STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS ) REGULATION, DIVISION OF FLORIDA ) LAND SALES, CONDOMINIUMS AND ) MOBILE HOMES, )
)
Petitioner, )
)
vs. ) CASE NO. 90-4916
) GOSPEL CRUSADE, INC., d/b/a ) CHRISTIAN RETREAT, )
)
Respondent. )
)
)
DEPARTMENT OF BUSINESS ) REGULATION, DIVISION OF FLORIDA ) LAND SALES, CONDOMINIUMS AND ) MOBILE HOMES, )
)
Petitioner, )
)
vs. ) CASE NO. 90-4917
) COUNTRY RETREAT, INC., d/b/a ) CHRISTIAN RETREAT, )
)
Respondent. )
)
RECOMMENDED ORDER
A hearing was held in this case in Bradenton, Florida, on December 12, 1990, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.
APPEARANCES
For the Petitioner: Kathryn E. Price, Esquire
Department of Business Regulation
725 South Bronough Street Tallahassee, Florida 32399-1550
For the Respondent: Joseph C. Ferrell, Esquire Gospel Crusade, Ferrell and Ferrell, Chartered Incorporated 1402 Third Avenue West
Bradenton, Florida 34205
For the Respondent: Robert M. Fournier, Esquire Country Retreat. 1800 Second Street, Suite 806 Incorporated Sarasota, Florida 34236
and
James L. Turner, Esquire Williams, Parker, Harrison Dietz & Getzen
1550 Ringling Blvd.
Sarasota, Florida 34236 STATEMENT OF THE ISSUES
The issue for consideration herein is whether the Respondents, as former and current owner/operators respectively of Christian Retreat, should face administrative sanctions of any sort because of the misconduct alleged in the respective Notices to Show Cause entered as regarding each in these cases.
PRELIMINARY STATEMENT
By Notice to Show Cause dated June 6, 1990, as to Gospel Crusade, Inc., (Gospel), and June 11, 1990, as to Country Retreat, Inc., (Country), the Petitioner, Department of Business Regulation, Division of Land Sales, Condominiums and Mobile Homes, (Division), seeks to impose administrative sanctions against each Respondent for the allegedly unlawful increase in lot rentals and collection of those increases, prior to the delivery of an approved prospectus to each affected homeowner on May 1, 1986 and February 1, 1988, as to Gospel, and on February 1, 1989 as to Country, in violation of Section 723.031(7), Florida Statutes, and Rule 7D-31.001(15), F.A.C.; and in addition, alleged that Gospel increased lot rentals on May 1, 1986 with a defective increase notice, in violation of Section 723.037, Florida Statutes, and Rule 7D- 32.002(1), F.A.C. Petitioner also alleges that Country improperly collected increased rentals on February 1, 1989.
Thereafter, each Respondent submitted a request for formal hearing, and on August 3, 1990, the files were forwarded to the Division of Administrative Hearings for appointment of a Hearing Officer. After the parties' responses to the Initial Orders filed herein, on August 24, 1990, the undersigned, to whom the cases had been assigned, set the hearing in Bradenton for December 12, 1990 at which time it was held as scheduled.
At the hearing, Petitioner presented the testimony of Dr. Faye Mayberry, Chief, Bureau of Mobile Homes; Warren Schoder, General Manager of Christian Retreat; and Harold C. Hines, Martha Potteiger and Thomas Reinecke, all residents at Christian Retreat. Petitioner also introduced Petitioner's Exhibits 1 through 5. Respondent, Gospel, presented the testimony of Philip G. Derstine, pastor and senior partner in Gospel Crusade, Inc.; and Robert Griedrick, Walter Wirries, Chrysta A. Milligan and Jean Mulholland, all either current or former residents at Christian Retreat, and introduced Gospel Crusade's Exhibits A and B. Respondent, Country, presented the testimony of Robert K. Ruggles, III, the principal, sole stockholder and director, (owner) of Christian retreat Mobile Home Park.
A transcript was provided. Both the Division and Country submitted proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order. gospel did not submit Proposed Findings of Fact.
FINDINGS OF FACT
At all times pertinent to the issues herein, the Petitioner, Division, has been the state agency responsible for the regulation of mobile home parks in Florida. Gospel was the developer and former owner and operator of a facility, located on church property in Manatee County, Florida, on which mobile homes were parked, owned and operated by individuals other than Gospel members, and known as Christian Retreat. Country is the present owner and operator of the facility in question, having purchased it from Gospel on December 15, 1988.
The mobile home park in question contains 76 mobile home lots which are all rented or leased by the park owner to mobile home owners under oral rental agreements. As of June 13, 1986, all lots had been leased.
Occupants of the lots do and did not have to belong to the owning church nor be a part of its ministry. No formal lease was required, but it was understood that the occupant would pay the required lot rental for as long as the lot was occupied. Because of this loose arrangement, Gospel claims it was not offering mobile home lots for rent or lease and was not, therefore, a "mobile home park owner" as defined by the statute. The evidence is clear, however, that the arrangement was formalized between the park and the lot occupants and the land was owned by Gospel. Though the occupant could remain as long as he or she desired, so long as the lot rental was paid if the party was capable of paying, and the community's standards were met, the occupant did not own the lot and paid rent to Gospel for the use of the space.
There is also some indication that the amount paid by the occupants to Gospel was no more than was required to meet operating costs and included no profit to Gospel or return on equity. This payment was, however, except in those few cases where the occupant could not pay, a condition precedent to the occupant's remaining on the site and regardless of by what name called, was compensation for the use of the property. This is rent.
On June 13, 1986, the Division approved Prospectus No. 4102545P, submitted by Gospel. Gospel had previously delivered to park residents a notice of increase in monthly lot rental from $82.00 to $90.00 which was to be effective on May 1, 1986, but which did not so state in its body. It was a defective notice. The prospectus was not delivered by hand, sent by certified mail or left at the lot prior to the effective date of the increase and at least
46 of the 76 occupants did not receive it. According to Reverend Derstine, Gospel's minister and leader of the congregation, some discussion took place between Gospel personnel and some owners regarding those matters contained in the prospectus, and a copy was kept in the park office for review by anyone who wanted to look at it. Further, the park's communication system, both written and electronic, may have carried notices of the availability of the prospectus. However, no copies were ever distributed to the residents in general as is required by law.
The monthly lot rental was again increased, from $90.00 to $127.00, effective on February 1, 1988. This increase was preceded by written notice to all 76 lot occupants by Gospel prior to its implementation. Again, on February 1, 1989, Gospel, for the third time, increased lot rentals, this time from
$127.00 to $150.00 per month. No prospectus was delivered for either the February 1, 1988 or the February 1, 1989 increases by either Gospel or Country, which purchased the park from Gospel on December 15, 1988.
Though the February 1, 1989 increase was implemented by Gospel, which collected all monthly rentals paid by occupants through December, 1988, as of January 1, 1989, monthly lot rentals were collected by the new owner, Country. Prior to December 15, 1988, Country was not in any way involved in the operation, management or administration of the park.
Prior to purchasing the park on December 15, 1988, Mr. Robert K. Ruggles, III, sole stockholders of Country, solicited from Mr. Schoder, then manager of Christian Retreat, proof that the prospectus for the impending lot rate increase scheduled for February 1, 1989 had been approved by the State. That proof was delivered to him. Mr. Ruggles insists that he did all he could do, from a practical standpoint, to determine that the prospectus had been appropriately sent out to the lot occupants, short of actually polling all occupants to determine it had been received. While the Division does not agree with Ruggles' position, it presented no evidence to demonstrate what further actions he could have taken, and in light of his sworn evidence regarding approval of the prospectus, it is found he did all he could do, reasonably, to insure the correctness of the procedure.
When Mr. Ruggles subsequently found out there was a problem, even the Division concedes he took immediate steps to rectify it and agrees he was not enriched by the error. He has been cooperative with the Division at all times, and on February 5, 1990, the Division approved an amended prospectus for the February 1, 1989 rent increase. This approved prospectus was subsequently delivered to all residents by Country Retreat, Inc.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.
The operation of mobile home parks is governed by the provisions of Chapter 723, Florida Statutes; which was promulgated as an outgrowth of Chapter 83, Part III, of the statutes, to give mobile home owners some degree of protection against unfair practices by mobile home park operators.
Section 723.011 of the 1985 statute provides: (1)(a) In a mobile home park containing
26 or more lots, the park owner shall file a prospectus with the division prior to entering into an enforceable rental agreement .
* * *
(2) The park owner shall furnish a copy of the prospectus ... together with all the exhibits thereto to each prospective lessee. Delivery shall be made upon execution of the rental agreement or at the time of occupancy, whichever occurs first. However, the park owner is not required to furnish a copy of the prospectus ... if the tenancy is a renewal of a tenancy and the mobile home owner has previously received the prospectus....
Much the same requirements are incorporated within the provisions of Rule 7D-31.001, F.A.C. in which the requirement for a prospectus is outlined and where, at subparagraph (6) thereof is found the requirement for the park owner to describe the manner in which the lot rental amount may be raised. Specifically, at (6)(a), the rule requires notification to the mobile home owner of the increase at least 90 days prior thereto.
In this case, the evidence clearly indicates that a lot rent increase was implemented on May 1, 1986 without a prospectus having been furnished to the occupants. The prospectus relating to these agreements was not approved until June 13, 1986, almost 45 days after the increase became effective, and appears not to have been distributed to the home owners at all. The oral dissemination of news regarding the availability of the prospectus and the broadcasting of information over the park network of information similar to that contained in the prospectus is insufficient. In this regard, then, Gospel is in violation of both the rule and the statute for that increase.
Further, Gospel has been charged with a violation of Section 723.037, Florida Statutes, 1985, and Rule 7D-32.02(1), F.A.C. as regards its May 1, 1986 increase. The statute requires the owner to provide notice of a proposed lot rental increase at least 90 days prior to the effective date of the increase. The rule reiterates that requirement and further sets forth the minimum information required to be included in the notice, to include the present rental charge, the proposed change, and the effective date of the change. Here the evidence clearly shows that Gospel's May 1, 1986 notice did not contain all of that required information. As such, the increase constituted a violation of both the rule and the statute as alleged.
Gospel is also charged with increasing the lot rental on February 1, 1988 for at least 46 lot occupants without delivery of an approved prospectus prior to the increase, in violation of Section 723.031(7), Florida Statutes, 1987, and Rule 7D-31.001(15), F.A.C. The statute prohibits an owner from increasing lot rentals until an approved prospectus has been delivered, and the rule requires park owners to deliver the prospectus prior to increasing the lot rental amount. If the occupant has previously been given a prospectus, only amendments thereto need to be delivered. In the instant case, neither a new prospectus nor an amendment were delivered, and, as was previously concluded, neither the use of the park's radio/TV system to advise of the changes or meetings nor the keeping of a prospectus or amendments in the park office are sufficient to constitute compliance.
The current owner of the park, Country Retreat, Inc., which bought the property from Gospel in December, 1988, is also charged with increasing the lot rent on February 1, 1989 and with collecting the increased rent thereafter, prior to the delivery of an approved prospectus. A notice of the increase was sent to the occupants in what appears to be a timely manner. No prospectus was delivered for this increase, however, until after an amended prospectus was approved by the Division on February 5, 1990. The Division claims that because the increase, though passed and noticed by Gospel prior to the sale, was collected by Country before a prospectus was delivered, Country is in violation of the statute and rule. Country' contends that it did not increase the rent but merely collected, in good faith, an increase it felt had been lawfully implemented and noticed by its predecessor owner.
The Division has stipulated that Country was not the owner which took any of the actions to increase the rents, and, in fact, had no involvement whatever in the operation of the park until after the increase notices were delivered to the occupants. It cannot be held, therefore, that Country increased the rent as alleged. Further, when Country negotiated for the purchase of the park, Mr. Ruggles took reasonable pains to determine that all required pre- increase actions had been taken by the seller. While the Division disagrees, it has presented no evidence to demonstrate what more he could have done. Consequently, it is concluded that Country is not guilty of having increased the lot rent.
With regard to Country's "collection" of the increased rental without the prior delivery of the approved prospectus, there can be no doubt it did what is alleged. Country received lot rents for January 1, 1989 and the increased amount on February 1, 1989 from at least 46 occupants, and no approved prospectus had been delivered at the time. The question is whether, under the circumstances of this case, and considering Mr. Ruggles' efforts to determine the prospectus status prior to purchase, Country can be held to have violated the statute and the rule.
Country seeks to compare its position in this situation with that of a "holder in due course" of a negotiable instrument. This comparison is not valid, however. It would be unreasonable to require Country to poll each resident to insure a prospectus had been delivered. Mr. Ruggles inquired if a prospectus had been approved and was assured it had been. Since Country did not effect the increase but, acting in good faith, merely collected one month of the increase effected by Gospel, it did not violate either the statute or the rule alleged.
The Division seeks not only to force both Gospel and Country to make refunds to the lot occupants for the amounts improperly collected from them under the terms of the increases not properly preceded by delivery of a prospectus, but also to collect a civil penalty for the proven violations of Chapter 723.
It has been concluded previously herein that Country did not effect the increase for 1989 and cannot be held responsible for the reimbursement of monies collected under that increase, much less the increases in 1986 and 1988. No further action is appropriate, under these circumstances, against Country, and the Notice to Show Cause addressed to it should be dismissed.
As to Gospel, however, each increase in issue here was implemented without the prior delivery of an approved prospectus and this constitutes repeated violations of the provisions of Chapter 723, Florida Statutes. The Division seeks to assess a penalty of $1,000.00 for the 1986 increase and a total of $1,500.00 for the remaining violations, for a grand total of $2,500.00. This appears appropriate.
It also seeks to force repayment by Gospel of $407.00 to each of 46 occupants, (for a total of $18,722.00), for the 11 months of improper rent increase from February 1, 1988 through December 1, 1988. There was no evidence that this increase was unjustified or unsupported by business considerations. The action here was predicated upon Gospel's failure to conform to a statutory requirement for pre-increase delivery of a prospectus. In light of the fact that neither unfair practices nor unjust enrichment was either charged or proven, reimbursement is not appropriate.
Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:
RECOMMENDED that a Final Order be entered herein directing that:
The Notice to Show Cause against Country Retreat, Inc. be dismissed.
That Gospel Crusade, Inc. pay a civil penalty of $2,500.00.
RECOMMENDED this 1st day of February, 1991, in Tallahassee, Florida.
ARNOLD H. POLLOCK, 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 1st day of February, 1991.
APPENDIX TO RECOMMENDED ORDER IN CASES NO. 90-4916 & 90-4917
The following constituted my specific rulings pursuant to S 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.
FOR THE PETITIONER:
I.
Accepted and incorporated herein.
& 3. Accepted
Accepted and incorporated herein.
- 7. Accepted and incorporated herein.
Accepted.
& 10. Accepted and incorporated herein.
- 13. Accepted and incorporated herein except for the names of individual residents specified which are not included.
II.
Accepted.
- 5. Accepted and incorporated herein.
FOR THE RESPONDENT, COUNTRY:
1. & | 2. | Accepted and incorporated herein. | |
3. & | 4. | Accepted and incorporated herein. | |
5. | First sentence accepted and incorporated | herein. | |
Balance accepted. | |||
6. - | 8. | Accepted and incorporated herein. | |
9. - | 12. | Accepted and incorporated herein. | |
13. | Accepted and incorporated herein. | ||
14. - | 16. | Accepted. | |
17. | Accepted and incorporated herein. | ||
18. | Accepted. | ||
19. | Accepted and incorporated herein. |
COPIES FURNISHED:
Kathryn E. Price, Esquire Department of Business
Regulation
725 South Bronough Street Tallahassee, Florida 32399-1550
Joseph C. Ferrell, Esquire Ferrell and Ferrell, Chartered 1402 Third Avenue West Bradenton, Florida 34205
Robert M. Fournier, Esquire 1800 Second Street, Suite 806
Sarasota, Florida 34236
James L. Turner, Esquire Williams, Parker, Harrison
Deitz & Getzen 1550 Ringling Blvd.
Sarasota, Florida 34236
E. James Kearney Director
Division of Florida Land Sales, Condominiums and Mobile Homes
725 South Bronough Street Tallahassee, Florida 32399-1000
Joseph A. Sole General Counsel
Department of Business Regulation
725 South Bronough Street Tallahassee, Florida 32399-1000
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BUSINESS REGULATION
DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES 725 SOUTH BRONOUGH STREET - JOHNS BUILDING
TALLAHASSEE, FLORIDA 32399-1007
DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES,
Petitioner, DOAH CASE NO. 90-4916 vs. DBR Case No. MH90096
GOSPEL CRUSADE, INC. d/b/a CHRISTIAN RETREAT,
Respondent.
DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES,
Petitioner,
vs. DBR Case No. MH90I20
COUNTRY RETREAT, INC. d/b/a CHRISTIAN RETREAT,
Respondent.
/
FINAL ORDER
Pursuant to Notice, a consolidated formal hearing was conducted in the above captioned case on December 12, 1990, in Bradenton, Florida, before the Honorable Arnold H. Pollock, a duly designated hearing officer of the Division
of Administrative Hearings. The Hearing Officer entered a Recommended Order dated February 1, 1991. Neither Respondent has filed exceptions to the Recommended Order.
ISSUES AND BACKGROUND
This is a consolidated case involving both the present and prior owners of the Country Retreat Mobile Home Park: (f/k/a Christian Retreat Mobile Home Park). The case involves the issue of whether the prior owner, Respondent, Gospel Crusade, Inc., (hereinafter Gospel) is guilty of the violations alleged in the Notice to Show Cause dated June 6, 1990, issued against Gospel by the Petitioner, Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (hereinafter the Division)
Gospel has been charged with renewing the existing rental agreements of at least thirty-seven (37) mobile homeowners by implementing a lot rental amount increase. Gospel has also been charged with increasing the lot rental amount on May 1, 1986, with a rent increase notice that did not provide for an effective date or disclose the present rental charge for the mobile home lot.
Gospel has also been charged with increasing the lot rental amount of at least forty-six mobile homeowners on February 1, 1988, without the delivery of an approved prospectus prior to the Increase.
The case also involves the issue of whether the present park owner, Respondent Country Retreat, Inc. (hereinafter `Country') is guilty of the violations alleged in the Notice to Show Cause dated June 11, 1990, issued by the Division. Respondent, Country, has been charged with increasing the lot rental amount of at least forty-six mobile homeowners on February 1, 1989, by twenty-three dollars ($23.00) per month without delivering each affected mobile homeowner a prospectus approved by the Division.
Country also has been charged with collecting lot rental amount increases from at least forty-six mobile homeowners which increases were imposed by the previous owner, Gospel Crusade, Inc. prior to the delivery of an approved prospectus. The homeowners' lot rental amounts were increased on May 1, 1986 and February 1, 1988, prior to delivery of an approved prospectus.
At the final hearing in this matter, the Division presented the testimony of six (6) witnesses: Faye Mayberry, Chief of the Bureau of Mobile Homes; Warren Schoder, General Manager of Gospel Crusade, Inc.; and the following homeowners: Harold Hines, Martha Potteiger, Thomas Reinecke and Carmella Campora. The Division introduced six (6) exhibits into evidence which are referred to herein as Petitioner's Exhibits 1-6.
Gospel presented the testimony of five (5) witnesses; Phillip Derstine, Robert Friedrich, Walt Wirries, Crystal Milligan, and Jean Mulholland. Gospel introduced two (2) exhibits into evidence which are referred to herein as Gospel Crusade Exhibits A and B. Country presented the testimony of Mr. Robert Ruggles and did not introduce into evidence any exhibits.
After examining the Recommended Order and reviewing the record, it is HEREBY ORDERED:
FINDINGS OF FACT
The Findings of Fact made by the hearing officer in the Recommended Order are adopted as the Findings of Fact by the Division:
At all times pertinent to the issues herein, the Petitioner, Division, has been the state agency responsible for the regulation of mobile home parks in Florida. Gospel was the developer and former owner and operator of a facility, located on church property in Manatee County, Florida, on which mobile homes were parked, owned and operated by individuals other than Gospel members, and known as Christian Retreat. Country is the present owner and operator of the facility in question, having purchased it from Gospel on December 15, 1988.
The mobile home park in question contains 76 mobile home lots which are all rented or leased by the park owner to mobile home owners under oral rental agreements. As of June 13, 1986, all lots had been leased.
Occupants of the lots do and did not have to belong to the owning church nor be a part of its ministry. No formal lease was required, but it was understood that the occupant would pay the required lot rental for as long as the lot was occupied. Because of this loose arrangement, Gospel claims it was not offering mobile home lots for rent or lease and was not, therefore, a "mobile home park owner" as defined by the statute. The evidence is clear, however, that the arrangement was formalized between the park and the lot occupants, and the land was owned by Gospel. Though the occupant could remain as long as he or she desired, so long as the lot rental was paid, if the party was capable of paying, and the community's standards were met, the occupant did not own the lot and paid rent to Gospel for the use of the space.
There is also some indication that the amount paid by the occupants to Gospel was no more than was required to meet operating costs and included no profit to Gospel or return on equity. This payment was, however, except in those few cases where the occupant could not pay, a condition precedent to the occupant's remaining on the site and regardless of by what name called, was compensation for the use of the property. This is rent.
On June 13, 1986, the Division approved Prospectus No. 4102545P, submitted by Gospel. Gospel had previously delivered to park residents a notice of increase in monthly lot rental from $82.00 to $90.00 which was to be effective on May 1, 1986, but which did not so state in its body. It was a defective notice. The prospectus was not delivered by hand, sent by certified mail or left at the lot prior to the effective date of the increase and at least
46 of the 76 occupants did not receive it. According to Reverend Derstine, Gospel's minister and leader of the congregation, some discussion took place between Gospel personnel and some owners regarding those matters contained in the prospectus, and a copy was kept in the park office for review by anyone who wanted to look at it. Further, the park's communication system, both written and electronic, may have carried notices of the availability of the prospectus. However, no copies were ever distributed to the residents in general as is required by law.
The monthly lot rental was again increased, from $90.00 to $127.00, effective on February 1, 1988. This increase was preceded by written notice to all 76 lot occupants by Gospel prior to its implementation. Again, on February 1, 1989, Gospel, for the third time, increased lot rentals, this time from
$127.00 to $150.00 per month. No prospectus was delivered for either the February 1, 1988 or the February 1, 1989 increases by either Gospel or Country, which purchased the park from Gospel on December 15, 1988.
Though the February 1, 1989 increase was implemented by Gospel, which collected all monthly rentals paid by occupants through December, 1988, as of January 1, 1989, monthly lot rentals were collected by the new owner, Country. Prior to December 15, 1988, Country was not in any way involved in the operation, management or administration of the park.
Prior to purchasing the park on December 15, 1988, Mr. Robert K. Ruggles, III, sole stockholder of Country, solicited from Mr. Schoder, then manager of Christian Retreat, proof that the prospectus for the impending lot rate increase scheduled for February 1, 1989 had been approved by the State. That proof was delivered to him. Mr. Ruggles insists that he did all he could do, from a practical standpoint, to determine that the prospectus had been appropriately sent out to the lot occupants, short of actually polling all occupants to determine it had been received. While the Division does not agree with Ruggles' position, it presented no evidence to demonstrate what further actions he could have taken, and in light of his sworn evidence regarding approval of the prospectus, it is found he did all he could do, reasonably, to insure the correctness of the procedure.
When Mr. Ruggles subsequently found out there was a problem, even the Division concedes he took immediate steps to rectify it and agrees he was not enriched by the error. He has been cooperative with the Division at all times, and on February 5, 1990, the Division approved an amended prospectus for the February 1, 1989 rent increase. This approved prospectus was subsequently delivered to all residents by Country Retreat, Inc.
CONCLUSIONS OF LAW
The Conclusions of Law in paragraphs 1-7 inclusive, made by the Hearing Officer in the Recommended Order are approved, adopted, and incorporated herein as Conclusions of Law by the Division:
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.
The operation of mobile home parks is governed by the provisions of Chapter 723, Florida Statutes, which was promulgated as an outgrowth of Chapter 83, Part III, of the statutes, to give mobile home owners some agree of protection against unfair practices by mobile home park operators.
Section 723.011 of the 1985 statute provides:
(1)(a) In a mobile home park containing 26 or more lots, the park owner shall file a prospectus with the Division prior to entering into an enforceable rental agreement.
(2) The park owner shall furnish a copy of the prospectus . . . together with all the exhibits thereto to each prospective lessee. Delivery shall be made upon execution of the rental agreement or at the
time of occupancy, whichever occurs first. However, the park owner is not required to furnish a copy of the prospectus . . . if the tenancy is a renewal of a tenancy and the mobile home owner has previously received the prospectus.
Much the same requirements are incorporated within the provisions of Rule 7D-31.001, F.A.C. in which the requirement for a prospectus is outlined and where, at subparagraph (6) thereof is found the requirement for the park owner to describe the manner in which the lot rental amount may be raised. Specifically, at (6)(a), the rule requires notification to the mobile home owner of the increase at least 90 days prior thereto.
Much the same requirements are incorporated within the provisions of Rule7D-31.001, F.A.C. in which the requirement for a prospectus is outlined and where, at subparagraph (6) thereof is found the requirement for the park owner to describe the manner in which the lot rental amount may be raised. Specifically, at (6)(a), the rule requires notification to the mobile home owner of the increase at least 90 days prior thereto.
In this case, the evidence clearly indicates that a lot rent increase was implemented on May 1, 1986 without a prospectus having been furnished to the occupants. The prospectus relating to these agreements was not approved until June 13, 1986, almost 45 days after the increase became effective, and appears not to have been distributed to the home owners at all. The oral dissemination of news regarding the availability of the prospectus and the broadcasting of information over the park network of information similar to that contained in the prospectus is insufficient. In this regard, then, Gospel is in violation of both the rule and the statute for that increase.
Further, Gospel has been charged with a violation of Section 723.037, Florida Statutes, 1985, and Rule 7D-32.02(1), F.A.C. as regards its May 1, 1986 increase. The statute requires the owner to provide notice of a proposed lot rental increase at least 90 days prior to the effective date of the increase. The rule reiterates that requirement and further sets forth the minimum information required to be included in the notice, to include the present rental charge, the proposed change, and the effective date of the change. Here the evidence clearly shows that Gospel's May 1, 1986 notice did not contain all of that required information. As such, the increase constituted a violation of both the rule and the statute as alleged.
Gospel is also charged with increasing the lot rental on February 1, 1988 for at least 46 lot occupants without delivery of an approved prospectus prior to the increase, in violation of Section 723.031(7), Florida Statutes, 1987, and Rule 7D-31.001(15), F.A.C. The statute prohibits an owner from increasing lot rentals until an approved prospectus has been delivered, and the rule requires park owners to deliver the prospectus prior to increasing the lot rental amount. If the occupant has previously been given a prospectus, only amendments thereto need to be delivered. In the instant case, neither a new prospectus nor an amendment were delivered, and, as was previously concluded, neither the use of the park's radio/TV system to advise of the changes or meetings nor the keeping of a prospectus or amendments in the park office are sufficient to constitute the compliance
The current owner of the park, Country Retreat, Inc., which bought the property from Gospel in December, 1988, is also charged with increasing the lot rent on February 1, 1989 and with collecting the increased rent thereafter, prior to the delivery of an approved prospectus. A notice of the increase was sent to the occupants in what appears to be a timely manner. No prospectus was delivered for this increase, however, until after an amended prospectus was approved by the Division on February 5, 1990. The Division claims that because the increase, though passed and noticed by Gospel prior to the sale, was collected by Country before a prospectus was delivered, Country is in violation of the statute and the rule. Country contends that it did not increase the rent but merely collected, in good faith, an increase it felt had been lawfully implemented and noticed by its predecessor owner.
The Division rejects the conclusion of law in paragraph 8, in which the Hearing Officer stated that because Country had no involvement in the operation of the park until after the notice of the February, 1989, increase was delivered; the Respondent did not increase the rent as alleged. Section 723.031(7), Florida Statutes, states that no park owner may increase the lot rental amount until an approved prospectus had been delivered if one is required. This section cannot be interpreted as meaning that merely providing notice of an increase violates the statute. The event triggering a violation of Section 723,031(7), Florida Statutes, is the actual collection of an increase in lot rental prior to delivery of an approved prospectus. Country, by failing to deliver copies of the approved prospectus to each resident prior to collecting the February 1, 1989, increase in lot rental, violated Section 23.031(7), Florida Statutes.
The Division approves, adopts and incorporates herein the Hearing Officer's Conclusion of Law in paragraph 9:
With regard to Country's "collection" of the increased rental without the prior delivery of the approved prospectus, there can be no doubt it did what is alleged. Country received lot
rents for January 1, 1989, and the increased amount on February 1, 1989 from at least 46 occupants,
and no approved prospectus had been delivered
at the time. The question is whether, under the circumstances of this case, and considering Mr.
Ruggles' efforts to determine the prospectus status prior to purchase, Country can be held to have violated the statute and the rule.
The Division rejects the conclusion of law stated in paragraph 10 in which the Hearing Officer concluded that it would be unreasonable to require Country to poll each resident too insure a prospectus had been delivered. The Hearing Officer also stated that Country inquired if a prospectus had been approved; was assured that it had been, and, acting in good faith, merely collected one month of the increase effected by Gospel. The Hearing Officer concluded that Country neither violated the statute or rule as alleged. Country stipulated to the fact that it collected increased lot rentals for the thirteen month period beginning February, 1990, from all 76 homeowners. As earlier stated, the collection of increased lot rentals prior to delivery of a prospectus triggers a violation of Section 723.031(7), Florida Statutes. Furthermore, Country's good faith efforts in determining whether a prospectus was approved are not relevant to determining whether a prospectus was approved are not relevant to determining whether a violation of Section 723.031(7),
Florida Statutes, has occurred. That section requires delivery of an approved prospectus prior to lot rental increases, thus the question of whether that section was violated must focus on whether an approved prospectus was delivered, not merely whether the prospectus was approved.
The Division approves, adopts, and incorporates herein the Hearing Officer's Conclusion of Law in paragraph 11:
The Division seeks not only to force both Gospel and Country to make refunds to the lot occupants for the amounts improperly collected from them under the terms of the increases not properly preceded by delivery of a prospectus, but also to collect a civil penalty for the proven violation of Chapter 723.
The Division rejects the Hearing Officer's conclusions of Law in paragraph 12 that Country did not effect the February, 1989 increase and thus cannot be held responsible for reimbursement of monies collected under that increase, and that the Notice to Show Cause should be dismissed. Country violated Section 723.031(7), Florida Statutes, and Rule 7D-31.001(15), Florida Administrative Code, by collecting increased amounts of lot rental beginning February, 1989 through February, 1990 prior to delivery of an approved prospectus. Because Country Retreat, Inc., violated Chapter 723, Florida Statutes, the Division, pursuant to its powers under Section 723.006, Florida Statutes, could require reimbursement of the funds collected in violation of the statute. However, after a review of the entire record and based on the specific facts of this case, the Division is unable to cite with particularity from the record sufficient reasons to justify increasing the recommended penalty by requiring Country to reimburse the funds collected in violation of Chapter 723, Florida Statutes. The Division thus cannot meet the standard required by Section 120.57(1)(b)10, Florida Statutes.
The Division approves, adopts and incorporates herein the Hearing Officer's Conclusion of Law stated in paragraph 13:
As to Gospel, however, each increase in issue here was implemented without the prior delivery of an approved prospectus and this constitutes repeated violations of the provisions of Chapter 723, Florida Statutes. The Division seeks to assess a penalty Of $1,000.00 for the 1986 increase and a total of $1,500.00 for the remaining violations, for a grand total of
$2,500.00. This appears appropriate.
The Division rejects the Hearing Officer's conclusion of law stated in paragraph 14 that reimbursement by Respondent, Gospel of the amounts collected in violation of Chapter 723, Florida Statutes, is not appropriate because neither unfair practices nor unjust enrichment was either charged or proven. Requiring reimbursement of the lot rental increase collected by Gospel would be appropriate because the money was collected in violation of the Chapter 723, Florida Statutes. The Division, pursuant to its powers under Section 723.006, Florida Statutes, need not charge or prove unfair practices or unjust enrichment in order to require reimbursement of funds collected in violation of Chapter
723, Florida Statutes. However, after review of the entire record, and based on the specific facts of this case, the DIVISION is unable to cite, with particularity from the record sufficient reasons to justify increasing the recommended penalty by requiring Gospel to reimburse the funds collected in violation of Chapter 723, Florida Statutes, and thus cannot meet the standard required by Section 120.57(1)(b)10, Florida Statutes.
The undersigned Division Director has reviewed the entire record in this case and has rejected the hearing officer's conclusions of law in paragraphs 8, 10, and 12, and made the affirmative finding that Country is guilty of violating section 723.031(7), Florida Statutes, and Rule 7D- 31.001(15), Florida Administrative Code. Country Retreat, for its violation of Chapter 723, Florida Statutes, and the rules promulgated thereunder is fined One Thousand, Five Hundred Dollars ($1,500.00) in civil penalties. This increase in the recommended civil penalty is based on the following citations from the record:
Country Retreat, Inc. stipulated to the fact that it collected the increased lot rental from
all seventy-six (76) homeowners in the park beginning February 1, 1989. Transcript, Volume
II, pp. 119-120.
Mr. Ruggles, sole stockholder of Country Retreat, Inc. testified that he did not inquire of Gospel Crusade, Inc. as to whether the approved prospectus was delivered to homeowners. Transcript, Volume II, p. 249.
ORDER
Based upon the adopted Findings of Fact and the Conclusions of Law stated above, IT IS HEREBY ORDERED:
Respondent, Gospel Crusade, Inc. shall, within thirty (30) days from the date of this Final Order, remit a certified check payable to the Division of Florida Land Sales, Condominium and Mobile Homes Trust Fund in the amount of Two Thousand Five Hundred Dollars ($2,500.00). The above-stated amount represents civil penalties for the Respondent's violations of Chapter 723, specifically, the Respondent increased the lot rental amounts of homeowners in the Christian Retreat Mobile Home Park on or around Nay, 1986, with a notice which did not comply with Section 723.011, Florida Statutes (1985). Gospel also increased the lot rental amount on or around February 1, 1988, prior to delivery of an approved prospectus, in violation of Section 723.031(7), Florida Statutes.
Respondent, Country Retreat, Inc., is guilty of violating Section 723.031(7), Florida Statutes. Respondent shall remit a certified check payable to the Division of Florida Land Sales, Condominiums and Mobile Homes Trust fund In the amount of One Thousand, Five Hundred Dollars ($1,500.00) in civil penalty for its violations of Chapter 723, Florida Statutes, within thirty (30) days of the date of this Final Order.
DONE AND ORDERED this 8 day of May , 1991.
HENRY M. SOLARES, DIRECTOR
Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business Regulation State of Florida
RIGHT TO APPEAL
THIS FINAL ORDER CONSTITUTES FINAL AGENCY ACTION AND MAY BE APPEALED BY RESPONDENT PURSUANT TO SECTION 120.68, FLORIDA STATUTES AND RULE 9.110 FLORIDA RULES OF APPELLATE PROCEDURE BY FILING A NOTICE OF APPEAL CONFORMING TO THE REQUIREMENTS OF RULE 9.110(d), FLORIDA RULES OF APPELLATE PROCEDURE, BOTH WITH THE APPROPRIATE DISTRICT COURT OF APPEAL, ACCOMPANIED BY THE APPROPRIATE FILING FEE, AND WITH CAROLYN CANNON, DOCKET CLERK FOR THE DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HONES, WITHIN THIRTY (30) DAYS OF THE RENDITION OF THIS FINAL ORDER.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished by U.S. Certified Mail to Joseph Ferrell, Esquire, 1402 Third Avenue West, Bradenton, Florida 34205; and Robert Fournier, Esquire, 1800 Second Street, Suite 806, Sarasota, Florida 34236, this 8 day of May_, 1991.
CAROLYN ANNON, Docket Clerk
Copies furnished by U.S. Mail:
Honorable Arnold H. Pollock, Hearing Officer Division of Administrative Hearings
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550 Copies furnished to:
Kathryn E. Price Assistant General Counsel
Faye S. Mayberry, Chief Bureau of Mobile Homes
| Issue Date | Proceedings |
|---|---|
| Jun. 22, 1992 | Final Order filed. |
| Feb. 01, 1991 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| May 08, 1991 | Agency Final Order | |
| Feb. 01, 1991 | Recommended Order | Mobile home park run by church was commercial enterprise that fell under rules of DLSCMH and misconduct in operation supports fine if not forced repay. |
