STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WATER OAK MANAGEMENT )

CORPORATION, as general ) partner of WATER OAK, LTD., )

)

Petitioner, )

)

vs. ) CASE NO. 89-6776RX

)

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF )

FLORIDA LAND SALES, )

CONDOMINIUMS, AND MOBILE )

HOMES, )

)

Respondent. )

)

FINAL ORDER

This matter came on for hearing in Tallahassee, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on January 10, 1990. After the hearing officer announced his decision to grant the respondent's motion to dismiss and for summary final order, the parties waived filing proposed orders and, subsequently, the time requirements pertaining to entry of final orders.

APPEARANCES

For Petitioner: Daniel C. Brown

Marguerite H. Davis Katz, Kutter, Haigler,

Alderman, Eaton, Davis & Marks, P.A.

Post Office Box 1877 Tallahassee, Florida 32302-1877

For Respondent: Debra S. Roberts

Pamela S. Leslie

725 S. Bronough Street Tallahassee, Florida 32399-1000

STATEMENT OF THE ISSUES

Whether Rule 7D-31.001(5), Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority? Whether a petition to determine the invalidity of a rule is properly addressed either to alleged, "unwritten, unadopted rule[s]," or to an agency's free form actions in a particular case?

PRELIMINARY STATEMENT

This proceeding is an offshoot of a substantial interest proceeding, Department of Business Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes v. Water Oak Management Corporation, No. 89-5626, that has arisen in connection with certain prospectuses petitioner filed with the respondent.

In its petition to determine invalidity of existing rules, petitioner alleges that Rule 7D-31.001(5), Florida Administrative Code, together with respondent's alleged interpretation of this rule "to require that consent of homeowners in a mobile home park to a proposed prospectus amendment must be unanimous," and "retroactive application" of the rule, so interpreted, amount to an invalid exercise of delegated legislative authority. Although petitioner was granted leave to file and did file an amended petition, it sought leave thereafter to reinstate its original petition, and reinstatement was granted by order entered January 10, 1990.

Also by order entered January 10, 1990, the petition to intervene filed by Florida Manufactured Housing Association, Inc. and the petition for leave to intervene filed by the Federation of Mobile Homeowners of Florida, Inc. were each denied as untimely.

FINDINGS OF FACT

1. Petitioner operates a mobile home park, "Water Oak Country Club Estates," near Lady Lake, Florida.

   
   

2. The parties have stipulated, as follows:

   
   

   1. That the Bureau's [petitioner's Bureau of Mobile Homes] current position regarding prospectus amendments is that the Bureau will not approve amendments which call for changes from the matters disclosed in a previously approved and delivered prospectus [except for those changes falling within Rule 7D-312.001(5) (b)-(i)] unless the park owner can demonstrate that the consent of every mobile home owner who received the prospectus to be amended has been obtained as to the amendment and

      1. that such is the current Bureau policy even if the prospectus to be amended was approved by the Bureau with

         "reservation-of-rights" clauses as to the matters to be changed in the amendment; and

      2. that such is currently the consistent Bureau practice as applied in all reviews of prospectus amendments; and

      3. that such current practice is a departure from Bureau practice in the past with regard to review of prospectus amendments where the

         prospectus to be amended contained "reservation of rights" language.

         * * *

         1. That James Leftheris was the Bureau employee assigned to review the prospectus amendments for Water Oak which were submitted to the Bureau for approval on or about

            April 6, 1988; and

            a. that he reviewed the prospectus

            amendments themselves and the letter of April 6, 1988 (Water Oak's Exhibit "4") in the course of his review, and compared the amendments to the previously approved prospectuses to which each amendment related; and

            * * *

            1. that he recommended approval of the amendment to his supervisor, Mrs. Joann Dixon; and

            2. that the amendments were accepted by the Bureau on June 23, 1988; and

            * * *

         2. That the letter of April 25, 1989 from Joann Dixon to Richard Lee (Water Oak's Exhibit "17") states the Bureau's reasons for its rescission of the June 23, 1988 acceptance of

         the Water Oak prospectus amendments in question.

         
         

         The parties also stipulated that it is expensive for mobile home tenants to move out of mobile home parks, that it is not easy for them to move, and that some mobile home parks will not accept used mobile homes.

         
         

3. On April 6, 1988, petitioner submitted to respondent proposed amendments to three prospectuses, Nos. 3500521P, 3500521P2, and 3500521P86, pertaining to its mobile home park.

   
   

4. The proposed amendments "were accepted for filing purposes on June 23, 1988." Petitioner's Exhibit No. 11; Petitioner's Exhibit No. 10.

   
   

5. On April 25, 1989, respondent wrote petitioner's lawyer, stating:

   
   

   Since our records do not include the requisite consent of the home owners, the Bureau is rescinding its acceptance of the subject amendments.

   
   

   Petitioner's Exhibit No. 11. This rescission applied to all three amendments, Nos. 3500521P, 3500521P2, and 3500521P86.

   
   

6. Rule 7D-31.001(5), Florida Administrative Code, reads, as follows:

   
   

   (5) The prospectus distributed to a home owner

   or prospective home owner shall be binding for the length of the tenancy, including any assumptions of that tenancy, and may not be changed except in the following circumstances:

   1. Amendments consented to by both the home owner and the park owner.

   2. Amendments to reflect new rules or rules that have been changed in accordance with procedures described in Chapter 723, F.S., and the prospectus.

   3. Amendments to reflect a change in the name of the owner of the park.

   4. Amendments to reflect changes in zoning.

   5. Amendments to reflect a change in the person authorized to receive notices and demands on the park owner's behalf.

   6. Amendments to reflect changes in the entity furnishing utility or other services.

   7. Amendments required by the Division.

   8. Amendments required as a result of revisions of Chapter 723, F.S.

   9. Amendments to add, delete or modify user fees for prospective homeowners.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction of petitions like the present one challenging (purportedly) existing administrative rules as an invalid exercise of delegated legislative authority. Section 120.56, Florida Statutes (1989).

   
   

8. As the "one who attacks the . . . rule," Agrico Chemical Company v. State Department of Environmental Regulation, 365 So.2d 759, 763 (Fla. 1st DCA 1978) cert. den. 376 So.2d 74 (Fla. 1979), petitioner has the burden to:

   
   

   show that (1) the agency adopting the rule has exceeded its authority; (2) that the requirements of the rule are not appropriate to the ends specified in the legislative acts; and (3) the requirements contained in the rule are not reasonably related to the purpose of enabling legislation but are arbitrary or capricious.

   
   

   Department of Administration, Division of Retirement v. Albanese, 455 So.2d 639, 641 (Fla. 1st DCA 1984). The challenger's burden "is a stringent one indeed." Agrico Chemical Company v. Department of Environmental Regulation, 365 So.2d 759, 763 (Fla. 1st DCA 1978). cert. den. 376 So.2d 74 (Fla. 1979).

   
   

9. "[T]he validity of . . . [a challenged] rule must be upheld if it is reasonably related to the purpose of the legislation interpreted and it is not arbitrary or capricious." Department of Professional Regulations v. Durrani,

   455 So.2d 515, 517 (Fla. 1st DCA 1984); Florida Beverage Corp. v. Wynne, 306 So.2d 200 (Fla. 1st DCA 1975).

   
   

   Moreover, the agency's interpretation of a statute need not be the sole possible interpretation or even the most desirable one; it need only be within the range of possible interpretations. Department of Health and Rehabilitative Services v. Wright, 439 So. 2d 937 (Fla. 1st DCA 1983)(Ervin, C.J. dissenting); Department of Administration v. Nelson 424 So.2d

   852 (Fla. 1st DCA 1982); Department of Health and Rehabilitative Services v. Framat Realty Company, 407 So.2d 238 (Fla. 1st DCA 1981).

   
   

   Department of Professional Regulation v. Durrani, 415 So.2d 515, 517 (Fla. 1st DCA 1984). Here the First District's decision in Hobe Associates, Ltd. v.

   Department of Business Regulation, 504 So.2d 1301 (Fla. 1st DCA 1987), which upheld the rule against a prior attack, at 1305-6, effectively precludes petitioner's attack on Rule 7D-31.001(5), Florida Administrative Code. Although the rule challenged in Hobe was subsequently renumbered, it has not been altered in substance.

   
   

10. In an effort to circumvent the effect of the Hobe decision, petitioner has attacked not only Rule 7D-31.001(5), Florida Administrative Code, as written, but also, as illicit rules, the Department's application of the published rule to its prospectus amendments, and the interpretation of Rule 7D- 31.001(5), Florida Administrative Code, this application purportedly evinces. With respect to these alleged "unwritten, unadopted rule[s]," the initial question is whether petitioner has proven that any application or interpretation of the published rule itself amounts to a rule, within the meaning of the Administrative Procedure Act.

    
    

11. As the principal authority on which petitioner relies unequivocally states, the Administrative Procedure "[A]ct has as one of its principal goals the abolition of `unwritten rules.'" Straughn v. O'Riordan, 338 So.2d 832, 834

    n.3 (Fla. 1976). The Administrative Procedure Act's rigorous provisions governing rulemaking have accomplished this "principal goal." Since regulators and regulated alike are almost universally aware of the inefficacy of any oral pronouncement to bind with the force of law, it will be a rare case, indeed, in which an agency purports to fix public privileges and duties, to "create rights and responsibilities," without reducing an edict to writing. But see Lakeland Regional Medical Center v. Department of Health and Rehabilitative Services, No. 89-2157R (DOAH; Nov. 15, 1989). The present case is not one of the rare exceptions. Here petitioner proved the existence of no rule concerning homeowners' consent, independent of the duly promulgated provisions of Rule 7D- 31.001(5), Florida Administrative Code.

    
    

12. A policy implicit in agency action does not ipso facto amount to an administrative rule, even when it has been consistently applied. Home Health Professional Services, Inc. v. Department of Health and Rehabilitative Services,

463 So.2d 345 (Fla. 1st DCA 1985). "The APA does not slow the open development of policy by forbidding all utterance of it except within the strict rulemaking process of Section 120.54." McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977). Mere "unwritten policy" cannot amount to an illicit rule. Department of Corrections v. McCain Sales of Florida, Inc., 400 So.2d 1301 (Fla. 1st DCA 1981), ("a program as such is not a statement of policy" at 1302). A rule is a statement "of general applicability . . . applied and . . . intended to be applied with the force of a rule of law." State, Department of Administration v. Stephens, 344 So.2d 290, 296 (Fla. 1st DCA 1977); McDonald v. Department of Banking and Finance, 346 So.2d 569, 580-581 (Fla. 1st DCA 1977). Except for Rule 7D-31.001(5), Florida Administrative Code, as written, petitioner failed to prove the existence of a statement of general applicability applied and intended to be applied with the force of a rule of law.

ORDERED

It is, accordingly, ordered, The petition to determine invalidity of existing rules is denied.

DONE and ENTERED this 14th day of February, 1990, in Tallahassee, Florida.

ROBERT T. BENTON, II

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 14th day of February, 1990.

COPIES FURNISHED:

Debra Roberts

Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1007

Daniel C. Brown

KATZ KUTTER HAIGLER ALDERMAN EATON DAVIS & MARKS, P.A.

Post Office Box 1877 Tallahassee, FL 32302-1877

Pamela S. Leslie Assistant General Counsel Department of Business

Regulation

725 South Monroe Street Tallahassee, FL 32399-1007

David D. Eastman Martha Corry Olive

PARKER SKELDING LABASKY & CORRY

Post Office Box 669 Tallahassee, FL 32302

Stephen Presnell

304 N. Meridian Street Suite 3

P.O. Box 10356 Tallahassee, FL 32302

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 89-006776RX

Orders for Case No: 89-006776RX