Findings Of Fact On five dates in June and July, 1988, Respondent advertised in The Orlando Sentinel newspaper its Invitation to Bid for the project known as High School "BB." The advertisement announced that bids would be received at 2:00 p.m. on August 4, 1988, at which time all bids would be publicly opened. The advertisement stated that Respondent reserved the right to waive irregularities. The Invitation to Bid stated that bids received after the deadline "will be returned unopened" and bids "received on time" will be opened publicly. The Invitation to Bid also stated: "The Owner reserves the right to waive any informality or irregularity in any bid received when such a waiver is in the best interest of the Owner. The contract would be awarded, according to the Invitation to Bid, within 45 days after the opening of bids. The location designated for the opening of the bids was the Facilities Services building located at 6200 Chancellor Drive, Orlando, Florida. The bids were opened in a conference room within the building. Robert Gallardo, who is Respondent's Director of School Planning and Construction, was in charge of the bidding process. Mr. Gallardo has been in this position for six years. During this time, he has been responsible for the majority of school construction bids for Respondent. He estimates that he has supervised ten such bids. On August 4, 1988, Mr. Gallardo worked in his office in the Facilities Services building until 1:55 p.m. At that time, he asked his secretary if the bid tabulation forms had been prepared, and, with the forms, he left his office for the conference room where the bids were to be opened. Mr. Gallardo entered the conference room, which was occupied by a number of bidders' representatives, at 1:58 p.m., according to the clock on the wall. At a few seconds before 2:00 p.m., he first spoke, asking that all bids be handed in. He then asked his secretary to call the front desk to see if any bids had been turned in there and needed to be brought down the hall into the conference room. This was a normal procedure. In past bids, some bidders left their bids with the receptionist at the front desk. Prior to obtaining any response from his secretary who was talking on a phone in the conference room, Mr. Gallardo announced his name and position and announced that he was going to open bids. He then picked up a sealed bid from the pile of sealed bids in front of him. As he was about to open the envelope, at or about 30 seconds past 2:00 p.m., a man entered the conference room and said that he had a bid to deliver. The man disclosed the bidder which he represented, but Mr. Gallardo did not clearly hear the name and did not know whose bid was being offered to him. Mr. Gallardo accepted the bid and placed it at the bottom of the pile. The late bid was from Intervenor. A few seconds after it was accepted Mr. Gallardo opened the first bid. A few seconds after that, another man entered the conference room and attempted to deliver a bid. Mr. Gallardo refused to accept the bid because, as he explained, the first bid had already been opened. Mr. Gallardo's practice has consistently been to accept late bids, provided they are delivered prior to the opening of the first bid. Mr. Gallardo had not previously known of Intervenor, which had never previously even submitted a bid on a school job being let for bid by Respondent. Mr. Gallardo's only prior contact with Intervenor's representative who delivered the bid was seeing the man in the building, along with other bidders' representatives, prior to the opening of the bids; however, Mr. Gallardo did not know who the man represented. There was no fraud or collusion in the acceptance of the late bid. There was no evidence that, under the facts of this case, Respondent abused its discretion in accepting Intervenor's late bid. Petitioner's bid was lowest among the bids delivered prior to 2:00 p.m. However, Intervenor's bid was over $500,000 lower than Petitioner's bid on a project costing in excess of $25 million. Respondent has confirmed Mr. Gallardo's decision not to reject Intervenor's bid as late. On August 16, 1988, Respondent published the agenda for the next school board meeting, which was scheduled for August 23, 1988. One of the items to be taken up was the award of the contract for High School "BB." By letter dated August 18, 1988, Petitioner declined Respondent's invitation to participate in what the parties referred to as an informal hearing at the August 23 school board meeting. Threatening unspecified sanctions under state and federal law if Respondent awarded the contract at the August 23 meeting, Petitioner demanded a formal hearing and asserted that the bidding process should be stayed until resolution of the protest, under Section 120.5361 [sic -- apparently referring to Section 120.53(5)(c)]. By memorandum dated August 23, 1988, Respondent's attorney opined that Rule 6A-2.016(7) did not require Respondent to utilize the Section 120.53(5) bid protest procedures, but, out of an abundance of caution and in the interest of expediting resolution of the dispute, recommended the referral of Petitioner's protest to the Division of Administrative Hearings. By letter dated August 23, 1988, Respondent referred the protest to the Division of Administrative Hearings for a formal hearing.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered dismissing the bid protest of Petitioner. DONE and RECOMMENDED this 15th day of September, 1988, in Tallahassee, Florida. ROBERT E. MEALE 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 15th day of September, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4078BID Treatment Accorded Petitioner's Proposed Findings of Fact 1. Adopted except to the extent that "timely" implies that Intervenor's bid was improperly accepted. Such an implication is rejected as legal argument. 2 and 4. Adopted in substance. 3. Rejected as irrelevant. 5-7. Rejected as not findings of fact except that the inference of Intervenor's efficient utilization of time following the deadline is rejected as unsupported by the evidence and irrelevant. 8-9. Adopted to the extent relevant. 10-11. Rejected as irrelevant. 12-15. Rejected as subordinate to the procedures set forth in the Invitation to Bid and advertisement, especially concerning the waiver of irregularities. First sentence adopted. Second sentence rejected as recitation of testimony through semicolon and irrelevant as to remainder except that the basis for Mr. Gallardo's decision is adopted and modified to add that he accepted the late bid in accordance win his past practice. Petitioner proved all of the facts in this proposed finding except that it could have used effectively any additional time. In any event, all of the facts in this paragraph are irrelevant and are rejected for this reason. The theory of Petitioner's case, as well as the evidence that it offered, was that in this and every other major bid, the last minutes before the deadline are critical due to the unwillingness or inability of subcontractors to supply critical numbers substantially before the deadline. This theory proves too much because, if true, the Hewitt court would have been constrained to consider such a universal fact and thereby would have prevented the agency in that case from accepting the late bid. The Hewitt case stands for the proposition that, in general, an agency may accept late bids before the first bid is opened. It is incumbent upon a frustrated bidder to show that the agency abused its discretion, under the circumstances of the individual case. Petitioner has in essence suggested that the burden is upon the agency to show that it did not abuse its discretion, at least once the frustrated bidder shows that it spent a lot of time and money in preparing its bid and could have used more time. To the contrary, Hewitt tells the frustrated bidder that it must find evidence of impropriety, such as fraud or collusion, in the agency's acceptance of the late bid. This mandate is especially clear in light of the recent Groves-Watkins decision. 18-19 and 22. Rejected as irrelevant. See Paragraph 17. Adopted. 20A-20F. Rejected as legal argument. First sentence rejected as subordinate and recitation of testimony. Second sentence rejected as speculative. Rejected as speculative and unsupported by the evidence. Rejected as irrelevant and unsupported by the evidence. 24A-27. Rejected as legal argument. Adopted in substance. Rejected as not finding of fact. Treatment Accorded Respondent/Intervenor's Joint Proposed Findings of Fact 1-2. Adopted. 3-4. Rejected as not finding of fact. 5-6. Adopted in substance. Rejected as irrelevant. 8. Adopted in substance. 9-12. Adopted in substance except that Mr. Gallardo did not arrive in the conference room "several minutes" before 2:00 p.m. and Intervenor's representative arrived about 30 seconds after 2:00 p.m. 13. Rejected as irrelevant. 14-15. Adopted in substance. Rejected as unnecessary. Adopted. Rejected as irrelevant. See Paragraph 17 in Petitioner's proposed findings. COPIES FURNISHED: Joseph G. Thresher, Esquire Dykema Gossett Ashley Tower Suite 1400 100 South Ashley Drive Post Office Box 1050 Tampa, Florida 33601-1050 William M. Rowland, Jr., Esquire Rowland, Thomas & Jacobs, P.A. 1786 North Mills Avenue Orlando, Florida 32803 Scott H. Johnson, Esquire Maguire, Voorhis & Wells, P.A. Two South Orange Avenue Orlando, Florida 32801 James L. Schott Superintendent Orange County Public Schools Post Office Box 271 434 North Tampa Avenue Orlando, Florida 32802 Honorable Betty Castor Commissioner of Education The Capitol Tallahassee, Florida 32399
Findings Of Fact During the applicable time period, the Respondent was a certified building contractor in the state of Florida and held license number CB C026049. On or about January 6, 1986, the Respondent was hired by West Coast Remodeling & Construction Company. The Respondent was hired as an employee to supervise a building project based on a contract between West Coast and Clarence Harrod for the building of a quadriplex in Rotunda West, Florida. On January 17, 1986, the Respondent applied for a building permit for the Harrod project. The Respondent represented on the permit that he was the builder on the project instead of West Coast, who had the written contract with Harrod. Neither of the principals in West Coast, Gunnar Jacobsen or Gerald Hanley, held a building contractor's license and a licensed contractor was necessary to obtain the permit for the project. After the application for the permit was completed, but before the building permit was issued, the Respondent received a document from West Coast evidencing that the Harrod contract was assigned to him as an individual. At the time the Charlotte County Building Permit was actually issued, the Respondent was the assignee of the Harrod contract. Although the assignment was in effect on January 22, 1986, West Coast continued to receive the funds from Mr. Clarence Harrod, who was not notified of the assignment of the contract. The Respondent either allowed or acquiesced in the continued management of the project and the building funds by West Coast until April 15, 1986. Sometime between January 17, 1986, and January 31, 1986, the Respondent became a shareholder in West Coast. By April of 1986, the Respondent was a corporate officer and had a one-third interest in the corporation. The corporation had three shareholders: the Respondent, Gunnar Jacobsen, and Gerald Hanley. Although all three men were corporate officers, the Respondent was to supervise new construction projects, Jacobsen was to handle administrative affairs and solicit new work, and Hanley was to supervise the remodeling jobs obtained by Jacobsen. In April of 1986, the Respondent determined that there were insufficient funds in the corporate accounts to complete the Harrod project if overhead costs were not reduced immediately. This insight was acquired by the Respondent around the same time the following events occurred: A. Mr. Harrod complained in early April that the job was taking too long. The project was still in the framing stage, and Mr. Harrod was asked for $15,000 of the $25,184.44 draw which was set aside in the contract for the drywall phase of the project. B. Smaller projects that West Coast had in progress, such as three concrete jobs, were found to be unprofitable by the principals in the company. C. Jacobsen was complaining to the Respondent and Hanley, the other two corporate officers, that framing costs were too high on the Harrod project. D. The Respondent and Hanley had decided, between themselves, that Jacobsen was not earning his salary with the corporation because he was not acquiring the new remodeling jobs for the company that he was supposed to under their business arrangements. On April 15, 1986, Hanley and the Respondent locked Jacobsen out of the corporate offices and removed all the money in the corporate accounts, including the money involved in the Harrod project. On April 22, 1986, an agreement was signed by Jacobsen, Hanley, and Respondent which dissolved their business relationships. Pursuant to the agreement, the Respondent resigned his position as an officer in West Coast and assigned his stock in the corporation to Jacobsen. The Respondent and Hanley were also required to make an accounting of the corporate funds removed from the corporate accounts on April 15, 1986. The agreement does not reveal whether the Harrod project was to remain with West Coast or the Respondent. However, the project did remain with West Coast, and the Respondent contacted the Charlotte County Building Department to remove his name from the building permit effective 8:00 a.m., April 23, 1986. When the business relationship between the corporate principals was dissolving in April, the Respondent had contact with Mr. Clarence Harrod. He did not tell the owner about the assignment of the contract to him on January 22, 1986, nor did he advise the owner of the cost overruns which he now asserts were a reason for his resignation from the corporation. The documents attached to the April 22, 1986, agreement reveal that the Respondent was aware of the need for two releases of lien totalling $40,185 on the Harrod project at the time he left the corporation and allowed the corporation to take back and continue with the Harrod project. The Respondent appears to have commingled corporate funds with the Harrod project funds when the funds were under his and Hanley's joint control. During the seven days the Respondent and Hanley had joint control of the $11,611.88 seized from West Coast, the Respondent was paid $2,026.30 and Hanley was paid $2,633. On April 22, 1986, $5,281.97 was returned to West Coast with a list of acknowledged outstanding bills totalling $1,711.17. During the period of time between the assignment of the Harrod project to the Respondent on January 22, 1986, and the takeover of the project by West Coast on April 22, 1986, the Respondent accepted his legal responsibilities as a licensed contractor only on the occasions where it best served his most immediate personal interests.
Findings Of Fact Respondent Bruce G. Alles, is a certified general contractor, license number CGC C014472, and has been so licensed since the summer of 1979. At that time, he became the qualifying agent for Univel, Inc., Melbourne Beach, Florida, a general contracting firm. Prior to Respondent becoming the qualifier for Univel, Inc., one David Boland had been the qualifying agent for the company, and no apparent action was taken by Univel to remove Boland as a qualifier for an undisclosed period of time after Respondent assumed that function. (Pleadings, testimony of Respondent, K. Alles) The only project of Univel that Respondent supervised from 1979 until subsequent to April, 1981 was the renovation of several buildings called Ocean Landings. During the period of March or April, 1980 until April, 1981, he had no involvement in any of Univel's projects. Since April, 1981 he has pulled permits and supervised some small renovation or alteration projects. (Testimony of Respondent, K. Alles, Stipulation) For the past three and one-half years, Lawrence M. Stoner, a certified general contractor and qualifying agent for Dynamic Construction Company, Inc. has engaged in joint construction projects with Univel, Inc. In such instances, Stoner obtains the building permits and supervised construction of the projects. At some undisclosed point in time, Kenneth Alles, Vice President of Univel, Inc. consulted with and obtained assurances from legal counsel that, based upon Univel's relationship with Stoner and Dynamic Construction Company, it was unnecessary for Stoner to file a formal application as qualifying agent for Univel. In fact, Alles was of the opinion that at one point Univel had three qualifying agents simultaneously who were Respondent, Stoner, and Boland. (Testimony of K. Alles) At some undisclosed time subsequent to Respondent becoming the qualifying agent for Univel, that firm entered into a construction contract with Palm Harbor West, Inc. to construct a condominium building called Harbour Cay. Stoner supervised the construction of the building. There was an on-site superintendent of construction who was employed by Univel. Stoner and Univel co-signed a bank loan agreement for the project. (Testimony of K. Alles) Respondent was not involved in the Harbour Cay project in any respect. He did not affix his license number to the contract nor did he supervise of have any connection with the project. (Testimony of K. Alles, Stipulation) On March 27, 1981, the Harbour Cay building collapsed causing multiple deaths and injuries. (Testimony of K. Alles, pleadings)
Recommendation That the Construction Industry Licensing Board administer a written public reprimand to Respondent Bruce Alles for violation of Subsection 489.119(5), F.S., pursuant to Subsection 489.129(j), F.S. DONE and ENTERED this 23rd day of December, 1981, in Tallahassee, Florida. THOMAS C. OLDHAM 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 December, 1981. COPIES FURNISHED: Michael Egan, Esquire 217 South Adams Street Post Office Box 1386 Tallahassee, Florida 32302 Joe Teague Caruso, Esquire Post Office Box 757 Cocoa Beach, Florida 32931 James K. Kinnan Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32202
The Issue The issue to be determined is whether Respondent's proposed award for ITB 09-22 for Building 14B renovation is contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid.
Findings Of Fact The University of North Florida published its Notice of Bid/Request for Proposal in reference to ITB #09-22 entitled "GC's for Building 14B Renovation" on December 19, 2008, with a submission deadline of January 27, 2009. The opening date was eventually extended to January 30, 2009. There were four addendums to the ITB #09-22 Project. The Notice of Bid/Request for Proposal document contained the following provisions: This project consists of the following scope of work: The work includes all labor, supervision, equipment, and materials required to execute the Contract Documents in two phases for the tenant build-out of the existing UNF Building 14-B (approximate square footage 9742). The work includes, but is not limited to, demolition of all interior walls, finishes, mechanical, electrical, plumbing and communication components as well as a new exterior curtain wall system. Exterior construction will include new glazing in aluminum curtain wall. Interior construction will include new gypsum wallboard partitions with metal stud walls, millwork, suspended acoustical and gypsum wallboard ceilings, wood and metal doors in hollow metal frames, coiling overhead grilles, toilet partitions and vanities. Interior finishes include carpeting, resilient tile, ceramic tile, painting, and window treatments. Mechanical work includes installation of new Owner provided HVAC units with ductwork and all necessary connections to the UNF Central Plant chilled water system. Plumbing includes new piping and fixtures for the tenant build-out and renovation of the group male and female restrooms. Electrical work includes new wiring, devices and lighting for the new tenant build-out. Successful bidders must have demonstrable previous experience with the described systems and technical requirements. All bidders must be qualified at the time of the bid opening in accordance with the Bidders Qualification within the ITB 09-22 Bid documents. . . Article I, Section 2 includes a heading in bold stating "Qualification Criteria." This section states: Participants must qualify to bid on this project. UNF will utilize the following criteria to qualify the general contractors within this ITB. The information must be completed on the UNF Qualifications Form provided (page 10-11): Bonding: Demonstrates a bonding capacity of at least $2 million dollars and has an A.M. Best Rating of "A-V" or better. Licenses: Company is licensed to do business in the state of Florida and approved by the US Department of Treasury listing as an acceptable surety. Project references: Company has successfully completed at least 3 commercial construction projects of more than $1 million dollars each in the past three (3) years. List 3 such projects to include project name, client name, completion date, location, project value, role in project. Reference: Project name, owner, owner's representative name/phone number, completion date and construction cost. Years of experience: Company has a minimum five (5) years of GC experience under the current company name. The directions for the General Contractor's Qualification Summary, under Related Experience, reiterated that the bidder was to list "No more than 4 projects of comparable type, size and complexity. (1) Project must be for a college/university)." Addendum I for the Project, issued January 9, 2009, clarified that the requirement for having completed successfully a project of similar size and scope at a Florida University in the last three years is a qualification factor for this project. Addendum II, issued January 12, 2009, removed the requirement for bidders to have completed one project for a college or university. The other two addenda did not address contractor qualifications. Petitioner, Core Construction Company (Core Construction or Petitioner) bid in response to the ITB. Approximately 19 other bidders also responded. Core Construction was the apparent low bidder on the project, with a bid of $1,073,000. There was some concern expressed by the architect reviewing the bids because the bids were all within ten percent of each other for the top bidders, with the bidders 2-10 being within six percent of each other. In an e-mail to Dianna White, the Senior Buyer for UNF purchasing, Mr. Norman stated: Overall there was a 20% range in bid prices which I attribute to a significant difference in the size, quality and abilities of the contractors that bid this project. The apparently low bidder was $60,516 below the second low bidder and $83,000 below the third low bidder. This is a significant concern since there is only $46,484 between the second and fifth low bidders. I suggest the apparent low bidder be contacted and asked if they feel comfortable with their bid, because it appears to me they are missing something significant in their pricing. Purchasing should also carefully review their current financials and current bonding capacity if this is allowed. Project reference checks, price verification against the architect's construction estimate and bonding checks were performed with respect to the four lowest bidding companies: Core Construction, Pooley Contracting, Rivers & Rivers and Warden Construction. Pooley Contracting, the second-lowest bidder, was disqualified as non-responsive because its bid package did not include a bonding letter. Core provided the names of three completed projects that were valued at over one million dollars. Dianna White called each of the references provided, not only for Core but for three of the four lowest bidders. The same questions were asked of each reference for each company: 1) Was the project on time and within budget; 2) Did the project run smoothly; 3) Were project issues handled; and 4) Would you use the contractor again. Calls related to Pooley Contracting were not completed because it was disqualified as non-responsive. While the references for Rivers & Rivers and Warden were consistently good, two of the three references received for Core were not. Ms. White described them as the most "strongly negative" references she had ever received. In particular, the references indicated difficulty in completing jobs within budget and on time, which the Respondent viewed as the basis for determining whether a contractor had successfully completed a project. Two of the references indicated that they would not use the contractor again, or as one put it, "not if there was any way around it." Based on the recommendations received, the Purchasing Office for the University recommended that Core Construction be disqualified for failing to demonstrate successful completion of three projects over one million dollars that were similar in scope. Because Pooley Construction was also disqualified, the Purchasing Department recommended that the Project be awarded to the third-lowest bidder, Rivers & Rivers. The recommendation to award the project to Rivers & Rivers was accepted by the Vice President of Administration and Finance, and on February 18, 2009, a Notice of Award issued identifying Rivers & Rivers as the company receiving the award. On February 19, 2009, Core Construction notified Respondent that it intended to protest the award of the Project to Rivers & Rivers. On February 24, 2009, Core Construction provided a $10,000.00 surety bond and a written protest of the award. The basis of the protest was two-fold. First, Core Construction contended that Rivers & Rivers did not meet the qualification criteria set out in the ITB, because it was did not have a minimum of five years of general contractor experience under the current company name. Second, Core felt that the poor references received should not be a basis for disqualification. Upon receiving the bid protest, Respondent contacted Rivers & Rivers to verify its licensure status. Upon inquiry, it was determined that while the principals of the company had over 30 years of experience, the Rivers & Rivers entity had not been licensed under that name for the requisite five years. While no action has been taken while this bid protest is pending, Respondent indicated its intention to withdraw the award from Rivers & Rivers and award the contract instead to the next lowest bidder. The procedures used by the University in determining the appropriate award were not contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid. It was consistent with University policy to check references for projects of similar scope and size. Therefore, it was appropriate to ask for and check references for projects of over one million dollars. There is no indication that any bidder questioned what the University would consider as successful completion of a project. The time for questioning this issue would have been when the specifications were issued, consistent with Article I, Section 7 of the ITB. Having a project come in on time and within budget is a reasonable measure of successful completion. It is not the same as "substantial completion," which generally refers to a point of time in the construction process, not the final completion of the project.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That the President of the University of North Florida, pursuant to his authority under Board of Governor's Regulation 18.002, enter a final order dismissing Petitioner's written protest. DONE AND ENTERED this 30th day of April, 2009, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2009. COPIES FURNISHED: Jay H. Chung Core Construction Company, Inc. 4940 Emerson Street, Suite 205 Jacksonville, Florida 32207 Paul Christopher Wrenn, Esquire University of North Florida J.J. Daniel Hall, Suite 2100 1 University of North Florida Drive Jacksonville, Florida 32224 John A. Delaney, President University of North Florida J.J. Daniel Hall, Suite 2800 1 University of North Florida Drive Jacksonville, Florida 32224
Findings Of Fact Respondent is a certified building contractor having been issued license No. CE C014020. Be was so licensed and was the qualifier for ARC Construction, Inc. at all times material to this proceeding. On July 25, 1980, Respondent, on behalf of ARC Construction, Inc., contracted with Mr. and Mrs. Richard Doyle to remodel a residence in St. Petersburg. The contract price was $43,180, plus extras of $1,525. Respondent was paid $1,500 initially and received draw payments of $4,318 on August 11, 1980, $8,636 on August 19, 1980, and $10,795 on September 3, 1980. These payments totaled $25,249, or about 58 percent of the basic contract amount and 56 percent of the contract price with add-ons. Respondent was obligated to pay suppliers and acknowledged this responsibility to the complainant, Mr. Richard Doyle, but advised him that he was having cash flow difficulties. Respondent's checks to Scotty's, dated August 10, 1980, for $2,518.28, and August 22, 1980, for $738.99, were dishonored by the bank. His check for approximately $5,000 to Florida Forest Products was likewise returned. Respondent failed to settle these accounts and the complainant was eventually obliged to do so in order to remove the liens on his property. Respondent ceased work on the project in mid-October, 1980, and was terminated by the complainant in January, 1981. At the time Respondent ceased work the project was 50 percent to 80 percent complete.
Recommendation Based on the foregoing, it is RECOMMENDED: That Petitioner enter a Final Order dismissing the Administrative Complaint. DONE and ORDERED this 29th day of April, 1983, in Tallahassee, Florida. R. T. CARPENTER, 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 29th day of April, 1983. COPIES FURNISHED: John O. Williams, Esquire 547 North Monroe Street Suite 204 Tallahassee, Florida 32301 James H. Thompson, Esquire 620 Madison Street Suite 2-C Tampa, Florida 33602 James Linnan, Executive Director Construction Industry Licensing Board Department of Professional Regulation Post Office Box 2 Jacksonville, Florida 32202 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue is whether the intended award of the electrical subcontract for Phase 2 of the Comprehensive Needs Project at Oak Ridge High School (the Project) is a decision or intended decision of an "agency" as that term is defined in Subsection 120.52(1), Florida Statutes (2010).1
Findings Of Fact The School Board entered into a Standard Construction Management Contract with Wharton-Smith, Inc. (Wharton-Smith), for the Project. Wharton-Smith is a private corporation. The construction management contract provides that Wharton-Smith is to perform all work in connection with the management and construction of the Project. The work to be performed by Wharton-Smith is composed of two phases: the pre-construction phase services and the construction phase services. For the construction phase, Wharton-Smith is required to "furnish and pay for all management, supervision, financing, labor, materials, tools, fuel, supplies, utilities, equipment and services of every kind and type necessary to diligently, timely, and fully perform and complete in a good and workmanlike manner the construction of the [Project] (or designated portions thereof) in accordance with the terms and conditions of the Contract Documents." The construction management contract called for Wharton-Smith to provide the School Board with a guaranteed maximum price (GMP) proposal for the total sum of the construction management fee and the cost of the work, which included the subcontractor costs. Prior to determining the GMP, Wharton-Smith is required to competitively bid the subcontracts. The use of competitive bids is to foster competition and to select the most economical, qualified bidder to perform the work. Paragraph 36.2 of the construction management contract provides: A subcontractor is any person or entity who is performing, furnishing, supplying or providing any portion of the Work pursuant to a contract with Construction Contractor. Construction Contractor shall be solely responsible for and have control over the subcontractors. Paragraph 36.3 of the construction management contract provides: When Construction Contractor submits its guaranteed maximum price proposal to Owner, Construction Contractor also shall submit to Owner a list of the names, addresses, licensing information and phone numbers of the subcontractors Construction Contractor intends to use for each portion of the Work, as well as identifying in writing those portions of the Work it intends to perform with its own employees. The list identifying each subcontractor cannot be modified, changed, or amended without prior written approval from Owner. . . . Construction Contractor shall continuously update that subcontractor list, so that it remains current and accurate throughout the entire performance of the Work. Construction Contractor shall not enter into a subcontract with any subcontractor, if Owner reasonably objects to that subcontractor. Construction Contractor shall not be required to contract with anyone that it reasonably objects to. . . . All subcontracts between Construction Contractor and it subcontractors shall be in writing and are subject to Owner's approval. The following provisions of the construction management contract are relevant to the solicitation and award of subcontracts: The purpose of this Paragraph is to insure that Construction Contractor [Wharton-Smith] makes a genuine effort to stimulate subcontractor interest in the Project and maximize participation of potential qualified subcontractors in the bidding process. At all times Owner [School Board] shall have access to and the right to require copies of all correspondence, records, files and other bid documents (including all bid responses) with respect to the bidding process. Further, Construction Contractor shall notify Owner of the date, time and place of all bid openings and Owner shall have the right to attend any and all such bid openings. All bid openings shall be conducted in Orange County, Florida. Finally, Construction Contractor shall develop in writing subcontract bidding procedures for Owner's review and approval. Once those procedures have been approved by Owner, Construction Contractor shall not deviate from such procedures without obtaining Owner's prior written consent. * * * 37.1.2 Within thirty (30) days after execution of this Contract, Construction Contractor shall submit a written "Construction Market Analysis and Prospective Bidders Report" setting out recommendations and providing information as to prospective bidders. As various bid packages are prepared for bidding, Construction Contractor shall submit to Owner and Design Professional [architect and/or engineer] a list of potential bidders for their review and approval. Construction Contractor shall be responsible for promoting and encouraging bid competition. * * * Construction Contractor shall prepare invitations for bids and all other appropriate bid documents for all procurement of long lead items, materials and services, for subcontractor contracts and for site utilities. All such invitations for bids and bid packages shall be submitted to Design Professional and Owner for their review and approval prior to distribution to bidders. Except as hereafter provided in Paragraph 37.5, all subcontractors are to be awarded to the lowest responsive and responsible bidder. * * * 37.2.3 Subcontracts exceeding $25,000.00 must be publically advertised for at least two (2) consecutive weeks prior to the established bid opening time and date. All such bids must be in writing and shall be received and opened in the manner and at the location, date and time established in the bid documents. All such bids received by Construction Contractor shall be entered on a bid tabulation sheet and a copy of both the bids and the tabulation sheet shall be sent to Owner and Design Professional for their review and comment prior to Construction Contractor awarding the subcontract. * * * For each subcontract that exceeds $25,000, Construction Contractor shall, unless waived in writing by Owner, conduct a pre-bid conference with prospective bidders and pre-award conference with the successful bidder. Design Professional and Owner shall be invited to all such meetings. In the event questions are raised which require an interpretation of the bidding documents or otherwise indicate a need for clarification or correction of the invitation, Construction Constructor shall transmit these to the Design Professional in writing and upon receiving clarification or correction in writing from Owner or Design Professional shall issue an addendum to the bidding documents to all the prospective bidders. Notwithstanding the provision above requiring award of subcontracts to the lowest responsive and responsible bidder, Construction Contractor may award a subcontract to someone other than the lowest responsive and responsible bidder provided Construction Contractor has first received Owner's express written consent to such award. Owner's consent to any such award will be at Owner's sole discretion. Whenever Construction Contractor wishes to award a subcontract to someone who is not the lowest responsive and responsible bidder, Construction Contractor must notify Owner in writing, setting out in detail the reasons and justification for the suggested award. The subcontract for electrical work for Phase 2 of the Project was for more than $25,000. Wharton-Smith did the following in the procurement of the electrical subcontract for the Project: prepared the bid packages, advertised, issued the invitation for bids, held the pre-bid conference, collected the bids, opened and reviewed the bids, analyzed the bids for compliance with the scope of work, determined which bidder was the lowest responsive and responsible bidder, and selected the subcontractor. The bid form included in the invitation to bid provided: The Bidder understands and agrees that the Construction Manager and/or Owner reserves the right to reject this Bid or any and all bids for the Project, and to waive minor irregularities or informalities in any bid and to award Alternates in any order that in the Construction Manager's judgment will be in the Owner's best interests. This wording was prepared by Wharton-Smith without regard to the provisions of the construction management contract. Southern Atlantic had done the electrical work for Phase 1 of the Project. Southern Atlantic submitted a bid for the electrical subcontract for Phase 2 of the Project. Edwin Hutchins, the president of Southern Atlantic, was advised by David Lewis, who was employed by Wharton-Smith, that Southern Atlantic was not the lowest responsive and responsible bidder. The construction management contract provides that the School Board may review and comment on the bids that are submitted. Based on Petitioner's Exhibit 2, which is a bidder summary, the School Board did make some comments on the bids that were submitted for all subcontracts. No comments were made by the School Board concerning Southern Atlantic's bid. The School Board did not issue the invitation to bid, did not conduct the pre-bid conference, did not open the bids, and did not determine which was the lowest responsive and responsible bidder. The School Board will not be entering into a subcontract with the lowest responsive and responsible bidder for the electrical work on the Project and will not control or be responsible for the work of the subcontractor.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered dismissing Southern Atlantic's Petition. DONE AND ENTERED this 10th day of November, 2010, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL 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 10th day of November, 2010.
The Issue Whether Respondent, a certified general contractor in the State of Florida, violated various provisions of the contracting laws related to five different construction projects and, if so, what disciplinary action should be taken against him, if any?
Findings Of Fact At all times material hereto, Respondent has been licensed as a Certified General Contractor, holding license numbers CG C008004 and CG CA08004. At all times material hereto, Respondent was the qualifying agent for Asher Melzer Construction Corporation (hereinafter "AMCC"). DOAH CASE NO. 86-4732 At all times material hereto, Mr. and Mrs. Victor M. Franzese resided at 8880 Southwest 182nd Terrace, Miami, Florida 33157. On March 29, 1985, the Franzeses contracted with AMCC to construct a home in the Cutler Glen development for $279,000. The Franzeses made payments to AMCC totalling $32,901. Construction of the Franzese residence began almost immediately after the contract was signed. However, after the foundation was poured and the walls were put up, AMCC abandoned the project. During the time that the initial work was performed, Victor Franzese stopped by the construction site almost every day. Although he met the foreman on the job, he never met with, spoke to, or heard of the Respondent. Throughout the fall of 1985, Franzese wrote to Asher Melzer, the owner of AMCC, regarding the lack of work at the construction site. He received no responses to his letters. In January of 1986, Melzer indicated to Franzese that the roof trusses which had been lying on the ground at the Franzese project for many months would be installed. Franzese hired an engineer to inspect the trusses due to their obviously-deteriorated condition. The engineer reported that the trusses would need substantial bracing in order to be used. Additionally, a Dade County structural engineer told Franzese and Melzer after inspecting the trusses that no matter what bracing was added, the trusses would never pass inspection. AMCC did not begin construction again, and a foreclosure action was brought by Amerifirst Savings & Loan Association against Melzer, AMCC, the Franzeses, and others. The Franzeses lost all rights to the property which their house was being built on and lost all of the money which they had paid AMCC. During the entire time that the Franzeses were dealing with AMCC, they never heard of, spoke to, or saw the Respondent. The Franzeses lost approximately $38,000 in their dealings with AMCC. At all times material hereto, Mr. and Mrs. James R. Cross were the owners of property located at 9990 Southwest 127th Terrace, Miami, Florida. On March 25, 1985, the Crosses contracted with AMCC to construct a home on their property. The total contract price including extras subsequently agreed upon was approximately $152,400. The Crosses paid AMCC approximately $29,000 in deposit and draw monies. Although AMCC began construction of the Cross residence, the project was only completed through the tie beam phase. During the time that construction was being performed, James Cross visited the construction site on a daily basis. Although he met the foreman at the job site, he never spoke to, heard of, or met the Respondent. Construction at the Cross project ceased on approximately September 11, 1985, and was never resumed by AMCC. By that time, Cross had begun receiving Notices to Owner that liens would be placed on his property for failure to be paid by AMCC, and one lien had already been placed. The liens placed on his property were from the architect Ronald J. Dorris, Rinker Construction Company, ASP Construction Equipment Company, and Distrito Trucking Corporation. After receiving the first Notice to Owner, Cross contacted AMCC. He was told not to worry, that things would be taken care of by AMCC. All of the subcontractors and materialmen who filed liens on the Cross property were to have been paid by AMCC pursuant to the contract between the Crosses and AMCC. AMCC never provided the Crosses with any money nor posted any bonds to clear the liens. In fact, Melzer gave the Crosses a check to pay one of the liens, but the check bounced. Melzer never attempted to repay the money to them, and they were forced to pay off these liens personally for a total amount of $4,666. While James Cross was attempting to have AMCC pay the liens which were placed on his property, he never spoke to or heard from the Respondent. On December 7, 1985, after no work had been performed on the project for over 90 days, Cross served notice on AMCC that he considered the project abandoned. Cross hired another general contractor to complete the project and paid approximately $14,000 more than the original contract price to finish the project. During Cross' visits to the project, it did not appear that anyone was in control. Concrete blocks were being cemented into places where sliding glass doors were supposed to be placed, and windows were being built at improper sizes. Dade County, Florida, follows the South Florida Building Code as well as Chapter 10 of the Dade County Code, which regulates the conduct of contractors doing construction work within the limits of Dade County and all municipalities. In reference to the Cross project, Respondent obtained a permit for the construction. However, that permit did not include any plans for mechanical work, and no mechanical permit for the air conditioning system was ever obtained. Additionally, although an electrical permit was obtained, no inspections were ever called for by Respondent or anyone else. It is a violation of the South Florida Building Code and a violation of Dade County Code Chapter 10 to perform work without a permit, and it is the obligation of the qualifying agent pursuant to Chapter 10 to supervise, direct, and to control all work that is done under any permits that he has obtained The failure to obtain a mechanical permit for the Cross project indicates that Respondent was improperly supervising the job site activities. The numerous liens placed on the Cross property by subcontractors and materialmen indicate that there was a lack of supervision by Respondent. Under the Dade County Code, such actions would be considered diversion of funds. At all times material hereto, Mr. and Mrs. Mark E. Demsky resided at 7601 Southwest 162nd Street, Miami, Florida 33157. On May 16, 1985, the Demskys entered into a contract with AMCC to construct a home in the Cutler Glen development for $221,000. The Demskys paid AMCC a total of $28,000 towards the construction of that home. Work at the construction site began in late July or early August of 1985. Mark Demsky was concerned that the project did not begin immediately after the deposit money was paid and spoke to Melzer several times. When the work finally began, it proceeded very slowly. Although Demsky continued to ask questions regarding the pace of the work, he received only excuses from Melzer. Construction ceased after the foundation was poured. Construction ceased completely by December of 1985. By that time, numerous liens had been placed on the Demsky property. Because no money was placed in an escrow account at the beginning of construction, Demsky had required that Melzer sign a letter agreement on July 9, 1985, allowing Demsky to rescind the contract with 45-days notice prior to the closing. By March 18, 1986, after no work had been performed for over a three-month period, Demsky exercised that right of rescission and attempted to obtain the $28,000 deposit money he paid Melzer. Melzer gave Demsky a promissory note in the amount of $28,000 and executed a Release of Contract for Sale and Purchase. Although the promissory note from AMCC and Melzer became due on September 18, 1986, the Demskys have never received any payments on that promissory note. They filed suit to recover the $28,000 and received a final judgment against Melzer and AMCC for repayment of the promissory note, which final judgment remains unsatisfied. During the time that construction was being performed at the Demsky project, Mark Demsky visited the construction site almost every day. Although he met one of the supervisors on the job, and some of the workers, Demsky never met with, heard of, or spoke to the Respondent. Additionally, during all of the time that problems arose at the construction site and during the time that the job was abandoned, Demsky never heard from or spoke to the Respondent. The Demskys lost a total of approximately $29,250 in their dealings with AMCC. DOAH CASE NO. 88-5764 At all times material hereto, Mr. and Mrs. Calvin W. Tinsley resided at 14123 Southwest 66th Street, Miami, Florida. They now reside at 585 Shadowwood Lane, Titusville, Florida. On October 2, 1984, the Tinsleys contracted with AMCC to construct a home in the Cutler Glen development for $242,908. The Tinsleys paid AMCC approximately $32,000 in deposit money. Although the contract was signed in October of 1984, construction did not begin until February of 1985. The Tinsleys immediately noticed that things were not proceeding on schedule and the work was taking longer than promised. After a while, the subcontractors were placing liens on the Tinsley property. During all of the conversations with Melzer regarding the construction project, Calvin Tinsley never spoke to, heard of, or met with the Respondent. In fact, Calvin Tinsley believed that Asher Melzer was the general contractor for AMCC. Amerifirst Savings & Loan Association filed a foreclosure action against AMCC and Melzer, as well as the Tinsleys. A final summary judgment was entered against the Tinsleys, and their property was sold at an auction. The Tinsleys never recovered any of the $32,000 deposit money they paid AMCC. DOAH CASE NO. 89-0133 At all times material hereto, Mr. and Mrs. Warren W. Lovell, Jr., resided in Miami, Florida. They now reside at 16630 Southwest 87th Place, Miami, Florida 33157. On February 8, 1985, the Lovells contracted with AMCC to construct a home in Cutler Glen development for $195,000. The Lovells paid AMCC a total of $168,000 for the work which was performed at 16630 Southwest 87th Place in Miami. In August of 1985, construction stopped on the Lovell project for at least three months. Numerous liens had been placed on Lovell's property as well as the other properties within Cutler Glen. Lovell attempted to help Melzer complete the Cutler Glen project and arranged a meeting among Melzer and many of the homeowners and subcontractors. During this period of time, as well as when the construction was being performed, Lovell never met with, spoke to, or heard of the Respondent. In order to help AMCC begin construction again, Lovell released the claims of lien which he had placed on four homes owned by AMCC in the Cutler Glen development. Unfortunately, Lovell's efforts proved fruitless, and AMCC was never able to complete the development. Lovell ultimately had to pay to have the claims of liens which had been placed on his property released. Lovell then had to pay the subcontractors approximately $30,074 to complete his house. In 1986, Lovell discovered that the mortgage he had entered into with Melzer on the Lovell property was not a first mortgage as Melzer had represented. Lovell discovered that there were two previous mortgages filed on his property that were superior to his mortgage. Lovell was forced to pay an additional $70,000 to satisfy those mortgages to obtain title to his property. At the time those mortgages were discovered, Lovell had already paid $168,000 to AMCC for the construction of his house and the purchase of the property. In exchange for Lovell paying off the prior mortgages, Melzer gave Lovell three promissory notes totalling $70,000. These notes are past due and have not been paid, even in part. Lovell's out-of-pocket costs to complete his house were approximately $87,500.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a Final Order be entered as follows: Finding Respondent guilty of the statutory violations as set forth above; Permanently revoking Respondent's license numbers CG C008004 and CG CA08004; Requiring Respondent to pay a civil fine to Petitioner in the amount of $5,000 within 30 days from the entry of the Final Order; Requiring Respondent to make partial restitution to each of the homeowners involved in this proceeding in the amount of $11,000 each to the Franzeses, to the Crosses, to the Demskys, to the Tinsleys, and to the Lovells for a total of $55,000 within 30 days from the entry of the Final Order; and Requiring that Respondent pay such civil fine and such partial restitution prior to any application for relicensure by Respondent being approved. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22nd day of November, 1989. LINDA M. RIGOT 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 22nd day of November, 1989. COPIES FURNISHED: Jan L. Darlow, Esquire Rapheal M. Prevot, Jr., Esquire Department of Professional Regulation Adorno, Zeder, Allen, Yoss, Bloomberg & Goodkind, P. A. Bayview Executive Plaza 3225 Aviation Avenue, Suite 400 Miami, Florida 33133 Nicholas A. Mascioli 18750 Southwest 207th Avenue Miami, Florida 33187 Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Fred Seely, Executive Director Department of Professional Regulation Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32202 APPENDIX TO RECOMMENDED ORDER, CASE NOS. 86-4732, 88-5764 and 89-0133 Petitioner's proposed findings of fact numbered 1, 3-10, 13-19, 22-27, 30-33, and 36-40 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 2 has been rejected as being unnecessary for determination of the issues in this cause. Petitioner's proposed findings of fact numbered 11, 12, 20, 21, 28, 29, 34, 35, and 41-47 have been rejected as not constituting findings of fact but rather as constituting recitations of the testimony, conclusions of law, or argument of counsel.
Findings Of Fact Respondent Paul McAllister is a certified general contractor and was the qualifying individual for the firm of Garnett-McAllister Associates, Inc., Fort Lauderdale, Florida, in 1977 and until July, 1978. (Stipulation) On April 8, 1977, Respondent's firm entered into a contract with Ray Borchardt, Westchester, Illinois, for the construction of a four-unit apartment building at Lighthouse Point, Florida. The contract provided for a total price of $139,110.00, payable in five payments or "draws" in various percentages of the contract price at specified stages of construction. However, the contract did not specify a time for performance or completion of the building. It contained a clause stating "Any alteration or deviation from above specifications involving extra costs - will be executed only upon written orders, and will become an extra charge over and above the estimate." Respondent obtained a building permit for the construction of the building from the building official, City of Lighthouse Point, Florida, on May 8, 1977. (Petitioner's Exhibits 1, 2) Prior to the commencement of construction, it was determined that foundation pilings for the building were required and therefore Borchardt sent Respondent the sum of $13,519.65 on June 9, 1977, as an additional sum over and above the contract price. At this time, he also sent the first draw in the amount of $20,866.00 even though such payment was not called for until completion of the foundation and "rough in" of plumbing and electric connections. On August 1, 1977, Borchardt paid the second draw of $20,866.00 although the roof was not on, nor had the beam been poured at the time as called for under the contract. Respondent was delayed approximately three weeks by failure of a supplier to provide the second floor concrete planking. On October 24, 1977, Borchardt paid the third draw in the amount of $34,777.00 although construction was not at the stage called for under the contract. On November 22, 1977, Borchardt paid $18,000.00 of the fourth draw and on January 23, 1978, paid the remaining portion of $16,777.00. At that time, the roof was not completed, tile work had not been started, woodwork was incomplete, and kitchen cabinets and vanities had not been installed pursuant to the terms of the contract. Borchardt had made a number of trips from Illinois to Florida during the construction period and was aware that his various partial payments were made in advance of completion of the several construction phases. He had dealt primarily with Edward J. Garnett, president of Garnett-McAllister Associates, Inc., as to the financial aspects of the project. Respondent primarily was a "field" man in charge of supervising construction. Also, Borchardt's son-in- law, Vincent A. Svegel, had moved to Florida in September, 1977, and acted as Borchardt's contact with Respondent's firm after that time. Both Respondent and Garnett informed Svegel in the fall of 1977 that the building would be completed by December 15. (Testimony of Borchardt, Svegel, Petitioner's Exhibit 1) Although during the early part of 1978, five subcontractor liens were filed against the property for work and materials supplied on the project, three of these liens were eventually paid by Garnett-McAllister and the remaining two totaling over $7,000.00 were eventually paid by Borchardt. One of the latter liens was filed by Pompano Roofing Company, Inc. That firm refused to install the roofing tile until paid and the tile therefore "sat on the roof" for approximately five months. On March 13, 1978, Borchardt filed a complaint with Petitioner based on the fact that the work had not been performed according to the draw schedule and liens had been placed on the property. Borchardt also complained to James P. Simmons, the building official of Lighthouse Point about the project delays and claims of lien. As a result, on March 14, 1978, Simmons referred the complaint to Petitioner because Respondent was certified by the state. Petitioner's local inspector, Wallace Norman, issued a Notice of Violation of Section 468.112(2)(e), F.S., to Respondent on March 15, 1978, for diversion of funds based on the filing of liens by suppliers. In a meeting with Respondent and Garnett, Norman asked for an explanation of the situation. They told him that they had been building a house in Davies, Florida, and had used some of the money that Borchardt had paid them to pay suppliers on that house and they had expected to be able to put the money back into the Borchardt project when they sold and realized a profit on the other house. (Testimony of Borchardt, Svegel, Simmons, Norman, Petitioner's Exhibits 7, 9, 10; Respondent's Exhibit 3) During the period between January and March, 1978, some progress was made toward completing the building, including the rough in of the plumbing and electrical systems, installation of inside lath work, installation of tub and shower stalls, and extension of a kitchen area. As late as April 19, 1978, Respondent accompanied Borchardt to a supplier to purchase windows for the building. (Testimony of Svegel, Respondent, Pet. Ex. 3) On May 29, 1978, Svegel, in behalf of Borchardt, notified building official Simmons that Garnett-McAllister Associates, Inc. had been terminated from any further work on the building due to the fact that the building permit had expired and would not be reissued, and requested authorization to finish the building. Simmons thereafter issued a building permit to complete the building to Borchardt on June 21, 1978. He also instructed his staff not to issue any more permits to Respondent due to his "poor track record" and liens which had been filed against the building under construction. Simmons issued the completion permit under the authority of Section 304.3 of the South Florida Building Code, Broward County Edition, which provided that a building permit expires and becomes null and void if work is abandoned at any time for a period of ninety days. Although Simmons considered that the time limit had elapsed because an inspection had not been called for by the builder for ninety days, he erroneously believed that the last inspection had been on January 4, 1978, when, in fact, the city's inspection records show that the plumbing department had made an inspection of rough plumbing on March 27, 1978. Simmons did not notify Respondent of the issuance of the second permit. He considered that he had inherent authority in his position to prohibit issuance of additional permits to Respondent, but didn't consider his action in this regard to be disciplinary in nature because the City of Lighthouse point does not issue contractor's licenses. Therefore, the matter was referred to Petitioner for any action against Respondent's state certification. (Testimony of Simmons, Svegel, Petitioner's Exhibit 3, 4, 11, Respondent's Exhibit 1) At some time prior to obtaining the permit to complete the building, Borchardt had refused to pay the final draw of $27,824.00 to Garnett-McAllister Associates, Inc. because the firm was so far behind on the job. Garnett had told Borchardt that be was selling another home for $80,000.00 and was going to put some of the money he realized from that sale into the Borchardt project. He wanted Borchardt to loan him $20,000.00 and take back a lien on a boat in order to have money in the interim to work on the building. When Borchardt declined to do so, Garnett told him that he could not complete the job. Borchardt also received a call from Respondent to the effect that he would finish the job on his own for $150.00 a week if Borchardt would pay the remaining costs. Borchardt informed him that he would pay nothing further until the job was completed. Garnett had also told Svegel that he had used some $25,000 to $30,000 of the Borchardt funds to construct the house in Davies and that he would put that money back into the firm's business account to use for the Borchardt building when the house was sold. (Testimony of Borchardt, Svegel, Respondent) At the time Borchardt took over completion of construction, the building was approximately 70-75 percent completed. Borchardt paid an additional sum of about $82,000.00 to complete the building which was some $54,000.00 more than the original contract price. However, about $12,000.00 of this sum constituted changes to the original specifications that had been agreed to by Borchardt during the course of construction. Some of these involved changes due to building code requirements, such as the addition of a ramp for the handicapped. Other changes were made on the recommendation of subcontractors or resulted from requests by Borchardt's daughter and son-in-law who were intending to occupy one of the apartments in the building. None of these changes was reflected in a written change order or supplemental agreement to the contract because Borchardt had agreed to the changes and neither party to the contract apparently considered it necessary to formalize these matters. Additional changes in the sum of some $12,000 were made to the building after Borchardt took over construction. These primarily dealt with carpeting, appliances and the like. (Testimony of Borchardt, Svegel, Simmons, Respondent, Stipulation, Petitioner's Exhibits 5, 8) Respondent testified at the hearing and disclaimed knowledge of the financial affairs of the corporation which he claimed were handled exclusively by Garnett. He denied ever abandoning the project and stated that he was unaware, until June 7, 1978, that Borchardt was taking over the construction project to complete. He acknowledged that funds became a problem about mid- January, 1978, and that he then recognized that the contract price had been set at too low a figure because cost overruns were being experienced. He denied diversion of Borchardt's funds to the Davies house, and claimed that his firm did not purchase supplies for that project. He conceded, however, that the firm had one corporate business account from which suppliers on all jobs were paid. Respondent further testified that when funds for the Borchardt building became scarce, profits from other jobs were used in meeting construction costs on the building. He acknowledged receiving a salary of $8,420.00 during the course of construction and said that Garnett had also drawn a sum of approximately $11,000.00 for himself. (Testimony of Respondent) A review of the books of Garnett-McAllister Associates, Inc. by a certified public accountant indicated that they were not well kept and were frequently in error. The auditor's report reflected that the firm had expended at least $80,675.00 in direct construction costs on the project. Certain cost items could not be verified due to the failure of suppliers to respond to the auditor's inquiry. These accounts were reflected on the books of the firm at a total of approximately $1,000.00. (Testimony of Webb, Respondent's Exhibit 4)
Recommendation That Respondent's certification as a general contractor be suspended for a period of 90 days, but that he be permitted to complete any contracts which are uncompleted at the time suspension is effected. DONE and ENTERED this 25th day of April, 1979, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Barry Sinoff, Esquire 2400 Independent Square Jacksonville, Florida 32302 Alan C. Brandt, Jr., Esquire 1040 Bayview Drive Fort Lauderdale, Florida 33304 J. K. Linnan Executive Director Florida Construction Industry Licensing Board Post Office Box 8621 Jacksonville, Florida 32211
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Petitioner, School Board of Brevard County, Florida, is empowered to designated the personnel positions to be filled, prescribe qualifications for those positions, and provide for the appointment, compensation, promotion, suspension, and dismissal of employees for the school district. The Respondent, Arthur Douglas Barna, has been employed by the Petitioner since the early 1970s. The Respondent has a degree in mechanical engineering, is a registered professional engineer, and has twenty years of experience in the construction field. Respondent's first position with the Petitioner was as construction manager. In 1976, Respondent's title was amended to staff engineer and construction manager. In 1981, Respondent was made Director of Facilities a position he held until February, 1991, when he was returned to the staff engineer position and John Allen was retained to be Director of Facilities. On April 23, 1991, Respondent was recommended for appointment to the position of staff engineer for the 1991-92 contract term by the school superintendent. The qualifications for appointment as staff engineer/project manager are: Graduation from a college or university with a degree in engineering. Registered as an engineer in the State of Florida. Experience (five years minimum) in educational design and facility planning administration. Experience in administration of educational construction contracts. Knowledge of Uniform Building Code and Florida School Laws and Regulations. On April 23, 1991, by a 3-2 vote, the Petitioner rejected the superintendent's recommendation to employ Respondent. Prior to April 23, 1991, Respondent had received satisfactory personnel evaluations. Prior to April 23, 1991, Respondent had not been reprimanded or disciplined for any act or omission regarding the performance of his duties. In the two years prior to April 23, 1991, Respondent had participated in numerous construction and remodeling projects for the Petitioner. Such projects exceeded $46,000,000.00 in cost to the public. One of projects Respondent was involved with during his tenure with the Board was Stone Middle School (Stone). That project originated with a bid proceeding to choose a contractor to perform the construction work. One of Respondent's duties was to represent the Board at bid openings. In the case of the Stone project, within a short time after the bid opening, the apparent low bidder on the job, Speegle Construction (Speegle), advised Respondent that an error had been made on the bid form. That error was claimed to be in the amount of $40,000.00. Speegle's bid was $90,000.00 lower than the next low bidder. Speegle had tendered a bid bond in the amount of $50,000.00. After reviewing the matter with the bidder, Respondent took the matter to his supervisor who then took the issue to the school superintendent and board staff. Among the staff who considered the issue was the school board attorney. Regardless of any dispute regarding the computation of the $40,000.00 error (such are deemed irrelevant to the essential issue), the Board was presented its options: to take the bid bond and award the contract to the next lowest bidder; to give Speegle the additional $40,000.00 and award it the contract; or, presumably, rebid the project. Since awarding Speegle the contract, with the $40,000.00 addition, still saved the public $50,000.00, over the next lowest bidder, Respondent recommended that option. His recommendation was supported by his superiors. After public discussion of the matter, the Board unanimously voted to select Speegle as recommended by staff. No evidence supports the assumption that the Board's decision, based in part on Respondent's recommendation, was found to be illegal, unethical or challenged by the other bidders on the project. The Stone project had additional problems since the architectural firm hired to complete the drawings did not meet the guidelines established by the Department of Education. On at least two occasions the plans had to be returned to comply with state standards. Consequently, the project was late commencing. Such lateness was not due to the fault or error of the Respondent. To the extent he was involved, Respondent properly supervised the Stone construction project and did not approve inferior work. All specifications of the contract were met and verified by Respondent and then assistant superintendent for facilities, Leon Cowling. Issues regarding performance of the Stone project arose between Respondent and Cliff Gordon, president of the architectural firm involved with the job. Such issues related to the lockers and an athletic field which Mr. Gordon claimed did not meet specifications. Such allegations are not supported by the record in this case. When the Stone project was not completed on time, Respondent assessed liquidated damages against Speegle in accordance with the contract terms. Respondent was not responsible for the lateness, and Speegle, in fact, made good on the damages. Respondent and Mr. Gordon did not agree on aspects of the Stone project. Mr. Gordon became disgruntled when Respondent would not approve payment to Mr. Gordon's firm for work allegedly done. Mr. Gordon attended Board meetings regardless of his claim that Respondent had advised him to stay away. Respondent was not responsible for the removal or encapsulation of asbestos found in several schools. Respondent's position placed him in a position over construction, not maintenance. Moreover, another school administrator was assigned to be responsible for overseeing issues related to asbestos at all times material to this case. Respondent did not supervise a project wherein the treatment of asbestos was at issue. Anderson Elementary School (Anderson) has a noise problem in that sound travels from one area to another. The ceiling tile used in the Anderson project was the same product used in the other schools and was the contractor's choice. At the time of installment an issue arose as to whether the tile to be used met the specifications of the contract. Ultimately, the architect signed off on the use of the tile requested by the contractor. Unfortunately, the tile used does not buffer noise. Whether the tile originally requested would more effectively buffer the noise is unknown. Whether the design of the facility contributes to the noise problems is also unknown. That there is a noise problem at Anderson is not due to an act, omission, or the negligence of the Respondent. In connection with the air conditioning system installed at Southwest Junior High School (Southwest) a problem arose as to that system's design. Respondent did not design the system. In fact, a design firm was retained to complete the work and the system was installed based upon that work. The Board does not have the personnel or the staff expertise to verify whether outside consultants perform their jobs correctly. Presumably, the Board utilizes such consultants because it does not have the internal resources to do the work requested. In the case of Southwest, the firm hired designed the system improperly. As a result, the Board made a claim, and collected, against the firm's errors and omissions insurance. Thus, the Board received damages for the design defect. Cambridge Elementary School (Cambridge) is located adjacent to a housing subdivision developed by Centex Homes. Due to drainage problems associated with the development, the homeowners' association and the developer requested that the Board execute a drainage easement on the Cambridge property so that the properties might be enhanced. The homeowners' proposal made to the Board gave the expense of preparing and maintaining the easement to the association. Respondent was approached regarding the drainage easement and considered the matter to benefit the school site. Respondent and Mr. Cowling recommended granting the easement. Such easement was to be preceeded by an agreement setting forth the homeowners' obligations to the Board. For reasons not addressed by this record, an agreement was not prepared and returned to the Board as had been directed. In fact, the Board chairman and superintendent executed the drainage easement without evidence of an agreement. Nothing in this record suggests Respondent had anything to do with the execution of the easement or the failure to obtain a written agreement regarding it. Moreover, these events occurred in May and November, 1988, some three years prior to the nonappointment of Respondent. The construction of the educational services facilities at Viera posed many novel and complicated construction issues for the Board and its staff. For one thing, the Board had not utilized a "design/build" format in construction before. Based upon the record in this case, it is unlikely that the format will be used again. The design/build format requires the construction of some phases of a project while the design is still occurring. As a result, unlike situations where a contractor has a determined set of plans to follow, the builder in the design/build format is in a constant state of flux and change. As may be expected, the owner is tied to the same constant amendment to plans. In the case of Viera, Respondent served as the owner's representative on the project. By contract, all notices and changes went through Respondent who was then responsible for coordinating with the Board staff. At all times material to the Viera project, Respondent kept his supervisor aware of the progress of the project and of the changes to plans or specifications. It was not Respondent's responsibility to report directly to the Board regarding the Viera project (or any other for that matter). Respondent routinely made reports to his supervisor who then coordinated matters with finance and the superintendent. Respondent was available to the Board for any matters that might require his input. Early on in the Viera project Respondent advised his supervisor and the Board that they had little control over how the building was constructed. As long as the project stayed within the general design concept, the specifications were fairly open. Respondent's first priority was to try to keep the Viera project on budget as to the changes that occurred. To that end, items such as the carpet allotment were reduced to capture more funding for other requested items. In each such case Respondent made his superior aware of the changes. Ultimately, the changes requested by Respondent, the superintendent, or John Forbes were placed before the Board as change order #1 and approved. While some of the changes had already occurred, there is no evidence that the Board took action to prohibit Respondent and the administration from making the day-to-day decisions on the project. In fact, the contractor make changes on the Viera project without authorization from any Board administrator. Presumably, necessity caused the Board to accept such work. There is no evidence that the changes authorized by Respondent on the Viera project were arbitrary or in violation of the contract. Respondent did not fail to abide by the contract terms. Respondent did not act improperly regarding the Viera project and is not responsible for the quality of the workmanship of the job. As energy costs became a concern to the Board, the Respondent participated in a conservation effort whereby energy firms were solicited for proposals as to how the Board might save on energy expenses. Initially five contractors showed interest in the project but only three filed proposals with the facilities department. To evaluate the proposals, which was deemed a "win/win" deal by the Board, an outside consultant was hired to review each of the submittals. The proposals, along with input from the consultant, was then heard and considered by a committee of eleven school board employees. The Respondent was not a voting member of the group. After receipt of the proposal and the foregoing review, the committee and Respondent recommended to the Board that Facility Masters Incorporated (FMI) be selected for the contract. The Board also reviewed the proposals and recommendations and approved the recommendation to hire FMI. The contract between FMI and the Board was reviewed by the school board attorney. The scope and terms of the project were outlined to the Board and the administrative staff. The concept of the proposal was to replace, at no initial cost to the Board, the outdated and inefficient equipment with new, efficient units so that the energy savings would actually pay for the equipment. None of the persons who reviewed the FMI project was aware that the proposal might require a performance bond. Respondent and others aware of the project were familiar with bonds and the necessity to have same on certain types of projects. In this instance, the superintendent, the assistant superintendent for facilities, the school board attorney, and Respondent did not request a bond for this job. No Board member questioned whether a bond should be requested for the project. All of the foregoing operated under the assumption that the replacement of equipment and the construction incidental to that did not require a bond. The principals employed at FMI had a satisfactory work history on similar projects. Their qualifications were investigated by Mr. Cowling, the assistant superintendent. No prior poor work performance was discovered. Under the terms of the FMI contract, the Board was to receive and approve a list of subcontractors before FMI was to "commence the installation of the System." There was no requirement that FMI submit a list for subcontractors of subcontractors. After commencement of the installation of the system, the Board and several of its individual members were sued for amounts allegedly owed Miller Electric, a subcontractor of a subcontractor on the FMI project. That suit brought to light the issue of the performance bond, or lack thereof, and the discovery that an individual, identified in the record as Armondo Diaz, had somehow obtained the balance of $167,000 from the Shawmut Bank. Such monies represented the final draws due on the FMI project. Respondent, however, did not authorize the final draw from the bank nor is there any evidence that he supported Mr. Diaz in that matter. Subsequently, the Board sued the bank over the release of the funds and settled the suit with Miller. Whether the $167,000 (quickly released) would have settled Miller Electric's claim is unknown. Certainly, it would have greatly reduced it. At the time of Respondent's departure from employment, the FMI system was operating in seven of the twelve schools in an acceptable manner. The other five schools were operational but not to the efficiency level anticipated. The Respondent acted reasonably in the selection and award of the contract to FMI, the administration of the project, and is not responsible for the improper release of the final draw. Three Board members testified that they have lost confidence in Respondent's ability to perform the duties of staff engineer/project manager. None of the three had registered complaints regarding his work performance with Respondent or his supervisor, Mr. Cowling, prior to the Board meeting April 23, 1991. None of the three Board members was able to articulate the factual basis for her lost confidence when asked to do so in December, 1991. The Respondent meets all of the qualifications for employment as staff engineer/project manager as that job title is described by the Board. The Respondent acted appropriately and within the scope and description of his job duties on each of the following projects: Stone Middle School; asbestos; Anderson Elementary School; Southwest Junior High School; Cambridge Elementary School; Viera; and FMI.
Recommendation Based on the foregoing, it is RECOMMENDED: That a final order be entered appointing Respondent to the position of staff engineer/project manager with all back pay and benefits withheld him from the date of his termination. DONE and ENTERED this 31st day of July, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1992. APPENDIX TO CASE NO. 91-5645 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER, THE SCHOOL BOARD: It should be noted that Petitioner did not number the paragraphs in its proposed findings of fact. The numbers indicated below were assigned as follows: paragraphs 1 through 20 related to Respondent's general job description and responsibilities; paragraphs 21 through 31 are under the heading related to Viera; paragraphs 32 through 53 are under FMI; paragraphs 54 through 66 are under the Stone Middle School heading; paragraphs 67 and 68 are under Southwest Jr. High School; paragraphs 69 through 73 are under the asbestos heading; and 74 through 79 are under Cambridge Elementary School heading. No proposed findings of fact were submitted for the allegations related to Anderson Elementary School. Paragraphs 1 through 16 are accepted but do not necessarily reflect accurate quotes of the cited material as there are minor, insignificant irregularities. Paragraph 17 is rejected as contrary to the weight of the evidence. While it is accepted that three board members testified they had lost confidence in Mr. Barna, it is not concluded that they had objective reasons for that opinion prior to the vote on the Superintendent's recommendation. Paragraph 18 is accepted. With regard to paragraph 19, it is accepted that the job description had been held by Mr. Barna prior to the Board decision and would have been afterwards had they accepted the Superintendent's recommendation. Paragraphs 20 and 21 are accepted. Paragraph 22 is rejected as irrelevant. Paragraph 23 is accepted. Paragraph 24 is rejected as contrary to the weight of the credible evidence. Paragraph 25 is accepted. With regard to paragraph 26, it is accepted that some, but not all, of the changes addressed by change order 1 were completed prior to the submission of the item to the Board. Paragraph 27 is rejected as contrary to the weight of the evidence, and contrary to the facts established at hearing. Mr. Barna did not authorize changes without making his superiors aware of the items to be considered. The contract speaks for itself as to his authority. Paragraph 28 is rejected as contrary to the weight of the evidence; see also comment re: paragraph 27 above. With regard to paragraph 29, it is accepted that change order 1 represented an increased cost to the project; otherwise rejected as not supported by the record cited. Paragraph 30 is accepted but is irrelevant since evidence established that Mr. Barna did not approve some of the changes to the project and that they were done without any authorization. Paragraph 31 is accepted but is irrelevant; Mr. Barna did not stand as the guarantor on the work performed by others. Paragraph 32 is accepted. Paragraph 33 is rejected as contrary to the weight of the evidence. Paragraphs 34 and 35 are accepted. Paragraph 36 is rejected as not supported by the record cited; weight of the evidence supports the fact that Miller Electric was a subcontractor for a subcontractor and that the contract did not require the disclosure of subs of subs. Paragraph 37 is rejected as contrary to weight of the evidence; see comment paragraph 36 above. Paragraph 38 is accepted but is irrelevant. Paragraph 39 is accepted but is irrelevant. Paragraph 40 is rejected as contrary to the weight of the evidence. Paragraph 41 is rejected as irrelevant. Paragraph 42 is rejected as contrary to the weight of the credible evidence. Paragraph 43 is rejected as not supported by the evidence; to the extent that the paragraph suggests Mr. Barna was generally familiar with bond requirements and that he compiled "boiler plate" forms it can be accepted, otherwise must be rejected since no evidence that Mr. Barna prepared or drafted documents. The bond form on its face shows it is an AIA document A310 form. Paragraph 44 is rejected as argument. Paragraph 45 is rejected as a conclusion of law. The facts of this case establish that no one associated with the School Board side of the project realized it was, or should have been, a bond job until the lawsuit was filed. Had anyone suspected a bond should be required, it would have been requested. Mr. Barna was not at fault for not requesting a bond anymore than Mr. Walker was, or Mr. Cowling, or Mr. Collingsworth, or the individual Board members who know when bonds are required. Paragraph 46 is rejected as contrary to the weight of the evidence. Paragraph 47 is rejected as contrary to the weight of the evidence as it suggests Mr. Barna knew a bond was required (as it was a construction job); clearly, neither he nor anyone else realized a bond would, or should, be required. Paragraph 48 is rejected as irrelevant. Paragraph 49 is rejected as contrary to the weight of the evidence. Paragraph 50 is rejected as irrelevant. Paragraph 51 is accepted. Paragraph 52 is contrary to the weight of the evidence. Paragraph 53 is contrary to the weight of the evidence. Paragraphs 54 through 57 are accepted. Paragraph 58 is rejected as a conclusion of law not supported by the record and contrary to the weight of the evidence. Paragraph 59 is rejected as a conclusion of law not supported by the record and contrary to the weight of the evidence. Paragraph 60 is accepted but is irrelevant. Paragraphs 61 through 66 are rejected as contrary to the weight of the evidence, irrelevant, or assuming facts or conclusions of law not evidence. Paragraph 67 is accepted. Paragraphs 68 through 73 are rejected as contrary to the weight of the evidence, conclusions based upon facts not in evidence, or irrelevant. Paragraph 74 is accepted. With regard to paragraph 75, it is accepted that Mr. Barna represented that drainage would be improved by the proposed easement drainage; as to the suggestion that Mr. Barna assured "no water" would be drained unto the property, such proposed fact is rejected. Paragraphs 76 and 77 are rejected as contrary to the weight of the evidence. The Board's decision to accept the concept was not solely based upon Mr. Barna's recommendation. Paragraph 78 is accepted. Paragraph 79 is rejected as irrelevant, beyond the scope of this proceeding, and to the extent it suggests Mr. Barna to be at fault, is contrary to the weight of the evidence. Mr. Barna was not responsible for drainage problems at the school. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT, BARNA: 1. Paragraphs 1, 2, 7 through 18, 20, 22, 23, 25 through 38, 41, 43, 46 through 56, 58 through 61, 66 through 71, 77 through 79, 93 through 97, 101, 102 through 105, 109 through 111, 113, 114, 116, 120, 123, 124, 127, 129, 130, 132, 135 through 146, 148, 149, 151 through 157, 159, 160, 162 through 165, 167 through 169, 171, 172, 174, 176, 177, 179, 181, 182, 186, 188, 189, 190, 191 are accepted. Paragraphs 3, 4, and 5 are accepted but are irrelevant. Paragraph 19 is rejected as irrelevant; reiteration of charges, not fact; or argument. With regard to paragraph 21, it is accepted that projects described in statement of cause were extent of Board consideration (if that); otherwise, not supported by record cited. 5. Paragraph 24 is rejected as irrelevant and argument. 6. Paragraph 39 is rejected as repetitive or argument. 7. Paragraph 40 is rejected as argument. 8. Paragraph 42 is rejected as conclusion of law. 9. Paragraph 44 is rejected as restatement of document not fact. 10. Paragraph 45 is rejected as argument or comment. 11. Paragraph 57 is rejected as restatement of document not fact and argument. Paragraph 62 is rejected as hearsay not supported by direct evidence. Paragraph 63 is rejected as restatement of document not fact and argument. Paragraph 64 is rejected as comment, not fact. Paragraph 65 is rejected as hearsay not supported by direct evidence. Paragraphs 72 and 73 are rejected as recitation of testimony. Paragraph 82 is rejected as restatement of document not fact and irrelevant. Paragraph 83 is rejected as irrelevant. Paragraph 84 is accepted but is irrelevant to this case. Paragraphs 85 and 86 are rejected as argument. Paragraph 87 is rejected as restatement of document not fact. Paragraph 88 is rejected as argument. Paragraph 89 is accepted but is irrelevant to this case. Paragraph 90 is rejected as restatement of document not fact. Paragraphs 91 and 92 rejected as argument and recitation of testimony. Paragraph 98 is rejected as irrelevant. Paragraph 99 is accepted but is irrelevant to this case. Paragraph 100 is rejected as restatement of document not fact. Paragraph 106 is accepted but is irrelevant to this case. Paragraphs 107 and 108 are rejected as restatement of document not fact. Paragraph 112 is accepted to the extent that the terms outlined were Mr. Barna's understanding but such terms were not reduced to writing in accordance with the Board's directive. Why the easement was signed prior to an agreement being drafted and approved by the Board is unknown. No evidence suggests Mr. Barna was responsible for the oversight. With regard to paragraph 115, see comment regarding paragraph 112 above. Paragraph 117 is rejected as irrelevant. Paragraph 118 is accepted but is irrelevant to this case. Paragraph 119 is rejected as restatement of document not fact. Paragraph 122 is rejected as argument. Paragraph 128 is rejected as not supported by evidence cited. Paragraph 131 is rejected as hearsay. Paragraph 133 is rejected as hearsay. Paragraph 134 is rejected as restatement of document not fact. Paragraph 147 is accepted but is irrelevant to this case. Paragraph 150 is rejected as restatement of document not fact. With regard to paragraph 155, the phrase "which ultimately recommended" should be added before "FMI" to clarify the statement instead of "recommending." Paragraph 158 is rejected as restatement of document not fact. Paragraph 161 is rejected as restatement of document not fact. With regard to paragraph 166, it should be added that at all material times to the review of the project before the letting of the job, the FMI project was considered as described. Paragraph 170 is accepted with the substitution of the word "acceptably" for "perfectly." It is the view of the trier of fact that no system can be perfect. Paragraph 173 is rejected as contrary to the weight of the evidence. From this record it would appear that Mr. Walker gave no definitive statements regarding the FMI project. Paragraph 175 is rejected as contrary to the weight of the evidence. It is accepted that Mr. Barna and Mr. Walker, together with other persons in authority, discussed the FMI project. Paragraph 178 is rejected as argument. Paragraph 180 is rejected to the extent it concludes funds were obtained by fraud; clearly that is the Board's position as no one authorized the final draw. Paragraph 183 is accepted but is irrelevant to this case. Paragraph 184 and 185 are rejected as argument not fact. Paragraph 187 is rejected as irrelevant and argument. Paragraphs 192 through 196 are rejected as argument, conclusion of law, or not supported by the weight of the evidence. COPIES FURNISHED: Stanley Wolfman David J. Wolfman STANLEY WOLFMAN, P.A. 200 W. Merritt Island Causeway Post Office Box 540513 Merritt Island, Florida 32954-0513 Louis V. Cianfrogna James H. Earp CIANFROGNA, TELFER, REDA & FAHERTY, P.A. Suite 102 1990 West New Haven Avenue Melbourne, Florida 32904 Abe Collingsworth Superintendent of Schools Brevard County School District 2700 St. Johns Street Melbourne, Florida 32940
The Issue The issue in this case is whether Respondent failed to include his professional license number on contractual documents, committed mismanagement or misconduct in the performance of contracting services, abandoned construction projects, and was incompetent or mismanaged work he performed.
Findings Of Fact Petitioner is the state agency responsible for, inter alia, licensing general construction contractors in the State of Florida. Its headquarters is located in Tallahassee, Florida. Respondent is a certified general contractor, who has qualified two businesses under his license: Arizen Homes, Inc., and Islander Builders, Inc. Respondent's two licenses, both of which are currently active, are Nos. CG-C1104399 and CG-C1204399. Respondent has two addresses of record with Petitioner: 1862 Pier Point Street, North Port, Florida, and 2700 West Cypress Creek Road, No. B-111, Ft. Lauderdale, Florida. Shanahan Project On or about December 21, 2005, Respondent contracted with Steve Shanahan to build a home at 3416 6th Street Southwest, Lehigh Acres, Florida. (An amended contract was prepared on January 23, 2006, and an addendum was added on February 8, 2007.) The contract price was $292,300. The contract did not contain Respondent's license number on it. Shanahan paid Respondent a deposit on the contract amount by way of four checks totaling $14,865. Shanahan did not own the lot on which the house was to be built by Respondent. One of the checks (in the amount of $250) Shanahan sent to Respondent was for "lot evaluation." That is, Shanahan paid Respondent to determine the adequacy of the lot for the proposed house, which Respondent presumably did. Shanahan was relying on Respondent to assist him (Shanahan) with the purchase of the lot. Early in 2006, Shanahan began calling Respondent to ascertain why no work was being done on the site. He was advised by "Michael" at Respondent's office that the project was going to take a little longer than expected. An addendum to the contract was prepared in February 2008, extending the deadline for completion from two years to three years. Shanahan signed the Addendum. No work has been done on Shanahan's house. The contract with Respondent was never terminated. None of Shanahan's deposit money was returned to him. Respondent is not financially able to do any work on Shanahan's home at this time. Hall Project By contract dated October 22, 2006, Respondent agreed to construct a house for Dornant Hall at 1017 State Avenue, Lehigh Acres, Florida. The contract amount was $372,960. The contract did not include Respondent's license number. Hall paid Respondent a deposit of $17,648 by way of two separate checks. The contract between Hall and Respondent was never terminated. No work has been done on the proposed house, nor is Respondent financially able to work on the project at this time. Hall did not receive any of his deposit back from Respondent. Gordon/Suarez Project On June 10, 2006, Respondent contracted with Arthur Gordon and Alma Suarez to construct a house for them at 1311 Southwest 38th Terrace, Cape Coral, Florida. The contract amount was $404,039 for the lot, the house, and a pool. The contract between Gordon/Suarez and Respondent did not include Respondent's license number. Gordon/Suarez paid for the lot on which the home was to be built. An additional deposit of $44,411 was paid to Respondent either by way of checks or draws from the construction loan. Some of that amount may have been for impact fees or permits relating to construction, but the permits were never picked up from the city or county by Respondent. The contract between Respondent and Gordon/Suarez was never terminated. The house called for in the contract was never built. Gordon/Suarez did not receive their deposits back. Gordon/Suarez ultimately contracted with another builder to construct a home on the site. The house built for Gordon/Suarez had more options than the one planned by Respondent and cost less. However, Gordon/Suarez never got their money back from Respondent. Respondent's Position Respondent has been a builder since 1972 and a licensed general contractor in Florida since at least 1990 (the date Island Builders, Inc., was licensed). Respondent was building homes in Lee and Charlotte counties for many years. In total, Respondent built approximately 200 to 300 homes in that geographic area and had plans to expand to other counties as well. For most of its existence, Respondent relied upon a line of credit from lenders to fund construction projects. Once a contract with a client was finalized, Respondent would take a small deposit, then begin construction using money from the line of credit. The line of credit was sometimes also used to purchase lots on which to build the homes. From September 2006 through July 2007, Respondent began to experience great difficulty closing construction projects. The real estate boom had reached its climax and was beginning to quickly diminish. Appraisals of projects were going down. Respondent could not match competitors which owned their own lots. It was a difficult time for Respondent financially. In 2007, Respondent had approximately 100 houses in various stages of development. About one-half of those homes had received Certificates of Occupancy so that the buyers could move in once the closing was held. However, many buyers did not close on the deals for a number of reasons. Some could not get an appraisal of the home high enough to justify the mortgages for which they had applied. Others simply got "cold feet" as a result of the economic situation in the state. Many buyers simply did not show up at the scheduled closing. Buyers began to ask Respondent for discounts at closing, meaning that Respondent was losing money on many projects. In response, Respondent began negotiating with its lenders, seeking for a discount from them to match the discounts being requested by buyers. Respondent asked its bank for a 30-percent discount; the request was denied. Respondent asked for 16-percent; that was also denied. Finally, in May 2008, negotiations between Respondent and its lenders ended. The banks refused to give Respondent any leeway on the amounts owed on the construction loan lines of credit. The banks refused to enter into an agreement to purchase the houses with Certificates of Occupancy in order to generate capital to pay off the line of credit. The effect of termination of discussions between Respondent and the banks was to place Respondent in bankruptcy. That effectively ended Respondent's ability to do any further work on its clients' houses. And because all of Respondent's funds were tied up in bankruptcy, Respondent could not offer any refunds to his aggrieved clients. Respondent also offered to finish all the pending projects for the banks, allowing the banks to then negotiate settlements with the buyers, but that offer was refused as well. Respondent did not refund the deposits paid by Shanahan, Hall, and Gordon/Suarez. Based on the pending bankruptcy, Respondent does not have the current ability to make such refunds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Business and Professional Regulation, Construction Industry Licensing Board, finding Respondent guilty of violating Subsection 489.129(1), Florida Statutes, and that: (1) a fine of $9,750 be imposed and that Respondent be required to pay $841.09 in costs; and (2) Respondent's license be suspended until such time as all fines and costs have been paid. All claims for restitution by the aggrieved parties will need to be filed in the bankruptcy court proceeding. DONE AND ENTERED this 13th day of April, 2009, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of April, 2009. COPIES FURNISHED: G. W. Harrell, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Ned Luczynski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Val L. Osinski, Esquire Law Offices of Val L. Osinski 9600 West Sample Road, Suite 304 Coral Springs, Florida 33065 Lisa Livezey Comingore, Esquire Tiffany A. Harrington, Esquire Sorin Ardelean, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 42 Tallahassee, Florida 32399-2202
