STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF FLORIDA LAND SALES, ) CONDOMINIUMS AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) CASE NO. 85-1072

)

MOHICAN VALLEY, INC. d/b/a )

INDIAN WOODS, )

)

Respondent. )

)

RECOMMENDED ORDER

An evidentiary hearing was held in this case on July 2, 1985, in Orlando. By unopposed motions for extensions of time which were granted, the parties requested until September 13, 1985, in which to serve their proposed findings of fact.

APPEARANCES

are:

For Petitioner: Thomas L. Barnhart, Esquire

Staff Attorney

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

For Respondent: Ladd H. Fassett, Esquire

Post Office Box 2747 Orlando, Florida 32302

The issues for determination in this factfinding proceeding

1. Which individuals are purchasers or attempted purchasers of subdivided land at Indian Woods of Winter Springs or Mohawk Village of Winter Springs which would be entitled to notification of a right to

   rescind their purchase and receive a full refund.

   
   

2. What sales of subdivided lands at Indian Woods of Winter Springs or Mohawk Village of Winter Springs are subject to the authority of the Division of Land Sales and Condominiums and are not exempt from regulation under the provisions of Chapter 498, Florida Statutes (1983).

   
   

3. Whether Mohican Valley, Inc. has substantially complied with the Order entered by the Division of Land Sales and Condominiums on March 9, 1983, sought to be enforced in this action.

1. Procedural Background.

   
   

   On December 14, 1982, Petitioner, Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Division), filed a Notice To Show Cause administratively charging Respondent, Mohican Valley, Inc. d/b/a Indian Woods (Respondent), with failing to comply with Chapter 498, Florida Statutes. On March 9, 1983, Petitioner, Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Division), entered a Final Order in the case entitled Division of Florida Land Sales and Condominiums vs. Mohican Valley, Inc. d/b/a Indian Woods, Docket No. 82195RSD (Final Order). The Final Order made the following Findings Of Fact:

   
   

   * * *

   
   

   3. That Mohican Valley, Inc. and/or its officers immediately notify any purchaser or attempted purchaser of subdivided land at Indian Woods of Winter Springs or Mohawk Village of Winter Springs who has paid to Mohican Valley, Inc. any money in connection with such purchase or attempted purchase of their right to rescind their purchase or attempted purchase and to obtain a full refund of all monies paid for such purchase or attempted purchase. Such rescission notification must be by letter approved by the Division of Florida Land Sales and

   Condominiums and must be sent within thirty

   (30) days of the entry of this Final Order.

   
   

   * * *

   
   

   6. . . . . Winter Springs Mobile Home Corporation and the Mohawk Village of Winter Springs subdivision were not registered with the Division of Florida Land Sales and Condominiums under Chapter-498, Florida Statutes, nor were they exempt from the registration requirements.

   * * *

   
   

   8. The indenture of lease method used by Mohican Valley, Inc. in offering, disposing of and/or selling interests in subdivided lands in the Indian Woods subdivision was adopted for the purpose of evasion of Chapter 498, Florida Statutes.

   
   

   The Final Order went on to order:

   
   

   1. That Mohican Valley, Inc. and its officers, agents, servants and employees immediately cease and desist from advertising and/or from offering, disposing of or participating in any offer or disposition of any interest in the subdivided lands located at the Indian Woods of Winter Springs subdivision.

      
      

   2. That Mohican Valley, Inc. pay a civil penalty to the Division of Florida Land Sales and Condominiums in the amount of

      $10,000

      within thirty (30) days of the entry of this Final Order.

      
      

   3. That Mohican Valley, Inc. and/or its officers immediately notify any purchaser or attempted purchaser of subdivided land at Indian Woods of Winter Springs or Mohawk Village of Winter Springs who has paid to Mohican Valley, Inc. any money in connection with such purchase or attempted purchase of their right to rescind their purchase or attempted purchase and to obtain a full refund of all monies paid for such purchase or attempted purchase. Such rescission notification must be by letter approved by the Division of Florida Land Sales and Condominiums and must be sent within thirty

      (30) days of the entry of this Final Order.

      
      

   4. That Mohican Valley, Inc. and/or its officers shall immediately establish an escrow account in a financial institution

      located in this State in sufficient amount to ensure the full payment of refunds to all purchasers who elect to rescind their purchase agreement or their attempted purchase of an interest in subdivided land in the subdivision now known as Indian Woods of Winter Springs, and to ensure the conveyance of clear and marketable title to all those purchasers who do not elect to rescind their purchase agreement. Such escrow account must be approved by the Division and shall be fully funded in the amount determined by the Division upon completion of review of all books and records of Mohican Valley, but in no event later than thirty (30) days from the entry of this Final Order.

      
      

   5. That Mohican Valley, Inc. and/or its officers, agents, servants and employees shall immediately produce any and all financial records directly or indirectly related to the Indian Woods or Winter Springs subdivision for review and audit by the

   Division of Florida Land Sales and Condominium for the purpose of determining all purchasers and attempted purchasers of an interest in subdivided lands at the subdivision now known as Indian Woods of Winter Springs, and for the purpose of determining the full amount of the escrow account required pursuant to Paragraph 4. above.

   
   

   Respondent, Mohican Valley, Inc., d/b/a Indian Woods (Respondent), appealed the Final Order to the District Court of Appeal, First District of Florida, which affirmed the Final Order. Respondent sought discretionary review in the Florida Supreme Court; which denied review.

   
   

   On or about September 14, 1984, the Division filed in the Circuit Court, Eighteenth Judicial Circuit, in and for Seminole County, Florida, a Petition To Enforce Agency Action, commencing Civil Action No. 84-2539-CA-18-G. The petition sought enforcement of the Division's Final Order. On March 28, 1985,

   Circuit Judge Vernon Mize, Jr., entered an Order in Civil Action No. 84-2539-CA-18-G. The order recited:

   
   

   * * *

   
   

   1. That the Administrative Order issued by Petitioner was entered pursuant to a default. Because of the default, there was no fact-finding proceeding held prior to the entry of the Administrative Order.

      
      

   2. That Section 120.69(4)(a), Florida Statutes, provides that if enforcement depends on any facts other than those appearing in the record the Court may ascertain such facts under procedures set forth in Section 120.68(6). That Section provides that when there has been no Hearing prior to agency action and the reviewing Court finds that the validity of the action depends on disputed facts the Court shall order the agency to conduct a factfinding proceeding. Since there was no Hearing because of the default the facts do not appear of record and, therefore, a fact- finding proceeding is necessary because of disputed facts. Now, therefore, it is

   
   

   ORDERED AND ADJUDGED as follows:

   
   

   * * *

   
   

   2. That Petitioner shall conduct a prompt factfinding proceeding pursuant to the requirements of Chapter 120, Florida Statutes, to determine the [facts in issue in this proceeding].

   
   

2. Jurisdiction Of The Division Of Administrative Hearings.

   
   

   Section 120.69, Florida Statutes (1983), sets forth the procedure for enforcing agency action such as the Division's Final Order by filing a petition for enforcement in the circuit court where the subject matter of the enforcement is located.

   Section 120.69(1)(a). Section 120.69 provides, among other things:

   
   

   (5) In any enforcement proceeding, the respondent may assert as a defense the invalidity of any relevant statute, the inapplicability of the administrative determination to respondent, compliance by the respondent, the appropriateness of the remedy sought by the agency, or any combination of the foregoing. . . .

   
   

   Section 120.69 also provides in part:

   
   

   (4) In all enforcement proceedings:

   
   

   (a) If enforcement depends on facts other than those appearing in the record, the court may ascertain such facts under procedures set forth in s. 120.68(6).

   
   

   Section 120.68(6), Florida Statutes (Supp. 1984), which governs appellate review, provides:

   
   

   When there has been no hearing prior to agency action and the reviewing court finds that the validity of the action depends upon disputed facts, the court shall order the agency to conduct a prompt, factfinding proceeding under this act after having a reasonable opportunity to reconsider its determination on the record of the proceedings.

   
   

   Therefore, Chapter 120, Florida Statutes, authorized the Circuit Court in Civil Action No. 84-2539-CA-18-G, to "order the agency, to conduct a prompt, factfinding proceeding under this act" instead of hearing the evidence and finding the facts itself.

   
   

   The only "factfinding proceeding under this act" is the proceeding set forth in Section 120.57, Florida Statute (Supp. 1984).Section 120.57 provides in pertinent part:

   
   

   The provisions of this section apply in all proceedings in which the substantial interests of a party are determined by an agency, unless such proceedings are exempt pursuant to subsection (5). Unless waived by all parties, subsection (1) applies

   whenever the proceeding involves a disputed issue of material fact.

   
   

   Respondent's substantial interests are determined by the Division in this statutory factfinding aspect of enforcement proceedings. The proceeding is not exempt under subsection (5), and the parties have not waived subsection (1) proceedings. In proceedings under Section 120.57(1), a Hearing Officer assigned by the Division of Administrative Hearings conducts all hearings with certain statutory exceptions which do not apply in this case. Therefore, the Division of Administrative Hearings has jurisdiction to hear the evidence and recommend to the Division the fact findings which it should report to the Circuit Court under the order entered on March 28, 1985, in Civil Action No.

   84-2539-CA-18-G.

   
   

3. Discussion Of Issues Presented.

   
   

   1. Which individuals are purchasers or attempted purchasers of subdivided land at Indian Woods of Winter Springs or Mohawk Village of Winter Springs which would be entitled to notification of a right to rescind their purchase and receive a full refund.

      
      

      The purchasers or attempted purchasers of subdivided land at Indian Woods of Winter Springs or Mohawk Village of Winter Springs who would be entitled to notification of a right to rescind their purchase and receive a full refund are further identified by the Division's Final Order as any such purchaser or attempted purchaser "who has paid to Mohican Vailey, Inc., any money in connection with such purchase or attempted purchase." The Division's Final Order also further specifies that those individuals have a "right to rescind their purchase or attempted purchase and to obtain a full refund of all monies paid for such purchase or attempted purchase."

      
      

      All individuals who entered into leases before March 9, 1983, the date of the Division's Final Order, with either Respondent or Winter Springs Mobile Home Corporation and who paid money to Respondent are-entitled to notice of their right of rescission. Upon rescission, such individuals are entitled to a refund of all monies paid to either Respondent or Winter Springs Mobile Home Corporation for their leasehold interests (including initial lease payments, whether lump sum or installment, interest on installment payments, lot rent, taxes

      and other incidental expenses except, the Division concedes, for lot rent, garbage fees and water fees paid incident to residing in the subdivision. Such non-refundable lot rent is identified as lot rent paid during times an individual also was paying garbage fees and water fees incident to residing in the subdivision.

      
      

   2. What sales of subdivided lands at Indian Woods of Winter Springs or Mohawk Village of Winter Springs are subject to the authority of the Division of Land Sales and Condominiums and are not exempt from regulation under the provisions of Chapter 489, Florida statutes (1983).

      
      

      The Division's Final Order asserts jurisdiction over all sales of subdivided lands at Indian Woods of Winter Springs and Mohawk Village of Winter Springs. The Final Order includes a Finding Of Fact that the Indian Woods subdivision "is a subdivision within the Division's jurisdiction." As earlier noted, the Final Order has been affirmed on appeal, and discretionary review has been denied by the Florida Supreme Court. Therefore, the Final Order's findings and conclusions with respect to the Division's jurisdiction are conclusively established under principles of res judicata and law of the case. See generally, 32 Fla.Jur.2d, Judgments And Decrees, Sections 96 through 100, 105 (1981).

      
      

      The Division's jurisdiction is based on Section 498.051, Florida Statutes (1983), which provides in pertinent part:

      
      

      (1) The division may issue an order requiring a person to cease and desist, and to take such affirmative action as in the judgment of the division will carry out the purpose of this chapter, if the division determines that the person has:

      
      

      1. Violated any provision of this chapter;

         
         

      2. Directly or through an agent or employee knowingly engaged in any false, deceptive, or misleading advertising, promotional, or sales methods to offer-or dispose of any interest in subdivided lands;

      
      

      * * *

      
      

      1. Disposed of any interest in subdivided lands which have not been registered with the division; or

         
         

      2. Violated any lawful order or rule of the division.

      
      

      * * *

      
      

   3. The affirmative action to be taken by a person pursuant to an order authorized by subsection (1) may include, but is not limited to:

      
      

      a) Notifying any purchaser of subdivided land who has a rescission right pursuant to contract or pursuant to other provisions of this chapter that the purchaser may elect to rescind the purchase transaction as provided by contract or by other pro-visions of this chapter; and

      
      

      (b) Establishing a trust or escrow account in a financial institution located within this state to assure the payments of refunds to those purchasers who elect to rescind, or to assure the conveyance of clear and marketable title to those purchasers who do not elect to rescind transactions. Section

      498.051 clearly confers jurisdiction on the Division to have determined whether Respondent violated Chapter 498. The Division's determination in its Final Order has the effect of res judicata. Since the determination has been appealed to the district court of appeal and the highest court in the State, it also is the law of the case.

      
      

      To the extent that it could be said that the Division's subject matter jurisdiction depends upon certain findings of fact, the Division certainly had subject matter jurisdiction to consider and determine those facts. By the Division's Final Order, the Division has done so and has determined, among other things: that Mohawk Village and Indian Woods were subdivisions: they were required to have been registered; they were not

      registered that there was no reservation program which had been approved for the subdivision in accordance with Chapter 498; and that Mohican Valley, Inc. and Winter Springs Mobile Home Corporation offered, disposed of, and/or sold interest in subdivided lands in the subdivisions. Again, even if prerequisite to subject matter jurisdiction; those findings and determinations have the effect of res judicata and law of the case.

      
      

      Respondent asserts that all or some of the transactions involved in this case are exempt from the requirement of registration. But, as previously mentioned, such an exemption does not affect the Division's subject matter jurisdiction.

      Moreover, unlike jurisdiction, an exemption can be waived if not timely raised. Cf. Ringling Brothers-Barnam & Bailey Combined Shows, Inc. v. State, 295 So. 2d 314 (Fla. 1st DCA 1974).

      
      

      Even if the existence of an exemption had an effect on the Division's jurisdiction and had not been waived, the existence of an exemption depends upon facts which the Division had jurisdiction to determine as part of its Final Order. Section 498.025(1), Florida Statutes (1983), provides in pertinent part:

      
      

      (1) Unless the method of offer, disposition, or transfer is adopted for the purpose of evasion of this chapter, the provisions of this chapter do not apply to:,:

      
      

      * * *

      
      

      (h) Any offer or disposition of an interest in land on which there is a residential commercial, or industrial building or as·to which there is a legal obligation on the part of the seller to construct such a building within 2 years from date of disposition.

      
      

      The Final Order includes specific Findings Of Fact and Conclusions Of Law: "that Mohican Valley, Inc. and the Indian Woods subdivision are not exempt from the provisions of Chapter 498"; that "Winter Springs Mobile Home Corporation and the Mohawk Village of Winter Springs subdivision were not registered with the Division of Florida Land Sales and Condominiums under Chapter 498, Florida Statutes, nor were they exempt from the registration requirements"; and that the "indenture of lease method used by Mohican Valley, Inc., in offering, disposing of,

      and/or selling interests in subdivided lands in the Indian Woods subdivision was adopted for the purpose of evasion of Chapter 498, Florida Statutes." Again, those findings and conclusions have the effect of res judicata and law of the case.

      
      

      3. Whether Mohican Valley, Inc. has substantially complied with the Order entered by the Division of Land Sales and Condominiums on March 9, 1983, sought to be enforced in this action.

      
      

      This last issue obviously was not determined by the Division's Final Order. It also clearly is one of the factual issues contemplated for determination in this factfinding proceeding. See Section 120.69(5), Florida Statutes (1983).

      Therefore, none of the comments addressed to the second issue immediately above apply to this third issue.

      
      

4. Findings Of Fact.

   
   

   1. The purchasers and attempted purchasers of subdivided lands at Indian Woods of Winter Springs or Mohawk Village of Winter Springs who have paid to Mohican Valley, Inc. any money in connection with such purchase or attempted purchase (and who therefore are entitled to notice of their right to rescind their purchase or attempted purchase and to obtain a full refund of all monies paid for such purchase or attempted purchase) include the following:

      
      

      Adamonis, Frank Adkinson, Olney Alvarez, Alberto Anderson, William Ardizzone, Roy Arnett, Howard Arnold, Olive Aycock, John Aycock, Joseph Balog, Michael Balog, Richard Barnes, Fred Bartels, Thomas Baumgardt, David Beecher, Ruth Blayney, Darlene Bloch, Vivian Blythe, Grace

      Bosch, Nelson Brunelli, Ted Bruno, Thomas Burton, Clyde Campanaro, Phillip Carroll, Michael Cartier, Richard Cataldo, Adam Chaney, George Chase, Clayton.

      Christian, Jon Christian, William Coffin, Gaylon Coleman, Robert Colling, Gerald Colling, Timothy Connel 1, John Corradi, Harry Cosentino, Ralph Craig, William Critch, Clifford Curtis, Terry

      D' Elia, Peter Drayer, Sanford. Duke, Richard Dwyer, Lorraine Eisen, Mildred Eller, Walter Ennis, Ann Falls, Ruth Farrell, Michael Figueroa, Jesus. Ford, Edward Fries, Joseph Gallagher, Fred

      Gallagher, Richard Gandolfo, Angelo Garguilo, Louis Garner, Margie Gertz, Doris, Gonzalaz, Emilio Green, Alma Gregory, Robert, Halstead, A1 Halloran, Eva Hamilton, Victor Handzuk

      Healey, Dorothy Herring, Gary Hoenicke, Wil Holloway, JuliaeY Hood, Cecil.

      Hopkins, David Hopkins, Donald Johnson, Hilmer Jones, Gerri Jordan, John Kelln, Henry Knight, Leonard Krenitsky, Paul Krummel, Warren LaPalm, Carole Lull, Jose MacLean, Daniel MacDonald, Alan McDermott, Mary McGrath, Henry McKinley, Obediah McManus, E. J. Merritt, Dorothy Mess, William Minadie, Kerto Minadie, Sockie Moss, Rita

      Mount joy, Donald Mulhern, Louise Myers, Harold Myers, Patrick Naiman, Jack Nicolosi, Kathleen O'Connor, Daniel Olds, Ronald Olsen, Alfred Olsen, Henry Pearson, Alan Picard, Russell Pozzuolo, Louis Rampp, Shirley Reichert, Warren Rizzo, Eugene Roberts, Jack Roels, Edith

      Ross, David Roush, John

      Salbach, Jeanette Sanders, John Sanzo, April Sherman, Joan Shrecengost, Wayne Simpkins, Lillian Smith, Barbara Stone, Leroy Storti, Margaret Stroschein, Charles Vickers, Tom

      Wills, Helen Williams, William Wilson, Helen Wilson, Barclay Woodward, George Zimmer, Edward

      
      

      These individuals entered into leases with either Respondent or Winter Springs Mobile Home Corporation on or before March 9, 1983, and have paid money to Respondent, and are therefore entitled to notice of their right of rescission. Upon rescission, they are entitled to a refund of all monies paid to either Respondent Winter Springs Mobile Home Corporation for their leasehold interests (including initial lease payments, whether lump sum or installment, interest on installment payments, lot rent, taxes and other incidental expense except, the Division concedes, for lot rent, garbage fees and water fees paid incident to residing in the subdivision.) Such non- refundable lot rent is identified as lot rent paid during times an individual also was paying garbage fees and water fees incident to residing in the subdivision.

      
      

      Neither party calculated the amounts of refund due using this method of calculation, and the Circuit Court's March 28, 1985, Order does not by its terms require a finding as to the amounts of refund due. These details can be included in the notice of right of rescission and, if applicable, refund. Under the terms of the Division's Final Order, the form of the notice of right of rescission and right of refund will be subject to Division approval.

      
      

   2. All sales of subdivided lands in Winter Springs or Mohawk Village of Winter Springs are subject to the authority of the Division of Florida Land Sales, Condominiums and Mobile Homes, and are not exempt from regulation under the provisions of Chapter 498, Florida Statutes (1983). Those sales include

      the sales or attempted sales to the individuals referred to in the immediately preceding paragraph, as well as to others whose identities are not relevant.

      
      

   3. Since March 9, 1983, Respondent has not entered into any leases for a period in excess of three years, other than leases transferring an existing lease to another lot. Therefore, Respondent has substantially complied with the part of the Division's Final Order "[t]hat Mohican Valley, Inc., and its officers, agents, servants and employees immediately cease and desist from advertising and/or from offering, disposing of or participating in any offer or disposition of any interest in the subdivided lands located at the Indian Woods of Winter Springs subdivision."

      
      

   4. Respondent has not complied, substantially or otherwise, with the part of the Division's Final Order "[t]hat Mohican Valley, Inc. pay a civil penalty to the Division of Florida Land Sales and Condominiums in the amount of $10,000 within thirty (30) days of the entry of this Final Order."

      
      

   5. Respondent has contacted purchasers regarding rescission offers, in general, but has not substantially complied with the part of the Division's Final Order requiring:

      
      

      [t]hat Mohican Valley, Inc. and/or its officers immediately notify any purchaser, or attempted purchaser of subdivided lands at Indian Woods of Winter Springs or Mohawk Village of Winter Springs who has paid to Mohican Valley, Inc. any money in connection with such purchase or attempted purchase of their right to rescind their purchase or attempted purchase and to obtain a full refund of all monies paid for such purchase or attempted purchase. Such rescission notication must be by letter approved by the Division of Florida Land Sales and Condominiums and must be sent within thirty

      (30) days of the entry of this Final Order.

      
      

   6. Since Respondent did not comply with the requirements of the Division's Final Order that it notify purchasers or attempted purchasers of their right of rescission, Respondent also did not comply with the next part of the Division's Final Order, "[t]hat Mohican Valley, Inc. and/or its officers shall immediately establish an escrow account in a financial

      institution located in this State in sufficient amount to ensure the full payment of refunds to all purchasers who elect to rescind their purchase agreement or their attempted purchase of an interest in subdivided land in the subdivision now known as Indian Woods of Winter Springs, and to ensure the conveyance of clear and marketable title to all those purchasers who do not elect to rescind their purchase agreement."

      
      

   7. Respondent did not comply, substantially or otherwise, with the part of the Division's Final Order, "[t]hat Mohican Valley, Inc. and/or its officers, agents, servants and employees shall immediately produce any and all financial records directly or indirectly related to the Indian Woods of Winter Springs subdivision for review and audit by the Division of Florida Land Sales and Condominiums for the purpose of determining all purchasers and attempted purchasers of an interest in subdivided lands at the subdivision now known as Indian Woods of Winter Springs, and for the purpose of determining the full amount of the escrow account required pursuant to Paragraph 4. above." However, Respondent did produce the financial records required by the Division's Final Order at the hearing in this factfinding proceeding on July 2, 1985.

      
      

   8. Both parties submitted proposed findings of fact. (Respondent's Motion To Strike Petitioner's Proposed Findings Of Fact, served on September 19, 1985, is denied.) The proposed findings of fact were reviewed, and the following Findings Of Fact attempt to rule, either directly or indirectly, on each. proposed finding of fact. Proposed findings of fact where were approved and adopted are reflected in the following Findings Of Fact. Where proposed findings of fact are not reflected and no direct ruling rejecting them is apparent, the proposed findings of fact have been rejected as being subordinate, cumulative, immaterial or unnecessary.

REPORT AND FINDINGS MADE this 4 day of October, 1985, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON Hearing Office

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division Administrative Hearings this 4th day of October, 1985.

COPIES FURNISHED:

Thomas L. Barnhart Staff Attorney Department of Business

Regulation

725 S. Bronough Street Tallahassee, FL 32301

Ladd H. Fassett, Esquire

P. O. Box 2747 Orlando, FL 32802

E. James Kearney Director

Division of Land Sales, Condominiums & Mobile Homes

Department of Business Regulation 725 S. Bronough Street Tallahassee, FL 32301

Richard B. Burroughs, Jr. Secretary

Department of Business Regulation

725 S. Bronough Street Tallahassee, FL 32301

Harold F.X. Purnell General Counsel

Department of Business Regulation 725 S. Bronough Street Tallahassee, FL 32301

Docket for Case No: 85-001072

Orders for Case No: 85-001072