08-000226PL Department Of Business And Professional Regulation, Construction Industry Licensing Board vs. Raymond Spencer Status: Closed Recommended Order on Friday, April 18, 2008.

Summary: Respondent abandoned the project and failed to pull permits.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, )

)

Petitioner, )

)

vs. ) Case No. 08-0226PL

)

RAYMOND SPENCER, )

)

Respondent. )

)

RECOMMENDED ORDER

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

on March 4, 2008, in Cocoa Beach, Florida, before Susan B.

Harrell, a designated Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Collin W. L. Mcleod, Esquire

Robert A. Crabill, Esquire

Wright, Fulford, Moorhead

& Brown, P.A. 145 North Magnolia Avenue

Orlando, Florida 32803

For Respondent: Raymond Scott Spencer, pro se

319 Kent Drive

Cocoa Beach, Florida 32931

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent violated

Statutes (2004), 1 and, if so, what discipline should be imposed.

PRELIMINARY STATEMENT

On March 28, 2007, the Department of Business and

Professional Regulation, Construction Industry Licensing Board

(Department), filed a five-count Administrative Complaint

against Respondent, Raymond Spencer (Mr. Spencer), alleging that

Mr. Spencer violated Subsections 489.129(1)(g)2., (g)3., (j),

(o), and (m), Florida Statutes. Mr. Spencer requested an

administrative hearing, and the case was forwarded to the

Division of Administrative Hearings on January 11, 2008, for

assignment to an Administrative Law Judge to conduct the final

hearing.

At the final hearing, the Department called the following

witnesses: Jesse J. Ross, Sr.; Dawn Lynn Ross; Frank Wisniski;

Robert T. Shindo; and Michael McCaughin. Petitioner's

Exhibits 1 through 14 were admitted in evidence. Mr. Spencer

testified in his own behalf and offered no exhibits.

The Transcript of the final hearing was filed on

March 24, 2008. The parties agreed to file their proposed

recommended orders within ten days of the filing of the

Transcript. The Department filed its Proposed Recommended Order

on April 3, 2008. To date, Respondent has not filed any post-

hearing submittal. The Department's Proposed Recommended Order

has been given consideration in the preparation of this

Recommended Order.

FINDINGS OF FACT

1. Mr. Spencer holds a current, active Florida State

Certified Building Contractor License, having been issued

license number CBC 1252039. He is certified with the Department

as doing business as KCLS Spencer, Inc. (KCLS), and is the

primary qualifying agent thereof.

2. Mr. Spencer submitted a Proposal, bearing the

letterhead of KCLS and dated September, 14, 2004, to Jesse J.

Ross, Sr. (Mr. Ross), which pertained to the exterior remodeling

of Mr. Ross' jewelry store located at 6290 North Atlantic

Avenue, Cape Canaveral, Florida 32920. Initially, the Proposal

put the cost for the remodeling at $48,762.86. After some

negotiating, the Proposal that ultimately formed the basis of

their contract set the cost at $45,000.00 and relieved

Mr. Spencer of the obligation of constructing walkways.

3. The Proposal's explicit terms provide:

As per specifications and blueprints pricing

is as follows; labor and material to

renovate existing exterior building. Prices

to include all demolition of all exist [sic]

structures, installation of siding, columns,

dormers, cupolas, two (2) French doors,

windows, front gutters and down spouts,

electrical, and final painting.

Notes:

1. Signs by owner.

2. Paint colors by owner.

3. Power and water supplied by owner.

4. Color of pre-painted metal roof

determined by owner.

5. Material storage space to be provided by

owner.

6. Quotes good for 10 days (after 10 days,

please reconfirm material pricing).

7. 20% deposit $9752.57 due to start

project, invoicing to [sic] made weekly per

actual costs.

Essentially, much of the exterior remodeling to be performed is

simply stated as being based on the specifications and

blueprints, which Mr. Ross provided to Mr. Spencer. These

specifications and blueprints have not been received in

evidence, but there appears to be no dispute among the parties

regarding the scope of the work.

4. The terms of payment were for an initial 20 percent

deposit of $9,752.57, with weekly invoices to follow based on

actual, ongoing costs. On October 25, 2004, Mr. Ross' lender,

Coastal Bank, drafted a loan check for $9,752.57 made payable to

KCLS. Sometime shortly thereafter, KCLS began the work of

remodeling the exterior of Mr. Ross' store.

5. As work progressed, Mr. Spencer provided Mr. Ross with

an invoice, dated November 11, 2004, requesting payment for

costs incurred. Despite listing on the invoice an "off set

balance" of $2,515.32 that applied costs to date against the

initial deposit, the total amount due was nevertheless listed as

$12,268.04. On November 23, 2004, Mr. Ross wrote a check for

$12,268.04 made payable to Mr. Spencer personally.

6. Later, Mr. Spencer provided Mr. Ross with another

invoice, dated December 23, 2004, requesting payment for further

costs incurred. The total amount due was $8,475.24. By check

dated that same day, Mr. Ross wrote a check for $8,475.24 made

payable to Mr. Spencer personally. At this time, Mr. Ross

received assurance from Mr. Spencer that no further money would

be due, until the work was entirely completed.

7. Sometime between Christmas 2004 and New Year's 2005,

Mr. Spencer returned again to Mr. Ross' store and requested from

him an additional $3,000.00. At this point, Mr. Ross refused,

because of Mr. Spencer's earlier assurance that no further

ongoing payments would be demanded and because of the lack of

any work performed since the last payment. Mr. Spencer insisted

that he had all of the necessary materials in his warehouse and

that he would be back on the Monday following the New Year's

holiday to work on the store. He never returned and could not

be contacted by Mr. Ross.

8. As the storefront remained in disrepair, Mr. Ross was

compelled to contract with other parties to complete the work.

Sunland General Contractors, Inc. (Sunland); Baker Roofing

(Baker); and D.A.B. Painting, Inc. (DAB), completed the work

that Mr. Spencer had previously been contracted with to perform.

According to the testimony of Mr. Ross, they based their work

upon the same specifications and blueprints that Mr. Ross had

previously provided to Mr. Spencer. Sunland, except for the

roofing and painting, performed what work that remained.

9. Based on a payment history dated December 16, 2005, the

total cost of Sunland's work for Mr. Ross was $23,770.00.

However, this cost includes $3,990.00 for walkway decking, which

Mr. Ross and Mr. Spencer, in their previous negotiations, had

agreed would not be part of their final agreement. As such, the

relevant cost in the instant case for Sunland's work is

$19,780.00. According to a Baker invoice, dated November 10,

2005, the cost to Mr. Ross for the new roof was $14,935.00.

According to a letter from DAB, dated April 23, 2005, Mr. Ross

paid $6,500.00 for the painting of his store. In sum, the

relevant costs to Mr. Ross for this subsequent work total

$41,215.00.

10. Sometime in October of 2005, Mr. Ross provided

Mr. Frank A. Wisniski (Mr. Wisniski), a general contractor and

owner of Sunland, with a set of blueprints and asked him to

takeover the job that Mr. Spencer had not completed.

Mr. Wisniski further testified on the condition of the building,

as Mr. Spencer had left it. According to his testimony, some of

the siding was not nailed properly, and the columns in the front

of the store were not well secured, a potentially hazardous

situation. Overall, in his opinion, he felt that Mr. Spencer

had completed approximately 25 percent of the total scope of the

job.

11. Mr. Robert T. Shindo (Mr. Shindo) is an investigator

for the Department. He responded to Mr. Ross' complaint to the

Department regarding Mr. Spencer's work on the store. He found,

"basically, a building that was not in repair." Some siding

work had been done on the north face of the building, as well as

some column work. However, the columns appeared damaged or

incomplete, and the siding appeared incomplete as well.

12. Besides the siding and columns, Mr. Shindo testified

that "[t]here did not appear to be any other work." Overall,

Mr. Shindo had familiarized himself with the Proposal and

estimated that between ten and 15 percent of the job appeared to

be complete.

13. Mr. Michael McCaughin (Mr. McCaughin) is employed at

the Building Code Division of Brevard County and is the chief

building official for the county. Mr. McCaughin concluded that

based on the work specified in the Proposal of Mr. Spencer, the

only item which would not have required permitting is the

gutters. Mr. McCaughin personally searched the county permit

database, and no permits were ever pulled by Mr. Spencer for the

remodeling of Mr. Ross' store. Petitioner's Exhibit 14, a

printout of the permits that have been pulled for Mr. Ross'

store, confirms Mr. McCaughin's testimony. Moreover,

Mr. McCaughin "performed a search of Mr. Spencer under his name,

under his state license number, and also under the company name,

KCLS and, could not find any record of any permits being pulled,

nor was he registered with Brevard County contractor licensing."

14. Mr. Spencer, in testifying in his own behalf, mainly

confirmed the testimony of the other witnesses and the other

facts in evidence. Among other things, he confirmed that he and

Mr. Ross had an agreement for KCLS to remodel the exterior of

the store and that the agreement was based on the Proposal he

had submitted to Mr. Ross. He agreed that he received the

payments that Mr. Ross testified to having paid and testified

that he never pulled the permits for the job, because he "[j]ust

didn't take the time to do it."

15. Mr. Spencer's recollection of his final conversation

with Mr. Ross was substantially the same as Mr. Ross' testimony,

with Mr. Spencer testifying that he had told Mr. Ross he would

be back to work on the job and that there was an understanding

that final payment would be made at the end of the project. He

goes on to testify that he did actually go back after this final

conversation to finish up the siding on the south side of the

store and that the siding was completed. This last testimony is

not credible.

16. In Mr. Spencer's defense, some of the work was farmed

out to subcontractors, and they were paid in full. He then

testified that he was planning on continuing the work but that

he was waiting on a roofer. While he was waiting for the

roofer, he testified that there was some dispute between himself

and Mr. Ross regarding a ring he had received from Mr. Ross. He

testified that the ring fell apart and that the dispute ended

their working relationship.

17. But for "$8200 - Ring" being handwritten on the

Proposal alongside the other payments made by Mr. Ross, no

mention of this ring was made by the Petitioner. Presumably,

this ring was given as in-kind payment to Mr. Spencer, but

without anything more to go on, the insufficiency of the

relevant evidence precludes any recognition of the ring as

payment.

18. Therefore, the three previously described checks,

furnished by Mr. Ross and made payable to Mr. Spencer or KCLS,

are found to represent the entirety of the consideration

furnished. To refresh, these checks are dated October 25, 2004;

November 23, 2004; and December 23, 2004, and amount to

$9,752.57; $12,268.04; and $8,475.24, respectively. In sum,

they total $30,495.85.

19. Mr. Spencer also testified about the installation of

French doors at Mr. Ross' store. Mr. Ross earlier testified

that he had refused delivery of two French doors, when a

subcontractor arrived to install them, because they were not the

style, size or number he desired. He further testified that

Mr. Spencer was aware that he desired six doors with plastic

slats (not two as listed in the Proposal), because he had

directed Mr. Spencer to examine the doors of a nearby

storefront, whose style he wished to replicate.

20. Mr. Spencer was questioned about these doors by

opposing counsel. Opposing counsel asked, "Were the French

doors ever installed into the building?" Mr. Spencer responded,

"Not that I know of, by Bill, no." Several questions later,

opposing counsel asked, "Okay. My point is, the doors were

never installed in the project; is that your understanding?"

Mr. Spencer responded, "My understanding from Bill was that,

yes, they were installed." On this issue, Mr. Spencer could

only speculate, because he never returned to the job site to

check whether the doors had been installed. Mr. Spencer's

testimony on this topic is not credible.

21. Despite never being installed, Mr. Ross paid a

$4,700.00 deposit for the French doors that was never refunded.

When asked why this money was never refunded to Mr. Ross, Mr.

Spencer goes on to testify that he trusted the subcontractor

delivering the doors, that he assumed they were delivered, and

that that's why he never attempted to receive a refund of the

doors' cost from the subcontractor.

CONCLUSIONS OF LAW

22. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat. (2007).

23. The Department has the burden to establish the

allegations in the Administrative Complaint by clear and

convincing evidence. Department of Banking and Finance v.

Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996). The

Department has alleged that Mr. Spencer violated Subsections

which provides that the following acts constitute grounds for

disciplinary action by the Department:

(g) Committing mismanagement or misconduct

in the practice of contracting that causes

financial harm to a customer. Financial

mismanagement or misconduct occurs when:

* * *

2. The 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,

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

* * *

3. The contractor's job has been completed,

and it is shown that the customer has had to

pay more for the contracted job than the

original contract price, as adjusted for

subsequent change orders, unless such

increase in cost was the result of

circumstances beyond the control of the

contractor, was the result of circumstances

caused by the customer, or was otherwise

permitted by the terms of the contract

between the contractor and the customer.

* * *

(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 local building department permits

and inspections.

24. Mr. Brown is and was the primary qualifying agent for

KCLS during all the times material to this proceeding.

Subsection 489.1195(1)(a), Florida Statutes, provides:

(1) A qualifying agent is a primary

qualifying agent unless he or she is the

secondary qualifying agent under this

section.

(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.

Thus, irrespective of whether or not the work was subcontracted

to others, Mr. Spencer, as primary qualifying agent for KCLS,

was responsible for all of the work that was performed under the

aegis of KCLS at Mr. Ross' jewelry store.

25. The Department established by clear and convincing

evidence that KCLS abandoned the project in violation of

Subsection 489.129(1)(j), Florida Statutes. The project was not

completed, KCLS left the job and never returned, and KCLS gave

no reason to Mr. Ross for not returning to the job to complete

the work. As primary qualifying agent for KCLS, Mr. Spencer was

responsible for completing the work.

26. The Department established by clear and convincing

evidence that the percentage of completion of the job was less

than the percentage of the total contract price paid to KCLS as

of the time of abandonment in violation of Subsection

489.129(1)(g)2., Florida Statutes. Mr. Wisniski testified that

he estimated the job, as he originally found it, to be

approximately 25 percent complete, and Mr. Shindo estimated it

to be approximately 10 to 15 percent complete. Their

testimonies are given additional illumination by the fact that

Mr. Ross was compelled to expend an additional $41,215.00 to

complete the job. The evidence establishes that Mr. Ross paid

Mr. Spencer a total of $30,495.85, which is 68 percent of the

total contract price.

27. The Department has failed to establish by clear and

convincing evidence that Mr. Spencer violated Subsection

489.129(1)(g)3., Florida Statutes. The strict construction of

Subsection 489.129(1)(g)3., Florida Statutes - required due to

the statute's penal nature 2 --leads to the determination that the

subsection is only applicable when the contractor charged with

violating Subsection 489.129(1)(g)3., Florida Statutes,

completes the job. The record affirmatively establishes that

Mr. Spencer never completed the job but rather abandoned it.

28. The Department established by clear and convincing

evidence that Mr. Spencer never pulled the necessary permits in

violation of Subsection 489.129(1)(o), Florida Statutes. Ample

evidence was presented by the Department that no permits were

ever pulled, and, by Mr. Spencer's own admission, he never

pulled the permits.

29. The Department established by clear and convincing

evidence that Mr. Spencer committed incompetency or misconduct

in the practice of contracting in violation of Subsection

489.129(1)(m), Florida Statutes. Mr. Spencer, in failing to

ensure the columns were properly secured, created a potential

hazard to the public-at-large that remained lurking at the

entrance to Mr. Ross' store for almost a year. Moreover, on

more than this one occasion, Mr. Spencer's lack of supervision

of his subcontractors led to unacceptable or shoddy work; the

example above is simply the most egregious.

30. Florida Administrative Code Rule G1G4-17.001(1) (2004) 3

lists the "normal penalty ranges" that, in the absence of

aggravating or mitigating circumstances, must be applied, by

both the undersigned and the Department, when determining

appropriate penalties for violations of Chapter 489, Part I,

Florida Statutes. See Williams v. Department of Transportation ,

531 So. 2d 994, 996 (Fla. 1st DCA 1988); § 455.2273(5), Fla.

Stat. The rule provides for separate first and repeat offender

penalty ranges, and, since Mr. Spencer is a first offender, the

former penalty ranges are applicable.

31. Florida Administrative Code Rule G1G4-17.001(1) (2004)

provides the following relevant penalty ranges:

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

Mismanagement or misconduct causing

financial harm to the customer. First

violation, $ 750 to $ 1,500 fine and/or

probation; repeat violation, $ 1,500 to $

5,000 fine and suspension or revocation.

* * *

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

Abandonment. First violation, $ 500 to $

2,000 fine; repeat violation, revocation and

$ 5,000 fine.

* * *

4. The following guidelines shall apply to

cases involving misconduct or incompetency

in the practice of contracting, absent

aggravating or mitigating circumstances:

* * *

c. Any other form of misconduct or

incompetency. First violation, $ 250 to $

1,000 fine and/or probation; repeat

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

suspension or revocation.

* * *

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

on any job without obtaining applicable

local building department permits and/or

inspections.

* * *

3. Job finished without a permit having

been pulled, or no permit until caught after

job, or late permit during the job resulting

in missed inspection or inspections. First

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

violation, $ 1,000 to $ 2,500 fine and

suspension or revocation.

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

requires the Department to order the contractor to make

restitution in the amount of financial loss suffered by the

consumer. Evidence was presented that the total cost to

Mr. Ross for the three other contractors to complete the work

that Mr. Spencer had abandoned was $41,215.00. Mr. Ross is

recognized as having paid Mr. Spencer a total of $30,495.85.

Mr. Ross ultimately paid $71,710.85 to complete a job that was

originally contracted to cost only $45,000, and thus, absent any

evidence to the contrary, Mr. Ross' amount of financial loss

suffered is the difference between these two amounts,

$26,710.85.

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

provides that the Construction Industry Licensing Board may

assess the costs of investigation and prosecution, excluding

costs relating to attorney time. No evidence was presented as

to the amount of these costs.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered finding

that Respondent violated Subsections 489.129(1)(g)2.,

489.129(1)(j), 489.129(1)(m), and 489.129(1)(o), Florida

Statutes; finding that Respondent did not violate Subsection

489.129(1)(g)3., Florida Statutes; imposing an administrative

fine of $1,500.00 for the violation of Subsection

489.129(1)(g)2., Florida Statutes; imposing an administrative

fine of $2,000.00 for the violation of Subsection 489.129(1)(j),

Florida Statutes; imposing an administrative fine of $1,000.00

for the violation of Subsection 489.129(1)(m), Florida Statutes;

imposing an administrative fine of $1,500.00 for the violation

of Subsection 489.129(1)(o), Florida Statutes; requiring

Respondent to make restitution to Mr. Ross in the amount of

$26,710.85; placing Respondent on probation for a period of

three years; and requiring Mr. Spencer to attend a minimum of

seven additional hours of continuing education classes.

DONE AND ENTERED this 18th day of April, 2008, in

Tallahassee, Leon County, Florida.

S

SUSAN B. HARRELL

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 18th day of April, 2008.

ENDNOTES

1/ Unless otherwise noted, all subsequent statutory references

are to the 2004 Florida Statutes.

2/ See State v. Pattishall , 126 So. 147 (Fla. 1930); Lester v.

Department of Professional and Occupational Regulation, State

Board of Medical Examiners , 348 So. 2d 923 (Fla. 1st DCA 1977).

3/ As it would be a violation of the ex post facto clause to

apply the higher penalties provided for in the current rule, the

applicable "Normal Penalty Ranges" are those that were in effect

in 2004, when the acts subject to discipline occurred. See

Arias v. Dep't of Business and Professional Regulation , 710 So.

2d 655, 661 (Fla. 3d DCA 1998).

COPIES FURNISHED :

Raymond Scott Spencer

319 Kent Drive

Cocoa Beach, Florida 32931

Collin W. L. Mcleod, Esquire

Robert A. Crabill, Esquire

Wright, Fulford, Moorhead & Brown, P.A.

145 North Magnolia Avenue

Orlando, Florida 32803

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

G. W. Harrell, Executive Director

Construction Industry Licensing Board

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.