The Issue At issue in this proceeding is whether the Respondent, Vinyl Siding Contractor Service, LLC ("Vinyl Siding"), failed to abide by the coverage requirements of the Workers' Compensation Law, chapter 440, Florida Statutes, by not obtaining workers' compensation insurance for its employees; and, if so, whether the Petitioner properly assessed a penalty against the Respondent pursuant to section 440.107, Florida Statutes.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following Findings of Fact are made: The Department is the state agency responsible for enforcing the requirement of the Workers' Compensation Law that employers secure the payment of workers' compensation coverage for their employees and corporate officers. § 440.107, Fla. Stat. Vinyl Siding is a Florida corporation. The Division of Corporations’ “Sunbiz” website indicates that Vinyl Siding was first incorporated on December 30, 2003, and remained active as of the date of the hearing. Vinyl Siding’s principal office is at 50 Stanford Road, Pensacola, Florida 32506. Vinyl Siding is solely owned and operated by Thomas Melvin. Mr. Melvin is the manager and sole officer of the corporation. Vinyl Siding was actively engaged in performing carpentry during the audit period from June 4, 2016, through January 4, 2017. Jesse Holman is a compensation compliance investigator for the Department. During the period relevant to this proceeding, Mr. Holman was assigned to an area that included Santa Rosa and Okaloosa Counties. Mr. Holman’s job entailed conducting random compliance investigations and investigating referrals made to his office by members of the public. Mr. Holman testified that as an investigator, he would enter worksites and observe the workers and the types of work they were doing. Mr. Holman testified that he first came into contact with Vinyl Siding in early June 2016, in the Milton area. Mr. Holman checked on Mr. Melvin and his only employee, Curtis Braswell, and found they both had active exemptions from workers’ compensation coverage requirements. Mr. Holman testified that he noticed Mr. Braswell’s exemption was due to expire the next day and cautioned him on the need to renew it. On January 4, 2017, Mr. Holman visited a worksite at 2350 Genevieve Way in Crestview. A new house was under construction and Vinyl Siding was at work on it. Mr. Holman remembered Mr. Melvin and Mr. Braswell and asked them about their exemptions. Each man replied that his exemption was current. Mr. Holman returned to his vehicle to perform computer research on Vinyl Siding. He consulted the Sunbiz website for information about the company and its officers. His search confirmed that Vinyl Siding was an active Florida corporation and that Thomas Melvin was listed as its registered agent and as manager of the corporation. No other corporate officers were listed. Mr. Holman also checked the Department's Coverage and Compliance Automated System ("CCAS") database to determine whether Vinyl Siding had secured the payment of workers' compensation insurance coverage or had obtained an exemption from the requirements of chapter 440. CCAS is a database that Department investigators routinely consult during their investigations to check for compliance, exemptions, and other workers' compensation related items. CCAS revealed that Vinyl Siding had no active workers' compensation insurance coverage for its employees and that no insurance had ever been reported to the state for Vinyl Siding. There was no evidence that Vinyl Siding used an employee leasing service. Mr. Melvin had an active exemption as an officer of the corporation pursuant to section 440.05 and Florida Administrative Code Rule 69L-6.012, effective July 24, 2016, through July 24, 2018. Mr. Braswell’s exemption had expired on June 3, 2016. Based on his Sunbiz and CCAS computer searches, Mr. Holman concluded that as of January 4, 2017, Vinyl Siding had an exemption for Mr. Melvin but had failed to procure workers’ compensation coverage or an exemption for Mr. Braswell, in violation of chapter 440. Mr. Holman consequently issued a Stop-Work Order that he personally served on Mr. Melvin at the job site on January 4, 2017. Also on January 4, 2017, Mr. Holman served Vinyl Siding with a Request for Production of Business Records for Penalty Assessment Calculation, asking for documents pertaining to the identification of the employer, the employer's payroll, business accounts, disbursements, workers' compensation insurance coverage records, professional employer organization records, temporary labor service records, documentation of exemptions, documents relating to subcontractors, documents of subcontractors' workers’ compensation insurance coverage, and other business records, to enable the Department to determine the appropriate penalty owed by Vinyl Siding. Mr. Holman testified that he later met twice with Mr. Melvin. After Mr. Melvin turned in some business records, Mr. Holman met with Mr. Melvin and served him with the Amended Order of Penalty Assessment. Mr. Melvin subsequently submitted additional business records, which led Mr. Holman to recalculate the penalty and issue the 2nd Amended Order of Penalty Assessment, which Mr. Holman personally served on Mr. Melvin on May 1, 2017. Mr. Braswell testified that he had been aware that his exemption was about to expire and was going to drive to the Department’s offices to renew it. His wife, Julie Braswell, told him that she would save him the gas money by renewing his exemption online. Ms. Braswell timely submitted the renewal application on May 26, 2016, but the Department returned it as “incomplete” because under the heading “scope of employment,” Ms. Braswell checked “contractor” rather than Mr. Braswell’s actual scope of employment, “carpenter.” Operations and management consultant Kevin Sterling is part of the Department’s team that oversees the daily activities of the exemption unit. He oversees the “denial team” that undertakes a second review of any application that is initially deemed incomplete or ineligible. Mr. Sterling testified that Mr. Braswell’s application was deemed incomplete because the scope of employment, “contractor,” requires a license from the Department of Business and Professional Regulation. No evidence was submitted that Mr. Braswell had such a license. Mr. Sterling testified that in filling out the online form, an applicant first selects the category “non-construction” or “construction.” If the applicant selects “construction,” a drop-down box appears and the applicant selects the correct category. Ms. Braswell inadvertently checked the wrong box on the form. Ms. Braswell testified that she received a written notice in the mail about two weeks after she submitted the application. The notice informed her that the application was incomplete but gave her no information as to why the application was incomplete. She resubmitted the application, but failed to correct the category error. The Department’s website informed her that the application was complete. She and her husband believed they had taken care of the exemption renewal. Both Curtis and Julie Braswell testified that they received no further written correspondence from the Department. Ms. Braswell did not include an email address on the application, so no email was sent to inform her that the application had not been corrected and the exemption had not been renewed. Ms. Braswell testified that she had given the Department her email address when she applied for Mr. Braswell’s previous exemption and that she had received email confirmation from the Department as to payment of the application fee when she sent in the first renewal application in May 2016. Mr. Sterling testified that the application software looks first to the email address provided in the application itself. If there is no email address provided, then a hard copy of the relevant document is generated and mailed to the applicant. The Braswells’ failure to receive the hard copy of the second notice of incompleteness was not explained at the hearing. Mr. Sterling testified that the Department’s 23 examiners process around 16,000 applications per month. Businesses constantly change addresses. Employees move from company to company. Because of the mass of applications and the mobility of the regulated population, the Department exclusively uses the data on the most recent application. Mr. Sterling stated that there is simply no time to look up and attempt to reach an old email address if the applicant fails to include one on the current application. Lead auditor Lawrence Pickle performed the calculation of the assessed penalty. Mr. Pickle testified as to the process of penalty calculation. Penalties for workers' compensation insurance violations are generally based on doubling the amount of evaded insurance premiums over the two-year period preceding the Stop-Work Order. § 440.107(7)(d), Fla. Stat. In this case, the period was shorter than two years because Mr. Braswell’s exemption did not expire until June 3, 2016. Therefore, the penalty was calculated from June 4, 2016, through January 4, 2017, the date of the Stop-Work Order. In the penalty assessment calculation, the Department consulted the classification codes and definitions set forth in the SCOPES of Basic Manual Classifications (“Scopes Manual”) published by the National Council on Compensation Insurance (“NCCI”). The Scopes Manual has been adopted by reference in rule 69L-6.021. Classification codes are four-digit codes assigned to occupations by the NCCI to assist in the calculation of workers' compensation insurance premiums. Rule 69L- 6.028(3)(d) provides that "[t]he imputed weekly payroll for each employee . . . shall be assigned to the highest rated workers' compensation classification code for an employee based upon records or the investigator's physical observation of that employee's activities." Mr. Pickle applied NCCI Class Code 5645, titled “Carpentry--Construction of Detached One or Two Family Dwellings.” The corresponding rule provision is rule 69L- 6.021(2)(yy). Mr. Pickle used the approved manual rates corresponding to Class Code 5645 for the periods of non- compliance to initially calculate the penalty. Vinyl Siding timely provided the Department with business records that listed the company’s payroll, cash receipts, and cash withdrawals. The Department determined that the company’s business records and receipts did not validate the payroll and expenses that corresponded with the company’s cash withdrawals. Pursuant to rule 69L-6.035(1)(k), the Department included 80 percent of cash withdrawals as wages or salaries to employees. On May 1, 2017, the Department served the 2nd Amended Order of Penalty Assessment on Vinyl Siding, assessing a penalty of $13,257.20. The evidence produced at the hearing established that Mr. Pickle utilized the correct class codes, wage information, and manual rates in his calculation of the 2nd Amended Order of Penalty Assessment. The Department has demonstrated by clear and convincing evidence that Vinyl Siding was in violation of the workers' compensation coverage requirements of chapter 440. Mr. Braswell was an employee of Vinyl Siding on January 4, 2017, performing services in the construction industry without valid workers' compensation insurance coverage or an exemption. The Department has also demonstrated by clear and convincing evidence that the penalty was correctly calculated through the use of the approved manual rates and the penalty calculation worksheet adopted by the Department in rule 69L-6.027. Vinyl Siding could point to no exemption, insurance policy, or employee leasing arrangement that would operate to lessen or extinguish the assessed penalty. Through an unfortunate sequence of events, Mr. Braswell allowed his exemption to lapse on June 3, 2016, though he became aware of that lapse only when Mr. Holman informed him at the job site on January 4, 2017. Mr. Melvin testified that he does not use a computer. Mr. Braswell stated that he does not know how to turn on a computer. Ms. Braswell made an unfortunate slip of the finger in selecting a scope of employment for her husband. Vinyl Siding appears to be a victim of progress, i.e., the Department’s online-only exemption application process. The company is not wealthy and its principals made a good-faith attempt to comply with the requirements of chapter 440. Vinyl Siding presents a singularly sympathetic example of why the workers’ compensation insurance enforcement process should include some element of agency discretion to reduce or eliminate the financial penalty under defined circumstances. However, as matters stand, equitable considerations have no effect on the operation of chapter 440 or the imposition of the penalty assessed pursuant thereto.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers' Compensation, assessing a penalty of $13,357.20 against Vinyl Siding Contractor Service, LLC. DONE AND ENTERED this 16th day of March, 2018, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 16th day of March, 2018.
The Issue The issues in these cases are whether Respondent violated sections 489.129(1)(i), 489.129(1)(o), and 489.1425, Florida Statutes (2007 & 2009),1/ and, if so, what discipline should be imposed.
Findings Of Fact At all times material to the administrative complaints, Mr. Organo was licensed as a certified general contractor in the State of Florida, having been issued license number CGC 1512005. At all times material to the administrative complaints, Mr. Organo was the primary qualifying agent for Bennett Marine Contracting and Construction, Inc. (Bennett Marine). On or about September 29, 2007, Jean Walker (Ms. Walker) entered into a contract with Bennett Marine to construct a dock and a tiki hut at 12305 Boat Shell Drive. The contract (the Walker contract) provided that the contractor would make application for a permit from Lee County, Florida. Mr. Organo signed the Walker contract for Bennett Marine. It is undisputed that the Walker contract did not include a written statement explaining Ms. Walker's rights under the Florida Homeowners' Construction Recovery Fund. On October 24, 2007, Bennett Marine applied for a permit to construct the dock. The application was denied October 29, 2007, because the site plan contained the tiki hut. When the tiki hut was removed from the application, the dock permit was approved. Ms. Walker paid Bennett Marine draws on the construction project. The payments were given to Mr. Organo. The payments totaled $9,200. By February 2008, a tiki hut had been constructed on Ms. Walker's property without a permit. Because the tiki hut was built without a permit, and it was in an illegal location, Lee County required that the tiki hut be removed. By April 2008, the tiki hut had been removed, and another tiki hut had been built in its place. Again, no permit was pulled for the tiki hut, and it was placed in an illegal location. Again, Lee County required that the tiki hut be removed. Mr. Organo subcontracted the construction of the tiki hut to Rick Fewell Chickees. Mr. Fewell of Rick Fewell Chickees, a Seminole Indian,2/ applied for a permit to build a tiki hut, but the application was rejected because the plot plan was not to scale, and the tiki hut did not meet the setback requirements from the water. Another tiki hut was built, and, in March 2009, Lee County again cited Ms. Walker for not having a permit for the tiki hut and for not meeting the setback requirements. In 2010, a permit was finally issued for the construction of a tiki hut on Ms. Walker's property. The permit was issued to Ms. Walker. Bennett Marine commenced work on the tiki hut without obtaining a building permit. On January 5, 2010, Bennett Marine entered into a contract with Chris Bevan (Mr. Bevan) to remove an existing dock, uninstall an existing boatlift, construct a dock, construct a tiki hut, and to reinstall the boatlift. The contract (the Bevan contract) required that the contractor obtain a City of Cape Coral building permit. The Bevan contract was signed by Mr. Organo for Bennett Marine. It is undisputed that the Bevan contract did not contain a written statement explaining Mr. Bevan's rights under the Florida Homeowners' Construction Recovery Fund. On March 17, 2010, Bennett Marine showed up on Mr. Bevan's property and commenced work, by knocking down a cantilever dock that was hanging over a seawall, removing old decking from the boatlift, and rough-framing part of the new dock. Bennett Marine worked until approximately March 25, 2010. That was the last that Mr. Bevan heard from Mr. Organo or Bennett Marine. Mr. Organo applied for a building permit for the Bevan contract on April 1, 2010. The permit was approved on April 13, 2010, but it was not issued. On May 14, 2010, the City of Cape Coral placed a stop-work order on the Bevan project. Mr. Bevan applied for an owner-builder permit for the dock construction, and the permit was issued on June 9, 2010. Mr. Bevan completed the dock construction at additional expense.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Mr. Organo violated sections 489.129(1)(i), 489.129(o), and 489.1425; imposing a fine of $250 each for the Walker contract and the Bevan contract for a total of $500, for failure to advise the owners of the recovery fund; imposing a fine of $3,000 and placing Mr. Organo on probation for two years for beginning work without a permit for the Walker contract; and imposing a fine of $1,000 and placing Mr. Organo on probation for one year for beginning work on the Bevan contract without a permit with the one-year probation to run concurrently with the probation imposed for the Walker contract. DONE AND ENTERED this 13th day of April, 2011, 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 13th day of April, 2011.
Findings Of Fact Rood is a black person. Rood was employed by Coastal Lumber Company on June 22, 1981, as a glue line superintendent, where he supervised three shifts and three shift supervisors. In January, 1982, Rood was promoted to Dry End Superintendent, responsible for seven supervisors and three shifts. Coastal Lumber Company operates a plywood production plant in Hinson, Florida. The plant has been in operation only since 1981 and produces plywood panels for use in the construction industry. Plywood production is divided into several stages. The first stage is referred to as the Green End and involves stripping green logs straight from the forest by use of an industrial lathe. The lathe strips the logs into thin veneer sheets approximately 50 inches by 101 inches in size. The veneer sheets are then transported to a huge oven where the sheets are dried out. Once the green veneer has had most of the water content removed in the oven, the sheets are placed on a conveyer belt (the lay-up line). Glue is applied and the veneer sheets are placed one on top of the other like a sandwich to obtain the desired thickness. The multi-layered sheets are then pressed together in a large hydraulic press to cure the glue and bond the veneer sheets together to form a plywood panel. After pressing, the rough-edged panels are squared off into standard size panels, sorted, graded, and shipped. The production line beginning with the drying out process in the ovens through gluing and pressing process is referred to as the Dry End. The finishing and shipping department is a part of the Dry End in that the finished product has been dried in the oven, but is more typically referred to as a separate department. David Carter was hired by Coastal Lumber as the plywood production manager in February 1982. He had previously been employed by the Union Camp Corporation as a plant manager and has twenty-five years of experience in the plywood industry. Carter was hired because Coastal Lumber was in dire financial straits. The company had lost a lot of money in its first year of operation and was in danger of closing down. Production was down, costs were out of control and the plant was lacking in leadership. When he arrived at Coastal Lumber, Carter found the plant organized in a departmental superintendent system. Warren Thornton, a black man, was the Green End superintendent. Rood was the Dry End superintendent. John Asbell, a white man, was the Finishing and Shipping superintendent. Under the system, the three superintendents were of equal authority and were responsible for scheduling and coordinating production between their departments. Carter had worked before in plants which used this departmental superintendent system but based on his many years of experience preferred a system utilizing a single plant superintendent who is responsible for scheduling production throughout the plant. In order to increase production and turn the plant around, Carter began making changes. First, he fired John Asbell because Asbell was unable to improve the finishing and shipping department. He then transferred Mike Leonard, a black employee, from the glue line to the finishing and shipping department because Leonard had some prior experience in the area. Rood, who had previously supervised Leonard on the glue line, was required to assume superintendent responsibilities for the finishing and shipping department in addition to his responsibilities as dry end superintendent. Both of these personnel moves were on a trial basis. Although some improvement occurred in the finishing and shipping department under Rood's supervision, the improvement was not satisfactory in light of the serious financial condition of the company. Production had not improved sufficiently, housekeeping and maintenance was not up to par and the manufacture of specialty items was requiring too much personal involvement by Carter due to Rood's inexperience. Having exhausted internal efforts at increasing production in the finishing and shipping department, Carter hired Leon Pinner from outside the company as the finishing and shipping supervisor. Pinner had over one and one- half years experience in the finishing and shipping department with International Paper Company and had been directly involved in the production of specialty items. He had also worked as assistant plant superintendent, plant superintendent and plant manager while employed with Georgia Pacific. For several weeks Pinner worked under Rood's supervision but Carter relieved Rood of any supervisory responsibilities in the finishing and shipping department shortly after Pinner's arrival. Within four weeks or so after Pinner's arrival, the finishing and shipping department was up to production, housekeeping was in order and Carter was tremendously impressed with Pinner's performance. Shortly thereafter Carter, along with his immediate boss - J. T. Woods, elected to switch to a plant superintendent organizational scheme for the plywood plant. This reorganization resulted in the elimination of the three departmental superintendent positions, although as a practical matter two of the positions were vacant at of the time of reorganization. Woods and Carter considered three candidates for the position of plant superintendent - Warren Thornton, Bill Rood and Leon Pinner. There was no advertisement or announcement that Coastal was seeking a plant superintendent. Based on Pinner's superior performance in straightening out the finishing and shipping department, Pinner's experience in the industry and Rood's inability to straighten out the finishing and shipping department, Pinner was promoted to the position of plant superintendent. Rood completed 3 1/2 years of college credits. He was first hired in the plywood industry in 1966. He has worked as a foreman, a supervisor, Dry End Superintendent, and plant superintendent. He has a total of 14 1/2 years of supervisory experience at the different levels of responsibility. Pinner began in the plywood industry in 1967. In addition to various line positions, he has served as supervisor in the glue line, drier and finishing and shipping and as assistant plant superintendent, plant superintendent and plant manager. Carter and Pinner discussed how the reorganization was to be handled and what was to be done with Bill Rood's position as Dry End superintendent. Rood's position was eliminated and he was transferred to day shift glue line supervisor, without a pay cut. His new position was equivalent to that held by any other supervisor and he no longer had the authority to exercise any supervision over the other supervisors. On June 18, 1982, Pinner called a production supervisors' meeting to advise the supervisors of the reorganization. Rood was present at the meeting. Pinner advised Rood that his position had been eliminated and that he was placed in the position of day shift glue line supervisor. He was advised that the change was effective immediately. Pinner also advised all supervisors to pull maintenance while the plant was shut down. Pinner gave strict instructions that all supervisors, including Rood, were to be present on June 20, 1982, to perform maintenance. Rood was advised to run his day shift on June 19, 1982, after which the plant would shut down for maintenance. Following this meeting, Rood no longer had supervisor authority over the other supervisors and no longer had the authority or latitude of a superintendent. On Sunday, June 20, 1982, Rood showed up at the plant and instructed the other two supervisors in the glue line as to what maintenance needed to be done. Rood then left the plant and did not return. Rood performed no actual maintenance work himself. He did not ask permission to leave of either Pinner or Carter, both of whom were present at the plant themselves performing maintenance. The next day, June 21, 1982, Pinner terminated Rood. Carter concurred in this decision. The decision to terminate Rood was based on several reasons. First, Rood had disobeyed a direct order from the plant superintendent, an order which had been given in the presence of other supervisors. Second, Rood had left without asking permission. As an on-line supervisor, like all other supervisors, Rood could not come and go as he pleased. Although, while he was the Dry End superintendent, Rood had necessarily worked at various times (due to the responsibility of having to oversee all shifts in his department), he no longer had such flexibility and was required to be at the plant specific times for a specific shift. He was required to help with maintenance on Sunday just like every other supervisor (including the plant superintendent and plant manager - Pinner and Carter). He failed to do so. Third, his failure to pull maintenance despite direct orders set a bad example for other supervisory personnel, some of who had legitimate reasons for needing June 20 off. At various times Coastal has had problems with other employees, both black and white. No other employee had been terminated on the first instance of absence from work without permission. Infractions by others were dealt with first by warnings or suspensions. Termination did occur with both black and white employees. Rood was treated differently because all of this took place during a critical period for the plant when everyone s cooperation was imperative. In this regard, Rood's situation is clearly distinguishable from that of other employees, both black and white whose jobs had been terminated only after several instances of tardiness because of his prior position and the dire circumstances of the company. Mr. Rood was not fired because he is black. After his termination, Coastal Lumber offered Rood the same opportunity it typically offered supervisory personnel that were fired or quit: he was offered a hourly job as a core layer with the opportunity to work his way back up into a supervisory position. This opportunity was administered equally to both black and white workers (for example, Lacy Stacker and David Brown). Had Rood accepted the core layer job at $6.00 per hour and proved himself capable of good job performance, he probably would have resumed a supervisory role within a month or so, as did Stacker and Brown. Rood made reasonable attempts to secure other employment, but remained unemployed from June 21, 1982 until January 1983. During that period he collected $2,630.00 as unemployment compensation. At the time of his termination, Rood was paid $2,530.00 per month. In January 1983, he was hired by Boise Cascade Lumber Company in South Carolina with an annual salary of $20,991.00. In May 1984, Rood was promoted to a supervisory position and received a pay increase to $27,000.00 per year. 30. Rood lost income of $15,180.00 during 1982, $9,459.00 in 1983 and $5,845.00 from January 1, 1984 until November 1, 1984. The total lost wages for this period was $30,484.00. Rood continues to make $380.00 less per month than while employed by Coastal.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the complaint of William D. Rood, Jr., be DISMISSED and that the Prayer for Relief be DENIED. DONE and ENTERED this 7th day of February, 1985, in Tallahassee, Florida. DIANE K. KIESLING 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 7th day of February, 1985.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Respondent, Walter C. Davis, became licensed in Florida as a certified general contractor in March of 1973, holding license number CG C007063. Respondent was away from the State of Florida from late 1976 until 1979. During the 1977-79 and 1979-81 license periods, respondent renewed his license number CG C007063 on an inactive basis. On or about September 4, 1980, respondent submitted to the petitioner a "certification change of status application" to change his licensing status from inactive to active status. Among the questions asked on the application were 1) are there now any unpaid past-due bills or claims for labor, materials, or services as a result of the applicant's construction operations?, and 2) are there now any suits, or judgments of record or pending as a result of the applicant's construction operations? To both these questions, respondent answered "no". By affidavit attached to the "certification change of status application", respondent vouched for the truth and accuracy of all statements and answers contained in the application. Respondent's license was placed on an active status and he currently holds such license number CG C007063. As a result of respondent's failure to pay for trusses used by respondent in the construction of a peach barn, Cox Lumber Company of Brooksville filed a lawsuit against respondent's construction company seeking the amount of $2,481.03. The original and amended complaints were served on respondent on September 1, 1976 and December 28, 1976. A Final Judgment, by default, was entered against the respondent on February 23 1977. This judgment remained outstanding as of September 4, 1980. Respondent failed to pay for certain prefabricated steel buildings provided by Kirby Building Systems. Suit was brought by Kirby against the respondent, the respondent was served with the complaint on April 13, 1977, and, on July 12, 1977, the Circuit Court for Sarasota County entered a Final Judgment, by default, against respondent in the amount of $5,713.11. This judgment remains outstanding. As of April 30, 1976, respondent owed $435.62 to Carroll Contracting Company for ready mix concrete used by the respondent on a construction project. This amount was past due on September 4, 1980. As a result of a complaint, the Citrus County Board of Examiners voted on June 22 1976, to suspend respondent's permit-pulling privileges in Citrus County. This action was to remain in effect until the respondent made restitution or satisfied the complainant's concerns. Citrus County Ordinance No. 72-3 requires the holding of a public hearing after notice to the holder of a Certificate of Competency prior to suspension or revocation of a Certificate. No such public hearing was held by the Citrus County Board of Examiners. On or about December 7, 1981, respondent entered into a contract with Boyd T. Peeler to construct a boathouse and shop for $6,200.00. Mr. Peeler paid respondent the entire contract price. The structure was completed and passed final inspection on August 18, 1982. Respondent failed to pay $490.00 to Overhead Door Company of Ocala for the labor and materials used to install two rolling doors for the Peeler boathouse. As of the date of the hearing, the bill remained unpaid by the respondent
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is
The Issue The issues are whether Respondent violated Subsection 489.127(1)(f), Florida Statutes (2008), for the reasons stated in the Administrative Complaints and, if so, what, if any, penalty should be imposed.
Findings Of Fact Petitioner, the Department of Business and Professional Regulation (DBPR), is the state agency charged with regulating the practice of contracting in the State of Florida. It also has jurisdiction over the unlicensed practice of contracting pursuant to Section 455.228, Florida Statutes (2008). DBPR has filed two administrative complaints charging Respondent Frank Clardy with violating Subsection 489.127(1)(f), Florida Statutes (2008), by engaging in the business of, or acting as a contractor without a license. Mr. Clardy, was not a state certified or registered contractor licensed to engage in the practice of contracting pursuant to Part I, Chapter 489, Florida Statutes, at any time relevant to this proceeding. He maintains he did not need a license, because he was acting as a salesman and not himself engaging in the business of, or acting as a contractor. The other named Respondent charged in the complaint in DOAH Case No. 08-1108, O. E. Total Services, Inc. ("O.E."), is a Florida corporation with Onel Eschevarria as its registered officer/director. The state investigator assigned to this case testified that O.E. was listed as an inactive entity by the State Division of Corporations, so she did not check to see if O.E. was a general contractor licensed by DBPR. The testimony of two witnesses, Mr. Clardy and Herbert Neff, support a finding that, at all relevant times, Onel Eschevarria, the owner of O.E., was not a licensed general contractor. Therefore, O.E. could not have been an entity registered and qualified to use his license number. Daisy Green and her late husband, Herbert Green, entered into a contract listing O.E. as the corporate entity, signed by Frank Clardy, as salesman and officer, to pay $9,351 for the installation of hurricane shutters for 17 openings in their home in Boca Raton, Florida. The license numbers on the contract were CGC A23836 and CCC 057010, and belonged to Carlos Fulmann. According to Mr. Clardy, Mr. Fulmann notified O.E. that he was unable to work with O.E. at that time, and O.E. was looking to affiliate with another licensed contractor. Nevertheless, Mr. Clardy took the measurements for the shutters at the Greens' home and accepted a check for a deposit of $3740.40. The check, dated April 11, 2006, was payable to O.E. and was deposited in the account of O.E. The shutters were never delivered and the money has not been refunded. DBPR's investigator confirmed that no permit was ever issued for the installation of shutters at the Greens’ residence. On April 18, 2006, Mrs. Green wrote a check in the amount of $1700 made payable to Frank Clardy personally, with "Deposit Shutters" on the line indicating the purpose for the check. Mr. Clardy cashed that check. That brought the total amount paid by the Greens, apparently in connection with the contract for hurricane shutters, to $5440.40. At the hearing, Mrs. Green testified that she and her husband paid $7240 of the total contract amount of $9351, leaving a balance due of $2111, as indicated by handwritten notes made on the contract. No one was sure who made the notes and there was no other evidence of additional payments arguably for hurricane shutters over and above the two checks that total $5440.40. Mrs. Green could not explain the discrepancy between the total amount of the two checks and the note on the contract. There was also conflicting testimony over the purpose for the $1700 check. Mrs. Green testified that Mr. Clardy said that the first check (for $3740.40) had been a deposit and he needed the second one (for $1700) for materials, but that contradicts her note on the check that it was inexplicably a second deposit for shutters. Mr. Clardy testified the $1700 check was paid for him to hire two crews to perform other work for the Greens, including replacing a side door in the garage with a hurricane door, repairing woodwork around the door, repairing cement in the garage, replacing and painting fascia boards, and installing a pool rail. Mr. Clardy testified that he had a written contract for this work but was unable to find it. Mrs. Green testified that she and her husband paid $250 to Mr. Clardy to fix the side door to their garage, and that they also separately paid someone he recommended to install handrails for the pool. Mrs. Green's testimony appears to be more likely truthful than Mr. Clardy’s based on a handwritten and signed receipt that Mr. Clardy apparently gave the Greens that reads: Paid in full Side door facia boards hand rail to pool $250.00 Mr. Clardy acknowledged that his signature was on the receipt but claimed it was altered after he signed it. In support of his position, Mr. Clardy pointed out that his name, as printed on the receipt as "Claridy" is misspelled. Based on his acknowledgement of his signature, his claim that the receipt does not accurately represent work he performed for $250 is rejected. Ivan M. Rubin entered into a contract with Mr. Clardy on June 27, 2006, to pay $5600 for the installation of hurricane shutters at his home in Boynton Beach. The corporate entities listed on the Rubin contract were Access-Ability, Inc. (Access- Ability) & O. E. Total Services, Inc. Frank Clardy signed as salesman and officer. The license number on the contract was CGC 051895, which is registered with the State as the certified general contractor license number for Herbert John Neff and Access-Ability as a qualified business. Mr. Rubin gave Mr. Clardy a check for the deposit in the amount of $2600, made payable to Access-Ability. That check was given by Mr. Clardy to Mr. Neff at Access-Ability. Soon after, Mr. Rubin had additional questions about the shutters and called the telephone number on the contract. When he was unable to reach Mr. Clardy, Mr. Rubin stopped payment on the check. Although he remembered that the amount of the check was for $2500, not $2600, Mr. Neff acknowledges that he received the check from Mr. Rubin on which the bank payment was stopped. On July 11, 2006, Mr. Clardy explained, according to Mr. Rubin, that he had been in the hospital and had paid for the materials for the shutters from his personal funds. So, Mr. Rubin wrote another check for $2600 made payable to Frank Clardy personally. At hearing, Mr. Clardy admitted having never paid for shutters for the Rubins. Both Mr. and Mrs. Rubin said Mr. Clardy told them he owned O.E. and that they believed it because he signed the contract as “salesman” and "officer." Mr. Clardy testified that he ordered the hurricane shutters for the Green and Rubin projects, and that, as he had done with the Greens' deposit, he cashed Mr. Rubin's second check and gave the money to Onel Eschevarria, who took it and is now in jail. As a result of not being paid by O.E., the manufacturer refused to deliver the products. The Rubins did not receive the shutters and have not received a refund. There was never a permit application filed for the Rubin project. After not receiving the shutters and not getting help contacting Mr. Clardy after talking to his mother and stepfather, Mr. Rubin checked the license number, found it was issued to Mr. Neff, and contacted him. Mr. Neff told Mr. Rubin that he could find Mr. Clardy in the card room of a casino in Coconut Creek. Mr. Rubin went there to look for him, but Mr. Clardy was not there. Mr. Neff testified that he has been a licensed general contractor in Florida since 1990, that the only company he qualified for the use of his license was Access-Ability, and that he knew it was unlawful for an unlicensed person to subcontract with a licensed contractor. Mr. Neff was never qualified by the state to use his license to secure permits for O.E., nor for Access-Ability and O.E. as a joint venture. Mr. Neff confirmed that he and Mr. Clardy discussed a business proposal in which Mr. Clardy would get the business and arrange for the installation of shutters, and Mr. Neff would get the building permits. According to Mr. Neff, Mr. Clardy told him that he was a salesman for O.E., that O.E. was a licensed contractor, and that he was negotiating to acquire O.E. Mr. Neff testified that he never entered into a contract with Mr. Clardy and "[t]he arrangements we were making were just left up in the air because we couldn't conclude it." Mr. Neff's testimony is rejected as totally inconsistent with the evidence. He contradicted his claim that Mr. Clardy led him to believe that O.E. was licensed, when he also testified that he remembered reading a proposal from Mr. Clardy, and saying ". . . I couldn't sign it because it contained a built-in violation of my license," because O.E. was not licensed and was not owned by Mr. Clardy. At the hearing, he said it looks like his signature, that "it looks like he did" sign the following agreement: Date: Feb 20, 2006 To: ACCESS-ABILITY, INC Attn: Mr. HerbNeff 610 E. Sample RD Pompano Beach, FL 33064 Mr. Neff: We have decided to use your services of installing shutters and pulling permits for the clients we sign up with 0. E. Total Services, Inc. Our company will be the sales company for Access -Ability, Inc. This is the way we are going to work with your company. We will sign up the client take the deposit wait for the check to clear the bank and then issue you a cashiers check for the amount of the deposit. We will pay your company $3 .00 per square foot to install the HV Bertha shutters and pull the necessary permits. You will then issue O.E. a cashier's check back for the amount minus the $3.00 a square foot to install the HV Bertha Shutters and pull the permits needed for each job. Once the job is signed up and you issue us a cashier's check for that job, O.E. will order the material from our supplier(s) and give you a copy of the purchase order placed to our supplier with the date the product will be in stock for that particular job. Also O.E. will give Access-Ability a form that gives the clients name and address with the square footage of that job. It will also state the deposit of the job and the date the job should be installed. If Access - Ability, Inc. agrees on these terms please sign the bottom of this letter and return it back to us as soon as possible. I think this will be a profitable venture for both companies and look forward to working with you and your company. Respectfully and Sincerely, The letter was signed by Frank Clardy, as Vice President of Sales for O.E. Total services, Inc., and Herbert J. Neff, as Authorized Representative for Access-Ability, Inc. Mr. Neff agreed, regarding the letter, that [i]t provided [for] me to pull permits and then have someone else collect the money, and you're not allowed to do that. Now, the only way that could have been done is if Mr. Clardy had become licensed -- had a license, if O. E. Total Services was actually licensed. . . ." He acknowledged further that he knew ". . . they never had a license. . ." Mr. Neff testified that he never received any money for the work that was supposed to have been done for the Greens and the Rubins. He admitted having created a spreadsheet to keep track of money paid to him by O.E. to get permits for their customers, but claimed the money was not tied to or derived from any particular customer. According to Mr. Neff, funds were paid to him in advance by O.E. and held until O.E. provided him a permit application package to file. In addition to the checks, Mr. Neff admits having received cash from O.E. and from Mr. Clardy. The evidence, including his admissions, completely contradicts his claim of not having an illegal agreement with O.E. Mr. Neff’s testimony that he was not aware of the Green and Rubin contracts until they complained that their shutters had not been delivered is also rejected as inconsistent with the evidence. On his spreadsheet, Mr. Neff listed the name "Herb Green" with $500 in the column headed "Fee" and $100 in the column headed "Permit & NOC” (meaning notice of commencement), and Mr. Neff admitted that he received the check on which Mr. Rubin later stopped payment. Mr. Clardy placed advertisements soliciting business for Access-Ability, with Mr. Neff's license number on them and Mr. Clardy's telephone number as the contact for customers seeking free estimates. He signed an exhibit agreement and set up a booth at a shopping mall to promote sales for Access-Ability. Mr. Neff's claim that he was unaware of the advertisements is contradicted by his statement that he called Mr. Clardy to complain that the first advertisement violated the law, by having both the names of Access- Ability and O.E. on it. He testified that only the name of the company that was qualified to use his license number, Access-Ability should have appeared on the advertisements. Mr. Neff testified that Mr. Clardy told him that he would be setting up a mall kiosk, but unpersuasively claimed that he did not know that he would be advertising for Access-Ability until he arrived at the mall. Mr. Neff claimed he never authorized Mr. Clardy to use 4100 Power Line Road as his address, yet he used the same address in a notice of commencement after acknowledging, in a written proposal to install shutters that he submitted to a homeowner ". . . to complete and comply with the contract signed . . . with Frank Clardy." The evidence, including the contradictions by Mr. Neff, support Mr. Clardy's claim that O.E. and Mr. Clardy were authorized to use Mr. Neff's license number on contracts, advertisements, and business cards. Mr. Clardy testified that he worked as a salesman for Access-Ability, based on their agreement. He also worked, he claimed, as a salesman for O.E., from February to August 2006, when O.E. stopped paying him. He compared his role to that of any salesperson employed by a home improvement store. DBPR's investigator confirmed that neither Frank Clardy nor O.E. and Access-Ability as a joint venture is a state-licensed general contractor or a registered qualified business. DBPR's investigative costs were $280.62 for the Green case and $333.56 for the Rubin case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent Frank Clardy guilty of violating Section 489.127(1)(f), Florida Statutes (2008); imposing an administrative fine in the amount of $5,000 and requiring the payment of investigative costs in the amount of $333.56 in DOAH Case No. 08-1084 (DBPR Case No. 2006-062380); and imposing an administrative fine in the amount of $5,000 and requiring the payment of investigative costs in the amount of $280.62 in DOAH Case No. 08-1108 (DBPR Case No. 2006-053353). DONE AND ENTERED this 18th day of February, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 18th day of February, 2009. COPIES FURNISHED: Sorin Ardelean, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399 Frank Clardy 5830 Eagle Cay Lane Coconut Creek, Florida 33073 G. W. Harrell, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Nancy S. Terrel, Hearing Officer Office of the General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Ned Lucynski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
