vs. ) CASE NO. 84-3709
) COPPICE-BODEN, INC.; PETER M. ) LENHARDT; C. THOMAS PETERSEN; ) AND TIMBER OAKS, INC., d/b/a ) SHADOW RUN, UNIT 1, )
Respondents. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on April 30, 1985, at Tallahassee, Florida.
For Petitioner: Thomas L. Barnhart, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
For Respondents: Stephen C. Cole, Esquire Coppice-Boden and Post Office Box 1669 Peter M. Lenhardt Clearwater, Florida 33517
The other Respondents were neither present nor represented.
By Notice to Show Cause dated April 19, 1984, the Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, Petitioner, seeks to revoke the registration, impose civil penalties, or take other affirmative action against all the above-named Respondents. As grounds therefor it is alleged the Respondents participated in the violation of a written agreement to transfer title to a lot in Shadow Run Subdivision to a homeowners association. Only Coppice-Boden and Peter M. Lenhardt were present or represented in these proceedings.
At the hearing Petitioner called one witness and ten exhibits were admitted into evidence. No additional evidence was submitted by Respondents. Proposed findings have been submitted by the parties. There are no disputed issues of
material fact; the dispute stems from conclusions to be drawn from those facts. To the extent the proposed findings are included herein, they are adopted; otherwise, they are rejected as not supported by the evidence, cumulative immaterial, or unnecessary to the conclusions reached.
Suncoast Highland Corp. (Suncoast), is the developer and registrant of Shadow Run Subdivision in Hillsborough County. Prior to 1970, Suncoast was known as Suncoast Peach Corporation. C. Thomas Petersen, Peter Lenhardt, and two other individuals formed Suncoast Peach Corporation in 1964.
In 1974 Suncoast registered Unit 1 of Shadow Run with the Division of Land Sales (Division). At that time Suncoast's principals were C. Thomas Petersen, President and Director, and Peter M. Lenhardt, Vice President, Director, and in charge of marketing. As a charter stockholder and owner of 166,000 shares (26-2/3 percent of ownership), Lenhardt filed an affidavit stating he devoted 100 percent of his time five days per week to Suncoast's business affairs. Lenhardt was (and presumably still is) a registered real estate broker and was in charge of sales in Shadow Run.
In 1977 Suncoast registered Unit 2 (consolidated with Unit 1) with the Division. At this time Petersen and Lenhardt alleged each owned 13.5 percent of Suncoast and Lenhardt again filed an affidavit stating he devoted 100 percent of his time to Suncoast's business affairs and was in charge of sales in Shadow Run.
In the Annual Report filed November 13, 1978, Lenhardt executed an affidavit representing himself to be Suncoast's principal officer in connection with this filing. This report included financial and inventory data for Shadow Run, Units 1 and 2, as well as 16 other registered subdivisions. At this time Petitioner and Lenhardt represented they each owned 38 percent of Suncoast (Exhibit 1E). On January 30, 1979, Lenhardt filed, under oath, renewal applications for Shadow Run, Units 1 and 2. This application (Exhibit 1F) showed out of 277 lots registered in Unit 1, 227 had been deeded and 50 remained to be sold. In Unit 2 out of 89 registered lots, 76 had been deeded and only 13 remained unsold.
In August 1978 the Division began receiving complaints from Shadow Run homeowners concerning assessments, placing of utilities, and lack of promised recreational facilities. After meeting with the homeowners association and representatives of Suncoast, the Division issued a Notice to Show Cause against Suncoast. For several months thereafter representatives of the Division, Suncoast, and the homeowners association attempted to resolve the complaints.
On April 19, 1979, C. Thomas Petersen, President, and Thomas Coates, Secretary, of Suncoast executed a stipulation in which, inter alia, further sales would remain suspended pending submission of all promotional and advertising materials to the Division, Suncoast would enter into an agreement concerning recreational facilities to be furnished by Suncoast, and Suncoast would pay a $7,500 civil penalty to the Division (Exhibit 1G). On December 10, 1979, Suncoast executed an agreement (Exhibit 1H) whereby it agreed, among other things, to install a concrete boat ramp no longer than 20 feet extending not more than two feet into Lake Grady on Lot 14, Block 1, Shadow Run, Unit 1, and convey legal title of the boat ramp area to the association; and, in conjunction with the boat ramp, provide a parking area 96 feet wide abutting on Shadow Run Boulevard at Lot 14, Unit 1, Shadow Run Subdivision, running from Shadow Run Boulevard to the water. This agreement was not recorded.
No evidence was submitted when, or if, Lenhardt disposed of his ownership interest in Suncoast and Timber Oaks and terminated his management role in those companies. Lenhardt was listed as Secretary/Treasurer of Suncoast in the annual corporate report for 1980. His name on the 1981 annual corporate report for Suncoast was lined out and Linda Burr's name was added as Secretary. Lenhardt's name does not appear on subsequent reports.
Timber Oaks, Inc., was incorporated February 11, 1980, with C. Thomas Petersen as President, Peter M. Lenhardt as Vice President, and Linda Burr as Secretary (Exhibit 3). On the 1981 annual corporate report Lenhardt's name was lined out and Linda Burr's name was added as Secretary.
Coppice-Boden, Inc., was incorporated August 28, 1980, with Peter Lenhardt as President, Helen K. Lenhardt as Vice President, and Delores Hamm as Secretary. Hamm's name was deleted from the 1982 annual corporate report and both Lenhardts continued to be listed through the 1984 annual corporate report.
No evidence was submitted showing transfer of the property which included Lot 14, Unit 1, Shadow Run Subdivision 1, from Suncoast to Timber Oaks, Inc.; however, by warranty deed dated October 29, 1982, Timber Oaks, Inc., conveyed property which specifically included Lot 14, Unit 1, Shadow Run Subdivision 1, to Coppice-Boden Corp., for a stated consideration of $340,000 (Exhibit 5). On November 11, 1982, Coppice-Boden, Inc., mortgaged the property which included Lot 14, Block 1, Unit 1, Shadow Run Subdivision, to G. G. Moore to secure a note in the amount of $72,031.63. The Special Warranty Deed dated February 29, 1980 (Exhibit 8) whereby Community Banks of Pinellas conveyed certain property to Timber Oaks, Inc., excluded Lots 1 through 22, inclusive, of Block 1, of Shadow Run, Unit 1.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.
Section 498.049(4), Florida Statutes, provides:
The division may, by order, impose civil penalties against any person for violations of this chapter or rules relating hereto.
Such imposition of a civil penalty shall not preclude the division from invoking any other appropriate remedy authorized by this chapter. Each person who materially participates in
any offer or disposition of any interest in subdivided lands in violation of this chapter or rules relating hereto, which violation involves fraud, deception, false pretenses, misrepresentation, or false advertising or involves the disposition, concealment, or diversion of any funds or assets of any
person so as to adversely affect the interests of a purchaser of any interest in subdivided lands, and who directly or indirectly controls a subdivider or is a general partner, officer, director, agent, or employee of a subdivider shall also be liable under this subsection jointly and severally with and to the same extent as the subdivider, unless such person did not know, and in the exercise of reasonable care could not have known, of the existence
of the facts by which such liability is alleged to exist, and among such persons there is a right of contribution as in cases of contracts among persons so liable, except that a creditor of a subdivider so liable shall not be jointly and severally liable unless the creditor
has assumed managerial or fiduciary responsibility in a manner which is pertinent to the spaces
for the liability of the subdivider under this subsection. No civil penalty so imposed shall exceed $10,000 for each offense,
and all amounts collected shall be credited with the Treasurer to the credit of the Florida Land Sales Trust Fund. No order requiring the payment of a civil penalty shall become effective until 20 days after
date of such order, unless otherwise agreed in writing by the person on whom the penalty
is imposed.
Transfer of Lot 14, Block 1, Unit 1, Shadow Run Subdivision constitutes a disposition or diversion of assets of Suncoast. If this lot was in fact transferred from Suncoast to Coppice-Boden, Inc., this violates the agreement signed by Petersen on behalf of Suncoast. At the time the stipulation was executed by Petersen on behalf of Suncoast (December 10, 1979), Lenhardt was still an officer in Suncoast and certainly had constructive, if not actual, notice of this commitment to deed some part of Lot 14 to the homeowners association. If Coppice- Boden thereafter accepted a deed from Suncoast conveying Lot 14 to Coppice-Boden, the latter must be held to have been aware of the agreement and of the violation of this agreement such transfer would constitute.
However, the evidence here presented is insufficient to find Coppice- Boden and Lenhardt responsible for now carrying out the agreement executed by Suncoast. This is so for two reasons. First, Exhibit 1H (the agreement) provides Suncoast will install a boat ramp 'no longer than twenty feet (20') extending not more than two feet (2') into Lake Grady" on Lot 14, Block 1, Shadow Run, Unit 1, and convey legal title to the "boat ramp area" to the homeowners association; and provide a parking area in conjunction with the boat ramp "ninety-six feet (96') wide abutting on Shadow Run Boulevard at Lot 14,
Unit 1, SHADOW RUN SUBDIVISION running from Shadow Run Boulevard to the water." Whether the parking area is located on Lot 14 is not determinable from the evidence submitted nor is it determinable if an easement for the parking area or a deed for the land involved in this parking area was contemplated. If the parties contemplated a conveyance of Lot 14 to the homeowners association, the agreement does not so state. Nor does the agreement set out exactly what is supposed to be conveyed to the association. An agreement to convey the boat ramp area surely leaves many uncertainties and would be difficult to enforce; likewise, the intent regarding the parking area is less than clear.
Second, no evidence was submitted that Suncoast conveyed Lot 14 in violation of the agreement. Evidence was submitted that Timber Oaks, Inc., conveyed Lot 14, Block 1, of SHADOW RUN UNIT 1 to Coppice-Boden (Exhibit 5). How Timber Oaks acquired title to Lot 14 was not shown. If a mortgagee foreclosed on the property and thereafter conveyed the property to Timber Oaks, or the property was transferred to the mortgagee in lieu of foreclosure, the agreement for the benefit of the homeowners assocation would have been rendered unenforceable. The unrecorded agreement was notice only to those privy thereto or who had knowledge of the agreement, either actual or constructive. Further, even had the agreement been recorded, it would have been inferior to the prior recorded mortgage encumbering the property. Only if Lot 14 was conveyed by Suncoast to Timber Oaks and from Timber Oaks to Coppice-Boden could Lenhardt and Coppice-Boden be deemed in violation of Section 498.049(4), Florida Statutes, above quoted and then, only if it can be shown that Lenhardt had notice of the agreement, either actual or constructive. I have less problem with finding notice than with finding Suncoast conveyed the property in issue. Absent evidence that Suncoast conveyed the property in question, there can be no finding that any of the Respondents violated Section 498.049(4), Florida Statutes, as alleged.
From the foregoing it is concluded that the evidence is inadequate to show, by a preponderance of the evidence, that Lot 14, Block 1, Shadow Run, Unit 1, was transferred by Suncoast in violation of its agreement to provide recreational facilities to the homeowners association. It is
RECOMMENDED that the Notice to Show Cause be dismissed. ENTERED this 24th day of May, 1985, at Tallahassee, Florida.
K.N. AYERS Hearing Officer
FILED with the Clerk of the Division of Administrative Hearings this 24th day of May, 1985.
Thomas L. Barnhart, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Stephen O. Cole, Esquire Post Office Box 1669
C. Thomas Petersen
Timber Oaks Inc.
E. James Kearney, Director Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Richard B. Burroughs, Jr., Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
