STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LAKELAND MEMORIAL GARDENS, INC. )

)

Petitioner, )

)

vs. ) Case No. 97-2840RX

) DEPARTMENT OF BANKING AND FINANCE, ) BOARD OF FUNERAL AND CEMETERY ) SERVICES, )

)

Respondent, )

)

TRINITY MEMORIAL GARDENS OF )

LAKELAND, INC., and FLORIDA )

CEMETERY ASSOCIATION, INC., )

)

Intervenors. )

)

FINAL ORDER

Upon due notice, this matter was scheduled for a formal hearing on August 11, 1997, but prior to the hearing the parties submitted a stipulation of the facts which obviated the need for a hearing. Thereafter, the hearing was cancelled, and the matter proceeded forward on the stipulated facts.

APPEARANCES

For Petitioner: William E. Williams, Esquire

Huey, Guilday and Tucker, P.A. Highpoint Center, Suite 900

106 College Avenue Tallahassee, Florida, 32301

P. Bruce Culpepper, Esquire Akerman, Senterfitt and Eidson

216 South Monroe Street Suite 200

Tallahassee, Florida 32302-2555

For Respondent: Theresa G. Walsh, Esquire Department of Department of Banking and Finance Banking and 101 East Gaines Street

Finance Tallahassee, Florida 32399-0350

For Intervenor: Chris H. Bentley, Esquire Trinity Diane Tremor, Esquire

Memorial John L. Wharton, Esquire Gardens of Rose, Sundstrom and Bentley Lakeland, Inc. 2548 Blairstone Pines Drive

Tallahassee, Florida 32301

For Intervenor: Ross A. McVoy, Esquire

Florida Eckert, Seamans, Cherin and Mellott Cemetery Hospitality Square, Third Floor Association, 200 West College Avenue

Inc. Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Are Rules 3F-5.004(4)(b)1. and 2., Florida Administrative Code, an invalid exercise of delegated legislative authority?

PRELIMINARY MATTERS

By Petition filed on June 11, 1997, Lakeland Memorial Gardens, Inc., sought an administrative determination of the invalidity of Rule 3F-5.004(4), Florida Administrative Code. On July 8 1997, Trinity Memorial Gardens of Lakeland, Inc., and the Florida Cemetery Association, Inc., were granted leave to intervene in this proceeding. This matter was continued from its originally scheduled date of July 15, 1997, and rescheduled for August 11, 1997, after Lakeland Memorial Gardens, Inc., was granted permission to amend its Petition. Thereafter, the parties agreed to submit various fact stipulations which obviated the need for a hearing. The hearing scheduled for

August 11, 1997, was cancelled; the stipulations were filed; and the parties' proposed final orders were timely received.

FINDINGS OF FACT

The following are the stipulated facts:

1. On or about September 15, 1995, Trinity Memorial Gardens of Lakeland, Inc., a Florida corporation, filed an application to organize a new cemetery company to be located at the Northwest corner of Mall Hill and Griffen Roads in Polk County, Florida.

2. By publication in the Florida Administrative Weekly on March 29, 1996, the State of Florida, Department of Banking and Finance issued a Notice of Intent to Approve the Application for a New Cemetery Company submitted by Trinity Memorial Gardens of Lakeland, Inc.

3. On April 18, 1996, Lakeland Memorial Gardens, Inc., a licensed Florida cemetery, located at 2126 South Bartow Highway, Lakeland, Polk County, Florida, filed a Petition for Formal Proceeding pursuant to Section 120.57, Florida Statutes, to contest the proposed action of the Department to approve the proposed new cemetery. On June 24, 1997, the Florida Cemetery Association, Inc., filed a Petition to Intervene which was granted July 8, 1997.

4. In reviewing an application for a license for a new cemetery, the Department is required to determine whether there is a need for the new cemetery in accordance with requirements of Sections 497.005(28) and 497.201(3), Florida Statutes, and Rule 3F-5.004(4), Florida Administrative Code.

5. Rule 3F-5.004(4), Florida Administrative Code, has been in existence since approximately 1975, and was last amended on October 23, 1991. Rule 3F-5.004(4), Florida Administrative Code, for purposes of this proceeding, is a rule proposed and adopted by the Department.

6. In reviewing the application filed by Trinity the Department purported to apply Rule 3F-5.004(4)(b)2., Florida Administrative Code, in making a determination of need on the application filed by Trinity Memorial Gardens of Lakeland, Inc.

7. In 1993, the Florida Legislature defined for the first time the term “community” in Section 497.005(28), Florida Statutes, by passing Chapter 93-339, Laws of Florida.

8. Rule 3F-5.004(4), Florida Administrative Code, has not been amended since the passage of Chapter 93-339, Laws of Florida.

9. The Department of Banking and Finance has not implemented the definition of “community” contained in Rule 3F-5.004(4)(b)1., Florida Administrative Code, in a

   determination of need under Section 497.201(3), Florida Statutes, since the effective date of Chapter 93-339, Laws of Florida. It is the Department’s position that the definition of “community” contained in Section 497.005(28), Florida Statutes, “superseded” or codified the definition of “community” contained in

   Rule 3F-5.004(4)(b)1., Florida Administrative Code.

   
   

10. The Department interprets the requirements of

    
    

    Rule 3F-5.004(4)(b)2., Florida Administrative Code, to mean that

    only those cemeteries located within a twelve mile radius of a proposed new cemetery will be considered in determining need for a new cemetery. This interpretation by the Department has been utilized since October 18, 1990.

11. In making a determination of need, the Department uses a fifteen-mile radius to determine the projected number of burial spaces needed in the “community” for a period of thirty years.

12. In determining the “adequacy” of existing cemetery facilities under Section 497.201(3), Florida Statutes, the Department uses a twelve-mile radius to determine the number of spaces “available” for a period of thirty years and excludes from consideration all existing licensed or unlicensed cemeteries within a fifteen-mile radius but outside a twelve-mile radius of the proposed new cemetery.

13. Use of twelve-mile radius, as opposed to a fifteen-mile radius, for the examination of the adequacy of existing facilities pursuant to Section 497.201(3), could, and has in the past, caused the exclusion of licensed cemeteries in the area outside of twelve miles but inside of fifteen miles.

14. The Department noticed in the Florida Administrative Weekly the following:

    1. Notice of Proposed Rules 3D-30.0051, 3D-30.0052,

       
       

       3D-30.0053, 3D-30.0054, Volume 22, Number 37, September 13, 1996.

       
       

    2. Notice of Proposed Rule 3D-30.0055, Volume 22, Number 40, 5665, October 4, 1996.

    3. Notice of Withdrawal of Proposed Rules No. 3D-30.0051, 3D-30.0052, 3D-30.0053, 3D-30.0054, Volume 23, Number 15, 1900, April 11, 1997.

    4. Notice of Change, Rule 3D-30.0055, Volume 23, Number 15, April 11, 1997.

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, this proceeding pursuant to Section 120.56(1), Florida Statutes

    (Supp. 1996.).

    
    

16. Lakeland Memorial Gardens, Inc.; Trinity Memorial Gardens of Lakeland, Inc.; and the Florida Cemetery Association, Inc., have each established that they are substantially affected by these rules and thereby have standing to challenge the rules.

17. While the parties have stipulated to certain facts, it is the function of the Administrative Law Judge to determine which facts are relevant to this proceeding. Other than those facts found herein, the remaining facts set forth in the parties' Stipulation are determined to be irrelevant to the adjudication of this cause.

18. Lakeland Memorial Gardens, Inc., bears the burden of proving by a preponderance of the evidence that the challenged rules are an invalid exercise of delegated legislative authority. Agrico Chemical Company vs. Department of Environmental Regulation, 365 So. 2d 759 (1st DCA Fla. 1979). Lakeland Memorial Gardens, Inc., has met that burden as discussed below.

19. Section 120.56(1)(a), Florida Statutes, authorizes any substantially affected person to seek administrative determination that an existing rule is an invalid exercise of delegated legislative authority. Section 120.52(8), Florida Statues, provides in pertinent part:

    (8) "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 of the following applies:

    * * *

    (b) The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(3)(a)1.;

    c) The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(3)(a)1.;

    1. The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency;

    2. The rule is arbitrary or capricious;

    3. The rule is not supported by competent substantial evidence . . . . (emphasis added)

    
    

20. Lakeland Memorial Gardens, Inc., contends that the challenged rules exceed the Department's grant of rulemaking authority and enlarge, modify, or contravene the provisions of Sections 497.005(28) and 497.201(3), Florida Statutes.

21. Section 497.103(1), Florida Statutes, authorizes the Department to adopt rules not inconsistent with law as may be necessary to carry out the duties and authority conferred upon the Department by Chapter 497, Florida Statutes, as may be necessary to protect the health, safety, and welfare of the public. The Department has identified Section 497.201, Florida Statutes, among others not involved in this proceeding, as the law being implemented.

22. Rules 3F-5.004(4)(b)1. and 2., Florida Administrative Code, constitute the rules challenged in this proceeding, and provide:

    (b) In the investigation to determine need for a new cemetery the department shall consider the following criteria:

    1. The community in which the cemetery is to be located shall be defined for the purpose of seeking authority to organize a cemetery pursuant to Chapter 497, F.S., as the smallest area contiguous to the proposed cemetery from which approximately seventy- five percent of sales of burial spaces are expected to be derived.

    2. After the community is determined, the Department shall consider the adequacy of the existing facilities by obtaining from all profit, non-profit, religious, and municipal cemeteries, that would also derive the majority of their sales from the same community as the applicant, the number of burial spaces available in ground burials, lawn crypts, mausoleums, including contemplated mausoleums structures in which sales have been made, requiring construction within five years from date of sale, plus unplatted reserve acreage as stated on the annual report of cemetery estimated at 1200 burial spaces per acre. (emphasis added)

    The above rules were adopted prior to the enactment of Chapter 93-399, Laws of Florida, wherein the legislature amended Section 497.201, Florida Statutes, and for the first time defined "community" in Section 497.005(28), Florida Statutes, and these rules have not been amended or repealed since that time.

23. Section 497.201(3), Florida Statutes, authorizes the Department of Banking and Finance to make a determination regarding the extent to which there is a need for new cemeteries, and provides in pertinent part:

    (3) The department shall determine the need for a new cemetery by considering the adequacy of existing cemetery facilities, licensed and unlicensed, within the community

    . . . . (emphasis added)

24. Section 497.005(28), Florida Statutes, defines "community" as follows:

    (28) "Community" means the area within a 15-mile radius surrounding the location or proposed location of a cemetery. (emphasis added)

25. The above definition of community is clear and unambiguous. Clearly, the legislature intended the community to be a specific geographic area (the area within a 15-mile radius), and not an area to be determined by where the proposed cemetery may derive a specific percentage of its burial sales as is contemplated by Rule 3F-5.004(4)(b)1., Florida Administrative Code. Conceivably, using a percentage of burial sales to determine the community for a proposed cemetery could result in the community exceeding the 15-mile radius. Likewise, the statutory definition of community does not contemplate an area within the 15-mile radius that is smaller than the total area within the 15-mile radius. The legislature has so defined "community" that it is subject only to one interpretation. Thus, Rule 3F-5.004(4)(b)1., Florida Administrative Code, impermissibly enlarges, modifies, or contravenes the definition of "community" as defined in Section 497.005(28), Florida Statutes.

26. Section 497.201(3), Florida Statutes, requires the Department to determine the need for a new cemetery by considering the adequacy of existing facilities, licensed and unlicensed, within the community. Having determined that the community is the area within the 15-mile radius, there is no language in Chapter 497, Florida Statutes, specifically, Sections 497.005(28) or 497.201(3), Florida Statutes, which authorizes ,or could be reasonably interpreted to authorize, the Department to restrict its consideration of the adequacy of the existing

    facilities to only those facilities that derive a majority of their sales from the same community as the proposed cemetery, as Rule 3F-5.004(4)(b)2., Florida Administrative Code, does.

    Therefore, Rule 3F-5.004(4)(b)2., Florida Administrative Code, impermissibly enlarges, modifies, or contravenes Sections 497.005(28) and 497.201(3), Florida Statutes.

27. Rules 3F-5.0094(4)(b)1. and 2., Florida Administrative Code, are an invalid exercise of delegated legislative authority in that they go beyond the powers, functions, and duties delegated to the Department in that: (a) they exceed the Department's grant of rulemaking authority; and (b) enlarge, modify, or contravene Sections 497.005(28) and 497.201(3), Florida Statutes.

ORDER

Based on the foregoing, it is hereby,

ORDERED that Rules 3F-5.004(4)(b)1. And 2., Florida Administrative Code, are invalid exercises of delegated legislative authority. The Division of Administrative Hearings retains jurisdiction to determine the issue of attorneys’ fees under Section 120.595(3), Florida Statutes, upon proper motion.

DONE AND ORDERED this 15th day of September, 1997, in Tallahassee, Leon County, Florida

_ WILLIAM R. CAVE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6947

Filed with the Clerk of the Division of Administrative Hearings this 15th day of September, 1997.

COPIES FURNISHED:

Honorable Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350

Harry Hooper General Counsel Room 1302

The Capitol

Tallahassee, Florida 32399-0350

Liz Cloud, Chief

Bureau of Administrative Code The Elliott Building Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director Administrative Procedures Committee Holland Building, Room 120 Tallahassee, Florida 2399-1300

William E. Williams, Esquire Huey, Guilday and Tucker, P.A.

106 East College Avenue Highpoint Center, Suite 900 Tallahassee, Florida 32302

P. Bruce Culpepper, Esquire

Akerman, Senterfitt and Edison, P.A.

216 South Monroe Street Suite 200

Post Office Box 10555 Tallahassee, Florida 32302-2555

Theresa G. Walsh, Esquire Department of Banking and Finance

101 East Gaines Street Tallahassee, Florida 32399-0350

Chris Bentley, Esquire Diane Tremor, Esquire John L. Wharton, Esquire

Rose, Sundstrom and Bentley 2548 Blairstone Pines Drive Tallahassee, Florida 32301

Ross A. McVoy, Esquire

Eckert, Seamans, Cherin and Mellott Hospitality Square, Third Floor

200 West College Avenue Tallahassee, Florida 323012

NOTICE OF RIGHT TO APPEAL

A 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.

Docket for Case No: 97-002840RX

Orders for Case No: 97-002840RX