Construction Regulation Subcommittee Monthly Report Months of July-August 2016

The Florida Bar: Real Property, Probate and Trust Law Section
Construction Law Committee

Construction Regulation Subcommittee Monthly Report
Months of July-August 2016

           

STATE AND FEDERAL APPELLATE DECISIONS: 

Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Company, 2016 WL 4087782, --- F.3d --- (U.S. Ct. of Appeals, Eleventh Circuit, 2016).  The District Court held that a chapter 558 notice unambiguously does not trigger the insurer’s duty to defend or indemnify.  The Eleventh Circuit is “not as sure” and certified the matter to the Florida Supreme Court.

Great American Insurance Company v. Brewer, et al., 2016 WL 3640395 (M.D. Fla., Orlando Division).  The trial court granted partial summary judgment to a surety on the indemnitor’s defense that section 725.06, Fl. Stat., applies to nullify an indemnity agreement.  Section 725.06 does not apply to a surety as plaintiff because it is not an owner of real property, or an architect, engineer, general contractor, subcontractor, sub-subcontractor, or materialman.

Maschmeyer Concrete Company of Florida v. American Southern Insurance Company, 2016 WL 3746379 (M.D. Fla., Orlando Division).  In a section 255.05 payment bond case, the trial court held the surety liable on summary judgment.  The contract was for an initial term of one year with a provision to allow the parties to renew the term for up to 60 months.  The bond term expressly limited the surety’s liability to a single term year that was prior to plaintiff’s provision of materials.  The trial court found that section 255.05(1)(e) rendered the limitation unenforceable.  That statute provides in part that “any provision in [a statutory bond] issued on or after October 1, 2012, . . . which limits or expands the effective duration of the [statutory bond] . . . is unenforceable.”


DOAH ORDERS (if any):

Department of Financial Services, Division of Workers’ Compensation v. Soler and Son Roofing, DOAH Case No. 15-7356: Recommended order issued on July 19, 2016. A roofing company was assessed over $63,000 for having one (1) uninsured worker, with the penalty calculated based on the department’s statutory “imputation” that the worker: (1) had been employed for the past two (2) years, and, (2) at the “average weekly wage” of $841.57 (as determined annually by the Department of Economic Opportunity). Since the evidence showed that the worker earned only $10 per hour, which was found to rebut the statutory presumption of the “average weekly wage,” the Administrative Law Judge determined that the penalty assessment should have been calculated at only $15,000 (as an alternative to only a $1,000 fine).

HOWEVER, in addition, even though the company failed to produce payroll records, the ALJ found that the department had failed to prove by “clear and convincing evidence” that the worker had been employed for more than just one (1) day, and rejected the two-year imputation of employment based on a conflict between the statutory provisions of section 440.107(7) (d)1, and Rule 69L-6.028(2). In particular, the ALJ held that the employer’s failure to produce business records was not a basis for the department to impute a two-year employment period.

By invalidating this rule, the ALJ then applied the July 1, 2016, effective date change in section 120.57(1)(e), which now provides the authority to invalidate a rule in a 57.105 hearing, and prohibits agency or ALJ action based on an invalid exercise of delegated legislative authority.

Anticipating, based on prior decisions, that the department would attempt to make an Exception to this Conclusion of Law, and override it with a contrary conclusion, the ALJ noted that this area of law (i.e., determination of rules of evidence) may not be in the agency’s “substantive jurisdiction” (which, if so, would prevent the agency from overturning the ALJ’s “conclusion of law” on this point.

Editor’s Note: This is a very important decision; however, it’s only a “recommended” order, and must now go to the agency to enter a “final” order; accordingly, we will continue to monitor this case for any changes the agency may make in its final order (and for any appellate actions based thereon).




AGENCY REGULATIONS:

A. Department of Business and Professional Regulation:
           
1.      Construction Industry Licensing Board – Chapter 489, Part I, FS and Chapter 61G4 FAC:

(a)   Rule Changes (if any):

NOTE: The board will hold a rules workshop on August 12, 2016, in Jacksonville on a Petition for Rulemaking filed by the Florida Pool and Spa Association, requesting clarification of the scope of a pool contractor’s license with regard to replacing pool equipment that is operated by electricity.


Rule 61G4-12.011:
The terms “active experience” and “proven experience,” and the items of work that are not exempted from licensure under section 489.103(9) [“casual, minor, or inconsequential], is to be clarified, but the preliminary text of this rule change is not yet available.

Rule 61G4-15.001, regarding qualifications for work experience and verification, has been amended by the board, but have been objected to the Joint Administrative Procedures Committee (“JAPC”) by letter dated December 15, 2015, and the rule changes are not effective until these objections have been addressed. In the meantime, the board has postponed changes to this rule.

(b)  Petitions for Declaratory Statement (if any):

        Charlie Deathridge – Petition filed on February 8, 2016, seeking a determination of the applicability of section 489.105 as it relates to the activities of installing ground anchors, utility poles and backfilling. By order entered on July 6, 2016, the board declined to answer because petitioner was not a substantially affected person and had no standing.

        Roger W. Feicht – Petition filed on February 22, 2016, seeking a determination of the applicability of sections 455.227 (grounds for discipline) and 489.129 (disciplinary proceedings) based on conduct of a contractor that occurred in 2007, 2008 and 2009. By order entered on July 6, 2016, the board declined to answer because the petitioner was not substantially affected and did not have standing.

Larry Carnley – Petition filed on April 5, 2016, seeking a determination of whether the scope of a pool/spa contractor’s license in performing electrical work, has not yet been scheduled for hearing.
Editor’s Note: It is not likely that the board will address this petition in light of the Rules Workshop noted above.


 (c)  Petitions for Variance or Waiver (if any):

Richard Albert Stolte – Petition filed on April 12, 2016, seeking a waiver of the rule requiring a passing score on the Business and Finance Exam.

Nolan Carl Sweeting – Petition filed on May 11, 2016, seeking a waiver from the building contractor’s license examination until December 31, 2016.

Scott Douglas Chambers – Petition filed on July 15, 2016, seeking a waiver of the financial responsibility and stability requirements of Rule 61G4-15.006 in order to change the status of the petitioner license to that of a certified pool/spa servicing contractor.
Editor’s Note: This petition currently holds a certified pool/spa contractor’s license, so such a change of status is a “downgrade.”

2.      Electrical Contracting Licensing Board (includes both electricians and alarm contractors) – Chapter 489, Part II, FS and 61G6, FAC;

(a)     Rules Changes (if any): None noticed.

(b)     Petitions for Declaratory Statement (if any): None noticed.

(c)       Petitions for Variance or Waiver (if any): Nathan Macksey – Petition filed on June 23, 2016, seeking a waiver of the rule that examination scores are valid only for a period of two (2) years.

3.      Board of Architecture and Interior Design – Chapter 481, Part I, FS and 61G1 FAC:

(a)Rules Changes (if any): None noticed.

(b)         Petitions for Declaratory Statement (if any): None noticed.

(c)          Petitions for Variance or Waiver (if any): None noticed.

4.      Board of Professional Engineers – Chapter 471, FS and 61G15 FAC:

(a)    Rules Changes (if any):

Rule 61G15-19.004, regarding grounds for disciplinary proceedings to delete the discretionary phrase “depending on the severity of the offense.”

Rule 61G15-24.001 to reduce licensure fees and established fees for CE courses.

 (b)  Petitions for Declaratory Statement (if any): Mr. and Mrs. Tom Shoquist, seeking a determination of whether one-site inspections to determine the percentage of work completed and compliance with drawings and specifications on a new, permitted construction project, is required to be performed by a licensed engineer or architect. By order filed on April 14, 2016, the petitioner’s motion to withdraw this petition was granted.

(c)    Petitions for Variance or Waiver (if any):

Julian B. Irby – Petition filed on January 19, 2016, seeking a waiver of Rule 61G15-23.003(1) requiring that engineering documents be signed by “hand.” By order filed on March 1, 2016, the board granted the waiver based on undue hardship.

Adriana Jaegerman – Petition filed on January 21, 2016, seeking a waiver of Rule 61G15-35.000(1) requiring that relevant experience be gained with seven (7) years of the application. By order filed on February 11, 2016, the board granted petitioner’s request to withdraw the petition.

Olof H. Jacobson – Petition filed on May 11, 2016, seeking a waiver of Rule 61G15-21.001(1) (a) and licensure by endorsement. By order filed on July 5, 2016, the board granted the petition because the petitioner meet the purpose of the underlying statute by passage of a state Fundamentals of Engineering and Principals Exam, which is substantially equivalent to Parts I and II of the NCEES licensure exam.

Wassin Naguib – Petition filed on May 17, 2016, seeking a waiver of
Rule 61G15-20.007(5) and allowing petitioner to be licensed by endorsement. By order filed on July 5, 2016, the petition was denied for failure to meet the purpose of the underlying statute by other means.

David Bush – Petition filed on May 18, 2016, seeking a waiver of Rule 61G15-21.001(1) (a) and licensure by endorsement. By order filed on July 5, 2016, the board granted the petition because the petitioner meet the purpose of the underlying statute by passage of a state Fundamentals of Engineering and Principals Exam, which is substantially equivalent to Parts I and II of the NCEES licensure exam.

Manoj Tadhani – Petition filed on August 1, 2016, seeking a waiver from Rule 61G15-20.007(3) requiring that CLEP courses be used to satisfy educational deficiencies in General Education but not in Math and Basic Science (to be heard by the board on August 18).

Raghavender Joshi – Petition filed on August 3, 2016 seeking a waiver of Rule 61G15-20.007(1) (b) requiring that applicants for licensure with non EAC/ABET accredited degrees demonstrate 9 hours of general education credit (to be heard by the board on August 18).

5.      Building Code Administrators and Inspectors Board – Chapter 468, Part XII and 61G19 FAC:

(a)     Rule Changes: (if any): None noticed.

(b)     Petitions for Declaratory Statement (if any): None noticed.

(c)       Petitions for Variance or Waiver (if any): None noticed.

6.      Florida Building Commission[1] – Chapter 553, Part IV and Chapter 61G20, FAC):
Note: The current Florida Building Code is the 5th edition (2014).

(a)         Rule Changes (if any): The commission has announced a series of meetings of its various Technical Advisory Committees (TACs) for the purpose of taking public input on changes to the 6th edition (2017) of the Florida Building Code.

Rule 61G20-1.001, to make changes to the 5th edition (2014) of the Florida Building Code, effective June 8, 2016, pursuant to Chapter 2016-129 and Chapter 2016-211, Laws of Florida. The newly created Energy Rating Index Workgroup has completed its first meeting and is expected to make recommendations regarding “onsite renewable power generation” at the commission’s August 17th meeting in Fort Lauderdale.

(b)         Petition(s) for Declaratory Statement (if any):

Patriot Plumbing Corp. of USA – seeking a determination of whether Section 405.3.1 of the Plumbing volume considers the built out on the left corner of a bathtub to be a sidewall or an obstruction.

Ted Berman & Associates
– seeking clarification of Section 1609.1.2, Building volume of whether an opening protection system that is tested and analyzed for load resistance would be within the exemption.

Deco-Flash – seeking clarification as to whether its products, a hybrid between a window buck and a window flashing, falls within the scope of Rule 61G20-3.001.

(c)          Petitions for Variance or Waiver (if any): None noticed.

(d)         Petitions for Interpretation of Building Code (if any): None noticed.

C.    Department of Financial Services:

Important Note: You can check compliance with worker’s compensation insurance requirements (coverage or exemptions) by name of company, federal employer ID number, employer policy number, and exemption holder name or exemption holder SS number at https//:secure.fldfs.com/WCAPPA/Compliance.

Division of Workers’ Compensation – Chapter 440 and 69L FAC:

(a)   Rule Changes (if any):

Rule 69L-6.028 – clarification of time periods of employer non-compliance for penalty calculations and imputation of employer’s payroll.

Rule 69L-6.035 – defines remuneration to include expense reimbursements, and that occurring on the day the stop-work order is issued.

(b)   Petitions for Declaratory Statement (if any): None noticed.

(c)    Petitions for Variance or Waiver (if any): None noticed.


Legislative Action:  There is nothing to report at this time; the next regular legislative session is due to commence on March 7, 2017 for 60 consecutive calendar days. No bills will be filed prior to the General Election on November 8, 2016, except Senate Claims bills that are required to be filed no later than August 1, 2016; as of that date, nine (9) such bills have been filed.



[1] The Florida Building Commission is not allowed to grant variances or waivers from the Florida Building Code, expect as to handicapped accessibility issues, but is specifically authorized to issue declaratory statements interpreting sections of the code.

From Real Property, Probate, & Trust Law Section 



Trenton H. Cotney
Florida Bar Certified Construction Lawyer
Trent Cotney, P.A. 
407 N. Howard Avenue
Suite 100
Tampa, FL 33606

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