not initially accepted by the building department, since it was not a unitary unit-- in which all segments are designed to work together as a unit. However, even though the unit was rejected by the building authorities, they let the work continue based on a letter from the engineer who approved the purchase of the system, which indicated the engineer would be responsible for the working of the unit. In addition, the building officials allowed the work on Mr. Johnson's home to continue even after the discussions regarding the lack of a proper licensee because Respondent assured Mr. Germain of the building office that Mr. Masters, who was in fact a registered and licensed air conditioning contractor in St. Johns County, was going to do the work. Though the unit was basically installed in April 1980, it was not working property even up to July 3, 1980 It did not cool properly. At that point, Respondent contends he was still owed some money by Mr. Johnson. In November 1980, when it became obvious that the initially installed compressor was insufficient in size to cool a house the size of Mr. Johnson's, Respondent replaced the compressor, installing one a half ton larger than that initially installed. At that point, Don Johnson paid Respondent the sum of $800, which, according to Mr. Johnson, was the entire sum owed on the complete installation after deduction of the credit of $483 for the firebox which Mr. Johnson fabricated in lieu of that initially proposed by Respondent and which Respondent could not provide. After Respondent was paid the $800, he stopped responding to calls to service the cooling system and the heating system, even though neither worked properly at that time. Respondent admits that at some point in time he refused to continue servicing Mr. Johnson's unit and did not honor the warranty. He contends, however, that he stopped servicing because Mr. Johnson still owed him $453. The weight of the evidence indicates otherwise. Mr. Johnson ultimately hired another craftsman to repair his system, and the system was repaired without any further assistance by Respondent.
Recommendation That Respondent pay a fine of $1,000, and that Respondent's license be placed on probation for a period of two years.
The Issue The issue is whether Respondent failed to secure workers' compensation coverage for its employees and, if so, the amount of the penalty to be assessed against Respondent.
Findings Of Fact Respondent installs and maintains air conditioning and heating equipment for residential and commercial applications. On May 2, 2017, Respondent was installing a duct system at 3128 East Hillsborough Avenue in Tampa. Two of Respondent's employees were performing work at the site and were not covered by workers' compensation. Leslie Michaud is the president and sole shareholder of Respondent. The air conditioning installation work performed by Respondent's employees is classified by the National Council on Compensation Insurance (NCCI) as class code 5537. This code is for "Heating, Ventilation, Air-Conditioning and Refrigeration Systems Installation, Service and Repair . . . ." During the audit period of May 3, 2015, through May 2, 2017 (Audit Period), code 5537 bore two rates. For the Audit Period, Respondent had no workers' compensation coverage for any of its employees, although it maintained an exemption for Mr. Michaud. For the Audit Period, Respondent's gross payroll was $213,327.49 exclusive of any payments to Mr. Michaud. Applying the manual rates during the Audit Period to the gross payroll yields unpaid workers' compensation premium of $14,870.43.
Recommendation It is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order determining that Respondent failed to secure workers' compensation coverage for its employees during the Audit Period and imposing a penalty of $29,740.86. DONE AND ENTERED this 7th day of January, 2019, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 7th day of January, 2019. COPIES FURNISHED: Tabitha G. Harnage, Esquire Steven R. Hart Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Leslie G. Michaud L and M Airconditioning System, Inc. 49 North Federal Highway, No. 206 Pompano Beach, Florida 33062 Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed)
The Issue The issues are whether the existing and proposed provisions of Florida Administrative Code Rule 61G4-15.005, as identified in the next paragraph, are invalid exercises of delegated legislative authority.
Findings Of Fact Petitioner Gold Coast School of Construction, Inc. (Gold Coast), engages in the business of offering courses to individuals who seek to become certified or registered contractors in Florida. Gold Coast offers prelicensing courses for prospective general contractors, building contractors, residential contractors, Class A air conditioning contractors, Class B air conditioning contractors, Class C air conditioning contractors, and roofing contractors. Enrollment in these classes ranges from 200-600 students annually. For the trades in which Gold Coast offers prelicensing courses, Gold Coast is substantially affected by the proposed rule, which would substantially raise the net-worth requirements imposed on prospective contractors, reduce the number of persons who could qualify for certification, and reduce the number of persons who would enroll in Gold Coast's prelicensing courses. Petitioner Douglas L. Gamester (Gamester) has passed the Construction Industry Licensing Board (Respondent) examination for certification as a general contractor. After he filed his rule challenge, Respondent granted him a general contractor's certificate and approved his qualification of a business entity. Gamester is not substantially affected by the rule or proposed changes to the rule. Although Gamester may, in the future, attempt to obtain other contracting certificates in other trades, any finding of such plans at present would be based entirely on speculation. Florida Administrative Code Rule 61G4-15.005 provides: 61G4-15.005 Requirements for Certification and Registration. In order that the Board may carry out its statutory duty to investigate the financial responsibility, credit, and business reputation of a new applicant for certification or registration or a change of status of a certification or registration, an applicant shall be required to forward the following to the Department for a review by the Board: A credit report from any nationally recognized credit agency as defined in subsections 61G4-12.011(13) and (14), F.A.C. A financial statement, not older than 12 months, which shall contain information indicating the current assets, current liabilities, total assets, total liabilities, and total net worth, and which shall report all material financial changes occurring between the date of the financial statement and the date of the application. As a prerequisite to issuance of a certificate, an applicant shall, in addition to the submissions required in subsections and (2) above, submit competent, substantial evidence to the Florida Construction Industry Licensing Board demonstrating the following: Net worth as listed below for the following categories of contractors: General Contractor, $20,000; Building Contractor, $20,000; Residential Contractor, $20,000; Sheet Metal Contractor, $10,000; Roofing Contractor, $10,000; Class A Air Conditioning Contractor, $10,000; Class B Air Conditioning Contractor, $10,000; Class C Air Conditioning Contractor, $10,000; Mechanical Contractor, $10,000; Commercial Pool/Spa Contractor, $10,000; Residential Pool/Spa Contractor, $10,000; Swimming Pool/Spa Servicing Contractor, $2,500; Plumbing Contractor, $10,000; Underground Utility and Excavation Contractor, $10,000; Solar Contractor, $10,000; Residential Solar Water Heating Specialty Contractor, $2,500; Specialty Structure Contractor, $10,000; Pollutant Storage System Specialty Contractor, $10,000; Gypsum Drywall Specialty Contractor, $2,500; Gas Line Specialty Contractor, $10,000; or Glass and Glazing Specialty Contractor, $10,000. Possession of either a letter of credit or a compliance bond established to reimburse the appropriate parties for diversion of funds, abandonment, and all other statutory violations, said instruments to be issued in the same license classification to dollar ratio listed in paragraph (a), above. The aforementioned instruments are not to be construed as performance bonds. Net worth shall be defined to require a showing for all contractor licensure categories that the applicant has a minimum of 50 percent (%) of the amount in cash. Cash shall be defined to include a line of credit. On February 6, 2004, Respondent published in the Florida Administrative Weekly, Volume 30, Number 6, proposed changes to Florida Administrative Code 61G4-15.005(3)(a), so that the new net-worth requirements would be as follows (new language is underlined and old language is stricken): Net worth as listed below for the following categories of contractors: General Contractor, $80,000 20,000; 20,000; 10,000; 10,000; Building Contractor, $40,000 Residential Contractor, $20,000; Sheet Metal Contractor, $20,000 Roofing Contractor, $20,000 Class A Air Conditioning Contractor, $20,000 10,000; Class B Air Conditioning Contractor, $20,000 10,000; Class C Air Conditioning Contractor, $20,000 10,000; Mechanical Contractor, $20,000 10,000; Commercial Pool/Spa Contractor, $20,000 10,000; Residential Pool/Spa Contractor, $20,000 10,000; Swimming Pool/Spa Servicing Contractor, $10,000 2,500; Plumbing Contractor, $20,000 10,000; Underground Utility and Excavation Contractor, $20,000 10,000; Solar Contractor, $20,000 10,000; Residential Solar Water Heating Specialty Contractor, $5,000 2,500; Specialty Structure Contractor, $20,000; 10,000; Pollutant Storage System Specialty Contractor, $20,000; 10,000; Gypsum Drywall Specialty Contractor, $5,000; 2,500; Gas Line Specialty Contractor, $20,000 10,000; or [sic]. Section 489.105(3), Florida Statutes, divides contractors into Division I and Division II. Division I contractors are general, building, and residential contractors. Division II contractors are all other contractors. Section 489.105(3), Florida Statutes, defines Division I contractors as follows: "General contractor" means a contractor whose services are unlimited as to the type of work which he or she may do, who may contract for any activity requiring licensure under this part, and who may perform any work requiring licensure under this part, except as otherwise expressly provided in s. 489.113. "Building contractor" means a contractor whose services are limited to construction of commercial buildings and single-dwelling or multiple-dwelling residential buildings, which commercial or residential buildings do not exceed three stories in height, and accessory use structures in connection therewith or a contractor whose services are limited to remodeling, repair, or improvement of any size building if the services do not affect the structural members of the building. "Residential contractor" means a contractor whose services are limited to construction, remodeling, repair, or improvement of one-family, two-family, or three-family residences not exceeding two habitable stories above no more than one uninhabitable story and accessory use structures in connection therewith. In contrast to building and residential contractors, a general contractor is unlimited in the scope of work that he or she may under take, subject to Section 489.113(3), Florida Statutes, which requires a contractor to subcontract out electrical, mechanical, plumbing, roofing, sheet metal, swimming pool, and air conditioning work, unless the contractor is certified or registered in the particular trade. Building contractors may undertake work on residential or commercial structures not more than three stories high, and residential contractors may undertake work on limited residential structures not more than two stories high. Although Petitioners identify various small jobs that require a general contractor's certificate or registration, such as the construction of small communications towers, balcony repairs in parking garages, and door repairs in high-rise apartments, the record generally supports the finding that the scope of jobs undertaken by general contractors is more extensive than the scope of jobs undertaken by building contractors, and the scope of jobs undertaken by building contractors is more extensive than the scope of jobs undertaken by residential contractors. This case involves one of the requirements imposed on persons seeking to become certified as contractors in specific trades. Certification is distinct from registration. Section 489.105(7) and (8), Florida Statutes, defines "certificate" as a certificate of competency issued by Respondent and a "certified contractor" as a contractor who may practice anywhere in the state. Section 489.105(9) and (10), Florida Statutes, defines "registration" as registration with Respondent and a "registered contractor" as a contractor who may practice only in the local jurisdiction for which the registration is issued. Section 489.115(1), Florida Statutes, prohibits any person from engaging in the practice of contracting without first obtaining a certificate or registration in the appropriate trade. Section 489.115(5)(b) and (6), Florida Statutes, provides: (b) In addition to the affidavit of insurance, as a prerequisite to the initial issuance of a certificate, the applicant shall furnish a credit report from a nationally recognized credit agency that reflects the financial responsibility of the applicant and evidence of financial responsibility, credit, and business reputation of either himself or herself or the business organization he or she desires to qualify. The board shall adopt rules defining financial responsibility based upon the applicant's credit history, ability to be bonded, and any history of bankruptcy or assignment of receivers. Such rules shall specify the financial responsibility grounds on which the board may refuse to qualify an applicant for certification. * * * (6) An initial applicant shall, along with the application, and a certificateholder or registrant shall, upon requesting a change of status, submit to the board a credit report from a nationally recognized credit agency that reflects the financial responsibility of the applicant or certificateholder or registrant. The credit report required for the initial applicant shall be considered the minimum evidence necessary to satisfy the board that he or she is financially responsible to be certified, has the necessary credit and business reputation to engage in contracting in the state, and has the minimum financial stability necessary to avoid the problem of financial mismanagement or misconduct. The board shall, by rule, adopt guidelines for determination of financial stability Although testimony at the hearing suggested that "history of bankruptcy" meant an inability to generate sufficient cash flow to pay debts owed, it is more likely that a "history of bankruptcy" is a record of filing for bankruptcy. Like the appointment of a receiver, the filing of a petition for bankruptcy is an action that is easily detected, as opposed to the inability to pay debts as they matured or the existence of liabilities in excess of assets--either of which, for most natural persons, is difficult to determine, especially historically. The "credit report" mentioned in Section 489.115(5)(b), Florida Statutes, and the "credit report" mentioned in Section 489.115(6), Florida Statutes, is the same credit report. Florida Administrative Code Rule 61G4-12.011(11) and (12) defines the credit report as follows: A “credit report from a nationally recognized credit agency that reflects the financial responsibility of the applicant, certificateholder or registrant”, shall for the purposes of Section 489.115(6), F.S., mean a credit report that provides full, accurate, current, and complete information on the following items in a manner which allows the Board to determine the credit worthiness of the applicant: Payment history; Credit rating; Public filings in county, state and federal courts; Bankruptcies, business history, suits, liens, and judgments, all on a nationwide basis; Location of business, number of years in business; Social security numbers, if available, of all corporate officers, owners and partners, and all federal employer identification numbers, if available, held by the applicant or any business entity that he currently qualifies or is applying to qualify; and UCC filings. A “nationally recognized credit agency” shall mean a credit agency that: Obtains credit information both within and outside the State of Florida; Validates, updates, and maintains the accuracy of credit information obtained; and Obtains credit reports from at least two (2) credit bureaus. The statutory requirement of a credit report focuses upon an individual's creditworthiness, based on his or her use or abuse of credit and payment history. The closest that these statutes come to specifying net worth as a criterion of certification are the requirements of "financial. . . responsib[ility]" and "the minimum financial stability necessary to avoid the problem of financial mismanagement or misconduct," which is the cause of about 70 percent of all disciplinary proceedings against contractors. However, these statutory references guide Respondent in the authorized use of the credit report, which does not warrant the imposition of a net-worth requirement. First, the credit report lacks net-worth information. Second, the credit report presents a subject's financial history--most of which is of no use in establishing the subject's present net worth. In contrast to these provisions in Section 489.115(5)(b) and (6), Florida Statutes, Section 489.1195(1)(d), Florida Statutes, expressly authorizes Respondent to adopt rules imposing "net worth" and "cash” requirements on individuals seeking to qualify as financially responsible officers (FROs) for construction businesses. The Legislature clearly evidenced its ability to require net worth as a condition to certification as an FRO, which are not involved in this case, and obviously elected not to impose as onerous a requirement upon contractors themselves. Respondent determined the new net-worth requirements in the proposed rule by two means. Respondent had not changed the net-worth requirements for Division II contractors for 20 years, so Respondent estimated that the effects of inflation justified the increases set forth in the proposed rule. Respondent had raised the net-worth requirements for Division I contractors from $10,000 to $20,000 in 1998. Respondent derived the new net-worth requirements for general and building contractors based on estimates of weekly salaries for these respective contractors, not inflation. The present record contains no evidence of the rate of inflation during any relevant period of time, nor any evidence of average weekly salaries paid by Division I contractors. Nor does it appear that Respondent considered such data when determining the new net-worth requirements in the proposed rule.
Findings Of Fact At all times material hereto, the Respondent, Thomas W. Hunter, was a certified Class B Air Conditioning contractor, having been issued license number CA C014646, by the State of Florida. At all times material hereto, Derrell Baugh (D. Baugh) was an electrical contractor having been issued a license by the State of Florida. D. Baugh has not had an air conditioning license for Lake County, but has held a City of Eustis air conditioning license for some 15 years. Gregory Duane Baugh (G. Baugh) is the son of D. Baugh. G. Baugh has not been licensed by the State of Florida. The Respondent has been doing business as Hunter Air. The Respondent has never qualified Baugh's Electric, and D. Baugh has never qualified Hunter Air. In approximately 1976, D. Baugh and his son G. Baugh, and the Respondent were partners in the business of Baugh's Electric. There was no written partnership agreement, only a handshake partnership. The Respondent did the air conditioning and refrigeration work, and D. Baugh and G. Baugh did the electrical work. All three of them shared in the profits. If a job involved electrical and air conditioning work, the partner who had already contracted for the job would encourage the main contractor to use the other partner. When the Respondent and D. Baugh were working on the same job, if one partner was behind in his work, the employees of one would assist the one who was behind to complete his work. Further, when working on the same job, and when authorized by the Respondent, D. Baugh would sometimes pull air conditioning permits for the Respondent. This partnership arrangement ended in 1980 or 1982. After the dissolution of the partnership, the Respondent continued to have access to the checking accounts, and charge accounts with wholesalers, of Baugh's Electric. The Respondent can write checks on the account and charge items with wholesalers. Even after the partnership dissolved, Baugh's electric continued to use the business cards of the partnership, which included the Respondent's name. The business part of Baugh's Electric, bookwork and the writing of proposals, is handled by G. Baugh. The field work and troubleshooting is handled by D. Baugh. On June 30, 1985, G. Baugh prepared an electrical and air conditioning proposal for Gary Wyckoff (Wyckoff) on a spec house being constructed by Wyckoff. The proposal was on proposal paper for the business of Baugh's electric and showed the electrical contractor as G. Baugh, the air conditioning contractor as the Respondent, and a breakdown of the cost for each type of work. The total cost for the work, per the proposal, was $4,170. Baugh's Electric had performed other work for Wyckoff, but had not always submitted a written proposal. G. Baugh believed that the Lake County Building Department saw no problem with either the proposals of Baugh's Electric, or with the Respondent being on the proposal sheet of Baugh's Electric, as long as it was specified who was going to do what. G. Baugh has written at least six proposals in this manner. The proposal for the Wyckoff job was written as it was because the Respondent had no proposal paper of his own and it was convenient. Before the Wyckoff job, D. Baugh had a discussion with the Lake County Construction License Investigator, Mary Pasak (Pasak), concerning himself and the Respondent working together. D. Baugh was informed that there was nothing wrong with them working together as long as the Respondent did the air conditioning work and obtained the air conditioning permits, and D. Baugh did the electrical work and obtained the electrical permits. The Respondent testified that he saw nothing wrong with putting multiple proposals from different contractors with different types of licenses on one proposal sheet because he had been employed with companies which engaged in this practice. He testified that he saw nothing wrong with putting his proposal for air conditioning on the same proposal sheet with Baugh's Electric which was to do the electrical work, because everyone who was working on a project, including the Wyckoff job, was made aware of who was doing what. D. Baugh pulled the electrical permit for the Wyckoff job. As part of the air conditioning work, duct work had to be done. To complete the duct work G. Baugh contacted a duct man, James Edwards (Edwards), whom Baugh's Electric had used on several other jobs in the City of Eustis area, because the Respondent was unable to start the job. Edwards knew that he was performing the work under the Respondent's license because he had been informed years ago, during the partnership, that among the partners the Respondent had the air conditioning license. However, Edwards informed the Lake County Building Inspector that he was employed by D. Baugh on the Wyckoff job. Edwards had neither seen nor had any contact with the Respondent. On all the jobs that Edwards had done duct work on for Baugh's Electric, either D. Baugh or G. Baugh had made the contact with him, given him the okay to do the duct work, or paid him. Edwards completed the duct work, and was paid by Baugh's Electric. The Respondent reimbursed Baugh's Electric. No permit to perform the air conditioning work, including the duct work, had been pulled before Edwards started and completed the duct work. Edwards believed that D. Baugh had taken care of the mechanical permit for the air conditioning work. Wyckoff also believed that the mechanical permit had been pulled. Wyckoff knew that the Respondent had the license to perform the air conditioning work, although he had only seen the Respondent twice. Their contact was usually by telephone. The Respondent pulled the mechanical permit for the Wyckoff job after Edwards had completed the duct work. Because the Respondent pulled the permit after the work had begun, he had to pay the Lake County Building Department a double fee for this permit. The Respondent pulled the mechanical permit as a favor to Baugh's Electric. The Respondent did not know that the duct work for the air conditioning job had begun. He knew he was to perform some air conditioning work for Wyckoff on a house, but he did not know which house it was, or where it was located. The Respondent completed the air conditioning work, and on August 21, 1985, submitted to Wyckoff an invoice in the amount of $2,200 for the work. Even though the invoice was on the letterhead of the Respondent's company, Hunter Air, the invoice was filled out by G. Baugh. Wyckoff paid the Respondent for the air conditioning work.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent, Thomas W. Hunter, be found guilty as charged, and that he be assessed an administrative fine in the amount of $1,000. THIS RECOMMENDED ORDER entered on this 24th day of September, 1986 in Tallahassee, Leon County, Florida. WILLIAM B. THOMAS 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 24th day of September, 1986. COPIES FURNISHED: Errol H. Powell, Esquire 130 North Monroe Street Tallahassee, Florida 32301 Thomas W. Hunter 502 Citrus Avenue Eustis, Florida 32726 Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Wings S. Benton, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Fred Seely Executive Director Department of Professional Regulation Post Office Box 2 Jacksonville, Florida 32201
Findings Of Fact At all times relevant hereto, respondent, Sam Pollack, held certified air-conditioning contractor license number CA-C008663 issued by petitioner, Department of Professional Regulation, Construction Industry Licensing Board (Board). He has been licensed by the Board for approximately sixteen years. Respondent used his license with and was qualifying agent for a firm known as Dr. Cool's Clinic, Inc. located at 10662 Southwest 186th Lane, Miami, Florida. Around April 1, 1986 Steven and Beverlee Swerdlen moved into a 1,400 square foot prefabricated modular home at 19800 Southwest 180th Avenue, Miami, Florida. The home is located in a large modular home subdivision known as Redland. Although a modular home resembles a mobile home in certain respects, it is considered to be a fixed, permanent residential dwelling under local building codes. The home had previously been a model unit in the subdivision and had never been lived in since being built at least three years earlier. On April 3, 1986 respondent entered into a contract with Steven Swerdlen to install a Rheem four-ton air conditioning unit at Swerdlen's home. The contract called for a total price of $2152.50. The Swerdlens paid for the job in full the same day by credit card. Because Swerdlen's home had the ductwork and twenty outlets already in place, Pollack was to adapt the unit to the existing ductwork. Respondent's firm was selected over other firms because Mrs. Swerdlen was impressed with Pollack's advertisement which represented that Pollack provided "air conditioning designed and serviced for people with allergies and other respiratory problems." This was important to her since she suffers a heart condition and requires air-conditioning during warm weather. She also accepted respondent's oral representations that he had the experience and expertise to satisfy her needs. The ductwork in the home was accessible through a small crawlspace located under the floor. There were also two vents under the floor to prevent a buildup of moisture. The flooring in the home was made of particle board and was sealed with a vapor barrier which was designed to protect it from moisture damage. When the Swerdlens purchased their home, the vapor barrier was already cracked in several places and, coupled with the fact that the area had only two vents, the floor was susceptible to moisture damage. Before a central air-conditioning unit is installed, a prudent and competent air-conditioning contractor should take measurements of the home, perform heat loss calculations and inspect the existing ductwork to insure that the proper size unit is being installed. The evidence is sharply conflicting as to what steps, if any, were undertaken by respondent when he visited the Swerdlen home on April 3 to discuss the job. It is found, however, that Pollack made a visual inspection of the home but did not take formal measurements or make heat loss calculations. He inspected the ductwork to the extent he looked under the house through the crawlspace opening. He noted a potential problem with the vapor barrier and a supply duct hookup location that was blocked by a pier (support). He mentioned to Mrs. Swerdlen that she needed additional ventilation windows underneath the home and that she had a potential moisture problem with the vapor barrier. However, he did not suggest that she wait and have those matters corrected before he installed the unit. The unit was installed on April 7, 1986, or four days after the contract was signed. Besides respondent and a helper, Mrs. Swerdlen was the only person present. No electricians were called in to assist on the job. According to Pollack, the only electrical work that he performed was the installation of the thermostat unit in the closet under the fuse box and the internal electrical connections to the unit. As to this latter work, Pollack stated he did not believe an electrical license was needed to connect the terminal wires to the air-conditioning unit. He did not obtain a building permit from the county nor did he request an inspection of his work. Both were required by county regulations. Because the supply duct hookup was blocked by a pier, Pollack was forced to place a three or four foot high supply duct in a bedroom closet. Without advising the Swerdlens as to the extent or nature of modifications needed to bypass the pier, Pollack cut a large, unsightly hole in the closet floor. It was also necessary to penetrate the vapor barrier when the hole was cut. The cut was never resealed. The new duct took up much of the closet space and was vulnerable to puncture damage. A photograph of the supply duct is found in petitioner's exhibit 14. After the work was completed, Pollack did not advise the Swerdlens that the vapor barrier had been broken or that it needed to be resealed to avoid moisture damage to their floor. The power source to the air-conditioning unit was a 10-gauge wire. Since the unit required a larger gauge, it was necessary that an 8-gauge wire be installed. Pollack and his helper left for one and one-half hours at lunch during the day of installation, and Pollack claims the wire was changed by someone during the time he was gone. The Swerdlens contended they knew nothing about electrical wiring and could not perform the task themselves. Their testimony is accepted as being more credible and it is found that Pollack, even though he was not licensed as an electrician, changed the electrical power source wiring. In addition, Pollack did all other electrical work required for the installation of the unit. In doing so, he made no provision for overload, left exposed wiring in the closet by the thermostat and failed to provide a service disconnection switch for the unit inside the home. Until these deficiencies were corrected several months later, the Swerdlens could smell a burning odor in their home. According to industry standards and local building code requirements, the unit should have been placed on a concrete slab. However, Pollack used two sets of concrete runners obtained from the unit manufacturer. He justified this on the ground that many other homes in the same subdivision did not have slabs under their units. Even so, this did not justify a deviation from code requirements. Because a slab was not used, the unit sank into the ground after the first rainfall. Pollack eventually installed a cement slab in November, 1986 after being ordered to do so by local building officials. The Swerdlens' floors began to buckle and ripple within a short time after the unit was installed. It began in the bathroom directly above the area where Pollack had penetrated the vapor barrier to install the supply duct and was exacerbated by the closure of one of the two vents under the floor when Pollack installed the unit. The damaged floor is memorialized in photographs received in evidence as petitioner's exhibit 14. Mrs. Swerdlen contacted respondent after the above problems began to occur. Other than adjusting the thermostat to get better cooling, Pollack did nothing since he did not think he was responsible for the other problems. He offered to make the other changes for additional compensation and if the Swerdlens would agree to release him from all liability. After declining Pollack's offer, Mrs. Swerdlen had other persons or companies make the needed repairs. Most of the costs were paid by her insurance company. She also contacted the Metropolitan Dade County Building and Zoning Department (Department) and the Board. The Department learned that no permit had been obtained by Pollack even though one was required and that no inspections had been made during and after the work. Pollack obtained an after-the-fact permit on November 24, 1986, after paying a double fee and a $100 violation fee for failing to timely obtain the permit. After being contacted by Mrs. Swerdlen, a Department mechanical inspector made an inspection of the Swerdlens' home on November 24, 1986. He found several violations of the local building code including (a) a failure to obtain a permit and have required inspections made, and (b) improper electrical work. A summons was issued against Pollack for these violations. The disposition of the summons is not of record. The inspector also noted that the vapor barrier around the closet supply duct had not been resealed, that the flooring was warped above the cut and that the unit was not on a concrete slab. Although the inspector suggested that Pollack correct these deficiencies, only the latter deficiency was corrected. The work never passed final inspection. The Board employed a Jacksonville residential contractor as its expert in this case. Although the expert did not personally inspect the property, he reviewed photographs of the site, respondent's deposition and the investigative file and spoke with the Swerdlens by telephone. According to the Board's expert, Pollack was guilty of gross negligence by performing work that exceeded the scope of his license, performing potentially hazardous electrical wiring, installing a non-efficient system in the Swerdlens' home, failing to follow accepted industry rules concerning static friction, velocities, noise levels and filtration, failing to properly inspect the home prior to installation, improperly installing the unit, damaging the vapor barrier, installing a large supply duct in the closet without obtaining the Swerdlens' approval and failing to use a cement slab to support a heavy unit. He further opined that respondent was deceitful by selling the system in the manner that he did, particularly since it was sold and installed within a four day period with no thought given to or preparation taken as to the problems that might be encountered. The expert agreed that the work was made more difficult by the position of the pier but stated that Pollack should have explained this problem to the Swerdlens and obtained their approval prior to cutting through their closet floor. Pollack has worked in the air-conditioning business for around 26 or 27 years, of which two were spent as a building inspector for Dade County in the late 1960s. He contended he warned Mrs. Swerdlen about the penetrated vapor barrier, the blocked air duct and the lack of a sufficient number of vents. Pollack also stated he advised Mrs. Swerdlen it was her responsibility to get an electrician to do all electrical work. However, these contentions are rejected as not being credible. Moreover, if there were special problems with the Swerdlens' home, it was respondent's responsibility to design and install a system that was compatible with those special needs. Pollack asserted that the Swerdlens' home was actually a mobile home, and he was under the impression that permits were not required for work on this type of home. However, this contention is irrelevant since Dade County has required permits for air conditioning work on both fixed and mobile homes for at least the last ten years.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating Subsections 489.129(1)(d), (j), and (m), Florida Statutes (1985), that he pay a $3,000 civil fine within thirty days from date of a Final Order in this cause, and that his license be suspended for thirty days, or until the fine is paid if after the expiration of said thirty day period. DONE AND ORDERED this 3rd day of June, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 3rd day of June, 1988.
The Issue This matter began when Respondent, a certified air conditioning contractor, was charged by Petitioner in an administrative complaint with violation of Section 489.129(1)(m), Florida Statutes, through the commission of gross negligence, incompetence, or misconduct in connection with a certain job undertaken by the air conditioning business for which Respondent was responsible as the qualifying agent. Respondent requested a formal administrative hearing. This proceeding followed. At hearing, Petitioner presented testimony of two witnesses and six evidentiary exhibits. Respondent presented testimony of two witnesses, including himself, and three evidentiary exhibits. Petitioner was granted leave to submit a post hearing exhibit no later than March 3, 1989. Proposed findings of fact submitted by Petitioner are addressed in the appendix to this recommended order. No proposed findings were received from Respondent by the required deadline or at the time of the preparation of this recommended order. Based upon all of the evidence, the following findings of fact are determined:
Findings Of Fact Respondent is Steven E. Taucher, a certified air conditioning contractor and the qualifying agent for Discount Air Conditioning & Heating Services, Inc., at all times pertinent to these proceedings. He has been licensed by Petitioner since 1985 and holds license CA-CO36835. His address of record is Tampa, Florida. In May of 1987, Janet Daniels contracted with Respondent's company for the installation in her home of a heat pump system. The system was to consist of one supply duct and a filter back return; a three ton condenser heat pump; a three ton air handler; a 3 ton coil; and a heat strip, thermostat and outdoor slab. The unit was to fulfill heating and cooling functions. Installation work was to be completed in a "substantial and workmanlike manner"; using existing ductwork and electrical connections. Upon execution of the written agreement, Daniels paid Respondent $2,000. A sales rebate of $525 was also signed over to Respondent by Daniels, leaving a total owed to Respondent of $125. This amount was to be paid by June 30, 1987. Daniels never paid this final sum to Respondent because she was not satisfied with his work and eventually had to pay another contractor $420 to make certain repairs to the system. Respondent, by his own admission, failed to timely pull the permits for the project; however, he did install the system, connecting it to existing ductwork and electrical connections as specified in the contractual agreement. Within two and a half hours after installation, the temperature gauge reflected that the unit was not cooling the Daniels' house to the desired 76 degree thermostat setting. Respondent informed Daniels that the unit's capacitor wasn't functioning. Respondent replaced the capacitor. The unit did not function properly and Respondent attempted other repairs at later dates varying from replacement of the thermostat to installation of a sump pump for removal of condensation from the unit. Daniels was still unable to get the unit to cool the residence to the desired thermostat setting. Further, there was a disparity in the temperature between rooms in the residence. On July 23, 1987, Respondent, accompanied by a factory representative from the manufacturer of the heat pump system, returned to the Daniels home. It is undisputed by the parties that the factory representative found that a portion of the unit, the vertical air handler, was not level and not well mounted and, as a result, was poorly installed. He further determined that the unit contained an excess amount of freon, a refrigerant gas. Respondent maintains that he performed the installation task strictly in accordance with the contract between the parties. It is his position that the installation of the air handler without a new wooden support base under it or replacement of the leaking existent return air plenum was in compliance with the parties' agreement to use existing ductwork. Respondent's position as to compliance with contractual terminology is supported by testimony of Petitioner's expert that the meaning within the trade of the terminology "use of existing ductwork" ordinarily includes the existing return air plenum as part of that ductwork. However, testimony of Petitioner's expert also establishes that Respondent's failure to realize and advise Daniels that the existing ductwork was obviously inadequate and might not permit the system to function effectively, demonstrated incompetence with regard to his ability to properly design and install a relatively simple system. The overall sloppiness of the workmanship in the system installation also reflects incompetence on the part of Respondent.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered assessing the Respondent an administrative penalty of $500 in accordance with disciplinary guidelines set forth in section 21E-17.001(19)(b), Florida Administrative Code. RECOMMENDED this day of March, 1989, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 15th day of March, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-5193 The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. PETITIONER'S PROPOSED FINDINGS 1.-6. Addressed and adopted in substance. COPIES FURNISHED: David Bryant, Esquire 220 East Madison Street, Suite 530 Tampa, Florida 33617 Steven E. Taucher Post Office Box 271581 Tampa, Florida 33688 Fred Seely, Executive Director Department of Professional Regulation Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32201
Findings Of Fact The following facts (a) through (r) are found based upon a stipulation by and between counsel for Petitioner and counsel for Respondent as to the truth of these facts: Respondent is a registered general con- tractor having been issued License No. RG0019039. Respondent's last known address is c/o Page Construction Company, 402 Davenport Drive, Valparaiso, Florida 32580. At all times material herein, Respondent was the qualifying agent for Page Con- struction Company. In August, 1980, Lillian Mark contacted the Respondent for advice as to how to get the central air conditioning system at her residence into operation. On August 15, 1980, Respondent inspected the old air conditioning unit and recommended that Lillian Mark have a new air conditioning system installed in the residence. On August 20, 1980, Respondent, who was doing business as Page Services, orally contracted to install a new Mammoth water- to-air heat pump at Lillian Mark's residence, located at 408 West Cedar Street, Niceville, Florida. Lillian Mark paid to Respondent a $1,600 down payment on the system, by check payable to Page Services. Respondent immediately started work on the installation and completed the work on August 23, 1980. On August 23, 1980, Lillian Mark gave Respondent a check in the amount of $435 payable to Page Services. A portion of the $435 was to pay for repairs to the duct system. The only license held by Respondent was a general contractor's license. At the time Respondent performed the work for Lillian, he was doing business as Page Services. The Mammoth heat pump installed by Respon- dent failed to heat the residence during cold weather. Further, the system required a large quantity of water to operate, which resulted in excessive water utility bills. Respondent agreed to remove the Mammoth water-to-air unit and replace it with a Ruud Air Conditioning System. However, the Respondent failed to install the new system properly, and water leaked from the unit causing property damage to Lillian Mark's residence. Further, the new Ruud unit failed to operate as installed. In May, 1980, Agnes Webb contacted Respon- dent for advice as to what work was required to make the air conditioning system in her residence operable. Respondent inspected the old air conditioning unit, and recommended that Agnes Webb have a new air conditioning system installed in the residence. On or about May 21, 1980, Respondent orally contracted with Agnes Webb to install a Ruud heat pump at her residence located at 1008 Bayshore Drive, Niceville, Florida. Respondent installed the unit and Agnes Webb paid Respondent $1,700 for the work. When Respondent performed the work for Agnes Webb, he had only his general contractor's license. Respondent has made full restitution to Lillian Mark for all costs incurred by her as a result of work performed by Mr. Page. Respondent has made full restitution to Agnes Webb for all costs incurred by her as a result of work performed by Mr. Page. Respondent failed to obtain a permit for the installation of the air conditioning system at the Mark residence. Respondent failed to obtain a permit for the installation of the air conditioning system at the Webb residence. Niceville City Ordinance 309 (1973) required that a permit be obtained for the installations at the Mark and Webb residences. The Respondent installed an air handler unit inside and the heat pump unit outside at the Mark residence. He hired another person to do the electrical work. Following the Mark installation, the air conditioning function worked fine but the unit would not heat. The unit used an excessive amount of water. Respondent, at Ms. Mark's request, replaced the heat pump unit with a totally electric Ruud unit. The second unit worked fine but leaked large amounts of water and soaked the carpet. The Respondent then paid two men to install a third unit in the Mark's home. The installation of the third unit required additional work because of the following problems: (1) the refrigeration lines were spliced and of two different sizes, (2) the electrical lines were spliced and had to be replaced, and (3) the control circuits had to be completely redone. The cost of these repairs was $349. The Respondent replaced the thermostat and entire air conditioning unit, and did some duct work at the Webb residence. The thermostat was not the proper type of thermostat for the unit installed and the outside duct work was not properly covered to protect it from weather. At the time of the Mark and Webb installations, the Niceville City Ordinance No. 304 (-1974) required registration of general contractors, electrical contractors, plumbing contractors, and mechanical contractors. The Respondent was not registered with the City of Niceville. In addition to his state general contractor's license, the Respondent holds an Okaloosa County occupational license as a general contractor and an occupational license with the City of Valparaiso, Florida, as an electrical contractor. At no time did Respondent qualify Page Services to engage in the business of contracting in the State of Florida. Respondent was the contractor who was responsible for the entire installation at the Mark and Webb residences. He was aware certain licenses and permits were required by the City of Niceville. There was no evidence that Respondent checked with any City of Niceville official to determine if a permit was required for installation of air conditioning systems. Respondent had performed work on other jobs for other contractors where permits had been obtained for this type work. The Respondent was also aware that if he put in a new air conditioning system, including duct work, he would need a permit. He also understood that if he ran a new circuit, he needed a permit. Respondent understood that the work performed for Agnes Webb and Lillian Mark was replacement of a system, not repair of a system. Respondent did not check with any official of the City of Niceville to determine if he needed a particular license to perform air conditioning work in the City of Niceville. He was not personally aware that such a license was required. Since the filing of this action, Respondent has registered to take the examination in Okaloosa County for a license to do air conditioning repair work.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Respondent be found guilty of those specific violations as set forth above and that he be required to pay an administrative fine of $500. It is further recommended that Respondent's license as a registered general contractor be suspended for a period of 6 months. DONE and ENTERED this 21st day of June, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of June, 1983. COPIES FURNISHED: John O. Williams, Esquire 547 North Monroe Street Tallahassee, Florida 32031 Harold F. Peek, Jr., Esquire Post Office Box 147 Valparaiso, Florida 32580 Mr. Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. James Linnan Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32202
