01-004668 Stephan A. Humphrey vs. Robert P. Ryan, Jr., D/B/A Personalized Homes Of Brevard, Inc., And Department Of Business And Professional Regulation, Construction Industry Licensing Board, Construction Industries Recovery Fund Status: Closed Recommended Order on Monday, April 29, 2002.

Summary: Petitioner signed contract to construct home with Respondent on February 7, 1993, and contract was supplemented on September 5, 1993; Petitioner not eligible for payment of claim from the Fund since it was executed prior to July 1, 1993.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STEPHAN A. HUMPHREY, )

)

Petitioner, )

)

vs. ) Case No. 01 - 4668

)

ROBERT P. RYAN, JR., d/b/a )

PERSONALIZED HOMES OF BREVARD, )

INC., AND DEPARTMENT OF )

BUSINESS AND PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOA RD, )

CONSTRUCTION INDUSTRIES )

RECOVERY FUND, )

)

Respondents. )

)

RECOMMENDED ORDER

A formal hearing was held in this case before Daniel M.

Kilbride, Administrative Law Judge, Division of Administrative

Hearings, on March 1, 2002, in Melbourne, Florida.

APPEARANCES

For Petitioner: Bruce M. Harris, Esquire

Gray, Harris & Robinson

Post Office Box 3068

Orlando, Florida 32802

For Respondent: Elise Matthes, Esquire

Department of Business

and Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 323 99 - 1039

For Respondent: Charles L. Curtis, Esquire

Robert Ryan, Jr. Doumar, Curtis, Cross,

Laystrom & Perloff

1177 Southeast Third Avenue

Fort Lauderdale, Florida 333 16

STATEMENT OF THE ISSUES

Whether Petitioner is eligible to recover from the

Construction Industries Recovery Fund, and, if so, in what

amount.

PRELIMINARY STATEMENT

Petitioner, Stephen A. Humphrey, applied for recovery from

the Construction Industries R ecovery Fund (the "Fund") pursuant

to the provisions of Section 489.141, Florida Statutes.

Petitioner's request was denied by an Order dated April 24,

1998. Petitioner filed a Notice of Appeal and a Request for a

Formal Hearing. The case was transferred to the Division of

Administrative Hearings ("DOAH"), and a hearing was scheduled

before the undersigned Administrative Law Judge ("ALJ"). At the

hearing, the parties announced that a settlement agreement had

been reached and that there were no material i ssues of disputed

fact for the ALJ to consider. In April 1999, the Construction

Industry Licensing Board (the "Board") approved the settlement

agreement. In September 2000, the Board entered a Final Order

approving Petitioner's Claim. The Board approved payment of

$25,000 to Petitioner from the Fund. Respondent, Robert P.

Ryan, appealed this final agency decision to the Fourth District

Court of Appeal. Respondent Ryan urged the appellate court to

dismiss Petitioner's claim as to Respondent Ryan. The c ourt

declined Respondent Ryan's invitation to dismiss the action, but

remanded the matter for a formal DOAH hearing. The case was

again transferred to DOAH and a formal hearing occurred on

March 1, 2002.

At the formal hearing, Petitioner testified in his own

behalf and 15 exhibits were entered into evidence. Respondent

Ryan presented the testimony of John Kingsley and offered

16 exhibits, each of which were entered into evidence. The

Board offered no exhibits or witnesses. A Transcript of the

proceedi ngs was filed, on March 29, 2002. Petitioner and

Respondent Ryan timely filed Proposed Recommended Orders. The

Board has not filed proposals as of the date of this Order.

Respondent Ryan's Motion for Entry of Recommended Order, filed

April 22, 2002, is denied as moot.

FINDINGS OF FACT

1. Petitioner entered into a contract with "Personalized

Homes" to build his home located in Brevard County, on

February 7, 1993. Jack Powell signed the contract on behalf of

Personalized Homes. This contract required s ubstantial

completion on or before September 15, 1993.

2. Respondent Ryan was the qualifying agent for

Personalized Homes, Personalized Homes Corporation, Personalized

Homes, Inc., and Personalized Homes of Brevard, Inc., during all

times relevant hereto.

3. Petitioner took the February 1993 Contract to the bank

which approved a construction loan. Petitioner used a portion

of the proceeds from the construction loan obtained in March

1993 to buy the lot upon which his house was eventually built.

4. Petit ioner could not have obtained the construction

loan or purchased the lot upon which he built his home without

the use of the February 1993 Contract.

5. Petitioner had architectural plans drawn up in

February/March 1993, after the February 1993 Contract wa s

signed.

6. Petitioner recorded in the official records of Brevard

County a Notice of Commencement of the construction of a home in

March 1993. The Notice of Commencement was for the plans drawn

up for the house after the February 1993 Contract was si gned.

No actual construction was begun under the original plans.

7. The initial plans were rejected and new plans were

prepared in the summer of 1993. Petitioner sought bids from

several contractors but settled on Personalized Homes to

complete the proj ect.

8. Petitioner and Personalized Homes, Inc., entered into

another written document relating to the construction of

Petitioner's home which was dated September 5, 1993. Jack

Powell and John Kingsley signed the September 5 Contract on

behalf of Persona lized Homes, Inc.

9. An application for a building permit for the

construction of Petitioner's house was filed on September 28,

1993, and construction commenced.

10. Problems developed from the construction of

Petitioner's house which led to Petitioner f iling a civil action

in C ircuit C ourt in Brevard County against persons and entities,

including Personalized Homes of Brevard, Inc., but not including

Respondent Ryan.

11. On August 6, 1996, Petitioner filed an Amended

Complaint against Jack Powell, John Kingsley, Personalized

Homes, Inc., and Personalized Homes of Brevard, Inc., but not

including Respondent Ryan. The Defendants each filed answers

and affirmative defenses stating that the February 7 Contract

was for financing purposes only and that the Se ptember 5

Contract was the applicable contract.

12. On January 8, 1998, the parties to the litigation

entered into a settlement agreement. Pursuant to the settlement

agreement, Jack Powell, John Kingsley, Personalized Homes, Inc.,

and Personalized Homes of Brevard, Inc., agreed to pay

Petitioner $17,500. Paragraph 13 of the settlement agreement

provides that Petitioner will not prosecute an administrative

claim against Jack Powell, John Kingsley, and Personalized Homes

of Brevard, Inc., including any cla ims with the Board. This

covenant expressly does not prohibit any claim against

Personalized Homes, Inc. Paragraph 13 further provides that

Petitioner "will not institute, maintain, prosecute or continue

to maintain or prosecute any claims against the li cense of

qualifying agent for Personalized Homes, Inc., Robert Ryan, with

the Construction Industry Licensing Board, however Humphrey

shall not be prohibited from pursuing any claim with regard to

the Construction Industry Recovery Fund."

13. While Respon dent Ryan was neither a named party in

Petitioner's prior civil action nor a signatory to the

settlement document effectuated therein, Respondent Ryan is

specifically mentioned in that document, and the document

specifically contemplates actions to be take n with regard to

Respondent Ryan and his license with the Board.

14. On January 9, 1998, a final judgment was entered in

which the court found: Personalized Homes, Inc., and Petitioner

entered into the September 5 Contract; Respondent Ryan was the

qualif ying agent for Personalized Homes, Inc., during the

construction of Petitioner's home; Personalized Homes, Inc.,

commenced construction on or after September 5, 1993; the

construction was defective and performed in such a way that

Personalized Homes, Inc., knowingly violated applicable state

and local building codes; Petitioner suffered damages in the

amount of $96,041.75; and the February 7 Contract was not

performed, was cancelled before performance began, and is not

related to the September 5 Contract.

1 5. However, in the prior civil action, Petitioner filed

pleadings with the court characterizing Petitioner's September

1993 written document as a supplement to the February 1993

Contract.

16. After the settlement of the civil action, Petitioner

filed a c laim with the Board in 1998 that sought payment of his

claim under Chapter 489, Florida Statutes, from the Fund based

upon Petitioner's unsatisfied judgment entered in the Circuit

Court action in Brevard County. A prerequisite for being paid a

claim from the Fund is to successfully obtain an order from the

Board. In Petitioner's claim that was filed with the Board,

Petitioner represented to the Board that the September 1993

written document is a supplement to the February 1993 Contract.

In the Board proc eeding in 1998, Petitioner's settlement was

made a part of that record.

17. Petitioner's claim was heard and denied by order of

the Board, dated April 24, 1998. The Board rejected the claim

when it found that (1) Petitioner's contract upon which the

clai m is based was entered into in February 1993 and his

contract pre - dates the effective date (July 1993) of the

Recovery Statute under which his claim is governed, and

(2) Petitioner waived his claim against the Fund according to

the terms of his settlement in the prior judicial action.

18. Petitioner requested a formal administrative

proceeding before DOAH relating to the Board's 1998 order.

Respondent Ryan was joined in that action which was, upon

Respondent Ryan's unopposed motion, abated and dismissed against

Respondent Ryan. No party in that action appealed the ALJ order

dismissing Respondent Ryan. The action was terminated by

administrative order in 2000 when the remaining parties advised

the ALJ that they had entered into a settlement agreement and

that there were no genuine issues of material fact and that

Petitioner was entitled to recover from the Fund. The Board

entered an order in 2000 reversing its 1998 order, adopted the

agreed settlement and entered an order approving Petitioner's

claim.

19. Respondent Ryan appealed this final agency decision

and the Fourth District Court of Appeal reversed the order

entered by the Board in 2000 and remanded the case for an

evidentiary hearing.

20. Respondent Ryan has filed motions seeking to dismiss

and abate this proceeding based upon the doctrines of the law of

the case and collateral estoppel. Those motions were denied

prior to the hearing and renewed at the formal hearing and again

are denied.

CONCLUSIONS OF LAW

21. The Division of Administrative H earings has

jurisdiction of the parties and the subject matter of this

proceeding. Section 120.569 and 120.57(1), Florida Statutes.

22. Section 489.141, Florida Statutes, provides in

pertinent part:

(1) Any person is eligible to seek

recovery form the Construction Industries

Recovery Fund after having made a claim and

exhausting the limits of any available bond,

cash bond, surety, guarantee, warranty,

letter or credit, or policy of insurance,

if:

(a) Such person has received final

judgment in a cou rt of competent

jurisdiction in this state in any action

wherein the cause of action was based on a

construction contract . . . where the

contract was executed . . . on or after

July 1, 1993 . . . .

23. The applicable contract in this proceeding is the

Construction Agreement executed February 7, 1993, as

supplemented on September 5, 1993.

24. Petitioner's arguments that the September 5, 1993,

document nullified the February 7, 1993, Contract or is a

separate contract from the February 7, 1993, Contracto r

Agreement are rejected.

25. A prerequisite for being paid a claim by the Fund is

to successfully obtain an order from the Board. There is no

basis shown in this record to recommend changing the findings or

conclusions of the Board's April 24, 1998, ord er.

26. The February 7, 1993, Contract makes Petitioner

ineligible to receive any recovery from the Fund under Section

489.141, Florida Statutes, since it was executed prior to

July 1, 1993.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Co nclusions

of Law, it is

RECOMMENDED that Petitioner's claim be denied.

DONE AND ENTERED this 29th day of April, 2002, in

Tallahassee, Leon County, Florida.

___________________________________

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administ rative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 29th day of Ap ril, 2002.

COPIES FURNISHED :

Charles L. Curtis, Esquire

Doumar, Curtis, Cross, Laystrom & Perloff

1177 Southeast Third Avenue

Fort Lauderdale, Florida 33316

Bruce M. Harris, Esquire

Gray, Harris & Robinson

Post Office Box 3068

Orlando, Florida 32802

Elise Matthes, Esquire

Department of Business

and Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 1039

Suzanne Lee, Executive Director

Construction Industry Licensing Board

Department of Business and

Professional Regulatio n

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Hardy L. Roberts, III, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

NOTICE O F 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.