STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF FLORIDA LAND SALES AND ) CONDOMINIUMS, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1930

)

PEBBLE SPRINGS CONDOMINIUM )

ASSOCIATION OF BRADENTON, )

INC., d/b/a PEBBLE SPRINGS, )

)

Respondent. )

)

RECOMMENDED ORDER

This case arose from an Administrative Complaint filed by the Petitioner, Department of Business Regulation, Division of Florida Land Sales and Condominiums, against the Respondent, Pebble Springs Condominium Association of Bradenton, Inc., d/b/a Pebble Springs. This Administrative Complaint charged the Respondent with violation of Section 718.111(7), Florida Statutes. These charges stem from the refusal by the Respondent to make the second page of an attorney's bill available to Matthew Ford, a member of the Respondent association, after Ford's request to see the Respondent's financial records.

The second page of the attorney's bill was a detailed, itemized statement of the attorney's activities on behalf of the Respondent in a lawsuit against Ford to enforce the Articles of Condominium. In defense against these disciplinary charges, the Respondent asserts that it was not obligated to produce the records for Ford's inspection because of the statutory attorney/client privilege of Section 90.502, Florida Statutes.

Because the parties stipulated to the facts upon which the case was based, this matter was presented in a series of memoranda briefs with proposed findings of fact. While the parties raised many collateral legal issues, the basic issue is whether the Respondent is exempt from producing records for a member pursuant to Section 718.111(7), Florida Statutes. For reasons which are explained in detail in the Conclusions of Law, a condominium association is exempt from complying with Section 718.111(7), supra, under the circumstances presented in this case.

APPEARANCES

For Petitioner: Karl M. Scheuerman, Esquire

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

For Respondent: Daniel J. Lobeck, Esquire

1343 Main Street, Suite 204

Sarasota, Florida 33577

Both parties, through their respective counsel, waived a formal or informal hearing in this matter and elected to submit to the Hearing Officer proposed recommended orders and answer briefs in lieu of a hearing. The parties have submitted a composite pre-hearing stipulation with three exhibits attached thereto, which was read and considered. Those findings not incorporated herein are found to be subordinate, cumulative, immaterial, unnecessary, or not supported by the evidence.

FINDINGS OF FACT

1. At all times relevant to this case, the Respondent, Pebble Springs Condominium Association of Bradenton, Inc., was the condominium association for Pebble Springs Condominium VI in Bradenton, Florida.

   
   

2. Matthew Ford is and, at all times relevant to this complaint, was a unit owner at Pebble Springs Condominium VI and a member of the condominium association.

   
   

3. Matthew Ford requested to inspect the Respondent's records, hereafter described in paragraph 4 and referred to as Exhibits A and B, which were prepared and provided by the law firm of Becker, Poliakoff and Streitfeld, P.A., to the Respondent as a bill for legal services rendered in the Respondent's suit against Ford. At the time that Ford made his request for Inspection of the Respondent's records pursuant to Section 718.111(7), Florida Statutes, he was the defendant in a circuit court lawsuit in which the Respondent was plaintiff. Said court case is currently on appeal.

   
   

4. Joint Exhibits A and B constitute the entirety of said law firm's bill to the Respondent. Joint Exhibit B describes each instance of attorney's service to the Respondent and the amount of time attributed to said service. The parties stipulate that the information contained in the document sought by Ford is the same as that reported in Exhibit B. The data in Exhibit B is reported in four columns, as follows: date, attorney, time, and actions. The information listed under "actions" includes the following listings:

   
   

   (03/14/83) Telephone conversation with bank officers and association officers re unfreezing of association funds.

   (03/14/83) Preparation for meeting with board members and witnesses; preparation of counterclaim.

   (03/14/83) Research concerning mandamus and other injunctive relief; preparation of counterclaim.

   (03/15/83) . . . preparation of counterclaim and motions to strike.

   (03/16/83) Preparation of counter-claim; . . . filing of counterclaim and coordination of service.

   (04/06/83) Preparation of motion to dismiss or for more definite statement and motion to

   strike on behalf of firm and Daniel J. Lobeck. (04/07/83) Memorandum to Alan E. Tannenbaum re

   Murley contempt of court order.

   (04/08/83) Receipt and review of motion to dismiss filed on behalf of board by insurance

   counsel; . . .

   (04/12/83) Preparation of motion to hold [deleted in exhibit] in contempt.

   (04/13/53) Correspondence to auto owners; correspondence to [deleted]; amendment of motion for contempt; setting of contempt hearing.

   (04/15/83) Review of motion to appoint special master and notice of bearing; telephone conference with Alan Tannenbaum re same.

   (04/18/83) Conference with Daniel J. Lobeck re: motion to appoint receiver.

   (04/19/83) Preparation of proposed order dismissing motion to appoint special master; research and preparation for hearing on motion; hearing on motion; telephone conferences with clients re hearing and order.

   
   

5. Ford's request as to Joint Exhibit B was refused by the Respondent, which did provide him with Joint Exhibit A which states the sum due for legal services together with stated costs and total balance due. The Respondent also provided for Ford's inspection the Respondent's ledgers and checkbooks, which displayed the sums paid each month by the Respondent to the law firm.

   
   

6. In the course of the litigation between the Respondent and Ford, Ford sought the production of documents from the Respondent as evidenced by Exhibit C.

   
   

7. In the context of the hearing for attorney fees in the litigation between the Respondent and Ford, the Respondent has offered to provide Ford with the information which he had previously sought.

   
   

8. During March or April 1983, Ford filed a complaint with the Petitioner alleging that he was being denied access to the Respondent's books and records contrary to Section 718.111(7), Florida Statutes.

   
   

9. The Petitioner conducted an investigation of Ford's complaint, which resulted in the issuance by the Petitioner of a Notice to Show Cause to the Respondent issued May 9, 1983.

   
   

10. The Respondent requested a formal hearing by petition dated June 1, 1983, which request was granted.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Petitioner, Department of Business Regulation, Division of Florida Land Sales and Condominiums, has authority over the Respondent condominium association. This Recommended Order is entered pursuant to the provisions of Section 120.57(1), Florida Statutes, and in accordance with the stipulation of the parties.

    
    

12. The Petitioner charges that the Respondent violated Section 718.111(7), Florida Statutes, by failing to provide to Matthew Ford a copy of the second page of a bill to the Respondent from its attorney. This second page sets forth in some detail the activities of the attorney on behalf of the Respondent in a suit by the Respondent against Ford. The Respondent admits that

    it withheld the second page of this bill but asserts it was relieved from the requirement of Section 718.111(7), supra, to produce this document because (1) the records sought were not accounting records and (2) the provisions of Section 90.502, Florida Statutes, exempt disclosure of communications between an attorney and client.

    
    

13. Concerning Exhibit B and its relationship to Exhibit A, clearly Exhibit B constitutes the second and subsequent pages of the bill sent by the law firm to the Respondent. Exhibit B constitutes a detailed statement of the time spent by the law firm in performing specific activities on behalf of the Respondent in support of the law firm's bill. Section 718.111(7), Florida Statutes, provides that the Respondent shall maintain accounting records according to good accounting practices. This subsection specifically provides that the record shall include, but not be limited to, a record of all receipts and expenditures. While the record sought by Ford is not a record of receipts and expenditures, it is a record which would normally be retained as a backup to the attorney's bill "according to good accounting practices." It is the second and subsequent pages of the bill. It is therefore found that Exhibit B is an accounting record and that Ford had a right pursuant to Section 718.111(7), supra, to request production of Exhibit B.

    
    

14. Concerning the second issue of whether the Respondent had a right pursuant to Section 90.502, Florida Statutes, to deny Ford the document under the attorney/client privilege, it is concluded that the attorney/client privilege is not applicable to the specific type of document sought. Although for purposes of applying this section, (1) the Respondent is a client, as defined by the statutes; (2) the law firm which sent the bill was an attorney;

    (3) the Respondent claimed the privilege as provided by statute; and (4) none of the disqualifying conditions, as set forth in Section 90.502(4), Florida Statutes, are present in this case, the attorney/client privilege does not attach because Exhibit B does not reveal any confidential information originating with the client and communicated to the attorney.

    
    

15. Communications such as bills may be subject to the attorney/client privilege when they reveal matters communicated to the attorney by the client. It is the purpose of the attorney/client privilege to protect such communications. However, Exhibit B does not reveal any information communicated from client to attorney. Therefore, Section 90.502, Florida Statutes, does not apply. Exhibit B, however, does reveal intended actions of the attorney or his recommendations to the client which would disclose the strategy and tactics of the attorney's case. This type of communication is protected by the work product exemption which is set forth in Rule 1.250, Florida Rules of Civil Procedure. Although Respondent has not raised the work product exemption as a defense, it must be considered, as it generally is, as an adjunct to the attorney/client privilege. The operative portion of Rule 1.250, supra, which protects the materials sought by Ford is as follows: ". . . the court shall protect against disclosure of the mental impressions, conclusions, opinions or legal theories of an attorney. "

    
    

16. Referencing the Findings of Fact relating to the materials contained in Exhibit B, Exhibit B indicates that the Respondent and its attorney conversed concerning unfreezing of the Respondent's funds, the preparation and filing of counterclaims, research on mandamus and other injunctive relief, and discussions with the Respondent's insurance carrier. This type of information discloses potential strategies and actions to be instituted by the Respondent or his "mental impressions, conclusions, opinions or legal theories." Such communications are protected by the work product rule against discovery.

17. The basis for this rule is found in Hickman v. Taylor, 329 U.S. 495,

    67 S.Ct. 385, 91 L.Ed. 451. In this landmark case, The U.S. Supreme Court determined that "work product" was not discoverable because an adversary in fairness could not capitalize on the work of his adversary unless the demands of justice required it under the necessities of the case. Therefore, had Ford attempted to obtain the document pursuant to either Section 718.111(7), Florida Statutes, or Rule 1.280, Florida Rules of Civil Procedure, the Respondent could have sought the protection of the work product rule to protect the attorney's mental impressions, tactics, and strategy without requiring production of the entire document. Put another way, if a document is ruled not subject to the attorney/client privilege, it is wholly discoverable. However, under Rule 1.280, supra, even if discoverable, the attorney's impressions, tactics, and strategy may be protected. Had Ford sought discovery, the court could have given him access to Exhibit A but protected Exhibit B. In short, Exhibit B meets the criteria of protection of Rule 1.280(b)(2), Florida Rules of Civil Procedure, and Respondent properly refused to produce the document without an appropriate court order.

    
    

18. The Respondent did not violate Section 718.111(7), Florida Statutes, by refusing to produce a document which it was entitled to protect from discovery pursuant to the civil rules of procedure.

RECOMMENDATION

Having found the Respondent not guilty of the allegations contained in the Administrative Complaint, it is recommended that the Administrative Complaint filed against Respondent be dismissed.

DONE and RECOMMENDED this 5th day of March, 1984, in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1984.

COPIES FURNISHED:

Karl M. Scheuerman, Esquire Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32301

Daniel J. Lobeck, Esquire 1343 Main Street,

Suite 204

Sarasota, Florida 33577

Gary Rutledge, Secretary Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32301

Docket for Case No: 83-001930

Orders for Case No: 83-001930