97-004810 Construction Industry Licensing Board vs. Lawrence C. Bright Status: Closed Recommended Order on Tuesday, February 3, 1998.

Summary: Contractor disciplined for failure to satisfy judgment against business he qualified and for filing of valid lien by subcontractor against customer's property.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) Case No. 97-4810

)

LAWRENCE C. BRIGHT, )

)

Respondent. )

______________________________________)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings

by its duly designated Administrative Law Judge, William J.

Kendrick, held a formal hearing in the above-styled case on

December 22, 1997, in Miami, Florida.

APPEARANCES

For Petitioner: Dorota Trzeciecka, Esquire

Department of Business and

Professional Regulation

401 Northwest Second Avenue, Suite N-607

Miami, Florida 33128

For Respondent: D. S. "Dar" Airan, Esquire

Airan and Associates, P.A.

275 Southwest 13th Street

Miami, Florida 33130

STATEMENT OF THE ISSUES

At issue in this proceeding is whether Respondent committed

the offenses set forth in the Administrative Complaint and, if

so, what penalty should be imposed.

PRELIMINARY STATEMENT

By a four-count Administrative Complaint, Petitioner charged

Respondent was guilty of violating the provisions of Section

489,129(l)(h)1, 489.129(l)(j), 489.129(l)(n), and 489.129(l)(r),

Florida Statutes, when liens were recorded against the property

of a customer for supplies or services even though the customer

had previously supplied the contractor with funds to pay for the

supplies or services; and, when Respondent failed to satisfy the

terms of a civil judgment obtained against the business

organization he had qualified.

Respondent filed an election of rights, as well as an answer

to the Administrative Complaint, whereby he contested the

material facts alleged in the Administrative Complaint and

requested a formal hearing. Consequently, in October 1997 the

matter was referred to the Division of Administrative Hearings

for the assignment of an administrative law judge to conduct a

formal hearing pursuant to Sections 120.569 and 120.57(1),

Florida Statutes.

At hearing, Petitioner called Raul Hernandez, the son of the

customer, and Theodore Gay, as witnesses. Petitioner's Exhibits

1 through 15 have been received into evidence. 1 Respondent,

Lawrence C. Bright, testified on his own behalf, but offered no

exhibits.

The transcript of the hearing was filed on January 6, 1998,

and the parties were accorded twenty days from that date to file

proposed recommended orders. Consequently, the parties waived

the requirement that a recommended order be rendered within

thirty days after the transcript is filed. Rule 60Q-2.031,

Florida Administrative Code. Petitioner elected to file such a

proposal, and it has been duly considered in the preparation of

this recommended order.

FINDINGS OF FACT

1. Petitioner, Department of Business and Professional

Regulation, Construction Industry Licensing Board (Department),

is a state government licensing and regulatory agency charged

with the duty and responsibility to prosecute administrative

complaints pursuant to the laws of the State of Florida, in

particular Section 20.165, Florida Statutes, and Chapters 120,

455, and 489, Florida Statutes, and the rules promulgated

pursuant thereto.

2. At all times material hereto, Respondent, Lawrence C.

Bright, was licensed by the Department as a certified general

contractor, having been issued license number CG C032808, and was

the qualifying agency for Briden Enterprises, Inc. (Briden). 2

3. In May 1995, Raul Hernandez, Sr., suffered storm damage

to his residence at 341 Northwest 63rd Court, Miami, Florida.

Consequently, Mr. Hernandez filed a claim with his insurance

carrier, Bankers Insurance (Bankers).

4. Briden, on behalf of Bankers, inspected the property and

by letter of June 13, 1995, provided Bankers with a written

estimate to repair the damage. The scope of the work included

the replacement of two roofs, a solar-panel, and awnings,

together with other miscellaneous work. The cost was stated to

be $13,264.20.

5. Following the inspection, Mr. Hernandez employed Briden

to undertake the needed repairs, as detailed in the written

estimate. The insurance carrier was notified of its employment,

and Bankers forwarded to Briden a check in the sum of $18,988,

which named Briden and Mr. Hernandez as joint payees. 3

6. On or about June 20, 1995, Briden's representative

brought the check to Mr. Hernandez's residence. Mr. Hernandez

endorsed the check and delivered it to the representative. In

exchange, Mr. Hernandez received a check drawn on a Briden

account for $9,494, and payable to "Raul Hernandez and Briden

Enterprises, Inc." 4 The stated purpose of this check, as noted

on its face, was "For 50% Retainer"; however, no further

explanation appears of record.

7. Briden employed Roberts Roofing, Inc. (Roberts Roofing),

to do the roof repair work. That work was satisfactorily

completed in or about October 1995. As for the other repairs,

Briden did not undertake them, nor did it return any of the money

it had received from Mr. Hernandez.

8. On or about November 28, 1995, Roberts Roofing filed a

claim of lien in the public records of Dade County, Florida. The

claim of lien charged that, pursuant to an agreement with Briden,

Roberts Roofing had installed a new roof on Mr. Hernandez's

residence for $7,200, and that $2,523.50 remained unpaid.

9. Following unsuccessful demands on Briden to make the

agreed repairs and pay Roberts Roofing, and later demands to

return the money owing to him, Mr. Hernandez filed a complaint in

February 1996 against Briden in the Circuit Court, Dade County,

Florida. That complaint sought judgment based on the following

allegations:

5. On or about June 20, 1995, Defendant

represented to Plaintiff that Defendant could

provide construction services to repair

Plaintiff's residence.

6. Defendant fraudulently represented to

Plaintiff the amounts and type of work which

would be performed on the project, the costs

associated therewith and requested payment

pursuant to said misrepresentations.

* * *

8. Plaintiff relied on Defendant's

misrepresentations by making payment to

Defendant for the construction services in

the amount of $18,988.00. From the payment

received by Defendant, Plaintiff acknowledges

that Defendant paid $4,678.00 to a third

party to accomplish the repair of the roof at

Plaintiff's residence. The full cost for the

roofing services was $7,200.00. As a result

of Defendant's failure to pay the full

amount, the third party has filed a lien

against Plaintiff's property for $2,522.00.

9. Defendant has failed to provide the

represented construction services, and, as a

result, Plaintiff has sustained damages in an

amount of $14,310.00 and has had title to his

residence liened.

10. On May 16, 1996, a final default judgment was entered

for Mr. Hernandez and against Briden. That judgment provided

that Mr. Hernandez recover from Briden damages of $14,311.50 and

costs of $189.00. Neither Briden nor Respondent paid the

judgment, and it remains unsatisfied to date.

11. Having failed to receive payment, Roberts Roofing filed

a complaint on July 11, 1996, against Mr. Hernandez to foreclose

its lien.

12. While that suit was pending, Mr. Hernandez filed a

claim under the Construction Industries Recovery Fund. Sections

489.140, et seq ., Florida Statutes. That claim was approved in

February 1997, and Mr. Hernandez was paid $14,311.50. 5

13. Following recovery from the fund, Mr. Hernandez paid

Roberts Roofing the unpaid balance it claimed, and Roberts

Roofing released its lien.

CONCLUSIONS OF LAW

14. The Division of Administrative Hearings has

jurisdiction over the parties to, and the subject matter of,

these proceedings. Sections 120.569, 120.57(1), and 120.60(5),

Florida Statutes (1997).

15. Where, as here, the Department proposes to take

punitive action against a licensee, it must establish grounds for

disciplinary action by clear and convincing evidence. Section

120.57(1)(h), Florida Statutes (1997), and Department of Banking

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

"The evidence must be of such weight that it produces in the mind

of the trier of fact a firm belief or conviction, without

hesitancy, as to the truth of the allegations sought to be

established." Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th

DCA 1983). Moreover, the disciplinary action taken may be based

only upon the offenses specifically alleged in the administrative

complaint. See Kinney v. Department of State , 501 So. 2d 129

(Fla. 5th DCA 1987); Sternberg v. Department of Professional

Regulation, Board of Medical Examiners , 465 So. 2d 1324 (Fla. 1st

DCA 1985); and Hunter v. Department of Professional Regulation ,

458 So. 2d 844 (Fla. 2d DCA 1984). Finally, in determining

whether Respondent violated the provisions of section 489.129(1)

as alleged in the Administrative Complaint, one "must in bear

mind that it is, in effect, a penal statute. . . . This being

true, the statute must be strictly construed and no conduct is to

be regarded as included within it that is not reasonably

proscribed by it." Lester v. Department of Professional

Occupational Regulation , 348 So. 2d 923, 925 (Fla. 1st DCA 1977).

16. Respondent's liability in this case is premised on the

responsibilities he assumed as the qualifying agent for Briden.

As the qualifying agent for Briden from May 5, 1992, until May 2,

1996, Respondent was "responsible for supervision of all

operations of the business organization; for all field work at

all sites; and for financial matters, both for the organization

in general and for each specific job." Section 489.1195(1)(a),

Florida Statutes. Moreover, following his resignation,

Respondent remained "responsible, even after . . . [the] . . .

change in status, for matters for which he was responsible" as

the qualifier for Briden. Section 489.1195(3)(d), Florida

Statutes. 6

17. Pertinent to this case, Section 489.129, Florida

Statutes (Supp. 1996), provides:

(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 or registration, 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 $5,000

per violation, require continuing education,

or assess costs associated with investigation

and prosecution, if the contractor,

financially responsible office, or business

organization for which the contractor is a

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:

* * *

(h) 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 the 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;

* * *

(j) Failing in any material respect to

comply with the provisions of this part or

violating a rule or lawful order of the

board.

* * *

(n) Committing incompetency or misconduct

in the practice of contracting.

* * *

(r) Failing to satisfy within a reasonable

time, the terms of a civil judgment obtained

against the licensee, or the business

organization qualified by the licensee,

relating to the practice of the licensee's

profession.

18. Here, the proof demonstrates with the requisite degree

of certainty, that while Briden had received adequate funds from

the customer to pay for the re-roofing, it failed to pay its

subcontractor the full cost for its work. That failure resulted

in a valid lien being recorded against the customer's property,

which was not removed within 75 days of recording. Consequently,

Respondent, as the qualifier of Briden, was shown to have

violated the provisions of Subsection 489.129(1)(h), Florida

Statutes, as alleged in Count I of the Administrative Complaint.

19. With regard to the charges that Respondent violated

subsections 489.129(1)(j) and (n), the proof demonstrates that

Respondent, contrary to the requirements placed on him as the

qualifier of Briden, failed to supervise all operations of

Briden, including work at the Hernandez site, and failed to

supervise financial matters, for both Briden in general and the

Hernandez job. Consequently, Respondent has been shown to have

violated the provisions of Subsections 489.129(1)(j) and (n),

Florida Statutes, as alleged in Counts II and III of the

Administrative Complaint; however, since the violations are

premised on the same facts, they should be considered one

violation when penalties are considered.

20. Finally, the proof clearly demonstrates that a civil

judgment was obtained against the business organization qualified

by Respondent, and that the judgment related to the practice of

contracting. Given the time that has elapsed since the entry of

the judgment, and Respondent's failure to satisfy the judgment in

whole or in part, it must be concluded that Respondent has been

shown to have violated the provisions of Subsection

489.129(1)(r), Florida Statutes, as alleged in Count IV of the

Administrative Complaint. See Rule 61G4-17.001(23), Florida

Administrative Code. See also Lewis v. Department of Business

and Professional Regulation, Construction Industry Board ,

23 Fla. L. Weekly D 184 (Fla. 2d DCA 1998).

21. Having reached the foregoing conclusions, it remains to

resolve the appropriate penalty that should be imposed.

Pertinent to this issue, Rule 61G4-17.001, Florida Administrative

Code, provides, absent aggravating or mitigating circumstances,

the following disciplinary guidelines for a violation of the

provisions of Chapter 489 alleged in the Administrative

Complaint:

(8)489.129(1)(h): Mismanagement or

misconduct causing financial harm to the

customer. First violation, $750 to $1,500

fine and/or probation; repeat violation,

$1,500 to $5,000 fine and/or probation,

suspension or revocation.

* * *

(10)489.129(1)(j): Failing in any material

respect to comply with the provisions of

Part I of Chapter 489.

* * *

2. Where violation is other than described

in (1), $5,000.00. Repeat violation under

any circumstances, $500 to $1,500 fine and/or

probation, suspension, or revocation.

* * *

(14) Misconduct or incompetency in the

practice of contracting as set forth in

Section 489.129(1)(n), Florida Statutes,

shall include, but is not limited to:

* * *

(b) Violation of any provision of

Chapter 61G4, Florida Administrative Code, or

Chapter 489, Part I, F.S.

* * *

(d) The following guidelines shall apply

to cases involving misconduct or incompetency

in the practice of contracting, absent

aggravating or mitigating circumstances:

* * *

2. Violation of any provision of Chapter

61G4, Florida Administrative Code, or

Chapter 489, Part I, F.S. First violation,

$500 to $1,000 fine; repeat violations,

$1,000 to $5,000 fine and/or probation,

suspension, or revocation. . . .

* * *

(18) Failure to satisfy a civil judgment

obtained against the licensee or the business

organization qualified by the licensee within

a reasonable time. First violation, $500 to

$1,000 fine and/or proof of satisfaction of

civil judgment; repeat violation, $1,000 to

$5,000 fine and/or proof of satisfaction of

civil judgment, probation, suspension, or

revocation.

22. The version of Rule 61G4-17.001(10) in effect at the

time of the violations in this case did not include a penalty

that would encompass a violation of Subsection 489.1195(1)(a),

Florida Statutes. The rule did provide, however, that the

absence of a reference to a violation would be viewed as an

oversight, and the penalty for the offense most closely

resembling the omitted violation would apply. Here, the

violation most closely resembling a violation of subsection

489.1195(1)(a) would be a violation of Subsection 489.129(1)(n),

Florida Statutes. Given such circumstances, the violation of

subsection 489.1195(1)(a) will only support one penalty.

23. According to Rule 61G4-17.002, Florida Administrative

Code, the circumstances which may be considered in mitigation or

aggravation of the penalty include, but are not limited to, the

following:

(1) Monetary or other damage to the

licensee's customer, in any way associated

with the violation, which damage the licensee

has not relieved, as of the time the penalty

is to be assessed. (This provision shall not

be given effect to the extent it would

contravene federal bankruptcy law.)

(2) Actual job-site violations of building

codes, or conditions exhibiting gross

negligence, incompetence, or misconduct by

the licensee, which have not been corrected

as of the time the penalty is being assessed.

(3) The severity of the offense.

(4) The danger to the public.

(5) The number of repetitions of offenses.

(6) The number of complaints filed against

the licensee.

(7) The length of time the licensee has

practiced.

(8) The actual damage, physical or

otherwise, to the licensee's customer.

(9) The deterrent effect of the penalty

imposed.

(10) The effect of the penalty upon the

licensee's livelihood.

(11) Any efforts at rehabilitation.

(12) Any other mitigating or aggravating

circumstances.

24. Petitioner's proposed recommended order suggests, as a

penalty for the violations found, the imposition of a $3,500

fine; a two year term of probation, subject to the conditions of

Rule 61G4-12.008(5), Florida Administrative Code; and the

assessment of the reasonable costs of investigation and

prosecution. 7 These proposals are consistent with the provisions

of Section 489.129(1), Florida Statutes, the penalty guidelines

established by Rule 61G4-17.001, Florida Administrative Code, and

the mitigation or aggravation factors established by Rule 61G4-

17.002, Florida Administrative Code, and are accepted as

appropriate under the circumstances of this case.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a Final Order be entered finding Respondent

guilty of the violations alleged in Counts I, II, III, and IV of

the Administrative Complaint, and imposing as a penalty for such

violations a $3,500 administrative fine; a two year term of

probation, subject to the conditions of Rule 61G4-12.008(5),

Florida Administrative Code; and the payment of the reasonable

costs of investigation and prosecution. 8

DONE AND ENTERED this 3rd day of February, 1998, in

Tallahassee, Leon County, Florida.

___________________________________

WILLIAM J. KENDRICK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this erd day of February, 1998.

ENDNOTES

1/ At hearing, Petitioner's Exhibit 4, a copy of a certification

of Respondent's licensure information was marked for

identification, with an original certification to be filed with

the Division of Administrative Hearings. An original

certification was filed January 29, 1998, and was appended to the

document marked Petitioner's Exhibit 4 at hearing. Petitioner's

Exhibit 4 was then received in evidence.

At hearing, ruling was deferred on the admission of Petitioner's

Exhibits 3, 8, and 9. Upon consideration, Exhibit 3 is received

for the purpose of demonstrating that a foreclosure action was

filed, and Exhibit 8 is received to demonstrate notice to the

owner of a claim of lien. Otherwise, Exhibits 3 and 8, as well as

Exhibit 9, are received subject to the provisions of Sections

120.569(2)(e) and 120.57(1)(c), Florida Statutes.

Petitioner's Exhibits 6, 7, 14, and 15 were admitted without

objection. The remaining exhibits, Petitioner's Exhibits 1, 2, 5,

10, 11, 12, and 13, were received in evidence subject to the

provisions of Sections 120.569(2)(e) and 120.57(1)(c), Florida

Statutes, and any additional limitations noted of record.

2/ Respondent was the qualifying agent for Briden Enterprises,

Inc., from May 5, 1992, until May 2, 1996. (Petitioner's

Exhibit 4.)

3/ According to Petitioner's Exhibit 6, the cost of the work

Briden was to perform totalled $13,264.20. Subtracting this

amount from the amount tendered by Bankers ($18,988) leaves a

balance of $5,723.80. What loss, if any, these funds were

intended to address does not appear of record.

4/ There is no explanation of record for this unusual

transaction. Notably, there is no explanation as to why Briden

retained, as part of the proceeds from the Banker's check, the

$5,723.80 that was unassociated with any repair work Briden was to

perform. Moreover, the check delivered to Mr. Hernandez by Briden

was without value, absent endorsement by Briden, and unless

adequate funds were on deposit to honor the check.

5/ As a result of that payment, Respondent's license was

suspended until repayment of the money paid by the fund.

Section 489.143(6), Florida Statutes.

6/ In an apparent attempt to divorce himself from the failures of

Briden on the project at issue, Respondent averred that he was

hired by Briden, on a fixed salary, to be the qualifying agent for

the company and to supervise construction. (Tr., pages 62 and

63.) According to Respondent, he exercised no control over the

finances of the company. (Tr., page 66.) That arrangement was,

however, contrary to the statutory duties and obligations he

assumed as Briden's qualifier; and his acquiescence in being

excluded from control of the company's finances is no defense to

the charges.

As for the other problems associated with the project, Respondent

simply avers that he had no knowledge of the project until after

Mr. Hernandez had filed a complaint with the Department, which

complaint was filed on or about August 23, 1996. (Petitioner's

Exhibits 12 and 15.) To explain his lack of knowledge, Respondent

responded to the following question with the following vague

observations:

Q. What happened that made it so that you

could not keep control of the jobs like this

one?

A. Well, after Hurricane Andrew, there was

so much work that came in, a lot of the jobs

-- they would sign a job. If it was not

involved in a direct permitted job of Briden

Enterprises, a lot of the times I -- they

would not tell me even about the job.

If an estimator went out and signed a job

and brought it in to one of the owners of the

company, I had no knowledge of it. The job

would get completed and I never saw it.

(Tr., page 63.)

Confusion that may have been associated with the aftermath of

Hurricane Andrew, which struck South Florida in August 1992, is

not a relevant consideration to the lack of supervision on this

project, which was undertaken in June 1995. The circumstances

under which Respondent would or would not be informed of a project

do not excuse his failings in this case. Had he supervised the

business of the company, including its finances, as required by

law, irregularities such as those which occurred on this project,

and apparently on other projects as well, should not have

occurred.

7/ Petitioner's proposed recommended order also suggests that

Respondent be ordered to "make restitution to the Construction

Industries Recovery Fund in the amount of $14,311.50." The

imposition of such a penalty is, however, beyond the agency's

authority. In so concluding, it is observed that Subsection

489.129(1), Florida Statutes, circumscribes the agency's authority

to impose penalties. The only authority to require restitution is

to "a consumer for financial harm directly related a violation of

a provision of this part." Here, the "consumer" was Mr.

Hernandez, not the Department. Consequently, the agency has no

authority to mandate, as a penalty in this case, restitution to

the Construction Industries Recovery Fund. Department of

Environmental Protection v. Puckett Oil Co. , 577 So. 2d 988, 992

(Fla. 1st DCA 1991) ("[A]n agency possess no inherent power to

impose sanctions, and . . . any such power must be expressly

delegated by statute."); and Willner v. Department of Professional

Regulation , 563 So. 2d 805, 806 (Fla. 1st DCA 1990), review denied

576 So. 2d 295 (Fla. 1991) ("[A] penalty . . . can only be upheld

if the legislative authority relied upon by the agency is

sufficiently specific to indicate a clear legislative intent that

the agency have authority to exact the penalty prescribed.") The

legislature has, however, addressed recovery by the Construction

Industries Recovery Fund under the provisions of Subsections

489.143(2) and (6), Florida Statutes.

8/ Rule 61G4-12.018, Florida Administrative Code, requires the

Department of Business and Professional Regulation to "submit to

the Board an itemized listing of all costs related to

investigation and prosecution of an administrative complaint when

said complaint is brought before the Board for final agency

action." Fundamental fairness requires that the Board provide

Respondent an opportunity to dispute and challenge the accuracy

and/or reasonableness of the itemization of investigative and

prosecutorial costs before the Board determines the amount of

costs Respondent will be required to pay.

COPIES FURNISHED:

Dorota Trzeciecka, Esquire

Department of Business and

Professional Regulation

401 Northwest 2nd Avenue, Suite N-607

Miami, Florida 33128

D. S. "Dar" Airan, Esquire

Airan and Associates, P.A.

275 Southwest 13th Street

Miami, Florida 33130

Mr. Lawrence C. Bright

7170 Harding Street

Hollywood, Florida 33024

Rodney Hurst, Executive Director

Construction Industry Licensing Board

7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

Lynda L. Goodgame, General Counsel

Department of Business and

Professional Regulation

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.