05-001668 Department Of Business And Professional Regulation vs. Curt L. Mckay, D/B/A Mckay Engineering Service, Inc. Status: Closed Recommended Order on Monday, July 18, 2005.

Summary: Administrative penalties, including a two-year suspension of Respondent`s license, should be imposed for abandoning the construction job and creating substantial financial harm to the consumer.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

)

Petitioner, )

)

vs. ) Case No. 05 - 1668

)

CURT L. MCKAY, d/b/a MCKAY )

ENGINEERING SERVICE, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

On June 23, 2005, a final hearing was held pursuant to

notice in Tampa, Florida, before Bram D. E. Canter,

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Bri an Elzweig, Esquire

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

For Respondent: No ap pearance

STATEMENT OF THE ISSUE

The issue in the case is whether the Respondent violated

Subsections 489.129(1)(g)2., 489.129(1)(j), 489.129(1)(i),

489.129(1)(m), and 489.129(1)(o), Florida Statutes (200 2 ), as

alleged in the Petitioner's Administrative Co mplaint, and, if

so, what penalty should be imposed.

PRELIMINARY STATEMENT

The Petitioner, Department of Business and Professional

Regulation, filed an Administrative Complaint alleging that the

Respondent, Curt L. McKay, d/b/a McKay Engineering Services,

Inc., had violated certain state laws regulating the practices

of contractors. The Respondent disputed the allegations and

requested an administrative hearing. The Petitioner referred

the matter to the Division of Administrative Hearings , which

scheduled and conducted a hearing.

At the hearing, the Petitioner presented the testimony of

one witness, Mack Hayes. The Petitioner's Exhibits 1 through 11

were admitted into evidence. The Respondent did not make an

appearance at the hearing and no evidence on his behalf was

presented for the record.

The one - volume Transcript of the hearing was filed on

July 8, 2005. The Petitioner timely submitted a proposed

recommended order, and it was considered in the preparation of

this Recommended Order. Nothing was su bmitted by the

Respondent.

FINDINGS OF FACT

1. The Petitioner is a state agency charged with the

licensing and regulation of building contractors pursuant to

Chapter 489, Florida Statutes.

2. The Respondent is a Florida State Certified Building

Cont ractor who holds license number CBC053702.

3. On December 9, 2002, Mack Hayes entered into a contract

with "McKay Engineering/Construction" to build an addition to

the Hayes residence located at 3011 East Deleuil Avenue in

Tampa, Florida.

4. Although th e contract refers to McKay

Engineering/Construction rather than McKay Engineering Services,

Inc., subsequent change orders to the contract show the

Respondent's license number in the letterhead. In

correspondence to the Petitioner, the Respondent also

ack nowledged that he was the contractor on the Hayes project.

5. The Hayes contract did not contain a statement

explaining the consumers ' rights under the Construction

Industries Recovery Fund. Counsel for the Petitioner, however,

stated that Mr. Hayes re main s eligible for assistance from the

Fund.

6. The original contract price for the construction was

$54,700. Change orders created an adjusted price of $57,450.

7. During the course of the construction, Mr. Hayes made

four payments to the Respondent to taling $49,000.

8. Not long after the construction commenced in January

2003, Mr. Hayes and his wife became frustrated with the slow

pace of the construction. Mr. Hayes originally understood that

the work would take about 90 days. Instead, the construct ion

remained uncompleted after nine months.

9. In July 2003, the pace of work on the Hayes' addition

slowed substantially and in October, the Respondent ceased work

altogether. The Respondent ceased work on the project despite

the fact that he had not be en fired or otherwise given a reason

to cease work.

10. In order to facilitate progress on the construction,

Mr. Hayes paid the air conditioning subcontractor $1,836, the

electrical subcontractor $1,000, and the stucco subcontractor

$800, even though it was the Respondent's responsibility under

the parties' contract to pay the subcontractors.

11. The Respondent's construction of the new roof of the

residence was of particular concern to Mr. Hayes. The tie - in of

new roof framing with the existing roof wa s misaligned and

otherwise improperly installed which caused the new roof to sag.

12. The records of the City of Tampa indicate that the

Respondent did not obtain a permit from the City for the roofing

work at the Hayes residence.

13. In an attempt to r epair the roof, large holes were cut

in the ceiling to gain access for cutting some of the rafters.

The holes in the ceiling were not repaired by the Respondent.

14. The plywood and other wood used on the unfinished

eaves was left exposed to weather for months, which has resulted

in water damage to the wood that will necessitate that it be

replaced.

15. Mr. Hayes obtained cost estimates from two other

contractors to repair the roof, gables, and eaves installed by

the Respondent. One estimate was $17,490 (including materials)

and the other estimate was $15,550 (without materials).

16. Numerous aspects of the construction project were

never started or were started and then abandoned, including the

gables and eaves, the door trim and hardware, internal

electrical box, attic access, plumbing, and front trim. Mack

Hayes paid $2,500 to Ezekial Bain and $2,500 to Drains, Etc. to

finish some of this work after the Respondent abandoned the

project.

17. Taking into account the adjusted contract price of the

construction, the amount paid to the Respondent by Mr. Hayes,

the direct costs paid to subcontractors by Mr. Hayes, and the

reasonable estimated costs for repair of the roof, gables, and

eaves, the total financial damages that the Respondent caused to

Mr. Hayes is $17,676.

18. The Petitioner did not present expert testimony

regarding the competency of the Respondent as a building

contractor. Without such testimony, the record evidence is not

sufficient to clearly and convincingly demonstrate that the

pro blems associated with this particular project were due to

incompetence. The problems could have been caused solely by the

Respondent's mismanagement and misconduct.

19. The Petitioner incurred investigative costs of $817.66

for the investigation and prosecution of this case.

CONCLUSIONS OF LAW

20. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter in this

case. §§ 120.569 and 120.57(1), Fla. Stat. (2004).

21. Pursuant to Subsection 489.129(1), Florida Statutes

(2002) , the Construction Industry Licensing Board may impose

penalties for violations of Chapter 489 , Florida Statutes ,

including placement on probation, reprimand, suspension, or

revocation of the Respondent's contractor certificate, and an

admin istrative fine not to exceed $5,000 per violation.

22. Subsection 489.129(1) , Florida Statutes (2002), sets

forth the wrongful acts that will subject a licensed contractor

to penalty. The provisions pertinent to the allegations

asserted in the Petitioner 's Administrative Complaint are as

follows:

(g) Committing mismanagement or misconduct

in the practice of contracting that causes

financial harm to a customer or misconduct.

Financial mismanagement occurs when:

* * *

2. The contractor has abando ned 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 re funds the excess funds within 30 days

after the date the job is abandoned; or

* * *

(i) Failing in any material respect to

comply with the provisions of this part or

violating a rule or lawful order of the

board.

(j) Abandoning a construction proj ect 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 notification to

the owner, including the reason for

t ermination, 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 permi ts and

inspections.

23. Because Section 489.129 , Florida Statutes (2002), is a

penal statute, and the Petitioner is seeking to impose a penal

sanction, the Petitioner has the burden of proving the specific

allegations set forth in its Administrative Com plaint by clear

and convincing evidence. See , e.g. , Department of Banking and

Finance v. Osbourne Stern & Co. , 670 So. 2d 932 (Fla. 1996).

24. The clear and convincing evidence standard has been

described as follows:

[C]lear and convincing evidence requ ires

that the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

evidence must be precise and explicit and

the witnesses must be lacking in confusion

as to the facts in issue. The evidence mu st

be of such weight that it produces in the

mind of the trier of fact the firm belief

without hesitancy, as to the truth of the

allegations sought to be established.

Evans Packing Co. v. Department of Agriculture and Consumer

Services , 550 So. 2d 112, 11 6 (Fla. 1st DCA 1989).

25. In determining an appropriate penalty in this case,

consideration has been given to the disciplinary guidelines set

forth in Florida Administrative Code Rule 61G4 - 17.001.

26. There being no evidence of a previous violation by the

Respondent, the guidelines applicable to first - time violations

are applicable.

27. In Count I of its Administrative Complaint, the

Petitioner charges the Respondent with violation of Subsection

489.129(1)(g)2., Florida Statutes (2002) , for committing

mismanagement of the Hayes project that caused financial harm to

Mack Hayes. The Petitioner met its burden to demonstrate that

this violation occurred. The Petitioner's proposed

administrative fine of $1,000 is fair and reasonable under the

circumstances .

28. In Count II of its Administrative Complaint, the

Petitioner charges the Respondent with violation of Subsection

489.129(1)(j), Florida Statutes (2002) , for abandoning the Hayes

project. The Petitioner met its burden to demonstrate that this

vio lation occurred. The Petitioner's proposed administrative

fine of $1,500 is fair and reasonable under the circumstances.

29. In Count III of its Administrative Complaint, the

Petitioner charges the Respondent with violation of Subsection

489.129(1)(m), Florida Statutes (2002) , for committing

incompetency or misconduct in the practice of contracting.

"Incompetency" is defined in Black's Law Dictionary as "lack of

ability, knowledge, legal qualification, or fitness to discharge

the required duty or profes sional obligation." "Misconduct" is

defined in Black's Law Dictionary as "a dereliction of duty,

willful in character."

30. The Petitioner did not meet its burden to demonstrate

by clear and convincing evidence that the Respondent was

incompetent. The Petitioner met its burden to demonstrate

misconduct, but only as to the violations charged in the other

counts of the Administrative Complaint. Therefore, no separate

penalty is warranted by the violation charged in Count III.

31. In Count IV of its Admi nistrative Complaint, the

Petitioner charges the Respondent with violation of Subsection

489.129(1)(i), Florida Statutes (2002) , which requires

compliance with the provisions of Chapter 489, Part I, because

the Respondent failed to apply for a certificate of authority

for McKay Engineering Services, Inc., as required by Subsection

489.119(2) , Florida Statutes . There being no record evidence on

this issue, the Petitioner has not met its burden to demonstrate

that this violation occurred.

32. In Count V of its Administrative Complaint, the

Petitioner charges the Respondent with violation of Subsection

489.129(1)(i), Florida Statutes (2002) , which requires

compliance with the provisions of Chapter 489, Part I , Florida

Statutes , because the Respondent failed t o include a notice in

the Hayes contract regarding the Construction Industries

Recovery Fund as required by Subsection 489.1425(1). The

Petitioner met its burden to demonstrate that this violation

occurred. The Petitioner's proposed administrative fine o f $200

is fair and reasonable under the circumstances.

33. In Count VI of its Administrative Complaint, the

Petitioner charges the Respondent with violation of Subsection

489.129(1)(o), Florida Statutes (2002) , for proceeding on the

Hayes project without all required local building permits. The

Petitioner has met its burden to demonstrate that this violation

occurred. The Petitioner's proposed administrative fine of

$1,500 is fair and reasonable under the circumstances.

34. Subsection 455.227(3)(a), Flor ida Statutes (2002) ,

provides that the Construction Industry Licensing Board may

assess costs related to the investigation and prosecution of

cases, excluding costs associated with attorney time.

35. The Petitioner's proposal that the Respondent pay

finan cial restitution to Mack Hayes in the amount of $17,676 is

fair and reasonable under the circumstances.

36. The Petitioner's proposal that the Respondent be

ordered to obtain seven hours of continuing education in the

area of Chapter 489, Part I, Florida Statutes (2002) , in

addition to the hours required for renewal of the Respondent's

certification is fair and reasonable under the circumstances.

37. The Respondent's unprofessional conduct and

mismanagement of a job under a state license clearly justifies

the suspension of the license. The Petitioner has recommended

that the Respondent's license be suspended for two years. The

suspension of the Respondent's license is a serious disciplinary

action that will prevent him from obtaining income from his

prof ession as a contractor. It would be an excessive penalty to

combine the two - year suspension with all the other penalties

proposed by the Petitioner. Therefore, in the recommendation

that follows, the administrative fine is omitted.

RECOMMENDATION

Base d on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Construction Industry Licensing Board

enter a final order requiring:

1. that the Respondent pay financial restitution to the

Hayes of $17,676;

2. that the Responden t obtain seven hours of continuing

education in the area of Chapter 489, Part I, Florida Statutes,

in addition to the hours required for renewal of the

Respondent's certification;

3. that the Respondent's license be suspended for two

years; and

4. that the Respondent reimburse the Petitioner for its

investigative costs of $817.66.

DONE AND ENTERED this 18th day of July, 2005, in

Tallahassee, Leon County, Florida.

S

BRAM D. E. CANTER

Administrative Law Judge

Division o f 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 Administrative Hearings

this 18th day of July, 2005.

COPIES FURNISHED :

Brian Elzweig, Esquire

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Curt L. McKay

9726 Timmons Loop

Thonotosassa, Florida 33592

L eon 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

Department of Business and

Profes sional 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 except ions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.