STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PROPERTY MANAGEMENT, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 80-769

) SECRETARY OF STATE, STATE OF ) FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Miami, Florida, before the Division of Administrative Hearings and its duly designated Hearing Officer, R. T. Carpenter, on July 14, 1980. The parties were represented by:

APPEARANCES

For Petitioner: Michael L. Hyman, Esquire

Suite 400 Roberts Building

28 West Flagler Street Miami, Florida 33130

For Respondent: William J. Gladwin, Jr., Esquire

Office of the Secretary of State The Capitol

Tallahassee, Florida 32301

By letter dated April 1, 1980, Property Management, Inc. (now registered as Property Management of South Florida, Inc.) requested an administrative hearing on its allegation that the Secretary of State was negligent in failing to notify the Petitioner of involuntary corporate dissolution, and in subsequently permitting the name Property Management, Inc. to be reserved by another corporation. The request for administrative hearing was joined by the Secretary of State in its letter of April 21, 1980. The relief sought as stated by Petitioner at the July 14, 1980, hearing is return of its original corporate name.

FINDINGS OF FACT

1. The Petitioner is a manager of real estate specializing in condominiums. It was incorporated in Florida on August 30, 1978, as Property Management, Inc. at the address of its attorney and registered agent, Mr. Michael L. Hyman, Suite 400, 28 W. Flagler Street, Miami, Florida 33130.

   
   

2. The corporation was involuntarily dissolved by the Secretary of State on December 5, 1979, for failure to file its annual report and pay its annual report filing fee. Petitioner admits that it was delinquent in submitting its annual report and filing fee, but contends that it was entitled to notice of

   delinquency prior to involuntary dissolution and reissuance of its corporate name.

   
   

3. Through testimony of Petitioner's president and corporate counsel's secretary, who opens and distributes incoming mail, Petitioner established that it had not received any of the three notices discussed below. Rather, Petitioner learned of the dissolution in February, 1980, when it sought telephone service. It then submitted the annual report and filing fee which were received by the Secretary of State on March 17, 1980. By that time the name Property Management, Inc. had been issued to another corporation and was not available. Petitioner was therefore reinstated as Property Management of South Florida, Inc.

   
   

4. The following notices relevant to this proceeding were prepared by the Secretary of State:

   
   

   January, 1979: Notices to all Florida corporations that annual reports and filing fees were due by July 1, 1979.

   
   

   September 1, 1979: Reminder notices to delinquent corporations that dissolution would follow if annual reports and filing fees were not submitted within 90 days.

   
   

   December 5, 1979: Certificates of dissolution issued to corporations which failed to submit the reports and filing fees.

   
   

5. The above notices were prepared from computer data and were transmitted by ordinary mail. Respondent produced a computer printout with Petitioner's correct name and address showing dissolution on December 5, 1979. However, no evidence was adduced to establish that this notice or either of the preceding notices were actually mailed to Petitioner.

   
   

   CONCLUSIONS OF LAW

   
   

6. Section 607.357 Florida Statutes (1979) provides in part:

   
   

   1. Each domestic corporation. . .shall file with the Department of State on or after January 1 and on or before July 1 of each year, a sworn report. . .

      (6) . . .any corporation failing to file the annual report shall be subject to dissolution or cancellation of its certificate. . .

      
      

7. Section 607.361 provides in part:

   
   

   The Department of State shall charge and collect for:

   (2) Filing an annual report, $10.

   
   

8. Section 607.271 provides in part:

   
   

   1. A corporation may be dissolved involuntarily by order of the Department of

      State when the Department of State has determined that:

      1. The corporation has failed to file its annual report or pay the annual report filing fee within the time required by this chapter.

   2. No corporation shall be involuntarily dissolved under subsection (2) unless the Department of State gives the corporation not less than 90 days' notice of the proposed dissolution, stating the reasons therefor, addressed to its registered office or to its principal place of business and the corporation has failed prior to such involuntary dissolution to correct the reasons for the proposed involuntary dissolution.

   3. If the Department of State shall involuntarily dissolve any corporation under the provisions of subsection (2), it shall issue a certificate to such effect and mail the certificate to the corporation at its registered office or its principal place of business. Upon the issuance of such certificate of involuntary dissolution, the existence of the corporation shall cease, except as otherwise provided by law.

   
   

9. Section 607.041 provides in part:

   
   

   (2) Any notice to or demand on a corporation made pursuant to this chapter may be made by:

   1. Writing, mailed to the registered office of the corporation in this state or to any other address in this state which is in fact the principal office of the corporation in this state.

   
   

10. The above procedures require corporations to file annual reports and pay fees or face dissolution, and direct the Secretary of State to issue notices of warning as well as notices of dissolution. These provisions contemplate notice by ordinary mail, which the Secretary of State customarily utilizes. However, Petitioner contends that proof of practice or custom alone does not constitute proof of performance on a specific occasion, citing Bernstein v. Liberty Mutual Insurance Company, 294 So.2d 63 (Fla. 3d DCA 1974).

    
    

11. Respondent argues that lack of funds and an annual volume of 30,000 involuntary corporate dissolutions make the keeping of records sufficient to supply proof of mailing impractical. This argument receives some support in Milros-Sans Souci, Inc. v. Dade County, 296 So.2d 545 (Fla. 3d DCA 1974). However, Respondent concedes that it has received numerous complaints since statutory notice by publication and name reservation provisions were repealed in 1976. In order to reduce future notice complaints, the Secretary of State on July 1, 1980, adopted a one year name reservation policy applicable to involuntarily dissolved corporations. However, this newly adopted policy comes too late to benefit Petitioner.

    
    

12. The statutory provisions Petitioner relies upon here provide only limited protection since receipt of notice is not assured. Rather, these

    provisions require only that the Secretary of State mail the notices. Although the reason for non-receipt of these notices cannot be determined, Respondent was remiss in failing timely to adopt procedures to insure and demonstrate compliance with statutory notice requirements, or to reserve the names of dissolved corporations for a reasonable period after involuntary dissolution.

    
    

13. The provisions for reinstatement following involuntary dissolution are contained in Section 607.271(5) which provides in part:

    
    

    Any corporation dissolved by the Department of State under the provisions of subsection (2) or prior law may be reinstated by the Department of State at any time upon approval of an application for reinstatement signed by an officer or director of the dissolved corporation. Such application shall be filed by the Department of State whenever it is established to its satisfaction that in fact there was no cause for the dissolution or that the reasons for the dissolution have been corrected and all fees, computed at the rate provided by law at the time the corporation applies for reinstatement, have been paid. If the name of the dissolved corporation has been lawfully assumed in this state by another corporation, the Department of State shall require the dissolved corporation to amend its articles of incorporation to change its name before accepting its application for reinstatement. . .

    
    

14. The above statute provides for return of the corporate name where dissolution was not proper unless that name has been lawfully assumed by another corporation. Since no evidence was adduced to establish that the name at issue was not lawfully assumed by another corporation, this remedy is not available. Petitioner is entitled only to reinstatement under a changed name, relief which has already been granted.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That Petitioner's request for return of the name Property Management, Inc. be DENIED.

DONE and ENTERED this 29th day of July, 1980, in Tallahassee, Florida.

R. T. CARPENTER, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Michael L. Hyman, Esquire Suite 400 Roberts Building

28 West Flagler Street Miami, Florida 33130

William J. Gladwin, Jr., Esquire Office of the Secretary of State The Capitol

Tallahassee, Florida 32301

Docket for Case No: 80-000769

Orders for Case No: 80-000769