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Howrey LLP
A
homeowner who contracted for construction of a home filed
a claim against the contractor with the Construction Industries
Licensing Board. The homeowner, who was dissatisfied because
of delays in construction, sought to recover payments made
to the contractor from the Construction Industry Recovery
Fund.
At
the initial hearing, the licensing board denied the homeowner's
claim on grounds that the contract between the homeowner
and the contractor predated the effective date for recoveries
under the Recovery Fund.
The
homeowner appealed the board's order and requested a formal
hearing before an administrative law judge. At the hearing,
the homeowner and the board jointly requested that the hearing
be rescheduled for a later date because a settlement had
been reached. The homeowner and board needed time to put
the settlement into writing and to obtain final approval
for the settlement from the board.
The
board scheduled a hearing to reconsider the homeowner's
claim and to vote on the settlement proposal. The board
also sought to join the building contractor's qualifying
agent as a party to the homeowner's claim. The board notified
the agent of the hearing but did not do so until four days
before the hearing.
Upon
receipt of the notice of hearing, the agent requested a
postponement in order to obtain legal counsel and to adequately
prepare for the hearing. The board, however, advised the
agent that his request for postponement would be considered
only if he attended the hearing. The board also advised
the agent that if postponement of the hearing was denied,
the board would go forward with its determination as to
whether or not to approve the proposed settlement. As a
result, the agent attended the hearing without an attorney.
At the reconsideration hearing, the board rejected the agent's
request for a postponement and voted to approve the proposed
settlement.
As
a direct result of the proposed settlement being approved
by the board, the agent's license was suspended, and the
agent became obligated to pay back into the Recovery Fund
all the monies that were paid to the homeowner as part of
the settlement.
The
agent appealed the board's approval of the settlement proposal.
The District Court of Appeal set aside the board's approval
of the proposed settlement. Ryan v. Florida Department
of Business and Professional Regulation, 798 So.2d 36
(Fla. Dist. Ct. App. 2001). It noted that the board gave
the agent only four days' notice of the hearing. The court
found that the board violated Florida law, which requires
at least 14 days' notice of an administrative hearing when
the substantial interests of a party are at issue.
Accordingly,
the court set aside the board's approval of the proposed
settlement and held that by failing to provide the agent
with sufficient notice, the board denied the agent the due
process of law to which he was entitled.
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For more information about the issues covered in this report, please contact Paul Berning in our San Francisco office at 415-848-4996 or at paulberning@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
©2002 Howrey LLP
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