10-002463 Department Of Business And Professional Regulation, Construction Industry Licensing Board vs. Harris M. Millman, D/B/A Affiliated Construction Services, Inc. Status: Closed Recommended Order on Friday, August 27, 2010.

Summary: Unsatis'd judgm't for supplies used in roofing projects and warehouse inventory related to roof'g proff. Violation of 489.129(1)(q). $500 fine & costs. Cont. ed. & requiring proof of satisf. not required for contractor who recognized & tried to pay debt.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, )

)

Petitioner, )

)

vs. ) Case No. 10-2463

)

HARRIS M. MILLMAN, d/b/a AFFILIATED CONSTRUCTION )

SERVICES, INC., )

)

)

Respondent. )

)

RECOMMENDED ORDER

Administrative Law Judge, John D. C. Newton, II, of the

Division of Administrative Hearings, heard this case, as

noticed, on July 22, 2010, by video teleconference at sites in

Miami and Tallahassee, Florida.

APPEARANCES

For Petitioner: Paul R. Waters, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399

For Respondent: Victor Rones, Esquire

Margulies and Rones, P.A.

16105 Northeast 18th Avenue

North Miami Beach, Florida 33162

STATEMENT OF THE ISSUES

(1) Does the unsatisfied civil judgment in ABC v Millman

et al , Case Number 50 2008 CA 006245 XXXX MB relate to practice

of Respondent’s profession, thus establishing that Respondent,

Harris M. Millman, violated section 489.129(1), Florida

Statutes,(2009)?

(2) If he committed the violation, what penalty should be

imposed?

PRELIMINARY STATEMENT

On January 20, 2010, Petitioner, Department of Business and

Professional Regulation (Department), filed an Administrative

Complaint (Complaint) in DBPR Case Number 2009-047490. The

Complaint alleged that Respondent, Harris M. Millman (Millman),

d/b/a Affiliated Construction Services, Inc. (Affiliated),

violated Florida laws regulating his professional activities as

a certified general and roofing contractor. The Complaint

charged that Millman violated Section 489.129(1)(q), Florida

Statutes,(2009) 1 by failing to satisfy, within a reasonable time,

the terms of a civil judgment obtained against the licensee

(Millman), or the business organization qualified by the

licensee (Affiliated), relating to the practice of Millman’s

profession.

Millman disputed the allegations and requested a formal

administrative hearing. The Department referred the case to the

Division of Administrative Hearings (DOAH) to conduct a hearing

as provided by Section 120.57, Florida Statutes. DOAH conducted

the hearing on July 22, 2010, as noticed.

The Department offered the testimony of Silas McHenry,

William J. Marell, and Millman. The Department offered eight

exhibits. All were admitted into evidence.

Millman testified on his own behalf. He also offered eight

exhibits. They were admitted into evidence.

The Department waived making a closing argument. Millman’s

attorney made a closing argument. Both parties submitted

Proposed Recommended Orders. Those Proposed Recommended Orders

and the record in this proceeding have been fully considered in

preparation of this Recommended Order.

FINDINGS OF FACT

1. The Construction Industry Licensing Board has certified

Millman as a General Contractor and a Roofing Contractor under

the authority of Chapter 489, Florida Statutes. In 2009 and

2010, he held license numbers CGC l1522 (General) and CCC

1327057 (Roofing). Millman’s licenses are presently inactive.

2. Millman has actively practiced the licensed professions

of general contractor and roofing contractor in Florida since

1977. The Department and its predecessor agencies have never

taken any disciplinary action against him.

3. At all times material to this proceeding, Affiliated

was a Construction Qualified Business in the State of Florida,

certified under Chapter 489, Florida Statutes, holding license

number QB45287.

4. Millman was the Primary Qualifying Agent for Affiliated

under Chapter 489, Florida Statutes, at all times material to

this proceeding.

5. On December 26, 2005, Millman signed a credit

application with American Builders and Contractors Supply

Company, Inc., d/b/a ABC Supply Co. Inc. (ABC), on behalf of

Affiliated.

6. Millman listed his Certified General Contractor’s

License (CGC 011522) on the credit application and personal

guarantee

7. Although Millman provided his General Contractor’s

license number on the application, ABC did not require a license

number.

8. The application indicates that the account is related

to “low and steep slope roofing.” The account was for the

purchase of roofing materials and supplies.

9. On December 29, 2005, Millman signed a personal

guarantee of the Affiliated account with ABC.

10. Millman’s personal guarantee made him personally

liable for Affiliated’s obligation to pay ABC.

11. ABC granted the application and opened a line of

credit for Millman and Affiliated.

12. Millman and Affiliated used the account to purchase

roofing supplies on credit. They purchased and paid for over

$800,000 worth of supplies from 2006 into 2009. This is

separate from the goods and materials that were the subject of

the lawsuit described below.

13. Most of the materials and supplies that Affiliated

purchased on the ABC account were for specific roofing projects.

But some, as Millman acknowledged in his testimony, were to

maintain roofing materials in the Affiliated warehouse. He used

these on small jobs and to supplement materials purchased for

larger, specific jobs. All the goods and materials purchased

related to Millman’s practice of the roofing contracting

profession.

14. In 2007 Millman and Affiliated started having

financial difficulties. Millman’s business began failing.

15. The failure of a lender that took over a construction

project it was financing resulted in the lender not paying

Millman for approximately $500,000 worth of his company’s work.

This contributed to Millman’s business failure. In addition to

Millman’s problems paying ABC, his landlord was evicting him.

16. Millman worked hard during these difficulties to meet

his obligations to ABC. He liquidated his Individual Retirement

Account and his life savings to make sure he paid for all

charges for supplies used for specified customers. He did this

to protect customers from the risk of liens being placed on

their properties.

17. Millman advised ABC that he was being evicted from his

warehouse. He told ABC that the warehouse contained materials

obtained with his line of credit that had not been paid for.

Millman did not have the ability to return the materials to ABC.

As eviction neared, he urged ABC to retrieve the materials

before eviction. ABC did not act to retrieve the materials.

The landlord evicted Millman. What happened to the materials is

not known.

18. On March 4, 2008, ABC sued Millman and Affiliated in

the Circuit Court of the Fifteenth Judicial Circuit in and for

Palm Beach County, Florida. ABC sought payment for goods and

materials purchased on the account and delivered to Millman and

Affiliated between January 31, 2007, and January 31, 2008. The

court assigned the action Case Number 50 2008 CA 006245 XXXX MB.

19. The goods and materials for which ABC sought payment

were roofing goods and materials. They included roofing felt,

roofing cement, shingles, plywood, lumber, roofing nails, lead

sheets, insulation, roof tile cement, lead boots for pipes,

roofing paint, asphalt, and galvanized roof edging. Much,

although not all, of the material was delivered to roof tops.

Many invoices for the material describe the roof for which the

material is intended by height and pitch. The goods and

materials related to Millman’s profession of roofing contractor.

20. On June 17, 2008, barely three months after ABC filed

suit, Millman entered into a Stipulation for Payment with

Judgment upon Default with ABC. Millman agreed in the

Stipulation for Payment with Judgment upon Default, that both he

as an individual and Affiliated are indebted to ABC in the

amount of $45,617.02. This amount included interest, attorney’s

fees, and costs.

21. The stipulation included a schedule of eight payments

starting with a payment of $2,500.00 on May 30, 2008, and ending

with a payment of $22,720.02 on December 30, 2008.

22. Millman made payments from January 1, 2007, forward,

even during and after the collection litigation. Millman made

over $16,000.00 of those payments. But he did not make all of

them.

23. As Millman made payments, he took care to designate

payments for supplies allocated to a specific customer and job.

He did this to protect his customers from liens and to make sure

that documents he signed attesting that supplies for specific

jobs had been paid for were honest and correct.

24. On August 3, 2009, the court rendered a Final Judgment

After Stipulation in ABC’s collection action. The court

adjudged that ABC recover $29,617.02 together with interest at

the rate of 11 percent per annum accruing from May 31, 2008,

from Affiliated and Millman, jointly and severally.

25. The judgment is for debt incurred relating to

Millman’s practice of his licensed profession of roofing

contracting. It is not related to Millman’s licensed profession

of general contracting.

26. ABC continued to actively pursue collecting the

judgment. It garnished Millman’s bank account with Bank

Atlantic and obtained $662.61.

27. Millman and Affiliated have not fully satisfied the

judgment within a reasonable period of time.

28. The Department incurred $216.00 in costs for the

investigation and this action.

CONCLUSIONS OF LAW

29. Section 120.57, Florida Statutes, grants DOAH

jurisdiction over the parties and subject matter of this

proceeding.

30. Florida law, through Section 20.165 and Chapters 455

and 489, Florida Statutes, charges the Department and the

Construction Industry Licensing Board with regulating the

practice of contracting.

31. Section 489.129, Florida Statutes, empowers the Board

to revoke, suspend or otherwise discipline the license of a

contractor who is found guilty of any of the offenses enumerated

in Section 489.129(1), Florida Statutes.

32. The Department must prove Millman’s alleged violations

with clear and convincing evidence. § 120.57(1)(j), Florida

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

Department of Banking and Finance v. Osborne Stern and Co. , 670

So. 2d 932 (Fla. 1996).

33. Clear and convincing evidence must be credible. The

memories of witnesses must be clear and not confused. The

evidence must produce a firm belief that the truth of the

allegations has been established. Slomowitz v. Walker , 429 So.

2d 797, 800 (Fla. 4th DCA 1983). Evidence that conflicts with

other evidence may be clear and convincing. The trier of fact

must resolve conflicts in the evidence. G.W.B. v. J.S.W. (in Re

Baby E.A.W.) , 658 So. 2d 961, 967 (Fla. 1995).

34. Clear and convincing evidence proved all of the

Findings of Fact in this Recommended Order.

35. The administrative complaint alleges that Millman

violated Section 489.129(1)(q), Florida Statutes. That section

permits the Department to take action against a certificate

holder or registrant such as Millman for:

Failing to satisfy within a reasonable time,

the terms of a civil judgment obtained

against the licensee, or the business

organization qualified by the licensee,

relating to the practice of the licensee’s

profession.

36. Florida Administrative Code Rule 6IG4-17.001(1)(q),

defines reasonable time as 90 days following the entry of a

civil judgment that is not appealed.

37. The Department proved by clear and convincing evidence

that Millman violated Section 489.129(1)(q), Florida Statutes.

38. Section 489.129(1), Florida Statutes, permits the

Construction Industry Licensing Board to impose a range of

penalties for a violation of Section 489.129(q), Florida

Statutes. They include a fine not exceeding $10,000 per

violation, requiring continuing education, assessing costs, and

financial restitution to a consumer, license revocation, and

license suspension.

39. Florida Administrative Code Rule 61G4-17.001

establishes disciplinary guidelines and recognizes that

aggravating and mitigating circumstances may be considered.

40. Florida Administrative Code Rule 61G4-17.002 lists

aggravating and mitigating circumstances as follows:

Circumstances which may be considered for

the purposes 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. (This

provision shall not be given effect to the

extent it would contravene federal

bankruptcy law.)

(2) Actual job-site violations of building

codes, or conditions exhibiting gross

negligence, incompetence, or misconduct by

the licensee, which have not been corrected

as of the time the penalty is being

assessed.

(3) The danger to the public.

(4) The number of complaints filed against

the licensee.

(5) The length of time the licensee has

practiced.

(6) The actual damage, physical or

otherwise, to the licensee's customer.

(7) The deterrent effect of the penalty

imposed.

(8) The effect of the penalty upon the

licensee's livelihood.

(9) Any efforts at rehabilitation.

(10) Any other mitigating or aggravating

circumstances.

41. The Department did not prove any aggravating

circumstances. No customers were damaged. This is the only

complaint ever filed against Millman. There are no jobsite code

violations. There are no indications of gross negligence,

incompetence, or misconduct. There is no danger to the public.

42. The facts establish several mitigating circumstances.

In 33 years of business, this is the only complaint against

Millman. His failure to fully satisfy the judgment is not

deliberate or the consequence of reckless or negligent actions.

All along, from before the civil lawsuit to the final hearing in

this matter, Millman has accepted responsibility for his debt

and attempted to satisfy it. He communicated with ABC, keeping

it informed about his financial problems and his efforts to pay.

Millman worked to minimize the effect of his financial problems

and his inability to pay the debt on his customers and on ABC.

He did everything that he could do to make sure obligations

linked to a specific job were satisfied to protect the customer.

Millman also advised ABC that he was being evicted and urged it

to recover the materials that were purchased with the

uncollected debt so that it could mitigate its damages. His

efforts amount to vigorous rehabilitation.

43. For the offenses that Millman has committed, the

penalty range established by the rule for a first offense is a

$500.00 fine and/or proof of satisfaction of the judgment up to

a maximum of a $5,000 fine and/or proof of satisfaction of the

civil judgment. Fla. Admin. Code R. 61G4-17.001(1)(q).

44. The Department seeks a fine of $5,000.00. That is not

supported in a case where there are no aggravating circumstances

and there are many mitigating circumstances. In light of the

mitigating circumstances and the lack of aggravating

circumstances, a fine of $500.00 is appropriate.

45. The Department also seeks a requirement that Millman

must provide proof that he has satisfied the judgment. 2 The

facts do not support this requirement.

46. ABC has demonstrated the ability and willingness to

use the many legal tools available to it to satisfy the

judgment. Millman has demonstrated that he accepts the duty to

pay and will strive to pay to the best of his ability. The

facts do not demonstrate the need for the Board and the

Department to remain involved in this commercial collection

matter.

47. The Department also seeks a requirement that Millman

complete seven additional hours of “live continuing education

with an emphasis on Chapter 489, Florida Statutes.” Florida

Administrative Code Rule 61G4-17.001(2) provides that the Board

shall require continuing education when the nature of the charge

or the facts indicate that the licensee lacks understanding of

the laws and rules governing the profession.

48. The facts do not indicate that Millman lacked

understanding of the laws and rules governing his profession.

Nothing inherent in the charge identifies a lack of

understanding of the laws and rules governing the profession.

Millman was aware of the governing laws and rules and did his

best to comply. One example is his efforts to do everything he

could to protect his customers from the risk of a “lien.”

Another example is the fact that Millman acknowledged his

responsibilities and sought to fulfill them as best as he could

in the midst of the financial problems. The very quick

resolution of the lawsuit by stipulation is one demonstration of

this.

49. The discipline imposed must be limited to the licensed

profession to which the judgment is related. The statute must

be strictly construed on account of being a penal statute.

Camejo v. Dept. of Bus. & Prof’l Regulation , 812 So. 2d 583

(Fla. 3rd DCA, 2002). Consequently, the Construction Industry

Licensing Board may only impose sanctions on Millman’s roofing

contractor license. The Department did not prove by clear and

convincing evidence that the unsatisfied judgment relates to

Millman’s practice of General Contracting.

50. The Department seeks payment of costs of $216.00.

This payment is supported.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusion of

Law, it is recommended that the Department of Business and

Professional Regulation, Construction Industry Licensing Board,

enter a final order finding that Respondent, Harris M. Millman,

violated Section 489.129(1)(q), Florida Statutes, and imposing

the following penalties:

1. Payment of an administrative fine of $500.00 within 180

days of entry of the final order.

2. Payment of costs of investigation and prosecution in

the amount of $216.00 within 180 days of entry of the final

order.

DONE AND ENTERED this 27th day of August, 2010, in

Tallahassee, Leon County, Florida.

S

JOHN D. C. NEWTON, II

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 27th day of August, 2010.

ENDNOTES

1/ All references to Florida Statutes in this order are to 2009

unless otherwise specified.

2/ Although the rule identifies requiring proof of satisfaction

of the judgment as a penalty, Section 489.129(1), Florida

Statutes, does not. It provides only for probation, reprimand,

revocation, suspension, financial restitution to a consumer for

financial harm directly related to a violation of a provision of

this part, an administrative fine not to exceed $10,000 per

violation, requiring continuing education, and assessing costs.

Restitution is not available in this case because ABC is not a

“consumer.” Jonas v. Florida Dept. of Bus. & Prof’l Regulation ,

746 So. 2d 1261 (Fla. 3rd DCA, 2000).

COPIES FURNISHED :

Paul R. Waters, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399

Victor Rones, Esquire

Margulies and Rones, P.A.

16105 Northeast 18th Avenue

North Miami Beach, Florida 33162

Reginald Dixon, 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.