Judges: J. LAWRENCE JOHNSTON
Agency: Department of Business and Professional Regulation
Latest Update: Sep. 04, 1987
Summary: No violation by mobile home park for failure to deliver approved prospectus. Violations for failure to file advertising and for false, misleading ads.
87-0165.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF FLORIDA LAND SALES, ) CONDOMINIUMS AND MOBILE HOMES, )
)
Petitioner, )
)
vs. ) CASE NO. 87-0165
) CENTURY REALTY FUNDS, INC., as )
general partner d/b/a COUNTRY ) MEADOWS ESTATES, LTD., )
)
Respondent. )
)
RECOMMENDED ORDER
For Petitioner: Debra Roberts, Esquire, and
P. Thomas Presnell, Jr., Esquire Tallahassee, Florida
For Respondent: Ronald L. Clark, Esquire, and
Michael A. Tewell, Esquire Lakeland, Florida
Final hearing was held in this case in Lakeland on July 15, 1987. Petitioner, Department of Business Regulation, Division of Land Sales, Condominiums and Mobile Homes (the Division), initially charged Respondent, Century Realty Funds, Inc. (Century), as general partner, d/b/a Country Meadows Estate, Ltd. (Country Meadows), in a Notice To Show Cause why Century should not be held guilty of four types of violations of Chapter 723, Florida Statutes, and Chapter 7D, Florida Administrative Code. The four alleged violations included generally: (1) entering into rental agreements without delivering an approved prospectus in violation of Section 723.011(2), Florida Statutes (1985), and Rule 7D-31.001(13), Florida Administrative Code (1986); (2) disseminating advertising without first filing the advertising with the Division in violation of Section 723.016(1), Florida Statutes (1985), and Rule 7D-30.006(1), Florida Administrative Code (1986); (3) disseminating advertising which misrepresented facts or created false or misleading impressions in violation of Section 723.016(3), Florida Statutes (1985), and Rule 7D-30.007, Florida Administrative Code (1986), and (4) entering into rental agreements prior to filing the rental agreements with the Division in violation of Section 723.011(1) and (2), Florida Statutes (1985).
Century, in its Written Request For Formal Hearing and later in responses to requests for admissions, admitted many of the factual allegations in the Notice To Show Cause. At final hearing, Century admitted to some more factual allegations, and the Division dismissed several of the factual allegations in the Notice To Show Cause and dismissed the fourth alleged violation in its entirely. The only factual issues remaining for resolution were: whether the unfiled information Century used was used for advertising; and, if advertising,
whether the information was false or misleading. The facts regarding rental agreements, filing of the prospectus and delivery of the prospectus were agreed.
At the end of the final hearing, the parties asked for and received 15 days from the filing of the transcript in which to file proposed recommended orders. The transcript was filed on July 29, 1987, making proposed recommended orders due August 13, 1987. Explicit rulings on the parties' proposed findings of fact may be found in the attached Appendix To Recommended Order, Case No. 87-0165.
FINDINGS OF FACT
At all pertinent time Country Meadows Estates, Ltd. (Country Meadows), a Florida limited partnership, has been the park owner of Country Meadows Mobile Home Park (the Park) which is located in Plant City, Florida. Century Realty Funds, Inc. (Century), is the general partner of Country Meadows Estates, Ltd. Century has been in the business of operating adult and retiree mobile home parks for approximately seven years. It operates over 20 different parks. Country Meadows has been in existence for approximately five years. Approximately 510 lots have been offered for rent or lease in the Park. When the last phase of the Park is completed, approximately 750 lots will have been offered for rent or lease.
Yearly rental increases at Country Meadows equate to the increase in the consumer price index, or a $5 minimum increase, whichever is greater. This rental agreement is guaranteed by Century for the lifetime of the mobile home owners as long as they reside in the Park.
Charge Of Failure To Deliver Approved Prospectus.
Century retained a law firm to provide assistance in securing approval of its proposed prospectus, lease agreement and park rules and regulations and paid the law firm a fee for its services.
On November 27, 1984, Country Meadows filed with the Department of Business Regulation, Division of Land Sales, Condominiums and Mobile Homes (the Division), a prospectus for the Park. In order to be able to increase rent in January, 1985, as provided in existing lot leases, Country Meadows tried to get a copy of the filed prospectus to all existing lot lessees by the end of 1984. Starting December 31, 1984, Country Meadows began delivering a copy of this prospectus to each new lessee of lots in the Park.
On January 7, 1985, the Division notified Country Meadows of deficiencies in the prospectus.
Century, often through its supervisor of property management operations, and its legal counsel held numerous telephone conferences with the Division and numerous conferences among themselves regarding the notice of deficiencies. On February 25, 1985, Country Meadows sent the Division a revised prospectus addressing the deficiencies. Country Meadows substituted the revised prospectus as the prospectus delivered to new lessees of lots in the Park after February 25, 1985.
On March 13, 1985, the Division sent Country Meadows another notice of deficiencies. The deficiencies found this time were in the original prospectus but were not noted in the first notice of deficiencies.
On March 15, 1985, Country Meadows stopped delivering a prospectus to new lessees of lots in the Park after March 15, 1985. Country Meadows believed the law prohibited it from delivering an unapproved prospectus after that date but did not believe that it was prohibited from continuing to do business until a prospectus was approved. Rather, Country Meadows believed the law allowed it to continue to enter into new lot leases in the Park without an approved prospectus after March 15, 1985, but that it would have to deliver a prospectus when approved and give lessees the right to rescind their lot leases after review of the approved prospectus.
On May 22, 1985, Country Meadows sent the Division a second revised prospectus.
On November 6, 1985, Country Meadows sent the Division yet another revised prospectus that distinguished between increase in base rent on a lot and increase in other fees associated with rental of a lot. On November 21, 1985, the Division approved Country Meadows' last revised prospectus for the Park.
Between March 16 and November 5, 1985, Country Meadows entered into 79 new Park lot rental agreements without delivering a prospectus to the lessee. Instead, the applicable filed but not yet approved prospectus was made available for inspection.
Within 45 days after approval of the third revised prospectus on November 21, 1985, Country Meadows distributed an approved prospectus to all lessees, including those who entered into leases between March 16 and November 5, 1985.
Century made a good faith effort to correct the deficiencies the Division cited in its proposed prospectuses.
Charge Of Failure To File Advertising.
In late summer or early fall, 1985, William and Nancy Hines responded to an advertisement in a magazine and asked for information. Century sent them documents. Some were not identified. One was entitled Greetings From Sunny Florida! (Petitioner's Exhibit 7). Century generally gives this document to persons who express an interest in Country Meadows, inviting them to pursue their interest and make a visit to the Park, free of charge. Later, Century sent a follow-up letter giving new information, further "selling" the benefits of Century parks, and finally asking the Hineses to indicate if they were still interested. (Petitioner's Exhibit 10). The Hineses arranged to make a visit to the park on November 15, 1985. At the Park, a County Meadows sales representative spoke with the Hineses and gave them a document entitled "Approximate Monthly Living Expenses At Country Meadows" (Petitioner's Exhibit 9). Country Meadows gives this document to persons who request information about Country Meadows. During the visit, the Hineses also were given a document entitled "Before You Purchase A Home: Questions And Answers You Should Know" (Petitioner's Exhibit 8). Country Meadows (and Century in general) usually sends this document to persons who express an interest in Country Meadows (or another Century park). It poses and answers general questions about mobile home parks and, in so doing, touts Century and its mobile home park developments. None of the documents (Petitioner's Exhibits 7, 8, 9 and 10) were filed with the Division. The Hineses entered into a lease agreement on November 15, 1985.
In late winter or early spring of 1985, Elmer and Adele Johnson also saw an advertisement in a magazine and arranged to visit Country Meadows. At
the visit, a Country Meadows sales representative gave the Johnsons a copy of a document entitled "Century: Mobile Home Communities, Affordable, Award-Winning, Adult Mobile Home Living-Now offering 11 outstanding Central Florida Mobile Home Communities for your inspection!" (Petitioner's Exhibit 11). It identified and listed information on each of the eleven parks, including Country Meadows.
After the visit, Country Meadows sent the Johnsons a follow-up letter giving new information, further "selling" the benefits of Century parks and finally asking the Johnsons to indicate if they were still interested. (Petitioner's Exhibit 10). The letter is a standard letter (addressed "Dear Friend") used to re- contact prospective customers who have visited a Century park (as, for example, hundreds have visited Country Meadows). On March 15, 1985, the Johnsons returned to Country Meadows. They were given a copy of Petitioner's Exhibit 8 and entered into a lease agreement. None of these documents (Petitioner's Exhibits 8, 10 and 11) were filed with the Division.
Petitioner's Exhibit 11 also was used and given to Myre Lutha Tillman, a prospective purchaser, in approximately July, 1985.
From at least May 29, 1984, through October 6, 1986, a billboard sign advertising Country Meadows (a picture of which is Petitioner's Exhibit 4) was located on Frontage Road and could be seen from Interstate 4, approximately six miles east of Plant City. Century admits the billboard was advertising that was not filed with the Division. The billboard was removed some time after October 6, 1986, and no longer is in use.
Country Meadows also placed newspaper advertisements of the Park in the Tampa Tribune on Sunday, February 2, and Sunday, February 26, 1986 (Petitioner's Exhibits 5 and 6, respectively). Century admits that this advertising was not filed with the Division.
Some of the information Century gave prospective purchasers including Petitioner's Exhibits 7, 8, 9, 10 and 11-- was given only to persons who expressed an interest in a Century mobile home park or at least requested information. Century's supervisor of property management operations did not think this information was "public" and therefore not "advertising" under the mobile home park statutes. This partially explains why Century did not file this information with the Division.
Charge Of False Or Misleading Advertising.
Century admits that it used a pamphlet entitled "Country Meadows: The Golden Dream" (Petitioner's Exhibit 12), which it properly filed with the Division, as advertising distributed to the public. The pamphlet advertises "Exercise Facilities & Locker Rooms" and "Security with Access Gatehouse."
The only locker rooms ever at Country Meadows were small package lockers located in the mailroom. The pamphlet, while technically not false, was misleading because it gives the impression of a locker room that would be used to change clothes in conjunction with the exercise room.
There always has been "Security with Access Gatehouse" at Country Meadows. Initially, the gatehouse was placed at the entrance of the Park and was manned by paid residents of the Park. The gatehouse was manned during the day until early evening hours and on weekends (in part to direct visitors and guests to residents.) Later, approximately in early 1986, the gatehouse was moved back from the entrance and was equipped with automatic security gate arms. The residents were given an access code which, when punched in at the gatehouse,
would automatically open the gate arm on either entering or leaving the Park. Country Meadows no longer hired residents to man the gatehouse but hired a full- time security guard who roves Country Meadows and an adjacent Century park that now has approximately 100 home sites leased. The security guard's hours of employment include the early morning and the evening hours.
Sometime after installation of the new gatehouse (no witness could say when), lightning struck the gate and blew out the computer that controls the gate arm. The computer was fixed and was operative for a while without access codes. It was anticipated that the access code mechanism would be operative and new access codes would be given to the residents by the end of August, 1987. Again, no witness could testify to more precise time frames in which these events took place.
Century also admits that it used another pamphlet or brochure, similar to Petitioner's Exhibit 12 but not filed with the Division, for advertising to the general public. This other pamphlet or brochure was entitled "The Golden Dream: Country Meadows" (Petitioner's Exhibits 13). It was given to Gerald Gott, among others, at a seminar in Merrillville, Indiana, sometime between October 10 and December 20, 1985. Like Petitioner's Exhibit 12, Petitioner's Exhibit 13 includes a color-coded map of Country Meadows showing: (1) "Home Sites Sold"; (2) "Home Sites Available"; and (3) "Final Phase, Future Home Site." In other colors, the map shows one clubhouse and one pool located between the first two color-coded areas (and bordered on the third side by golf course), and a second clubhouse and second pool nestled inside the third color- coded area (the "Final Phase"). Neither of the two pamphlets (or brochures) use the word "proposed" to describe the second clubhouse or second pool.
The "Final Phase" of Country Meadows now is underway, and it will include a clubhouse and pool. The clubhouse will be a closed pavilion with a patio.
The billboard advertising Century used for at least from May 29, 1984, through October 6, 1986, (Petitioner's Exhibit 4) stated: "Price [$29,900] Includes: Golf-Lakes-Pool- Clubhouse." However, Country Meadows actually was selling homes (and leasing lots) in the Park without golf included in that price. (Golf is optional for purchasers who pay an additional golf membership fee.) When prospective purchasers made an issue of the billboard advertising, Country Meadows on at least one occasion made an accommodation, including in the purchase price two years of free golf on the "gold card program" and charging
$240 per year for golf privileges after that.
The Tampa Tribune newspaper advertising (Petitioner's Exhibits 5 and
6) included the statement: "Free *Golf For 5 Years [under certain conditions]." The asterisk was intended to refer the reader to an asterisk near the bottom of the ad that said: "*No Free Golf On $32,900 Homes."
Mitigation.
Century has made reasonably diligent efforts in many respects both to cooperate with the Division to achieve compliance with the statutes and rules and to address and resolve the complaints and desires of residents of the Park.
CONCLUSIONS OF LAW
Section 723.006, Florida Statutes (1985), provides in pertinent part:
In performing its duties, the division has the following powers and duties:
* * *
(5) Notwithstanding any remedies available to mobile home owners, mobile home park owners, and homeowners' associations, if the division has reasonable cause to believe that a violation of any provision of this chapter or any rule promulgated pursuant hereto has occurred, the division may institute enforcement proceedings in its own name against a developer, mobile home park owner, or homeowners' association, or its assignee or agent, as follows:
* * *
(b) The division may issue an order requiring the mobile home park owner, or its assignee or agent, to cease and desist from an unlaw- ful practice and take such affirmative
action as in the judgment of the division will carry out the purposes of this chapter.
* * *
(d)1. The division may impose a civil penalty against a mobile home park owner or home- owners' association, or its assignee or
agent, for any violation of this chapter, a properly promulgated park rule or regulation, or a rule or regulation promulgated pursuant hereto. A penalty may be imposed on the basis of each separate violation and, if the violation is a continuing one, for each day of continuing violation, but in no event may the penalty for each separate violation or for each day of continuing violation exceed
$5,000. All amounts collected shall be deposited with the Treasurer to the credit of the Florida Mobile Home Trust Fund.
Charge Of Failure To Deliver Approved Prospectus.
Section 723.011, Florida Statutes (1985), provided in pertinent part: (1)(a) Every mobile home park owner of a park
which contains 26 or more lots shall file a
prospectus or offering circular with the division prior to entering into an enforce- able rental agreement.
The division shall determine whether the proposed prospectus or offering circular is adequate to meet the requirements of this chapter and shall notify the park owner by mail, within 45 days of receipt of the docu- ment, that the division has either approved the prospectus or offering circular or found specified deficiencies.
* * *
(2) The park owner shall furnish a copy of
the prospectus or offering circular together with all of 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 or offering circular if the tenancy is a re- newal of a tenancy and the mobile home owner has previously received the prospectus or offering circular.
Section 723.011, Florida Statutes (1985), was enacted as part of Chapter 84-80, Laws of Florida (1984). The effective date of the part of the law now codified as Section 723.011, "as to mobile home parks containing 100 spaces or more," was January 1, 1985.
4. Rule 7D-31.01, Florida Administrative Code (1985 Supp.), promulgated on January 10, 1985, and amended on October 20, 1985, now renumbered as Rule 7D- 31.001, provides in pertinent part:
(12)(a) A prospectus which has been received by the Division with the required filing fees prior to January 1, 1985, may be delivered to a mobile home owner prior to approval by the Division, but only until March 15, 1985. The prospectus must comply with the provisions of Section 720.303, F.S.[now 723.012]. After March 15, 1985, only a prospectus which has
been determined by the Division to meet the requirements of the Statutes and these rules may be delivered to a mobile home owner.
Until March 15, 1985, if a prospectus not yet determined adequate by the Division is delivered to a mobile home owner, a notice to the mobile home owner shall be attached
to the prospectus stating, in substantially the following form, that:
The prospectus has been filed with the Division but the Division has not yet determined whether the prospectus is adequate to meet the requirements of the Statutes and these rules; and
If amendments are required by the Division and those amendments materially alter the rental agreement in a manner that is adverse to the mobile home owner, the rental agreement shall be voidable by
the mobile home owner.
Immediately upon receipt of notification from the Division that the prospectus is adequate, the park owner shall deliver to the home owner all
amendments required by the Division together
with a written notice that if those amendments materially alter the rental agreement in a manner that is adverse to the mobile home owner, the rental agreement shall be voidable by the mobile home owner for a period of
15 days from the date of receipt of notice and the amendments.
(13) The park owner shall deliver the prospectus to existing tenants prior to the renewal of their rental agreements or prior to entering into a new rental agreement. Once a tenant has been given
a prospectus, the park owner shall not be required to provide another prospectus but shall provide amendments, as described in Rule 7D-30.04 and this rule.
Section 723.011(1), Florida Statutes (1985), requires the filing of a prospectus with the Division and the delivery of a prospectus to prospective lessees, in most cases upon execution of the rental agreement. But it does not specify that the prospectus must have been approved (or determined to have been adequate). Rule 7D-31.01 made it clear that, after March 15, 1985, an approved prospectus had to be delivered.
Under Section 723.011, Florida Statutes (1985), as interpreted by the Division's Rule 7D-31.01, Century should not have entered into any new lease agreements for the Park until its prospectus for the Park was approved. But approval of the prospectus was delayed in large part because the Division made an error and did not timely act on revisions. Deficiencies noted for the first time on March 13, 1985, should have been noted and communicated to Century when the first notice of deficiencies was sent on January 7,1985. All of those deficiencies could then have been corrected and approved by the time of the second notice of deficiencies on March 13, 1985. A long, unexplained length of time elapsed between Century's May 22, 1985, submission and the next (and last) revision on November 6, 1985. These circumstances, together with Century's generally reasonably diligent efforts to cooperate with the Division to achieve compliance with the prospectus requirement, would have mitigated Century's 79 violations of Section 723.011, Florida Statutes (1985), as interpreted by Rule 7D-31.01.
As a result of amendments to Section 723.011(1) enacted by Chapter 86- 162, Laws of Florida (1986), the statute now is codified as Section 723.011(1) Florida Statutes (Supp. 1986), and provides in pertinent part:
(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 agree- ment for a mobile home lot, the park owner shall deliver to the home owner a prospectus approved by the division. This subsection shall not be construed to invalidate those lot rental agreements for which an
approved prospectus was required to be delivered and which was delivered on or before July 1, 1986, if the mobile
home park owner had:
Filed a prospectus with the division prior to entering into the lot rental agreement.
Made a good faith effort to correct deficiencies cited by the division by responding within the
time limit set by the division, if one was set; and
Delivered the approved prospectus to the mobile home owner within 45 days of approval by the division. This paragraph shall not preclude the finding that a lot rental agreement is invalid on other grounds and shall not be construed to limit any rights of a
mobile home owner or to preclude a mobile home owner from seeking any remedies allowed by this chapter, including a determination that the lot rental agreement or any part thereof is unreasonable or unconscionable.
(b) The division shall determine whether the proposed prospectus or offering circular is adequate to meet the requirements of this chapter and shall notify the park owner by mail, within 45 days of receipt of the docu- ments, that the division has either approved the prospectus or offering circular or found specified deficiencies. In the event the division does not approve the prospectus or advise the park owner of deficiencies within
45 days, the prospectus shall be deemed to be approved.
These amendments indicate a legislative intent to over-ride the Rule 7D-31.01 interpretation of Section 723.011(1), Florida Statutes (1985), at least as to lot rental agreements to which the amendments apply. The 79 lot rental agreements Century entered into between March 16 and November 5, 1985, are of the kind to which the amendments apply. A prospectus was filed before they were entered into; Century made a good faith effort to correct deficiencies cited by the Division; and the approved prospectus was delivered within 45 days of approval. Therefore, no civil or administrative penalty should be imposed on Century for failure to deliver an approved prospectus before entering into the
79 lot rental agreements.
The Charge Of Failure To File Advertising.
Section 723.016(1) and (2), Florida Statutes (1985), provides:
All advertising materials for, used by, or promoting any mobile home park shall be filed with the division by the developer, park owner, or mobile home dealer 10 days prior to use.
The term "advertising materials" includes:
Promotional brochures, pamphlets,
advertisements, or other materials to be disseminated to the public in connection with the sale of a new mobile home or lease of a mobile home lot.
Billboards and other signs posted on and off the premises.
This statute also was enacted as part of Chapter 84-80, Laws of Florida (1984), but the effective date of this part of Chapter 84-80 was June 4, 1984.
Rule 7D-30.06(1), Florida Administrative Code (1985 Supp.), promulgated on January 10, 1985, and now renumbered Rule 7D-30.006(1), provides:
All advertising, including scripts for radio, telephone and television,
used in promoting a mobile home park
under the jurisdiction of the Division must be filed at least 10 days prior to use.
Section 723.016(1) and (2) and Rule 7D-30.06(1) must be construed to require the filing of all of the documents used by Century in promoting Country Meadows, including documents disseminated to discrete members of the public in connection with the sale of a mobile home or the lease of a lot regardless whether the recipient already had requested information or expressed an interest in the Park.
This interpretation of Section 723.016(1) and Rule 7D-30.06(1) is consistent with the overall legislative intent to broadly apply the remedial measures of the statute for the greater protection of the mobile home purchaser. See Smith v. Department of Business Regulation, 504 So.2d 1285, 1291 (Fla. 1st DCA 1987). To interpret the statute and rule not to apply to information disseminated to persons who already have requested information or expressed an interest certainly would narrow the scope of the statute's coverage and lessen the salutory effect of its provisions on advertising.
Under this interpretation of Section 723.016 and Rule 7D-30.06(1), Century was in violation in each of the instances referred to in the Findings Of Fact, including the billboard violation which continued at least from June 4, 1984, through October 6, 1986.
Charge Of False Or Misleading Advertising.
Section 723.016(3), Florida Statutes (1985), provides:
No advertising or oral statement made by any developer, park owner, or mobile home dealer shall:
Misrepresent a fact or create a false or misleading impression regarding the mobile home or mobile home park.
Contain any asterisk or other reference symbol as a means of contradicting or substantially changing any statement previously made or as a means of
obscuring a material fact.
Misrepresent the size, nature,
extent, qualities, or characteristics of the offered facilities.
Misrepresent the nature or extent of any service incident to the tenancy.
Like subsections (1) and (2) of the statute, subsection (3) was enacted as part of Chapter 84-80, Laws of Florida (1984), effective June 4, 1984.
Rule 7D-30.07, Florida Administrative Code (1985 Supp.), also promulgated on January 10, 1985, and now renumbered Rule 7D-30.007, provides:
In determining whether advertising materials violate Section 720.306 [now 723.016], F. S. or these rules, the Division shall consider both explicit representations and reasonable inferences created by such material. To determine whether misrepresentations or misleading impressions are made, the Division shall review the advertising materials in their totality.
Advertising shall be consistent with the disclosures in the prospectus required by Section 720.303 [now 723.012], F.S.
Advertising shall not misrepresent facts or create false or misleading impressions.
Advertising shall not use such
terms as "minutes away," "short distance," "only miles," "near," or similar terms to indicate distances unless the actual distance in road miles is used in conjunction with such terms.
Advertising shall not contain asterisks or any other reference symbol as a means of contradicting or substantially changing any previously made statement or as a means of obscuring material facts.
Advertising shall not contain statements, photographs, or sketches relating to facilities for recreation, sports or other conveniences which are not presently in existence or located in the park unless it is clearly stated
that such facilities are merely proposed if they do not exist; or, if they are
not located in the park, a statement to that effect and the actual distance thereto in road miles is stated.
Forecasts of, future events or population trends contained in advertising shall be based upon verifiable facts and shall be pertinent to the offering.
Any reference to a guarantee must Specifically state what is guaranteed.
The advertising shall not represent
that any part of the lot rental, as defined in Rule 7D-31.01, Florida Administrative Code, of the lessee will not increase unless all financial obligations of the lessee are guaranteed not to increase or a conspicuous statement is made disclosing that the lessee will be required to pay other charges which are not guaranteed.
Century's use of the pamphlet entitled "Country Meadows: The Golden Dream" (Petitioner's Exhibit 12) violates Section 723.016(3)(a) and (c) and Rule 7D-30.07(3). The pamphlet refers to "Exercise Facilities & Locker Rooms" whereas the only "locker room" Country Meadows ever has had was a mail room with package lockers. The pamphlet creates the false or misleading impression that the locker room is a facility for changing clothes in connection with the exercise room.
The representation "Security with Access Gatehouse" in the same pamphlet (Petitioner's Exhibit 12) does not violate either Section 723.016 or Rule 7D-30.07.
The representation of two pools and two clubhouses in the "Final Phase" of Country Meadows on the maps in both "Golden Dream" pamphlets (Petitioner's Exhibits 12 and 13) also does not violate either Section 723.016 or Rule 7D-30.07. The maps clearly state that the color-coded area in which one of the pools and one of the clubhouses appear is the "Final Phase, Future Home Sites." As Rule 7D-30.07(1) puts it, the reasonable inference to be drawn from the maps is that the pool and clubhouse appearing in the "Final Phase" of Country Meadows will be built during the "Final Phase." There was no evidence that any home owner or prospective home owner in Country Meadows was misled by the maps.
As to Rule 7D-30.07(6), the maps in the "Golden Dream" pamphlets do not use the words "proposed" or "merely proposed." But, besides the reasonable inference to be drawn from the maps that the second pool and second clubhouse will not be built until the "Final Phase," the pool and clubhouse is not "merely proposed." It always has been part of Century's plans to build them, and they are in fact now being built, as part of the "Final Phase."
The unfiled billboard Century used from June 4, 1984, through at least October 6, 1986, violated Section 723.016(3)(a), (c) and (d) and Rule 7D- 30.07(3). It misrepresented that golf privileges were included in the price of a home in County Meadows. In fact, golf privileges were an option at an additional cost or, at best, were free with the purchase price of a home only temporarily.
Turning to the two Tampa Tribune newspaper advertisements (Petitioner's Exhibits 5 and 6), they make use of an asterisk as a means of contradicting or substantially changing the statement: "Free *Golf For 5 Years [under certain conditions]." This is a violation of Section 723.016(3)(b) and Rule 7D-30.07(5). (The asterisk does not, as Century contended until its proposed recommended order conceded the point, just offer additional explanatory information.)
Summary Of Violations.
In light of the 1986 amendments to Section 723.011(1), Florida Statutes, Century is not guilty of violating Section 723.011, Florida Statutes (1985), and Rule 7D-31.01, Florida Administrative Code (1985 Supp.), for failure to deliver an approved prospectus. (Even if violations, they followed from a single decision: to continue to do business during the process of prospectus approval after March 15, 1985. In addition, there are other circumstances that would mitigate the seriousness of any violations--the Division's error and the unexplained delay in reviewing the May 22, 1985, revised prospectus.)
Century is guilty of eleven separate violations of Section 723.016(1) and (2), Florida Statutes (1985), and Rule 7D- 30.06(1), Florida Administrative Code (1985 Supp.), for failure to file advertising with the Division. One of the eleven violations (the billboard) was a continuous violation lasting at least 848 days. The evidence was that, of the other ten proven violations, eight were examples of a course of business repeated in many other instances not proven specifically in number or detail. These violations for failure to file advertising made it impossible for the Division to prevent some of Century's false advertising violations in the same advertisements.
Century was guilty of four separate violations of both Section 723.016(3), Florida Statutes (1985), and Rule 7D-30.07, Florida Administrative Code (1985 Supp.), for false or misleading advertising. Of the four separate violations of the statute and rule, one (the billboard) was a continuous violation for at least 848 days and one (the "Golden Dream" pamphlet) was an example of a course of business repeated in many other instances not proven specifically in number and detail.
In mitigation of the violations Century proved that it generally has made reasonably diligent efforts in many respects both to cooperate with the Division to achieve compliance with the statutes and rules and to address and resolve the complaints and desires of residents of the Park.
RECOMMENDATION
Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Petitioner, Department of Business Regulation, Division of Land Sales, Condominiums and Mobile Homes, enter a final order:
Dismissing the first and fourth charges alleged in the Notice To Show Cause;
Holding the Respondent, Century Realty Funds, Inc., d/b/a Country Meadows Estates, Ltd., guilty of the violations alleged in the second and third charges in the Notice To Show Cause;
Ordering the Respondent to cease and desist from the use of unfiled and false or misleading advertising; and
Ordering the Respondent to pay to the Petitioner a total civil penalty in the amount of $5000 for the violations for failure to file advertising and false or misleading advertising.
RECOMMENDED this day of September, 1987, in Tallahassee, Florida.
J. LAWRENCE JOHNSTON Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 4th day of September, 1987.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0165
Explicit rulings on the parties' proposed findings of fact are made to comply with Section 120.59(2), Florida Statutes (1985):
Petitioner's Proposed Findings Of Fact: 1.-4. Accepted and incorporated.
5.-6. Subordinate and unnecessary.
7.-26. Accepted and incorporated to the extent necessary and not subordinate.
Accepted and incorporated.
Rejected as not within the charges in the Notice To Show Cause. 29.-30. Rejected as contrary to facts found.
Subordinate to facts found.
Accepted and incorporated.
Rejected as irrelevant and not within the charges in the Notice To Show Cause.
Accepted and incorporated.
Subordinate to facts contrary to those found. 36.-38. Subordinate to facts found.
39.-41. Accepted and incorporated. 42.-44. Subordinate to facts found.
45.-47. Accepted and incorporated to the extent necessary and not subordinate.
48.-53. Accepted and incorporated.
Rejected as contrary to facts found. There are lockers in the mailroom, but the advertising is misleading.
Subordinate to facts found.
Subordinate.
Respondent's Proposed Findings Of Fact: 1-8 Accepted and incorporated.
Unnecessary.
Except that the reasonableness of the fee was not the subject of any evidence, accepted and incorporated.
11.-12. Accepted and incorporated.
13. Unnecessary.
14.-18. Accepted and incorporated.
19. Rejected as not proven if, when or why a third revision was demanded. The evidence proves only that the third revision provides some information the Division had requested.
20.-21. Accepted and incorporated.
Rejected as contrary to fact found. (It was not simply a matter of Century waiting for the Division to approve a filed prospectus.)
Accepted and incorporated.
24.-31. Irrelevant and unnecessary. (As to 29. to 31., the issues were not the same as in this case.)
32.-35. Subordinate to facts found (except it was not proven that every reasonable effort was made.)
36.-40. Accepted and incorporated except, as to 38, "financial security" was not an issue in the Notice To Show Cause and is irrelevant.)
41. Accepted and incorporated (but the lockers were in the mailroom, and the advertisement of them is misleading.)
42.-43. Accepted and incorporated.
Irrelevant and unnecessary.
Subordinate to facts found.
Rejected as contrary to facts found.
Irrelevant and unnecessary.
Accepted and incorporated.
See 47, above.
Rejected as contrary to facts found. (Petitioner's Exhibit 12 was.)
Accepted and incorporated.
Accepted and incorporated (although the first notice of deficiency, while incomplete, was timely.)
Rejected as not proven precisely what Century's decision, i.e., the understanding of its supervisor of property management operations, was based on.
54.-59. Accepted and incorporated.
Unnecessary.
Accepted and incorporated.
Rejected as conclusion of law.
63.-64. Accepted and incorporated except to the extent conclusion of law.
65. Rejected as not proven.
COPIES FURNISHED:
Debra Roberts, Esquire
Paul Thomas Presnell, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1927
Ronald L. Clark, Esquire Michael A. Tewell, Esquire MURPHY & CLARK, P.A.
Post Office Box 5955 Lakeland, Florida 33807-5955
Richard Coats, Director Division of Florida Land Sales, Condominiums and Mobile Homes The Johns Building
725 South Bronough Street Tallahassee, Florida 32399-1927
James Kearney, Secretary Department of Business Regulation The Johns Building
725 South Bronough Street Tallahassee, Florida 32399-1927
Thomas A. Bell, Esquire General Counsel
Department of Business Regulation The Johns Building
725 South Bronough Street Tallahassee, Florida 32399-1927
Docket for Case No: 87-000165
Orders for Case No: 87-000165
| Issue Date |
Document |
Summary |
|
Sep. 04, 1987 |
Recommended Order
|
No violation by mobile home park for failure to deliver approved prospectus. Violations for failure to file advertising and for false, misleading ads.
|
