11-002797PL Department Of Business And Professional Regulation, Construction Industry Licensing Board vs. Jordan Tal Kohn Status: Closed Recommended Order on Thursday, November 10, 2011.

Summary: Petitioner did not prove by clear and convincing evidence that Respondent had abandoned a construction project. Petitioner did prove that Respondent had not provided notice to the consumer of the Homeowner's Construction Industry Recovery Fund.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION , )

CONSTRUCTION INDUSTRY )

LICENSING BOARD, )

)

Petitioner, )

)

vs. ) Case No. 11 - 2797 PL

)

JORDAN TAL KOHN , )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was cond ucted in this case

pursuant to s ections 120.569 and 120.57(1), Florida Statutes 1 ,

before Jessica Enciso Varn , a duly - designated Administrative Law

Judge of the Division of Administrative Hearings (DOAH), on

September 26, 2011 , by video t eleconference at sites in

Lauderdale Lakes and Tallahassee, Florida.

APPEARANCES

For Petitioner: Andrew R. Fier , Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Katie Repko, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

For Respondent: Alexander O. Soto, Esquire

The Soto Law Group, P.A.

2400 East Commercial Boulevard

Suite 400

Fort Lauderdale, Florida 33308

STATEMENT OF THE ISSUE S

Whether Respondent abandoned a construction job, and

whether Respondent failed to include a statem ent of consumer ' s

rights in a contract; if so, whether (and what) discipline

should be imposed against Respondent ' s general contractor ' s

license.

PRELIMINARY STATEMENT

On February 4 , 2011, the Department of Business and

Professional Regulation, Construction Industry Licensing Board

(Department), issued a three - count Adm inistrative Compl aint

alleging that Respondent, in his capacity as the primary

qualifying agent for IGK Design Group, Inc. (IGK), engaged in

disciplinable wrongdoing in connection with a residential

construction project undertaken by IGK pursuant to a cont ract

with Kevin Barrington (Barrington) . Count One alleged that

Respondent violated s ection 489.1 29(1)(i), Florida Statutes

(2007 ), by failing to include in t he contract written

explanation of the Florida Homeowners Construction Recovery

Fund, as required by s ection 489.1425, Florida Statutes (2007 ).

Count Two alleged Respondent violated section

489.129(1)(i), by receiving, as initial payment, money totaling

more than 10 percent of the contract price for repair,

restoration, improvement, or construction to residential real

property without applying for permits within 30 days after the

payment was made, as required by s ection 489.1426, Florida

Statutes (2007) . Count Three alleged that Respondent violated

s ection 489.1 29(1)(j), Florida Statutes (2008 ), by abandoning

the construction project in which Respondent was engaged or

under contract as a contractor. Count Two was voluntarily

dismissed by the Department at the hearing .

By fi ling a completed Election of Rights form with the

Department, Respondent requested a formal hearing before a DOAH

Administrative Law Judge . On June 3, 2011, the matter was

referred to DOAH.

As noted above, the final hearing in this case was held

before th e undersigned on September 26, 2011 . The Department

offered the testimony of Kevin Barrington; Department exhibits

1 - 17 were offered and admitted into evidence. Respondent

testified on his own behalf and offered the testimony of Greg

Tal Kohn; Respondent exhibits 1 - 7 were off ered and admitted into

evidence, Respondent ' s exhibit 8 was pre - filed on the eve of

hearing, and offered and admitted into evidence over the

Department ' s objection. The undersigned saw no prejudice to the

Department in admitting E xhibit 8 into the record.

The two - volume Transcript o f the hearing was filed with

DOAH on October 13, 2011 . Both parties filed timely Proposed

Recommended Orders, which were considered in preparation of this

Recommended Order.

FINDINGS OF FACT

Based on t he evidence adduced at hearing, and the record as

a whole, the following findings of fact are made :

1. At all times material to the instant case, Respondent

was a Florida - licensed general contractor , holding license

number CGC 1509917 .

2. At all times material to the instant case, IGK held a

certificate of authority authorizing it to engage in contracting

in Florida through a qualifying agent. Respondent was the

licensed primary qualifying agent for IGK.

3. On or about December 20, 2007, Respondent entered into

a contract to renovate Kevin Barrington ' s residence, located at

1315 Lenox Avenue, Miami Beach, Florida.

4. The written contract did not contain a statement

explaining a consumer ' s rights under the Florida Homeowners

Construction R ecovery Fund, as then required by section

489.1425. A t hearing , Respondent produced a copy of a statement

that explained a consumer ' s rights under the Florida Homeowners

Construction Recovery Fund, and testified that he had attached

this statement to the written contract. T he statement produced

by Respondent at hearing was dated December 24, 2011, four days

after the contract was executed, and signed only by Respondent .

Barrington testified that he never received the statement. The

undersigned finds Barr ington ' s testimony credible, and finds

that the statement was not contained in the written contract as

required by statute.

6. Respondent has never been disciplined for a violation

of s ection 489.1425.

7 . The initial contract price for the residential

renovation totaled approximately $114,320.00.

8 . Several change orders increased the final contract

price to approximately $148,603.25.

9 . On December 20, 2007, Barrington paid Respondent an

initial pa yment of $46,968.00.

10 . Respondent began work on the renovation project in

January, 2008. Barrington rented an apartment while the home

was under construction.

11 . Between December, 2007 , and June, 2008, Barrington

made several payments to Respondent. By June, 2008, Respondent

had received approximately $155,505.81, which was more than the

original contract price, and more than the amount agreed to with

the additional change orders.

12 . By August, 2008, Respondent was s truggling

financially. IGK experienced a significant decline in business

and was forced to lay off employees.

13 . On August 23, 2008, Barrington sent Respondent an

e - mail, stating, in part:

I wanted to summarize our meeting

yesterday. I appreciated your honesty, and

I believe we came to a resolution that

satisfies both our objectives; remodel 1315

Lenox Avenue with high quality standards in

a timely manner. Due to unforeseen market

conditions, we are not able to continue work

within the confines of the existing contract

dated 12/ 20/2007 between IGK and Kenneth

Barrington. Therefore, we agreed to the

following course of action.

. . .

If the stated objectives are completed

on August 29th to Kenneth Barrington ' s

satisfaction, we decided to terminate the

existing contract and have my legal team

draft a new contract between IGK and Ken

Barrington that outlines the remaining scope

of services and payment plan. The payment

plan will be arranged as a loan between IGK

and Ken Barrington where Ken Barrington will

act as Lender and IGK as Borrower, IGK will

be responsible to perform the duties

outlined in the scope of services and

payback monies at a specified date. Loan

payments distributed to IGK are intended

solely for the purpose of paying for the

labor and materials used at 1315 Lenox Ave.

14 . On September 17, 2008, Respondent emailed Barrington,

stating, in pertinent part:

As discussed many times, I am trying to

do the right thing and complete your

project. However as stated before we are

not in complete projects (sic) t hat were

underbid last year. You are well aware that

we came in below everyone else. At the time

business was good and we could afford to

work on a very low mark up. I

tried...however and unfortunately the

business environment has change (sic) and we

ca n not (sic) do it any longer!!!

. . .

As it stands, for us to complete the

project as mentioned above, we will have to

receive a payment in the amount of

$20,000.00. You may of course decide to

hire to have some one (sic) else finish the

project, by (sic) I believe your cost will

be in excess of $40 - $50k.

15 . By September, 2008, approximately 60 percent of the

renovation project had been completed.

16 . On September 23, 2008, Respondent emailed Barrington

stating , in part :

Good morning Ken,

We are still awaiting your decision in

regards to which way your [ sic ] ant [ sic ] to

go with your project. I do understand and

per your advise [sic] , that you are trying

to hire other contra ctors to finish your

project.

However, if you decide to take/hire

another contractor, you must apply for a

change of contractors [ sic ] to, either [ sic ]

another contractor or to yourself as a

owner/contractor.

No one, including yourself can do work,

under our permits and/or call for

insp ections!!!

Please refrain from trying to hire my

employees to do unlicensed side jobs, they

will not, and if they do they lose their

jobs and/or be liable for prosecution by the

state/county for working without a license

and permit.

17 . Respondent, havin g indicated to Barrington that he

needed more money to complete the project, and expressing a

willingness to complete the renovation project , was clearly

awaiting Barrington ' s decision as to the renegotiation of the

contract .

18 . Barrington began to int erview other contractors in

October, 2008.

19 . On October 10, 2008, Barrington sent Respondent Change

of Contractor forms to sign and have notarized. On

October 14, 2008, Respondent signed the forms and had them

notarized.

20 . Also on October 14, 2008, Barrington sent Respondent a

letter, stating, in pertinent part:

I, Ken Barrington, property owner of

1315 Lenox Ave [ sic ] , Miami Beach, FL 33139,

am notifying you that your services are

hereby terminated from our project/permit

#s: B08014536, B08019 10, B0804552, BE080944,

BE 0825 72 , BMS0801808.

You are being terminated because:

You have acknowledged that you are no

longer capable of completing the project

according to our agreed upon contract.

You are no longer authorized to enter

my property.

21 . O n or about November 11, 2008, Barrington entered into

a contract with a new contractor, Strategic Engineering, to

complete the renovation project.

22 . The renovation project was complete by July, 2009,

when Barrington was able to move into his home. Resp ondent and

Barrington began to communicate again around this same time.

23 . Respondent informed Barrington that Respondent could

return to work on the home, but that IGK was filing for

bankruptcy. Respondent suggested that a Mutual Release be

executed.

2 4 . On September 23, 2009, Barrington and IGK entered into

a Mutual Release, intended to effect the elimination of any

obligations by either party.

25 . Respondent never expressed any intention to abandon

the project ; rather, Barrington terminated Responde nt shortly

after Respondent expressed a willingness to complete the project

despite his financial difficulties. During the tim e when

Respondent was awaiting Barrington ' s decision as to the offer to

renegotiate the contract price , Barrington elected to ter minate

Respondent, and did so. Barrington also forbade Respondent from

entering the property. Thus, Respondent ' s separation from the

project was cause d by Barrington ' s actions, not by his own

volition .

CONCLUSIONS OF LAW

2 6 . DOAH has jurisdiction over the subject matter of the

instant proceeding and of the parties hereto pursuant to c hapter

120, Florida Statutes.

2 7 . The Construction Industry Licensing Board (Board) may

take disciplinary action against a licensed contractor serving

as the primary qualifying agent for a business organization for

violations of s ection 489.129(1), Florida Statutes, committed by

either the contractor or business organization for which the

contractor is a primary qualifying agent. Hunt v. Dep ' t of

Prof. Reg. , Cons tr . Indus . Licensing B d . , 444 So. 2d 997, 999

(Fla. 1st DCA 1983 ).

2 8 . The Board may take such disciplinary action only after

the licensee has been given reasonable written notice of the

charges and an adequate opportunity to request a proceeding

pursuant to s ections 120.569 and 120.57, Florida Statutes.

2 9 . At the hearing, the Department bears the burden of

proving that the licensee engaged in the conduct, and thereby

committed the violations, al leged in the Administrative

Complaint . Proof greater than a me re preponderance of the

evidence must be presented by the Department to meet its burden

of proof. Clear and convincing evidence of the licensee ' s guilt

is required. See Dep ' t of Banking & Fin . , Div . of Sec . and

Investor Prot . v. Osborne Stern and Co . , 67 0 So. 2d 932, 935

(Fla. 1996); Ferris v. Turlington , 510 So. 2d 292, 294 (Fla.

1987); and § 120.57(1)(j), Fla. Stat.

30 . Clear and convincing evidence is an intermediate

standard, requiring more proof than a preponderance of the

evidence but less than the exclusion of a reasonable dou bt. In

re Graziano , 696 So. 2d 744, 753 (Fla. 1997). For proof to be

considere d clear and convincing , the evidence must be found to

be credible; the facts to which the witnesses testify must be

distinctly remembered; the tes timony must be precise and

explicit and the witnesses must be lacking in confusion as to

the facts in issue. The evidence must be of such weight that it

produces in the mind of the trier of fact a firm belief or

conviction, without hesitancy, as to the tr uth of the

allegatio ns. In re Davey , 645 So. 2d 398, 404 (Fla. 1994).

31 . The Administrative Complaint contains three counts:

Count One , alleging a violation of s ection 489.129(1) (i ) (by

failing to comply with s ection 489.1425 ; Count Two , alleging a

vio lation of s ection 489.129(1)(i) ; and Count Three , alleging a

violation of s ection 489.129(1)(j ) .

3 2 . Because of their penal nature , the foregoing statutory

provisions must be strictly construed, with any reasonable

doubts as to their meaning being resolved in favor of the

licensee. Jonas v. Fla . Dep ' t of Bus. & Prof. Reg . , 746 So. 2d

1261, 1262 (Fla. 3 d DCA 2000 ) .

3 3 . At all times m aterial to the instant case, s ection

489.129(1) (j ), provided that the following was a disciplinable

act :

(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.

3 4 . A contractor abandon s a construction project, as

proscribed by s ection 489.12 9(1)(j) , when it stops working on

the project and has no intent to resume its work. Cf. State v.

Schultz , 388 So. 2d 1326, 1329 (Fla . 4th DCA 1980) (stating that

a bandonment of personal property is th e intention to part with

the property forever ).

3 5 . Because intent is difficult to prove, the Legislature

has provided, in s ection 489.129(1)(j), th at abandonment may be

presumed under certain circumstances, incl uding where the

contractor has failed to p erform work without just cause for 90

consecutive days .

3 6 . Here, the Department has not successfully established

a prima facie case of abandonment through use of this

presumption, as Respondent had not ceased working on the project

for 90 days when he was terminated by Barrington.

3 7 . Absent from the record is clear and convincing

ev idence that Respondent abandoned the renovation project. As

Respondent credibly testified at the final hearing, Respondent

never intended to abandon the project; he simpl y made an offer

to renegotiate the contract price. Barrington, rather than

insist that the contract be executed as written, terminated

Respondent and forbade him from entering the property . N o

basis , therefore, exists to support a conclusion that

Respond en t ' s separation from the project constitute d

abandonmen t .

3 8 . In light o f the foregoing, Counts Two (dismissed at

hearing) and Three of the Administrative Complaint, which allege

vi olations of s ection 489.129(1)(i ) , and s ection 489.129(1) (j ) ,

respective ly, must be dismissed.

3 9 . At all times material to the instant case, s ection

489.1 29(1)(i), provided that the following was a disciplinable

act:

Failing in any material respect to comply

with the provisions of this part or

violating a rule or lawful order of the

board.

40 . At all times mate rial to the instant case, the failure

in any material respec t to comply with the provisions of s ection

489.1425(1), Florida Statutes (2007 ) , constituted wrongdoing of

the type described in s ection 489.129(1)(i):

A ny 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

no t 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 LICENS ING BOARD AT

THE FOLLOWING TELEPHO NE NUMB ER AND

ADDRESS:

The statement shall be immediately followed

by the board ' s address and telephone number

as established by board rule.

Subsection (2) of s ection 489.1425 provided that such wrongd oing

was punishable 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 de posited into the recovery fund.

(b) Upon finding a second or subsequent

violation of subsection (1), the bo ard shall

fine the contrac tor $ 1,000 per violation,

and the moneys must be deposited into the

recovery fund.

41 . The record evidence clearly and con vincingly

establishes that IGK failed to comply with s ection 489.1425 , a nd

thereby committed a violation of s ection 4 89.129(1)(i) .

4 2 . In determining what disciplinary action should be

taken against Respondent for t his violation of s ection

489.129(1)(i ) , it is necessary to consult the B oard ' s

disciplinary guidelines set forth in Florida Administrative Code

Chapter 61G4 - 17, which impose restrictions and limitations on

the exercise of its disciplinary authority . Se e § 455.2273(5),

Fla. Stat. ( providing that t he administrative law judge, in

recommending penalties in any recommended order, must follow the

penalty guidelines establish ed by the board or department and

must state in writing the mitigating or aggravating

circumstances upon which th e recommended penalty is based).

4 3 . In Florida Administrative Code Rule 61G4 - 17.001 , the

Board has announced the penalty r anges within which its

disciplinary action against contractors will fall, absent

aggravating or mitigating circumstances, for specified

violations.

4 4 . At all times material to the instant case, r ule 61G4 -

17.00 1 has provided, in pertinent part, that for a first offense

of s ection 489.129(1)(i), by failing to comply with s ection

489. 1425 , a violator could expect, absent aggravating or

mitigating circumstances, to re ceive a penalty ranging from a

minimum of a $ 25 0 fine to a maximum of a $ 500 fine . Fla. Admin.

Code R. 61G4 - 17.00 1(1)(i)4. The rule has also, among other

things, given notice of the B oard ' s additional authority to

assess the costs of investigation and prosecution . Fla. Admin.

Code R. 61G4 - 17.00 1(4).

4 5 . Florida Administrative Code Rule 61G4 - 17.00 2 lists

aggravating and mitigating circumstances to be considered in

determining whether a departure from the normal penalty range is

warranted in a particular case . 2 At all times materi al to the

instant case, these aggravating and mitigating circumstances

have i ncluded 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 deterr ent effect of the penalty

imposed.

(8) The effect of the penalty upon the

licensee ' s livelihood.

(9) Any efforts at rehabilitation.

(10) Any other mitigatin g or aggravating

circumstances.

4 6 . Having considere d the facts of the instant case in

light of the pertinent and applicable provisions of Florida

Administrative Code Chapter 61G4 - 17, it is the view of the

undersigned that the appropriate disciplinary action that should

be taken against Respondent in the instant case for his

v iolation of s ection 489.129(1)(i ), is to fine him $250 .00 and

order him to reimburse the Department for investigative and

prosecutorial costs related to such violation .

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Board issue a Final Order:

(1) dismissing Counts Two and Three of the Administrative

Complaint; (2) finding Respondent guilty of violating s ection

489.129(1)( i), by failing to comply with s ection 489.1425,

Florida Statutes, as allege d in Count I of the Administrative

Complaint; (3) fining him $ 250 .00 for having committed this

violation ; and (4) ordering him to reimburse the Department for

investigative and prosecutorial costs related to this violation .

DONE AND ENTERED this 10 th day of November , 20 11 , in

Tallahassee, Leon County, Florida.

S

___________________________________

JESSICA ENCISO VARN

Administrative Law Judge

Division of Administrative Hearing s

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 10 th day of November, 20 1 1 .

ENDNOTES

1 Unless otherwise noted, all references in this Recommended

Order to Florida Statutes are to Florida Statutes (2011).

2 With respect to violations of s ection 489.129(1)(i), Florida

Statutes, resulting from a failure to comply with s ection

489.1425, Florida Statutes, only a downward departure is

possible for a first violation, given that s ection 489.1425

provide s that the Board may only impose a fine of up to $500 for

such a violation.

COPIES FURNISHED :

Alexander O. Soto, Esquire

The Soto Law Group, P.A.

2400 East Commercial Boulevard

Suite #400

Fort Lauderdale, Florida 33308

Andrew Fier , Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Katie Repko, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

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

Layne Smith , General Counsel

Department o f Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

N OTICE OF RIGHT TO SU BMIT 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.