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OAH 16-1902-21096-2 |
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE Department
of Labor and Industry
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In the Matter of the Florey Construction, Inc. |
FINDINGS OF FACT, CONCLUSIONS AND RECOMMENDATION |
This matter came on for a hearing before
Administrative Law Judge Manuel J. Cervantes (ALJ) on May 18, 2010, in a
courtroom at the Office of Administrative Hearings (OAH) in
Michael J. Tostengard, Assistant Attorney General, appeared
on behalf of the Minnesota Department of Labor and Industry (Department). There was no appearance by, or on behalf of,
Respondent Jeffrey A. Florey after oral due notice at a prehearing conference
on March 26, 2010 and by
1.
Did Respondent violate
Minn. Stat. § 326.84 (7)[1]
by failing to use the proceeds from Complainants’ payments to pay for work
performed by subcontractors on Complainants’ project knowing that the material
and labor furnished for the improvements by the subcontractors remained unpaid?
2.
Did Respondent perform
negligently or in breach of contract in violation of Minn. Stat. § 326.84 (4) by
failing to complete the contracted work by attempting to install mahogany
rather than oak doors as required by contract?
The ALJ
concludes that Respondent is in default
and recommends that the allegations in the Notice and Order for Prehearing
Conference be accepted as true and deemed proven.
The ALJ
further concludes there are grounds for the Commissioner of Labor and Industry
(Commissioner) to impose a license sanction and it is recommended that a license sanction be imposed.
Based upon the evidence in the hearing record, the
ALJ makes the following:
1.
Respondent holds
a residential building contractor license issued by the Department on May 23,
2007, license No. 20627705.[2]
2.
On August 4,
2009, the Department opened an investigation based on a complaint submitted by
3.
Complainants
paid Respondent $12,100 for the work performed.
Complainants refused to pay for the mahogany doors because they had to
hire someone else to install the correct oak doors.[4]
4.
The last payment,
in the amount of $815 to $2,100, is in dispute.
Complainants reported that Respondent owes four subcontractors who also
provided labor and materials in the amount of $3,089.50 to Complainants’ home. Specifically, Larson Plumbing is owed
$1,170.50, Todd the cabinet maker is owed $359, Aldrich Woodworking is owed
$990, and the electrician is owed $570.[5]
5.
On December 10,
2009, the manager of Enforcement Services for the Department issued a Licensing
Order which assessed Respondent a $1,000 monetary penalty based on violations
of
6.
Respondent
timely requested a contested hearing.[7]
7.
On February 2,
2010, a Notice and Order for Prehearing
Conference in this matter was mailed to the Respondent’s last known
address. The Notice and Order for
Prehearing Conference indicated that a conference would be held in this matter
on March 26, 2010.
8.
The Notice and Order for Prehearing Conference
in this matter includes the following statement:
Respondent’s failure to
appear at the hearing or prehearing conference, or any failure to comply with
any order of the Administrative Law Judge, may result in a finding that
Respondent is in default, that the Department’s allegations contained in this
Notice and Order may be accepted as true, and its proposed action may be upheld.[8]
9.
Respondent
appeared at the prehearing conference on March 26, 2010. After a short discussion of the issues with
the ALJ, the parties agreed that the matter would be set for a contested
hearing on May 18, 2010, at 9:30 a.m., at the Office of Administrative Hearings
in
10.
There was no
appearance by, or on behalf of, Respondent at the May 18, 2010 scheduled contested
hearing. No prehearing request was made
for a continuance, nor was any communication received by the ALJ from Respondent.[10]
CONCLUSIONS
OF LAW
1.
The ALJ and the
Commissioner are authorized to consider the allegations against Respondent
under Minn. Stat. §§ 14.50 and 326B.82, subd. 7.
2.
Respondent was
given oral notice at the Prehearing Conference of March 26, 2010 and in
writing pursuant to the ALJ’s Scheduling Order mailed March 29, 2010 to his last
known address of the time and place of the contested hearing. This matter is, therefore, properly before
the Commissioner and the ALJ.[11]
3.
Respondent is in
default as a result of his failure to appear at the scheduled contested hearing.
4.
Pursuant to
Minn. R. 1400.6000, a contested case may be decided adversely to a
party who defaults. Upon default, the
allegations and claims set forth in the original Notice and Order for Prehearing
Conference may be taken as true or deemed proved without further evidence.
5.
Respondent, as a
licensed residential building contractor, must adhere to
6.
Minn. Stat.
§ 326B.082, subd. 1, states,
The commissioner may enforce all
applicable law under this section. The commissioner may use any enforcement
provision in this section, including the assessment of monetary penalties,
against a person required to have a license, registration, certificate, or
permit under the applicable law based on conduct that would provide grounds for
action against a licensee, registrant, certificate holder, or permit holder
under the applicable law. The use of an enforcement provision in this section shall
not preclude the use of any other enforcement provision in this section or
otherwise provided by law.
7.
Minn. Stat.
§ 326B.082, subd. 11 (b) (9), authorizes the
commissioner to
[d]eny, suspend,
limit, place conditions on, or revoke a person's permit, license, registration,
or certificate, or censure the person holding the permit, license,
registration, or certificate, if the commissioner finds that the person:
* * *
performed work in
connection with the permit, license, registration, or certificate or conducted
the person's affairs in a manner that demonstrates incompetence,
untrustworthiness, or financial irresponsibility.
8.
Minn. Stat.
§ 326B.84 (7) (2008), states,
In addition to the grounds set
forth in section 326B.082,
subdivision 11, the commissioner may deny, suspend, limit, place
conditions on, or revoke a license or certificate of exemption, or may censure
the person holding the license or certificate of exemption, if the … licensee:
* * *
has failed to use the proceeds of
any payment made to the licensee for the construction of, or any improvement
to, residential real estate, as defined in section 326B.802,
subdivision 13, for the payment of labor, skill, material, and
machinery contributed to the construction or improvement, knowing that the cost
of any labor performed, or skill, material, or machinery furnished for the
improvement remains unpaid.
9.
Respondent
failed to use the proceeds from Complainants’ payments to pay for the work
performed by four subcontractors on Complainants’ project and therefore, has
violated Minn. Stat. § 326B.84 (7).
10.
Minn. Stat.
§ 326B.84 (4) (2008), states,
In addition to the grounds set
forth in section 326B.082,
subdivision 11, the commissioner may deny, suspend, limit, place
conditions on, or revoke a license or certificate of exemption, or may censure
the person holding the license or certificate of exemption, if the … licensee:
* * *
[h]as
performed negligently or in breach of contract, so as to cause injury or harm
to the public.
11.
Respondent
performed negligently or in breach of contract by attempting to install
mahogany rather than oak doors, by installing an unplumbed wall, by installing
dry wall in sloppy fashion, and by failing to complete the contracted work in
violation of Minn. Stat. § 326B.84 (4).
The Complainants were harmed when they were required to contract with
another to properly install the correct bathroom doors at an additional cost to
them.
12.
The allegations
contained in the Notice and Order for Prehearing Conference are deemed proven.
13.
Based upon the facts
set forth in the Notice and Order for Prehearing Conference, there is a basis
for the imposition of a monetary penalty.
14.
The imposition
of a monetary penalty against Respondent is in the public interest.
Based upon these Conclusions, the Administrative Law
Judge makes the following:
It is hereby respectfully Recommended that
the Commissioner impose a $1,000 monetary penalty against Florey Construction,
Inc.
Dated: June 9, 2010
s/Manuel
J. Cervantes
|
MANUEL J. CERVANTES Administrative Law Judge |
This
report is a recommendation, not a final decision. The Commissioner of the Minnesota Department
of Labor and Industry will make the final decision after a review of the
record. The Commissioner may adopt,
reject or modify the Findings of Fact, Conclusions, and Recommendations. Under Minn. Stat. § 14.61, the
final decision of the Commissioner shall not be made until this Report has been
made available to the parties to the proceeding for at least ten days. An opportunity must be afforded to each party
adversely affected by this Report to file exceptions and present argument to
the Commissioner. Parties should contact
Nancy Leppink, General Counsel, Department of Labor and Industry,
The
record closes upon the filing of exceptions to the report and the presentation
of argument to the Commissioner, or upon the expiration of the deadline for
doing so. The Commissioner must notify
the parties and the Administrative Law Judge of the date on which the record
closes.
Under
Minn. Stat. § 14.62, subd. 1, the Commissioner is required
to serve its final decision upon each party and the Administrative Law Judge by
first class mail or as otherwise provided by law.
[1] All citations refer to the 2008
version of Minnesota Statutes, unless otherwise noted.
[2] Exhibit A, Licensing Order attached
to the Notice and Order for Prehearing Conference.
[3]
[4]
[5]
[6]
[7] Ex. B, attached to the Notice and
Order for Prehearing Conference.
[8] Notice and Order for Prehearing
Conference, at 3.
[9] See
Certificate of Service of D. Collins, dated March 26, 2010.
[10] Respondent failed to comply with
other provisions of the Scheduling Order regarding the preparation and exchange
of a witness list and exhibits.
[11] Minn. R. 1400.5550, subp. 2.