07-005767RX Juan Cuellar, Luis Garcia And Gerado Quintero vs. Department Of Business And Professional Regulation, Construction Industry Licensing Board Status: Closed DOAH Final Order on Tuesday, February 26, 2008.

Summary: Florida Administrative Code Rule 61G4-15.008, is invalid exercise of delegated legislative authority. Petitioners failed to prove that the possible interpretation of the statute is an unpromulated rule.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JUAN CUELLAR, LUIS GARCIA , AND )

GERA R DO QUINTERO, )

)

Petitioners, )

)

vs. ) Case No. 07 - 5767RX

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, )

)

Respondent. )

)

FINAL 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 January 25, 2008, in

Tallahassee, Florida.

APPEARANCES

For Petitioners: Timothy P. Atkinson, Esquire

Gavin D. Burgess, Esquire

Oertel, Fernandez, Cole & Bryant, P.A.

301 South Bronough Street, 5th Floor

Tallahassee, Florida 32302

For Respondent: Tom Barnhart

Senior Ass istant Attorney General

Department of Legal Affairs

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUE S

1. W hether Florida Administrative Code Rule 61G4 - 15.008,

constitute s an invalid exercise of delegated legislative

authority because it enlarges, modifies, or contravenes Section

489.129(1)(a), Florida Statutes, and because it exceeds

Respondent’s rulemaking authority; and

2. Whether an interpretation of Section 455.227(1)(h),

Florida Statutes, constitute s an unpromu lgated “rule.”

PRELIMINARY STATEMENT

On December 20, 2007, Petitioners Juan Cuellar, Luis

Garcia, and Gerardo Quintero, filed a Petition for Invalidity of

Existing Rule and Unadopted Rule (hereinafter referred to as the

"Petition") with the Division of Adm inistrative Hearings

(hereinafter referred to as the "DOAH").

Petitioner's challenge was designated DOAH Case No. 07 -

5767RX by Order of Assignment entered December 24, 2007 , and was

assigned to the undersigned.

By Notice of Hearing entered January 3, 2008, after

consultation with the parties , a final hearing was scheduled for

January 25, 2008 . On January 24, 2008 , the parties filed a

Joint Factual Stipulation (hereinafter refe rred to as the

"Stipulation"), and Petitioner s filed a Motion for

Administrative Law Judge to Take Official Recognition.

At the commencement of the final hearing, the Motion for

Administrative Law Judge to Take Official Recognition was

granted without objection. In light of the Stipulation, the

parties presented no evidence at hearing . Both parties did,

however, present oral argument.

The parties, pursuant to agreement at the close of the

final hearing, both filed Proposed Final O rders on February 11,

2008 . Those submittals have been fully considered in entering

this Final Order.

FIN DINGS OF FACT

The first 12 findings of fact are facts contained in the

Stipulation :

1. Prior to June 2005, Petitioner, Juan Cuellar, Luis

Garcia, and Gerardo Quintero, received what appeared to be a

valid Miami - Dade Building Business Certificate of Compet ency.

2. Upon receipt, Petitioners applied to the Department of

Business and Professional Regulation (hereinafter referred to as

the “Department”), to obtain a registered contractor’s license

using the Certificates of Competency.

3. Based on the Certific ates of Competency, the Department

issued each Petitioner a registered contractor’s license bearing

license numbers RG291103667 (Mr. Cuellar), RF11067267

(Mr. Garcia), and RF11067268 (Mr. Quintero).

4. Petitioners each applied for a certificate of authori ty

for their respective business es , Cuellar Construction and

Drywall (Mr. Cuellar), A.P.A. Plu mbing Corp. (Mr. Garcia), and

Q Plumbing Services Corp. (Mr. Quintero).

5. Based on the fact the Certificates of Competency and

the registered contractor’s licen se s had been granted, the

Department issued a certificate of authority to Cuellar

Construction and Drywall, QB 41342 ; APA Plumbing Corp., QB

42763 ; and Q Plumbing Services Corp., QB 42825.

6. At the time the Department issued Petitioners their

registered contractor’s licenses and subsequent certificates of

authority, it did so based solely on the Miami - Dade Building

Business Certificates of Competency presented by Petitioners and

the only information submitted to it.

7. The parties stipulate that Petition ers were not

entitled to their registered contractor’s licenses and

certificates of authority because the Miami - Dade Building

Business Certificates of Competency were not valid certificates.

8. At the time of their applications to the Department,

Petition ers were not qualified by any local jurisdiction or any

other method necessary to receive a registered contractor’s

license from the Department.

9. The Department filed A dministrative C omplaints against

Petitioners for the suspension or revocation of thei r licenses

based on violation s of Sections 489.129(1)(a), 489.129(1)(d),

489.129(1)(m), and 455.227(1)(h), Florida Statutes (hereinafter

collectively referred to as the “Administrative Complaints”) .

(All references to Sections of Chapter 489, Florida Stat utes, as

they relate to the Administrative Complaint are to the 2005

version. All other references to Florida Statutes are to the

2007 version).

10. Each Petitioner challenged the A dministrative

C omplaint filed against him in DOAH Case No. 07 - 2823PL

(Mr. Cuellar), DOAH Case No. 07 - 2824PL (Mr. Garcia), and DOAH

Case No. 07 - 2825PL (Mr. Quintero).

11. On December 13, 2007, the undersigned, as the

Administrative Law Judge to whom the cases had been assigned,

issued a R ecommended Order in DO AH Case No. 07 - 282 3PL

(Mr. Cuellar), DOAH Case No. 07 - 2824PL (Mr. Garcia), and DOAH

Case No. 07 - 2825PL (Mr. Quintero) , determining that Petitioners

violated Sections 489.129(1)(a), 489.129(1)(m), and

455.227(1)(h), Florida Statutes (hereinafter referred

collectively as the “Recommended Orders”) .

12. The “Recommendation” in each of the Recommended Orders

was , except for the name of the Respondent, the same as the

following :

Based on the foregoing Findings of Fact

and Conclusions of Law, it is RECOMMENDED

that a final order be entered by the

Department finding that Luis Garcia violated

the provision s o f Sections 489.129(1)(a) and

(m), and 455.227(1)(h), Florida Statutes , as

alleged in Counts I, III, and IV of the

Administrative Complaint; dismissing Count

II of the Administr ative Complaint;

requiring that Respondent pay the costs

incurred by the Department in investigating

and prosecuting this matter; giving

Respondent 30 days to voluntarily relinquish

his license; and revoking Respondent’s

license if he fails to voluntarily

relinquish it within 30 days of the final

order.

13. Based upon the foregoing, and the fact that no final

decision has been entered by the Construction Industry Licensing

Board (hereinafter referred to as the “Board”), Petitioners are

facing the possible revocation or voluntary relinquishment of

their licenses (an adverse impact whether they are “entitled” to

the licenses or not), continued defense against the

A dministrative C omplaints, and the payment of the cost incurred

by the Department in prosecuting the A dministrative C omplaints.

14. Should the Board revoke Petitioners’ licenses, they

will also be precluded from re - applying for licensure for a

period of five years pursuant to Section 489.129(9), Florida

Statutes. Petitioners face the same consequen ce even if they

voluntarily relinquish their license pursuant to Florida

Administrative Code Rule 61G4 - 12.017(3)(a).

1 5 . The adverse consequences of the possible final action

on the Administrative Complaints which they face stem in part

from a finding tha t they ha ve violated Section 489.129(1)(a),

Florida Statutes, which provides the following:

(1) The board may take any of the

following actions against any

certificateholder or registrant: place on

probation or reprimand the licensee, revoke,

suspend, o r deny the issuance or renewal of

the certificate, registration, 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 e xceed $10,000

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:

(a) Obtaining a certificate,

registration, or certificate of authority by

fraud or misrepresentation.

. . . .

16 . Petitioners were found in the Recommended Orders to

have violated Section 489.129(1)(a), Florida Statutes, based

upon an interpretation of that statutory provision adopted by

the Board in Florida Administrative Code Rule 61G4 - 15.008, an

existing r ule which Petitioners have challenged in this

proceeding (hereinafter referred to as the “Challenged Existing

Rule”), which provides:

Material false statements or information

submitted by an applicant for certification

or registration, or submitted for re newal of

certification or registration, or submitted

for any reissuance of certification or

registration, shall constitute a violation

of Section 489.129(1)(a), F.S., and shall

result in suspension or revocation of the

certificate or registration.

17 . E s sentially the same conclusions of law were reached

in the Recommended Orders concerning the application of the

Challenged Existing Rule ( in paragraphs numbered “23 ” through

“25” or “25” through 27” of the Recommended Orders ) :

While Respondent has not been

specifically charged with a violation of

Florida Administrative Code Rule 61G4 -

15.008, the Department cited the Rule, which

contains the following interpretation of

what constitutes "[o]btaining a certificate,

registration, or certificate of authority by

. . . misrepresentation" in violation of

Section 489.129(1)(a), Florida Statutes, in

support of Count I of the Administrative

Complaint:

. . . .

It is the Department’s position, that

despite the fact that Respondent did not

commit “fraud” in obtaining his license and

a certificate of authority for [the

business] and, in fact, did not knowingly

submit false information to the Department

in obtaining his license and the certificate

of competency, “[m]aterial false statements

or information” were nonetheless submitted

by Respondent in support thereof.

Florida Administrative Code Rule 61G4 -

15.008, in defining what constitutes the act

of "[o]btaining a certificate, registration,

or certificate of authority by . . .

misrepresentation” eliminates the need for

the Department to prove any knowledge on the

part of Respondent that he has made a

material misrepresentation or any intent on

the part of Respondent to rely upon a

material misrepresentation. All that is

required is proof that a material

representation was made and that the

representation was false.

18 . Petitioners have challenged the validity of the

Challenged Existing Rule as being an invalid exercise of

delegated legislative authority as defined in Section

120.52(8)(b) and (c), Florida Statutes.

19 . Pe titioners were also found in the Recommended Orders

to have violated Section 455.227(1)(h), Florida Statutes, based

upon an interpretation of that statutory provision advanced by

the Department during the prosecution of the Administrative

Complaints.

20 . Section 455.227(1)(h), Florida Statutes, provides that

the following act constitutes grounds for which disciplinary

action may be taken:

(h) Attempting to obtain, obtaining, or

renewing a license to practice a profession

by bribery, by fraudulent misrep resentation,

or through an error of the department or the

board . (Emphasis added) .

21 . The Department’s argument concerning the appropriate

interpretation and application of Section 455.227(1)(h), Florida

Statutes, advanced in the prosecution of the Adm inistrative

Complaints, was advanced in paragraphs 2 4 through 26 of the

Department’s Proposed Recommended Order:

24. Obtaining a certificate or

registration in error as a result of a

misrepresentation made during the

application process is conduct prosc ribed by

Section 455.227(1)(h), Florida Statutes.

25. Respondent was issued a registration

by error of the Department. To be issued a

registration by the Department, an applicant

must submit along with an application for

registration, a copy of the ap plicant’s

validly issued competency card from a local

government licensing board . . . .

26. Respondent submitted a fake

competency card that appeared to be validly

issued by the Miami Compliance Office. . . .

If the Department had known Respondent’s

C ompetency Card was fake and Respondents’

answer to the attest statement was false,

the Department would not have issued

Respondent a registration. Thus, since the

Department did not have truthful and

accurate information, the registration

issued to Respon dent was in error.

22 . The Department’s interpretation was described and

accepted in the Recommended Orders (in paragraphs numbered “29 ”

through “31” or “31” through 33”, in the Recommended Orders) , as

follows :

In support of this alleged violation, the

Department has argued that Respondent

obtained his license “through an error of

the department . . . .” That “error” was

the Department’s reliance upon an improperly

issued Miami - Dade building business

Certificate of Competency.

The evidence proved c learly and

convincingly that the Department issued the

Respondent’s license in “error.” While it

is true that Respondent did not

intentionally cause or even know of the

error, the Department reasonably takes the

position that Respondent obtained his

licen se nonetheless as a result of this

error and that is all that Section

455.227(1)(h), Florida Statutes.

The Department has proved clearly and

convincingly that Respondent violated

Section 455.227(1)(h), Florida Statutes

[requires] .

23 . Although not spe cifically quoted in their Petition in

this case, Petitioners have quoted what they believe is the

unpromulgated rule of the Board which they are challenging in

this case in paragraph 60 of Petitioner’s Proposed Final Order

(hereinafter referred to as the “ Challenged Language” ) :

. . . . Essentially, the Board applies the

following unadopted rule when applying

Section 455.227(1)(h):

Disciplinary action may be taken

pursuant to Section 455.227(1)(h),

Florida Statutes, where an

individual attempts to obtain a

license through an error of the

department even if the individual

did not have knowledge of the

error.

24. As of the date of the final hearing of this matter,

the Board had taken no a ction on the Recommended Orders .

CONCLUSIONS OF LAW

A. Jurisdiction .

25 . The DOAH has jurisdiction over the parties and the

subject matter of this proceeding pursuant to Section 120.56(1)

and (4), Florida Statutes.

B. Standing .

26 . “ S ubstantially affected persons ” may challenge the

facial validity of existing rules purs uant to Section 120.56(1)

and (3), Florida Statutes, and to challenge agency statements

which come within the definition of a “rule” but have not been

adopted pursuant to Section 120.54(1)(a), Florida Statutes ,

pursuant to Section 120.56(4), Florida Statut es . Petitioner s

were, therefore, as a threshold issue, required to prove they

are “substantially affected ” by the Challenged Existing Rule and

the Challenged Language” to institute the instant proceeding .

See Department of Professional Regulation, Board of Medical

Examiners v. Durrani , 455 So. 2d 515 (Fla. 1st DCA 1984).

27 . In order to prove that they are “substantially

affected , ” Petitioner s wer e required to specifically prove (a) a

real and sufficiently immediate injury in fact; and (b) that

their all eged interest is arguably within the “zone of interest”

to be protected or regulated. See Ward v. Board of Trustees of

the Internal Improvement Trust Fund , 651 So. 2d 1236 (Fla. 4th

DCA 1995). The Department has argued unconvincingly that

Petitioners hav e failed to prove either prong of the foregoing

test.

28 . Both the Challenged Existing Rule and the Challenged

Language are being relied upon, at least in part, by the

Department to prosecute the Administrative Complaints. As a

result of the Department’s prosecution, the Recommended Orders

entered as a result of the Department’s action, and the

potential adverse action which the Board may take against

Petitioners’ interests based upon the Challenged Existing Rule

and the Challenged Language, Petitioner s h ave proved the type of

immediate injury which gives them standing.

29 . The Department’s suggestion, in light of the fact that

the Board has not yet taken final action on the Recommended

Orders, that Petitioners “have yet to suffer any ‘sufficiently

real a nd immediate injury in fact’” ignores first, the fact that

Petitioners have been required to defend themselves against the

Administrative Complaints and, secondly, that Section 120.56,

Florida Statutes, does not require that a challenger to a rule

wait unt il the injury occurs to institute a rule - challenge. The

potential injury which Petitioners face as a result of the

issuance of the Administrative Complaints is more than adequate

to satisfy the “injury” test of standing.

C. The Challenged Existing Rule .

30 . Section 120.56(1) and (3), Florida Statutes, provide

in part the following:

(1) GENERAL PROCEDURES FOR CHALLENGING

THE VALIDITY OF A RULE OR A PROPOSED RULE. --

(a) Any person substantially affected by

a rule or a proposed rule may seek an

admi nistrative determination of the

invalidity of the rule on the ground that

the rule is an invalid exercise of delegated

legislative authority.

(b) The petition seeking an

administrative determination must state with

particularity the provisions alleged t o be

invalid with sufficient explanation of the

facts or grounds for the alleged invalidity

and facts sufficient to show that the person

challenging a rule is substantially affected

by it, or that the person challenging a

proposed rule would be substantial ly

affected by it.

(e) Hearings held under this section

shall be de novo in nature. The standard of

proof shall be the preponderance of the

evidence. Hearings shall be conducted in

the same manner as provided by ss. 120.569

and 120.57, except that the administrative

law judge's order shall be final agency

action. The petitioner and the agency whose

rule is challenged shall be adverse parties.

Other substantially affected persons may

join the proceedings as intervenors on

appropriate terms which shall not unduly

delay the proceedings. Failure to proceed

under this section shall not constitute

failure to e xhaust administrative remedies.

. . . .

(3) CHALLENGING EXISTING RULES; SPECIAL

PROVISIONS. --

(a) A substantially affected person may

seek an administrative determination of the

invalidity of an existing rule at any time

during the existence of the rule. The

petitioner has a burden of proving by a

preponderance of the evidence that the

existing rule is an invalid exercise of

delegated legisla tive authority as to the

objections raised.

(b) The administrative law judge may

declare all or part of a rule invalid. The

rule or part thereof declared invalid shall

become void when the time for filing an

appeal expires. The agency whose rule has

been declared invalid in whole or part shall

give notice of the decision in the Florida

Administrative Weekly in the first available

issue after the rule has become void.

31. An existing rule may be challenged pursuant to Section

120.56, Florida Statutes , only on the ground that it is an

"invalid exercise of delegated legislative authority . ” See

Schiffman v. Department of Professional Regulation, Board of

Pharmacy , 581 So. 2d 1375, 1379 (Fla. 1st DCA 1991); and Lewis

Oil Co., Inc. v. Alachua County , 496 So. 2d 184, 189 (Fla. 1st

DCA 1986).

32 . As the First District Court of Appeal observed in

Southwest Florida Water Management District v. Save the Manatee

Club, Inc . , 773 So. 2d 594, 597 - 98 (Fla. 1st DCA 2000):

This phrase ["invalid exercise of

delegate d legislative authority," as used in

Section 120.56, Florida Statutes] is defined

in section 120.52(8), Florida Statutes, as

an "action that goes beyond the powers,

functions, and duties delegated by the

Legislature." Section 120.52(8) then lists

seven ci rcumstances in which a rule is an

invalid exercise of delegated legislative

authority:

. . . .

In addition to the seven enumerated

grounds for challenging a rule, section

120.52(8) provides a set of general

standards to be used in determining the

va lidity of a rule in all cases. These

standards are contained in the closing

paragraph of the statute. . . .

33 . In the instant case, Petitioners contend that the

Challenged Existing Rule is an "invalid exercise of delegated

legislative author ity," withi n the meaning of Subs ections (8)(b)

and (c) of Section 120.52, Florida Statutes, which provide as

follows:

"Invalid exercise of delegated legislative

authority" means action which goes beyond

the powers, functions, and duties delegated

by the Legislature . A proposed or existing

rule is an invalid exercise of delegated

legislative authority if any one of the

following applies:

. . . .

(b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by s. 120.54(3)(a)1.;

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required

by s. 120.54(3)(a)1.;

34 . Subsections (8)(b) and (c) of Section 120.52, Florida

Statutes, although they are "interrelated," "ad dress two

different problems" or "issues." Board of Trustees of Internal

Improvement Trust Fund v. Day Cruise Association, Inc. , 794 So.

2d 696, 701 (Fla. 1st DCA 2001); and St. Johns River Water

Management District v. Consolidated Tomoka Land Co. , 717 So . 2d

72, 81 (Fla. 1st DCA 1998). Subsection (8)(b) "pertains to the

adequacy of the grant of rulemaking authority," including any

statutory qualifications upon the exercise of such authority.

Day Cruise Association , 794 So. 2d at 701; Department of

Busin ess and Professional Regulation v. Calder Race Course,

Inc. , 724 So. 2d 100, 104 (Fla. 1st DCA 1998); and Consolidated

Tomoka Land Co. , 717 So. 2d at 81. "Under section 120.52(8)(c),

the test is whether a . . . rule gives effect to a 'specific law

to be i mplemented,' and whether the . . . rule implements or

interprets 'specific powers and duties.'" Day Cruise

Association , 794 So. 2d at 704.

35 . Subsections (8)(b) and (c) of Section 120.52, Florida

Statutes, must be read in pari materia with the "closin g

paragraph of the statute," which is known as the "flush left

paragraph" and provides as follows:

A grant of rulemaking authority is necessary

but not sufficient to allow an agency to

adopt a rule; a specific law to be

implemented is also required. An ag ency may

adopt only rules that implement or interpret

the specific powers and duties granted by

the enabling statute. No agency shall have

authority to adopt a rule only because it is

reasonably related to the purpose of the

enabling legislation and is no t arbitrary

and capricious or is within the agency's

class of powers and duties, nor shall an

agency have the authority to implement

statutory provisions setting forth general

legislative intent or policy. Statutory

language granting rulemaking authority or

generally describing the powers and

functions of an agency shall be construed to

extend no further than implementing or

interpreting the specific powers and duties

conferred by the same statute.

36 . As to Petitioners allegation that the Challenged

Exi sting Rule is invalid because the Board “has exceeded its

grant of rulemaking authority, citation to which is required by

s. 120.54(3)(a)1” and “enlarges, modifies, or contravenes the

specific provisions of law implemented, citation to which is

required by s. 120.54(3)(a)1.” Petitioners alleged the following

in their Petition:

As interpreted by Respondent and the

Administrative Law Judge, existing Rule

61G4 - 15.008, Fla. Admin. Code, apparently

allows Respondent to impose discipline on a

licensee for a “fals e statement” even though

Petitioners did not intend to submit a false

statement. As such, existing Rule 61G4 -

15.008 violates Section1 20.52(8)(b) and

(c), Florida Statutes, by exceeding the

legislative grant of rulemaking authority

and by enlarging, modif ying or contravening

the specific provisions of Section

489.129(1)(a) and (3), Florida Statutes.

The phrase “fraud or misrepresentation”

contemplates that a licensee intend or have

knowledge of a false statement submitted to

the Board . . . .

37. The fo regoing assertion by Petitioners misses the

mark. All Petitioners have alleged is that the Challenged

Existing Rule is being “interpreted” in a way which Petitioners

assert is contrary to Section 489.129(1)(a), Florida Statutes.

In order to declare the C hallenged Existing Rule inconsistent

with the law implemented or in excess of the Board’s rulemaking

authority, it must be shown that the rule is invalid on its

face.

38 . Section 489 .129(1), Florida Statutes, establishes the

grounds for which the Board ma y take disciplinary action against

a licensee. Section 489 .129(3), Florida Statutes, gives the

Board specific authority to “specify by rule the acts or

omissions which constitute violations of this section.” It is

Section 489 .129(3), Florida Statutes, wh ich the Board has

specifically cited as the “specific authority” for adopting the

Challenged Existing R ule.

39 . Section 458.129(3), Florida Statutes, authorizes the

Board to do precisely what the Challenged Existing Rule attempts

to do: define specific c ircumstances which the Board has

concluded will constitute a violation of Section 489.129(1)(a),

Florida Statutes. Therefore, Petitioners have failed to prove

that the Challenged Existing Rule “has exceeded its grant of

rulemaking authority, citation to w hich is required by s.

120.54(3)(a)1.”

40 . Turning to the question of whether the Challenged

Existing Rule “enlarges, modifies, or contravenes the specific

provisions of law implemented, citation to which is required by

s. 120.54(3)(a)1,” while not raisin g the issue in their

Petition, Petitioners argue for the first time in their Proposed

Final Order that the Challenged Existing Rule is invalid

pursuant to Section 120.52(8)(c), Florida Statutes, because the

implementing law cited by the Board in support of the Challenged

Existing Rule is incorrect.

41 . The specific “law implemented” noted by the Board for

the Challenged Existing Rule is Section 489.129(3), Florida

Statutes, which is the law which gives the Board the authority

to adopt rules interpreting Se ction 489.129(1), Florida

Statutes . Section 489.129(3), Florida Statutes, while giving

the Board g eneral rule - making authority, clearly is not the

specific law the Board intended to implement. This error on the

part of the Board was first raised at the f inal hearing of t his

matter by the undersigned.

42 . Petitioners’ argument is rejected for two reasons.

First, Petitioners were required to “ state with particularity

the provisions alleged to be invalid with sufficient explanation

of the facts or grounds for the alleged invalidity . . . ” in

their Petition. § 120.56(1)(b), Fla. Stat. This Petitioners

did not do. The sole basis for their challenge to the

Challenged Existing Rule, quoted, supra , raised Petitioners’

substantive argument concerning the valid ity of the rule and not

the procedural issue noted by the undersigned at the final

hearing.

43 . Secondly, while the cited “law implemented” is in

error, it is clear that neither Petitioners nor any other person

interested in the rule will not realize what law is actually

being implemented by the Challenged Existing Rule: Section

458.129(1)(a), Florida Statutes. By its very terms, the

Challenged Existing Rule states that the Board’s specifically

described circumstances “shall constitute a violation of Sec tion

489.129(1)(a), F.S. . . .”

44 . Turning to the substantive arguments raised by

Petitioners in their challenge to the Challenged Existing Rule,

it is noted that Section 489.129(1)(a), Florida Statutes, is one

the Board is specifically responsible for a dministering .

Therefore , the Board’s construction of this provision (as

incorporated in the rule) "should be upheld when it is within

the range of permissible interpretations." Board of Podiatric

Medicine v. Florida Medical Association , 779 So. 2d 658, 6 60

(Fla. 1st DCA 2001); see also Gulfstream Park Racing Association

v. Tampa Bay Downs , No. SC05 - 251, 2006 Fla. LEXIS 2207 *11 (Fla.

2006 ). The agency's construction need not be the sole possible

construction, or even the most desirable one, but must only be

within the range of possible and reasonable constructions. See

Cagle v. St. Johns County School District , No. 5D05 - 1380, 2006

Fla. App. LEXIS 14626 *9 (Fla. 5th DCA September 1, 2006);

Florida Department of Education v. Cooper , 858 So. 2d 394, 396

(Fl a. 1st DCA 2003); and Republic Media v. Department of

Transportation , 714 So. 2d 1203, 1205 (Fla. 5th DCA 1998 ) .

45 . On the other hand, it must be kept in mind that

"Legislative intent is the 'polestar' in interpretation of

statutory provisions." Blinn v . Florida Department of

Transportation , 781 So. 2d 1103, 1107 (Fla. 1st DCA 2000).

Accordingly, if the Board’s construction of the statute is

contrary to the plain legislative intent , the Board’s

interpretation is not entitled to any d eference and must be

rejected.

46 . "Legislative intent must be derived primarily from the

words expressed in the statute. If the language of the st atute

is clear and unambiguous, these words must be given effect. ”

Florida Department of Revenue v. Florida Municipal Power Ag ency ,

789 So. 2d 320, 323 ( Fla. 2001 ).

47 . Guidance in ascertaining the meaning of an undefined

statutory term may be obtained by looking at definitions of the

same term found elsewhere in Florida Statutes, notwithstanding

that these definitions are not directly applicable. See

Dufresne v. State , 826 So. 2d 272, 275 (Fla. 2002 ).

48 . As pointed out by Petitioners, the Department has

argued and undersigned concluded in the Recommended Orders that,

based upon the Challenged Existing Rule, it is not necessa ry to

prove that the false information proved by Petitioners in

support of their licenses was knowingly or intentionally

provided in order to find a violation of Section 489.129(1)(a),

Florida Statutes. In order for Petitioners to prevail in their

challen ge, it must be concluded first that this interpretation

is inconsistent with Section 489.129(1)(a), Florida Statutes,

the implemented statute, and, secondly, that there is no other

reasonably interpretation of the Challenged Existing Rule which

would be co nsistent with the implemented statute.

49 . As to the first issue, whether the interpretation of

Section 489.129(1)(a), Florida Statutes, advanced by the

Department and accepted by the undersigned is inconsistent with

Legislative intent, the Department has cited Saunders Leasing

System, Inc. v. Gulf Central Distribution Center, Inc. , 513 So.

2d 1303 (Fla. 2d DCA 1987) . T he Department argues this case

supports its conclusion that the term “misrepresentation” in the

statute, does not require intent or knowle dge on the part of the

licensee or applicant.

50 . The Department has quoted the following language from

Saunders Leasing :

The elements of misrepresentation are: (1)

Misrepresentation of a material fact; (2)

knowledge by the misrepresenter, or

representa tions made without knowledge of

the truth or falsity of those

representations, or representations made in

circumstances where the representer should

have known of the falsity of those

representations ; (3) an intention to induce

reliance; and (4) resulting injury to the

party acting in justifiable reliance on

those misrepresentations. Joiner v.

McCullers , 158 Fla. 562, 28 So.2d 823

(1947). [Emphasis added].

Saunders Leasing , 513 So.2d at 1306. Relying on the emphasized

language quoted above, the Departme nt argues that the court held

that “intent” is not necessary to find a “misrepresentation.”

51 . The Department’s argument is rejected . T he language

relied upon by the D epartment contemplates a showing that the

person making the representation actually kn ew it was false,

that the person should have known it was false, or that the

person simply ignored any concern about whether the

representation was true or false. The court’s application of

the test in Saunders Leasing , supports this conclusion:

First, any misrepresentation regarding

mileage or condition was not material

because Saunders agreed to maintain the

vehicles and provide substitute vehicles

within four hours after notice that a given

vehicle was not operational. Even Bill

Gregory admitted that if Saunders had

corrected the quality deficiencies on the

tractors, he would have accepted the

tractors notwithstanding the mileage. Gulf

Central also admitted that all of the noted

deficiencies could have been corrected. In

fact, Saunders was correctin g them when it

received notice of Gulf Central's

repudiation.

Second, there is no evidence that Whitson

knew that the trucks that were to be

delivered would have mileages in excess of

175,000 miles or would not comport with Gulf

Central's desires as to condition. Neither

is there evidence that Whitson should have

known of same.

Third, Whitson did not describe the

tractors as "creampuff[s]." That was Bill

Gregory's term.

Fourth, while Gulf Central argues that it

would not have entered into the con tract but

for Saunders' alleged misrepresentations,

that argument is contrary to the obvious

fact that if those terms were so material to

Gulf Central's bargain, they would or should

have been included in the contract. Since

they were not, and particularl y since Gulf

Central's attorney added the last revisions

to the contract, the argument must fail.

Fifth, Bill Gregory apparently did not

feel defrauded when he wrote his September

16 letter. In that letter, Bill Gregory

wrote: "I spent a very restless night last

night. It is not often, in ones [sic]

lifetime, a person meets one like yourself.

You know your business extremely well and

are a most powerful salesman. You are a man

I would be proud to be associated with in

any endeavor." This is not the lang uage of a

man who feels he has been defrauded. There

was simply no evidence of fraud in the

inducement here and the express disclaimer

of warranties is, therefore, effective.

Barile Excavating & Pipeline Co. v. Vacuum

Under - Drain, Inc. , 362 So.2d 117 (Fl a. 1st

DCA 1978). [Emphasis added].

Saunders Leasing , 513 So.2d at 1306 - 1307.

52 . The stipulated facts in this case and in the

prosecution of the Administrative Complaints failed to prove

that Petitioners actually knew the information provided to the

Bo ard was false, that they should have known it was false, or,

most importantly, that they simply ignored whether their

representation was true or false. Unlike Saunders Leasing , the

Petitioners in this case had every reason to believe that the

information provided to the Board in support of their licensing

was true.

53 . More persuasive are the cases of Walker v. Florida

Department of Business and Professional Regulation , 705 So. 2d

6 52 (Fla. 5th DCA 1998), and Munch v. Department of Professional

Regulation , Division of Real Estate , 592 So. 2d 1136 (Fla. 1st

DCA 1992). Walker had been charged with a violation of Section

475.25(1)(m), Florida Statutes, with authorized the Florida Real

Estate Commission (hereinafter referred to as “FREC”), to impose

disciplin e where a licensee “[h]as obtained a license by means

of fraud, misrepresentation, or concealment”, language

materially the same as the language of Section 489.129(1)(a),

Florida Statutes. Munch had been charged with a violation of

Section 475.25(1)(b), F lorida Statutes, which authorized FREC to

impose discipline where a license e “[h]as been guilty of fraud,

misrepresentation, concealment, false promises, false pretenses,

dishonest dealing by trick, scheme, or device, culpable

negligence, or breach of trus t in any business transaction in

this state or any other state, nation, or territory . . . .”

54 . Although the ultimate results in Walker and Munch were

different, in pertine nt part, the court in both cases recognized

that there must be a showing of “inte nt” or knowledge to find a

“misrepresentation” under either Subsection 475.25(1)(b) or (m),

Florida Statutes.

55 . As pointed out by Petitioners, the interpretation of

“misrepresentation” as requiring a showing of “intent” has also

been followed in at leas t two DOAH Recommended Orders: Harrell

v. Department of Insurance and Treasurer , DOAH Case No. 89 - 2767

(1990), and Contessa v. Department of Busienss and Professional

Regulation, Division of Real Estate , DOAH Case No. 82 - 3100

(1983).

56 . Petitioners have also relied upon the definition of

“misrepresentation” found in Black’s Law Dictionary: “material

representation of presently existing or past fact, made with

knowledge of its falsity, and with intention that other party

rely thereon, resulting in relian ce by that other party to his

detriment.” Black’s Law Dictionary 1001 (6 th Ed. 1990).

57 . Based upon the foregoing, it is concluded that the

Department’s interpretation of Section 489.129(1)(a), Florida

Statutes, that a “ mis re pre sentation” may be made wi thout intent,

erroneously accepted by the undersigned in the Recommended

Orders, is inconsistent with the clear legislative intent of

Section 489.129(1)(a), Florida Statutes.

58 . Turning the second issue, it is also concluded that

Challenged Existing Rule is not capable of an interpretation

which would make it consistent with the foregoing interpretation

of the implemented statute. That is, the only reasonable

interpretation of the Challenged Existing Rule, and the one

advanced by the Department, is that it is not necessary that a

licensee intentionally submit false information in support of an

application for a certificate in or to find that the certificate

was obtained by “misrepresentation.”

59 . T he Challenged Existing Rule provides that a

submission o f any “[M]aterial false statements or information .

. .” by a licensee or applicant, regardless of intent or

knowledge on the part of the licensee or appli cant, constitutes

“fraud or mis representation” as used in Section 48 9.129(1)(a),

Florida Statutes.

60 . Based upon the foregoing, the Board, in adopt ing the

Challenged Existing Rule, “ has exceeded its grant of rulemaking

authority, citation to which is required by s. 120.54(3)(a)1.”

D. The Challenged Unpromulgated Rule .

61 . Petitioners have challenged t he following language as

being a “rule” which the Board has failed to adopt pursuant to

Section 120.54(1)(a), Florida Statutes:

Disciplinary action may be taken pursuant to

Section 455.227(1)(h), Florida Statutes,

where an individual attempts to obtain a

l icense through an error of the department

even if the individual did not have

knowledge of the error.

62 . Petitioners have challenged the Challenged Language

pursuant to Section 120.56(4)(a), Florida Statutes, which

provides , in part, the following:

An y person substantially affected by an

agency statement may seek an administrative

determination that the statement violates s.

120.54(1)(a). The petition shall include

the text of the statement or a description

of the statement and shall state with

partic ularity facts sufficient to show that

the statement constitutes a rule under s.

120.52 and that the agency has not adopted

the statement by the rulemaking procedure

provided by s. 120.54.

63 . "When section 120.54(1)(a) is read together with

section 120.5 6(4), it becomes clear that the purpose of a

section 120.56(4) proceeding is to force or require agencies

into the rule adoption process. It provides them with

incentives to promulgate rules through the formal rulemaking

process." Osceola Fish Farmers As sociation, Inc. vs. Division

of Administrative Hearings , 830 So. 2d 923, 934 (Fla.4th DCA

2002).

64 . "An agency statement constituting a rule may be

challenged pursuant to Section 120.56(4), Florida Statutes, only

on the ground that 'the agency has not ad opted the statement by

the rulemaking procedure provided by s. 120.54.'" Zimmerman v.

Department of Financial Services, Office of Insurance

Regulation , DOAH Case No. 05 - 2091RU, slip op. at 11 (Fla. DOAH

August 24, 2005)(Summary Final Order of Dismissal); see also

Southwest Florida Water Management District v. Charlotte County ,

774 So. 2d 903, 908 - 09 (Fla. 2d DCA 20 01) .

65 . What constitutes a " rule " i s defined by Section

120.52(15), Florida Statutes, which provides, in pertinent part,

as follows:

"Rule" means each agency statement of

general applicability that implements,

interprets, or prescribes law or policy or

describes the procedure or practice

requirements of an agency and includes any

form which imposes any requirement or

solicits any information n ot specifically

required by statute or by an existing rule.

The term also includes the amendment or

repeal of a rule. The term does not

include:

. . . .

66 . Only agency statements of "general applicability,"

i.e., those statements which are intended by their own effect to

create or adversely effect rights, to require compliance, or to

otherwise have the direct and consistent effect of law, fall

within th e definition of Section 120.52(15), Florida Statutes .

See Department of Highway Safety and Motor V ehicles v. Schluter ,

705 So. 2d 81, 82 (Fla. 1st DCA 1997); Balsam v. Department of

Health and Rehabilitative Services , 452 So. 2d 976, 977 - 978 (1st

DCA, 1984); and McDonald v. Department of Banking and Finance ,

346 So. 2d 569, 581 (Fla. 1st DCA 1977).

67 . Petitioners ’ assertion that the C hallenged L anguage

constitutes a policy of the Board is based upon essentially

three things: (1) statements of the Department contained in

pleadings filed in the prosecution of the Administrative

Complaints ; statements o f undersigned in the Recommended Orders

entered in those cases; and (3) statements of the Administrative

Law Judge in a Recommended Order entered in Department of

Business and Professional Regulation v. Gonzales , DOAH Case

No. 07 - 2501PL (Oct. 2007).

68 . T he statements relied upon by Petitioners are not

“rules”, first because they are not statements of the Board.

Even it is likely the Board will accept the conclusions of law

in the Recommended Order and the Recommended Order in DOAH Case

No. 07 - 2501PL, it has not done so at this time. The evidence,

therefore, failed to prove that the Challenged Language is a

“rule.”

69 . Secondly, even if the Challenged Language were

attributable to the Board, the allegations in this case fail to

substantiate a finding th at the policy is one of “general

applicability.” The statement challenged by Petitioners is a

statement made in pleadings and decisions involving alleged

violations of Section 455.227(1)(h), Florida Statutes, by

Petitioners and one other individual. As s uch, they are not

“rules.” See Wisconsin Life Insurance Company v. Florida

Department of Insurance , DOAH Case No. 01 - 3135RU (Nov. 2001),

affirmed , 831 So. 2d 239 (Fla. 1st DCA 2002); Sydney T. Bacchus

v. Department of Business and Professional Regulation , DOAH Case

No. 0 6 - 4816RX (Jan. 2007); and The Pool People, Inc. v. Board of

Professional Engineers , DOAH Case No. 05 - 1637RU (Dec. 2005).

See also George Marshall Smith vs. Alex Sink, as Agency Head and

Chief Financial Officer and Department of Financial S ervices ,

DOAH Case No. 07 - 4746RU (Jan. 2008).

70. Petitioners failed to prove that the Challenged

Language constitutes a “rule.”

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED :

1. Florida Administrative Code Rule 61G4 - 15.008,

constitute s an invalid exercise of delegated legislative

authority because it enlarges, modifies, or contravenes Section

489.129(1)(a), Florida Statutes; and

2. To the extent the Petition alleges that the Challenged

Language constitutes an unprom ulgated “rule,” it is DISMISSED.

DONE AND ORDERED this 26th day of February, 2008 , 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

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 26th day of February, 2008 .

COPIES FURNISHED :

T imothy P. Atkinson, Esquire

Gavin D. Burgess, Esquire

Oertel, Fernandez, Cole & Bryant, P.A.

301 South Bronough Street, 5th Floor

Tallahassee, Florida 32302

Richard A. Alayon, Esquire

Alayon & Associates, P.A.

4551 Ponce De Leon Boulevard

Coral Gables, F lorida 33146

Tom Barnhart

Senior Assistant Attorney General

Department of Legal Affairs

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

G. W. Harrell, Executive Director

Construction Industry Licensing Board

Department of Business and

P rofessional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Scott Boyd, Executive Director

and General Counsel

Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32399 - 1300

Holly B enson, Secretary

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 No rth Monroe Street

Tallahassee, Florida 32399 - 0792

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of appeal with the Clerk of the

Division of Administrative Hearings and a copy, accompanied by

filing fees prescribed by law, with the District Court o f

Appeal, First District, or with the District Court of Appeal in

the Appellate District where the party resides. The notice of

appeal must be filed within 30 days of rendition of the order to

be reviewed.