97-002141 Construction Industry Licensing Board vs. Robert Loeffler Status: Closed Recommended Order on Monday, November 10, 1997.

Summary: Licensee disciplined for not registering corporation through which he did business.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION , )

CONSTRUCTION INDUSTRY LICENSING )

BOARD , )

)

Petitioner , )

)

vs. ) Case No. 97-2141

)

ROBERT LOEFFLER , )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings,

by its duly designated Administrative Law Judge, William J.

Kendrick, held a formal hearing in the above-styled case on

October 23, 1997, in Miami, Florida.

APPEARANCES

For Petitioner : Theodore R. Gay, Esquire

Department of Business and

Professional Regulation

401 Northwest Second Avenue, Suite N-607

Miami, Florida 33128

For Respondent : No appearance at hearing.

STATEMENT OF THE ISSUES

At issue in this proceeding is whether Respondent committed

the offenses set forth in the Administrative Complaint and, if

so, what penalty should be imposed.

PRELIMINARY STATEMENT

By a three-count Administrative Complaint dated February 21,

1997, Petitioner alleged that Respondent was guilty of (a) acting

in the capacity of a contractor in a name other than the name on

Respondent's license in violation of Section 489.129(1)(g),

Florida Statutes; (b) violating a provision of Part I, Chapter

489, Florida Statutes (Sections 489.199(2) and 489.127(1)(f),

Florida Statutes), by engaging in contracting as a business

organization without applying for certification in violation of

Section 489.129(1)(j), Florida Statutes; and (c) failing to

satisfy within a reasonable time, the terms of a civil judgment

obtained against the license, or the business organization

qualified by the license, relating to the practice of the

licensee's profession, in violation of Section 489.129(1)(r),

Florida Statutes.

Respondent filed an election of rights whereby he contested

the material facts alleged in the administrative complaint, and

requested a formal hearing. Consequently, in May 1997 the matter

was referred to the Division of Administrative Hearings for the

assignment of an administrative law judge to conduct a formal

hearing pursuant to Sections 120.569 and 120.57(1), Florida

Statutes.

At hearing, Petitioner called Anthony Pirrone and Gary Stein

as witnesses, and its Exhibits 1-17 were received into evidence.

Neither Respondent nor anyone on his behalf appeared at hearing;

however, a "Legal Memorandum for Consideration in Connection with

Formal Hearing" was filed on his behalf on October 9, 1997. That

memorandum requested that official notice be taken of Exhibits A,

B, and C to the memorandum and, without objection, Respondent's

request was granted at hearing. Moreover, without objection,

recognition was accorded Respondent's first request for

admissions to Petitioner, and Petitioner's response thereto.

The transcript of hearing was not ordered. Therefore, it

was announced on the record that the parties were accorded ten

days from the date of hearing to file proposed recommended

orders. Petitioner elected to file such a proposal, and it has

been duly considered in the preparation of this order.

Respondent did not elect to file such a proposal, but the "Legal

Memorandum for Consideration in Connection with Formal Hearing"

filed on his behalf on October 9, 1997, has been duly considered.

FINDINGS OF FACT

1. Petitioner, Department of Business and Professional

Regulation, Construction Industry Licensing Board (Department),

is a state government licensing and regulatory agency charged

with the duty and responsibility to prosecute administrative

complaints pursuant to the laws of the State of Florida, in

particular Section 20.165, Florida Statutes, and Chapters 120,

455, and 489, Florida Statutes, and the rules promulgated

pursuant thereto.

2. At all times material hereto, Respondent, Robert

Loeffler, was licensed by Petitioner as a certified general

contractor, having been issued license number CG C040314. 1 At

all times material, Respondent's certified general contractor's

license authorized him to engage in the practice of contracting

in his individual capacity only, and not as the qualifying agent

of any business entity.

3. At all times material, Respondent was the owner, sole

director and sole officer of Loeffler Building and Design, Inc.

("LBD"), a Florida corporation. At no time was LBD registered or

certified to practice contracting in the State of Florida.

4. In April 1993, Anthony Pirrone and his wife Sheila

Pirrone purchased a home at 680 North Island Drive, Golden Beach,

Florida. Before moving in, the Pirrones wanted the house

renovated, and they negotiated with Respondent and arrived at an

agreement whereby LBD, as contractor, would do the work.

5. In February 1994, the Pirrones and Respondent, as

president of LBD executed a written contract, dated August 16,

1993, for the improvements. By that time, LBD had already done

some work, and the Pirrones had already made some payments to

LBD.

6. Indeed, in or about July 1993, Respondent, on behalf of

LBD, submitted an application for a demolition permit to the Town

of Golden Beach. The application listed "Loeffler Building and

Design" as the contractor, and named Respondent, with his license

number, as the corporation's qualifier. The permit was issued

August 9, 1993.

7. On or about November 3, 1993, Respondent, on behalf of

LBD, submitted an application for a permit to commence the

renovations and improvements contemplated by the agreement with

the Pirrones. The application listed "Loeffler Building," which

is understood to mean Loeffler Building and Design, Inc., as the

contractor, and again named Respondent, with his license number,

as the corporation's qualifier. The permit was issued November

5, 1993.

8. LBD continued work on the Pirrone home until August

1994, when all work ceased. On December 5, 1994, incident to the

pending dispute between the parties, the Pirrones terminated

their agreement with LBD.

9. The Pirrones and LBD asserted claims against each other,

and the claims became the subject of litigation between them.

The claims were arbitrated, and on July 24, 1995, the arbitrator

issued an award denying LBD's claim against the Pirrones,

andgranting the Pirrones' claim against LBD in the amount of

$62,315.81, together with interest and administrative fees, for a

total award of $65,512.13. On October 26, 1995, a final judgment

confirming the arbitrator's award was entered in the Circuit

Court, Dade County, Florida, Case No. 95-01131.

10. At the time of hearing, neither Respondent nor LBD had

made any payment on the judgment, nor had they entered into an

agreement with the Pirrones to satisfy the judgment by making

periodic payments. 2

11. Respondent has had no prior complaints filed against

him with the Department.

CONCLUSIONS OF LAW

12. The Division of Administrative Hearings has

jurisdiction over the parties to, and the subject matter of,

these proceedings. Sections 120.569, 120.57(1), and 120.60(5),

Florida Statutes (Supp. 1996).

13. Where, as here, the Department proposes to take

punitive action against a licensee, it must establish the grounds

for disciplinary action by clear and convincing evidence .

Section 120.57(1)(h), Florida Statutes (Supp. 1996), and

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

670 So. 2d 932 (Fla. 1996). "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 truth of the

allegations sought to be established." Slomowitz v. Walker ,

429 So. 2d 797, 800 (Fla. 4th DCA 1983). Moreover, the

disciplinary action taken may be based only upon the offenses

specifically alleged in the administrative complaint. See Kinney

v. Department of State , 501 So. 2d 129 (Fla. 5th DCA 1987) ;

Sternberg v. Department of Professional Regulation, Board of

Medical Examiners , 465 So. 2d 1324 (Fla. 1st DCA 1985); and

Hunter v. Department of Professional Regulation , 458 So. 2d 844

(Fla. 2d DCA 1984). Finally, in determining whether Respondent

violated the provisions of Section 489.129(1) as alleged in the

administrative complaint, one "must bear mind that it is, in

effect, a penal statute. . . . This being true, the statute must

be strictly construed and no conduct is to be regarded as

included within it that is not reasonably proscribed by it."

Lester v. Department of Professional and Occupational Regulation ,

348 So. 2d 923, 925 (Fla. 1st DCA 1977).

14. Pertinent to this case, Section 489.129, Florida

Statutes (Supp. 1996) , 3 provides:

(1 ) The board may take any of the

following actions against any

certificateholder or registrant: place on

probation or reprimand the licensee, revoke,

suspend . . . require financial restitution

to a consumer for financial harm directly

related to a violation of a provision of this

part , impose an administrative fine not to

exceed $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, a financially responsible

officer, or a secondary qualifying agent

responsible under s. 489.1195 is found guilty

of any of the following acts:

* * *

(g ) Acting in the capacity of a contractor

under any certificate or registration issued

hereunder except in the name of the

certificateholder or registrant as set forth

on the issued certificate or registration, or

in accordance with the personnel of the

certificateholder or registrant as set forth

in the application for the certificate or

registration, or as later changed as provided

in this part.

* * *

(j ) Failing in any material respect to

comply with the provisions of this part or

violating a rule or lawful order of the

board.

* * *

(r ) 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. (Emphasis added.)

And, pertinent to the violation of Subsection 489.129(1)(j)

charged in this case, Section 489.119(2), Florida Statutes,

provides that if an individual "proposes to engage in contracting

as a business organization . . . the business organization must

apply for certification or registration through a qualifying

agent, or the individual applicant must apply for certification

or registration under the fictitious name," and Section

489.127(1), Florida Statutes, provides that "No person shall:

. . . (f) Engage in the business or act in the capacity of a

contractor or advertise himself or a business organization as

available to engage in the business or act in the capacity of a

contractor without being duly registered or certified. . . ."

15. Here, the proof demonstrates with the requisite degree

of certainty that Respondent engaged in the business of

contracting through Loeffler Building and Design, Inc., without

first obtaining certification of the business organization, as

required by law. Sections 489.119(2) and 489.127(1)(f), Florida

Statutes. Consequently, Respondent violated the provisions of

Subsection 489.129(1)(j), Florida Statutes, as alleged in

Count II of the Administrative Complaint. Such conduct also

constitutes a violation of Subsection 489.129(1)(g), Florida

Statutes, as alleged in Count I of the Administrative Complaint,

since Respondent, while licensed as an individual, did business

through Loeffler Building and Design, Inc., a name different from

that set forth on his certification.

16. While Petitioner has sustained the charges encompassed

by Counts I and II of the Administrative Complaint, it has failed

with regard to Count III. Section 489.129(1), Florida Statutes,

only authorizes the Construction Industry Licensing Board (Board)

to take disciplinary action under the following circumstances:

(1 ) The board may take . . . action[ ]

against any certificateholder . . . if the

contractor, financially responsible officer,

or business organization for which the

contractor is a primary qualifying agent, a

financially responsible officer, or a

secondary qualifying agent responsible under

s. 489.1195 is found guilty of any of the

following acts:

* * *

(r ) 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.

17. Notably, the civil judgment was not obtained against

the licensee and the business organization against which the

judgment was obtained, Loeffler Building and Design, Inc., was

not "qualified" by the licensee as that term is used in Sections

489.119 and 489.1195, Florida Statutes. Given that the subject

statute is a penal statute, it must, as heretofore noted, "be

strictly construed and no conduct is to be regarded as included

within it that is not reasonably proscribed by it." Lester v.

Department of Professional and Occupational Regulation , supra .

Indeed, it would be rather incongruous to conclude otherwise,

when Petitioner has pled and demonstrated that Respondent

violated the provisions of Section 489.129(l)(j), Florida

Statutes, by contracting under the name of Loeffler Building and

Design, Inc., without having applied to the Board for

certification or registration as its licensed qualifier.

Accordingly, Petitioner has failed to demonstrate that Respondent

violated the provisions of Section 489.129(l)(r), Florida

Statutes, as alleged in Count III of the Administrative

Complaint.

18. Having reached the foregoing conclusions, it remains to

resolve the appropriate penalty that should be imposed.

Pertinent to this issue, Rule 61G4-17.001, Florida Administrative

Code, provides the following guidelines to be used in

disciplinary cases under Chapter 489, absent aggravating or

mitigating circumstances:

(7 ) 489.129(1)(g), 489.119: Failure to

qualify a firm, and/or acting under a name

not on license. First violation, $100 fine;

repeat violation $750 to $1,500 fine.

* * *

(10 ) 489.129(1)(j): Failing in any

material respect to comply with the

provisions of Part I of Chapter 489.

* * *

(i ) 489.119: Failure to register qualified

business organization. First violation, $250

to $500 fine; repeat violation, $500 to

$1,000 fine and/or probation, suspension or

revocation.

* * *

(20 ) For any violation occurring after

October 1, 1989, the board may assess the

costs of investigation and prosecution. The

assessment of such costs may be made in

addition to the penalties provided by these

guidelines without demonstration of

aggravating factors set forth in rule

61G4-17.002.

(21 ) For any violation occurring after

October 1, 1988, the board may order the

contractor to make restitution in the amount

of financial loss suffered by the consumer.

Such restitution may be ordered in addition

to the penalties provided by these guidelines

without demonstration of aggravating factors

set forth in rule 61G4-17.002, and to the

extent that such order does not contravene

federal bankruptcy law.

19. According to Rule 61G4-17.002, Florida Administrative

Code, the circumstances which may be considered in mitigation or

aggravation of the penalty 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 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 severity of the offense.

(4 ) The danger to the public.

(5 ) The number of repetitions of offenses.

(6 ) The number of complaints filed against

the licensee.

(7 ) The length of time the licensee has

practiced.

(8 ) The actual damage, physical or

otherwise, to the licensee's customer.

(9 ) The deterrent effect of the penalty

imposed.

(10 ) The effect of the penalty upon the

licensee's livelihood.

(11 ) Any efforts at rehabilitation.

(12 ) Any other mitigating or aggravating

circumstances. (Emphasis added.)

20. Having considered the circumstances of the instant

case, with due regard for the guidelines for disciplinary action,

and considering that there is no nexus between the violations

found and any financial harm to the customer, it would be

inappropriate to order restitution and the appropriate penalty

for the violations found would be an administrative fine in the

sum of $250.00.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered dismissing

Count III of the Administrative Complaint, finding Respondent

guilty of Counts I and II of the Administrative Complaint, and

imposing an administrative fine of $250.00 against Respondent.

It is further RECOMMENDED that the final order assess the

reasonable costs of investigation and prosecution against

Respondent. 4

DONE AND ENTERED this 10th day of November, 1997, in

Tallahassee, Leon County, Florida.

___________________________________

WILLIAM J. KENDRICK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488- 9675 SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 10th day of November, 1997.

ENDNOTES

1/ Respondent's license expired for lack of renewal on August

31, 1996. However, the status or change in status of a

certificate holder or registrant does not alter the Board's right

to take disciplinary action for acts or omissions committed while

holding a certificate registration. Section 489.116(7), Florida

Statutes.

2/ Pursuant to a final order of the Construction Industry

Licensing Board (CILB) filed January 27, 1997, the Pirrones

received $25,000 from the Construction Industries Recovery Fund.

In exchange, the Pirrones executed a partial assignment of their

judgment to the CILB. As a result of that payment, and pursuant

to the final order, Respondent's license was suspended until

repayment of the monies paid by the fund.

3/ Subsection 489.129(1) was amended by Chapter 96-298,

Section 8, Laws of Flor ida, to include the language that has been

emphasized in the text.

4/ Rule 61G4-12.018, Florida Administrative Code, requires the

Department of Business and Professional Regulation to "submit to

the Board an itemized listing of all costs related to

investigation and prosecution of an administrative complaint when

said complaint is brought before the Board for final agency

action." Fundamental fairness requires that the Board provide

Respondent an opportunity to dispute and challenge the accuracy

and/or reasonableness of the itemization of investigative and

prosecutorial costs before the Board determines the amount of

costs Respondent will be required to pay.

COPIES FURNISHED:

Theodore R. Gay, Esquire

Department of Business and

Professional Regulation

401 NW 2nd Avenue, Suite N-607

Miami, Florida 33128

Mr. Robert Loeffler

Post Office Box 641

Denver, North Carolina 28037

Rodney Hurst, Executive Director

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

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.