STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES, | ) ) ) ) | ||
) | |||
Petitioner, | ) | ||
) | |||
vs. | ) CASE | NOS. | 88-5088 |
) | 88-5089 | ||
JULIO BERCOWICZ, MID-FLORIDA | ) | 88-5090 | |
ACRES, INC., MELVIN LEWIS, | ) | 88-5091 | |
LARRY LEWIS, WEST MIAMI ESTATES, | ) | 88-5093 | |
INC., MAINGATE ACRES, INC., | ) | 88-5094 | |
MIAMI KENDALL ESTATES, INC. | ) | 88-5095 | |
GATEWAY ACRES, INC., VIRGINIA | ) | 88-5096 | |
YOUNG, and CENTRAL FLORIDA | ) | 88-5097 | |
ESTATES, INC., | ) | 88-5098 | |
) | |||
Respondents. | ) | ||
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in these consolidated cases in Miami, Florida, on May 2, 1989, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. At the hearing the parties were represented as follows:
APPEARANCES
For Petitioner: Eric H. Miller, Esquire
Reynold Meyer, Esquire
Department of Business Regulation The Johns Building
725 South Bronough Street Tallahassee, Florida 32399-1007
For Respondents: Harold M. Braxton, Esquire
1 Datran Center, Suite 406 9100 South Dadeland Bouelvard Miami, Florida 32156
STATEMENT OF THE ISSUES
The Respondents have all been charged with multiple violations of Chapter 48, Florida Statutes. The specific violations charged raise the following issues:
Whether the Respondents violated Section 489.023(1), Florida Statutes, by offering, disposing, or participating in the offer or disposition of subdivided lands located in Dade and Osceola Counties, Florida, without a valid
order of registration from the Division of Florida Land Sales, Condominiums and Mobile Homes.
Whether the Respondents violated Section 498.023(2), Florida Statutes, by disposing or participating in the disposition of subdivided lands located in Dade and Osceola Counties, Florida, without furnishing each purchaser with a public offering statement, approved by the Division of Florida Land Sales, Condominiums and Mobile Homes, prior to the purchase.
Whether the Respondents violated Section 498.023(3), Florida Statutes, by disposing or participating in the disposition of subdivided lands principally offered by long distance telephone solicitation without furnishing the prospective purchaser with a copy of a synopsis or summary of the sales script, approved by the Division of Florida Land Sales, Condominiums and Mobile Homes prior to the execution of the sales agreement
Whether Melvin Lewis, Larry Burton Lewis, Virginia G. Young, or Julio Bercowicz are jointly and severally liable with one or more of the other Respondents for the foregoing violations because of materially participating in the offer or disposition of subdivided lands located in Florida, which offers or dispositions were made in violation of Chapter 498, Florida Statutes, and involved fraud, deception, false pretenses, misrepresentation, or false advertising.
Underlying all of the foregoing issues is the issue of whether the activities of the Respondents alleged in the several Notices To Show Cause constitute a "common promotional plan" within the meaning of Rule 7D-1.003(3), Florida Administrative Code.
PRELIMINARY STATEMENT
On March 25, 1987, the Division of Florida Land Sales, Condominiums and Mobile Homes ("Division") issued and served a Notice to Show Cause on Julio Bercowicz and Larry Lewis. On March 26, 1987, the Division issued and served separate Notices to Show Cause on each of the remaining Respondents. Each Notice alleged that the named Respondent had violated certain provisions of Chapter 489, Florida Statutes.
Each Respondent subsequently requested a formal administrative hearing pursuant to Section 120.57(1), Florida Statues. Prior to the actual assignment of a Hearing Officer in these matters by the Division of Administrative Hearings, the Respondents sought and obtained from the Circuit Court in and for Dade County, Florida, a restraining order enjoining these administrative proceedings, with which restraining order the Division complied by entering its order suspending these proceedings on June 4, 1987.
After resolution of the case pending before the circuit court, the Division entered its order reinstating these proceedings on September 15, 1988, and requested assignment of a Hearing Officer from the Division of Administrative Hearings, resulting in the above-styled cases. On October 12, 1983, the Division issued its Amended Notice to Show Cause to Melvin Lewis and Larry Lewis, in Division Docket Nos. 87141RSD, 87145RS, and 87147RSD. By order dated December 1, 1988, the Hearing Officer then assigned in DOAH Case No. 88- 5088 consolidated all of the above-captioned proceedings for final hearing.
After one continuance, the final hearing was held on May 2, 1989, at Miami, Florida. The Division presented three witnesses: James Beadman, R.L.S., and
Daniel D. Gentry, R.L.S., as experts in surveying, and Helen Lewis, who was at that time, a Respondent in Case No. 88-5092. The Division's exhibits 1-7, 9-11, 16-18, 30-36, 50-52, and 54-60 were admitted into evidence without objection.
The Division's exhibits 8, 12-15, 19-25, 27-28, 38-46, and 49 were admitted into evidence over the Respondents' hearsay objections. It was also stipulated by the parties that unsworn Answers To Interrogatories previously furnished to the Division on behalf of the Respondents would be treated for the purposes of proof and making findings of fact as though they were sworn to. The Respondents presented Larry Lewis as their only witness. During the hearing, the Division dismissed Case No. 88-5092 pending against Helen Lewis, which file was subsequently closed by order of the Hearing Officer dated May 4, 1989.
A transcript of the proceedings at hearing was filed with the Hearing Officer on May 15, 1989. At the request of the Respondents, the time for filing proposed findings of fact and conclusions of law was extended until July 13, 1989. The Division and the Respondents have timely filed proposed findings of fact and conclusions of law. Specific rulings on all findings of fact proposed by all parties are contained in the appendix to this recommended order.
FINDINGS OF FACT
At all times material to these cases, Melvin Lewis and Fay Lewis were and are husband and wife. Larry Burton Lewis ("Larry Lewis") and Cindy Morales are their son and daughter. During the period June 11, 1984, through March 16, 1987 (and perhaps later), Helen Lewis was married to Larry Lewis. Julio Bercowicz is the brother of Helen Lewis.
From 1980 through 1987, Virginia Young was employed by Melvin Lewis as a secretary.
South Florida Properties, Inc., was a Florida corporation created on April 26, 1977, for purposes which included selling real property located in section 21, township 54 south, range 37 east, Dade County, Florida, comprising
48 lots known as South Florida Properties.
West Miami Estates, Inc., is an active Florida corporation created on July 20, 1978, for purposes which included selling the following real property: approximately 40 acres in the southeast 1/4 of the northwest 1/4 of section 19, approximately 10 acres in the northeast 1/4 of the southeast 1/4 of the southeast 1/4 of section 33, and approximately 21.25 acres in the northwest 1/4 of the northeast 1/4 of section 34, all in township 55 south, range 37 east, Dade County, Florida, comprising 48 lots known as West Miami Estates.
Miami Kendall Estates, Inc., is an active Florida corporation created on October 12, 1979, for purposes which included selling approximately 60 acres in both the southwest 1/4 and the southern 1/2 of the northwest 1/4, of the southwest 1/4 of section 17, township 54 south, range 38 east, and approximately
10 acres in the east 1/2 of the east 1/2 of the southeast 1/4 of the southeast 1/4 of section 35, township 55 south, range 37 east, Dade County, Florida, comprising 48 lots known as Miami Kendall Estates. Randy Landes was the original incorporator, director, and president of Miami Kendall Estates, Inc.
Miami Kendall West Inc., was a Florida corporation created on April 15, 1980, for purposes which included selling approximately 10 acres in the south 1/2 of the south 1/2 of the southwest 1/4 of section 32, township 54 south, range 38 east, and approximately 40 acres in the northeast 1/4 and approximately
20 acres in the west 1/2 of the southwest 1/4, both in the southwest 1/4 of
section 34, township 55 south, range 37 east, section 34, Dade County, Florida, comprising 46 lots known as Miami Kendall West.
Gateway Acres, Inc., is an active Florida corporation created on February 9, 1984, for purposes which included selling approximately 60 acres located in the western 1/2 of the southeast 1/4 of section 16, township 25 south, range 27 east, Osceola County, Florida, comprising 48 lots, numbered 27 through 39 and 42 through 76, known as Gateway Acres.
Maingate Acres, Inc., is an active Florida corporation created on June 11, 1984, for purposes which included selling approximately 35 acres located in the western 1/2 of the southeast 1/4 and in the northeastern 1/4 of the southwest 1/4 of section 16, township 25 south, range 27 east, Osceola County, Florida, comprising 28 lots, numbered 1 through 26, 40, and 41, known as Maingate Acres.
Central Florida Estates, Inc., is an active Florida corporation created on November 4, 1985, for purposes which included selling approximately 60 acres located in the southern 3/4 of the south 1/2 of the northeast 1/4 of section 19, township 25 south, range 27 east, Osceola County, Florida, comprising 48 lots known as Central Florida Estates.
Mid-Florida Acres, Inc., is an active Florida corporation created on December 18, 1985, for purposes which included selling approximately 60 acres located in the north 1/2 of the northeast 1/4 of section 19, township 25 south, range 27 east, Osceola County, Florida, comprising 48 lots known as Mid-Florida Acres.
Melvin Lewis controlled or participated in the formation, operation, or business of South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., M and L Management, Inc., and Central Florida Estates, Inc., as follows:
Melvin Lewis was a subscriber to the formation of South Florida Properties, Inc., Gateway Acres, Inc., and M and L Management, Inc., and participated in the formation of Central Florida Estates, Inc.
Melvin Lewis is and has been the sole shareholder of Gateway Acres, Inc., since 1984, of Maingate Acres, Inc., since 1986, and of Miami Kendall Estates, Inc., and Central Florida Estates, Inc., since 1988.
Melvin Lewis was the president of South Florida Properties, Inc., from 1977 through 1983; the president and a director of Miami Kendall Estates, Inc., from 1988 to the present; the president of Gateway Acres, Inc., from 1984 to present; the president of M and L Management, Inc., from 1985 to the present; the president and a director of Maingate Acres, Inc., from 1987 to the present; and the president and a director of Central Florida Estates Inc., from 1988 to the present.
Melvin Lewis has been the registered agent for Gateway Acres, Inc., from 1984; for Maingate Acres, Inc., from 1986; for M and L Management, Inc., from 1985; and for Central Florida Estates, Inc., from 1988.
Melvin Lewis executed the following checks, drawn on the indicated bank accounts, to pay the necessary filing fees to the Florida Secretary of State for the incorporation of the indicated corporations:
Gateway Acres, Inc., paid by check number 161, and Maingate Acres, Inc., paid by check number 186, both drawn on the account of
Melvin Lewis Licensed Real Estate Broker, account number 0104101960, with the Executive National Bank.
M and L Management, Inc., paid by check number 50 drawn on the account of Gateway Acres, Inc., account number 0104105354, Executive National Bank.
Central Florida Estates, Inc., paid by check number 2333 drawn on the account of Melvin Lewis and Fay Lewis, account number 0107205147, Executive National Bank.
Melvin Lewis participated in dividing into lots for resale those parcels known as Miami Kendall Estates, Gateway Acres, Maingate Acres, and Central Florida Estates.
Melvin Lewis directed and controlled the sale of lots in Miami Kendall Estates, Gateway Acres, and Maingate Acres. He further directed and controlled the sale of lots in Central Florida Estates as the real estate broker for Central Florida Estates, Inc.
Melvin Lewis was authorized to execute agreements for deed as an agent for west Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., and Maingate Acres, Inc. As an authorized agent for each corporation, he executed at least two agreements for deed for west Miami Estates, Inc. (November 6, 1978 and August 15, 1979), one each for Miami Kendall Estates, Inc. (January 12, 1980), and Miami Kendall West, Inc. (January 28, 1981), four for Gateway Acres, Inc. (September 12, 26, 30 and October 5, 1984), and three for Maingate Acres, Inc. (September 7, 10, 14, 1984).
As a notary public commissioned by the State of Florida, Melvin Lewis notarized the signature of Cindy Morales on six agreements for deed for Miami Kendall west, Inc. (dated from March 22 through September 21, 1982), and on one agreement for deed for Central Florida Estates, Inc. (January 28, 1986). He also notarized the signature of Fay Lewis on forty agreements for deed for Gateway Acres, Inc. (dated from April 23, 1984, through August 8, 1985), and on twenty agreements for deed for Maingate Acres, Inc. (dated from July 8 through October 31, 1984). He also notarized the agreement for deed, dated November 11, 1984, between Maingate Acres Inc., and Irma Jean DeWitt and/or Jean M. Hutchens for Maingate Acres lot 11. Melvin Lewis also notarized the corporate execution for deeds conveying lots to purchasers from West Miami Estates, Inc., Miami Kendall Estates, Inc., and Miami Kendall West, Inc.
Larry Lewis controlled or participated in the formation, operation, or business of South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., Central Florida Estates, Inc., and Mid-Florida Acres, Inc. as follows:
Larry Lewis was a subscriber in the formation of West Miami Estates, Inc., and South Florida Properties, Inc., and participated in the formation of Central Florida Estates, Inc.
Larry Lewis was president and a director of West Miami Estates, Inc., from 1979 through 1984, and from 1987 to the present; an officer of South Florida Properties, Inc., from 1977 to 1979; and the president of Mid-Florida Acres; Inc., from 1987 to the present.
Larry Lewis has been the sole shareholder of West Miami Estates, Inc., since 1978 and the sole shareholder of Mid-Florida Acres, Inc., since 1986.
Larry Lewis participated in dividing into lots for resale those parcels known as West Miami Estates and Mid-Florida Acres.
From the inception of West Miami Estates, Inc., and of Mid-Florida Acres, Inc., Larry Lewis has controlled the daily operations and sale of lots by each corporation.
Purchasers for lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid- Florida Acres were solicited by Larry Lewis using long distance telephone calls.
Fay Lewis controlled or participated in the formation, operation or business of South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., and Maingate Acres, Inc., as follows:
Fay Lewis was a subscriber to the formation of South Florida Properties, Inc., and Miami Kendall West, Inc.
Fay Lewis was the president and a director of Miami Kendall West, Inc., from its inception in 1980 until its dissolution in 1988. As president of West Miami Estates, Inc., Fay Lewis executed the warranty deed conveying lot 35A of West Miami Estates to Troy Johnson.
From April 30, 1984, to August 12, 1985, Fay Lewis executed at least forty agreements for deed on behalf of Gateway Acres, Inc.; thirty-eight as corporate secretary and two as an agent for the corporation. From July 17 to November 19, 1984, Fay Lewis executed at least twenty agreements for deed on behalf of Maingate Acres, Inc.; eighteen as corporate secretary and two as an agent for the corporation.
Fay Lewis executed two separate warranty deeds conveying lots in Miami Kendall Estates as a witness to the execution by the president of Miami Kendall Estates, Inc.
Cindy Morales participated in the operation or business of Miami Kendall Estates, Inc., Miami Kendall West, Inc., and Central Florida Estates, Inc., as follows:
From April 29 to September 28, 1982, Cindy Morales executed six agreements for deed as an authorized agent for Miami Kendall West, Inc. From January 21 to February 27, 1986, Cindy Morales executed fifteen agreements for deed as an authorized agent for Central Florida Estates, Inc.
Cindy Morales also executed two separate warranty deeds conveying lots in Miami Kendall Estates as a witness to the execution by the president of Miami Kendall Estates, Inc.
In 1985, Virginia Young participated in the formation of Central Florida Estates, Inc., and was listed as the sole subscriber, president, and registered agent. She participated in the daily operations of the corporation, including the filing of annual reports with the Florida Secretary of State. In 1987, she resigned her positions with Central Florida Estates, Inc., and transferred the corporation to Melvin Lewis.
Saundra Bonduel ("Bonduel"), who was Melvin Lewis' accountant, was an officer in South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., M and L Management, Inc., and Central Florida Estates, Inc., as follows:
Bonduel was a vice president of South Florida Properties, Inc., from 1978 to 1983; of West Miami Estates, Inc., from 1979 to the present; of Miami Kendall West, Inc., from 1981 to 1987; of Gateway Acres, Inc., and Maingate Acres, Inc., from 1985 to the present; of M and L Management, Inc., from 1987 to the present, and of Miami Kendall Estates, Inc.; and Central Florida Estates, Inc., from 1988 to the present.
Bonduel was a director and the corporate secretary of Miami Kendall Estates, Inc., from 1980 to 1988.
In the foregoing capacities, Bonduel executed the annual reports filed with the Florida Secretary of State for each corporation as follows: South Florida Properties, Inc. (1978-1983); West Miami Estates, Inc. (1979-1989); Miami Kendall Estates, Inc. (1980, 1982-1989); Miami Kendall West, Inc. (1982- 1987); Gateway Acres, Inc., and Maingate Acres, Inc. (1985-1989); M and L Management, Inc. (1987-1988); and Central Florida Estates, Inc. (1988-1989).
South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., M and L Management, Inc., Central Florida Estates, Inc., and Mid- Florida Acres, Inc. have shared common offices and telephones, as follows:
All of the corporations are or have been located at 633 N.E. 167th Street, North Miami Beach, Florida 33162, as follows:
South Florida Properties, Inc.: Suite 519 (1978); Suite 1020 (1979); Suite 810 (1980-1983)
West Miami Estates, Inc.: Suite 1020 (1979); Suite 810 (1980 to the present)
Miami Kendall Estates, Inc., and Miami Kendall West, Inc.: Suite 810 (1981 to
the present).
Gateway Acres, Inc., and Maingate Acres, Inc.: Suite 810 (1985 to the present)
M and L Management, Inc.: Suite 810 (1987 to the present).
Mid-Florida Acres, Inc.: Suite 810 (1986 to the present).
Central Florida Estates, Inc.: Suite 810 (1988 to the present).
2114 N.E. 182nd Street, North Miami Beach, Florida, was the personal address for Larry Lewis from 1979 through 1984; the personal address of Randy L. Landes, incorporator of Miami Kendall Estates, Inc., from 1979 through 1984; the personal address of Helen Lewis from 1984 through 1986; the corporate address of Miami Kendall Estates, Inc., in 1979 and 1980; and the corporate address of Maingate Acres, Inc., in 1984.
4927 S.W. 139th Court, Miami, Florida 33175 was the corporate address for Gateway Acres, Inc., in 1984 and for M and L Management, Inc., in 1985 and 1986.
(305) 652-8523 was the telephone number given for the officer executing each of the annual reports listed below for the following corporations: West Miami Estates, Inc., and Miami (Kendall Estates, Inc. (1980-present); South Florida Properties, Inc. (1980-1983); Miami Kendall West, Inc. (1981-1987); Gateway Acres, Inc., and Maingate Acres, Inc. (1985-present); M and L Management, Inc. (1986-present); Central Florida Estates, Inc. (1988-present); Mid-Florida Acres, Inc. (1986).
Mel Lewis, Larry Lewis, and Fay Lewis are authorized signers for the following corporate bank accounts with Executive National Bank, Miami, Dade County, Florida; each account opened on the indicated date:
Miami Kendall West, Inc., Account Number 010-410-176-6-06, opened on October 12, 1982;
Miami Kendall Estates, Inc., Account Number 010-410-179-0-06, opened on October 12, 1982;
West Miami Estates, Inc., Account Number 010-410-177-4-06, opened on October 12, 1982.
West Dade Acres, Inc., Account Number 010- 410-178-2-06, opened on October 12, 1982,
with Cindy Morales listed as an additional signer;
Gateway Acres, Inc., Account Number 101- 010-410-5354-06, opened on July 12, 1984;
Maingate Acres, Inc., Account Number 010- 410-6350-06, opened on June 25, 1984.
Mel Lewis, Larry Lewis, and Fay Lewis were the authorized signers for Skylake State
Bank, Account Number 102-007-6, opened July 28, 1978, for West Miami Estates, Inc.
Mel Lewis and Larry Lewis were the authorized signers for the bank account of South Florida Properties, Inc., at Skylake State Bank, Account Number 101-526-9.
Julio Bercowicz executed agreements for deed as an authorized agent of Mid-Florida Acres, Inc. Julio Bercowicz was the original incorporator of Mid- Florida Acres, Inc., and was, at one time, the sole stockholder. He was president of Mid-Florida Acres, Inc., until at least March 17, 1986.
The properties offered as West Miami Estates, Miami Kendall Estates, and Miami Kendall West share certain characteristics. All are located in the portion of the Everglades lying east of the Everglades National park. The parcels are typical Everglades wetland: primarily sawgrass prairie with occasional hardwood hammocks on slightly elevated areas and subject to seasonal flooding.
Several of the small parcels comprising West Miami Estates, Miami Kendall Estates, and Miami Kendall West are located close together. One of the parcels sold as West Miami Estates and two of those sold as Miami Kendall West; are located within the one square mile of section 34, township 55 south, range
37 east, Dade County, Florida. A second parcel of West Miami Estates and the smaller parcel of Miami Kendall Estates are located in sections 33 and 35, respectively, township 55 south, range 37 east, on either side of the foregoing section 34.
The parcels sold as Gateway Acres and Maingate Acres are contiguous and were formed from the single large parcel conveyed by Sand Hills Corporation to Melvin M. Lewis Licensed Real Estate Broker, Inc., on March 30, 1984. The single parcel was divided into a total of seventy-six consecutively-numbered lots; lots 1-26, 40, and 41 were then apportioned to Maingate Acres and lots 27-
39 and 42-76 to Gateway Acres.
On more than one occasion, when a lot in Gateway Acres or Maingate Acres was deeded, Melvin Lewis, individually, would convey the lot by warranty deed to the applicable corporation for nominal consideration (as shown by the documentary stamps affixed to each document). If the lot was in those apportioned to Gateway Acres, Inc., he would then execute a second warranty deed as corporate president, on the same date and before the same witnesses and notary, conveying the lot to the purchaser for substantial consideration. If the lot was in Maingate Acres, the warranty deed conveying the lot to the purchaser would be executed on the same day. Fay Lewis witnessed, and Mel Lewis witnessed and notarized, the execution of at least one warranty deed by Helen Lewis as president of Maingate Acres, Inc.
Those parcels sold as Central Florida Estates and Mid-Florida Acres were created from a single 140-acre parcel, acquired by M and L Management, Inc., on January 6, 1986, from David Alan Siegel and Betti L. Siegel, comprising almost the entire northeast 1/4 of section 19, township 25 south, range 27 east, Osceola County, Florida. On the same date, Melvin Lewis, as president of M and L Management, Inc., executed a warranty deed conveying to Kissimmee Hills, Inc., a 20-acre strip 2,640 feet long and 330 feet wide. This conveyance divided the single parcel conveyed by the Siegels into northern and southern portions. On January 7, 1986, Melvin Lewis, as president of M and L Management, Inc., executed a warranty deed conveying to Central Florida Estates, Inc., the remaining portion of the original parcel to the immediate south of the strip of property conveyed to Kissimmee Hills, Inc. Cindy Morales and Fay Lewis executed
the deed as witnesses to the signature of Melvin Lewis. Mid-Florida Acres is comprised of the northern 60 acres remaining after 60 acres were conveyed to Central Florida Estates, Inc., and 20 acres to Kissimmee Hills, Inc.
Identical or substantially identical form contracts were used to sell lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, and Central Florida Estates. The form of the contracts was also similar to the types of contracts used by many other people in the business of selling undeveloped real estate in Florida. Each sale was made by executing an unrecorded agreement for deed which reserved to the seller both the title and possession of the property until payment under the contract was complete. The use of agreements for deed is not an unusual practice in the business of selling undeveloped real estate in Florida.
Purchasers of lots in South Florida Properties exchanged their lots for lots in Miami Kendall Estates, Miami Kendall West, West Dade Acres, or West Miami Estates.
Melvin Lewis solicited people who had purchased lots from South Florida Properties, Inc., to exchange their lots for ones in West Miami Estates, Miami Kendall Estates, Miami Kendall West, or West Dade Acres. He subsequently sent letters to each of such purchasers verifying their discussions and providing the documents necessary for the exchange of lots.
Casimir T. Brudzinski purchased lot 94-B in South Florida Properties by an agreement for deed executed by Melvin Lewis as president of South Florida Properties, Inc. After being solicited by Melvin Lewis to exchange his lot, Mr. Brudzinski agreed to exchange his lot for lot 7WD in West Dade Acres.
Delbert D. Oldenburg purchased lot 126-D, South Florida Properties, by an agreement for deed executed by Melvin Lewis as president of South Florida Properties, Inc. After being solicited by Melvin Lewis to exchange his lot, Mr. Oldenburg agreed to exchange his lot for lot 43WDA in West Dade Acres, which exchange agreement was countersigned by Melvin Lewis.
Ralph J. and Beryl G. Hanchin purchased lots 100A and 100B in South Florida Properties, making monthly payments to South Florida Properties, Inc. The Hanchins continued to make payments after October 1982, which payments were credited toward the purchase of lots 55A and 55B in Miami Kendall Estates.
The following sales were made in each indicated parcel: at least 19 in West Miami Estates, 22 in Miami Kendall Estates, 19 in Miami Kendall West, 44 in Gateway Acres, (lots 38, 53, 67, 71 appear to have been resold due to purchaser default or refund), 24 in Maingate Acres, at least 15 in Central Florida Estates, and at least 43 in Mid-Florida Acres.
None of the lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid- Florida Acres were sold as part of a reservation program approved by the Division pursuant to Section 498.024, Florida Statutes.
West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., Central Florida Estates, Inc., and Mid-Florida Acres, Inc., are neither governments nor governmental agencies.
The lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres, were not offered as cemetery lots or interests in cemetery lots.
The offer or disposition of lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres was not registered with either the Florida Department of Banking and Finance or the United States Securities and Exchange Commission.
Each offer or disposition of a lot in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres was for the actual sale of real property and not for the sale of a debt secured by a mortgage on real property.
The sale price for each separate lot sold in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres did not exceed 50,000.00.
The lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres were each offered or sold without any residential or commercial buildings.
The lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres were each offered or sold without any obligation of the seller to construct a residential or commercial building thereof for the purchaser.
No plat or series of plats describing each lot in South Florida Properties, West Dade Acres, West Miami Estates, Miami Kendall Estates, or Miami Kendall West, was recorded or accepted for recordation in the official records of Dade County, Florida, prior to any lot sales.
No plat or series of plats describing each lot in Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres, was recorded or accepted for recordation in the official records of Osceola County, Florida, prior to any lot sales.
The Division did not issue any order exempting West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres from the registration requirements of Chapter 498, Florida Statutes, prior to any lot sale or other disposition being made.
The Division has not issued a valid order of registration for lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres pursuant to Chapter 498, Florida Statutes.
No purchaser of a lot in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres received a current public offering statement which had been approved by the Division.
No purchaser of a lot in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres received a synopsis or summary, approved by the Division, of
the sales script used in conjunction with the long distance telephone solicitation of the lot purchaser.
The Division has not approved a public offering statement for West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres.
The Division has not approved a synopsis or summary of any long distance telephone solicitation sales script for West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres.
Both Melvin Lewis and Larry Lewis were familiar with the subdivided land registration requirements of Chapter 493, Florida Statutes. West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres were each created to hold less than 50 lots in an attempt to avoid the registration requirements of Chapter 498. The physical characteristics of the parcels of land offered and sold by the Respondents made those parcels unacceptable for registration under Chapter 498.
Rodney A. Lein purchased lot 73 in Miami Kendall West on July 13, 1980, after a telephone call from Larry Lewis in which Larry Lewis offered Mr. Lein "income property" on land slated for development. In the conversation, Larry Lewis guaranteed he could resell the land at a profit within 3 to 4years. After the call, but before the purchase, Mr. Lein traveled to Miami to inspect the property. Larry Lewis took him to the end of west Kendall Drive in Dade County, Florida. Larry Lewis said the property offered was some 2 1/2 to 3 miles to the west of the pavement's end, but that Kendall Drive would be extended out past the property. Larry Lewis further said that as the urban area developed, the city would pay for extending such services as roads and water utilities to the property.
Thomas Bezelik purchased lot 54 D, Miami Kendall Estates in January 1980 after a telephone solicitation in which the caller said the property would be a good investment and possibly purchased for industrial use. Bezelik was told an aerospace business was located close to the property he was being offered and was a potential purchaser of the site. Bezelik is still paying for the property.
Robert Welch was solicited by telephone to purchase a lot in Central Florida Estates and was told the subdivision had been improved with paved streets and all utilities such as electricity, gas, telephone service, water, and sidewalks. He was further told the property would definitely appreciate in value. On the basis of this and other telephone conversations with the solicitor, Mr. Welch purchased lot 28 in Central Florida Estates. He subsequently spoke with Virginia Young by telephone, who identified herself as the president of Central Florida Estates, Inc., and affirmed the statements that had been made in soliciting him to purchase the property. She also stated Welch could redivide his 1 1/4-acre parcel into 4 lots.
Eileen O. Gometz, together with her husband, since deceased, purchased a lot in West Miami Estates as a result of a telephone conversation with Larry Lewis. Larry Lewis said the property was suitable for building and would be developed within 3 to 4 years from purchase. Larry Lewis told her the property was close to a large commercial company but that the actual property itself
would be home sites. At no time was she advised of the actual zoning or any rezoning of the property.
Paul J. Matrullo purchased a lot in Gateway Acres after a telephone call from Larry Lewis in which Lewis assured him the property was good quality, "buildable land." Prior to his purchase, Mr. Matrullo visited the general area of the property with Larry Lewis. During the physical inspection, Lewis stated the land would be developed for residential housing or the State of Florida would purchase the property to develop a highway. Lewis further stated the property had been purchased by himself and his father, and the land was of such quality that it would double or triple in value within 12 months to 2 years. Larry Lewis gave no information specifically describing the zoning of the property. Primarily based on Lewis' representation that the property would double or triple in value within a 2-year period, Mr. Matrullo purchased lot 56 in Gateway Acres. He is currently paying for the property.
William Somerset purchased lot 17 in Maingate Acres after receiving a telephone solicitation. He was told the intent of the offering was not to develop the land but to hold it as an investment for approximately 1 1/2 years and then sell it to developers. He purchased lot 17 because he was told the property would be quickly resold at a profit within "...perhaps a year and a half." He is still paying for the property.
Similar sales methods were utilized in the marketing of the lots in all of the subject subdivisions. For example, solicitations for sales were made by telephone and prospective purchasers were told that they should purchase for investment purposes. Much of the land offered for sale by the Respondents was a poor investment at any price.
The uses to which the property in sections 16 and 19, township 25 south, range 27 east in Osceola County, Florida, may be put are primarily agricultural. The minimum lot area is five acres and the density for residential development is one residence per five-acre lot. The purchasers of lots in Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres would not be permitted to build a separate structure on their individual lots; a minimum of four contiguous lots would have to be merged in order to create a parcel on which one residence could be built.
The property purchased from Sand Hills Corporation and resold as Gateway Acres and Maingate Acres is entirely contained within the "Davenport Creek Swamp." The property is low, poorly drained, wet Florida swampland subject to periodic flooding.
The single parcel sold as Central Florida Estates and Mid-Florida Acres, and in part conveyed to Kissimmee Hills, Inc., contains three distinct types of property. Roughly 45 percent of the tract is a "typical central Florida grass pond." During periods of dry weather portions of the pond dry up, but the property is subject to periodic flooding during the year. The second portion of the property is a "transitional zone" between the actual grass pond and potentially more usable land. The transitional property is low and poorly drained, again subject to occasional flooding. The smallest portion of the property, primarily found in the northern portion sold as Mid-Florida Acres, is sufficiently elevated and dry.
No clear public access exists to either Gateway Acres or Maingate Acres. Access is obtained either by four-wheel drive vehicle or by foot.
In soliciting purchasers for either Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres, Larry Lewis stated the offered real property was located in an area undergoing rapid growth and development. In fact, none of the parcels sold as West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres have been developed. Nor has West Kendall Drive in Miami, Florida, been extended westward to Lot 73, Miami Kendall West.
Neither South Florida Properties, Inc., nor Melvin Lewis explained to the previous purchasers of South Florida Properties that the reason that they were being offered an exchange of their property was because South Florida Properties had been deeded back to the original mortgage holder in lieu of foreclosure.
The lots offered for sale by the Respondents in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres were all offered as part of a common promotional plan by Melvin Lewis and Larry Lewis, with the assistance of a few of their relatives, friends, and employees.
In his various capacities described in paragraph 11 of these Findings of Fact, Melvin Lewis participated in the disposition of 143 lots of subdivided lands in Florida.
In his various capacities described in paragraph 12 of these Findings of Fact, Larry Lewis participated in the disposition of 186 lots of subdivided lands in Florida.
In her capacities described in paragraph 15 of these Findings of Fact, Virginia Young participated in the disposition of 15 lots of subdivided lands in Florida.
In his capacities described in paragraph 19 of these Findings of Fact, Julio Bercowicz participate in the disposition of at least 2 lots of subdivided lands in Florida.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to these consolidated cases. Sec. 120.57(1), Fla. Stat.
Several provisions of Chapter 498, Florida Statutes (1987), 1/ are relevant to the disposition of these cases. Attention is first directed to the definition at Section 498.005(19), Florida Statutes (1987), which reads are follows:
"Subdivision" or "subdivided lands" means:
Any contiguous land which is divided or is proposed to be divided for the purpose of disposition into 50 or more lots, units, or interests; or
Any land, whether contiguous or not, which is divided or proposed to be divided into 50 or more lots, parcels, units, or
interests which are offered as a part of a common promotional plan.
The above-quoted statutory definition has been implemented by Rule 7D- 1.003(3), Florida Administrative Code, which reads as follows:
"Common promotional plan" means an offering of subdivided lands by a person or by a group of persons in a similar plan of disposition. The Division may consider one or more of the following elements, or other elements as may be applicable, to determine whether subdivided lands are, have been or will be offered pursuant to common promotional plan:
physical relationship of the properties being offered; the offered properties are known, designated, or advertised as a common unit or a common name; the utilization of a common broker or sales personnel, common sales office of facilities, or common promotional methods; the utilization of cross-referrals of prospective purchasers between sales operations; common ownership interests.
Other pertinent statutory definitions include the following portions of Section 498.005, Florida Statutes (1987):
(5) "Disposition" means any transaction involving any interest in subdivided lands which is entered into for profit, including any sale, resale, lease for more than 5 years, assignment, or award by lottery of any interest in subdivided lands.
* * *
(10) "Offer" includes every inducement, solicitation, or attempt to encourage a person to acquire any interest in subdivided lands, if undertaken for gain or profit.
* * *
"Persons" means an individual, corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership, or unincorporated association of two or more of any of the foregoing having a joint or common interest or any other legal or commercial entity.
* * *
(18) "Subdivider" means any person who owns any interest in subdivided lands or is engaged in the disposition of subdivided lands either directly or through the services of a broker or salesman.
Various prohibitions are set forth in Section 489.023, Florida Statutes (1987), including the following relevant provisions:
498.023 Prohibitions on dispositions of interests in subdivided lands.--Unless the subdivided lands are exempt or the transaction is exempt pursuant to s. 498.025:
No person may offer or dispose of, or participate in an offer or disposition of, any interest in subdivided lands located in this state, nor may any person offer or dispose of, or participate in an offer or disposition of, any interest in subdivided lands located without this state to persons in this state, nor may any person within this state offer or dispose of, or participate within this state in an offer or disposition of, any interest in subdivided lands located without this state to persons located with- out this state, unless such person has a valid order of registration therefor.
No person may dispose of, or participate in the disposition of any interest in subdivided lands unless a current public offering statement is delivered to the purchaser prior to the disposition, the purchaser is afforded a reasonable opportunity to examine the public offering statement prior to the disposition, and the contract and public offering statement used contain a provision which authorizes the purchaser to cancel the agreement without cause until midnight of the seventh day after execution by the purchaser.
When the principal solicitation of the disposition is by long distance telephone, no person may dispose of, or participate in the disposition of, any interest in subdivided lands which are required to be registered pursuant to this chapter unless:
(a) .....
(b) .....
The subdivider furnishes the prospective purchaser with a copy of a synopsis or summary of the sales script, which synopsis or summary has been approved by the division, and a current public offering statement, either by mail or personal delivery, prior to the execution of the agreement to purchase and the purchaser certifies in writing to the receipt thereof....
Section 498.049(4), Florida Statutes (1987), contains the following provisions with regard to penalties for violations of Chapter 498 or related rules:
The division may, by order, impose civil penalties against any person for violations of this chapter or rules relating hereto. Such imposition of a civil penalty shall not preclude he division from invoking any other appropriate remedy authorized by this chapter. Each person who materially participates in any offer or disposition of any interest in subdivided lands in violation of this chapter or rules relating hereto, which violation involves fraud, deception, false pretenses, misrepresentation, or false advertising or involves the disposition, concealment, or diversion of any funds or assets of any person so as to adversely affect the interests of a purchaser of any interest in subdivided lands, and who directly or indirectly controls a subdivider or is a general partner, officer, director, agent, or employee of a subdivider shall also be liable under this subsection jointly and severally with and to the same extent as the subdivider, unless such person did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by which such liability is alleged to exist, and among such persons there is a right of contribution as in cases of contracts among persons so liable, except that a creditor of a subdivider so liable shall not be jointly and severally liable unless the creditor has assumed managerial or fiduciary responsibility in a manner which is pertinent to the basis for the liability of the subdivider under this subsection. No civil penalty so imposed shall exceed 10,000 for each offense, and all amounts collected shall be deposited with the Treasurer to the credit of the Division of Florida Land Sales, Condominiums, and Mobile Homes Trust Fund.
No order requiring the payment of a civil penalty shall become effective until 20 days after the date of such order, unless otherwise agreed in writing by the person on whom the penalty is imposed.
Finally, Section 498.051, Florida Statutes (1987), contains the following pertinent provisions:
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:
Violated any provision of this chapter;
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;
* * *
The affirmative action to be taken by a person pursuant to an order authorized by subsection (1) may include, but is not limited to:
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 provisions of this chapter; and
Establishing a trust or escrow account in a financial institution located within this state to assure the payment 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.
The primary disputed issue in these consolidated cases is whether any or all of the subject subdivisions are subject to the registration requirements of Chapter 498, Florida Statutes. The Respondents contend that the registration requirements do not apply, arguing that each subdivision was a separate entity comprised of fewer than 50 lots, parcels, units, or interests. The Division contends that the registration requirements do apply, arguing that the units in all of the subdivisions were offered as "part of a common promotional plan."
The facts in this case clearly demonstrate that the lots offered for sale by the Respondents in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid- Florida Acres were all offered as part of a common promotional plan within the meaning of Section 498.005(19)(b), Florida Statutes (1987), and Rule 7D- 1.003(3), Florida Administrative Code. The facts in this case are sufficient to meet about half of the elements listed in Rule 7D-1.003(3). In addition to those elements, the facts show many other elements indicative of a common promotional plan, not the least of which are the fact that Melvin Lewis and/or Larry Lewis, in one capacity or another, figure prominently in the activities of every one of the Respondent corporations and the fact that lots owned by one corporation were exchanged for lots owned by four other corporations. These exchanges are compelling evidence that the several Respondent corporations and other now defunct corporations were nothing more than alter ego devices created by or on behalf of Melvin Lewis and Larry Lewis for the purpose of avoiding the requirements of Chapter 498. (See, also, Department of Business Regulation, Division of Florida Land Sales and Condominiums v. Citrus Grove Acres, Inc., et al., DOAH Case Nos. 84-2200, 84-3125, and 84-3770 (R.O. issued May 30, 1985) in which the Hearing Officer found, on very similar facts, that the activities of several corporations constituted part of a common promotional plan.)
For the reasons stated in the immediately preceding paragraph, West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres constitute subdivided lands as defined by Section 498.005(19)(b), Florida Statutes (1987). The two pairs of parcels known respectively as Gateway Acres and Maingate Acres, and Central Florida Estates and Mid-Florida Acres, also constitute subdivided lands as defined by Section 498.005(19)(a), Florida Statutes (1987), because each of those pairs of parcels were formed by dividing a single parcel of land into more than fifty lots for disposition.
The offer and disposition of lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres was not done as part of a reservation program approved pursuant to Section 498.024, Florida Statutes (1987), nor done under an order of registration issued by the Division pursuant to Section 498.029, Florida Statutes (1987), nor exempt from registration pursuant to Section 498.025, Florida Statutes.
West Miami Estates, Inc., offered 48 lots and entered into 19 agreements to sell separate lots in subdivided lands located in Florida without a valid order of registration from the Division. The overall offering of such lots and each of the 19 agreements constitute separate violations of Section 498.023(1), Florida Statutes (1987). West Miami Estates, Inc., failed to deliver a current Florida Public Offering Statement to each purchaser prior to entering into each of the 19 agreements for deed. Each such failure constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). West Miami Estates, Inc., entered into 19 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation without furnishing each prospective purchaser with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such failure to provide a sales script constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
Miami Kendall Estates, Inc., offered 48 lots and entered into 22 agreements to sell separate lots in subdivided lands located in Florida without a valid order of registration from the Division. The overall offering of such lots and each of the 22 agreements constitute separate violations of Section 498.023(1), Florida Statutes (1987). Miami Kendall Estates, Inc., failed to deliver a current Florida Public Offering Statement to each purchaser prior to entering into each of the 22 agreements for deed. Each such failure constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Miami Kendall Estates, Inc., entered into 22 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation without furnishing each prospective purchaser with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such failure to provide a sales script constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
Gateway Acres, Inc., offered 48 lots and entered into 44 agreements to sell separate lots in subdivided lands located in Florida without a valid order of registration from the Division. The overall offering of such lots and each of the 44 agreements constitute separate violations of Section 498.023(1), Florida Statutes (1987). Gateway Acres, Inc., failed to deliver a current Florida Public Offering Statement to each purchaser prior to entering into each of the 44 agreements for deed. Each such failure constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Gateway Acres, Inc.,
entered into 44 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation without furnishing each prospective purchaser with summary of the solicitation sales script prior to the execution of sales agreement by the purchaser. Each such failure to provide a sales script constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
Maingate Acres, Inc., offered 28 lots and entered into 24 agreements to sell separate lots in subdivided lands located in Florida without a valid order of registration from the Division. The overall offering of such lots and each of the 24 agreements constitute separate violations of Section 498.023(1), Florida Statutes (1987). Maingate Acres, Inc., failed to deliver a current Florida Public Offering Statement to each purchaser prior to entering into each of the 24 agreements for deed. Each such failure constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Maingate Acres, Inc., entered into 24 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation without furnishing each prospective purchaser with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such failure to provide a sales script constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
Central Florida Estates, Inc., offered 48 lots and entered into 15 agreements to sell separate lots in subdivided lands located in Florida without a valid order of registration from the Division. The overall offering of such lots and each of the 15 agreements constitute separate violations of Section 498.023(1), Florida Statutes (1987). Central Florida Estates, Inc., failed to deliver a current Florida Public Offering Statement to each purchaser prior to entering into each of the 15 agreements for deed. Each such failure constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Central Florida Estates, Inc., entered into 15 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation without furnishing each prospective purchaser with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such failure to provide a sales script constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
Mid-Florida Acres, Inc., offered 48 lots and entered into 43 agreements to sell separate lots in subdivided lands located in Florida without a valid order of registration from the Division. The overall offering of such lots and each of the 43 agreements constitute separate violations of Section 498.023(1), Florida Statutes (1987). Mid-Florida Acres, Inc., failed to deliver a current Florida Public Offering Statement to each purchaser prior to entering into each of the 43 agreements for deed. Each such failure constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Mid-Florida Acres, Inc., entered into 43 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation without furnishing each prospective purchaser with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such failure to provide a sales script constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
As the real estate broker for Miami Kendall Estates, Inc., Gateway Acres, Inc., Maingate Acres, Inc., and Central Florida Estates, Inc., as the president of Gateway Acres, Inc., and by executing agreements for deed as an authorized agent for West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., and Maingate Acres, Inc., or in his capacity as a notary public commissioned by the State of Florida, Melvin Lewis participated in the offering of subdivided lands located in Florida and in
the disposition of 143 lots of such subdivided lands without a valid order of registration from the Division. The entire offering of such lots and each of such 143 dispositions constitute separate violations of Section 498.023(1), Florida Statutes (1987). No current Florida Public Offering Statement was delivered to any of the purchasers in any of the 143 dispositions in which Melvin Lewis participated. Accordingly, each such participation by Melvin Lewis constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Melvin Lewis participated in 143 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation in which none of the purchasers was furnished with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such participation by Melvin Lewis constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
As president of West Miami Estates, Inc., and Mid-Florida Acres, Inc., and as a salesman for those two corporations and for Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., and Central Florida Estates, Inc., Larry Lewis participated in the offering of subdivided lands located in Florida and in the disposition of 186 lots of such subdivided lands without a valid order of registration from the Division. The entire offering and each of such 186 dispositions constitute separate violations of Section 498.023(1), Florida Statutes (1987). No current Florida Public Offering Statement was delivered to any of the purchasers in any of the 186 dispositions in which Larry Lewis participated. Accordingly, each such participation by Larry Lewis constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Larry Lewis participated in 143 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation in which none of the purchasers was furnished with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such participation by Larry Lewis constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
As president director, and sole shareholder of Central Florida Estates, Inc., from 1985 to 1987, Virgina Young participated in the offering of subdivided lands located in Florida and in the disposition of 15 lots of such subdivided lands without a valid order of registration from the Division. The offering and each of such 15 dispositions constitute separate violations of Section 498.023(1), Florida Statutes (1987). No current Florida Public Offering Statement was delivered to any of the purchasers in any of the 15 dispositions in which Virginia Young participated. Accordingly, each such participation by Virginia Young constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Virginia Young participated in 15 separate dispositions of subdivided lands sold primarily by long distance telephone solicitation in which none of the purchasers was furnished with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such participation by Virginia Young constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
In his capacity as president and sole shareholder of Mid-Florida Acres, Inc., until at least March 17, 1986, and by executing agreements for deed as an authorized agent for Mid-Florida Acres, Inc., Julio Bercowicz participated in the offering of subdivided lands located in Florida and in the disposition of at least 2 lots of such subdivided lands without a valid order of Registration from the Division. The offering and each of such 2 dispositions constitute separate violations of Section 498.023(1), Florida Statutes (1987). No current Florida Public Offering Statement was delivered to either of the purchasers in either of the 2 dispositions in which Julio Bercowicz participated.
Accordingly, each such participation by Julio Bercowicz constitutes a separate violation of Section 498.023(2), Florida Statutes (1987). Julio Bercowicz participated in at least 2 dispositions of subdivided lands sold primarily by long distance telephone solicitation in which none of the purchasers was furnished with a summary of the solicitation sales script prior to the execution of the sales agreement by the purchaser. Each such participation by Julio Bercowicz constitutes a separate violation of Section 498.023(3), Florida Statutes (1987).
The pattern of statements used to promote and sell West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres involved fraud, deception, false pretenses, misrepresentation, or false advertising. The participation of Melvin Lewis, Larry Lewis, Virginia Young, and Julio Bercowicz in their respective capacities set forth in the Findings of Fact and summarized in these conclusions of law, was material to furthering the common promotional plan and to the offering and disposition of the subdivided lands in violation of Chapter 498, Florida Statutes. Pursuant to Section 498.049(5), Florida Statutes (1987), the following are jointly and severally liable:
Melvin Lewis, Larry Lewis, and West Miami Estates, Inc., are jointly and severally liable for those violations of Sections 498.023(1), 498.023(2), and 498.023(3), Florida Statutes, found against West Miami Estates, Inc.
Melvin Lewis, Larry Lewis, and Miami Kendall Estates, Inc., are jointly and severally liable for those violations of Section 498.023(1), 498.023(2), and 498.023(3), Florida Statutes found against Miami Kendall Estates, Inc.
Melvin Lewis, Larry Lewis, and Gateway Acres, Inc., are jointly and severally liable for those violations of Section 498.023(1), 498.023(2), and 498.023(3), Florida Statutes, found against Gateway Acres, Inc.
Melvin Lewis, Larry Lewis, and Maingate Acres, Inc., are jointly and severally liable for those violations of Section 498.023(1), 498.023(2), and 498.023(3), Florida Statutes, found against Maingate Acres, Inc.
Melvin Lewis, Larry Lewis, Virginia Young, and Central Florida Estates, Inc., are jointly and severally liable for those violations of Section 498.023(1), 498.023(2), and 498.023(3), Florida Statutes, found against Central Florida Estates, Inc.
Larry Lewis, Julio Bercowicz, and Mid-Florida Acres, Inc., are jointly and severally liable for those violations of Section 498.023(1), 498.023(2), and 498.023(3), Florida Statutes, found against Mid-Florida Acres, Inc.
With regard to the appropriate penalties to be imposed in these cases, the Division has argued that with regard to each disposition of each lot, three separate civil penalties should be imposed; one penalty for the violation of Section 498.023(1) by participating in the disposition of unregistered subdivided land, one penalty for violation of Section 498.023(2) by failing to provide a public offering statement, and one penalty for violation of Section 498.023(3) for failing to provide a sales script. It cannot be doubted that each disposition of a lot by one or more of the Respondents constituted a violation of all three of the mentioned statutory provisions by each Respondent who participated in the disposition. But the Division's view of the statute appears to be an unduly harsh interpretation of the statutory provision authorizing the imposition of civil penalties. Where a single act (i.e., the
disposition of one lot) results in violations of several related statutory provisions, it appears to be more reasonable to treat that one act as a single offense and to impose but a single penalty on each person (corporate or individual) who participated in the act. The fact that a single act was violative of several statutory provisions does, of course, argue heavily in favor of the imposition of a severe penalty, especially where, as here, there are no mitigating circumstances.
Based on all of the foregoing, it is RECOMMENDED that the Division of Florida "Land Sales, Condominiums and Mobile Homes enter a final order in this case to the following effect:
Finding each Respondent in these consolidated cases guilty of the violations charged in the respective Notices to Show Cause and Amended Notices to Show Cause.
Melvin Lewis shall be ordered to pay to the Division civil penalties totaling One Million Four Hundred Forty Thousand Dollars ($1,440,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 143 dispositions of lots in which he participated.
Larry Lewis shall be ordered to pay to the Division civil penalties totaling One Million Eight Hundred Seventy Thousand Dollars ($1,870,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 186 dispositions of lots in which he participated.
Virginia Young shall be ordered to pay to the Division civil penalties totaling One Hundred Sixty Thousand 43 Dollars ($160,000.00) comprised of one
$10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 15 dispositions of lots in which she participated.
Julio Bercowicz shall be ordered to pay to the Division civil penalties totaling Thirty Thousand Dollars ($30,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one
$10,000.00 penalty for each of the 2 dispositions of lots in which he participated.
West Miami Estates, Inc., shall be ordered to pay to the Division civil penalties totaling Two Hundred Thousand Dollars ($200,000.00) comprised of one
$10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 19 dispositions of lots in which it participated.
Miami Kendall Estates, Inc., shall be ordered to pay to the Division civil penalties totaling Two Hundred Thirty Thousand Dollars ($230,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 22 dispositions of lots in which it participated.
Gateway Acres, Inc., shall be ordered to pay to the Division civil penalties totaling Four Hundred Fifty Thousand Dollars ($450,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots
and one $10,000.00 penalty for each of the 44 dispositions of lots in which it participated.
Maingate Acres, Inc., shall be ordered to pay to the Division civil penalties totaling Two Hundred Fifty Thousand Dollars ($250,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 24 dispositions of lots in which it participated.
Central Florida Estates, Inc., shall be ordered to pay to the Division civil penalties totaling One Hundred Sixty Thousand Dollars ($160,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 15 dispositions of lots in which it participated.
Mid-Florida Acres, Inc., shall be ordered to pay to the Division civil penalties totaling Four Hundred Forty Thousand Dollars ($440,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 43 dispositions of lots in which it participated.
In addition to the civil penalties recited above, West Miami Estates, Inc., Miami Kendall Estates, Inc., Gateway Acres, Inc., Maingate Acres, Inc., Central Florida Estates, Inc., and Mid-Florida Acres, Inc., each shall be ordered to, under the supervision and approval of the Division, offer each purchaser of a lot from each respective corporation, the opportunity to rescind the purchase contact and receive a refund of all principal and interest paid in purchasing the lot. The offers of rescission and refund should be made to each purchaser. The offer to rescind shall be made within 60 days from the rendition of the final order by the Director of the Division. Those purchasers who elect to rescind their contract and receive a refund shall receive their payments no later than 90 days from the date they request their refund. The Division should impose such terms of compensation and require such security as will assure the maximum recovery by those purchasers selecting a refund, including, but not limited to requiring full disclosure of all facts material to the actual lot acquired by each respective purchaser, escrowing funds or posting bonds, or the appointment of a trustee or receiver to supervise the programs of rescission and refund whose fees are to be paid by the Respondents.
Melvin Lewis and Larry Lewis shall also be ordered to be jointly and severally liable for the civil penalties and other remedies ordered against West Miami Estates Inc., Miami Kendall Estates, Inc., Gateway Acres, Inc., and Maingate Acres, Inc.
Melvin Lewis, Larry Lewis, and Virginia Young shall also be ordered to be jointly and severally liable for the civil penalties and other remedies ordered against Central Florida Estates, Inc.
Julio Bercowicz and Larry Lewis shall also be ordered to be jointly and severally liable for the civil penalties and other remedies ordered against Mid-Florida Acres, Inc.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 3rd day of November 1989.
MICHAEL M. PARRISH
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 1989.
ENDNOTE
1/ References in the recommended order to provisions of Chapter 498, Florida Statutes, are to the 1987 edition of the Florida Statutes, because those are the provisions which were in effect at the time of the events alleged in the several Notices To Show Cause. (A number of provisions in Chapter 498 were revised in 1988).
APPENDIX TO RECOMMENDED ORDER CONSOLIDATED CASES NOS. 88-5088, 88-5089, 88-5090, 88-5091, 88-5093,
88-5094, 88-5095, 88-5096 and 88-5097
The following are my rulings on all proposed findings of fact submitted by all parties in these consolidated cases.
Findings proposed by the Petitioner:
All of the findings of fact proposed by the Petitioner have been accepted in substance or in their entirety, except as specifically noted below:
Paragraph 15: Third sentence is rejected as not being clearly supported by competent substantial evidence. The remainder of the paragraph is accepted.
Paragraph 55: Rejected as irrelevant in view of dismissal of charges against Helen Lewis.
Findings proposed by the Respondents:
All of the findings of fact proposed by the Respondents have been accepted in substance or in their entirety, except as specifically noted below:
Paragraphs 1 and 2: Rejected as constituting conclusions of law rather than proposed findings of fact.
Paragraph 8: The penultimate sentence of this paragraph is rejected as irrelevant in view of dismissal of charges against Helen Lewis. The remainder of the paragraph is accepted.
Paragraph 13: Rejected as contrary to the greater weight of the evidence.
COPIES FURNISHED:
Eric H. Miller, Esquire Department of Business Regulation The Johns Building
725 South Bronough Street Tallahassee, Florida 32399-1007
Harold M. Braxton, Esquire Suite 406
One Datran Center
9100 South Dadeland Boulevard Miami, Florida 33156
E. James Kearney, Director Florida Lands Sales Condominiums
and Mobile Homes
Department of Business Regulation The Johns Building
725 South Bronough Street Tallahassee, Florida 32399-1007
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES, | ) ) ) ) | ||
) | |||
Petitioner, | ) | ||
) | |||
vs. | ) CASE | NOs. | 88-5088 |
) | 88-5089 | ||
JULIO BERCOWIZC, MID-FLORIDA | ) | 88-5090 | |
ACRES, INC., MELVIN LEWIS, | ) | 88-5091 | |
LARRY LEWIS, WEST MIAMI ESTATES, | ) | 88-5093 | |
INC., MAINGATE ACRES, INC., | ) | 88-5094 | |
MIAMI KENDALL ESTATES, INC., | ) | 88-5095 | |
GATEWAY ACRES, INC.,VIRGINIA | ) | 88-5096 | |
YOUNG, and CENTRAL FLORIDA | ) | 88-5097 | |
ESTATES, INC., | ) | ||
) | |||
Respondents. | ) | ||
)
ORDER CORRECTING TYPOGRAPHICAL ERRORS IN RECOMMENDED ORDER
On November 13, 1989, the Petitioner filed a timely motion pursuant to Rule 221-6.032(1), Florida Administrative Code, seeking the correction of several typographical errors in the Recommended Order issued on November 3, 1989. There has been no response to the motion. Upon consideration, it is ORDERED: 1/
At page 2, first paragraph, second line: The statutory citation is corrected to read "498.023(1)."
At page 3, first paragraph of the Preliminary Statement, last line: The statutory citation is corrected to read "498."
At page 4, first paragraph, seventh line: The second docket number is corrected to read "87145RSD."
At page 4, second paragraph, eighth line: The itemization of exhibits received over objection is corrected by deleting the words "and 49."
At page 17, Finding of Fact 24, fourth line: The name "Betti" is corrected to read "Bettie."
At page 20, Finding of Fact 35, last line: The word "thereof" is corrected to read "thereon."
At page 39, Conclusion of Law 19, ninth line from top of page: The number "143" is corrected to read "186."
At page. 41, Conclusion of Law 22, eleventh line: The statutory citation is corrected to read "498.049(4)."
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 29th day of November 1989.
MICHAEL M. PARRISH
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 29th day of November, 1989.
ENDNOTES
1/ All references to pages in the following paragraphs are to the pages of the Recommended Order issued in these consolidated cases on November 3, 1989.
COPIES FURNISHED:
Eric H. Miller, Esquire Department of Business Regulation The Johns Building
725 South Bronough Street Tallahassee, Florida 32399-1007
Harold M. Braxton, Esquire Suite 406
One Datran Center
9100 South Dadeland Boulevard Miami, Florida 33156
E. James Kearney, Directory Florida Land Sales, Condominiums and Mobile Homes
Department of Business Regulation The Johns Building
725 South Bronough Street Tallahassee, Florida 32399-1007
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BUSINESS REGULATION
DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES 725 SOUTH BRONOUGH STREET - THE JOHNS BUILDING
TALLAHASSEE, FLORIDA 32399-1030
DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES,
Petitioner, vs. | DOAH CASE NO. DBR DOCKET NOS. | 88-5088 87139RSD |
87140RSD | ||
JULIO BERCOWICZ, | 87141RSD | |
MID-FLORIDA ACRES, INC., | 87142RSD | |
MELVIN LEWIS, | 87144RSD | |
LARRY BURTON LEWIS, | 87145RSD | |
WEST MIAMI ESTATES, INC., | 87146RSD | |
MAINGATE ACRES, INC., | 87148RSD | |
MIAMI KENDALL ESTATES, INC., | 87149RSD | |
GATEWAY ACRES, INC., | 87150RSD | |
VIRGINIA YOUNG, and | ||
CENTRAL FLORIDA ESTATES, INC., |
Respondents.
/
FINAL ORDER
Pursuant to Notice, a consolidated formal hearing was conducted in the above-captioned matters on May 2, 1989, in Miami, Florida, before the Honorable Michael M. Parrish, a duly designated hearing officer Of the Division Of Administrative Hearings. The Hearing Officer entered a Recommended Order dated November 3, 1989. After timely motion by the Department of Business Regulation,
Division of Florida Land Sales, Condominiums and Mobile Homes ("DIVISION"), the Hearing Officer entered an Order Correcting Typographical Errors in Recommended Order dated November 29, 1989. (Copies of the Recommended Order and the Order Correcting Typographical Errors are attached hereto as Exhibits A and B; subsequent references herein to the Recommended Order shall be to the Recommended Order as corrected.) Respondent has not filed exceptions to the Recommended Order.
The issues for resolution and procedural history of these proceedings as stated in the Recommended Order are incorporated herein. After examining the Recommended Order and reviewing the record, it is
HEREBY ORDERED, as follows:
FINDINGS OF FACT
The Findings of Fact made by the Hearing Officer in the Recommended Order are adopted and incorporated herein as the Findings of Fact by the DIVISION.
CONCLUSIONS OF LAW
Conclusions of Law 1-22, inclusive, made by the Hearing Officer in the Recommended Order are approved, adopted, and incorporated herein as Conclusions of law by the DIVISION.
The Division rejects recommended Conclusion of Law number 23, in which the Hearing Officer declined to follow the DIVISION'S proposed imposition of civil penalties, calculated for each statutory violation, by interpreting section 498.049(4), Florida Statutes (1987), as only allowing a single civil penalty for each act which violates more than one statute. Section 498.049(4), Florida Statutes (1987), limits civil penalties to a maximum of ten thousand dollars ($10,000.00) per offense. Sections 498.023(1), 498.023(2), and 498.023(3), Florida Statutes, describe separate offenses, each requiring proof of one or more facts and elements not required by the others. As the Legislature created these statutory subsections as coequal prohibitions against different activities, the DIVISION is authorized to impose a separate penalty for each such offense.
Under this analysis, the DIVISION will adopt the penalties recommended by the Hearing Officer, modified as explained below, not as single penalties for separate acts but as concurrent penalties for the various violations found in paragraphs 12 through 21 of the Recommended Conclusions of Law incorporated herein.
ORDER
Based upon the adopted Findings of Fact, Conclusions of Law, as modified, and after a review of the record,
IT IS HEREBY ORDERED, as follows:
For the violations of Melvin Lewis, individually, of Larry Lewis, individually, of Melvin Lewis, Larry Lewis, and West Miami Estates, Inc., jointly and severally, and of Melvin Lewis, Larry Lewis, and Miami Kendall Estates, Inc., jointly and severally, the Hearing Officer recommended respective civil penalties of $1,440,000, $1,870,000, $200,000, and $230,000. However, DIVISION'S exhibits 9 and 10 in evidence show 14 of the sales made in West Miami
Estates and one of the sales in Miami Kendall Estates were executed by the purchasers on or before July 1, 1979, prior to which date section 498.049(4), Florida Statutes, and its predecessor statute, permitted imposition of a maximum civil penalty for each offense of only $5,000.00. Violations occurring after July 1, 1979, are clearly subject to the revised maximum limit of $10,000.00 per offense. Therefore, as the maximum allowable civil penalty was $5,000.00 per offense when 14 sales were made in West Miami Estates and 1 of the sales was made in Miami Kendall Estates, resulting in the various statutory violations, the DIVISION has reduced the respective civil penalties of these respondents in order to consistently impose concurrent maximum civil penalties allowed by statute for each violation of sections 498.023(1), 498.023(2), and 498.023(3), Florida Statutes.
Within twenty-one (21) days from the date of this Final Order, Melvin Lewis shall pay the DIVISION civil penalties totaling One Million Three Hundred Sixty-Five Thousand Dollars ($1,365,000.00) for offering unregistered subdivided lands and for participating in 143 dispositions of unregistered subdivided lands, in violation of section 498.023(1), Florida Statutes, for participating in 143 dispositions of subdivided lands in which no purchaser received a current Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for participating in 143 dispositions of subdivided lands by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to the execution of the sales agreement, in violation of section 498.023(3), Florida Statutes.
Within twenty-one (21) days from the date of this Final Order, Larry Lewis shall pay the DIVISION civil penalties totaling One Million Seven Hundred Ninety-Five Thousand Dollars ($1,795,000.00) for offering unregistered subdivided lands and for participating in 186 dispositions of unregistered subdivided lands, in violation of section 498.023(1), Florida Statutes, for participating in 186 dispositions of subdivided lands in which no purchaser received a current Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for participating in 186 dispositions of subdivided lands by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to the execution of the sales agreement, in violation of section 498.023(3), Florida Statutes.
Within twenty-one (21) days from the date of this Final Order, Virginia Young shall pay the DIVISION civil penalties totaling One Hundred Sixty Thousand Dollars ($160,000.00) for offering unregistered subdivided lands and for participating in 15 dispositions of unregistered subdivided lands, in violation of section 498.023(1), Florida Statutes, for participating in 15 dispositions of subdivided lands in which no purchaser received a current Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for participating in 15 dispositions of subdivided lands by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to the execution of the sales agreement, in violation of section 498.023(3), Florida Statutes.
Within twenty-one (21) days from the date of this Final Order, Julio Bercowicz shall pay the DIVISION civil penalties totaling Thirty Thousand Dollars ($30,000.00) for offering unregistered subdivided lands and for participating in 2 dispositions of unregistered subdivided lands, in violation of section 498.023(1), Florida Statutes, for participating in 2 dispositions of subdivided lands in which no purchaser received a current Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for participating in 2 dispositions of subdivided lands by long distance
telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to the execution of the sales agreement, in violation of section 498.023(3), Florida Statutes.
Within twenty-one (21) days from the date Of this Final Order, Melvin Lewis, Larry Lewis, and West Miami Estates, Inc., jointly and severally, shall pay the DIVISION civil penalties totaling One Hundred Thirty Thousand Dollars ($130,000.00) for offering unregistered subdivided lands and disposing of 19 offering unregistered subdivided lots, in violation of section 498.023(1), Florida Statutes, for disposing of 19 subdivided lots for which no purchaser received a current Florida Public, Offering Statement, in violation of section 498.023(2), Florida Statutes, and for disposing of 19 subdivided lots by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to the execution of the sales agreement, in violation of section 498.023(3), Florida Statutes.
West Miami Estates, Inc., Melvin Lewis, and Larry Lewis, jointly and severally, shall further offer each purchaser of a lot in West Miami Estates the opportunity to rescind the purchase contract and receive a refund of all principal and interest paid in purchasing the lot, in compliance with the requirements stated below in paragraph 12.
Within twenty-one (21) days from the date of this Final Order, Melvin Lewis, Larry Lewis, and Miami Kendall Estates, Inc., jointly and severally, shall pay the DIVISION civil penalties totaling Two Hundred Twenty-Five Thousand Dollars ($225,000.00) for offering unregistered subdivided lands and for disposing of 22 unregistered subdivided lots, in violation of section 498.023(1), Florida Statutes, for disposing of 22 subdivided lots for which no purchaser received a current Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for disposing of 22 subdivided lots by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to executing the sales agreement, in violation of section 498.023(3), Florida Statutes.
Miami Kendall Estates, Inc., Melvin Lewis, and Larry Lewis, jointly and severally, shall further offer each purchaser of a lot in Miami Kendall Estates the opportunity to rescind the purchase contract and receive a refund of all principal and interest paid in purchasing the lot, in compliance with the requirements stated below in paragraph 12.
Within twenty-one (21) days from the date of this Final Order, Melvin Lewis, Larry Lewis, and Gateway Acres, Inc., jointly and severally, shall pay the DIVISION civil penalties totaling Four Hundred Fifty Thousand Dollars ($450,000.00) for offering unregistered subdivided lands and for disposing of 44 unregistered subdivided lots, in violation of section 498.023(1), Florida Statutes, for disposing of 44 subdivided lots for which no purchaser received a current Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for disposing of 44 subdivided lots by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to executing the sales agreement, in violation of section 498.023(3), Florida Statutes.
Gateway Acres, Inc., Melvin Lewis, and Larry Lewis, jointly and severally, shall further offer each purchaser of a lot in Gateway Acres the opportunity to rescind the purchase contract and receive a refund of all principal and interest paid in purchasing the lot, in compliance with the requirements stated below in paragraph 12.
Within twenty-one (21) days from the date of this Final Order, Melvin Lewis, Larry Lewis, and Maingate Acres, Inc., jointly and severally, shall pay the DIVISION civil penalties totaling Two Hundred Fifty Thousand Dollars ($250,000.00) for offering unregistered subdivided lands and for disposing of 24 unregistered subdivided lots, in violation of section 498.023(1), Florida Statutes, for disposing of 24 subdivided lots four which no purchaser received a current Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for disposing of 24 subdivided lots by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to executing the sales agreement, in violation of section 498.023(3), Florida Statutes.
Maingate Acres, Inc., Melvin Lewis, and Larry Lewis, jointly and severally, shall further offer each purchaser of a lot in Maingate Acres the opportunity to rescind the purchase contract and receive a refund of all principal and interest paid in purchasing the lot, in compliance with the requirements stated below in paragraph 12.
Within twenty-one (21) days from the date of this Final Order, Melvin Lewis, Larry Lewis, Virginia Young, and Central Florida Estates, Inc., jointly and severally, shall pay the DIVISION civil penalties totaling One Hundred Sixty Thousand Dollars ($160,000.00) for offering unregistered subdivided lands and for disposing of 15 unregistered subdivided lots, in violation of section 498.023(1), Florida Statutes, for disposing of 15 subdivided lots for which no purchaser received a current Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for disposing of 15 subdivided lots by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to executing the sales agreement, in violation of section 498.023(3), Florida Statutes.
Central Florida Estates, Inc., Virginia Young, Melvin Lewis, and Larry Lewis, jointly and severally, shall further offer each purchaser of a lot in Central Florida Estates the opportunity to rescind the purchase contract and receive a refund of all principal and interest paid in purchasing the lot, in compliance with the requirements stated below in paragraph 12.
Within thirty (30) days from the date of this Final Order, Larry Lewis, Julio Bercowicz, and Mid-Florida Acres, Inc., jointly and severally, shall pay the DIVISION civil penalties totaling Four Hundred Forty Thousand Dollars ($440,000.00) for offering unregistered subdivided lands and for disposing of 43 unregistered subdivided lots, in violation of section 498.023(1), Florida Statutes, for disposing of 43 subdivided lots for which no purchaser received a Florida Public Offering Statement, in violation of section 498.023(2), Florida Statutes, and for disposing of 43 subdivided lots by long distance telephone solicitation in which no purchaser received a summary of the sales solicitation script prior to executing the sales agreement, in violation of section 498.023(3), Florida Statutes.
Mid-Florida Acres, Inc., Larry Lewis, and Julio Bercowicz, jointly and severally, shall further offer each purchaser of a lot in Mid-Florida Acres the opportunity to rescind the purchase contract and receive a refund of all principal and interest paid in purchasing the lot, in compliance with the requirements stated below in paragraph 12.
Each offer of rescission and refund required by paragraphs 6 through 11, above, shall proceed as follows:
No later than twenty-one (21) days from the date of this Final Order, the joint and several Respondents shall complete the following:
Establish an account to escrow all payments for the subdivided lands received from all lot purchasers or from any other source, including governmental entities, on or after the effective date of this Final Order. The escrow account shall be an interest bearing account located in Florida with a state or federally chartered bank, savings and loan association, or credit union, from which account the Respondents may make no withdrawals without the prior written approval of the DIVISION.
Provide the DIVISION with the name and address of the financial institution with which the escrow account has been established, together with the account number and a copy of the escrow agreement. The Respondents shall also furnish the DIVISION with a complete list of the names, current addresses, current telephone numbers, and lot purchased, for those who purchased from the subject corporation.
No later than sixty (60) days from the effective date of this Order, the joint and several Respondents shall mail to each purchaser, postage prepaid, a letter containing the offer to rescind the contract and refund principal and interest paid. Each letter shall use the text approved by the DIVISION, attached hereto as Exhibit C, with the blank spaces therein properly completed for each purchaser.
No later than ninety (90) days from the date a purchaser requests a refund subsequent to the Notice required above in paragraph 12.b. of this Final Order, the joint and several Respondents shall refund all amounts paid by the purchaser for principal and interest. The date of the purchaser's refund request shall be the date on the written request; if the purchaser sends an undated request, the date of the request shall be the date it is received by one or more of the joint and several Respondents.
The Respondents shall furnish the DIVISION with one copy of all written correspondence, inquiries, or other contact with any purchaser, within five (5) days from receiving or making such contact. Beginning with the fourteenth (14th) day from the twenty-first (21st) day from the date of this Final Order, and continuing bi-weekly thereafter until all purchasers so entitled and requesting have received a refund pursuant to this paragraph 12, Respondents shall report all oral communications with any purchaser by providing the DIVISION with a summary containing the following information for each fourteen
day period: the date, name, and telephone number of the purchaser or purchaser's representative contacted, the name of the Respondent or Respondent's representative making or receiving the contact, the telephone number by or at which such contact was made, a summary of the substance of the communication, and verification that the purchaser or purchaser's representative was advised a summary of the call would be reported to the DIVISION.
DONE AND ORDERED in Tallahassee, Leon County, Florida this 5th day of January 1990.
C. James KEARNEY, DIRECTOR Division of Florida Land Sales,
Condominiums, and Mobile Homes Department of Business Regulation
RIGHT OF APPEAL
THIS FINAL ORDER, WHICH CONSTITUTES FINAL AGENCY ACTION MAY BE APPEALED BY RESPONDENTS PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND FLORIDA RULE OF APPELLATE PROCEDURE 9.110 BY FILING A NOTICE OF APPEAL CONFORMING TO THE REQUIREMENTS OF FLORIDA RULE OF APPELLATE PROCEDURE 9.110(d), BOTH WITH THE APPROPRIATE DISTRICT COURT OF APPEAL, ACCOMPANIED BY THE APPROPRIATE FILING FEES, AND WITH CONNIE BLACKMAN, CLERK FOR THE DIVISION OF FLORIDA LAND SALES CONDOMINIUMS AND MOBILE HOMES. WITHIN 30 DAYS OF THE RENDITION OF THIS ORDER.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U. S. Certified Mail, Return Receipt requested, to Harold M. Braxton, Esquire, Suite 406, 1 Datran Center, 9100 South Dadeland Boulevard, Miami, Florida 33156, Counsel for Respondents, this 5th day of January 1990.
CONNIE BLACKMAN, DOCKET CLERK
Copies to:
Eric H. Miller
Assistant General Counsel
W. Samuel Griffis, Chief Bureau of Florida Land Sales
| Issue Date | Proceedings |
|---|---|
| Nov. 03, 1989 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 05, 1990 | Agency Final Order | |
| Nov. 03, 1989 | Recommended Order | Evidence established lots were offered as ""part of a common promotional plan""; civil penalties totaling $5,230,000.00 recommended. |
