STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FLORIDA MANUFACTURED HOUSING ) ASSOC., INC., VISION OF )
REAL ESTATE, )
)
Petitioner, )
) MLH PROPERTY MANAGERS, INC., )
)
Intervenor, )
)
vs. ) CASE NO. 90-3107RP
)
DEPARTMENT OF BUSINESS ) REGULATION, DIVISION OF FLORIDA ) LAND SALES, CONDOMINIUMS )
AND MOBILE HOMES, )
)
Respondent. )
)
FINAL ORDER
Pursuant to notice a formal hearing was conducted in this case on September 4, 5, 6, and 7, 1990, at Tallahassee, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings.
Appearances for the parties at the hearing were as follows:
APPEARANCES
David D. Eastman, Esquire, of Parker, Skelding, Labasky, and Corry, Post Office Box 669, Tallahassee, Florida 32302, for the Petitioner Florida Manufactured Housing Association, Inc.
Daniel C. Brown, Esquire, of Katz, Kutter, Haigler, Alderman, Davis, Marks, and Rutledge, P.A., Post Office Box 1877 Tallahassee, Florida 32302-1877, for the Intervenor NIH Property Managers, Inc.
Debra Roberts, Esquire, of the Department of Business Regulation, 725 South Bronough Street, Tallahassee, Florida 32399-1007, for the Respondent.
Thomas Presnell, Jr., Esquire, and Lee Jay Colling, Esquire of Lee Jay Colling & Associates, Suite 1107, First Union Tower, 20 North Orange Avenue, Orlando, Florida 32801, for the Intervenor Federation Of Mobile Home Owners Of Florida.
STATEMENT OF THE ISSUES
The issue in this case is whether the Respondent's proposed rule 7D-31.002 is an invalid exercise of delegated legislative authority. The Petitioners and the Intervenor MLH Property Managers, Inc., contend that the rule is invalid.
The Respondent and the Intervenor Federation Of Mobile Home Owners Of Florida contend the proposed rule is valid.
PRELIMINARY STATEMENT
On August 10, 1990, the Petitioner Ridgewood Properties, Inc., filed a notice of voluntary dismissal. Consistent with that notice, Ridgewood Properties, Inc., did not appear at or participate in the formal hearing in this case.
At the commencement of the hearing on September 4, 1990, all parties then participating in the case filed a prehearing stipulation in which they stipulated to a number of facts, and also stipulated to the standing of the Petitioner and each Intervenor. During the course of the hearing, all parties other than Ridgewood Properties, Inc., presented the testimony of witnesses and offered documentary exhibits.
At the conclusion of the hearing the parties arranged for the preparation of a transcript, which was filed with the Hearing Officer on October 1, 1990. All parties were allowed until October 28, 1990, within which to serve their respective proposed final orders.
All parties other than Ridgewood Properties, Inc., timely served proposed final orders containing proposed findings of fact and conclusions of law.
Specific rulings on all findings of fact proposed by all parties are contained in the Appendix to this Final Order.
FINDINGS OF FACT
Facts stipulated to by the parties
Petitioner, Florida Manufactured Housing Association, Inc. (FMHA), is a Florida nonprofit corporation whose address is 115 North Calhoun Street, Suite 5, Tallahassee, Florida 32301.
The agency affected by this proceeding is the Respondent, Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (DBR), whose address is The Johns Building, 725 South Bronough Street, Tallahassee, Florida 32399-1000. The DBR is charged with the implementation, enforcement and interpretation of Chapter 723, Florida Statutes, concerning mobile home park lot tenancies. The DBR also possesses statutory authority to impose civil penalties against a mobile home park owner for any violation of Chapter 723, Florida Statutes, a rule of the Department promulgated thereunder, or a properly promulgated park rule or regulation.
This proceeding concerns the Respondent's proposed rule 7D-31.002, which was published in Vol. 16, No. 7 of the Florida Administrative Weekly (April 27, 1990).
The FMHA is a Florida nonprofit corporation, which is organized and maintained for the benefit of the owners of approximately 1,000 mobile home parks containing a combined total of approximately 300,000 to 350,000 mobile home lots. The owners of the 1,000 mobile home parks comprise a substantial portion of the membership of the FMHA.
One of the primary purposes of the FMHA is to act on behalf of its members before the various governmental entities of this state, including the Respondent, Florida Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes. FMHA member mobile home parks are subject to the provisions of Chapter 723, Florida Statutes, and the rules of the DBR contained in Rules 7D-30 through 7D-32, Florida Administrative Code. FMHA member mobile home parks are required to register with the DBR, to pay annual fees to the DBR, to file prospectuses and pay filing fees for the same to the DBR, to submit advertising to the DBR for approval, and are otherwise subject to the regulatory authority of the DBR with respect to the operation and management of their mobile home parks. Additionally, FMHA member mobile home parks are subject to the DBR's enforcement authority, which includes the power to fine or impose other civil penalties for failure to comply with the above-referenced rules and statutes.
Each of the owners of the FMHA member mobile home is engaged in the business of leasing individual mobile home lots to mobile home owners. The mobile home owners lease mobile home lots for the purpose of installing on the lots a mobile home owned by the tenant.
The Federation of Mobile Home Owners of Florida (FMO) is a Florida nonprofit corporation whose membership is comprised of over 100,000 mobile home owners residing in Florida. The normal activities of the FMO include, among other things, representing the interests of Florida's mobile home owners before Florida administrative agencies, including DBR and the Division of Administrative Hearings, in rulemaking proceedings and otherwise.
Thousands of FMO members reside in mobile home parks which are governed by Chapter 723, Florida Statutes, and the rules adopted thereunder by DBR. Thousands of FMO members were tenants of those parks on June 4, 1984, and thousands more have become tenants by purchasing a home located in those parks from a former mobile home owner who was a tenant of those parks on June 4, 1984.
MLH Property Managers, Inc. (MLH), a Delaware corporation, is the managing general partner of MLH Income Realty Partnership V, a New York limited partnership. MLH Income Realty Partnership V is the owner of eight mobile home parks in the State of Florida, each of which contain 26 or more mobile home lots which are offered for lease or rent for the placing thereon of mobile homes to be used as residences.
NIH has entered into rental agreements with the majority of residents in each of the parks which have a one-year term, with the intent of NIH that the terms and conditions of tenancy be established on a yearly basis.
The NIH parks contain lots which were leased to their present mobile home owner tenants (or their predecessor mobile home owners) prior to June 4, 1984.
The full text of the proposed rule which is the subject of this proceeding is as follows:
7D-31.002 Tenancy.
(a) A tenancy under chapter 723,
Florida Statues, begins when the mobile home park owner and mobile home owner enter into an initial rental agreement as defined in section 723.003(4), Florida Statues, or when the mobile home owner assumes occupancy in the park, whichever occurs first.
(b) Once a tenancy begins in accordance with paragraph (1)(a) of this rule, it is continuous and cannot be terminated by the mobile home park owner except pursuant to section 723.061, Florida Statutes.
(a) The enactment of chapter 723,
Florida Statutes, did not terminate the tenancy of a mobile home park owner which was in existence on June 4, 1984, the effective date of the chapter. Furthermore, chapter 723, Florida Statutes, does not allow or authorize the mobile home park owner to terminate a tenancy in existence on
June 4, 1984, the effective date of the chapter, in any manner other than pursuant to section 723.061, Florida Statutes.
(b) A tenancy in existence on
June 4, 1984, the effective date of chapter 723, Florida Statutes, shall be deemed a tenancy under chapter 723 if, prior to
June 4, 1984, the mobile home owner either entered into a rental agreement with the mobile home park owner, or the mobile home owner assumed occupancy in the mobile home park.
The rest of the facts
The Respondent has previously attempted to adopt a similar rule. In Volume 14, Number 7, of the Florida Administrative Weekly of February 19, 1988, the Respondent published a proposed rule 7D-31.002. The rule proposed in February of 1988 read as follows:
7D-31.002 Fee, Charges and Assessments.
For tenancies in existence before
June 4, 1984, including any assumptions of those tenancies pursuant to Section 723.059, Florida Statutes, the mobile home owner is not obligated to pay any fees, charges or assessments which were not disclosed fully in writing prior to occupancy, any provision to the contrary in a prospectus notwithstanding, unless the park owner can establish that the fees, charges or assessments have been
collected as a matter of custom as defined in subsection (4) of this rule. Furthermore, the mobile home owner is not obligated to install any permanent improvements at all, including those mandated by governmental entities or utility companies.
For tenancies created on or after June 4, 1984, pass through charges, as defined in Section 723.003(9), Florida
Statutes, may be imposed by the mobile home park owner if the mobile home owner's obligation to pay such charges was disclosed in general terms pursuant to Sections 723.011 and 723.012, Florida Statutes, or pursuant to Section 723.013, Florida Statutes, even though the charge being imposed was not disclosed specifically, and the imposition of such pass through charges is not a violation of section 723.042, Florida Statutes.
However, pass through charges may not be imposed if the mobile home owner's obligation to pay such charges was not disclosed generally and prior to occupancy as required by Sections 723.011(2) and 723.012, Florida Statutes, or Section 723.013, Florida Statutes, whichever is applicable.
No fee, charge or assessment shall be imposed by a mobile home park owner on the purchaser of a mobile home situated in the park that is offered for sale by a resident of the park and as a condition to the purchaser being reviewed or approved for residency in the park.
A fee, charge or assessment has been collected as a matter of custom if it was collected prior to July 1, 1967.
In the case of Florida Manufactured Housing Association, Inc., v. Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, et al., 10 F.A.L.R. 3919 (June 24, 1988), the former proposed rule quoted immediately above was determined to be invalid on several grounds.
The proposed rule that is the subject of this case will substantially affect the substantial interests of the Petitioner and each of the Intervenors. A substantial number of the members of the FMHA and the FMO are substantially affected by the proposed rule and the relief sought is the type and nature which these associations may properly seek on behalf of their respective members.
Mr. Bob Custer is a Vice President in De Anza Corporation. De Anza Corporation is the owner of Mobile Americana Mobile Home Park. De Anza Corporation is a member of the FMHA. De Anza Corporation purchased the park in July 1976. At that time there was a written lease offered to all home owners in the park. Subsequently, the park offered written leases to home owners in the park. After the adoption of Chapter 723 on June 4, 1984, the park owner filed a prospectus with the DBR, received approval from the DBR, and distributed the approved prospectus to the mobile home owners in the park in 1985. The prospectus contains provisions, including fees and charges, that are different
from the earlier offered rental agreements used in the park. The prospectus is the controlling document used by De Anza Corporation in determining increases in lot rent and fees and charges that will be collected during the tenancy.
Mr. Tom Keenan is the Vice President for Property Operations for Mobile Home Communities, Inc., which owns and operates 10 mobile home parks in Florida. Each of the individual-parks is a member of the FMHA. Lake Haven Mobile Home Park is owned and operated by Mobile Home Communities, Inc. Lake Haven Mobile Home Park entered into 4 year leases with its tenants, beginning in 1975 and again in 1979. After the adoption of Chapter 723, on June 4, 1984, Lake Haven Mobile Home Park filed and received approval for a prospectus from DBR, which was distributed to mobile home owners in 1985. The prospectus, including the rental agreement therein, contains terms and conditions different from the earlier 4 year leases (including the term of the rental agreement which is changed to annual), and there are different fees and charges which can be collected. Of the 379 lots that are rented in the park, approximately 200 tenants entered the park prior to the delivery of the prospectus. Mobile Home Communities, Inc., operates the park pursuant to the disclosures contained in the prospectus.
Ms. Jan West is the owner and operator of Eagle's Nest Mobile Home Estates, a 64 space mobile home park located in Fruitland Park, Florida. Ms. West is a member of the FMHA. Eagle's Nest was developed in the 1930's and purchased by Jan West's parents in the 1940's. Prior to 1987 the rental agreements in the park were all oral. Ms. West does not know the terms and conditions of the rental agreements offered to tenants when her parents operated the park. All 64 of the lots in the park were offered for rent or lease on June 4, 1984, the effective date of Chapter 723. In 1987 Eagle's Nest filed a prospectus with the DBR and the prospectus was approved. All of the tenants of the park signed the lease agreement contained in the prospectus in 1987 when the approved prospectus was delivered. The fees and charges that are included in the prospectus were never disclosed in writing to any of the tenants prior to the delivery of the prospectus. The prospectus is the document that Eagle's Nest uses to determine the landlord tenant relationship under Chapter 723.
Eagle's Nest collects lawn mowing fees and special services fees when they apply. Ms. West does not know if there were charges, other than the base rent, that were collected prior to 1987. She does not know if other charges, like late charges, return check charges, guest fees, vehicle storage fees, pet fees, special services fees, or pass-through charges were charged prior to delivery of the prospectus. Lawn mowing fees and maintenance fees were collected prior to 1987.
It is a common practice in the industry to use a fixed term lease, or a lease for a term of years, in the prospectus and rental agreement approved by the DBR.
The Mobile Home Study Commission was created in 1988 to study problems with alternative dispute resolution relating to mobile home park rents. Chapter 88-147, Laws of Florida. The Study Commission was reauthorized in 1989 for another one year period to study this issue. Chapter 89-202, Laws of Florida. The Study Commission was in existence, in 1988, when the Florida Manufactured Housing Association challenged an earlier proposed rule, 7D-31.002, which regulated the fees and charges that could be collected in mobile home parks. In that case the Division of Administrative Hearings issued a Final Order invalidating the earlier proposed rule on several grounds. That Final Order was affirmed by the First District Court of Appeal. Florida Manufactured
Housing Association, Inc. v. Department of Business Regulation, 10 F.A.L.R. 3919 (DOAH 1988), affirmed, 547 So.2d 636 (1st DCA 1989) (hereafter referred to as FMHA I). The DBR appeared at the Study Commission in 1990 and suggested legislation to directly overturn the hearing officer's decision in FMHA I. That suggested legislation was virtually identical to the proposed rule at issue in this proceeding. The legislation suggested by the DBR was not adopted.
Thirty-five to forty percent of the tenants residing in MLH parks today resided there prior to the enactment of Chapter 723, Florida Statutes, on June 4, 1984.
MLH or its predecessors in interest delivered prospectuses approved by DBR to all tenants residing in the parks on June 4, 1984, at or before the expiration of those tenants' pre-Chapter 723 leases. The prospectuses delivered to such residents disclosed the manner in which the residents' lot rental amount would be increased, other fees and charges which the resident would thereafter be charged, and the manner in which pass-through charges (for governmentally- mandated capital improvements) would be assessed.
In some of its barks MLH has passed on ad valorem property tax increases to park tenants. A number of tenants in MLH's parks are now contending that such charges cannot be passed on to them, even though such charges are disclosed in the park prospectuses which they received after enactment of Chapter 723, Florida Statutes, because (the tenants assert) such charges were not disclosed to them prior to their moving into the parks before the enactment of Chapter 723. MLH has no knowledge as to whether each charge disclosed in its approved Chapter 723 prospectuses was disclosed by the previous owners of MLH parks at the time that the original tenant moved onto a particular lot before the enactment of Chapter 723. MLH intends to continue passing on ad valorem tax increases.
The prospectuses for MLH parks approved by DBR provide for the collection of a $3.00 annual DBR filing fee. The obligation to pay that filing fee was not disclosed to tenants who moved into the parks before the enactment of Chapter 723 because, at that time, neither DBR nor any other state agency had regulatory jurisdiction over the parks and the legislature did not impose such a filing fee until the passage of Chapter 723 and the concomitant creation of the Bureau of Mobile Homes.
As to the years prior to the enactment of Chapter 723, it is sometimes very difficult, if not impossible, for a current park owner to ascertain and establish what fees, charges, and assessments were disclosed to tenants before they moved into a park. There was no central regulatory authority at that time which was charged with the responsibility to monitor such disclosures. There was no required, standardized disclosure document such as the prospectus which is now required of most parks by Chapter 723. Some parks now subject to regulation under Chapter 723 came into existence as early as the 1930's and operated as informal, family-run businesses. Thus, for the industry in general, the records are not available to establish what disclosures were made to tenants who long ago moved in, and still reside in the parks, at the time they initially took up residence.
MLH intends to continue the operation of its parks in Florida and, therefore, will be governed directly by the proposed rule, if it is adopted.
Prior to the enactment of Chapter 723, there was no statutory limitation on the frequency of rent increases, no requirement that the park owner disclose the factors which would be considered in setting rents, and no requirement of the park owner to mediate rent disputes with statutorily recognized tenant organizations, all of which are now imposed under Chapter 723.
All of the approved MLH prospectuses contain the land use descriptions required by Section 723.012(4)(c), (5), (14) (b), Florida Statutes, including a lot layout showing the location and size of all lots in the parks (whether vacant or occupied), the location of all recreation and common facilities, and a detailed description of those facilities.
MLH was a member of the Florida Manufactured Housing Association at the time that the Division of Administrative Hearings rendered its opinion in Florida Manufactured Housing Association, Inc. v. Department of Business Regulation, 10 F.A.L.R. 3910 (D.O.A.H. 1988) ("FMHA I") and at the time FMHA I was affirmed by the First District Court of Appeal.
DBR will apply the proposed rule to the administration of Section 723.031(5),(6), Florida Statutes. DBR will apply the proposed rule to the administration of existing rule 7D-31.001(5), Florida Administrative Code.
"Length of tenancy," as used in existing rule 7D- 31.001(5), F.A.C., is not defined by Chapter 723, Florida Statutes, or by existing DBR rules. Nor is the term "tenancy" expressly defined in Chapter 723, Florida Statutes or in DBR's implementing rules.
The word "continuous" used in the proposed rule is intended to have its common and ordinary meaning.
The resale value of a tenant's mobile home in a park, as compared to the value of a comparable mobile home purchased from a dealer's lot, is significantly higher due to the recreational and other amenities which are provided by the park owner for the tenants' use.
The resale value of a tenant's mobile home in a park, as compared to the value of a comparable mobile home purchased from a dealer's lot, is significantly higher if the tenant can pass on to the purchaser of the in-place home a rent schedule which is more favorable than the current rent schedule being charged for a home newly being placed in the park.
MLH uses and has entered into fixed-term, twelve-month leases with tenants in some of its parks. Those leases are part of DBR-approved prospectuses for the parks.
MLH's parks and other parks regulated under Chapter 723, Florida Statutes, compete vigorously for tenants and are willing to and, in fact, do negotiate long-term leases and even lifetime leases with residents of the parks.
It is important to park operators to have the flexibility to modify the prospectus disclosures regarding the use of vacant lots, vacant common areas, and land and improvements devoted to recreation facilities, in order to meet market changes and competition.
It is very difficult, and sometimes impossible to obtain unanimous consent of residents in a mobile home park on most issues.
In the case of MLH's park at Ellenton, Florida, the park land and improvements are valued at approximately $22,000,000. Yet it would cost MLH conservatively, $56,300,000 to purchase the homes in the park from the tenants. It would cost MLH, conservatively, $9,200,000 to $22,000,000 to move all of the tenants' homes from the park. Moreover, a portion of that required purchase price is for value added to the homes by reason of the placement of the homes in the owner's park.
Ninety-eight percent (98%) of the 1000 members in the full park division of the FMHA have parks that contain more than twenty-five (25) spaces. The Department of Health and Rehabilitative Services licenses a total of 5,500 mobile home parks in the State of Florida.
FMHA developed a model prospectus for its members to comply with the law as enacted in 1984.
FMHA advised its members to put all potential fees, charges, and assessments in prospectuses although such fees, charges, and assessments may not have been disclosed to the homeowner prior to the homeowner's occupancy in the park or prior to the homeowner entering into his or her initial rental agreement.
Mobile Americana Mobile Home Park, a Pinellas County mobile home park, was purchased by De Anza in July, 1976. The park's prospectus number 5200119P was approved and delivered to homeowners in 1985. Since 1976, several leases and rules and regulations have been in effect in the park. The prospectus number 5200119P includes fees, charges, and assessments that were not previously disclosed in prior leases to homeowners. However, De Anza is not presently charging or collecting these undisclosed fees.
De Anza manages A Garden Walk Mobile Home Park for MLH. Prospectus numbers 5000867P and 500086P86 are offered in the park. MLH offers various leases in A Garden Walk, including lifetime leases and the leased marked MLH Ex.
$9. MLH Ex. #9 was used in the park after 1985 although the exact time of use is not known. Neither De Anza or MLH know what fees, charges, or assessments were disclosed to homeowners by previous park owners.
For the last 3 years, De Anza has managed Hacienda Village Mobile Home Park. De Anza sets the rental amounts in its parks and uses the market approach. With the market approach, the park owners arrive at a market rent by comparing the rents in their parks with rents of other mobile home communities of comparable value. The park owners unilaterally arrive at the market value rent. The collection of governmental fees is accounted for in arriving at the market value rent.
Approximately 5 to 7 years prior to the enactment of Chapter 723, Florida Statutes, De Anza disclosed to homeowners living in De Anza owned parks the homeowners' obligations to pay for increased costs due to governmental actions and increases in taxes. All pre-1984 De Anza leases were subject to Chapter 83.
Mobile Americana, Hacienda Village, and A Garden Walk are members of the FMHA.
Mobile Home Communities also operates Windmill Village Mobile Home Park. Homeowners in Windmill Village were provided a prospectus in 1985. The prospectus contains terms and conditions that are different from the rental agreement that was in effect from 1983 until 1985.
Five of the parks owned by MLH were purchased on July 1, 1987. The other three parks were purchased between July 2, 1986, and 1989. At the time MLH purchased its eight parks each park had an approved prospectus in place.
One of MLH's parks, Colony Cove Ellenton, is located in Ellenton, Florida, and offers three separate prospectuses, including prospectus numbers 410024P, 410024P86 and 410024P2.
Pages 74, 75, and 76 of Colony Cove Ellenton prospectus number 410024P describe the park's recreational facilities. The park owner, on page 77, paragraph 4(f), reserves the right from time to time to alter or change any of the facilities by the removal, relocation, or alteration of existing facilities or the construction of new facilities. Page 85 of this prospectus provides for the collection of costs incurred as a result of state and local government actions.
MLH owns and operates Clearwater Cascade Mobile Home Community of Clearwater, Florida. Prospectus Number 5200525P86 lists each lot, including lot size, as well as describes recreational facilities and common facilities in the park.
LaCasa Mobile Home Park, a MLH park, offers at least two prospectuses in the park, prospectus numbers 5800237P and 5800237P86. Prospectus number 5800237P describes the recreational facilities in the park. The prospectus provides for an assessment to homeowners for ad valorem taxes. The park owner also reserves the right from time to time to change any of the facilities by the removal, relocation, or alteration of existing facilities or the construction of new facilities. MLH has not been told by the Division it would not have a right to make modifications to its facilities in accordance with its prospectuses.
The prospectuses delivered to homeowners in MLH parks allow for a variety of lease situations. There are no provisions in the prospectuses delivered by MLH which state that a prospectus applies only to persons who were in residence on June 4, 1984. All of the MLH prospectuses include reservation language similar to language contained in the Colony Cove Ellenton prospectus, reserving the right to modify facilities.
MLH owns and operates Valleydale Estate Mobile Home Park, which it purchased on July 1, 1987. The Valleydale Estates prospectus contains some fees that were not disclosed to homeowners prior to occupancy. When MLH purchased Valleydale, it did not inquire as to disclosures made to homeowners.
MLH also owns Heritage Village Mobile Home Park. Prior to its purchase of the park, MLH did not inquire as to disclosures made to homeowners living in the park.
Since 1984, Dr. Faye Mayberry has been the Chief of the Bureau of Mobile Homes. The Division has the duty to review and approve prospectuses. Park owners draft prospectuses and submit them to the Division for review. Approximately 3000 prospectuses have been approved by the Bureau of Mobile Homes. As part of the approval process the Division does not verify the accuracy of the contents of the prospectus, nor does the Division determine if the
contents of the prospectus are consistent with rental agreements offered to a particular mobile home owner. Park owners are advised by the Division that failure to cite deficiencies in the prospectus filing does not relieve them of obligations under the law. On January 10, 1985, Rule 7D-30.003 Florida Administrative Code, was adopted.
Mobile home parks may offer more than one version of a prospectus in a park. Park owners sometimes submit subsequent prospectus filings that are inconsistent with previously delivered prospectuses. The Division has not established a policy regarding subsequent prospectus filings which contain disclosures concerning the number of lots in the park which are inconsistent with the disclosures in the previously approved and delivered version of the prospectus. Such inconsistencies between the subsequent prospectus and the previously approved and delivered prospectus filings are handled by the Division on a case by case basis.
Prior to June 4, 1984, the primary issue of concern for mobile home owners was the mobile home park owners' failure to live up to disclosures that were given prior to the homeowners' occupancy in the park. (TV V, pg. 613).
The prospectus delivered to mobile home owners residing in the following mobile home parks included fees, charges, and assessments other than pass-through charges, which were not disclosed to homeowners until after they moved into the parks:
Park East Club -- Sarasota, Florida
Caribbean Estates -- New Port Richey, Florida River Grove Mobile Home Village -- Sebastian, Florida
Hacienda Village -- Winter Springs, Florida Ocean Pines Mobile Home Park - Indialantic, Florida
A Garden Walk -- Palm Beach Gardens, Florida
The amount for which a mobile home located in a mobile home park can be sold tends to decrease when the lot rental amount charged by the park increases.
It costs several thousand dollars to move a double- wide mobile home within a 50 mile radius and set it up again the way it was before the move. /1
Many FMO members have complained to the FMO leadership of prospectuses being delivered in their mobile home parks which include fees, charges, or assessments which were not disclosed prior to June 4, 1984.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. See Sections 120.54 and 120.57, Florida Statutes.
A threshold issue in this case is whether an intervenor who intervenes in a Section 120.54 rule challenge proceeding later than twenty-one days following the publication of the proposed rule may challenge the validity of the proposed rule on grounds that were not raised in the original petition. Section 120.54(4)(b), Florida Statutes, provides that challenges to the validity of proposed rules "must be filed with the division within 21 days after the date of
publication of the notice." This twenty-one-day period is jurisdictional See State, Department of Health and Rehabilitative Services v. Alice P., 367 So.2d 1045 (Fla. 1st DCA 1979); All Risk Corporation of Florida v. State, Department of Labor and Employment Security, 413 So.2d 1200 (Fla. 1st DCA 1982). Section 120.54(4)(d), Florida Statutes, specifically provides that "[o]ther substantially affected persons may join the proceeding as parties or intervenors on appropriate terms which will not substantially delay the proceedings" but, as is made clear by Alice P. and All Risk, the standing of those who intervene after the twenty-one day period is contingent upon the continuing viability of an original timely petition. The same considerations that cause the standing of one who intervenes after the twenty-first day to be dependent upon the continuing viability-of the original petition also compel a conclusion that one who intervenes after the twenty-first day is limited to the legal issues raised in the original timely petition and may not raise any new basis for challenging the validity of the proposed rule. Accordingly, the issues set forth in subparagraphs (a), (h), and (i) of paragraph 11 of the Petition To Intervene filed on behalf of MLH Property Managers, Inc., are not properly before the Hearing Officer in this proceeding.
Another threshold issue in this case is whether a Hearing Officer of the Division of Administrative Hearings has the authority to determine whether a proposed rule, if adopted, would violate the Florida Constitution. In Department of Environmental Regulation v. Leon County, 344 So.2d 297 (Fla. 1st DCA 1977), the court held:
The hearing officer, in the exercise of
quasi-judicial authority in futherance of the administrative rulemaking process, can determine whether or not a proposed rule violates the Florida Constitution if adopted, such determination being subject to judicial review. The hearing officer's determination
is similar to a determination by the legislature or a legislative committee that
it will not favorably report or enact proposed legislation because it considers that if enacted the legislation would be unconstitutional. Once a statute or rule has been enacted or adopted, however, the determination of the constitutionality or unconstitutionality thereof requires exercise of judicial power which is vested only in the courts.
In another decision dealing with constitutional issues in the context of proposed rules, the court in Florida Education Association/United v. Public Employees Relations Commission, 346 So.2d 551 (Fla. 1st DCA 1977), held:
In denying United's petition, the Commission expressed the view that the proposed fair share rule violated the
Constitution as we have found. It was proper for the Commission to consider the constitutional question because this question was inseparable from the question of whether to adopt the rule. When an agency thus considers the constitutional implications of
a rule proposed to it under Section 120.54(5), it does not violate the doctrine of separation of powers or invade the judicial function. Article II, Section 3, Florida Constitution. (Emphasis added)
The foregoing notwithstanding, the DBR and the FMO argue that a Hearing Officer's authority to decide issues regarding the constitutionality of proposed rules expired with the enactment of Section 2 of Chapter 87-385, Laws of Florida, which for the first time added to Section 120.52, Florida Statutes, a definition of the phrase "invalid exercise of delegated legislative authority." That definition, which now appears at 120.52(8), Florida Statutes, reads as follows:
"Invalid exercise of delegated legislative authority" means action which goes beyond the powers, functions, and duties delegated by the Legislature. A proposed or existing rule is an invalid exercise of delegated legislative authority if any one or more of the following apply:
The agency has materially failed to follow the applicable rulemaking procedures set forth in s. 120.54;
The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(7);
The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7);
The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or
The rule is arbitrary or capricious.
Invoking the maxim of statutory construction known as "expressio unius est exclusio alterius" (express mention of one thing in statute implies exclusion of another), the DBR and FMO argue that the legislative itemization of five examples of invalid exercises of delegated legislative authority should be construed as the only bases upon which a rule can be challenged.
The argument fails for several reasons. First, the maxim of "expressio unius est exclusio alterius" is, as noted in Smalley Transportation Company v. Moed's Transfer Company, 373 So.2d 55 (Fla. 1st DCA 1979), "strictly an aid to statutory construction and not a rule of law." See also U.S. v. Castro, 837 F.2d 441 (11th Cir. 1988) ("expressio unius" maximum is merely a guide to statutory construction and cannot apply when legislative history and context are contrary to such a reading of the statute). And in Ford v. United States, 273 U.S. 593, 47 S.Ct. 531, 71 L.Ed. 793 (1927), the Supreme Court of the United States noted that the maxim of "expressio unius est exclusio alterius"
is not of universal application, but depends upon the intention of the party as discoverable upon the face of the instrument or of the transaction; thus where general
words are used in a written instrument, it is necessary, in the first instance, to determine whether these general words are intended to include other matters besides such as are specifically mentioned, or to be referable exclusively to them, in which latter case only can the above maxim be properly applied.
It [the maxim] is often a valuable
servant, but a dangerous master to follow in the construction of statutes or documents.
The exclusio is often the result of inadvertence or accident, and the maxim ought not to be applied, when its application, having regard to the subject-matter to which it is to be applied, leads to inconsistency or injustice.
The maxim of "expressio unius est exclusio alterius" does not appear to be applicable to Section 120.52(8), Florida Statutes, first because there is nothing in the title or the text if the subject statutory provision that suggests a legislative intent that the general definition in the first sentence be limited only to the five specific examples following the general definition. It is a well-settled rule of statutory construction that "[a] statute should be so construed as to give a meaning to every word and phrase in it...." Vocelle
v. (night Brothers Paper Company, 118 So.2d 664 (Fla. 1st DCA 1960). See also Terrinoni v. Westward Ho!, 418 So.2d 1143 (Fla. 1st DCA 1982); Topeka Inn Management v. Pate, 414 So.2d 1184 (Fla. 1st DCA (1982). In order to give meaning to the general definition in the first sentence of Section 120.52(8), Florida Statutes, the itemizations which follow must be construed as non- exclusive examples. This is particularly true in the context of the specific issue at hand, proposed rules that are alleged to be violative of the Florida Constitution. It cannot be seriously contended that the Legislature would intentionally delegate to an administrative agency the power to adopt rules that violate the Florida Constitution. And it follows inescapably that a proposed rule that violates the Florida Constitution is one that "goes beyond the powers, functions, and duties delegated by the Legislature." Thus, such a rule is an invalid exercise of delegated legislative authority within the general definition in the first sentence of Section 120.52(8), Florida Statutes, regardless of whether it also falls within one of the five enumerated examples in the statute. To conclude that proposed rules that clearly come within the general definition in the first sentence of Section 120.52(8), Florida Statutes, are nevertheless immune from the Section 120.54, Florida Statutes, rule challenge procedures would produce an absurd result. Such results are, of course, to be avoided in the interpretation of statutes. See City of St. Petersburg v. Siebold, 48 So.2d 291 (Fla. 1950); Winter v. Playa del Sol, Inc.,
353 So.2d 598 (Fla. 4th DCA 1977). For all of the foregoing reasons, it is concluded that Hearing Officers of the Division of Administrative Hearings, in the exercise of their quasi-judicial authority, may still determine whether proposed rules violate the Florida Constitution. See Department of Environmental Regulation v. Leon County, 344 So.2d 297 (Fla. 1st DCA 1977).
With the threshold matters disposed of, attention is now addressed to Florida Manufactured Housing Association, Inc. v. Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, et al., 10 FALR 3919 (June 24, 1988), affirmed without opinion sub nom, Federation of Mobile Home Owners of Florida, Inc. v. Florida Manufactured Housing
Association, Inc., 547 So.2d 636 (Fla. 1st DCA 1989), ("FMHA I") a case in which most of these same parties participated in a rule challenge case challenging the validity of a similar rule proposed by the Respondent in 1988. That litigation resulted in the issuance of a final order which concluded that the 1988 proposed rule was an invalid exercise of delegated legislative authority. That final order was affirmed on appeal, without opinion. The Hearing Officer's conclusions of law in the 1988 litigation include the following pertinent passages, beginning at page 3929 of 10 FALR:
Chapter 723, Florida Statutes, was created as part of Chapter 84-80, Laws of Florida, which repealed existing mobile home park regulations contained in Chapter 83, Part III, Florida Statutes (1983). In place of
the earlier Chapter 83, Part III, the Florida Mobile Home Act established new comprehensive statewide mobile home park landlord/tenant regulations, which substantially modified existing rights, duties and obligations between mobile home park owners and mobile home owners who leased lots in those parks.
The Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes was given authority to enforce, and to adopt rules to enforce, interpret and implement the statute. Section 723.006, Florida Statutes.
The statute mandated disclosure of certain information to all tenants residing in the park as of June 4, 1984, and to all prospective tenants who leased a lot in the mobile home park after that date. See, e.g., sections 723.011, 723.012 and 723.013, Florida Statutes. In mobile home parks with
26 or more spaces, the mobile home park owner is required to deliver a prospectus to all existing residents in the park and to all prospective lessees prior to entering into a new enforceable rental agreement. Section 723.011(1) and (2). The prospectus requirement became effective January 1, 1985, for parks with 100 or more spaces, and
July 1, 1985, for parks with fewer than 100 spaces. Under the terms of the statute, the prospectus is deemed incorporated into the rental agreement (Section 723.031(10)), and the park owner may not increase the lot rental amount for an existing tenant until a prospectus has been delivered. Sections 723.031(7) and 723.011(1). Once delivered to the home owner, the prospectus binds the park owner, and the existing homeowner who assumes it, to its terms for the length of the tenancy offered and creates an obligation which may be assumed by a subsequent purchaser of the mobile home.
The court in Village Park Home
Association, Inc. v. State Department of Business Regulation, 506 So.2d 426, 428 (Fla. 1st DCA 1987) recognized that the prospectus is a disclosure document which when implemented establishes the terms and conditions of the rental agreement between the park owner and mobile home owner:
The prospectus is fundamentally a disclosure document. As required by Section 723.012, the prospectus, as drafted by the park owner, must contain certain information and exhibits, including a description of the mobile home park property (Section 723.012(4)(c)), a description of the recreational and other common facilities to be used by the homeowners (Section 723.012(5)), the arrangements for management of the park and maintenance and operation of the park property (Section 723.012(6)), a description of all improvements which are required to be installed by the mobile home owner (Section 723.012(7)), a description of the manner in which rents and other charges will be raised, including 90 days advance notice and disclosure of any rate increase or
pass-through charges, and any other fees, costs or charges to which the home owner may be subjected (Section 723.012(9)), and an explanation of the manner in which park rules or regulations will be set, changed or promulgated, including park regulations
currently in effect (Section 723.012(10)). The Act requires that the prospectus contain as exhibits any ground lease
which may be in effect, covenants and restrictions affecting the park property, and a copy of the rental agreement which will be offered by the park owner in the rental of mobile home lots (Section 723.012(13)). As may be seen from the above statutory analysis, the purpose of the prospectus is to disclose to prospective lessees certain information regarding the future operation of a mobile home park.
The mobile home owner has the right to cancel or void the rental agreement if a prospectus is not delivered prior to occupancy. In the case of the initial occupancy in the mobile home park by the purchaser of a new mobile home, the rental agreement is "voidable" by the lessee until
15 days after receipt by the lessee of the
prospectus (Section 723.014(1)), but in no event may the period of voidability extend beyond 45 days of initial occupancy. Section 723.014(1). In the case of an existing tenant, the mobile home owner has the right to "cancel" the rental agreement offered within 15 days after receipt of the prospectus. Section 723.014(2).
The legislature intended that the requirements of Chapter 723, including the prospectus and rental agreement provisions, were to apply to existing residents of mobile home parks at the time of the expiration, or renewal, of their existing rental agreement. Sections 723.011(1), (2) and (3);
723.012(14)(d) ; 723.014(2); 723.031(5), (6)
and (7). Due to the unique nature of the mobile home park landlord/tenant relationship, the expiration, or renewal, of the existing rental agreement is the point at which the provisions of the new statute must be applied.
There are two provisions contained within Chapter 723 relating to the prospectus and rental agreement that require separate treatment of existing residents of a mobile home park on the Act's effective date. Section 723.011, the section cited as authority for the proposed rule, provides that:
(3) With regard to a tenancy in existence on the effective date of this chapter, the prospectus or offering circular offered by the mobile home park owner shall contain the same terms and conditions as rental agreements offered to all other mobile home owners residing in the park on the effective date of this act, excepting only rent variations based upon lot location and size, and shall not require any mobile home owner to install any permanent improvements.
In addition, Section 723.031 requires the rental agreement offered in the prospectus to contain all financial obligations of the mobile home owner to the park owner and all services provided by the park owner to the home owner. The statute also provided a "bridge" between repealed section 83.760 and the new statute, which provided that for a tenancy in existence on the effective date of the Act and until the expiration of the existing rental agreement, the provisions of section 723.031 would not prohibit passing-on increased costs, including increased costs for utilities, which are incurred due to the
actions of any state or local government. Section 723.031(5), Florida Statutes.
The Respondent's argument suffers from a number of fatal flaws. First, it ignores the statutory purpose behind Chapter 723. The chapter is a complete revision of the law regulating mobile home park landlord/tenant matters. The prospectus, which is required to be delivered to all tenants in the park, is a binding agreement for the length of the tenancy. The prospectus is not required to be delivered until the renewal or expiration of a rental agreement for an existing tenant. Section 723.011(2). The statutory purpose for section 723.011(3) was to require that the park owner deliver a prospectus containing the same terms and conditions to each resident residing in the park on the effective date of the Act. The statute does not vest any rights to the terms of previous rental agreements between the park owner and the mobile home owner. The statute establishes a new tenancy based on the prospectus at the expiration of the existing rental agreement.
Second, since the terms of the prospectus apply at the renewal or expiration of the existing agreement, no existing contractual rights are impaired by the statute.
Respondent, in the proposed rule, however, establishes vested contractual rights to the first rental agreement entered into between the park owner and the mobile home owner.
There are also no vested rights to be free from any fees, charges or assessments that may not have been disclosed prior to occupancy based upon the provisions contained in repealed section 83.764, Florida Statutes. Chapter 83, Part III, Florida Statutes (1983), did not contain any similar provisions to those relating to the prospectus that are contained in Chapter 723. The prospectus is required to not only disclose all fees, charges and assessments, pursuant to section 723.012(9)(b)(8) but also to detail the manner of lot rental amount increases and the factors which will control raising the lot rental amount. Section 723.012(9)(b). Thus, while the mobile home owner might have a right during the term of the rental agreement to be free from a specific charge, there is no right under the statute to be free from paying "any costs incurred, including increased costs for utilities, due to the actions of state or local government." See Section 83.760, Florida Statutes (1983), which specifically
allowed park owners to pass-on to tenants increased costs due to actions of governments or utilities although not provided for in the lease. Since there was no right to be free from payment of rent in Chapter 83, only the limited right to be free from payment of a specific fee, charge or assessment, Chapter 723 does not modify any substantial right.
Third, the Respondent was required by statute to review each filed prospectus to determine if it were adequate to meet the requirements of the Act. Section 723.011(1)(a) and (b). The Respondent promulgated rules relating to the prospectus
to meet the requirements of Chapter 723. The Respondent testified that when a park owner filed a prospectus, Respondent reviewed the prospectus, the rental agreement and the rules and regulations to determine if they comply with Chapter 723. The Respondent, with respect to the witnesses testifying at hearing, reviewed and approved each filed prospectus, allowed existing residents to enter into enforceable rental agreements based upon the prospectus, and allowed purchasers of a mobile home to assume the prospectus offered to the initial recipient, pursuant to section 723.059. Now, the Respondent seeks a modification of the existing rental agreement and rewriting the terms of the prospectus delivered to, and assumed by, those existing residents. The park owner has the right to rely upon the approval given by Respondent and on the terms and conditions of the prospectus as delivered to the mobile homeowner. That prospectus is binding for the term of the tenancy according to Respondent's rule 7D-31.001(6), Florida Administrative Code. Moreover, the tenants had the opportunity to cancel the rental agreement offered in the prospectus within 15 days of delivery of the prospectus. Section 723.014(2). The Respondent cannot, by this rule, require a revision of the obligations and duties of the parties to the prospectus. To do so would be violative of Article I, Section 10, Florida Constitution (1968) since that would clearly impair the obligations of contracts.
Fourth, the Respondent has ignored the plain meaning of the language in sections 723.031(5) and (6), Florida Statutes.
Section 723.031(5)(c) provides, in part as follows:
The provisions hereof notwithstanding, the mobile home park owner may pass on, at any time during the term of the lot
rental agreement, ad valorem property taxes and utility charges, or increases of either, provided that the ad valorem property taxes and the utility charges are not otherwise being collected in the remainder of the lot rental amount and provided further that the passing on of such ad valorem property taxes or utility charges, or increases of either, was disclosed prior to tenancy, was being passed on as a matter of custom between the mobile home park owner and the mobile home owner, or such passing on was authorized by law. Such ad valorem taxes and utility charges shall be a part of the lot rental amount as defined by this chapter.
Section 723.031(6) provides that "except for pass through charges as defined in section 723.003(9), the park owner may not collect any fees, charges or assessments which were not disclosed prior to occupancy or collected as a matter of custom. Both of these provisions were derived from section 723.031(5), as adopted in 1984, which provided that until the term of the existing rental agreement expired, the park owner was not prohibited from "passing on" costs incurred due to the actions of state or local government. Existing rental agreements on June 4, 1984, as provided by section 83.760,
Florida Statutes, allowed that the park owner could ?;pass on" the costs incurred, including increased costs for utilities, due to the actions of state or local government. "Pass through" charges (section 723.031(6)) and "pass on" charges (section 723.031(5)(c)) were legally authorized in Chapter 723. The proposed rule would prohibit these charges unless they were disclosed fully in writing prior to occupancy or were collected as a matter of custom as defined by the proposed rule.
The Respondent's rule attempts to make the provisions of leases entered into at the time of occupancy in a mobile home park and prior to the enactment of Chapter 723, binding on the park owner. It is clear that the legislature intended for the provisions of Chapter 723 to apply to existing tenants in mobile home parks. There is no basis for applying terms and conditions from rental agreements which are no longer in force on current landlord/tenant relationships created after the effective date of Chapter 723.
Respondent's is clearly an erroneous reading
of the statute.
Respondent's interpretation of the statute
is contrary to the legislative purpose of the Act, and the requirements of the rule are not appropriate to the ends specified in the legislation. The result of this rule will be to establish separate rental agreements throughout the park, based not upon disclosures contained in the prospectus, but upon what can be proven by the park owner as "fully disclosed in writing prior to occupancy." That the legislature intended for a new rental agreement based upon the terms of the prospectus delivered to the existing mobile home owner, cannot be questioned. The Respondent, after having approved of the manner of increasing the lot rental amount in the prospectus, and approving the fees, charges and assessments that will be charged in the park set forth in the prospectus and rental agreement and rules and regulation, and establishing by rule that the park owner deliver a document that will be binding for the length of the tenancy (and any assumptions of that tenancy as allowed by the statute), cannot now overturn the statutory scheme that is in place throughout the state and amend existing contractual rights.
Both FMHA and MLH argue that FMHA 1 has either a res judicata or a collateral estoppel effect that compels invalidation of the proposed rule challenged in this case. The issues of res judicata and collateral estoppel were not raised in the original petition, but only in MLH's petition to intervene. Accordingly, for the reasons discussed above in paragraph 2 of these Conclusions of Law, the issues of res judicata and collateral estoppel are not properly before the Hearing Officer in this proceeding and will not be addressed further.
Both DBR and FMO argue, for a variety of reasons, that FMHA 1 should be disregarded, distinguished, or ignored. Among other things, it is argued that because of the differences between the proposed rule challenged here and the proposed rule challenged in FMHA I, the decision in FMHA I has no bearing on the issues in this case. While it cannot be doubted that the specific language of the proposed rule challenged in this case is in many ways different from the specific language of the proposed rule challenged in FMHA I, there are substantial similarities in the practical effects of the two proposed rules, as well as substantial similarities in the legal issues raised by the two proposed rules. In view of these similarities, and for the reasons summarized below, it is concluded that the decision in FMHA I should be followed in this case.
The primary reason for following FMHA 1, is that there have been no material changes in the applicable statutory provisions since the decision in FMHA 1, 2/ nor has there been any substantial change in the case law with regard to either statutory construction or the legal principles involved in the determination of the validity of proposed rules. The Conclusions of Law portion of FMHA I contains extensive discussion, interpretations, and conclusions
regarding Chapter 723, Florida Statutes, and its interrelationship to the preexisting statutory scheme regulating mobile home parks. Absent some showing that the interpretations and conclusions in FMHA I are erroneous or outmoded, they should be followed. 3/ Upon careful consideration, it appears that the interpretations and conclusions set forth in FMHA I (the most applicable of which are quoted above in paragraph 7 of these Conclusions of Law) are correct and are as applicable today as when written. Thus, there is no logical reason to deviate from them.
Some of the fundamental legal principles applicable to rule challenge cases were recently summarized as follows by Hearing Officer Kiesling in Venice Hospital, Inc., et al. v. Department of Health and Rehabilitative Services, et al., DOAH Case Nos. 90-2383R, et al. (Final Order issued October 31, 1990):
If a proposed rule does not exceed the agency's statutory authority and is reasonably related to an appropriate purpose of the statutes, it should be sustained. State, Marine Fisheries Commission v.
Organized Fisherman of Florida, 503 So.2d 935 (Fla. 1st DCA 1987); Agrico Chemical Co. v.
DER, 365 So.2d 759 (Fla. 1st DCA 1978). An
agency's construction of the statute it administers is entitled to great weight and is not to be overturned unless clearly erroneous. Pan American Airways, Inc. v.
Florida Public Service Commission, 427 So.2d 716 (Fla. 1983); Department of Professional Regulation v. Durrani, 455 So.2d 515 (Fla.
1st DCA 1984) (agency rule upheld as a valid exercise of delegated legislative authority). Moreover, the agency's interpretation of a statute when developing a rule need not be the sole possible interpretation or even the most desirable one; it need only be within the range of possible interpretations.
Humhosco, Inc. v. Department of Health and Rehabilitative Services, 476 So.2d 258 (Fla. 1st DCA 1985); Department of Professional Regulation v. Durrani, supra.
The various standards for applying Section 120.52(8) have been established by case law. A rule is vague or fails to establish adequate standards for agency decisions when its terms are so vague that persons of common intelligence must necessarily guess at its meaning and differ as to its application.
State v. Cumming, 365 So.2d 153 (Fla. 1978). A rule vests unbridled discretion in an agency when it fails to establish adequate standards and reserves to the agency the arbitrary power to determine private rights. Barrow v. Holland, 125 So.2d 749 (Fla. 1960). Arbitrary and capricious actions are defined in Agrico, supra, as follows:
A capricious action is one which is taken without thought or reason or
irrationally. An arbitrary decision is one not supported by facts or logic, or despotic.
See, Adam Smith Enterprises v. Florida Department of Environmental Regulation, 553 So.2d 1260 (Fla. 1st DCA 1989).
The burden is on the Petitioners to show
by a preponderance of the evidence that the rule is arbitrary and capricious. Agrico, supra. Petitioners have the burden to prove that a proposed rule is an invalid exercise of delegated legislative authority. It is a stringent burden of proof. Id. at 763.
The original petition in this case challenges the subject rule on four basic grounds. First, it is asserted that the rule is invalid on constitutional grounds because it violates Article 1, Section 10, of the Florida Constitution. The other three grounds asserted are that the rule is invalid for the reasons stated in subparagraphs (b), (c), and (e) of Section 120.52(8), Florida Statutes, by reason of, respectively, exceeding the agency's grant of rulemaking authority; enlarging, modifying, or contravening the specific provisions of law implemented; and by being arbitrary and capricious.
Directing attention first to the constitutional challenge, in FMHA I, the Hearing Officer concluded, inter alia:
The statute' does not vest any rights to the terms of previous rental agreements between the park owner and the mobile home owner.
The statute establishes a new tenancy based on the prospectus at the expiration of the existing rental agreement.
Second, since the terms of the prospectus apply at the renewal or expiration of the existing agreement, no existing contractual rights are impaired by the statute.
Respondent, in the proposed rule, however, establishes vested contractual rights to the first rental agreement entered into between the park owner and the mobile home owner.
The Respondent cannot, by this rule, require a revision of the obligations and duties of the parties to the prospectus. To do so would be violative of Article I, Section 10, Florida Constitution (1968) since that would clearly impair the obligations of contracts.
The conclusions quoted immediately above are equally applicable to the proposed rule challenged in this case, because each paragraph and subparagraph of the proposed rule at issue in this case, if adopted, would have the effect of establishing vested contractual rights to the first rental agreement entered into between the park owner and the mobile home owner. Such an effect is violative of Article I, Section 10, Florida Constitution. Thus, the subject proposed rule and all of its subparts are an invalid exercise of delegated legislative authority.
Attention is addressed now to the assertion that the subject rule is invalid because the agency has exceeded its grant of rulemaking authority. See Section 120.52(8)(b), Florida Statutes. The DBR's very broad rulemaking authority, is described at Section 723.006(7), Florida Statutes, as follows:
(7) The division is authorized to promulgate rules, pursuant to chapter 120,
which are necessary to implement, enforce and interpret this chapter.
For the reasons discussed above, the subject proposed rule is predicated upon a misinterpretation of portions of Chapter 723, Florida Statutes. Because the proposed rule misinterprets portions of Chapter 723, Florida Statutes, it exceeds the statutory grant of rulemaking authority and is, therefore, an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8), Florida Statutes.
The subject proposed rule is also invalid because it "enlarges, modifies, or contravenes the specific provisions of law implemented" within the meaning of Section 120.52(8)(c), Florida Statutes. The following observations by the Hearing Officer in FMHA I are equally applicable to the proposed rule at issue here:
The Respondent's rule attempts to make
the provisions of leases entered into at the time of occupancy in a mobile home park and prior to the enactment of Chapter 723, binding on the park owner. It is clear that the legislature intended for the provisions of Chapter 723 to apply to existing tenants in mobile home parks. There is no basis for applying terms and conditions from rental agreements which are no longer in force on current landlord/tenant relationships created after the effective date of Chapter 723.
Respondent's is clearly an erroneous reading of the statute. (emphasis added)
Respondent's interpretation of the statute
is contrary to the legislative purpose of the Act, and the requirements of the rule are not appropriate to the ends specified in the legislation. The result of this rule will be to establish separate rental agreements throughout the park, based not upon disclosures contained in the prospectus, but upon what can be proven by the park owner as "fully disclosed in writing prior to occupancy." That the legislature intended
for a new rental agreement based upon the terms of the prospectus delivered to the existing mobile home owner, cannot be questioned. The Respondent, after having approved of the manner of increasing the lot rental amount in the prospectus, and approving the fees, charges and assessments that will be charged in the park set forth in the prospectus and rental agreement and rules
and regulation, and establishing by rule that the park owner deliver a document that will be binding for the length of the tenancy (and any assumptions of that tenancy as allowed by the statute), cannot now overturn the statutory scheme that is in place throughout the state and amend existing contractual rights. (emphasis added)
The proposed rule challenged here "enlarges, modifies, or contravenes" portions of Chapter 723, Florida Statutes, to the same extent as the proposed rule in FMHA I. For those same reasons, it is invalid within the meaning of Section 120.52(8)(c), Florida Statutes.
The final issue to be addressed is the assertion that the subject proposed rule is "arbitrary and capricious" within the meaning of Section 120.52(8)(e), Florida Statutes. For all the reasons discussed above, the rule is arbitrary and capricious because it seeks to impose requirements and achieve ends that are different from and contrary to the requirements and the ends of the underlying statutory provisions. On the basis of the foregoing Findings of Fact and Conclusions of Law, it is
That Ridgewood Properties, Inc., is dismissed as a party to these proceedings.
That the Respondent's proposed rule 7D-31.002 is an invalid exercise of delegated legislative authority.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this day of January 1991.
MICHAEL M. PARRISH
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 29th day of January 1991.
ENDNOTES
1/ The experts testified to figures ranging from approximately $4,000 to approximately $10,000. The cost of a specific move probably varies greatly between those ranges due to a large number of variable factors.
2/ Several portions of Chapter 723, Florida Statutes, were modified during the 1990 legislative session, but none of those modifications bear on the validity of the proposed rule challenged here.
3/ This conclusion is based on notions of stare decisis and common sense; as the old saw goes, "If it ain't broke, don't fix it." The appropriateness of notions of stare decisis in administrative proceedings is reflected in Section 12O.68(12)(c), Florida Statutes, the effect of which is to require agencies to exercise their discretion in a manner consistent with prior actions unless deviation from prior actions is satisfactorily explained. The appropriateness of applying common sense in administrative proceedings is self-evident.
APPENDIX TO FINAL ORDER IN CASE NO. 90-3107RP
The following are the Hearing Officer's specific rulings on all proposed findings of fact submitted by all parties.
Findings proposed by Petitioner, Florida Manufactured Housing Association, Inc.: Paragraph 1: Accepted.
Paragraph 2: Accepted, including all of the subparagraphs designated "A"
through "I."
Paragraph 3: Accepted in substance.
Paragraph 4, 5, and 6: Accepted, with minor editorial revisions.
Paragraph 7: Accepted in substance, with most details omitted as subordinate and unnecessary.
Paragraph 8: Rejected as consisting primarily of generalized and vague commentary on part of the testimony, rather than a specific proposed finding. More specific findings have been made on this subject based on proposals by other parties.
Paragraph 9: Accepted in substance.
Unnumbered paragraph following paragraph 9: Rejected as subordinate and unnecessary details and as irrelevant to ultimate issues.
Findings proposed by Intervenor, MLH Property Managers, Inc.: Paragraph 1: Accepted.
Paragraph 2: Accepted in substance with some redundant material omitted. Paragraph 3: Accepted in substance.
Paragraph 4: First three sentences and last sentence are accepted. The remainder is rejected as constituting legal argument or conclusions of law, rather than proposed findings of fact.
Paragraphs, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15: Accepted. Paragraph 16: Accepted in substance.
Paragraph 17: Accepted.
Paragraph 18: Rejected as irrelevant.
Paragraphs 19, 20, and 21: Accepted in substance.
Paragraph 22: Rejected as constituting legal argument or conclusions of law rather than proposed findings of fact.
Paragraph 23: Accepted in substance.
Paragraph 24: Rejected as constituting legal argument or conclusions of law rather than proposed findings of fact.
Paragraph 25: First three sentences and last sentence rejected as constituting argument. The remainder is accepted.
Findings proposed by Respondent, DBR:
Paragraphs 1, 2, 3, 4, 5, 6, and 7: Accepted.
Paragraph 8: Accepted in substance with subordinate and unnecessary details omitted.
Paragraph 9: Accepted.
Paragraph 10: Accepted in substance.
Paragraphs 11, 12, 13, and 14: Rejected as irrelevant
Paragraphs 15, 16, 17, 18, 19, and 20: Accepted.
Paragraphs 21, 22, 23, 24, 25, and 26: Accepted in substance with subordinate and unnecessary details omitted.
Paragraphs 27, 28, and 29: Accepted.
Paragraphs 30 and 31: Accepted in substance with subordinate and unnecessary details omitted.
Paragraphs 32 and 33: Accepted.
Paragraph 34: First three sentences accepted. The remainder is rejected as constituting legal argument or conclusions of law.
Paragraphs 35 and 36: Accepted. Paragraph 37: Accepted in substance. Paragraphs 38, 39, and 40: Accepted.
Paragraphs 41 and 42: Accepted in substance with subordinate and unnecessary details omitted.
Paragraphs 43 and 44: Accepted.
Paragraph 45: Rejected as subordinate and unnecessary details.
Paragraph 46: First sentence is rejected as irrelevant. The remainder is rejected as constituting legal argument or conclusion of law.
Paragraphs 47 and 48: Rejected as constituting legal argument or conclusions of law.
Paragraph 49: Rejected as constituting subordinate and unnecessary details. Paragraphs 50 and 51: Accepted.
Paragraph 52: Rejected as constituting subordinate and unnecessary details. Paragraph 53: Accepted.
Paragraphs 54, 55, and 56: Rejected as constituting subordinate and unnecessary details.
Paragraph 57: Basic proposition accepted, but with most details omitted as subordinate and unnecessary.
Paragraph 58: First sentence accepted. The remainder is rejected as subordinate and unnecessary details.
Paragraphs 59, 60, 61, 62, and 63: Rejected as constituting subordinate and unnecessary details.
Paragraphs 64 and 65: Rejected as constituting summaries of testimony rather than proposed findings of fact; and, in any event, the substance of this paragraph consists of subordinate and unnecessary details.
Paragraphs 66 and 67: Rejected as constituting subordinate and unnecessary details.
Paragraph 68: For the most part, rejected as subordinate and unnecessary details. It is accepted that the cost of moving mobile homes is expensive, but not persuaded by exact figures testified to by witness.
Paragraph 69: Rejected as constituting subordinate and unnecessary details and as not fully supported by persuasive evidence.
Findings proposed by Intervenor, Federation of Mobile Home Owners of Florida, Inc..
Paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12: Accepted. Paragraph 13: Rejected as irrelevant.
Paragraphs 14, 15, 16, 17, 18, 19, and 20: Accepted.
Paragraphs 21 and 22: Accepted in substance. Paragraphs 23, 24, and 25: Accepted.
Paragraph 26: Rejected as constituting a conclusion of law rather than a proposed finding of fact.
Paragraph 27: Rejected as commentary on procedural details rather than proposed finding of fact.
Paragraphs 28 and 29: Accepted.
COPIES FURNISHED:
David D. Eastman, Esquire
Parker, Skelding, Labasky and Corry, Post Office Box 669
Tallahassee, Florida 32302
Daniel C. Brown, Esquire
Katz, Kutter, Haigler, Alderman, Davis, Marks, and Rutledge, P.A. Post Office Box 1877
Tallahassee, Florida 32302-1877
Debra Roberts, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007
Thomas Presnell, Jr., Esquire Lee Jay Colling, Esquire
Lee Jay Colling & Associates Suite 1107, First Union Tower
20 North Orange Avenue Orlando, Florida 32801
Carroll Webb, Executive Director Administrative Procedures Committee
120 Holland Building Tallahassee, Florida 32399-1300
Liz Cloud, Chief
Bureau of Administrative Code Room 1802, The Capitol Tallahassee, Florida 32399-0250
NOTICE OF RIGHT TO JUDICIAL REVIEW
PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
| Issue Date | Proceedings |
|---|---|
| Jan. 29, 1991 | Final Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 29, 1991 | DOAH Final Order | Proposed rule is invalid. Stare decisis applies in rule challenge cases. Constitutionality of proposed rules can still be challenged. |
