04-002076 Karen W. Scragg vs. Department Of Business And Professional Regulation, Construction Industry Licensing Board Status: Closed Recommended Order on Thursday, November 18, 2004.

Summary: The evidence fails to establish entitlement to reimbursement from the Construction Recovery Fund.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KAREN W. SCRAGG, )

)

Petitioner, )

)

vs. ) Case No. 04 - 2076

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, )

)

Respondent. )

)

RECOMMENDED ORDER

On October 20, 2004, an administrative hearing in this case

was held in Tallahassee, Florida, before William F. Quattlebaum,

Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

Fo r Petitioner: No appearance.

For Respondent: Adrienne C. Rodgers, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Ta llahassee, Florida 32399 - 2202

STATEMENT OF THE ISSUE

The issue in the case is whether the Petitioner's request

for payment from the Construction Industries Recovery Fund meets

the requirements of law and should be approved.

PRELIMINARY STATEMENT

By Or der dated August 15, 2003, the Department of Business

and Professional Regulation, Construction Industry Licensing

Board, Construction Industries Recovery Fund (Respondent),

denied the application of Karen W. Scragg (Petitioner) for

reimbursement from the fund. Petitioner filed a Petition for

Informal Hearing to challenge the denial. The Petition was

forwarded to the Division of Administrative Hearings.

By Notice of Hearing by Video Teleconference dated July 2,

2004, the dispute was scheduled to be hear d on October 20, 2004,

at 9:00 a.m., by videoconference between Tampa and Tallahassee.

By letter filed October 13, 2004, Petitioner requested that

venue for the hearing be changed to Tallahassee. Petitioner's

request was granted and the parties were telep honically notified

that the hearing would be conducted in Tallahassee. An Amended

Notice of Hearing dated October 14, 2004, stated that the

hearing would be conducted in Tallahassee on October 20, 2004,

at 9:00 a.m.

On October 20, 2004, at 9:00 a.m., cou nsel for Respondent

and a witness were present at the scheduled hearing time, as was

the court reporter and the undersigned Administrative Law Judge.

Because Petitioner was not present at the scheduled time, the

hearing was delayed to provide additional t ime for Petitioner to

appear. An attempt was made to contact Petitioner at the

telephone number provided to the Division of Administrative

Hearings by Petitioner, but there was no answer.

The hearing commenced at 9:30 a.m. with Petitioner absent.

Respo ndent's Exhibits 1 through 17 were admitted into evidence.

Prior to the hearing, both parties submitted pre - filed exhibits,

and both sets of Exhibits numbered 1 through 17 and submitted by

each party were identical.

Petitioner also pre - filed Exhibits nu mbered 18 through 20.

By Objection to Late Filed Exhibits filed on October 18, 2004,

Respondent noted that Petitioner's Exhibits 18 through 20 had

not been included in an exhibit exchange that was required

(pursuant to an Order of Pre - Hearing Instructions dated July 2,

2004) to have occurred by September 30, 2004. Petitioner's

Exhibits 18 through 20 were rejected at the hearing.

By the conclusion of the hearing, Petitioner remained

absent. Respondent advised that it would not be filing the

transcript o f the hearing. The Administrative Law Judge advised

that proposed recommended orders were due to be filed within ten

days of the hearing date.

Apparently at 1:30 p.m. on October 20, 2004, Petitioner

arrived at the Tallahassee hearing location, and asser ted that

the hearing had been scheduled for 2:00 p.m. Petitioner was

advised that the hearing had been scheduled for 9:00 a.m., and

that it had been conducted as scheduled. By letter subsequently

filed on October 20, 2004, Petitioner requested that the h earing

be rescheduled.

In the letter, Petitioner stated that she had "erred" and

believed that the hearing was scheduled for 2:00 p.m. There was

no explanation for how the error occurred, and Petitioner stated

that she was "at a loss" as to how she misu nderstood the hearing

time. The letter acknowledged that when Petitioner requested

the change in venue, she did not request any change to the

scheduled time. The letter also acknowledges that when the

venue change was confirmed by telephone there was no discussion

related to the scheduled time.

By letter filed on October 21, 2004, Respondent noted its

objection to Petitioner's request that the hearing essentially

be conducted again.

The hearing was initially scheduled for 9:00 a.m., and

every subseque nt notice related to the time of the hearing,

including notices filed by Respondent and copied to Petitioner

as to the arrangements for a court reporter to be present

confirmed that the hearing would commence at 9:00 a.m. Absent

any explanation as to why Petitioner misunderstood the scheduled

hearing time, there was insufficient cause to grant Petitioner's

request. Petitioner's request to re - hear the case was denied by

Order dated October 25, 2004. The Order advised that proposed

recommended orders were due by November 1, 2004, the schedule

established at the hearing.

No transcript of the hearing was filed. Both parties filed

Proposed Recommended Orders on November 1, 2004.

FINDINGS OF FACT

1. On or about March 20, 1995, Petitioner entered into a

c ontract with Kenneth Boaz (Boaz) doing business as Revival

Remodelers. Boaz was licensed as a Certified Residential

Contractor, Florida license number CR C035360.

2. The contract was for the remodeling of Petitioner's

home. The work appears to have be en either uncompleted by Boaz

or not completed in accordance with Petitioner's desires.

3. The total amount of the contract, including change

orders, was for $53,370.00.

4. Petitioner paid $41,755.00 to Boaz, leaving an unpaid

amount of $11,615.00.

5. Petitioner sued Boaz (County Court, Pinellas County,

Florida, Civil Division, Case Nos. 96 - 4335 - CO and 96 - 4343 - CO)

and received a Final Judgment dated August 26, 1996, against

Boaz in the amount of $5,796.00.

6. Petitioner appears to have initiated an attempt to

collect the judgment. By transmittal letter dated December 1,

1997, Petitioner received a check from an attorney in the amount

of $1,501.77. The letter indicates that the forwarded amount

was based on payment by Boaz of $1,877.21 minus a 2 0 percent

commission of $375.44. The letter also indicates a "current

balance of account" as $6,126.20.

7. Boaz appealed the County Court decision to the Circuit

Court (Sixth Circuit, Appeal No. 96 - 7707 - CI - 88B). By Order

dated June 29, 1998, the Circu it Court affirmed the

determination of liability, but vacated the amount of damages

and remanded the case to the trial court for a new trial to

determine damages.

8. On remand, the County Court entered another Final

Judgment awarding damages, dated Octobe r 28, 1998, and the case

was again appealed to the Circuit Court (Sixth Circuit, Appeal

No. 98 - 8369 - CI - 88A).

9. By Order dated June 29, 2000, the Circuit Court again

vacated the amount of damages and remanded the case to the trial

court for a new trial to determine damages in accordance with

directions provided in the Order.

10. At some point during the litigation, Boaz filed for

bankruptcy. The United States Bankruptcy Court for the Middle

District of Florida, Tampa Division, in Case No. 01 - 20049 - 8B7,

lifted the automatic bankruptcy stay applicable to Boaz, and by

Stipulation for Entry of Final Judgment Liquidating Claims of

Plaintiffs executed in April 2003, Petitioner and Boaz reached

an agreement that Petitioner's claim was in the amount of

$15,000. By Order Determining Claim of the Plaintiffs dated

April 25, 2003, the County Court accepted the stipulated amount

of $15,000

11. Petitioner filed a claim form seeking reimbursement

from the Construction Industry Recovery Fund. The claim form

has a si gnature purporting to be that of Petitioner. The form

contains a receipt date of February 17, 1998.

12. By Order dated August 15, 2003, Petitioner's claim was

denied by the Construction Industry Recovery Fund Committee and

the Construction Industry Lic ensing Board on the grounds that

Petitioner had failed to present a Final Judgment as to the

damages and that Petitioner failed to state a claim eligible for

compensation from the fund.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding. § 120.569, Fla. Stat. (2003).

14. Petitioner has the burden of establishing by a

preponderance of the evidence entitlement to the relief sought.

Balino v. Department of Health and R ehabilitative Services , 348

So. 2d 349 (1st DCA 1977). Although, as stated previously,

Petitioner did not appear for the hearing or present evidence,

Respondent's Exhibits 1 through 17 were identical to those

identified by Petitioner, and the exhibits wer e admitted into

the record of the hearing. Notwithstanding the admission of the

exhibits, Petitioner has failed to establish that the claim

should be approved.

15. Subsection 489.140(1), Florida Statutes (2003),

provides as follows:

The Florida Constru ction Industries Recovery

Fund shall be disbursed as provided in s.

489.143 , on order of the board, as

reimbursement to any natural person adjudged

by a court of competent jurisdiction to have

suffered monetary damages, or to whom the

licensee has been ord ered to pay restitution

by the board, where the judgment or

restitution order is based on a violation of

s. 489.129 (1)(g), (j), or (k) , committed by

any contractor, financially responsible

officer, or business organization licensed

under the provisions of this part at the

time the violation was committed, and

providing that the violation occurs after

July 1, 1993. (emphasis supplied)

16. There is no evidence that Boaz was ordered by the

Construction Industry Licensing Board to pay restitution to

Petition er.

17. Although damages were twice awarded to Petitioner by

the Pinellas County Court, the damage determinations were

vacated on appeal by the Circuit Court, and there does not

appear to have been a third determination. The parties

eventually entered i nto a stipulated agreement assigning a value

of $15,000 to Petitioner's claim. There is no credible evidence

permitting a determination that the claim value was based upon a

violation of Subsections 489.129 (1)(g), (j), or (k), Florida

Statutes (2003), whi ch provide in relevant part as follows:

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,

registr ation, 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

$5,000 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 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:

(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 the supplies or services;

and the co ntractor 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 cont ract

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; 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 orders, unless such

increase in cost was the result of

circumstances beyond the contr ol 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 customer.

* * *

(j) Abandoning a construction project in

which the contractor is en gaged 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 notification to

the owner, including the reason for

termination, or fails to perform w ork without

just cause for 90 consecutive days.

(k) Signing a statement with respect to a

project or contract falsely indicating that

the work is bonded; falsely indicating that

payment has been made for all subcontracted

work, labor, and materials whic h results in a

financial loss to the owner, purchaser, or

contractor; or falsely indicating that

workers' compensation and public liability

insurance are provided.

18. The evidence fails to establish that the project was

financially mismanaged. There i s no credible evidence of

financial harm to Petitioner based upon any liens placed on the

property. The percentage of completion was not less than the

percentage of the contract amount paid to Boaz. The evidence

fails to establish that the job was comple ted at a cost in

excess of the contract amount as adjusted for change orders.

There is no evidence that Boaz abandoned the project. There is

no evidence that Boaz made any false representations related to

the project.

19. Subsection 489.143(1), Florid a Statutes (2003),

provides as follows:

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

judgme nt 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, w hichever 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 based on one of the grounds for

recovery set forth in s. 489.140 (1).

(emphasis supplied)

20. The evidence in this case fails to prove that any

valid damage assessment against Boaz reflects actual or

compensatory damages. As set forth previously, the ev idence

fails to establish that that the stipulated claim value was

based upon a violation of Subsections 489.129 (1)(g), (j), or

(k), Florida Statutes (2003).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that Respondent enter a final order denying the

claim for reimbursement filed by Petitioner.

DONE AND ENTERED this 18th day of November, 2004, in

Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrati ve Law Judge

Division of Administrative 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 Administra tive Hearings

this 18th day of November, 2004.

COPIES FURNISHED :

Adrienne C. Rodgers, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399 - 2202

Karen W. Scragg

9085 Leisure Lane, No rth

Largo, Florida 33773 - 4707

Leon Biegalski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Tim Vaccaro, Director

Construction Industry Licensing Board

D epartment 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.