vs. ) CASE NO. 92-5622RX
) DIVISION OF FLORIDA LAND SALES, ) CONDOMINIUMS AND MOBILE HOMES, ) DEPARTMENT OF BUSINESS REGULATION, )
Respondent. )
Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on October 6, 1992, in Tallahassee, Florida.
For Petitioner: David D. Eastman, Esquire
For Respondent: E. Harper Field, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007
The issue presented is whether subsections (1) and (4) of Rule 7D-32.002, Florida Administrative Code, are an invalid exercise of delegated legislative authority.
On September 15, 1992, Petitioner filed with the Division of Administrative Hearings its Petition to Determine the Invalidity of an Existing Rule, challenging subsections (1) and (4) of Rule 7D-32.002, Florida Administrative Code. That Rule specifies the conditions under which any notifications of mobile home lot rental increases, reductions in services or utilities, and/or changes in park rules and regulations may become effective.
The parties entered into a prehearing Stipulation which, among other things, stipulated to all necessary facts to establish the standing of Petitioner to initiate this proceeding. The parties also stipulated to official
recognition of Chapter 723, Florida Statutes (1986-1992) and of Chapters 7D-30 through 7D-34, Florida Administrative Code. At the formal hearing, the parties presented no additional evidence; only oral argument on the validity of the rules at issue herein was presented.
Both parties submitted post-hearing proposed final orders setting forth the stipulated facts. Those necessary stipulated facts have been adopted in this Final Order. Respondent's unnumbered additional finding of fact has been rejected as constituting a conclusion of law.
Petitioner, Florida Manufactured Housing Association, Inc. (hereafter "FMHA"), is a not-for-profit corporation, organized under the laws of Florida, whose address is 115 North Calhoun Street, Suite 5, Tallahassee, Florida 32301.
The FMHA is organized and maintained for the benefit of its members, who include the owners of approximately 1,000 mobile home parks containing a combined total of approximately 300,000 to 350,000 mobile home lots. As an incorporated association, one of the primary purposes of the FMHA is to act in behalf of its members and represent their interests before various governmental entitles of the state of Florida, including the Department of Business Regulation.
The member mobile home park owners comprise a substantial number of the members of the FMHA.
Each of the member mobile home park owners is engaged in the business of leasing individual mobile home lots to individual tenants. The individual tenant leases the mobile home lot for the purpose of installing a mobile home owned by the tenant. A landlord-tenant relationship is created for the lease of the lot, based upon the rental agreement between the parties and the prospectus or offering circular delivered to the tenant or home owner, which relationship is generally governed by the provisions of Chapter 723, Florida Statutes. The member mobile home park owners give notices of lot rental amount increases, changes in rules and regulations, and reduction in services or utilities to their tenant mobile home owners on a regular basis, depending upon the terms of their rental agreement and prospectus.
The Respondent, Florida Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (hereafter "the Department") is an agency of the state of Florida, whose address is The Johns Building, 725 South Bronough Street, Tallahassee, Florida 32399-1000.
The Department has the authority under Section 723.006 to impose a civil penalty against a mobile home park owner for any violation of the chapter, for violation of a properly promulgated park rule or regulation, or violation of a rule or regulation promulgated by the Department pursuant to Chapter 723.
The Department has adopted Rule 7D-32.002(1) and (4), Florida Administrative Code, under the general powers of the agency to adopt rules, pursuant to Chapter 120, which are necessary to implement, enforce, and interpret Chapter 723. The specific subsections of the Rule at issue are set forth below with emphasis added to identify the contested portions of the Rule:
7D-32.002 Notice of Lot Rental Increase; Reduction in Services or Utilities; or Change
in Rules and Regulations.
Prior to the effectiveness of any lot rental increase, reduction in services or utilities, or change in rules and regulations, the park owner or subdivision developer shall give written notice to each affected home owner in the park or subdivision at least 90 days in advance. The notice is not effective until given to the last of all affected home owners in the park or subdivision and the board of directors of the homeowner's association if one has been established, and no increase, reduction or change shall be effective prior to 90 days after the date all affected homeowners and the board of directors have been given notice. The notice shall contain, at minimum, the following information:
The proposed rental charges, level of services or utilities, or rules or regulations;
The effective date of the change; and
The affected home owners by lot number, name, group, or phase; and
A separate disclosure for each
pass-through charge, to include the amount and the starting and ending dates of the pass-through charge.
* * *
(4) Notice shall be given by personal delivery or by U.S. Mail. Notice given by personal delivery shall be given when actually delivered to the home owner. Notice by U.S. Mail shall be given five days after the Notice is placed in the U.S. Mail addressed to the mobile home owner's last known address.
Notice to the board of directors of the homeowner's association may be given by serving a copy of the notice on the president or registered agent of the corporation.
The relevant statutory provision that the rule is intended to implement, enforce, and interpret is Section 723.037(1), which, in relevant part, provides as follows:
723.037 Lot rental increases; reduction in services or utilities; change in rules and regulations; mediation.
(1) A park owner shall give written notice to each affected mobile home owner and the board of directors of the homeowners' association, if one has been formed, at least
90 days prior to any increase in lot rental amount or reduction in services or utilities provided by the park owner or change in rules and regulations. . . .
All of the member mobile home park owners are subject to the provisions of Chapter 723, Florida Statutes, and Rule 7D-32.002, Florida Administrative Code.
The member park owners are subject to the authority of the Department to enforce Rule 7D-32.002 and Chapter 723. The Department has the authority to impose a civil penalty, and can bring a civil action for a failure to comply with the Rule or the statute.
All of the member mobile home park owners throughout the state are persons "substantially affected" by the challenged Rule because the Rule regulates when notices of rental increase, reductions in services or utilities, or changes in park rules or regulations become effective.
Because the relief requested is to declare an agency rule invalid, the relief requested is of the type appropriate for a trade association to receive on behalf of its members, and the FMHA has standing to challenge the Rule in its own name as the representative of its members.
CONCLUSIONS OF LAW
x
The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Sections 120.56 and 120.57(1), Florida Statutes.
The FMHA contends that Subsections (1) and (4) of Rule 7D-32.002 are an invalid exercise of delegated legislative authority as defined in Section 120.52(8), Florida Statutes, because each Subsection (1) enlarges, modifies, or contravenes the specific provisions of law which it implements and (2) is arbitrary or capricious. Sections 120.52(8)(c) and (e), Florida Statutes.
An agency interpretation of a statute it implements is entitled to deference, but deference need not be adhered to when there is clear error. Campus Communications v. Department of Revenue, 374 So.2d 1290, 1295 (Fla. 1985). An agency cannot redefine terms to enlarge, modify, or contravene the plain meaning of a statute. Campus Communications, at 1296 (modifying the definition of "newspaper" to require that it be sold rather than given away); State Department of Business Regulation v. Salvation Limited, Inc., 452 So.2d 65, 66 (Fla. 1st DCA 1984) (limiting the definition of "restaurant" as a place where food is cooked and prepared on the premises); State, Department of Health and Rehabilitative Services v. McTigue, 387 So.2d 454 (Fla. 1st DCA 1980) (defining "physician" to include only Florida physicians).
In Campus Communications, the Florida Supreme Court examined a number of cases involving statutory requirements which were invalidly modified, enlarged, or contravened by administrative rule. The court noted that by imposing additional requirements not contained in the statute, the rule is an invalid exercise of delegated authority. In this case the Department has imposed additional requirements on the yardstick laid down by the Legislature for notice by a mobile home park owner.
The FMHA's challenge to these rule subsections centers around the impact the subsections have on the validity of the park owners' notice. FMHA contends that the subsections impermissibly enlarge or modify the statutory requirements in an area where the Legislature has expressly set out specific requirements that the park owner must follow. The FMHA correctly points out that the Department is requiring 95 days' notice when the notice is given by
mail, and that the statute requires 90 days' notice, not 95. By adding five days to the time requirements when the notice is sent by mail, the Department has impermissibly enlarged, modified, or contravened the requirements imposed under the statute. Further, imposing a requirement that the notice is ineffective unless it is received by all affected home owners could render all valid notices invalid, because one notice was improperly or untimely given. For these reasons, which are more specifically detailed below, the subsections at issue here are an invalid exercise of delegated legislative authority as defined in Section 120.52(8), Florida Statutes.
The statutory section that this Rule implements, Section 723.037(1), is simple and unambiguous:
A park owner shall give written notice to each affected mobile home owner and the board of directors of the homeowners' association, if one has been formed, at least 90 days prior to any increase in lot rental amount or reduction in services or utilities provided by the park owner or change in rules and regulations. . . .
The Legislature's choice of words, when it uses language which is clear, reasonable, and logical in its operation, is controlling. 49 Fla. Jur. 2d Statutes Section 111 (1984). In Section 723.037(1), the statute provides that the park owner must "give" the notice of rental increase "90 days" prior to its effective date. Commonly used words, when used in a statute, "should be construed in their plain and ordinary sense as it must be assumed the legislature knows the plain and ordinary meaning of words used in the statutes."
49 Fla. Jur. 2d Statutes Section 123 (1984). Where the statute itself contains no ambiguity or conflict, "the plain meaning of a statute will not be disturbed." Id.
Rule 7D-32.002(4) establishes that notices of lot rental increases, reductions in services or utilities, or changes in park rules and regulations if "given" via U.S. Mail are not "given" until 5 days after the notice is placed in the U.S. mail. Thus, in its Rule the Department has arbitrarily extended the time of notice from 90 days to 95 days if the notice is given by U.S. mail.
It is commonly understood that "notice" is given by U.S. mail when the notice is dropped in the mail box. This interpretation of notice by mail has been applied in various situations, including contract formation, interpretation of a landlord tenant lease renewal clause, and statutory construction of a medical malpractice notice requirement.
The "deposit acceptance rule" or "mail box rule" for contract formation was adopted in Florida by the Second District Court of Appeal in Morrison v. Thoelke, 155 So.2d 889 (Fla. 2d DCA 1963). The mail box rule has been adopted by the majority of jurisdictions. Notice of acceptance of a contract offer is deemed given under the mail box rule when the acceptance is mailed, not 5 days later or at the time of receipt.
In landlord tenant law, where the lease allows or requires notice to be given by mail, notice is given when mailed, not 5 days later, or upon receipt. Capriccio Restaurant, Inc. v. Poinciana Properties, Ltd., 492 So.2d 849, 850 (Fla. 4th DCA 1986).
The rule that notice by mail is considered "given" at the time the notice is placed in the mail box has also been applied to the statutory notice requirements under the medical malpractice statute. Barron v. Crenshaw, 573 So.2d 17 (Fla. 5th DCA 1990).
Since notice by mail is understood to be "given" at the time the notice is dropped in the mailbox, the Department's rule requiring 95 days' notice if the notice is mailed is an invalid enlargement of the time requirements laid down by the Legislature, and the rule modifies and contravenes the Legislature's pronouncement that 90 days' notice is all that is required.
The Department argues that the five days added to the notice requirement is necessary to give a distinct point in time when the notice of rental increase has been "given." The basis for the Department's position is that under the Florida Rules of Civil Procedure, the Florida Appellate Rules, the Model Rules of Procedure, and the Rules of the Division of Administrative Hearings, when a paper or pleading is served on a person, the time requirements under court rules, statutes, and administrative rules is extended by five days if service is by mail. Therefore, the Department argues, a five-day period must be added to the time period of the park owner when giving the notice by mail.
This is incorrect for two reasons. First, those rules authorize five additional days for a response by a person who receives a paper or pleading that is served by mail. If that person is required to take some action within a specified time period after service, and service is by mail, the person required to take some action has an additional five days to act. It is an incorrect reading of those rules to impose the five-day period on the person who originally served the paper, rather than on the person receiving the paper.
The Department argues that under Section 723.037(4) the home owners have the obligation to request a meeting with the park owner 30 days after "receipt" of the 90-day notice of increase, if they so desire. The Department points out that since the 90-day notice is the first step in the alternative dispute resolution process, without having a distinct point in time when the Department can ascertain that the home owners received the notice, the Department cannot determine whether the home owners complied with the requirement of requesting a meeting in a timely manner. Therefore, the Department argues, the park owner must give 95 days' notice if the notice is sent by mail to assure that the notice is in fact received prior to the 90th day. This is very similar to the argument considered in Barron v. Crenshaw, supra, except the Department attempts to tack the 5 days onto the park owner's time period for notice, rather than on the home owner's response time for requesting a meeting. The court in Barron held that the 5-day rule did not apply because the statute involved in the case specifically stated that the response period began upon receipt of the notice. Likewise, Section 723.037(4) requires the home owners to request a meeting, if they so desire, within 30 days from receipt of the notice, not within 30 days from the date notice is given.
Second, the Florida Rules of Civil Procedure, the Florida Appellate Rules, the Model Rules of Procedure, and the Rules of the Division of Administrative Hearings apply to litigation before the courts and administrative agencies, by their own terms. The Department has cited no authority or rationale for imposing those rules on persons not involved in adjudicatory proceedings, but rather simply giving notices required by statutes and/or contracts.
In Chapter 723, the Legislature understood and made a distinction between the terms "to give notice" and "receipt of notice." Section 723.037 clearly establishes the home owners' responsibility for taking action to request a meeting with the park owner "within 30 days after receipt by the homeowners of the notice. . . ." Section 723.037(4), Florida Statutes. Moreover, the Legislature has not been confused in its use of these terms in the commercial or consumer lease area. To "give" notice and to "receive" notice are terms that have a clear, different meaning.
Under the Uniform Commercial Code (UCC), Chapter 680 governs commercial and consumer leases, and Section 680.1031 incorporates the "General definitions" section of the UCC to terms used in commercial and consumer leases. In that section both giving notice and receiving notice are defined:
A person "notifies" or "gives" a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it. A person "receives" a notice or notification when
It comes to his attention, or
It is duly delivered at the place of business through which the contract was made or any other place held out by him as the place for receipt of such communications. [Emphasis supplied]
Section 671.201(26), Florida Statutes.
When it chose the terms "give written notice" in Section 723.037(1), the Legislature meant for the park owner to send the notice of rent increase in the ordinary course; it did not mean that the park owner had to actually or constructively deliver the notice 90 or more days before the proposed change. Nor did it mean that the home owner had to actually receive the notice 90 days in advance of the effective date. In fact, the next action by the home owners is benchmarked from the date of receipt of the notice.
Chapter 723 provides alternative dispute resolution procedures for the protection of both the homeowners and the park owners once notice is given. If the homeowners contest the reasonableness of the proposed changes, within 30 days of receipt of the notice, they are required to request a meeting with the park owner to attempt to resolve the disagreement informally. Section 723.037(4), Florida Statutes. It is the receipt of the notice that triggers the thirty-day requirement for the initial meeting with the park owner, not the giving of the notice.
The Department argues that an interpretation of the statute that does not add additional time for mailing to the park owners' obligation will frustrate the purpose of a coordinated response by the homeowners' association in requesting a meeting with the park owner. If the Department desires to provide for a coordinated response, it could require, for example, the meeting
30 days after receipt of the notice by the last of the affected home owners or the homeowners' association.
Rule 7D-32.002(1) provides that the notice is not effective for any individual home owner until it is given to the last of all affected home owners. The relevant statute this rule implements provides "a park owner shall give
written notice to each affected mobile home owner and the board of directors of the homeowners association. . . ." Section 723.037(1), Florida Statutes. The statute does not require the notice to have been "received" by or "delivered" to the last of the affected homeowners 90 days prior to the effective date of the rental increase.
FMHA correctly argues that a notice is either valid or it is not. When the notice is delivered to the affected home owners and to the board of directors of the homeowners' association, the park owner has met the requirements of the statute, and the notice should be valid.
If the park owner makes a mistake and does not give a notice to an affected home owner or to the board of directors of the homeowners' association, then under the statute the park owner has failed to give a proper notice. See, Menna v. Sun Country Homeowners Association, Inc., Case No. 91-03253 (Fla. 2d DCA; September 2, 1992) (a case involving the sufficiency of a notice, not the validity of the Department's rule under which the notice was given).
The Department argues that since the park owner is required to identify all the "affected homeowners" in the notice, the failure of the park owner to give a notice to one of the affected home owners renders the notice invalid. This analysis ignores the clear intent of the statute to require the park owner to identify all of those "affected homeowners" in the notice to allow the home owners to confer and determine whether to meet with the park owner to challenge the change. The statute requires a majority of the "affected homeowners" or the homeowners' association, after receipt of the notice, to designate a committee to request a meeting with the park owner as a prerequisite to mediation. Section 723.037, Florida Statutes. The statute is clear: A home owner who has not received a notice is not affected. It is an impermissible enlargement of the statutory requirements that the validity of the notice to the rest of the park hinges upon whether all "affected" home owners were given the notice.
Subsections (1) and (4) of Rule 7D-32.002, Florida Administrative Code, change the statutory requirement of 90 days to 95 days and the statutory requirement of "give" to "receive." Both Subsections, therefore, enlarge, modify, or contravene the specific provisions of law they implement. For the same reasons, both Subsections are arbitrary and capricious.
The constitutional challenges raised by Petitioner are not determined. A hearing officer has no power to rule on constitutional questions for petitioners challenging the constitutionality of an adopted rule, as these issues are properly reserved for the courts upon any subsequent judicial review. Rice v. Department of Health and Rehabilitative Services, 386 So.2d 844 (Fla. 1st DCA 1980); Key Haven Associated Enter. v. Bd. of Trustees of the Internal Improvement Trust Fund, 427 So.2d 153 (Fla. 1982). The constitutional challenge to Rule 7D-32.002 having been properly raised in the Petition, the question is preserved for judicial review.
ORDERED that Subsections (1) and (4) of Rule 7D-32.002, Florida Administrative Code, are an invalid exercise of delegated legislative authority.
DONE and ORDERED this 18th day of November, 1992, at Tallahassee, Florida.
LINDA M. RIGOT
Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 1992.
David D. Eastman, Esquire
E. Harper Field, Esquire Thomas Bell, Esquire
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007
Henry M. Solares, Director
Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000
Janet E. Ferris, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000
Donald D. Conn, General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000
Carroll Webb, Executive Director Administrative Procedures Committee Room 120, Holland Building Tallahassee, FL 32399-1300
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.
