STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SARASOTA YACHT CLUB ON COON ) KEY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 80-406

)

SARASOTA YACHT CLUB, INC., )

and STATE OF FLORIDA, )

DEPARTMENT OF STATE, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a final hearing in this case on October 13, 1981, in Sarasota, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: William H. Stockham, Esquire

2032 Hillview Street

Sarasota, Florida 33579

For Respondent: Shirley Ziel Hall, Regional Representative Department of Department of State

State, Division Ringling Museum of Art of Corporations Post Office Box 1838

Sarasota, Florida 33578

For Respondent: No appearance. Sarasota Yacht

Club, Inc.

ISSUE

Whether or not the corporate names Sarasota Yacht Club on Coon Key, Inc., and Sarasota Yacht Club, Inc., are deceptively similar to each other and, if so, whether or not pertinent rules and regulations of the Department of State require the latter chartered corporation to amend its Articles of Incorporation and registration to reflect a new name due to a "bad faith" name reservation by Respondent, Sarasota Yacht Club, Inc.

FINDINGS OF FACT

1. Based upon the testimony adduced at the hearing, the documentary evidence received and the entire record compiled herein, the following relevant facts are found.

2. Documents on file in the Division of Corporations, Department of State, reveal that the Articles of Incorporation for the Sarasota Yacht Club, 1/ a Florida corporation not for profit, were granted by the Circuit Court of Sarasota County, Florida, on June 30, 1926. (See Exhibit A of the Stipulation received herein as the parties' Joint Exhibit 1.) Sarasota Yacht Club came under the jurisdiction of the Division of Corporations of the Department of State (Respondent) on April 18, 1963, with the filing of certain amendments to the Articles of Incorporation (Exhibit B of Joint Exhibit 1).

   
   

3. The Sarasota Yacht Club was dissolved on September 3, 1976, for failure to file its Annual Report for 1974 and subsequent years. Notices mailed by Respondent, Division of Corporations, to the Sarasota Yacht Club were directed to 1100 Ringling Boulevard, an address which was erroneously given on the 1973 Annual Report of Sarasota Yacht Club, whose correct address is 1100 John Ringling Boulevard. (Exhibit C of Joint Exhibit 1.)

   
   

4. The postmaster of Sarasota, Florida, upon inquiry by the Department, indicated that mail addressed to the Sarasota Yacht Club at 1100 Ringling Boulevard would not automatically be forwarded to 1100 John Ringling Boulevard, Sarasota, Florida. (Joint Exhibit 1 and testimony of John W. Arnold, the manager of Sarasota Yacht Club on Coon Key, Inc., during the calendar years 1975 through 1979.)

   
   

5. On July 9, 1979, Martin J. McGuire, Ethel May McGuire and William Kecht filed Articles of Incorporation under the name Sarasota Yacht Club, Inc., which corporation was granted Charter No. 748001. (Exhibit D of Joint Exhibit 1.)

   
   

6. Sarasota Yacht Club reinstated its Charter under the name of The Sarasota Yacht Club on Coon Key, Inc., on September 24, 1979, with the original Charter No. 705493. (Exhibit E of Joint Exhibit 1.)

   
   

7. Sarasota Yacht Club, Inc., Charter No. 748001, failed to file its Annual Report prior to July 1, 1980, and was involuntarily dissolved December 8, 1980, and failing reinstatement of Charter No. 748001, pursuant to Chapter 10- 1.09, Florida Administrative Code, the name Sarasota Yacht Club will become available for reissuance on December 8, 1981. (Joint Exhibit 1.)

   
   

8. Sarasota Yacht Club on Coon Key, Inc., Charter No. 705493, has attempted to reserve the name Sarasota Yacht Club so that it may be restored to the use of its name granted on June 30, 1926, however, the Respondent, Department of State, Division of Corporations, will not process said name reservation until December 8, 1981. (Exhibit F of Joint Exhibit 1.)

   
   

9. During the years 1975 through 1979, when Messr. Arnold was manager of Sarasota Yacht Club, the Club continued to do business with various State agencies and regularly renewed various licenses with the Department of Natural Resources; gasoline dealers; special fuel certificates; Department of Business Regulation, Division of Hotels and Restaurants; Internal Revenue Service special tax stamps and licenses issued by the City of Sarasota, including the Health Department. Also, during this period, the Club received various letters which were not properly addressed, such as John Ringling Causeway, Ringling Causeway, etc.

   
   

10. As stated herein, Sarasota Yacht Club, Inc., Charter No. 748001, was formed on July 3, 1979, for the express purpose of encouraging boating and yachting to provide entertainment food, refreshments and social activities for

    its members and guests. Accordingly, the purpose for which that club was formed is the identical purpose for which Petitioner was originally formed and continues to operate since 1926. Also, both corporations operate in the same locality, Sarasota, Florida. Respondent, Sarasota Yacht Club, Inc., however, has not conducted any business in furtherance of its corporate purpose other than the chartering of the corporation.

    
    

11. Martin McGuire, one of the incorporators of Respondent, Sarasota Yacht Club, Inc., was a former member of Petitioner. His membership was terminated for reasons unknown to the Hearing Officer, during 1979. On July 12, 1979, Norman Jacobson, an attorney licensed to practice in Florida received a phone call from Martin McGuire. Attorney Jacobson has known attorney Martin McGuire for more than thirty-five (35) years. Attorney Jacobson attended law school with Martin J. McGuire at John Marshall Law School, Chicago, Illinois. During the July 12, 1979, conversation, attorney McGuire related to attorney Jacobson, certain alleged problems that Sarasota Yacht Club, Inc., was experiencing including personal, financial and tax liabilities which could affect the Club (Petitioner) if made known to the public. This conversation took place subsequent to the time when attorney McGuire had been expelled as a member of Petitioner. According to Jacobson, attorney McGuire agreed to dissolve Corporate Charter No. 748001 provided Petitioner do the following:

    
    

    l. Reinstate his membership in good standing;

    1. Guarantee his continued membership in good standing; and

    2. Agree to certain unspecified changes in Petitioner's by-laws.

       
       

12. Attorney Jacobson advised attorney McGuire that those concessions could not and would not be made if his recommendation to the Club's membership were adopted. Attorney Jacobson considered McGuire's demands to be a form of blackmail.

    
    

13. Attorney Jacobson reported to the Club (Petitioner) the details of the conversation and discussions that he had with attorney McGuire as outlined above and the Club unanimously agreed to maintain its original decision to cancel attorney McGuire's membership.

    
    

14. Messr. Brady, a former practicing attorney and also an employee of the Department of Justice, Federal Bureau of Investigation, is familiar with Petitioner's history. Messr. Brady recounted that the Club was formed during 1926, and its stature has continuously grown. The Club presently boasts of a membership in excess of 500 and regularly sponsors regattas and other sailing events. The Club is sponsoring its third annual sailing regatta this month and one of its female members is a finalist in this year's Adams Cup Race.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Section 120.57(1), Florida Statutes (Supp. 1980).

    
    

16. Section 607.024(1)(b), Florida Statutes (1979), which is part of the Florida General Corporation Act, provides in part that:

    (1) The corporate name:

    * * *

    (b) Shall not be the same as, or deceptively similar to, the name of any domestic corporation existing under

    the laws of this state or any foreign corporation authorized to transact business in the state, a name the exclusive right to which is, at the time, reserved in the manner provided in this act, or the name of a corpora- tion which has in effect a registration of its corporate name as provided in this act, . . . .

    
    

17. By Rule Section 10-1.04, Florida Administrative Code (1980), the Department of State has defined "deceptively similar." The Rule states:

    
    

    Corporate names are deceptively similar if on comparison of the names, written as above provided, there is an apparent difference, but the difference or dif- ferences are of such character that the

    names are likely to be confused by persons giving oral or written information to

    this office, or by persons in the Office of the Secretary of State who are attempt- ing to enter into or retrieve from the records of this office corporate informa- tion, or by persons attempting to receive written or oral information from the Office of the Secretary of State, or by judicial or law enforcement officers,

    or by persons in the general public who are attempting to identify a corporation solely on the basis of written or oral communications concerning its name, or

    by consumers who could be easily confused by similar names. Such names shall be rejected by the Division and shall not

    be filed.

    
    

18. Under the above statute and rule, the corporate name Sarasota Yacht Club on Coon Key, Inc., is deceptively similar to the name Sarasota Yacht Club, Inc. Assuming that Sarasota Yacht Club, Inc., was actually engaged in the business for which it was expressly chartered, i.e., encouraging boating and yachting to provide entertainment, food, refreshments and social activities for its members and guests, it would be directly engaged in a business identical to the business engaged in by Petitioner in the same locality. However, the evidence herein reveals that, apart from the mere filing for and receiving its Corporate Charter, Respondent, Sarasota Yacht Club, Inc., is not engaged in any business activity and that its sole purpose in receiving the Charter was that of extracting certain concessions from Petitioner. In this regard, Rule Section

    10-1.021(6), Florida Administrative Code, provides in pertinent part that all corporate names filed under Chapter 607 or 617, Florida Statutes, shall:

    Be filed in good faith, with the

    intent of conducting a legitimate business in the State of Florida and not for the purpose which might defraud, confuse or mislead the public or another business

    on file with this Division.

    
    

19. A close examination of the facts herein and an application of the above cited rule provision leads the undersigned to conclude that Respondent, Sarasota Yacht Club, Inc., was not filed in good faith, in violation of Rule Section 10-1.021(6), Florida Administrative Code. It is so concluded.

RECOMMENDATION

Upon consideration of the foregoing Findings of Fact and Conclusions of Law, it is hereby

RECOMMENDED:

That the corporate name Sarasota Yacht Club, Inc., be found deceptively similar to Sarasota Yacht Club on Coon Key, Inc., and that approval for use of the name Sarasota Yacht Club, Inc., be withdrawn by the Secretary of State. 2/

RECOMMENDED this 16th day of November, 1981, in Tallahassee, Florida.

JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 16 day of November, 1981.

ENDNOTES

1/ Sarasota Yacht Club on Coon Key, Inc., is the successor corporation to Sarasota Yacht Club.

2/ The undersigned considered the facts that, in all likelihood the Respondent, Department of State, Division of Corporations, will be in a position to process Petitioner's name reservation after December 8, 1981, since Respondent, Sarasota Yacht Club, Inc., failed to file its Annual Report and will most likely not file reinstatement of its Charter pursuant to Chapter 10-1.09, Florida Administrative Code. However, the facts herein seem to warrant the conclusion that the name approval given herein to Respondent, Sarasota Yacht Club, Inc., be withdrawn.

COPIES FURNISHED:

William H. Stockham, Esquire 2032 Hillview Street

Sarasota, Florida 33579

Shirley Ziel Hall Regional Representative Department of State Ringling Museum of Art Post Office Box 1838 Sarasota, Florida 33578

Henry P. Trawick, Jr., Esquire Post Office Box 4019

2051 Main Street

Sarasota, Florida 33578

William J. Gladwin, Jr., Esquire Assistant General Counsel Secretary of State

The Capitol

Tallahassee, Florida 32301

Docket for Case No: 80-000406

Orders for Case No: 80-000406