07-003123PL Department Of Business And Professional Regulation, Construction Industry Licensing Board vs. Michael Hill Status: Closed Recommended Order on Friday, October 12, 2007.

Summary: Respondent/contractor took Petitioner`s money and failed to build the residence for which he contracted.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD , )

)

Petitioner , )

)

vs. ) Case No. 07 - 3123PL

)

MICHAEL HILL , )

)

Respondent . )

)

RECOMMENDED ORDER

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

on August 30, 2007, by Jeff B. Clark, duly - designated

Administrative Law Judge of the Division of Administrative

Hearings , in Palm Bay, Florida.

APPEARANCES

For Petitioner: Tiffany A. Harrington, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street , Suite 42

Tallahassee, Florida 32399 - 2202

For Respondent: No appearance

STATEMENT OF THE ISSUE

Wh ether disciplinary action should be taken against

Respondent, Michael Hill ' s, contracting license based on the

violations as charged in the Administrative Complaint in this

proceeding.

PRELIMINARY STATEMENT

On March 21, 2007, Petitioner , Department of Busi ness and

Professional Regulation, Construction Industry Licensing Board,

f iled an Administrative Complaint alleging that Respondent ,

Michael Hill, had violated the laws regulating his professional

activities as a certified contractor in the State of Florid a.

The Administrative Complaint charged Respondent with violat ing

Subsection 489.129(1)(i), Florida Statutes (2006) , 1/ by failing

to apply for a C ertificate of A uthority for Michael Hill Homes,

Inc., as a qualified business organization, in violation of

S ubsection 489.119(2), Florida Statutes; violating Subsection

489.129(1)(i), Florida Statutes, by failing to apply for the

necessary permits after receiving, as initial payment, money

totaling more than ten percent of the contract price for repair,

restorat ion, improvement, or construction to residential real

property, in violation of Subsection 489.126(2)(a), Florida

Statutes; violating Subsection 489.129(1)(g) and (2), Florida

Statutes, by committing mismanagement or misconduct in the

practice of contracti ng that causes financial harm to a

customer, which occurs when the contractor 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, unle ss 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;

violating Subsection 489.129(1)(j), Florida Statutes, by

abandoning a construction project in which the contractor is

engaged or under contract as a contractor; violating Subsection

489.129(1)(o), Florida Statutes, by proceeding on any job

without obtaining applicable local building department permits

and inspections; and violating Subsection 489. 129(1)(m), Florida

Statutes, by committing incompetency or misconduct in the

practice of contracting.

On April 17, 2007, Respondent filed an Answer t o

Administrative Complaint that disputed some allegations

contained in the Administrative Complaint , effec tively electing

to have a formal administrative hearing. The case was

transferred to the Division of Administrative Hearings by letter

dated July 11, 2007, that requested a hearing pursuant to

Section 120.57, Florida Statutes.

An Initial Order was forward ed to the parties on July 11,

2007. Based on Petitioner ' s response, the case was scheduled

for final hearing in Palm Bay, Florida , on August 30, 2007.

The final hearing took place as scheduled. Respondent did

not appear. Petitioner offered the testimony of three

witnesses: Aldith Rose Farquharson, Edwin Almetes, and John

Brown. Petitioner introduced seven exhibits, which were entered

into evidence and marked Petitioner ' s Exhibits 1 through 7.

Official notice was taken of Chapter 489, Florida Statutes, and

Florida Administrative Code Chapter 61G4 - 17 .

The Transcript of Proceedings was filed on September 17,

2007. Petitioner timely filed a Proposed Recommended Order.

FINDINGS OF FACT

Based on the evidence and testimony of the witnesses

presented and the entire record in this proceeding, the

following F indings of F act are made:

1. Respondent is a certified contractor, having been

issued L icense No. CR C057409 by the Florida Construction

Industry Licensing Board. Respondent ' s license as a c ertified

r esid ential c ontractor is currently active.

2. Respondent was not certified with the Construction

Industry Licensing Board as doing business as " Michael Hill

Homes, Inc. "

3. On or about April 11, 2005, Kenneth and Aldith

Farquharson ("Farquharson") entered into a written contractual

agreement with Respondent, d/b/a Michael Hill Homes, Inc., for

the construction of a single - family residence at Lot 17,

Hattaras Terrace, Palm Bay, Florida.

4. The original contract price of the contract between

Respondent and Farquharson was $240,900.00.

5. The original contract price was subsequently increased,

via change orders executed by Respondent and Farquharson, by

$4,500.00, for a total contract price of $245,400.00, adding the

value of the change order for the fill di rt needed for the lot.

6. On June 19, 2005, Farquharson paid a total of

$28,590.00 to Respondent.

7. The scope of work under contract required appropriate

permits from the City of Palm Bay Building Department before

work could commence.

8. Respondent failed to apply for the permits necessary to

commence work under the contract.

9. Respondent delivered some sand to the l ot on or before

October 2005.

10. After delivering the sand, Respondent failed to

continue any more of the contracted work.

11. F rom November 2005 to December 2006, Respondent

performed no work on the project under contract.

12. From October 2005 to February 2006, Farquharson made

multiple attempts to contact Respondent regarding the lack of

work under the contract.

13. Farquharson did not prevent Respondent from commencing

and completing the work under contract or agree to delay the

project for any reason.

14. Farquharson did not terminate the contract with

Respondent.

15. Respondent did not refund any money to Farquharson.

16. T he amount of actual damages that Respondent caused

Farquharson is calculated as follows:

Amount paid: $28,590.00

Amount of work performed

by Respondent (dirt fill): _ 4,500.00

$24,090.00

17. The Petitioner ' s total investigative cos t for the case

is $439.79.

CONCLUSIONS OF LAW

18 . The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding pursuant to Section 120.57 , Florida Statutes (2007) .

19. Petitioner is the state agency charg ed with regulating

the practice of contracting pursuant to Chapters 455 and 489,

Florida Statutes.

20. Pursuant to Section 489.129, Florida Statutes, the

Florida Construction Industry Licensing Board is empowered to

revoke, suspend or otherwise discipline the license of a

contractor who is found guilty of any of the prohibited acts

enumerated in Subs ection 489.129(1), Florida Statutes.

21. Petitioner has the burden of proving by clear and

convincing evidence the allegations against Respondent alleged

in the Administrative Complaint. Department of Banking and

Finance v. Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996);

Ferris v. Turlington , 510 So. 2d. 292 (Fla. 1987) . Evans

Packing Co. v. Department of Agriculture and Consumer Services ,

550 So. 2d 112, 11 6, fn. 5 (Fla. 1 st DCA 1989) , provides the

guidance regarding the clear and convincing evidence standard .

That standard has been described as follows:

Clear and convincing evidence requires that

the evidence must be found to be credible;

the facts to wh ich 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 must be of

such weight that it produces in the mind of

the trier of fa ct the firm belief of (sic)

conviction, without hesitancy, as to the

truth of the allegations sought to be

established. Sl omowitz v. Walker , 429

So. 2d 797, 800 (Fla. 4 th DCA 1983).

22. The Administrative Complaint alleges that Respondent

is guilty of ha ving violated Subsection 489.129(1)(i), Florida

Statutes, by failing to comply with Subsection s 489.119(2) and

489.126(2)(a), Florida Statutes . §§ 489.129(1)(g) 2. ,

489.129(1)(j), 489.129(1)(o), and 489.129(1)(m), Fla . Stat.

23. Subsection 489.129(1), Flor ida Statutes, 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 certificat e or registration, 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

$10,000 per violation, require continuing

education, or assess costs associated with

investigation and prosecution, if the

contractor . . . or business organization

for which the contractor is a primary

qualifying agent . . . is found guilty of

any of the following acts:

* * *

(g) Committing mismanagement or

mi sconduct in the practice of contracting

that causes financial harm to a customer.

Financial mismanagement or misconduct occurs

when:

* * *

2. The contractor has abandoned a

customer ' s job and the percentage of

completion is less than the pe rcentage 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 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 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 reason for

termination, 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 building department

permits and inspections.

24. Subsection 489.1 19(2), Florida Statutes, provides, in

pertinent part:

If the applicant propose s to engage in

contracting as a business organization,

including any partnership, corporation,

business trust, or other legal entity, or in

any name other than the applicant ' s l egal

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 agent and under the

fictitious name, if any.

25. Subsection 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 for repair,

restoration, or construction to residential

real property must:

(a) Apply fo r 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 . . . .

26. Petitioner has proven by clear and convincing evidence

that Respondent vi olated Subsection 489.119(2), Florida

Statutes. Respondent held himself out as doing business as

Michael Hill Homes, Inc., but failed to obtain the required

Certificate of Authority for Michael Hill Homes , Inc .

27. Petitioner has proven by clear and conv incing evidence

that Respondent violated Subsection 489.126(2)(a), Florida

Statutes. Despite being paid over ten percent of the contract

price in his contract with Farquharson, Respondent failed to

apply for permits within 30 days of when the payment was made.

In fact, Respondent never applied for permits with the City of

Palm Bay Building Department, the appropriate authority.

28. Petitioner has proven by clear and convincing evidence

that Respondent violated Subsection 489.129(1)(g) 2. , Florida

Statute s, by establishing that Respondent abandoned the contract

with Farquharson and that the percentage of the contract price

paid exceeded the percentage of the contracted work performed by

Respondent, thereby causing financial harm to Farquharson . This

occur red when Respondent ceased all work on the project , and the

percentage of completion was less than the percentage of the

total contract price paid to the contractor as of the time of

abandonment. This was evidenced by the fact that Respondent

only dropped off sand on the lot despite being paid

approximately 12 percent of the contract price. Respondent was

not entitled to retain such funds under the terms of the

contract and did not refund the excess funds within 30 days

after the date the job was abandone d.

29. Petitioner has proven by clear and convincing evidence

that Respondent violated of Subsection 489.129(1)(j), Florida

Statutes, by abandoning the project under which Respondent was

engaged or under contract as a contractor with Farquharson. A

proj ect may be presumed abandoned after 90 days if the

contractor terminates the project without just cause or without

proper notification to the owner, including reason for

termination, or fails to perform work without just cause for

90 consecutive days. In the contract with Farquharson,

Respondent abandoned the project when he failed to perform work

without just cause for a period of more than 90 days.

30. Petitioner has proven by clear and convincing evidence

that Respondent violated Subsection 489.129(1)( o), Florida

Statutes, by proceeding on the job without obtaining applicable

local building permits and inspections. Respondent failed to

obtain permits for the contracted work with Farquharson prior to

commencing work on the project, and the work to be pe rformed by

Respondent required a permit from the local building department.

31. Petitioner has proven by clear and convincing evidence

that Respondent has violated Subsection 489.129(1)(m), Florida

Statutes, by committing misconduct in the practice of

c ontracting, by abandoning the contract , and causing financial

harm to his customer.

32. Respondent is subject to disciplinary action by the

Construction Industry Licensing Board pursuant to Sections

455.227 and 489.129, Florida Statutes. The disciplinary action s

under these statutes includes placing the license e on probation ;

reprimanding the licensee ; revoking, suspending, denying the

issuance or renewal of the certificate or registration ; requiring

financial restitution to the consumer ; imposing an admin istrative

fine not to exceed $10,000 per violation ; and requiring continuing

education and assessing costs associated with investigation and

prosecution.

33. Subs ection 455.2273(5), Florida Statutes, states the

A dministrative L aw J udge, in recommending p enalties in any

recommended order, must follow the penalty guidelines

established by the board or department and must state in writing

the mitigating or aggravating circumstances upon which the

recommended penalty is based.

34. Florida Administrative Code Rule 61G4 - 17.002 provides,

in pertinent part, the following:

Circumstances which may be considered 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

licen see ' s customer, in any way associated

with the violation, which damage the

licensee has not relieved, as of the time

the penalty is be assessed. (This provision

shall not be given effect to the extent it

would contravene federal bankruptcy law.)

(2) Actual job - site violations of

building codes, or conditions exhibiting

gross negligence, incompetence, or

misconduct by the licensee, which have not

been corrected as of the time the penalty is

being assessed.

( 3 ) The danger to the public.

( 4 ) The number of complaints filed

against the licensee.

( 5 ) The length of time the licensee has

practiced.

( 6 ) The actual damage, physical or

otherwise, to the licensee ' s customer.

( 7 ) The deterrent effect of the penalty

imposed.

( 8 ) The effect of the penalty upon the

licensee ' s livelihood.

( 9) Any efforts at rehabilitation.

(1 0 ) Any other mitigating or aggravating

circumstances.

35. Florida Administrative Code Rule 61G4 - 17.001,

provides, in pertinent part, the following g uidelines that are

pertinent to this proceeding:

(1) The following guidelines shall be

used in disciplinary cases, absent

aggravating or mitigating circumstances and

subject to other provisions of this ch apter.

* * *

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

Mismanagement or misconduct causing

financial harm to the customer . First

violation, $1,500 to $2,500 fine,

restitution and/or probation ;

* * *

(i) Section 489.129(1)(i) , F.S.: Failing

in any material respect to comply with the

provisions of Part I of Chapter 489 F.S.

* * *

8. Section 489.119, F.S.: Failure to

register qu alified business organization.

First violation, $250 to $500 fine ;

* * *

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

Abandonment. First violati on $5,000 to

$1,000 fine and/or probation.

* * *

(m) Misconduct or incompetency in the

practice of contracting, 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 Chapte r

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

First violation, $1,000 to $2,500 fine ;

c. Any other form of misconduct or

incompetency. First violation, $500 to

$1,000 fine and probation ;

* * *

(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. First

violation , $250 to $1,000 fine and/or

probation or suspension ; . . . .

36. As stated in paragraph 27, Respondent violated

Subsection 489.126(2)(a), Florida Statue s. However, Florida

Administrative Code Rule 61G4 - 17.001 does not list a penalty for

this statutory violation. Florida Administrative Code Rule

61G4 - 17.001(6) contemplates an omission of th is kind and states:

(6) The absence of any violation from this

chapter shall be viewed as an oversight, and

shall not be construed as an indication that

no penalty is to be assessed. The guideline

penalty for the offense most closely

resembling the omitte d violation shall

apply.

Therefore, an appropriate fine for this violation should range

from $250 to $1,000.

3 7 . There is no evidence that Respondent has been

previously disciplined for any violations under Chapter 489,

Florida Statutes, therefore the g uidelines that should be used

are for the first violation.

RECOMMENDATION

Based on the foregoing F indings of F act and C onclusions of

L aw, it is

RECOMMENDED that a f inal o rder be entered as follows:

1. Finding Respondent guilty of having committed one

vi olation of Subs ection 489.129(1)(i), Florida Statutes, as

alleged in Count I of the Administrative Complaint, for

violating Subs ection 489.119(2), Florida Statutes , and imposing

as a penalty an administrative fine in the amount of $500.00 ;

2. Finding Resp ondent guilty of having committed one

violation of Subs ection 489.129(1)(i), Florida Statutes, as

alleged in Count II of the Administrative Complaint, for

violating Subs ection 489.126(2)(a), Florida Statutes , and

imposing as a penalty an administrative fin e in the amount of

$1,000.00 ;

3. Finding Respondent guilty of having committed one

violation of Subs ection 489.129(1)(g), Florida Statutes, as

alleged in Count III of the Administrative Complaint, and

imposing as a penalty an administrative fine in the am ount of

$2,500.00 ;

4. Finding Respondent guilty of having committed one

violation of Subs ection 489.129(1)(j), Florida Statutes, as

alleged in Count IV of the Administrative Complaint, and

imposing as a penalty an administrative fine of $5,000.00 ;

5. Fin ding Respondent guilty of having committed one

violation of Subs ection 489.129(1)(o), Florida Statutes, as

alleged in Count V of the Administrative Complaint, and imposing

as a penalty an administrative fine in the amount of $1,000.00 ;

6. Finding Responde nt guilty of having committed one

violation of Section 489.129(1)(m), Florida Statutes, as alleged

in Count VI of the Administrative Complaint, and imposing as a

penalty an administrative fine in the amount of $2,500.00 ;

7. Respondent be ordered to pay financial restitution in

the amount of $24,090.00 to Kenneth and Aldith Farquharson ;

8. Assessing cumulative cost of investigation and

prosecution in the total amount of $439.79, which excludes costs

associated with any attorney ' s fees ; and

9. P ermane ntly revok ing Respondent's license as a result

of the numerous violations and the financial harm sustained by

Kenneth and Aldith Farquharson.

DONE AND ENTERED this 1 2 th day of October , 2007 , in

Tallahassee, Leon County, Florida.

S

JEFF B. CLARK

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

www.doah.state.fl.us

Filed wi th the Clerk of the

Division of Administrative Hearings

this 1 2 th day of October , 2007 .

ENDNOTE

1/ All references are to 200 6 Florida Statutes, unless otherwise

indicated.

COPIES FURNISHED :

Tiffany A. Harrington, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399 - 2202

Michael Hill

1520 Sakonnet Court

Brandon, Florida 33511

Albert S. Lagano, Esquire

Albert S. Lagano, P.A.

551 South Apollo Boulevard, Suite 103

Melbourne, Florid a 32901

G. W. Harrell, Executive Director

Construction Industry Licensing Board

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

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 thi s Recommended Order should be filed with the agency that

will issue the Final Order in this case.