06-001531PL Department Of Business And Professional Regulation, Construction Licensing Board vs. Frank Joseph Polacek, V Status: Closed Recommended Order on Wednesday, September 20, 2006.

Summary: Respondent abandoned five construction contracts after performing little if any work, and failed to return any part of the down payments.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD,

)

Petitioner, )

)

vs. ) Case No. 06 - 1531PL

)

FRANK JOSEPH POLACEK, V , )

)

Respondent. )

___ ______________________________)

RECOMMENDED ORDER

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

before Larry J. Sartin, an Administrative Law Judge of the

Division of Administrative Hearings, on July 12, 2006, in West

Palm Beach, Florida.

A PPEARANCES

For Petitioner: Jeffrey J. Kelly, Esquire

Department of Business and

Professional Regulation

Post Office Box 1489

Tallahassee, Florida 32302

For Respondent : Frank Joseph Polacek, V, pro se

5245 Center Street

Jupiter, Florida 33401

S TATEMENT OF THE ISSUE

The issue in this case is whether Respondent, Frank J.

Polacek, V , committed the violations alleged in an

Administrative Complaint filed with Petitioner March 15, 2006,

DBPR Case Nos. 2005 - 036101, 2005 - 035843, 2004 - 056690, 2005 -

045647 , and 2005 - 034560, and, if so, what disciplinary action

should be taken against him .

PRELIMINARY STATEMENT

In an Administrative Complaint dated March 2, 2006 , and

filed on March 15, 2006, with the Department of Business and

Professional Regulation , Frank J oseph Polacek, V, was charged

with having violated statutory and rule provisions governing the

conduct of Florida certified general contractors . Mr. Polacek

timely disputed the factual allegations in the Administrative

Complaint by executing an Election o f Rights form . Mr. Polacek

also made the following request in the Election of Rights form :

"These cases are pending in the Palm Beach Court System. I

would ask the board to place my lic. in active probation pending

the final outcome."

Not honoring Mr. P olacek's request , the Administrative

Complaint and the Election of Rights form he filed were

forwarded to the Division of Administrative Hearings for the

assignment of an administrative law judge to conduct an

evidentiary hearing. The matter was designate d DOAH Case

No. 0 6 - 1531 PL and was assigned to the undersigned.

By Notice of Hearing entered May 8, 2006 , the final hearing

of this case was scheduled for June 15 and 16, 2006 .

At the final hearing, Petitioner presented the testimony of

Diane Jackson, Richa rd Brooks, Nancy Sarro, Terri Ferrando, and

A. Carter Pottash, M.D. Petitioner also had admitted 43

E xhibits . Respondent offered no evidence. He was, however,

allowed, without objection, to file a letter of reference after

the close of the final hearing . That letter, from John

Zuccarelli, III, was filed on June 21, 2006. It has been marked

as Respondent's Exhibit 1.

By Notice of Filing of Transcript issued July 12, 2006, the

parties were informed that the Transcript of the final hearing

had been filed on July 12, 2006 . The parties were also informed

that they had until August 11, 2006 , to file proposed

recommended orders. Petitioner filed Petitioner's Proposed

Recommended Order on August 11, 2006. Respondent filed a letter

on the same day. Both plea dings have been fully considered in

rendering this Recommended Order.

All references to Florida Statu t es and the Florida

Administrative Code are to those laws in effect at the time of

the events at issue in this matter unless otherwise noted.

FINDINGS OF F ACT

A. The Parties .

1. Petitioner, the Department of Business and Professional

Regulation (hereinafter referred to as the "Department"), is the

agency of the State of Florida charged with the responsibility

for, among other things, the licensure of indiv iduals who wish

to engage in contracting in the State of Florida; and the

investigation and prosecution of complaints against individuals

who have been so licensed. See Ch. 689, Fla. Stat .

2. Respondent, F r ank J. Polacek, V , is and has been at all

times material hereto a licensed certified general contractor in

Florida.

3. Mr. Polacek's license number is CG C059603. At all

times material hereto, the status of his license has been

"Current, Active."

4. At all times material, Mr. Polacek was certified as

doing business as Endeavor Development, Inc (hereinafter

referred to as " Endeavor "), a Florida corporation. Endeavor

possessed a certificate of authority as a qualified business

organization.

5. The Department has jurisdiction over Mr. Polacek's

license .

B. Dalton Design, Inc.; Department Case No. 2004 - 056690 .

6. On June 29, 2004, Terri Ferrando, owner of Dalton

Design, Inc. (hereinafter referred to as "Dalton Design"),

entered into a contract with Mr. Polacek, acting as Endeavor

(hereinafter referred to as the "Dalton Design Contract").

7. Pursuant to the Dalton Design Contract, Mr. Polacek

agreed to renovate a bathroom of an apartment owned by a client

of Dalton. The apartment is located in Delray Beach, Florida.

8. Dalton Design agreed to pay Mr. Polacek $15,871.00 in

exchange for his services.

9. Mr. Polacek failed to include notification of the

existence and availability of the Construction Industry Recovery

Fund in the Dalton Design Contract. See § 489.1425(a), Fla.

Stat.

10. As contemplated by the Dalton Design Contract, Dalton

Design paid $7,935.50 , or 50 percent of the total contract

price, to Mr. Polacek as a deposit. The deposit was paid via

check dated June 29, 2004.

1 1 . A small of amount of work, consisting of demolition,

was commence d on the Dalton Design Contract by Mr. Polacek. The

demolition work was the only work performed by Mr. Polacek. The

work performed by Mr. Polacek was significantly less than the

amount he had been paid by Dalton Design.

1 2 . On or about May 16, 2005, Mr. Polacek abandoned the

Dalton Design Contract when he wrote a letter to Ms. Ferrando

and Dalton Design. Mr. Polacek stated the following in the

letter:

Please acknowledge this written notice that

as a result of hurricane frances we will be

unable to provi de Dalton designs [sic] or

their related customers with construction

services this will be effective immediately

and a partial refund of construction moneys

will be refunded within one week.

The refund was never made, despite efforts of Ms. Ferrando to

co ntact Mr. Polacek by telephone, in writing, and in person.

1 3 . The Dalton Design Contract provided that "August 20,

2004, is the last day for work, and everything must be completed

at that time." Because Mr. Polacek failed to perform work on

the project and in light of his termination letter, Ms. Ferrando

arranged to have the project completed by another contractor.

That contractor performed the same work formerly agreed to by

Mr. Polacek.

1 4 . The total costs of completing the Dalton Design

Contract wor k was $16,877.33 and was paid by Dalton Design.

1 5 . Damages sustained by D alton Design as a result of

Mr. Polacek's abandonment of the Dalton Design Contract include

the $7,935.50 deposit plus the amount of $1,006.33 paid to

complete the project in excess of the original contract price

($16,877.33 minus $15,871.00) or a total of $ 8,941.83.

1 6 . The Department incurr ed costs investigating Case

No. 2004 - 056690 of $616.88.

17. The evidence failed to prove that Mr. Polacek failed

to obtain the necessary permi ts or inspections for the work

performed on the Dalton Design Contract.

C . Palm Beach Biltmore Condominium Association; Department

Case No. 2005 - 045647 .

1 8 . In August 2004, Richard Brooks, the manager of the

Palm Beach Biltmore Condominium Association (h ereinafter

referred to as the "Biltmore"), e ntered into a contract with

Mr. Polacek , doing business as Endeavor (hereinafter referred to

as the "Biltmore Contract").

1 9 . The Biltmore Contract provided, in pertinent part,

that Mr. Polacek would provide the following services to

Biltmore:

Propose to remove and replace two matching

exterior access ladders to elevator service

shafts. Remove all existing steel support

brackets and prepare new surface for the

installation of the new aluminum ladders. .

. . Prov ide and install new 16' custom

fabricated alluminum [sic] ladders same

locations with no powder coated finish.

20 . In exchange for the foregoing services, Biltmore

agreed to pay Mr. Polacek $5,000.00, "50% of the total sum due

upon agreement; 50% of tota l sum due promptly upon completion."

21 . Biltmore paid Mr. Polacek $2,500.00 via check on

August 18, 2004.

2 2 . Despite having been paid half the Biltmore Contract

price, Mr. Polacek performed none of the services he had agreed

to perform . Mr. Brooks mad e several efforts to communicate with

Mr. Polacek by telephone and mail, but w as unsuccessful.

2 3 . Mr. Polacek abandoned the Biltmore Contract for well

in excess of 90 days.

2 4 . Mr. Polacek failed to refund any amount of the

$2,500.00 down - payment paid t o him by Biltmore. Thus Biltmore

suffered damages of $2,500.00.

2 5 . The Department incurr ed costs investigating Case

No. 2005 - 045647 of $266.33.

D . A. Car ter Pottash ; Department Case No. 2005 - 0 3 456 0 .

2 6 . On August 9, 2004, A. Carter Pottash, M.D., ente red

into a contract with Dr . Polacek, doing business as Endeavor

(hereinafter referred to as the " Pottash Contract ").

2 7 . The Pottash Contract provided, in pertinent part, that

Mr. Polacek would remodel three condominium apartments owned by

Dr. Pottash, c onverting the three apartments into on e living

space.

2 8 . In exchange for his services Mr. Polacek agreed to

provide under the Pottash Contract , Dr. Pottash agreed to pay

Mr. Polacek $ 170,821.00 , "50% of the total due upon agreement;

35 % of total sum due at 50% of completion; 15% of total sum due

upon completion."

29 . Mr. Polacek failed to include notification of the

existence and availability of the Construction Industry Recovery

Fund in the Pottash Contract. See § 489.1425(a), Fla. Stat.

30 . As contem plated by the Pottash Contract, Dr. Pottash

paid Mr. Polacek a total of $155,322.50, or 90 percent of the

total contract price, between August 19, 2004, and October 22,

2004. The payments were made via check and wire transfer .

31 . Mr. Polacek commenced w ork on the Pottash Contract by

performing demolition work, installing drywall, and performing

some but not all of the finishing work. A fter November 1, 2004,

no work was performed on the Pottash Contract by Mr. Polacek .

32 . Between November 1, 2004, and January 5, 2005, having

invested a significant amou nt of money in the project,

Dr. Pottash made numerous unsuccessful attempts via telephone,

personal visits, and in writing to contact Mr. Polacek.

33 . As a result of the work Mr. Polacek did perform, he

i ncurred financial obligation s to sub - contractors. Some of the

obligations were not paid by Mr. Polacek, resulting in three

Claims of Liens being filed against Dr. Pottash's property. The

liens, each one for $2,166.50, were filed by T & F General

Contract ing, Inc. (hereinafter referred to as "T & F"). T & F

had performed some of the finishing work on the project.

34 . On or about March 22 , 2005, Mr. Polacek abandoned the

Pottash Contr act when he wrote a letter to Dr. Pottash , in which

he stated the follow ing:

Please acknowledge this written notice

that ENDEAVOR DEV. INC. will no longer be

performing any construction related services

to you at the Palm Bch. Biltmore. By law I

am bound to cancel all my permits or

transfer them to your new contractor. I

w ill inform the Palm Bch. Bldg. Dept. in

writing. I am truley [sic] sorry for the

problems we have had between us. I want to

do whatever is possible to resolve this

situation i n your favor. Please respond if

you are willing.

35 . Mr. Pol a cek did nothing to resolve his failure to

perform. Nor did he make any refund of the moneys paid to him

under the Pottash Contract, which exceeded the amount paid by

Dr. Pottash to Mr. Polacek .

36. Due to Mr. Pol acek's failure to perform, Dr. Pottash

had to hire other contractors to complete the project. He did

so, acting as his own general contractor, completing the project

in essentially the same manner contemplated by the Pottash

Contract.

37 . Dr. Pottash incurred costs to complete the Pottash

Contract totaling $90 ,280.77. These costs were paid by checks

($58,716.48) and credit card ($31,564.29).

38 . Dr. Pottash also paid a total of $3,653.50 to remove

one of the three T & F liens.

39. The total cost of completing the Pottash Contract

incurred by Dr. Pottash was $ 93,934.27 .

40 . Damages sustained by Dr. Pottash as a result of

Mr. Polacek's abandonment of the Pottash Contract total

$78,435.77, calculated as follows:

Total Contract Price: $170,821.00

Amount Paid: 155,322.50

Amount To Be Paid : $ 15,498.50

Am ount Paid To Complete: $ 93,934,27

Amount To Be Paid : 15,498.50

Total Financial Harm: $ 78,435.77

41 . The Department incurred c osts investigating Case

No. 2005 - 0 34 560 of $ 565.61 .

E . Alexander Rentz and Diane Jackson ; Department Case

No. 2005 - 0 3 6 1 01 .

42 . On January 13, 2005 , Alexander Rentz and Diane

Jackson , entered into a contract with M r . Polacek, doing

business as Endeavor (hereinafter referred to as the

" Rentz/Jackson Contract ").

43 . The Rentz/Jackson Contract provided, in pertinent

part, th at Mr. Polacek would make repairs to their Lake Park,

Florida, home caused by hurricane damage.

44 . In exchange for Mr. Polacek's services , Mr. Rentz and

Ms. Jackson agreed to pay him $26,346.10, " 1/3 upon agreement/

1/3 at 50%/ 1/3 at complete."

45 . On January 14, 2005, an addendum to the Rentz/Jackson

Contract was executed by Mr. Polacek whereby he agreed to remove

and replace carpeting and padding. In exchange for these

services, Mr. Rentz and Ms. Jackson agreed to pay an additional

$1,520.00.

46 . Mr . Polacek failed to include notification of the

existence and availability of the Construction Industry Recovery

Fund in the Rentz/Jackson Contract. See § 489.1425(a), Fla.

Stat.

47 . Mr. Rentz and Ms. Jackson paid Mr. Polacek a total of

$ 13,933.05 via th ree check s issued on January 13, 2005,

February 1, 2005, and February 11, 2005 .

48 . Mr. Polacek commenced work on the Rentz/Jackson

Contract by partially taking down a wooden fence on the

property . A fter taking down the fence , no work , not even the

remov al of the fencing material, was performed on the

Rentz/Jackson Contract by Mr. Polacek.

49 . On February 22, 2005, after efforts to get Mr. Polacek

to return to the job failed, Mr . Polacek wrote a letter to

Mr. Rentz and Ms. Jackson in which he abandoned t he

Rentz/Jackson Contract, stating:

Please acknowledge this written notice.

Since we have not heard from you w/ a

decision on whether to proceed w/your job we

can only assume you want to terminate the

contract. Out last conversation on 2 - 15 - 05

Ms. Jack son was irate and threatened to sue

our Co. if we could not produce roofing

shingles. All supply Co's are on a back log

and shingles are being allocated. We do not

controll [sic] the production of shingles

and we warned you of this problem at the

start o f our engagement. Fax us a letter of

termination and the total of all $ will be

returned in 30 days.

Mr. Polacek's explanation concerning the unavailability of

shingles, even if it had been supported by evidence at the final

hearing, which it was not, fa ils to explain why none of the

other work called fo r in the Rentz/Jackson Contract was

performed.

50 . Mr. Rentz and Ms. Jackson did not at anytime terminate

their contract. Instead, they m ade numerous efforts to get

Mr. Polacek to carry out the terms of their agreement. Efforts

to discuss the matter with Mr. Polacek were ultimately

unsuccessful.

51 . Due to Mr. Pol acek's failure to perform, Mr. Rentz and

Ms. Jackson were required to hire another contractor, Built

Right Construction, Inc. (hereinafter ref erred to as "Built

Right"), to complete the project. The same services

contemplated by the Rentz/Jackson Contract were ultimately

performed by Built Right.

52 . The contract price for Built Right's services,

including contract addendums, totaled $33,293.9 5. This amount

was paid via checks by Mr. Rentz and Ms. Jackson.

53 . Damages sustained by Mr. Rentz and Ms. Jackson as a

result of Mr. Polacek's abandonment of the Rentz/Jackson

Contract total ed $ 19 , 360 . 90 , calculated as follows:

Total Contract Price: $ 27,866.10

Amount Paid: 13,933.05

Amount To Be Paid: $13,933.05

Amount Paid To Complete $33,293.95

Amount To Be Paid : 13,933.05

To tal Financial Harm: $19,360.90

54 . The Department incurred c osts investigating Case

No. 2005 - 0 3 6 1 0 1 of $ 457.00 .

55. The evidence failed to prove that Mr. Polacek failed

to apply for any permits required by the Rentz/Jackson Contract

or that Endeavor was not in compliance with fictitious - name

statutes.

F . Nancy Sarro ; Department Case No. 2005 - 0 35843 .

56 . On Apri l 17, 2005, Nancy Sarro, entered into a

contract with M r . Polacek, doing business as Endeavor

(hereinafter referred to as the " Sarro Contract ").

57 . The Sarro Contract provided, in pertinent part, that

Mr. Polacek would remodel the Sarro residence located in

Jupiter, Florida.

58 . In exchange for Mr. Polacek's services , the Sarros

agreed to pay Mr. P olacek $ 23,919.75 , " 50% of total sum upon

agreement ; 25% of total sum at 50% complete; 15% of total sum at

75% complete; 10% of total sum at 100% complete."

59 . Mr. Polacek failed to include notification of the

existence and availability of the Construction Industry Recovery

Fund in the Sarro Contract. See § 489.1425(a), Fla. Stat.

60 . Ms. Sarro paid Mr. Polacek a total of $ 11,039. 8 7 , or

46 percent of the tot al contract price, via check issued

April 17, 2005.

61 . Mr. Polacek commenced work on the Sarro Contract by

demolishing a small wooden deck at the rear of the Sarro

residence and removing the front door of the residence, leaving

the residence without a fr ont door. After taking performing the

foregoing work, no further work was performed on the Sarro

Contract by Mr. Polacek.

62 . On May 16 , 2005, after efforts to get Mr. Polacek to

return to the job failed, Mr. Polacek wrote a letter to

Ms . Sarro in which he abandoned the Sarro Contract, stating:

Please acknowledge this written notice

that Endeavor Dev. Inc. will no longer be

providing construction services to you at .

. . . My attorney will contact you to

discuss the matter of our deposit.

Do not att empt to contact Ms. Jessica

Jolley or her family members regarding this

matter. They are going to press charges

against you for harassment.

Endeavor Dev. Ind. Has had no in - tent

[sic] to defraud or abandone [sic] your job

and Ms. Jolley is not an emplo yee of the Co.

nor did she recieve [sic] anymoneys from you

so please leave my girlfriend out of this

matter.

I will be contacting you via my attorney.

63 . M s. Sarro made attempts to contact Mr. Polacek, but

was unsuccessful. At no time, however, d id Ms. Sarro abandon or

otherwise attempt to terminate the Sarro Contract.

64 . Mr. Polacek subsequen tly sent a second letter to

Ms. Sarro promising that the money paid as a deposit on the

Sarro Contract would be refunded. Mr. Polacek did not, however,

re turn any moneys to Ms. Sarro or complete any further work on

the Sarro Contract.

65 . Damages sustained by Ms. Sarro as a result of

Mr. Polacek's abandonment of the Sarro Contract totaled

$ 11,039.87.

66 . The Department incurred c osts investigating Case No .

2005 - 0 3 5843 of $ 368.76 .

G. Incompetency or Mismanagement in the Practice of

Contracting .

67. Mr. Polacek caused damages on the five contracts at

issue in this case totaling $120,278.37. He did so without

explanation to the individuals for whom he had contracted with.

CONCLUSIONS OF LAW

A. Jurisdiction .

68 . The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2006) .

B. The Burden and Standard of Proof .

69 . In the Administrative Complaint, the Construction

Industry Licensing Board (hereinafter referred to as the

"Board") is seeking the imposition of, among other penalties,

the revocation or suspension of Mr. Polacek' s certification as a

general contractor . Therefore, the Board has the burden of

proving the allegations in the Administrative Complaint by clear

and convincing evidence. See Department of Banking and Finance,

Division of Securities and Investor Protectio n v. Osborne Stern

and Co. , 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington , 510

So. 2d 292 (Fla. 1987); and McKinney v. Castor , 667 So. 2d 387

(Fla. 1st DCA 1995).

70 . Clear and Convincing evidence has been defined as

evidence which:

requires that the e vidence must be found to

be credible; the facts to which the

witnesses testify must be distinctly

remembered; the testimony must be precise

and explicit and the witnesses must be

lacking in confusion as to the facts in

issue. 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).

71 . The grounds proven in support of the Board's assertion

that Mr. Polacek's certificate should be revoked or suspended

are limited to those specifically alleged in the Administrative

Complaint. See , e.g. , Cottrill v. Department of Insurance , 685

So. 2d 1371 (Fla. 1st DCA 1996); Kinney v. Department of State ,

501 So. 2d 129 (Fla. 5th DCA 1987); and Hunter v. Department of

Professional Regulation , 458 So. 2d 842 (Fla. 2nd DCA 1984).

C. The Department’s Authority to Discipline General

Contractors; The Charges Against Mr. Polacek .

7 2 . Secti on 489.129(1), Florida Statutes , gives the Board

the authority to revoke or suspend the license of any g eneral

c ontractor , if he or she commits certain acts specified in the

statute.

73 . In this case, Mr. Polacek has been alleged to have

violated the following acts proscribed by Section 489.129(1),

Florida Statutes:

a. One count in the Pottash Contract case of violating

Section 489.129(1)(g)1 . , Florida Statutes;

b. On count each in the Dalton Design Contract case, the

Biltmore Contract case, the Pottash Contract case, the

Rentz/Jackson Contract case, and the Sarro Contract case of

violating Section 489.129(1)(g)2, Florida Statutes;

c. One count in the Rentz/Jackson Contract case of

violating Section 489.129(1)(i), Florida Statutes, by failing to

comply with Section 489.119(2)(b), Florida Statutes;

d . One count each in the Dalton Design Contract case, the

Rentz/Jackson Contract case, and the Sarro Contract case of

violating Section 489.129(1)(i), Florida Statutes, by failing to

comply with Sectio n 489. 126(2)(a) , Florida Statutes;

e . One count each in the Dalton Design Contract case, the

Pottash Contract case, the Rentz/Jackson Contract case, and the

Sarro Contract case of violating Section 489.129(1)(i), Florida

Statutes, by failing to comply wit h Section 489. 1425(1) , Florida

Statutes;

f . One count each in the Dalton Design Contract case, the

Biltmore Contract case, the Pottash Contract case, the

Rentz/Jackson Contract case, and the Sarro Contract case of

violating Section 489.129(1)(j), Florida Statutes;

g . One count each in the Dalton Design Contract case, the

Biltmore Contract case, the Pottash Contract case, the

Rentz/Jackson Contract case, and the Sarro Contract case of

violating Section 489.129(1)(m), Florida Statutes; and

h . One count in the Dalton Design Contract case of

violating Section 489.129(1)(o), Florida Statutes.

D. Section 489.129(1)(g)1 . , Florida Statutes .

74 . Section 489.129(1)(g)1 . , Florida Statutes, provides

that disciplinary action may be taken by the Board if a general

co ntractor is guilt y of:

(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 contractor has not had the

liens removed from the property, by payment

or by bond, within 75 days after the date of

such liens; or

. . . .

75 . The evidence in this case proved clearly and

convincingly that Mr. Polacek violated Section 489.129(1)(g)1 . ,

Florida Statu t es , with regard to the Pottash Contract. Th ree

valid liens were recorded against Dr. Pottash's property by

T & F as a result of Mr. Polacek's failure to pay T & F.

E . Section 489.129(1)(g)2 . , Florida Statutes .

76 . Section 489.129(1)(g)2 . , Florida Statutes, provides

that disciplinary action ma y be taken by the Board if a general

contractor is guilt y of:

(g) Committing mismanagement or

misconduct in the practice of contracting

that causes financial harm to a customer.

Financial mismanagement or misconduct occurs

when:

. . . .

2. The c ontractor has abandoned 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 o f the contract

or refunds the excess funds within 30 days

after the date the job is abandoned; or

. . . .

77 . The evidence in this case proved clearly and

convincingly that Mr. Polacek violated Section 489.129(1)(g) 2 . ,

Florida Statues with regard to all fi ve contracts.

78 . A total of 46 percent of the Sarro Contract was paid

to Mr. Polacek , but virt ually no work was performed; 50 percent

of the Dalton Design Contract, the Biltmore Contract, and the

Rentz/Jackson Contract was paid to Mr. Polacek with no work

performed on two of the contracts and little work being

performed on the Rentz/Jackson Contract; and 90 percent of the

Pottash Contract was paid to Mr. Polacek , well below the percent

of work performed by Mr. Polacek.

79 . In all five case s , Mr. Po lacek failed to return any of

the money he received on the five contract s .

F. Section 489.129(1)(i), Florida Statutes .

80 . Section 489.12 9(1)(i), Florida Statutes , provides that

disciplinary action may be taken by the Board if a general

contractor is gu ilty of:

(i) Failing in any material respect to

comply with the provisions of this part or

violating a rule or lawful order of the

board.

81 . It has been alleged that Mr. Polacek violated this

provision by having violated three sections of Chapter 489 ,

Florida Statutes: Section 489.1 19 ( 2 ) (b); Section 489.126(2)(a);

and 489.1425(1).

82 . It has been alleged that Mr. Polacek violated Section

489.129(1)(i), Florida Statutes, by reason of having failed to

comply with Section 489.119(2)(b), Florida Statute s, with regard

to the Rentz/Jackson Contract. Section 489.119(2)(b), Florida

Statutes, provides, in pertinent part:

(2) If the applicant proposes to engage

in contracting as a business organization,

including any partnership, corporation,

business trus t, or other legal entity, or in

any name other than the applicant's legal

name or a fictitious name where the

applicant is doing business as a sole

proprietorship, the business organization

must apply for a certificate of authority

through a qualifying age nt and under the

fictitious name, if any.

. . . .

(b) The applicant must furnish evidence

of statutory compliance if a fictitious name

is used, the provisions of s. 865.09(7)

notwithstanding.

83 . The evidence failed to prove that Mr. Polacek faile d

to comply with Section 489.119(2)(b), Florida Statutes.

84 . It has been alleged that Mr. Polacek violated Section

489.129(1)(i), Florida Statutes, by reason of having failed to

comply with Section 489.126(2)(a), Florida Statutes, with regard

to the Rent z/Jackson Contract, the Sarro Contract, and the

Dalton Design Contact. Section 489.126(2)(a), Florida Statutes,

provides, in pertinent part:

(2) A contractor who receives, as initial

payment, money totaling more than 10 percent

of the contract price fo r repair,

restoration, improvement, or construction to

residential real property must:

(a) Apply for permits necessary to do

work within 30 days after the date payment

is made, except where the work does not

require a permit under the applicable codes

and ordinances, and

. . . .

85 . The Department failed to present competent substantial

evidence sufficient to prove the alleged violation s of Section

489.126(20(a), Florida Statutes . As to the Rentz/Jackson

Contract, no evidence on this issue was pr esented, a fact which

the Department concedes in its Proposed Re commended Order. As

to the Sarro Contract and the Dalton Design Contract, the only

testimony presented was t estimony from Ms. Sarro and

Ms. Ferrando that they were not aware of any permits be ing

obtained. They were not, however, in a position to testify

conclusively that no permits were obtained. Such proof would

have to come from Mr. Polacek or the officials in charge of

issuing permits. The Department, therefore, failed to prove

that Mr. Polacek violated Section 489.129(1)(i), Florida

Statutes, by failing to comply with Section 489.126(2)(a),

Florida Statutes.

86 . Finally, it has been alleged that Mr. Polacek violated

Section 489.129(1)(i), Florida Statutes, by reason of having

failed to comply with Section 489.1425(1), Florida Statutes,

with regard to the Rentz/Jackson Contract, the Sarro Contract,

the Dalton Design Contact, and the Pottash Contract.

87. Section 489.1425(1), Florida Statutes, provides, in

pertinent part:

(1) Any agree ment or contract for repair,

restoration, improvement, or construction to

residential real property must contain a

written statement explaining the consumer's

rights under the recovery fund, except where

the value of all labor and materials does

not exceed $2,500. The written statement

must be substantially in the following form:

FLORIDA HOMEOWNERS' CONSTRUCTION

RECOVERY FUND

PAYMENT MAY BE AVAILABLE FROM THE

FLORIDA HOMEOWNERS' CONSTRUCTION

RECOVERY FUND IF YOU LOSE MONEY ON A

PROJECT PERFORMED UNDER CO NTRACT, WHERE

THE LOSS RESULTS FROM SPECIFIED

VIOLATIONS OF FLORIDA LAW BY A LICENSED

CONTRACTOR. FOR INFORMATION ABOUT THE

RECOVERY FUND AND FILING A CLAIM,

CONTACT THE FLORIDA CONSTRUCTION

INDUSTRY LICENSING BOARD AT THE

FOLLOWING TELEPHONE NUMBER AND AD DRESS :

The statement shall be immediately followed

by the board's address and telephone number

as established by board rule.

88 . The evidence proved cl early and convincingly that

Mr. Polacek violated Section 489.129(1)(i), Florida Statutes,

with regard to the Rentz/Jackson Contract, the Sarro Contract,

the Dalton Design Contract, and the Pottash Contract by failing

to comply with Section 489.1425(1), Florida Statutes. All of

these contracts involved residential property and none of them

contained the st atement required by Section 489.1425(1).

G. Section 489.129(1)( j ), Florida Statutes .

89 . Section 489.12 9(1)(j), Florida Statutes , provides that

disciplinary action may be taken by the Board if a general

contractor is guilty of:

( j ) Abandoning a constr uction 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 notification to

the owner, including the r eason for

termination, or fails to perform work

without just cause for 90 consecutive days.

90 . The evidence proved cl early and convincingly that

Mr. Polacek violated Section 489.129(1)(j), Florida Statutes,

when he abandoned the five contracts at issue in this matter.

H . Section 489.129(1)(m), Florida Statutes .

91 . Section 489.129(1)(m), Florida Statutes , provides that

disciplinary action may be taken by the Board if a general

contract or is guilty of:

(m) Committing incompetency or misconduct

in the practice of contracting.

92 . The evidence proved clearly and convincingly that Mr.

Polacek violated Section 489.129(1)(m), Florida Statutes, with

regard to all five contracts. Mr. Polacek abandoned all five

contracts without explanation, causing damage s totaling more

than $120,000.00. His conduct constit utes incompetency or

misconduct .

I . Section 489.129(1)( o ), Florida Statutes .

93 . Section 489.129(1)(o), Florida Statutes , provides that

disciplinary action may be taken by the Board if a general

contr act or is guilty of:

(o ) Proceeding on any job without

obtaining applicable local building

department permits and inspections .

94 . The allegation that Mr. Polacek violated this

provision, limited to the Dalton Design Contract, was not proved

clearly an d convincingly by the evidence.

J . The Appropriate Penalty .

95 . The Department is authorized, upon finding a violation

of Section 489.129(1), Florida Statutes, to impose discipline

upon a general contractor's license. In particular, the Board

is authori zed to take any of the following actions:

. . . 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 restitution to a consumer

for fi nancial harm directly related to a

violation of a provision of this part,

impose an administrative fine not to exceed

$10,000 per violation, require continuing

education, or assess costs associated with

investigation and prosecution, if the

contractor, fin ancially 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 . . . .

96 . Section 455. 2273(5), Florida Statu tes , requires that

the penalty guidelines of the Board must be followed in

determining what disciplinary action to take under Section

489.129(1), Florida Statutes. Those guidelines are set out in

Florida Administrative Code Chapter 61G4 - 17.

97 . In releva nt part, Florida Administrative Code Rule

61G4 - 17.001 provides the following:

(1) The following guidelines shall be

used in disciplinary cases, absent

aggravating or mitigating circumstances and

subject to other provisions of this chapter.

. . . .

(g) Section 489.129(1)(g), F.S.:

Mismanagement or misconduct causing

financial harm. First violation, $ 750 to

$ 1 ,500 fine and/or probation; repeat

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

probation, suspension , or revocation .

. . . .

(i) Section 48 9.129(1)(i), F.S.: Failing

in any material respect to comply with the

provisions of Part I of Chapter 489, F.S.

. . . .

Section 489.1425, F.S.: Failure to notify

residential property owner of recovery fund.

First violation, $250 to $500 fine; repeat

violation, $500 to $1,000 fine and/or

probation, suspension, or revocation.

Section 489.119(2), F.S.: Failure to

register qualified business organization.

First violation, $250 to $500 fine; repeat

violation $500 to $1,000 fine and/or

probation, suspens ion or revocation.

Section 489.126(2)(a), F.S.: Failure to

obtain permit within 30 days of receiving

ten percent of the contract price. First

violation, $250 to $1,000 fine; repeat

violation, $1,000 to $3,000 fine and/or

probation.

. . . .

(j) Se ction 48 9.129(1)(j), F.S.:

Abandonment, f irst violation, $500 to

$ 2 ,000; repeat violation, revocation, and

$5,000.

. . . .

(m) Misconduct or incompetency in the

practice of contracting as se forth in

Section 489.129(1)(n)[sic], shall include,

but is not limited to:

. . . .

2. Violation of any provision of Chapter

61G4, F.A.C., or Chapter 489, Part I, F.S.

. . . .

4. The following guidelines shall apply

to cases involving misconduct or

incompetency in the practice of contracting,

absent aggravating or mitigating

circumstances:

. . .

b. Violation of any provision of jChapter

61G4, F.A.C. or Chpater 489, Part I, F.S.

Fist violation, $500 to $1,000 fine; repeat

violations, $1,000 to $5,000 fine and

suspension or revocation.

c. Any other form of misconduct or

incompetency. First violation, $250 to

$1,000 fine and probation; repeat violations

$1,000 to $5,000 fine and suspension or

revicaton.

. . . .

(o) Section 489.129(1)(o), F.S.:

Proceeding on any job without obtaining

applicable local building department permits

and/or inspections.

. . . .

2. Failure to obtain inspections. Repeat

violation, $500 to $2,500 fine and

suspension or revocation.

3. Job finished without a permit having

been pulled, or no permit u ntil caught after

job, or late permit during the job resulting

in missed inspection or inspections. First

violation, $500 to $1,500 fine and/or

probation; repeat violation, $1,000 to

$2,500 fine and suspension or revocation.

98 . Florida Administrative C ode Rule 61G4 - 17.001 goes on

to provide the following guidelines relevant to this case:

(3) For purposes of these guidelines,

violations for which the Respondent has

previously been issued a citation pursuant

to Section 455.224, F.S., and Rule 61G4 -

19.0 01, F.A.C., shall be considered repeat

violations.

(4) For any violation occurring after

October 1, 1989, the board may assess the

costs of investigation and prosecution. The

assessment of such costs may be made in

addition to the penalties provided by these

guidelines without demonstration of

aggravating factors set forth in Rule 61G4 -

17.002, F.A.C.

(5) For any violation occurring after

October 1, 1988, the board shall order the

contractor to make restitution in the amount

of financial loss suffere d by the consumer.

Such restitution shall be ordered in

addition to the penalties provided by these

guidelines upon demonstration of aggravating

factors set forth in subsection 61G4 -

17.002(1), F.A.C., and to the extent that

such order does not contravene f ederal

bankruptcy law.

99 . Florida Administrative Code Rule 61G4 - 17.002 provides

for the consideration of the following relevant aggravating and

mitigating circumstances in determining what penalty to impose

on a licensee :

Circumstance which may be con sidered for

the purpose of mitigation or aggravation of

penalty shall 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 ha not rel ieved, as of the time the

penalty is to be assessed . . . .

. . . .

(3) The severity of the offense.

(4) The danger to the public.

(5) The number or 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.

100 . The Department has proved the violations alleged in

20 of the 25 counts alleged in the Administrative Complaint; one

violation of Section 489.129(1)( g ) 1 . , Flo rida Statutes; five

violations of Section 489.129(1)(g)2 . , Florida Statutes; four

violations of Section 489.129(1)(i) , by failing to comply with

Section 489.1425(1), Florida Statutes; five violations of

Section 489.129(1)(j), Florida Statutes; and five vio lations of

Section 489.129(1)(m), Florida Statutes . The Department has

suggested the following penalties for these violations:

a. For the six violations of Section 489.129(1)(g),

Florida Statutes ( Count s V, X, XVI, XIX, XXIII, and XXIV ) the

minimum admin istrative fine of $1 ,500.00 for each violation or a

total of $9,000.00 ;

b. For the four violations of Section 489.129(l)(i),

Florida Statutes, by failing to comply with Section 489.1425(1),

Florida Statutes (Counts I, VII, XII, and XXI ) the minimum

admini strative fine of $500.00 for each violation or a total of

$2,000.00;

c. For the five violations of Section 489.129(j), Florida

Statutes (Counts IV, IX, XV, and XVIII ) the minimum

administrative fine of $2,000.00 for each violation or a total

of $10,000.00 ;

d. For the five violations of Section 489.129(m), Florida

Statutes (Counts VI, XI, XVII, XX, and XXV ) the minimum

administrative fine of $1,000.00 for each violation or a total

of $5,000.00; and

e. For all the violations, the permanent revocation of

Mr . Polacek's contracting license.

101. T he Department's recommended penalties are within the

guidelines for the violations Mr. Polacek committed and are,

therefore, adopted.

102 . The Department has also suggested that Mr. Polacek be

required to pay restit ution on all five contracts equal to the

damages sustained under the contracts and pay the costs of the

inves tigation and prosecution of the five contracts . These

recommendation s are also adopted.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered by the

Department:

1. Finding that Frank Joseph Polacek, V, committed the

violations alleged in Counts I, IV through VII, IX through XII,

and XV through XXV of the Administrative Complai nt;

2. Dismissing Counts II, III, VIII, XIII, and XIV of the

Administrative Complaint; and

3. Imposing an administrative fine in the total amount of

$ 26,000 .00; requiring that Mr. Polacek pay restitution on the

five contracts equal to the amount of damag es found in this

Recommended Order ; requiring that Mr. Polacek pay $ 2,275.58 as

the costs of the investigation and prosecution of this matter;

and that his license be permanently revoked .

DONE AND ENTERED this 20th day of September , 200 6 , in

Tallahassee, Leon County, Florida.

S

LARRY J. SARTIN

Administrative 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

w ww.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

t his 20th day of September, 2006 .

COPIES FURNISHED :

Jeffrey J. Kelly, Esquire

Department of Business and

Professional Regulation

Post Office Box 1489

Tallahassee, Flo rida 32302

Frank Joseph Polacek, V

5245 Center Street

Jupiter, Florida 33401

G. W. Harrell , Executive Director

Construction Industry Licensing Board

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 323 99 - 0792

Josefina Tamayo , General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

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.