08-002394PL Department Of Business And Professional Regulation, Construction Industry Licensing Board vs. Danny Henley Status: Closed Recommended Order on Wednesday, August 20, 2008.

Summary: License of Respondent, who abandoned project and failed to obtain final inspection, should be revoked.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, )

)

Petitioner, )

)

vs. ) Case No. 08-2394PL

)

)

DANNY HENLEY, )

)

Respondent, )

_________________________________)

RECOMMENDED ORDER

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

on July 23, 2008, in Stuart, Florida, before Administrative Law

Judge Claude B. Arrington of the Division of Administrative

Hearings (DOAH).

APPEARANCES

For Petitioner: Brian P. Coats, Esquire

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2022

For Respondent: Danny Henley, p ro se

1524 Bob Loftin Road

Panama City, Florida 32405

STATEMENT OF THE ISSUE

Whether Respondent committed the offenses alleged in the

Administrative Complaint and, if so, the penalties that should

be imposed.

PRELIMINARY STATEMENT

On March 24, 2008, Petitioner filed an Administrative

Complaint against Respondent, which alleged certain facts

pertaining to Respondent’s dealings with a consumer named Ruth

Schumacher and, based on those factual allegations, charged

Respondent in four Counts with the violations that are at issue

in this proceeding.

Count I alleged that Respondent violated Section

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

written notice of the consumer’s rights under Florida

Homeowners’ Construction Recovery Fund as required by Section

489.1425(1), Florida Statutes.

Count II alleged that Respondent violated Section

489.129(1)(j), Florida Statutes, by abandoning a construction

project in which the contractor is engaged or under contract as

the contractor.

Count III alleged that Respondent violated Section

489.129(1)(o), Florida Statutes, by failing to obtain the

appropriate permits and resulting inspections necessary to

initiate and complete the subject project.

Count IV alleged that Respondent violated Section

489.129(1)(m), Florida Statutes, by committing incompetence or

mismanagement in the practice of contracting.

Respondent timely requested a formal administrative

hearing, the matter was duly referred to DOAH, and this

proceeding followed.

At the formal hearing, Petitioner presented the testimony

of Andrew Bruhn (an employee of the Martin County, Florida,

Building Department), and Jacqueline Macey (Ms. Schumacher’s

daughter). Petitioner offered 13 sequentially-numbered

Exhibits, each of which was admitted into evidence. Respondent

appeared at the final hearing and cross-examined Petitioner’s

witnesses. Respondent did not offer any exhibits and he

presented no testimony.

A Transcript of the proceeding was filed July 31, 2008.

The deadline for the filing of post-hearing submittals was set

for ten days following the filing of the transcript. Petitioner

timely filed a Proposed Recommended Order (PRO), which has been

duly-considered by the undersigned in the preparation of this

Recommended Order. Respondent has not filed a PRO as of the

entry of this Recommended Order.

FINDINGS OF FACT

1. At all times relevant to this proceeding, Respondent

has been licensed by the Construction Industry Licensing Board

(CILB) as a certified contractor and has held license CGC 13316.

2. At all times relevant to this proceeding, Coastal

Structures, LCC (Coastal Structures) has possessed a certificate

of authority as a contractor qualified to do business in the

State of Florida and has held license QB39088. At all times

relevant to this proceeding, Respondent has been the primary

qualifying agent for Coastal Structures.

3. At times relevant to this proceeding, Ruth Schumacher

was the owner of a residence located in Martin County at

2880 Southwest Brighton Way, Palm City, Florida (the subject

property). Ms. Schumacher passed away on June 17, 2008. Prior

to her mother’s death, Ms. Macey assisted Ms. Schumacher with

her affairs. After her death, all of Ms. Schumacher’s estate,

including the subject property, was placed in a trust with

Ms. Macey as the trustee.

4. In late October 2005, a screened porch on the subject

property was damaged by Hurricane Wilma. In November 2005,

Ms. Macey, on behalf of her mother, contacted Coastal Structures

about making repairs to the damaged porch. In November 2005,

David and Donna Williams, on behalf of Coastal Structures,

visited the subject property, made temporary repairs to the

damaged porch, and discussed with Ms. Macey and Ms. Schumacher

the replacement of the porch.

5. On November 28, 2005, Coastal Structures entered into a

written contract with Ms. Schumacher to remove the damaged porch

and to replace it with a new screened porch over the existing

concrete slab.

6. The written contract failed to contain a written

statement explaining to Ms. Schumacher her rights under the

Florida Homeowners’ Construction Recovery Fund as required by

Section 489.1425(1), Florida Statutes.

7. When Ms. Schumacher contracted with Coastal Structures

on November 25, 2005, her insurance company had accepted her

claim, but had not completed the damage assessment. The scope

of the work was to be based on the allowances provided in the

insurance adjuster’s statement of loss once the damage

assessment was completed.

8. The insurance company’s damage assessment for the

damaged porch was completed December 3, 2005. The total

replacement cost was valued at $21,190.10, with a deductible of

$2,960.00, for a net claim value of $18,230.10.

9. On March 8, 2006, Respondent submitted to the Martin

County Building Department an application for a permit for a

screen enclosure over an existing slab.

10. The Martin County Building Department approved the

permit application and issued permit number BSCE-2006030334 (the

subject permit) to Respondent on March 8, 2006.

11. The subject permit required one inspection, which was

to be a final inspection after the completion of the work.

Respondent failed to request the required inspection and the

subject permit expired.

12. After the execution of the contract with Coastal

Structures and the completion of the damage assessment by the

insurance company, Ms. Schumacher and Coastal Structures agreed

to change the scope of the work from a screened enclosure to a

glass enclosure with windows. Ms. Schumacher and Coastal

Structures did not execute a written change order or any other

written amendment to the written contract.

13. Coastal Structures completed its work on the porch in

May 2006. Pursuant to its verbal agreement with Ms. Schumacher,

Coastal Structures replaced the damaged screen porch with a

glass enclosure with windows. On May 17, 2006, Ms. Schumacher

paid Coastal Structures the sum of $25,363.00 in full payment

for the work it had done.

14. After payment had been made, Ms. Macey observed

several problems with the project including leaks from the

ceiling panels and tile work that was not flush with the bottom

of the exterior doorway, which allowed water to seep into the

structure.

15. In response to complaints from Ms. Macey, Mr. Williams

returned to the subject property in May 2006 and applied

caulking to the ceiling and along the floor of the structure.

That work did not resolve the problems with the project.

16. Ms. Macey made further complaints to Mr. Williams, but

he did not respond to those complaints.

17. Ms. Macey and Ms. Schumacher asked Palm City

Screening, LLC (Palm City Screening) to determine the problems

with the project and to provide an estimate to repair those

problems. On February 13, 2007, Palm City Screening provided

Ms. Schumacher with an estimate of $19,785.00 to replace the

existing porch.

18. In May 2007, Respondent visited the subject property

in response to complaints from Ms. Macey. Ms. Macey pointed out

to Respondent problems with the porch and Respondent inspected

the structure. Respondent told Ms. Macey that he would send

someone named George to the subject property to make repairs.

Respondent left the subject property and Ms. Macey heard nothing

further from him. No one returned to the property on behalf of

Respondent.

19. At no time did Ms. Schumacher or Ms. Macey terminate

the contract with Coastal Structures or prevent Coastal

Structures from correcting the problems with the porch.

20. On July 2, 2008, Palm City Screening provided a second

estimate to Ms. Macey in the amount of $23,230.00 to replace the

structure. Palm City Screening’s representative told Ms. Macey

that the structure could not be repaired as built, but would

have to be replaced. The scope of work and estimated costs

excluded electrical work for the structure.

21. On July 11, 2008, Jimmy Rowell Electric Service

provided Ms. Macey with a written estimate in the amount of

$1,520.00 for the electrical work that would be required if the

structure were to be replaced.

22. No one on behalf of Palm City Screening or Jimmy

Rowell Electric Service testified at the formal hearing.

23. The total investigative costs of this case to

Petitioner, excluding costs associated with attorney’s time, was

$176.39.

24. On October 8, 1995, Petitioner filed an Amended

Administrative Complaint against Respondent in DBPR Case 91-

00022. The Amended Administrative set forth certain factual

allegations pertaining to Respondent’s dealings with a person

named Donald H. Shaffer. Based on those allegations, Petitioner

charged Respondent with abandonment of a project (Count I);

committing mismanagement or misconduct in the practice of

contracting that caused financial harm to a customer by allowing

liens to be placed against the project (Count II); failure to

supervise (Count III); mismanagement or misconduct in the

practice of contracting that caused financial harm to a customer

by abandoning the project (Count IV); and by having committed

fraud, deceit, gross negligence, incompetence, or misconduct in

the practice of contracting (Count V).

25. DBPR Case 91-00022 was resolved by stipulation. As

part of the stipulation, Respondent agreed to pay a fine and

make restitution to the customer. The stipulation contained the

following provision:

Respondent neither admits nor denies the

allegations of fact contained in the Amended

Administrative Complaint attached hereto as

Exhibit “A”.

26. The CILB entered a Final Order Approving Settlement

Stipulation on August 2, 1966, which “. . . approved and adopted

in toto . . .” the settlement stipulation.

CONCLUSIONS OF LAW

27. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties hereto

pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

28. Petitioner has the burden of proving by clear and

convincing evidence the allegations against Respondent. See

§ 120.57(1), Fla. Stat.; Ferris v. Turlington , 510 So. 2d 292

(Fla. 1987); Evans Packing Co. v. Department of Agriculture and

Consumer Services , 550 So. 2d 112 (Fla. 1st DCA 1989); Inquiry

Concerning a Judge , 645 So. 2d 398 (Fla. 1994); and Department

of Banking and Finance v. Osborne Stern and Co. , 670 So. 2d 932

(Fla. 1996).

29. Petitioner is the agency of the State of Florida

charged with regulating the practice of construction contracting

in the State of Florida pursuant to the provisions of

Section 20.165, Chapter 455, and part I of Chapter 489, Florida

Statutes.

30. Respondent, in his capacity as a licensed contractor,

is subject to the provisions of Chapters 455 and 489, Florida

Statutes. Petitioner has the authority to regulate Respondent’s

activities as a contractor.

31. Respondent, as its primary qualifying agent, is

responsible for the actions of Coastal Structures pursuant to

the provisions of Section 489.1195(1)(a), Florida Statutes,

which provides as follows:

(a) All primary qualifying agents for a

business organization are jointly and

equally responsible for supervision of all

operations of the business organization, for

all field work at all sites, and for

financial matters, both for the organization

in general and for each specific job.

32. Section 489.129(1), Florida Statutes, gives the CILB

the authority to discipline the license of any general

contractor, if he or she commits certain acts specified in the

statute.

COUNT I

33. Count I alleged that Respondent violated Section

489.129(1)(i), Florida Statutes, by having violated Section

489.1425(1), Florida Statutes.

34. Section 489.129(1)(i), Florida Statutes, provides that

disciplinary action may be taken by the CILB if a general

contractor is guilty 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.

35. Section 489.1425(1), Florida Statutes, provides as

follows:

(1) Any agreement 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

CONTRACT, 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 ADDRESS:

The statement shall be immediately followed

by the board's address and telephone number

as established by board rule.

36. Petitioner established by clear and convincing

evidence that Respondent failed to include in the contract

between Ms. Schumacher and Coastal Structures the statement

required by Section 489.1425(1), Florida Statutes. As alleged

by Count I of the Administrative Complaint, that failure

constituted a violation of Section 489.129(1)(i), Florida

Statutes.

COUNT II

37. Section 489.129(1)(j), Florida Statutes, provides that

disciplinary action may be taken by the CILB if a general

contractor is guilty of:

(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.

38. Petitioner established by clear and convincing

evidence that Respondent abandoned the subject construction

project in violation of Section 489.129(1)(j), Florida Statutes,

by failing to call for the final inspection of the project, by

permitting the building permit to expire, and by failing to

correct the defects in the project.

COUNT III

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

disciplinary action may be taken by the CILB if a general

contractor is guilty of:

(o) Proceeding on any job without

obtaining applicable local building

department permits and inspections.

40. The record is undisputed that Respondent obtained a

building permit for a screened porch prior to beginning work on

the subject project, but that he never called for the final

inspection of the project. That failure established the

violation alleged in Count III of the Administrative Complaint.

COUNT IV

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

disciplinary action may be taken by the CILB if a general

contractor is guilty of:

(m) Committing incompetency or misconduct

in the practice of contracting.

42. Petitioner established by clear and convincing

evidence that Respondent violated Section 489.129(1)(m), Florida

Statutes, with regard to the subject project. Respondent

entered into the subject contract without a written statement

explaining the consumer’s rights under the Florida Homeowner’s

Construction Recovery Fund. Respondent thereafter abandoned the

project, causing substantial damages to the customer.

Respondent’s conduct constitutes incompetency or misconduct as

alleged in Count IV of the Administrative Complaint.

RESTITUTION

43. Florida Administrative Code Rule 61G4-17.001(5)

provides as follows:

(5) For any violation occurring after

October 1, 1988, the board shall order the

contractor to make restitution in the amount

of financial loss suffered 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 federal

bankruptcy law.

44. Respondent has failed to make any restitution or take

any effective action to correct the defective construction on

the subject property.

45. The written estimates from Palm City Screening and

Jimmy Rowell Electric Service are hearsay evidence. The only

evidence that the structure would have to be replaced and could

not be repaired came from a statement made to Ms. Macey by a

representative of Palm City Screening. That statement is

hearsay. Section 90.801(1)(c), Florida Statutes, defines the

term “hearsay” as follows:

(c) ”Hearsay” is a statement, other than

one made by the declarant while testifying

as the trial or hearing, offered in evidence

to prove the truth of the matter asserted.

46. Section 120.57(1)(c), Florida Statutes, provides as

follows:

(c) Hearsay evidence may be used for the

purpose of supplementing or explaining other

evidence, but it shall not be sufficient

itself to support a finding unless it would

be admissible over objection in civil

actions.

47. The hearsay evidence offered by Petitioner to prove

the amount of restitution did not supplement or explain other

evidence and cannot be the basis of a finding as to the amount

of restitution. Unfortunately, without competent proof of the

amount of restitution, the undersigned cannot recommend that

Petitioner order Respondent to pay restitution to the owner of

the subject property.

REPEAT VIOLATIONS

48. Respondent’s licensure has been previously

disciplined, but that discipline was based on a stipulation. As

part of the stipulation, Respondent neither admitted nor denied

the alleged violations of the Amended Administrative Complaint

in DBPR Case 91-00022. While it can be concluded that

Respondent’s licensure has been previously disciplined, it

cannot be concluded that Respondent is a repeat offender of any

particular statutory violations alleged in the Administrative

Complaint that underpins this proceeding. Nevertheless, the

disciplinary guidelines set forth above should be applied to

Respondent as a repeat offender because of the following

definition of the term “Repeat Violations” set forth in Florida

Administrative Code Rule 61G4-17.003:

(1) As used in this rule, a repeat

violation is any violation on which

disciplinary action is being taken where the

same licensee had previously had

disciplinary action taken against him or

received a letter of guidance in a prior

case; and said definition is to apply

regardless of whether the violations in the

present and prior disciplinary actions are

of the same or different subsections of the

disciplinary statutes.

(2) The penalty given in the above list

for repeat violations is intended to apply

only to situations where the repeat

violation is of a different subsection of

Chapter 489, F.S., than the first violation.

Where, on the other hand, the repeat

violation is the very same type of violation

as the first violation, the penalty set out

above will generally be increased over what

is otherwise shown for repeat violations in

the above list.

COST OF INVESTIGATION

49. Florida Administrative Code Rule 61G4-17.001(4)

provides as follows:

(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.

THE APPROPRIATE PENALTY

50. Sections 489.1425(2)(a) and (b), Florida Statutes,

pertains to violations of Section 489.1425(1), Florida Statutes,

and provides as follows:

(a) Upon finding a first violation of

subsection (1), the board may fine the

contractor up to $500, and the moneys must

be deposited into the recovery fund.

(b) Upon finding a second or subsequent

violation of subsection (1), the board shall

fine the contractor $1,000 per violation,

and the moneys must be deposited into the

recovery fund.

51. Petitioner 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 CILB is

authorized 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 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, 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 . . . .

52. Section 455.2273(5), Florida Statutes, requires that

the penalty guidelines of the CILB 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.

53. In relevant part, Florida Administrative Code Rule

61G4-17.001 (1) 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.

54. For the Count I violation, the recommended guideline

for a first offense is for the imposition of an administrative

fine from $250.00 to $500.00. For a repeat violation, the

recommendation is for the imposition of an administrative fine

in the amount of $1,000.00.

55. For the Count II violation, the recommended guideline

for a first offense is for the imposition of an administrative

fine from $2,500.00 to $7,500.00 and the imposition of probation

or suspension. For a repeat violation, the recommendation is

for the imposition of an administration fine from $5,000.00 to

$10,000.00 and the revocation of licensure.

56. For the Count III violation, the recommended guideline

for a first violation is for the imposition of an administrative

fine from $250.00 to $1,000.00 and/or the probation or

suspension of licensure. For a repeat violation, the

recommendation is for the imposition of an administration fine

from $1,000.00 to $5,000.00 and the imposition of suspension or

revocation of licensure.

57. For the Count IV violation, the recommended guideline

for a first violation is for the imposition of an administrative

fine from $1,000.00 to $2,500.00 and/or the imposition of

probation or suspension of licensure. For a repeat violation,

the recommendation is for the imposition of an administration

fine from $2,500.00 to $10,000.00 and the imposition of

suspension or revocation of licensure.

58. Florida Administrative Code Rule 61G4-17.002 provides

the following aggravating and mitigating circumstances to be

considered in determining the penalty or penalties to impose on

a licensee:

Circumstance 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

licensee's customer, in any way associated

with the violation, which damage the

licensee has not relieved, as of the time

the penalty is to be assessed. . . .

59. Petitioner proved that the homeowner suffered

significant financial damage as a result of acts for which

Respondent is responsible.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby RECOMMENDED that Petitioner enter a final

order finding Respondent guilty of the violations alleged in the

Administrative Complaint. It is further RECOMMENDED that the

final order impose against Respondent administrative fines as

follows: $500.00 for Count I; $5,000.00 for Count II; $5,000.00

for Count III; and $5,000.00 for Count IV, for the aggregate

amount of $15,500.00. It is further RECOMMENDED that

Respondent’s licensure be revoked.

DONE AND ENTERED this 20th day of August, 2008, in

Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of August, 2008.

ENDNOTE

1/ All statutory references are to Florida Statutes (2008). The

provisions of Chapter 489 cited herein have not changed since

2005.

COPIES FURNISHED :

Danny Henley

1524 Bob Loftin Road

Panama City, Florida 32405

Brian P. Coats, Esquire

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2022

G. W. Harrell, Executive Director

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 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

issue the Final Order in this case.