STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SADRUDIN AND NURY PREMJI,

Petitioners,

vs.

DEPARTMENT OF TRANSPORTATION,

Respondent.

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) Case No. 00-0211

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RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly-designated Administrative Law Judge,

Jeff B. Clark, held a formal hearing in the above-styled case on October 24, 2000, in Bartow, Florida.

APPEARANCES

For Petitioner: Jon E. Tileston, Esquire

Moran, Tileston and Simon, P.A. 4012 Gunn Highway, Suite 175

Tampa, Florida 33624

For Respondent: Jodi B. Jennings, Esquire

Department of Transportation 605 Suwannee Street

Mail Station 58

Tallahassee, Florida 32399-0450 STATEMENT OF THE ISSUE

Whether Respondent, Department of Transportation, properly denied Petitioners, Sadrudin and Nury Premji, a replacement

housing payment, pursuant to Chapter 14-66, Florida Administrative Code, and 49 Code of Federal Regulations, Part 24.

PRELIMINARY STATEMENT

By letter dated December 17, 1999, Petitioners, through their attorney, requested a formal administrative hearing alleging that Respondent in a letter dated November 30, 1999, had improperly denied them a previously calculated replacement housing allowance of $12,317.00.

Respondent's November 30, 1999, letter indicates that Petitioners' eligibility for replacement housing allowance was nullified based on the acquisition price paid for the Petitioners' property.

At the October 20, 2000, hearing Petitioners offered one witness, Donald Trask, who was accepted as an expert witness/real estate appraiser. Petitioners offered four exhibits; two were admitted into evidence (Exhibits 1 and 2) and two were not admitted into evidence (Exhibits 3 and 4) but were proffered. Respondent called four witnesses, one of whom, Richard Eddleman, was accepted as an expert witness in the administration of relocation assistance programs and Respondent offered five exhibits all of which were accepted into evidence. There were three joint exhibits which were admitted into evidence.

A Transcript of the final hearing was filed on November 6, 2000; Petitioners and Respondent each submitted Proposed Recommended Orders, which were taken into consideration.

FINDINGS OF FACT

1. Respondent, Department of Transportation, is the state agency which constructs public roadways in the State of Florida. When Respondent acquires land for the construction of federally- assisted roadway projects and takes residential property, Respondent may be required to provide a replacement housing allowance as a part of relocation assistance dictated by state and federal law.

2. Petitioners, Sadrudin and Nury Premji, were the owners of a motel known as the Garden Motor Lodge located in Polk County, Florida, which was condemned in order to construct a federally-assisted road project. The condemnation action resulted in a Stipulated Final Judgement.

3. The Stipulated Final Judgement as to Defendant Karim Motels, Inc., a Florida Corporation d/b/a Garden Lodge Motel f/k/a Red Carpet Inn, entered in Polk County Circuit Court civil action no.: GC-G-98-109, State of Florida, Department of Transportation vs. Karim Motels, Inc., d/b/a Garden Lodge Motel, et al., states, in part:

   1. ORDERED AND ADJUDGED that the Defendant, Karim Motels, Inc., a Florida Corporation d/b/a Garden Lodge Motel f/k/a Red Carpet

      Inn, does have and recover of and from the Petitioner the sum of one million four hundred ninety-one thousand and no/100 dollars ($1,491,000.00) in full settlement of all claims whatsoever, including statutory interest, but excluding attorney's fees, cost and expenses; and it is further

      
      

   2. ORDERED AND ADJUDGED that this settlement shall be without prejudice to the right of Defendant to claim any applicable benefits to which the Defendant may be entitled under the Petitioner's relocation assistance procedures, as governed by the Uniform Relocation Assistance Act. All relocation claims shall remain separate and apart from this eminent domain action. Defendant shall cooperate with employees and agents of Petitioner by allowing them immediate reasonable access to the property, during business hours, and to assist Petitioner in conducting an inventory of fixtures and personal property (emphasis added).

      
      

4. Petitioners had occupied a "manager's residential apartment" in the motel subject to condemnation and met the criteria under Florida Administrative Code Rule 14-66.09 for "carve out" consideration to determine the value of the residential portion relative to the entire taking and relocation assistance eligibility, if appropriate.

5. In December 1997, Respondent's right-of-way specialist,

   
   

   W.P. Kozsey, determined that Petitioners' manager's residential apartment occupied 1,803 square feet of a total of 16,075 of improvements and represented 11 percent of the total improvements.

6. Respondent's initial appraisal for the motel was

   
   

   $740,000. Trade fixtures (value at $34,700) were excluded from the value of the land and improvements. Multiplying the result,

   $705,300 by 11 percent (residential portion), it was determined that the value of the portion of the motel used by Petitioners for residential purposes was $77,583.00.

7. Respondent determined, through comparable appraisals, that the cost of "decent, safe and sanitary, fundamentally equivalent" "housing in the same geographic area" was $89,000. As a result, Petitioners were entitled to $12,317.00 in "purchase additive payment" (replacement housing payment).

8. The procedure used by Respondent for "carving out" the residential portion of a joint residential/business use follows the methodology set forth in Rule 14.66.009(2)(d) and (e), Florida Administrative Code, and 49 Code of Federal Regulations Sections 24.2, 24.401, and 24.403.

9. Petitioners refused to accept the $12,317.00 in purchase additive payments (replacement housing payment) and proceeded with litigation which resulted in a mediated settlement and the Stipulated Fund Judgement wherein they reserved "the rights to claim any applicable benefits to which the Defendant [Petitioners] may be entitled under Petitioner's [Respondent] relocation assistance procedures "

10. The Stipulated Final Judgement did not allocate value to any elements of the total settlement award and, as a result, Respondent recalculated the residential portion of the total property value by multiplying 11 percent of $1,491,000.00 which gave the residential portion a value of $164,010.00. The new residential value ($164,010.00) exceeded the cost of "decent, safe and sanitary, fundamentally equivalent" housing of $89,000. As a result, the purchase addition payment (replacement housing payment) was reduced to $0.00.

11. Respondent consistently applied this methodology of valuation to other motels with residential "carve outs" and reassessment of purchase additive payments after conclusion of litigation.

12. Petitioners' expert witness, Donald Trask, testified to a valuation basis which, although it provides an enhanced valuation, does not appear to contemplate the methodology set forth in the Florida Administrative Code or the Code of Federal Regulations regarding assessment of the replacement housing cost and determining entitlement to purchase additive payments.

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the subject matter pursuant to Section 120.57(1), Florida Statutes.

14. Petitioners have the burden of proving, by a preponderance of the evidence, that Respondent improperly denied them a replacement housing payment (also referred to as a "purchase additive payment"). No evidence was received from Petitioners which supported the allegation that Respondent inappropriately denied Petitioners a replacement housing payment.

15. Conversely, it appears from the evidence that Respondent correctly followed its own relocation assistance procedures as set forth in Florida Administrative Code Chapter 14-66 and 49 Code of Federal Regulations, see Part 24, in denying Petitioners a purchase additive payment in that the value of the "residential portion" of the mediated settlement greatly exceeded the cost of "decent, safe, and sanitary, fundamentally equivalent" housing.

RECOMMENDATION

It is hereby

RECOMMENDED that the Department of Transportation enter its Final Order denying the claim of Sadrudin and Nury Premji for relocation housing payment and dismissing their claim for same.

DONE AND ENTERED this 11th day of December, 2000, in Tallahassee, Leon County, Florida.

JEFFREY B. CLARK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 11th day of December, 2000.

COPIES FURNISHED:

Jodi B. Jennings, Esquire Department of Transportation 605 Suwannee Street

Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32399-0450

Jon E. Tileston, Esquire

Moran, Tileston and Simon, P.A. 4012 Gunn Highway, Suite 175

Tampa, Florida 33624

Pamela Leslie, General Counsel Department of Transportation 605 Suwannee Street

Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32399-0450

James C. Myers

Clerk of Agency Proceedings Department of Transportation 605 Suwannee Street

Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32399-0450

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 00-000211

Orders for Case No: 00-000211