08-001432PL Department Of Business And Professional Regulation, Construction Industry Licensing Board vs. Armando Victor Calleja Status: Closed Recommended Order on Friday, August 29, 2008.

Summary: Respondent contractor failed to pay a subcontractor, and a lien was filed against the homeowner. Respondent abandoned the project and commenced work without a building permit.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, )

)

Petitioner, )

)

vs. ) Case No. 08-1432PL

)

ARMANDO VICTOR CALLEJA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on June 20, 2008, in Viera, Florida, before Susan B. Harrell, a

designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Scott A. Smothers, Esquire

Robert A. Crabill, Esquire

Wright, Fulford, Moorehead & Brown, P.A.

Post Office Box 2828

Orlando, Florida 32801-2828

For Respondent: Tino Gonzalez, Esquire

1600 Sarno Road, Suite 1

Melbourne, Florida 32935

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent violated

489.129(1)(m), and 489.129(1)(o), Florida Statutes (2005), 1 and,

if so, what discipline should be imposed.

PRELIMINARY STATEMENT

On July 18, 2007, the Department of Business and

Professional Regulation (Department) filed a six-count

Administrative Complaint before the Construction Industry

Licensing Board (Board), alleging that Respondent,

Armando Victor Calleja (Mr. Calleja), violated Subsections

489.129(1)(m), and 489.129(1)(o), Florida Statutes. In its

Proposed Recommended Order, the Department states that it is

withdrawing the allegations in Count I of the Administrative

Complaint, which relate to the violation of Subsection

489.119(2), Florida Statutes.

Mr. Calleja requested an administrative hearing, and the

case was forwarded to the Division of Administrative Hearings on

December 26, 2007, and assigned DOAH Case No. 07-5784PL. A

final hearing was commenced, and the parties announced at the

final hearing that the parties had agreed to settle. The file

of the Division of Administrative Hearings was closed by Order

dated March 6, 2008.

On March 20, 2008, the Department filed a Motion to Re-open

Case, stating that the parties were unable to resolve the

issues. The motion was granted, and the case was re-opened and

assigned DOAH Case No. 08-1432PL. The final hearing was

scheduled for May 8, 2008. On April 21, 2008, the Department

filed Petitioner’s Motion to Continue Final Hearing. The motion

was granted, and the final hearing was re-scheduled for June 20,

2008.

At the final hearing, the Department called the following

witnesses: Mark Schulsemeyer, Clifford P. Stokes, Patrick J.

McDonough, David Bogenrief, and Jack S. Coleman. Petitioner’s

Exhibits 1 through 5, 8, 9, and 11 through 19 were admitted in

evidence. Petitioner’s Exhibits 7 and 20 were not admitted in

evidence.

At the final hearing, Mr. Calleja testified in his own

behalf. Respondent’s Exhibits 1, 2, and 3 were admitted in

evidence.

The two-volume Transcript was filed on July 21, 2008. The

parties agreed to file their proposed recommended orders within

ten days of the filing of the Transcript. The Department filed

its Proposed Recommended Order on July 29, 2008. As of the date

of this Recommended Order, Mr. Calleja has not filed a post-

hearing submittal.

FINDINGS OF FACT

1. At all times material to this proceeding, Mr. Calleja

had a valid and active license as a commercial certified

pool/spa contractor. His license number is CP 1456568. At all

times material to this proceeding, Mr. Calleja was the owner of

or did business as Nautica Pools & Spa (Nautica).

2. The Board is charged with regulating the practice of

contracting in the State of Florida pursuant to Chapters 455

and 489, Florida Statutes.

3. On April 2, 2005, Mr. Calleja, as the representative

for Nautica, entered into a contract with Jack Coleman to

renovate Mr. Coleman’s existing pool.

4. From April 2005 to July 27, 2005, Nautica installed

rebar in the pool and set a new skimmer. Nautica subcontracted

with Prestige Gunite of Melbourne, Inc. (Prestige), to put the

gunite in the pool. Gunite is concrete that is sprayed out of a

hose to form the walls of the pool.

5. Personnel from Prestige arrived on the project site on

the afternoon of July 27, 2005, to apply the gunite, but did not

do so because the application would have taken longer to do than

one afternoon. The following day, July 28, 2005, Mr. Calleja

and a crew from Prestige returned to the project. A

representative from Prestige told Mr. Calleja that the steel

rebar had not been laid properly. Mr. Calleja told Prestige to

apply the gunite and do what was necessary to cover the steel.

Mr. Calleja left the project site, and Prestige began applying

the gunite.

6. During the application of the gunite, it became evident

that the first spraying of gunite was not going to cover the

steel. Attempts were made to reach Mr. Calleja, but Mr. Calleja

was not available to solve the problem. Prestige began applying

additional coats of gunite in an attempt to cover the steel.

7. After the gunite was applied, two problems were

identified. The first problem was in the fountain area. The

gunite had not been applied properly, and there were hollow

areas. The second problem was in the wet deck area. The steel

rebar was too close to the surface of the floor, and the steel

was visible. In order to remedy the problems, the concrete in

the areas would have to be jack hammered to remove the concrete,

and new gunite would have to be applied.

8. By letter dated August 28, 2005, Nautica requested

Mr. Coleman to pay Prestige $954.57. Nautica advised

Mr. Coleman that when that amount had been paid, Nautica would

pay the balance owed to Prestige and forward a release to

Mr. Coleman. Mr. Calleja claimed that Mr. Coleman owed the

$954.57 because Mr. Coleman had damaged Mr. Calleja’s saw. In

the letter, Nautica acknowledged that there was additional work

which had not been completed. The letter was signed by

Mr. Calleja’s wife. Mr. Calleja had verbally told Mr. Coleman

that he wanted Mr. Coleman to pay him $2,000.00, and he would

take care of paying Prestige.

9. The general specifications in the contract required

that the contractor was responsible for “[s]tandard structural

engineering plans and permits required by code.” Prior to

commencing work on the pool renovation, Mr. Calleja did not

secure the required building permits for the project.

10. Mr. Coleman called Clifford Stokes, who is the

building official with the town of Indialantic, and asked

whether a permit had been issued. Mr. Stokes went to the

project site. At that time, the gunite had been shot, and there

was exposed steel rebar. Since no permit had been pulled, no

inspection had been done after the steel was put in place.

11. On September 15, 2005, Mr. Calleja applied for a

building permit. Because the steel had been placed, and the

gunite shot, it was impossible to do a visual inspection to

determine whether the steel had been placed properly. In order

to get a permit after the construction had been commenced,

certain affidavits had to be submitted to the building official

of Indiatlantic. Mr. Calleja had to submit an affidavit stating

that the steel had been placed properly. An affidavit stating

that the work had been performed properly had to be submitted

from an engineer, who had made a site visit to the project and

had determined that the work performed had been according to

code. Additionally, Mr. Coleman was required to submit an

affidavit that stated that he understood that no inspection had

been done of the work by the building official. Mr. Calleja

also had to pay a fine to Indiatlantic for commencing work

without a building permit.

12. On October 19, 2005, Mr. Calleja and Robert Lee from

Lee Engineering came to the project site for the purpose of

preparing the affidavits necessary to secure a building permit.

Mr. Calleja did not return to the project site after October 19,

2005.

13. Mr. Coleman sent a letter to Mr. Calleja dated

October 13, 2005, noting that no work had been done on the

project since July 28, 2005, and requesting that Mr. Calleja

remedy a number of deficiencies with the work performed on the

project and complete the job in accordance with the contract.

The letter was returned to Mr. Coleman by the postal service

because the time for forwarding mail from the address listed in

the letter had expired. When Mr. Calleja came to the project

site on October 19, 2005, Mr. Coleman requested a current

address from Mr. Calleja, but Mr. Calleja refused to give him

one.

14. Mr. Coleman wrote another letter to Mr. Calleja dated

October 25, 2005, again stating that no work had been done since

July 28, 2005, and requesting that Mr. Calleja correct the

deficiencies in the work and complete the contract.

15. Mr. Coleman filed an action in small claims court

attempting to recover the money for the lien filed by Prestige.

However, Nautica had filed for bankruptcy, and Mr. Coleman did

not proceed with the small claim action.

16. A building permit for the project was issued in

January 2006. The issuance of the building permit did not

relieve Mr. Calleja from the responsibility of assuring that the

work in the shallow end of the pool area where the rebar was

sticking up was redone properly. After the building permit was

issued, neither Mr. Calleja nor Mr. Coleman called for

inspections by the Indiatlantic building official. The permit

expired in June 2006.

17. After the issuance of the building permit, Nautica

performed no further work on the project.

18. The total contract price was $9,340.00. Mr. Coleman

and Mr. Calleja entered into an addendum to the contract on

July 27, 2005, which increased the contract price to $13,000.00.

19. The contract called for a down payment of $934.00,

which was ten percent of the contract amount. After completion

of excavation and the form and steel work, a payment of

$3,736.00 was due, representing 40 percent of the total work.

After completion of the pool shell, a payment of $2,802.00 was

due, representing 30 percent of the total work. Prior to

plastering, which represented 20 percent of the total work, a

payment of $1,868.00 was to be paid. The contract addendum of

$3,660.00 called for 50 percent of the addendum amount to be

paid at the completion of the pool shell, and the remaining

50 percent of the addendum amount was to be paid at the

completion of the pool.

20. By check dated April 22, 2005, signed by Mr. Coleman’s

wife, Mr. Coleman paid Mr. Calleja $1,000.00 as down payment on

the project. In June 2005, Mr. Coleman gave Mr. Calleja a check

for $573.42 for a pool and spa light. Mr. Coleman was to

receive a credit of $380.00 toward the contract for the light.

Additionally, Mr. Coleman overpaid Mr. Calleja by $166.90. By

check dated July 27, 2005, and signed by Mr. Coleman’s wife,

Mr. Coleman paid Mr. Calleja $7,396.00. This payment was to

include half of the addendum amount, but Mrs. Coleman

inadvertently included the full amount of the addendum. By

check dated August 1, 2005, and signed by Mrs. Coleman,

Mr. Coleman paid Mr. Calleja $739.10. Thus, by August 1, 2005,

Mr. Coleman had paid Mr. Calleja, $9,682.00 on the contract.

21. In December 2005, Mr. Coleman asked a representative

of Paradise Pools, Patrick McDonough, to come to the project

site and give an estimate to complete the pool. The estimate of

$7,800.00 from Paradise Pools was for a cosmetic plaster of the

existing pool, and the work was not warranted against leakage.

Mr. McDonough would not warrant the work, because he saw a lot

of potential liability problems with the work performed by

Mr. Calleja. Mr. McDonough did not recommend that a cosmetic

plaster be performed because of the potential problems.

22. On October 26, 2005, Prestige filed a Claim of Lien

against the property of Mr. Coleman for $4,227.40 plus interest,

costs, and attorney’s fees. The lien was for the work which

Prestige had performed on the project on July 28, 2005, and for

which Mr. Calleja had failed to pay. Mr. Coleman called

Mr. Calleja and told him that a lien had been filed.

Mr. Calleja assured him that he would pay the lien, but he

failed to do so. Mr. Coleman satisfied the lien by check dated

April 11, 2006, for the amount of $5,139.58.

23. David Bogenrief, P.E., viewed the project in June 2008

and provided Mr. Coleman with a quote to develop structural

plans to repair Mr. Coleman’s pool. There was no testimony on

the amount of the quote, and the Department did not request that

the written proposal be admitted in evidence. Mr. Bogenrief did

not know what it would cost to repair the pool.

24. The Department has incurred $470.49 for costs in the

prosecution of this case.

CONCLUSIONS OF LAW

25. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat. (2007).

26. The Department has the burden to establish the

allegations in the Administrative Complaint by clear and

convincing evidence. Department of Banking and Finance v.

Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996). The

Department alleges that Mr. Calleja violated Subsections

m),

and 489.129(1)(o), Florida Statutes, which provide:

(1) The board may take any of the following

actions against any certificateholder or

registrant: place on probation or reprimand

the licensee, revoke, suspend, or deny the

issuance or renewal of the certificate,

registration, or certificate of authority,

require financial restitution to a consumer

for financial harm directly related to a

violation of a provision of this part,

impose an administrative fine not to exceed

$10,000 per violation, require continuing

education, or assess costs associated with

investigation and prosecution, if the

contractor, financially responsible officer,

or business organization for which the

contractor is primary qualifying agent, a

financially responsible officer, or a

secondary qualifying agent responsible under

s. 489.1195 is found guilty of any of the

following acts:

* * *

(g) Committing mismanagement or misconduct

in the practice of contracting that causes

financial harm to a customer. Financial

mismanagement or misconduct occurs when:

1. Valid liens have been recorded against

the property of a contractor’s customer for

supplies or services ordered by the

contractor for the customer’s job; the

contractor has received funds from the

customer to pay for supplies or services;

and the contractor has not had the liens

removed from the property, by payment or by

bond, within 75 days after the date of such

liens;

2. The contractor has abandoned a

customer’s job and the percentage of

completion is less than the percentage of

the total contract price paid to the

contractor as of the time of abandonment,

unless the contractor is entitled to retain

such funds under the terms of the contract

or refunds the excess funds within 30 days

after the date the job is abandoned;

* * *

(j) Abandoning a construction project in

which the contractor is engaged or under a

contract as a contractor. A project may be

presumed abandoned after 90 days if the

contractor terminates the project without

just cause or without proper notification to

the owner, including the reason for

termination, or fails to perform work

without just cause for 90 consecutive days.

* * *

(m) Committing incompetency or misconduct

in the practice of contracting.

* * *

(o) Proceeding on any job without obtaining

applicable local building department permits

and inspections.

27. The Department has established by clear and convincing

evidence that Mr. Calleja violated Subsection 489.129(1)(g)1.,

Florida Statutes, by failing to satisfy the lien, which Prestige

filed against the property of Mr. Coleman for work and materials

which were furnished on the project. Mr. Calleja had received

the payment from Mr. Coleman for the work and materials

furnished by Prestige, but failed to pay Prestige for them.

28. The Department has established by clear and convincing

evidence that Mr. Calleja violated Subsection 489.129(1)(g)2.,

Florida Statutes, by abandoning the project when the percentage

of completion is less than the total of the contract price which

had been paid to him. The last work that Mr. Calleja actually

did on the project was on July 28, 2005. No further work could

be done on the project until a building permit was obtained. He

did take action between September 2005 and January 2006 to get a

building permit. Mr. Calleja did nothing further on the

contract after the building permit was issued in January 2006.

Mr. Coleman had paid Nautica $9,682.00, which represented

approximately 75 percent of the contract amount. The pool shell

had not been completed at the time that Mr. Calleja abandoned

the project because the work was deficient. Thus, the contract

completion was 40 percent.

29. The Department has established by clear and convincing

evidence that Mr. Calleja violated Subsection 489.129(1)(j),

Florida Statutes, by abandoning the project for over 90 days and

failing to provide just cause to terminate work on the project.

Mr. Calleja never performed any work on the project after the

building permit was issued in January 2006 and never provided

just cause for failing to terminate work on the project.

30. The Department has established by clear and convincing

evidence that Mr. Calleja violated Subsection 489.129(1)(m),

Florida Statutes. Mr. Calleja failed to obtain a building

permit prior to commencing work on the project.

31. The Department has established by clear and convincing

evidence that Mr. Calleja violated Subsection 489.129(1)(o),

Florida Statutes. Mr. Calleja did not obtain a final inspection

of the project.

32. Florida Administrative Code Rule 61G4-17.001 provides

for the penalty ranges for disciplinary actions taken by the

Department. The penalty for a violation of Subsection

489.129(1)(g) ranges from a $1,500.00 fine and/or probation or

suspension to a $5,000.00 fine and/or probation or suspension.

The penalty for a violation of Subsection 489.129(1)(j), Florida

Statutes, ranges from a $2,500.00 fine and/or probation or

suspension to a $7,500.00 fine and/or probation or suspension.

The penalty for a violation of Subsection 489.129(1)(m), Florida

Statutes, ranges from a $1,000.00 fine and/or probation or

suspension to a $5,000.00 fine and/or probation or suspension.

The penalty for a violation of Subsection 489.129(1)(o), Florida

Statutes, ranges from a $250.00 fine to a $1,000.00 fine and/or

probation or suspension. Additionally, Florida Administrative

Code Rule 61G4-17.001(5) provides that the Board may require the

contractor to make restitution to the extent of the financial

harm sustained by the consumer.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered finding

that Mr. Calleja did not violate Subsection 489.119(2), Florida

Statutes, and that Mr. Calleja violated Subsections

m),

and 489.129(1)(o), Florida Statutes; for the violation of

Subsection 489.129(1)(g)1., Florida Statutes, imposing a fine of

$2,000.00, suspending Mr. Calleja's license for six months, and

requiring Mr. Calleja to pay Mr. Coleman $5,139.58 as

restitution for the payment of the lien filed by Prestige; for

the violation of Subsection 489.129(1)(g)2., Florida Statutes,

imposing a fine of $2,000.00, suspending Mr. Calleja's license

for six months, and requiring Mr. Calleja to pay Mr. Coleman

$9,682.00, which represents the amount that Mr. Coleman paid to

Mr. Calleja; for the violation of Subsection 489.129(1)(j),

Florida Statutes, imposing a $1,000.00 fine and four years of

probation; for the violation of Subsection 489.129(1)(m),

Florida Statutes, imposing a $1,000.00 fine and four years of

probation, which shall run concurrently with the other probation

imposed; and, for the violation of Subsection 489.129(1)(o),

Florida Statutes, imposing a $1,000.00 fine and two years of

probation to run concurrently with the other probation imposed;

and requiring payment of $470.49 as costs for the prosecution of

this case.

DONE AND ENTERED this 29th day of August, 2008, 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

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 29th day of August, 2008.

ENDNOTE

1/ Unless otherwise indicated, all references to Florida

Statutes are to the 2005 version.

COPIES FURNISHED :

Tino Gonzalez, Esquire

1600 Sarno Road, Suite 1

Melbourne, Florida 32935

Scott A. Smothers, Esquire

Robert A. Crabill, Esquire

Wright, Fulford, Moorhead & Brown, P.A.

Post Office Box 2828

Orlando, Florida 32801-2828

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

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

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.