02-000464 Lamont Silas And Claudette Silas vs. Department Of Business And Professional Regulation, Construction Industry Licensing Board, Construction Industries Recovery Fund And Louis Sclease, Iii Status: Closed Recommended Order on Wednesday, December 4, 2002.

Summary: Petitioners satisfied all the requirements for recovery from the Construction Industries Recovery Fund. Recommend approving maximum allowable recovery amount.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LAMONT SILAS AND CLAUDETTE )

SILAS, )

)

Petitioners, )

)

vs. ) Case No. 02 - 0464

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, CONSTRUCTION INDUSTRIES )

RECOVERY FUND AND LOUIS )

SCLEASE, III, )

)

Respondents. )

________________________________)

RECOMMENDED ORDER

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

on August 29, 2002, in Miami, Florida, before Errol H. Powell, a

desig nated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioners: Robert M. Sondak, Esquire

Cohen, Chase & Hoffman, P.A.

9400 South Dadeland Boulevard, Suite 600

M iami, Florida 33156

For Respondent

Sclease: Franklin L. Hileman, Esquire

2937 Southwest 27th Avenue

Suite 203 Grove Forest Plaza

Miami, Florida 33133

For Respondent

Department: E lise Matthes, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 1039

STATEMENT OF THE ISSUE

Whether Petitioners' claim for recovery from the

Construction Industries Recovery Fund should be approved.

PRELIMINARY STATEMENT

Lamont Silas and Claudette Silas (Petitioners) filed a claim

for recovery from the Construction Industries Recovery Fund

(Recovery Fund) for $43,199.67. The claim was granted for

$25,000.00, the maximum amount allowed. Louis Sclease, III

(Respondent Sclease) disputed the award and requested a hearing,

contending that Petitioners failed to allege or show that

Respondent Sclease had violated Subsection 489. 129(1)(g), (j), or

(k), Florida Statutes, as required by Subsection 489.141(1)(a),

Florida Statutes. 1 However, at the hearing before the Division of

Administrative Hearings, it was determined that the 1997

statutory provision of Section 489.129, Florida S tatutes, was the

correct statutory provision and, therefore, Respondent Sclease

contested whether he had violated Subsection 489.129(1)(d), (h),

(k), or (l), Florida Statutes (1997).

The Department of Business and Professional Regulation,

Construction Indu stry Licensing Board (Board) reviewed Respondent

Sclease’s request and determined that no issues of material fact

existed and held an informal hearing. At the informal hearing,

the Board determined that disputed issues of material fact

existed and ended i ts informal hearing to allow the matter to be

referred to the Division of Administrative Hearings. On

February 6, 2002, this matter was referred to the Division of

Administrative Hearings. By agreement of the parties, the focus

of the hearing included wh ether Respondent Sclease violated

Subsection 489.129(1)(d), (h), (k), or (l), Florida Statutes

(1997).

At hearing, Petitioners presented the testimony of two

witnesses, including Respondent Sclease, and entered nine

exhibits (Petitioner's Exhibits numbered 1 - 9) into evidence.

Respondent Sclease entered seven exhibits (Respondent’s Exhibits

numbered 1, 2(a) - (i), and 3 - 7) into evidence, with one exhibit

(Respondent’s Exhibit 1) being deposition testimony. The role of

counsel for the Department of Business a nd Professional

Regulation, Construction Industry Licensing Board, Construction

Industries Recovery Fund was only as a resource to the parties

and the undersigned, not as a party participant.

A transcript of the hearing was ordered. At the request of

the parties, the time for filing post - hearing submissions was set

for more than ten days following the filing of the transcript.

The Transcript, consisting of one volume, was filed on

September 12, 2002. Only Petitioners filed a post - hearing

submission, whic h was considered in the preparation of this

Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Respondent Sclease was a

licensed certified general contractor.

2. In 1995, Petitioners and Respondent Sclease entered into

a contract for Re spondent Sclease to make repairs to Petitioners’

home, which was damaged by Hurricane Andrew. The repair work was

completed in May 1996, and a certificate of completion was issued

on May 16, 1996. Petitioners subsequently discovered that

problems existed with the work and filed suit in the Circuit

Court of Dade County, Florida, Eleventh Judicial Circuit, against

Respondent Sclease and the company that he had qualified.

3. A non - jury trial was held and all parties were

represented by counsel. The court’s final judgment was entered

on January 7, 1999, and filed on January 13, 1999. The findings

of the court were in pertinent part as follows:

The claim in the complaint is that Defendants

[Sclease Construction Company, Inc., a

dissolved Florida corporation, and Louis

Sclease] breached the contract to make

repairs to the plaintiffs’ [Lamont J. Silas

and Claudette Silas] home after Hurricane

Andrew. The defective construction work

caused substantial damage to the home. . . .

It is undisputed that the parties entered

into a contract in June, 1995 under which

Defendants promised to make repairs to the

property. The total contract price, as

subsequently amended, was $45,758.37, all of

which has been paid to defendants. In April,

1996, Defendants represented th at the work

was completed.

It is also undisputed that within six (6)

months of the completion of the construction

work, several rooms of the home had evidence

of mildew on the walls and other damage,

including damage caused by water. The

property, which is income producing rental

property, was, by the Fall of 1996,

uninhabitable. Plaintiffs lost their tenant

and could not re - rent the premises for eight

(8) months until the damage was repaired.

The Defendant [sic] based its [sic] defense

upon allegations that the tenants caused the

damage from growing marijuana plants in the

residence.

Plaintiff’s [sic] evidence clearly showed

defects in the workmanship of Defendant’s

[sic] installation of a shower pan as well as

defective installation of tiles. Plainti ff’s

[sic] expert further testified that he had

inspected prior homes wherein marijuana was

grown and the instant residence bore no

evidence which should have otherwise existed

if marijuana had, in fact, been growing (e.g.

moisture all over the walls; blac k ceilings,

etc.).

Defendant [sic] did not provide any competent

evidence showing existence of growing

marijuana and provided no evidence concerning

faulty tiles.

Clearly, the Defendant [sic] substantially

breached his contract with Plaintiff [sic]

and P laintiff [sic] is entitled to recover

its reasonable damages which the Court

determines as follows:

1. Cost to repair $30,364.93

[Amount paid to another

contractor to fix the home]

2. Loss of rental income $ 7,200.00

_______ ___

Total Damages $37,564.93

Plaintiffs are entitled to prejudgment

interest in the amount of $5,634.74.

Therefore, judgment is entered . . . in the

amount of $43,199.67 . . . .

4. Petitioners had insurance on the home. Prior to the

final judgment, they received $9,583.22 from their insurance

company. No insurance proceeds were received subsequent to the

final judgment and no claim with their insurance company is

pending.

5. On April 18, 2000, the Department of Business and

Professional Regulation (Department) filed an Administrative

Complaint against Respondent Sclease before the Board. The

Administrative Complaint alleged, among other things, that on or

about January 13, 1999, Petitioners had obtained a final judgment

against Respondent Sclease, relating to the practice of

contracting, in the amount of $43,199.67; that no payment had

been made nor had an agreement been made to satisfy the judgment;

and that Respondent Sclease had violated Subsection

489.129(1)(q), Florida Statutes.

6. By Final O rder dated January 3, 2001, and filed

January 12, 2001, the Board found, among other things, that the

facts of the Administrative Complaint were not contested and that

Respondent Sclease was represented by counsel before the Board.

The Board concluded, am ong other things, in the Final Order that

the allegations of fact and conclusions of law in the

Administrative Complaint were adopted as the Board’s findings of

fact and conclusions of law; and that the violations warranted

disciplinary action. Finally, t he Board ordered in the Final

Order, among other things, that Respondent Sclease either pay

restitution to Petitioners in the amount of $43,199.67 or submit

proof that he had satisfied the civil judgment obtained by

Petitioners.

7. Petitioners filed a cla im with the Recovery Fund. No

dispute exists as to the timeliness of Petitioners’ claim.

8. By Order dated January 3, 2001, which was the same date

as the Board's Final Order as to restitution, and filed

January 4, 2001, the Recovery Fund Committee and t he Board

ordered, among other things, that Petitioners had satisfied all

the requirements for payment from the Recovery Fund and that

their claim was granted in the maximum amount of $25,000.00.

9. In February 2001, Respondent Sclease filed an amended

req uest for a formal hearing challenging the Board's order of

payment from the Recovery Fund, which challenge included the

contention that he had not violated Section 489.129, Florida

Statutes, as required by Section 489.141, Florida Statutes, for a

claim t o be considered.

10. At the time of hearing on the instant case, the final

judgment was not satisfied by Respondent Sclease. There is no

dispute that Petitioners earnestly attempted to execute on the

final judgment but had been unsuccessful.

11. The evi dence presented at hearing on the instant case

established that the installation of the shower pan was not in

accordance with the requirements of the 1994 South Florida

Building Code (Building Code), was defectively installed, and was

the cause of water da mage to the home. Respondent Sclease

admitted that the purpose of the Building Code, regarding the

installation of the shower pan, was to prevent water from leaking

out of the shower. The failure to install the shower pan in

accordance with the Building Code was willful.

12. Also, the evidence presented at hearing on the instant

case established that insulation was not placed on all of the

exterior walls of the home, which was required by the Building

Code, and that such failure was a violation of the Bu ilding Code.

Respondent Sclease admitted that the failure to put insulation on

the exterior walls would be a violation of the Building Code.

The failure to put insulation on the exterior walls in violation

of the Building Code was willful.

13. Even tho ugh a Certificate of Completion was issued, the

evidence presented at hearing on the instant case does not

support a finding that the work completed by Respondent Sclease

was in accordance with the Building Code.

14. Additionally, the evidence presented at hearing on the

instant case established that Respondent Sclease failed, in

accordance with the Building Code, to pull all the proper permits

for the work performed. The failure to pull the proper permits

was willful.

CONCLUSIONS OF LAW

15. The Divisio n of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto pursuant to Section 120.569 and Subsection

120.57(1), Florida Statutes.

16. Respondent Sclease is prevented by the principles of

res judicata and collateral estoppel from relitigating issues in

the instant case that were litigated in the court case. Wager v.

City of Green Cove Springs , 261 So. 2d 827 (Fla. 1972); United

States Fidelity and Guaranty Co. v. Odoms , 444 So. 2d 78, 80

(Fla. 5th DCA 1984); Jet Air Freight v. Jet Air Freight Delivery,

Inc. , 264 So. 2d 35 (Fla. 3d DCA 1972); Carol City Utilities,

Inc. v. Miami Gardens Shopping Plaza , 165 So. 2d 199 (Fla. 3d DCA

1964).

17. Section 489.143, Florida Statutes, entitled “Payment

from the f und,” provides in pertinent part:

(1) Any person who meets all of the

conditions prescribed in s. 489.141(1) may

apply to the board to cause payment to be

made to such person from the Construction

Industries Recovery Fund in an amount equal

to the judgmen t or restitution order,

exclusive of postjudgment interest, against

the licensee or $25,000, whichever is less,

or an amount equal to the unsatisfied portion

of such person's judgment or restitution

order, exclusive of postjudgment interest, or

$25,000, wh ichever is less, but only to the

extent and amount reflected in the judgment

or restitution order as being actual or

compensatory damages. The fund is not

obligated to pay any judgment or restitution

order, or any portion thereof, which is not

expressly b ased on one of the grounds for

recovery set forth in s. 489.140(1).

* * *

(3) Payments for claims arising out of the

same transaction shall be limited, in the

aggregate, to $25,000, regardless of the

number of claimants involved in the

transaction.

* * *

(7) Upon the payment of any amount from the

Construction Industries Recovery Fund in

settlement of a claim in satisfaction of a

judgment or restitution order against a

licensee as described in s. 489.141(1), the

license of such licensee shall be

automatically suspended, without further

administrative action, upon the date of

payment from the fund. The license of such

licensee shall not be reinstated until he or

she has repaid in full, plus interest, the

amount paid from the fund. A discharge of

bankruptcy does not relieve a person from the

penalties and disabilities provided in this

section.

18. Section 489.141, Florida Statutes (1997), entitled

“Conditions for recovery; eligibility,” provides in pertinent

part:

(1) Any person is eligible t o seek recovery

from the Construction Industries Recovery

Fund after having made a claim and exhausting

the limits of any available bond, cash bond,

surety, guarantee, warranty, letter of

credit, or policy of insurance, if:

(a) Such person has received f inal judgment

in a court of competent jurisdiction in this

state in any action wherein the cause of

action was based on a construction contract

or the Construction Industry Licensing Board

has issued a final order directing the

licensee to pay restitution to the claimant

based upon a violation of s. 489.129(1)(d),

(h), (k), or (l), where the contract was

executed and the violation occurred on or

after July 1, 1993, and provided that:

1. At the time the action was commenced,

such person gave notice thereof to the board

by certified mail; except that, if no notice

has been given to the board, the claim may

still be honored if the board finds good

cause to waive the notice requirement;

2. Such person has caused to be issued a

writ of execution upon such judgm ent, and the

officer executing the writ has made a return

showing that no personal or real property of

the judgment debtor liable to be levied upon

in satisfaction of the judgment can be found

or that the amount realized on the sale of

the judgment debtor' s property pursuant to

such execution was insufficient to satisfy

the judgment; or

3. If such person is unable to comply with

subparagraph 2. for a valid reason to be

determined by the board, such person has made

all reasonable searches and inquiries to

a scertain whether the judgment debtor is

possessed of real or personal property or

other assets subject to being sold or applied

in satisfaction of the judgment and by his or

her search has discovered no property or

assets or has discovered property and ass ets

and has taken all necessary action and

proceedings for the application thereof to

the judgment but the amount thereby realized

was insufficient to satisfy the judgment; or

(b) The claimant has made a diligent

attempt, as defined by board rule, to col lect

the restitution awarded by the board; and

(c) A claim for recovery is made within 2

years from the time of the act giving rise to

the claim or within 2 years from the time the

act is discovered or should have been

discovered with the exercise of due

diligence; however, in no event may a claim

for recovery be made more than 4 years after

the date of the act giving rise to the claim;

and

(d) Any amounts recovered by such person

from the judgment debtor, or from any other

source, have been applied to the damages

awarded by the court or the amount of

restitution ordered by the board; and

(e) Such person is not a person who is

precluded by this act from making a claim for

recovery.

(2) A person is not qualified to make a

claim for recovery from the C onstruction

Industries Recovery Fund, if:

(a) The claimant is the spouse of the

judgment debtor or licensee or a personal

representative of such spouse;

(b) The claimant is a certificateholder or

registrant who acted as the contractor in the

transactio n which is the subject of the

claim;

(c) Such person's claim is based upon a

construction contract in which the

certificateholder or registrant was acting

with respect to the property owned or

controlled by the certificateholder or

registrant;

(d) Such person's claim is based upon a

construction contract in which the contractor

did not hold a valid and current license at

the time of the construction contract; or

(e) Such person was associated in a business

relationship with the certificateholder or

re gistrant other than the contract at issue.

(f) Such person has suffered damages as the

result of making improper payments to a

contractor as defined in chapter 713, part I.

19. A licensee is charged with knowing the practice act

that governs his/her li cense. Wallen v. Florida Department of

Professional Regulation, Division of Real Estate , 568 So. 2d 975

(Fla. 3d DCA 1990).

20. Section 489.129, Florida Statutes (1997), entitled

“Disciplinary proceedings,” provides in pertinent part:

(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 r estitution 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 prose cution, if the contractor,

financially responsible officer, 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:

* * *

(d) Knowingly violating the applicable

building codes or laws of the state or of any

municipalities or counties thereof.

* * *

(h) Committing mismanagement or misconduct

in the practice of contracting that ca uses

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

contrac tor 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;

2. The contractor has abandoned a custome r'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 exc ess funds

within 30 days after the date the job is

abandoned; or

3. The contractor's job has been completed,

and it is shown that the customer has had to

pay more for the contracted job than the

original contract price, as adjusted for

subsequent change o rders, unless such

increase in cost was the result of

circumstances beyond the control of the

contractor, was the result of circumstances

caused by the customer, or was otherwise

permitted by the terms of the contract

between the contractor and the custo mer.

* * *

(k) Abandoning a construction project in

which the contractor is engaged or under

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 n otification to

the owner, including the reason for

termination, or fails to perform work without

just cause for 90 consecutive days.

(l) Signing a statement with respect to a

project or contract falsely indicating that

the work is bonded; falsely indicat ing that

payment has been made for all subcontracted

work, labor, and materials which results in a

financial loss to the owner, purchaser, or

contractor; or falsely indicating that

workers' compensation and public liability

insurance are provided.

21. Pe titioners’ claim against the Recovery Fund is timely.

22. Petitioners received a final judgment from a court of

competent jurisdiction in the State of Florida based on a

construction contract.

23. Furthermore, Petitioners demonstrated that Respondent

Scl ease violated Subsections 489.129(1)(d) and (h)3., Florida

Statutes (1997).

24. As the construction issues in the court suit and the

instant case are the same, the undersigned also concludes that

Petitioners demonstrated a violation of Subsections 489.129 (1)(d)

and (h)3., Florida Statutes (1997), in both actions.

25. The Board's Administrative Complaint and its Final

Order are based upon Respondent Sclease’s failure to satisfy the

final judgment in the court action. Consequently, the basis for

the Board’ s Administrative Complaint and Final Order includes a

violation of Subsections 489.129(1)(d) and (h)3., Florida

Statutes (1997).

26. Petitioners have otherwise satisfied all requirements

for a Recovery Fund claim under Section 489.141, Florida

Statutes.

2 7. The maximum recovery allowable to Petitioners from the

Recovery Fund is $25,000.00. Section 489.143, Florida Statutes.

Petitioners received an insurance payment of $9,583.22.

Petitioners argue that the insurance payment should not be

considered beca use the insurance payment was received prior to

the entering of the final judgment in the court case. It is

clear that Section 489.141, Florida Statutes, intends for

insurance proceeds to be applied to the damages. Subsection

489.141(1)(d), Florida Statu tes (1997). No distinction is made

as to insurance proceeds received prior to or after a final

judgment. The undersigned determines that the insurance proceeds

of $9,583.22 should be applied to the award made by the final

judgment, thereby, reducing Peti tioners’ claim made against the

Recovery Fund to $33,616.45. However, such reduction of the

claim made against the Recovery Fund should not reduce the

maximum amount payable to Petitioners by the Recovery Fund, i.e.,

$25,000.00.

RECOMMENDATION

Based on th e foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Business and Professional

Regulation, Construction Industry Licensing Board, Construction

Industries Recovery Fund enter an order approving the claim of

Lamont Si las and Claudette Silas against the Construction

Industries Recovery Fund and granting them the maximum allowable

recovery amount of $25,000.00.

DONE AND ENTERED this 4th day of December, 2002, in

Tallahassee, Leon County, Florida.

___________________________________

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto B uilding

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 4th day of December, 2002.

ENDNOTE

1/ Respond ent Sclease refers to Section 489.129, F.S., as it

appeared effective May 25, 2000, i.e., Subsection 489.129(1)(g),

(j), or (k), F.S. However, Petitioners filed their claim is

1998, prior to the effective date of the subsections referred to

by Respondent Sclease. The pertinent statutory provisions in

effect at the time of the filing of the claim were Subsections

489.129(1)(d), (h), (k), or (l), F.S.

COPIES FURNISHED:

Robert M. Sondak, Esquire

Cohen, Chase & Hoffman, P.A.

9400 South Dadeland Boulevard, Suite 600

Miami, Florida 33156

Franklin L. Hileman, Esquire

2937 Southwest 27th Avenue

Suite 203 Grove Forest Plaza

Miami, Florida 33133

Elise Matthes, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 1039

Hardy L. Roberts, III, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 1039

Robert Crabill, Executive Director

Construction Industry Licensing Board

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 1039

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.