ORDERS:
ORDER AND DECISION
This is an appeal from an order of the State Licensing Board for Contractors ("Board") revoking
the license of Rivers Construction Company, Inc. ("Rivers"). The final decision of the Board was
issued on March 7, 1994. Rivers received the written decision on March 11, 1994, but filed his
Notice of Appeal with the Administrative Law Judge Division ("Division") on March 8, 1994
after receiving an oral decision on February 23, 1994. An appeal was also filed with the Court of
Common Pleas in Richland County. The Division properly exercised jurisdiction over this matter
pursuant to S.C. Code Ann. §1-23-600(D) (Supp. 1994) and § 40-11-350 (Supp. 1994).
Rivers appeals on the basis that the Board was without jurisdiction over the matter; the findings
by the Board were not supported by the evidence; and the Board erred as a matter of law by not
allowing Rivers to interpose contractual defenses to charges. For the following reasons, the
decision of the Board is affirmed.
LACK OF JURISDICTION
Rivers argues that the Board was without jurisdiction over the matter because it failed to hear the
case within the time prescribed by law. S.C. Code Ann. § 40-11-250 (1986) provides that
charges against a contractor, "unless dismissed without hearing by the Board as unfounded or
trivial, shall be heard and determined by the Board within three months after the date on which
they are preferred." Section 40-11-250 requires that the Board first determine whether the
charges merit a hearing. If such a determination is made, the Board then schedules a hearing on
the complaint. This section must be read in conjunction with S.C. Code Ann. § 40-11-70 (Supp.
1993), which provides that the Board shall meet quarterly, in January, April, July, and October,
for the purpose of transacting business properly before it. In this case, a complaint was filed with
the Board against Jim Rivers and Rivers Construction Company in August 1993. At the Board's
next scheduled meeting in October 1993, the Board reviewed the complaint and the results of the
investigation conducted by its staff, and scheduled a hearing for January 19, 1994, its next
scheduled meeting date. Rivers was notified of this hearing date by letter dated October 22,
1993. It is clear that the Board fulfilled its statutory duty to determine whether a hearing was
necessary at the first meeting following the filing of the complaint. Having determined that a
hearing was needed, the Board then acted expeditiously in scheduling a hearing for the next
scheduled meeting in January. Moreover, on January 14, 1994, Rivers sought an injunction in the
Richland County Court of Common Pleas to prohibit the Board from conducting the hearing on
several grounds. One was that the Board did not have jurisdiction over the grievance because
three months had passed since the matter was filed with the Board. The circuit court denied the
injunction, stating that the "Board has jurisdiction to hear the complaint before it which is
scheduled for January 19, 1994." I therefore conclude that the Board had jurisdiction to hear the
complaint.
Rivers also claims that a member not present at the testimony illegally participated in the decision
to revoke the license. At the time the hearing was conducted on January 19, 1994, the Board was
composed of eight members, of which a quorum was five. S.C. Code Ann. §§ 40-11-20 and
40-11-70 (Supp. 1993). There were five members present at the hearing. After presentation of
evidence by the complainant, a board member became ill and did not observe the remainder of the
testimony and evidence. The other four members continued in the hearing. The board later met
to determine what action if any to take against Rivers. The board member who left during the
hearing participated in the deliberations. Rivers claims that under the statute the Board was not
empowered to make a decision because a quorum had not heard the entire matter and that the
member who left in the middle of the hearing could not participate in the deliberations because he
did not have the benefit of judging the demeanor and credibility of the witnesses. A similar issue
was presented in Pettiford v. South Carolina State Board of Education, 218 S.C. 322, 62 S.E.2d
780 (1950). In Pettiford, not all of the members of the Board of Education heard the testimony
and evidence against a teacher in a proceeding to revoke her certificate. The South Carolina
Supreme Court stated that to satisfy due process in a quasi-judicial administrative proceeding, the
administrative body must consider all of the evidence before rendering its decision upon a
particular question. Due process does not require that the actual taking of testimony be before
the same officers who are to determine the matter involved. A hearing is not inadequate or
unlawful merely because the taking of testimony is delegated to less than the whole number, or
even to a single member, of the administrative tribunal, or to an examiner, hearer, or investigator,
even though such procedure has not been expressly authorized by the legislature. 62 S.E.2d at
789. The administrative body must have the evidence before it, and consider such evidence when
rendering its decision. Id. at 791. The Order of the Board specifically states that Francis
Freeman, the member who left the hearing, read the complete transcript and participated in the
deliberations and decision which was rendered by the Board. Accordingly, the due process rights
of Rivers were protected.
DUE PROCESS VIOLATION
Rivers argues that his due process rights were violated because the statutes did not provide
adequate notice of the actions that would lead to revocation of his license. The Board may
revoke the license of a contractor who is found guilt of gross negligence, incompetence, or
misconduct in the practice of his profession. S.C. Code Ann. § 40-11-240 (Supp. 1994). The
Board may revoke the license upon a unanimous vote in favor of finding the accused guilty. S.C.
Code Ann. § 40-11-250 (1986). Rivers states that the terms "gross negligence, incompetence, or
misconduct" are vague. The regulations governing grounds for revocation provide additional
information concerning the factors the Board will consider in reaching its conclusions. 32A S.C.
Code Regs. § 29-11 (Supp. 1994) states that gross negligence "for the purposes of this chapter,
shall be defined as continued and/or habitual failure to construct in accordance with plans and
specifications or building codes, whether intentional or not." Although the regulation does not
define the terms "incompetence" and "misconduct," I conclude that these words are sufficiently
clear and capable of projecting their meaning so as to provide Rivers adequate notice of the
standard required for continued licensure.
DENIAL OF CONTRACTUAL DEFENSES
Rivers next argues that the Board erred as a matter of law in not allowing its contractual defenses
to the charges preferred. The Board is charged with regulating contractors in the state. S.C.
Code Ann. §§ 40-11-10 et seq. If a contractor's conduct is found to be grossly negligent,
incompetent or misconduct, the Board may revoke the contractor's license. S. C. Code Ann. §
40-11-240 (Supp. 1994). The Board does not have authority to award damages for delay in
construction, failure to perform the work in a satisfactory manner, or any other remedies that may
arise from a breach of contract action. The complaint filed with the Board alleges a breach of the
contract to perform the work for the price agreed. It also alleges that Rivers misrepresented
certain facts about the project, engaged in fraud and misconduct, performed substandard work,
and was negligent and incompetent in the practice of the profession. At the hearing, the Board
refused to hear any evidence about "monetary considerations." The Board clearly stated that its
jurisdiction was limited to whether the work was done properly. Although the complaint clearly
contained allegations relating to the contract and performance under that contract, the Board's
decision was based upon its finding that the work that was completed was defective in many
instances. Other problems noted by the Board were considered by it to be remediable. Thus, the
Board confined its decision to those facts relating to the workmanship of the completed work.
There was no error in refusing to hear evidence relating to the breach of contract as it concerned
damages and any defenses to Rivers' failure to complete the work.
LACK OF EVIDENCE IN THE RECORD
On this issue, Rivers claims that the Board's finding that the "workmanship performed by the
Licensee in the construction and renovation of the Complainant's home was defective in many
instances, particularly as it concerned the shingle roof, the lack of flashing around the fireplace,
the rubber roof, the inside painting, floor tile installation in the bathrooms and laundry room, and
the sheetrock" is erroneous in view of the reliable, probative and substantial evidence on the
whole record. In reviewing the findings of the Board, the Division is limited to determining
whether substantial rights of the appellant have been prejudiced because the administrative
findings, inferences, conclusions or decision are clearly erroneous in view of the reliable, probative
and substantial evidence on the whole record. S.C. Code Ann. §1-23-380(A)(6)(e) (Supp. 1994).
In accordance with the foregoing provision, the Board's decision may only be set aside if
unsupported by "substantial evidence." "'Substantial evidence' is not a mere scintilla of evidence
nor the evidence viewed blindly form one side of the case, but is evidence which, considering the
record as a whole, would allow reasonable minds to reach the conclusion that the administrative
agency reached or must have reached in order to justify its action." Lark v. Bi-Lo, Inc., 276 S.C.
130, 276 S.E.2d 304, 306 (1981).
Application of this standard is appropriate only in those cases where a "manifest or gross error of
law has been committed by the administrative agency. The statute specifically states: 'The court
shall not substitute its judgment for that of the agency as to the weight of the evidence on
questions of fact.'" 276 S.E.2d at 307. This standard is applicable by the Division in an appeal
from a final decision in a contested case decided by a professional and occupational licensing
board pursuant to S.C. Code Ann. § 1-23-380(B) (Supp. 1994). Rivers argues that the evidence
reveals that the work performed was done in a workmanlike manner but was simply incomplete
because of the contractual dispute that arose with the complainant.
The testimony and photographs reveal that there were problems with the installation of the shingle
roof. The testimony is that shingles were damaged, the way they overlapped made them uneven,
they were not properly aligned during installation, in the corners the shingles were on an angle,
and portions of the shingles had been cut. With respect to the rubber roof, the testimony and
photographs reveal that the rubber must have been old because it was cracking, the disks placed
on the rubber roof were not properly sealed, and the sealant used caused corrosion. The metal
roof had fresh nail holes in it. The metal ordered for the roof was the wrong type and the wrong
size. The proper nails were not used on the roofs.
The evidence further revealed that there were three chimneys on the house. One did not have any
flashing to prevent water leakage. The testimony revealed that the person who did remedial work
would not leave a job without making sure the chimney did not leak. On another chimney, the
flashing only required some touch-up. The time to flash the chimney is during the roofing.
With respect to the interior painting and sheetrock, the evidence clearly reveals that the sheetrock
was improperly installed with uneven lines and angles. The sheetrock was not properly prepared
for painting. There was not enough mud on the tape to hold it in place, the walls were not sanded
before painting, and many of them had blisters and puckering. The coats of paint were uneven
and the painting was done before the walls were properly prepared.
The evidence further reveals that the tile was not properly installed in the bathrooms and the
laundry room. The tile on the corners of the shower did not have rounded edges, and the floor
did not have the proper slope to allow water to drain out. The tile was not laid correctly around
the plumbing fixtures and to allow the vanity to be installed. In the laundry room, the proper
drain for the washing machine was not installed.
In addition to the instances cited by the Board in its Order, there is substantial evidence to support
the Board's conclusion that the completed work performed by Rivers was substandard and had to
be redone in many instances. The evidence clearly supports the conclusion that the work
performed by Rivers was incompetent work.
The remaining arguments raised by Rivers relating to the proceeding being criminal in nature are
without merit.
Based upon the record and the applicable law, the decision of the Board is AFFIRMED.
AND IT IS SO ORDERED.
_________________________
ALISON RENEE LEE
Administrative Law Judge
May _____, 1995
Columbia, South Carolina. |
