96-004581 Construction Industry Licensing Board vs. Louis Roth Status: Closed Recommended Order on Friday, May 23, 1997.

Summary: Contractor abandoned project, mismanaged funds, and committed misconduct.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

CONSTRUCTION INDUSTRY LICENSING )

BOARD, )

)

Petitioner, ) CASE NOS. 96-4580

) 96-4581

vs. ) 96-4582

)

LOUIS ROTH, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

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

on January 28, 1997, in Miami, Florida, before Claude B.

Arrington, a duly designated Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: John O. Williams, Esquire

Boyd, Lindsey and Williams

1407 Piedmont Drive, East

Tallahassee, Florida 32317

For Respondent: Robert McNeely, Esquire

McFarlain, Wiley, Cassedy and Jones, P.A.

215 South Monroe Street, No. 600

Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

Whether the Respondent, a licensed general contractor,

committed the offenses alleged in the three administrative

complaints and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

Petitioner filed three separate administrative complaints

against the Respondent, a licensed general contractor. Each

administrative complaint pertained to a contract for

construction in the aftermath of Hurricane Andrew. Respondent

timely requested a formal hearing for each case. Thereafter,

the matters were referred to the Division of Administrative

Hearings, where they were consolidated.

The administrative complaint in DOAH Case 96-4580 pertained

to work performed by Respondent or his company for Anthony

Rodriguez. Based on factual allegations involving that matter,

Petitioner charged Respondent with violating the provisions of

Section 489.129(1)(d),(k),(n), and (p), Florida Statutes.

The administrative complaint in DOAH Case 96-4581 pertained

to work performed by Respondent or his company for William R.

Ellis. Based on factual allegations involving that matter,

Petitioner charged Respondent with incompetence or misconduct in

the practice of contracting. Such a charge would, if proven, be

a violation of Section 489.129(1)(n), Florida Statutes.

The administrative complaint in DOAH Case 96-4582 pertained

to work performed by Respondent or his company for Carl F.

Kuchenbacker. Based on factual allegations involving that

matter, Petitioner charged Respondent with violating the

provisions of Section 489.129(1)(h)1,(k),(n), and (p), Florida

Statutes.

At the formal hearing, Petitioner presented the testimony

of Anthony Rodriguez, William R. Ellis, Carl F. Kuchenbacker,

Antonio Varona, and Jose Mitrani. Mr. Varona was, at the times

pertinent to this proceeding, a Dade County building official.

Mr. Mitrani is a contractor who was permitted to express expert

opinions within the scope of his expertise. Petitioner

presented 16 exhibits, each of which was accepted into evidence.

Respondent presented testified on his own behalf and presented

the additional testimony of Jay Marron, his former business

associate. Respondent presented one exhibit, which was accepted

into evidence.

A transcript of the proceedings has been filed. At the

request of the parties, the time for filing post-hearing

submissions was set for more than ten days following the filing

of the transcript. Consequently, the parties waived the

requirement that a recommended order be rendered within thirty

days after the transcript is filed. Rule 60Q-2.031, Florida

Administrative Code. The Petitioner and Respondent filed

proposed recommended orders, which have been duly considered by

the undersigned in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with regulating

the practice of contracting pursuant to Section 20.165, Florida

Statutes, and Chapters 455 and 489, Florida Statutes.

2. At all times pertinent to this proceeding, Respondent

has been licensed as a general contractor by the Petitioner.

Respondent was issued license number CG C010162 in 1975 and has

held that licensure ever since.

3. The first complaint against Respondent’s licensure,

like the three complaints at issue in this proceeding, arose

from a post-Hurricane Andrew contract. That complaint was

resolved by stipulation of the parties. Respondent did not

admit to wrongdoing in his stipulation. Respondent was

financially unable to comply with the terms of the settlement.

Consequently, his license was suspended at the time of the

formal hearing. There was no explanation as to why this

complaint, which occurred at approximately the same time as the

three contracts at issue in this proceeding, was prosecuted

separately.

4. At all times pertinent to this proceeding, Respondent

was the qualifier for Allstate Construction Management, Inc.

(Allstate), a Florida corporation.

THE RODRIGUEZ CONTRACT (DOAH CASE 96-4580)

5. On March 17, 1993, Allstate entered into a contract

with Anthony Rodriguez to build a garage at 15525 SW 209 th

Avenue, Miami, Florida. The contract price was $16,250.00,

which included “plans, permit and cleanup.”

6. Allstate was paid the sum of $4,062.50 on March 17,

1993. Allstate obtained the Dade County building permit for the

project on March 26, 1993. Allstate was paid the sum of

$5,593.75 on April 5, 1993, after the concrete blocks were

installed. On April 8, 1993, Allstate requested a tie

beam/reinforcing inspection from the Dade County building

department. In response to that request, Antonio Varona

inspected the project on April 12, 1993. The inspector noted

that the project was not ready for inspection because no truss

plans were available. Respondent testified, credibly, that he

had to construct the roof conventionally because of the

difficulty in obtaining pre-fabricated trusses; however, that

testimony does not explain why there were no truss plans

available for inspection. Appropriately engineered truss plans

are required for a roof to pass inspection.

7. Despite the failure of the project to pass inspection,

Mr. Rodriguez accepted the roof and paid Allstate $4,968.75 on

May 21, 1993.

8. As of May 21, 1993, there remained a final payment of

$1,625 on the contract. After May 21, 1993, Respondent and

Allstate left the Rodriguez job. There was a dispute in the

evidence as to whether Mr. Rodriguez fired Allstate or whether

Allstate abandoned the project. This dispute is resolved by

finding that the evidence was insufficient to establish by clear

and convincing evidence that Allstate abandoned the Rodriguez

project.

9. When Allstate left the Rodriguez job, there were

sufficient funds remaining unpaid to complete the project.

10. Because he had obtained the initial building permit,

it was incumbent upon Respondent to either obtain a final

inspection of the project or notify the building department that

his company had been terminated by the owner. Respondent did

neither.

THE ELLIS CONTRACT (DOAH CASE 96-4581)

11. At the times pertinent to this proceeding, William R.

Ellis owned the Arleen House, which is an apartment building

located at 2191 N.E. 168 th Street, North Miami Beach, Florida.

This building suffered damages from Hurricane Andrew. On

September 11, 1992, Respondent and Mr. Ellis inspected the

building and Respondent prepared an estimate as to the items

that had been damaged by the hurricane and other non-hurricane

related repairs that should be made. The mansard roof for this

building had been damaged by Hurricane Andrew to the extent that

it contained gaping holes.

12. Shortly after that inspection, Mr. Ellis met with his

insurance adjuster who gave him a check in the amount of $13,000

to repair the roof. It was necessary to dry in the roof and

repair the mansard as soon as possible to avoid additional

damage to the building from rains.

13. While there was a dispute as to the extent of the

services Allstate was to provide Mr. Ellis, the record is clear

that Respondent, on behalf of Allstate, agreed to undertake the

roof repair for the sum of $13,000.

14. Respondent told Mr. Ellis that his company had a

roofing crew ready to begin work on the roof repairs as soon as

Mr. Ellis paid the sum of $13,000. Between September 11 and

September 15, 1992, Mr. Ellis gave Allstate a check in the

amount of $13,000 with the understanding that the check he had

received from the insurance company had to clear before his bank

would honor the check he was giving to Allstate. Immediately

thereafter 1 Allstate sent a roofing crew to the project for the

purpose of temporarily covering exposed areas.

15. Despite having been told by Mr. Ellis that the check

he was giving Allstate would not be good until after the check

for the insurance proceeds had cleared, Allstate did not wait to

deposit Mr. Ellis’ check. Respondent was promptly notified that

the check Mr. Ellis had given him would not be honored by Mr.

Ellis’ bank. Respondent immediately thereafter withdrew the

roofing crew from the project. The roofing crew had made only

minor repairs at the time they were withdrawn from the project.

Respondent knew, or should have known, that the building was

vulnerable to further damage from rain.

16. On September 15, 1992, Mr. Ellis gave Respondent a

second check in the amount of $13,000. This check cleared the

banking process on September 18, 1992.

17. Mr. Ellis made repeated efforts to have Allstate send

a crew to repair the roof. After it withdrew the crew that had

been sent to the property when Allstate received the first

check, Allstate did not take action to protect the property by

repairing the exposed areas of the roof.

18. Towards the end of September 1992, a heavy rainstorm

caused additional damages to Mr. Ellis’ building.

19. Allstate did not send a crew to the project again

until October 6, 1992.

20. Mr. Ellis hired this crew away from Allstate. He

testified he did so because the crew complained about Allstate

not paying for the materials they were using to repair the roof

and because the workmen were threatening to file liens against

the property. Mr. Ellis paid this crew the sum of $3,400 to

temporarily repair the roof. He then entered into a contract

with another contractor to complete the roofing repairs for the

sum of $17,500. Mr. Ellis demanded the return of the $13,000 he

paid to Allstate, but, as of the time of the formal hearing, he

had not been repaid.

THE KUCHENBACKER CONTRACT (DOAH CASE 96-4582)

21. On November 6, 1992, Allstate entered into a contract

with Carl F. Kuchenbacker to repair his residence at 18500 SW

88 th Road, Miami, Florida. Mr. Kuchenbacker’s residence had been

damaged by Hurricane Andrew.

22. The initial contract price was $33,375.00. Respondent

secured the building permit and Allstate began work on the

project. During the course of the work, additional work was

added to the contract, which raised the total contract price to

$38,015.00.

23. In late February or early March, 1993, Allstate

abandoned the project without just cause and without notice to

the owner. At the time it abandoned the project, Allstate had

been paid the sum of $26,620.00.

24. Allstate failed to pay all of the subcontractors and

materialmen who had performed work or provided material for the

Kuchenbacker job. As a result of that failure, valid liens were

recorded against Mr. Kuchenbacker’s property. The following

liens were recorded: Rite-Way Plumbing and Plastery, Inc. in the

amount of $3,520.00; Commercial Lighting and Maintenance, Inc.,

in the amount of $1,835.00; and Scott Bornstein Plumbing, Inc.,

in the amount of $798.00. Allstate had received sufficient

funds from the owner to pay these liens, but neither Respondent

nor Allstate paid these liens.

25. Mr. Kuchenbacker and Petitioner’s expert witness

testified that the value of the work performed by Allstate

before it abandoned the job was $21,000.00. Mr. Kuchenbacker

also testified as to the items that remained undone and as to

the percentage of the work that had been completed. From that

testimony and from the testimony as to the estimated costs of

completing the job, it is found that the sum of $11,395.00,

which was the difference between the total contract price and

the total amount that was paid to Allstate, was sufficient to

complete the project and pay off the liens on the property.

26. Respondent did not call for a final inspection of the

property and he did not advise the Dade County Building

Department that he was abandoning the project.

27. Allstate abandoned the Kuchenbacker project because it

went out of business.

CONCLUSIONS OF LAW

28. The Division of Administrative Hearings has

jurisdiction of the parties to and the subject of this

proceeding. Section 120.57(1), Florida Statutes.

29. Petitioner has the burden of proving by clear and

convincing evidence the allegations against Respondent. See

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). Evans Packing , supra, 550 So.2d

112, 116, fn. 5, provides the following pertinent to the clear

and convincing evidence standard. That standard has been

described as follows:

[C]lear and convincing evidence requires

that the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

evidence 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 the firm belief of

(sic) conviction, without hesitancy, as to

the truth of the allegations sought to be

established. Slomowitz v. Walker , 429 So.2d

797, 800 (Fla. 4th DCA 1983).

30. Section 489.129, Florida Statutes, regulates the

practice of contracting and provides, in pertinent part, as

follows:

(1) The board may take any of the

following actions against any certificate

holder or registrant: place on probation or

reprimand the licensee, revoke, suspend, or

deny the issuance or renewal of the

certificate or registration, require

financial restitution to a consumer, impose

an administrative fine not to exceed $5,000

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 or

is a secondary qualifying agent responsible

under Sec. 489.1195 is found guilty of any

of the following acts:

* * *

(d) Knowingly violating the applicable

building codes or laws of the state or of

any municipalities or counties thereof.

* * *

(h) Committing mismanagement or misconduct

in the practice of contracting that causes

financial harm to a customer. Financial

mismanagement or misconduct occurs when:

1. Valid liens have been recorded against

the property of a contractor's customer for

supplies or services ordered by the

contractor for the customer's job; the

contractor has received funds from the

customer to pay for the supplies or

services; and the contractor has not had

the liens removed from the property, by

payment or by bond, within 75 days after the

date of such liens;

* * *

(k) 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.

* * *

(n) Committing incompetency or misconduct

in the practice of contracting.

* * *

(p) Proceeding on any job without

obtaining applicable local building

department permits and inspections.

31. Respondent does not dispute that he, as the qualifier

of Allstate, is responsible for the actions of the corporation.

32. The administrative complaint in DOAH Case 96-4580,

pertaining to the contract with Anthony Rodriguez, contained

four separate counts. Count I of DOAH Case 96-4580 alleges that

Respondent violated Section 489.129(1)(p), Florida Statutes, by

proceeding on the Rodriguez job without obtaining applicable

building permits or inspections. Petitioner established that

violation by proving by clear and convincing evidence that

Allstate left the Rodriguez job without obtaining required

inspections.

33. Count II of DOAH Case 96-4580 alleges that Respondent

violated Section 489.129(1)(d), Florida Statutes, by failing to

maintain approved truss plans at the construction site.

Petitioner established this violation by clear and convincing

evidence. The evidence established that Allstate constructed

the Rodriguez roof without prefabricated trusses and it did not

have drawings available for inspection. While this evidence

creates an inference that Allstate did not use engineered plans

for this roof, it does not establish that fact clearly and

convincingly. Consequently, it is concluded that Petitioner did

not establish that Allstate constructed the roof without

properly engineered plans.

34. Count III of DOAH Case 96-4580 alleges that Respondent

violated Section 489.129(1)(k), Florida Statutes, by abandoning

the Rodriguez job. Petitioner failed to establish that

violation.

35. Count IV of DOAH Case 96-4580 alleges that Respondent

violated Section 489.129(1)(n), Florida Statutes. Petitioner

established by clear and convincing evidence that Allstate was

guilty of misconduct by proving that Allstate left the Rodriguez

job without notifying the Dade County Building Department.

36. The administrative complaint in DOAH Case 96-4581

pertaining to the contract with William R. Ellis, contained one

count and charged Respondent with incompetence or misconduct in

the practice of contracting. Such a charge, if proven, is a

violation of Section 489.129(1)(n), Florida Statutes.

Petitioner established this alleged violation by clear and

convincing evidence. Petitioner proved that Allstate had the

duty to move expeditiously to protect the Ellis property after

it received the down payment for the roofing job and that it

failed to discharge that duty. While some might suggest

Allstate was justified in withdrawing the crew from the project

when the first check was not honored, a conclusion not here

drawn, there was no justification for failing to protect the

roof between September 18, 1992, the date the second check

cleared, and October 6, 1992, the date the crew went to the

project for the second time. The facts that there was a

shortage of materials and labor during this hectic time does not

excuse this failure. If Allstate was in a position where it

could not perform, it should not have entered into the contract

and it should not have accepted the down payment for the job.

Petitioner established that the owner suffered substantial

damages as a result of Allstate’s failure to timely protect the

roof it contracted to repair.

37. The administrative complaint in DOAH Case 96-4582

pertaining to the contract with Carl F. Kuchenbacker contained

four counts. Count I of DOAH Case 96-4582 alleges that

Respondent violated Section 489.129(1)(h)1, Florida Statutes, by

failing to pay subcontractors and material men who subsequently

recorded valid liens against the property. Petitioner proved

this violation by clear and convincing evidence.

38. Count II of DOAH Case 96-4582 alleges that Respondent

violated Section 489.129(1)(k), Florida Statutes, by abandoning

the project. Petitioner proved this violation by clear and

convincing evidence.

39. Count III of DOAH Case 96-4582 alleges that Respondent

violated Section 489.129(1)(p), Florida Statutes, by failing to

obtain a final inspection for the property before he abandoned

the project. Petitioner established this violation by clear and

convincing evidence.

40. Count IV of DOAH Case 96-4582 alleges that Respondent

violated Section 489.129(1)(n), Florida Statutes, by engaging in

misconduct in the practice of contracting. The failure to

obtain the final inspection, the financial mismanagement that

resulted in liens against the property, and the abandonment of

the project constitute misconduct in violation of Section

489.129(1)(n), Florida Statutes, as alleged in Count IV of DOAH

Case 96-4582. No separate penalty is being recommended for this

violation because the same facts establish the violations found

in Counts I, II, and III.

41. Rule 61G4-17.001, Florida Administrative Code,

provides discipline guidelines that are pertinent to this

proceeding. Rule 61G4-17.002, Florida Administrative Code,

provides for mitigating and aggravating circumstances. Rule

61G4-17.003, Florida Administrative Code, provide for penalties

involving repeat violators. The undersigned has applied the

guidelines contained in Rule 61G4-17.001, Florida Administrative

Code. There are not sufficient aggravating or mitigating

circumstances to require deviation from those guidelines. As

reflected in the findings of fact, Respondent has been

previously disciplined by Petitioner. In applying the

guidelines to the facts of these cases, the undersigned has not

considered Respondent to be a repeat violator because the

earlier disciplinary action also involved jobs undertaken during

the aftermath of Hurricane Andrew. Petitioner has discretion as

to the speed with which disciplinary actions are prosecuted, and

there was no showing as to why the earlier case was not

prosecuted simultaneously with these three cases. In

determining the penalty to be applied within the range of

penalties contained in the guidelines, the undersigned has

considered the length of time the Respondent has been licensed,

the exigent circumstances that existed in Dade County during the

aftermath of Hurricane Andrew, and the impact of Allstate’s

actions on its customers.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that that Petitioner enter a final order

that adopts the findings of fact and conclusions of law

contained herein. It is further recommended that Petitioner

impose fines totaling $5,000 against Respondent’s licensure as

follows:

For the violation established by Count I

of DOAH Case 96-4580, an administrative fine

in the amount of $500.

For the violation established by Count II

of DOAH Case 96-4580, an administrative fine

in the amount of $500.

For the violation established by Count IV

of DOAH Case 96-4580, an administrative fine

in the amount of $250.

For the violation established by DOAH Case

96-4581, an administrative fine in the

amount of $500.

For the violation established by Count I

of DOAH Case 96-4582, an administrative fine

in the amount of $750.

For the violation established by Count II

of DOAH Case 96-4582, an administrative fine

in the amount of $2,000.

For the violation established by Count III

of DOAH Case 96-4582, an administrative fine

in the amount of $500.

IT IS FURTHER RECOMMENDED THAT in addition to the fines

recommended for the violations found in DOAH Case 96-4581,

Respondent’s licensure be suspended for two years.

IT IS FURTHER RECOMMENDED THAT in addition to the fines

recommended for the violations found DOAH Case 96-4582,

Respondent’s licensure be suspended for two years, to run

concurrently with the suspension recommended for DOAH Case 96-

4581.

DONE AND ENTERED this 23rd day of May, 1997, 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]

Filed with the Clerk of the

Division of Administrative

Hearings

this 23rd day of May, 1997

ENDNOTE

1/ Respondent testified that he thought he had not actually

received this first check from Mr. Ellis when he sent the

roofing crew to the project for the first time. Mr. Ellis

testified that Respondent did not send a crew to the project

until after he had the check in hand. Whether he received the

check before or after he sent the crew to the project has no

bearing on the recommendations contained herein.

COPIES FURNISHED:

John O. Williams, Esquire

Boyd, Lindsey, Williams and Branch, P.A.

1407 Piedmont Drive East

Post Office Box 14267

Tallahassee, Florida 32317

Robert McNeely

215 South Monroe Street, No. 600

Tallahassee, Florida 32301

Mr. Louis Roth

3201 North Surf Road, No. 202

Hollywood, Florida 33019

Rodney Hurst, Executive Director

Department of Business and

Professional Regulation

Construction Industry Licensing Board

7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

Lynda L. Goodgame, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Northwood Centre

Tallahassee, Florida 32399

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.