Findings Of Fact Prior to the hearing the parties jointly moved to consolidate the two (2) above styled cases and stated the stipulation would cover both 76-2197, D.O.A.H., and 77-604, D.O.A.H. The former involved six (6) deeds and the latter three (3) deeds. The following facts were stipulated to by the parties: The Respondent, Department of Revenue, imposed a documentary stamp tax upon six (6) deeds which transferred the title to properties from individual persons to Petitioner Corry. The transfer came about as a result of the following: In each of the six (6) transfers under question, Petitioner Corry sold property to certain individuals. The Petitioner gave to the individuals a deed and took back a purchase money mortgage. The purchasers made essentially no payments on the mortgage to Petitioner Corry and ultimately the purchasers deeded the property back to the Petitioner. The deeds were recorded in the courthouse records. In one of the deeds there is a specific statement that the deed is executed in lieu of foreclosure and that the purchaser is released from all liability. There is no such specific statement in the other deeds. By a Proposed Notice of Assessment dated August 3, 1976, the Respondent, Department of Revenue, sought to impose a documentary stamp tax upon the six (6) deeds. The consideration upon which the tax is based in cases like the instant case is usually the amount of mortgage debt forgiven but in the instant case no such information was provided and the tax was based on the assessed values of the property. Petitioner Corry is contesting the legal liability of Petitioner for the assessment and is not contesting the legal liability of Petitioner for the assessment and is not contesting the mathematical computation of the amount allegedly due. It is Petitioner's contention that the six (6) deeds are not subject to documentary stamp taxation inasmuch as the Petitioner paid nothing for the deeds and were signed by the mortgagors at the request of the Petitioner to clear title of the equitable owner. It is the Respondent Department of Revenue's contention that the six (6) deeds are subject to documentary stamp taxation since they are deeds in lieu of foreclosure or are deeds given when debts are rendered unenforceable. At the time the six (6) deeds were recorded on December 22, 1975, in Taylor County, the Deputy Clerk asked Petitioner how much he paid for the six (6) deeds in question and when he responded that he paid nothing for the deeds the Deputy Clerk advised him that he owed no documentary stamp tax or surtax thereon. Relying on the Deputy Clerk's advice, the deeds were recorded and no taxes were paid, only the recording fees. The Hearing Officer further finds: The deeds in question were secured for the purpose of clearing title to the equitable owner. The Petitioner paid nothing to the mortgagor for the deeds. The stipulation controls both cases No. 76-2197 and 77-604.
Recommendation Hold the assessments as valid assessment. DONE and ORDERED this 6th day of July, 1977, in Tallahassee, Florida. COPIES FURNISHED: Caroline C. Mueller, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 William W. Corry, Esquire Post Office Box 527 Tallahassee, Florida 32302 DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of July, 1977.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that the assessment of the documentary stamp surtax in the amount of $2,436.50 and the penalty in a like amount, for a total assessment of $4,873.00, be upheld. Respectfully submitted and entered this 17th day of December, 1976, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of December, 1976. COPIES FURNISHED: Mr. Gerald J. Biondo PAUL, LANDY, BAILEY & YACOS 200 Southeast First Street Miami, Florida 33131 Mr. Edwin J. Stacker Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 Mr. J. Ed Straughn Executive Director Department of Revenue The Capitol Tallahassee, Florida 32304
The Issue The issues in this case are whether Respondent committed the violations alleged in the Administrative Complaint, and, if so, what discipline should be imposed.
Findings Of Fact Admitted Facts Per Pre-Hearing Stipulation Petitioner is the state agency charged with regulating the practice of contracting pursuant to section 20.165 and chapters 455 and 489, Florida Statutes. Respondent is a state-certified building contractor in the State of Florida, having been issued license No. CBC 039025. Respondent was the licensed primary qualifying agent for Thom Colan Construction, Inc., from June 10, 2004, to September 4, 2008. On January 10, 2006, Thom Colan Construction, Inc., entered into a contract with Kathleen and Robert Masten to construct a house and pool on property located at 547 Bradenton Road, Venice, Florida (the project). The contract price for the project was $260,000.00. The project was completed with the issuance of a certificate of occupancy. Additional Findings of Fact Based on the weight and credibility of the testimony and evidence presented, the following additional facts are found: The contract between Respondent and the Mastens was a fixed-price contract. Although the contract price was $260,000.00, the Mastens paid a total of $320.394.19 for the project. The payments were made by the following methods: $49,968.58 was paid by check from the Mastens directly to Respondent; Respondent obtained an additional $222,320.71 in total bank draws, pursuant to a construction loan that authorized Respondent to draw funds directly from the bank for the project; and the remaining $48,104.90 was paid by check or credit card by the Mastens directly to subcontractors for labor and materials provided for the project. Thus, the Mastens paid $60,394.19 more than the contract price. At issue, and the subject of much dispute at the final hearing, was why the project exceeded the contract price by over $60,000.00. Respondent asserted that the entire amount by which the contract price was exceeded was attributable either to changes to the contract terms required by the Mastens or to circumstances beyond Respondent's control, such as price increases by subcontractors.2/ It was difficult to establish the causes for the price increases, in part, because the parties to the contract did not adhere to the formalities called for by the contract. For example, while both witnesses acknowledged that the Mastens requested changes as the project progressed, there was substantial disagreement about the extent of these changes and the cost differential. Unfortunately, there were no written change orders as required by the contract. Written change orders would have documented exactly what was changed and what cost was attributable to the change. Another problematic area in attempting to pinpoint why the contract price was exceeded was that there was no clear proof of the contract specifications detailing the design features of the house and pool. The written contract described a process of developing "plans" with "specifications" as to design elements. Initially, the plans would be preliminary, with items designated for buyer selections. The contract contemplated that the buyer would make these selections, which would become part of the plans, and the plans would then be considered final. Thus, certain buyer selections would be part of the contract. Thereafter, if the buyer wanted to change the final plans and specifications, the buyer would be responsible for the increased costs. No evidence was presented as to what the plans provided with respect to design features and which of those design features provided for buyer selections. Neither the preliminary plans and specifications for the Masten contract, nor the final plans and specifications after buyer selections, were offered into evidence, and it is unclear whether the process contemplated by the written contract was even followed. Nonetheless, Mrs. Masten admitted that she requested certain changes, which she acknowledged were not contemplated by the contract and were more costly than what the contract contemplated. For example, Mrs. Masten acknowledged that she requested an upgrade in kitchen appliances, increasing the cost by $2,703.55. She also acknowledged that she requested an upgrade in bathroom fixtures, but she was unsure of the cost attributable to the upgrade. Respondent testified that the total cost increase for upgrades requested by Mrs. Masten to plumbing and fixtures was $4,745.42. Mrs. Masten thought that amount was too high; it included changes claimed by Respondent, but disputed by Mrs. Masten, such as an upgrade to a hot tub that Mrs. Masten said she did not want but, apparently, was installed. The circumstances surrounding other apparent changes were in dispute. For example, an expedition, including Mrs. Masten and Respondent, trekked to a tile outlet store in Fort Meyers to pick out tile to use in the shower stall and floors. For the shower stall, Respondent testified that he "insisted" on travertine; Mrs. Masten apparently agreed, but said that she felt pressured to do so. The purchase was made, and Respondent returned to haul the travertine and other tile for the flooring on a trailer back to Venice. At some point, Mrs. Masten changed her mind about the travertine after being told by a competitor that travertine was a high-maintenance bad choice. Respondent claimed it was too late to return the tile, which he valued at $750.00, and so he testified that he threw it away. Mrs. Masten then selected different tile from the competitor at a price that was $1,292.16 higher than the travertine. The circumstances surrounding the selection of cabinetry were also in dispute. Respondent testified that he planned to use Enrique Benitez, a subcontractor who was doing other work in the house, to make the cabinets. Respondent claimed that he had Enrique prepare wood samples with different stains and that Mrs. Masten approved the samples and picked out the stain. At that point, Respondent said he paid Enrique $2,970.00 to begin constructing the cabinets. Mrs. Masten claimed that she never approved any samples, was shown only a rough, long plank of splintered wood that she said was awful and would not approve, and that she did not like any of the work this particular subcontractor was doing throughout the house. At some point, Mrs. Masten impressed upon Respondent that she would not accept these cabinets, and she selected different cabinets at an increased cost of $6,886.00. If Enrique ever built cabinets for the Mastens, he kept them. Another outing was made to select countertops. Mrs. Masten did not like the granite pieces that Respondent had intended to use, and the result was that the cost of the granite countertops selected by Mrs. Masten was $5,000.00 higher. Respondent and Mrs. Masten also could not agree on the extent of requested changes to the plans for flooring or the cost of those changes. Respondent testified that Mrs. Masten changed the mix of tile and carpeting, but Mrs. Masten disagreed. Respondent testified that Mrs. Masten required an upgraded carpet style, and although Mrs. Masten acknowledged that she selected a different carpet style, there was no evidence pinpointing the cost difference of the carpet upgrade. Additionally, Respondent acknowledged that one reason why the total cost for flooring was higher than expected was that Enrique Benitez increased the price to install the tiles from $3,000.00 to $7,500.00. Respondent sought to blame Mrs. Masten for the increased installation price, claiming that Mrs. Masten "fired" Enrique over the cabinet debacle, but Respondent had to rehire Enrique to install the floors and had to pay the increased price to overcome Enrique's hurt feelings. Mrs. Masten denied the claim that she "fired" Enrique, though she acknowledged that she was not happy with his work and that she refused to approve the cabinets Enrique was supposed to build, because the sample was unacceptable. Respondent testified that an additional $3,079.90 was spent for upgraded lighting and fans requested by the Mastens and for other electrical upgrades to accommodate other changes, such as the pool heater and spa tub. The cost to construct the pool increased by $3,700.00. According to Respondent, this increase was due to the cost of adding a pool heater that was not part of the original plans, at the request of the Mastens. Mrs. Masten disputed that this was a change. Respondent testified that there was a $323.00 cost increase because of the Mastens' request for an upgraded water softener. Post-contract changes made by the engineer to relocate the septic tank system necessary to obtain the requisite permits, altered the elevation and slope of certain parts of the property, including the space where the air conditioner would sit. Those changes resulted in the need to add a concrete slab and platform for the air conditioner. This additional cost was $419.25. Also because of the septic system design change, the county imposed additional landscaping requirements in order to obtain a certificate of occupancy. This resulted in an additional $979.05 spent to purchase trees. Respondent testified that permitting fees imposed by the county exceeded the estimated cost by $2,365.63. Respondent attributed the increase to the higher impact fee charged by the county as a condition to obtain a certificate of occupancy because the post-construction value of the house was higher than estimated. In other words, the combination of cost increases and upgrades led to imposition of a higher impact fee. The rest of the difference between the contract price and the total paid by the Mastens was attributable to increases in costs because of the delay in completing the project or increases in prices charged by subcontractors for their labor and materials. These included increases in the price of concrete, plumbing work, framing, insulation, roofing, drywall, hauling trash, installation of flooring, electrical work, equipment rental, and electricity charges. Respondent explained that he obtained "bids" for various components of the project in September 2005, although he did not sign the contract with the Mastens until January 10, 2006. Respondent anticipated that he would start the project that month, but the start was delayed by more than two months because of the septic system permitting difficulties encountered by the project engineer who had been retained by the Mastens. Mr. Colan utilized the estimates he received from others to develop his overall cost estimates for the project, which he used to establish the contract price. There was no allowance built into the cost estimations for inflation, price increases, or contingency reserves. Although Respondent characterized the price estimates he obtained from subcontractors as "bids," they were not bids in the sense of being firm offers to do work or supply material at a specific cost; they were essentially price estimates subject to change. Respondent testified that at least in some cases, he could count on a bid price being "good" for six months and, in some cases, for as long as seven months. However, Respondent did not lock in any of the bid prices by contracting with the subcontractors in September 2005 or in January 2006 when the Masten contract was executed. Thus, Respondent's reliance on the price estimates given to him in September 2005 was not shown to be reasonable. These estimates would have been four months old before Respondent anticipated starting the project and closer to seven months old before the project actually began. Since many of the price estimates were for items that would not be needed for months after the project began (such as bathroom fixtures, appliances, cabinetry, flooring, and lighting), even under the best-case scenario without any delays, Respondent was plainly taking a risk by using September 2005 cost estimates as if they were guaranteed prices in determining the contract price for the Mastens' project. Not surprisingly, many subcontractors were not willing to honor the stale price estimates when Respondent sought to contract with them many months later. Respondent suggested that he should not bear the risk of others' price increases, because they were not within his control. But Respondent controlled how he went about estimating his costs for the project and how he established the fixed price he agreed to in the contract. No credible evidence was presented to establish that the price increases by Respondent's subcontractors were due to such extraordinary market conditions or delays that they could not have been reasonably anticipated and addressed sufficiently through inflation allowances or contingency reserves built into the cost estimations. While Respondent attempted to characterize certain price increases, such as the rise in the price of cement and copper or the increased cost of dirt, as attributable to a "heated up" construction market, which caused unanticipated demand, Respondent's testimony was not credible and was not supported by any independent non-hearsay evidence. Indeed, Respondent admitted that in most cases, he did not shop around before accepting the price increases demanded by his subcontractors. In some cases, he had checked on prices within the two-county area when obtaining the cost estimates in September 2005, and then he assumed that by identifying the lowest price or best supplier in September 2005, there was no need to check around when that supplier demanded a price increase later. In no instance did Respondent check prices outside of his local area. Respondent acknowledged that the total amount spent for engineering and surveying fees exceeded his estimate by $4,177.12. Respondent argued that these fees were beyond his control, because the Mastens had retained the engineer and surveyor before Respondent entered into a contract with the Mastens. However, Respondent included the engineer and surveyor fee expenses in his cost estimates and assumed the responsibility for covering these fees as part of the overall construction of the house and pool within the fixed contract price. No credible evidence established that the fees were unusually high and could not have been anticipated or addressed by appropriate contingency reserves. Respondent attempted to blame many of the price increases on the two-plus month delay in starting the project because of the engineer's need to relocate the septic system to resolve permitting issues. As pointed out above, this delay did not in and of itself cause the problem of price increases by subcontractors unwilling to honor price estimates quoted in September 2005. In any event, Respondent did not testify that the delays were extraordinary and not reasonably anticipated, even if the exact reason for the delays may not have been known. Instead, various delays for various reasons are to be expected, and, indeed, are expressly contemplated throughout the written contract. Notably, in a section called "Price Guarantee," the contract form allowed the parties to specify a month by which construction had to begin or else the builder would have a qualified right to adjust the contract price. Respondent waived that right by specifying "N/A" in the blank where a start-by month could have been named: This Contract price is guaranteed to Buyer only if it is possible for Builder to start construction on or before the month of N/A. If start of construction is delayed beyond this time by Buyer, or due to any ruling or regulation of any governmental authority, or due to any other cause which is not the fault of the Builder, the Contract price may be adjusted to the current list price or to cover any cost increases incurred by Builder. A plausible explanation for Respondent's lack of care in developing reasonable, achievable cost estimates is that Respondent did not consider the fixed-price contract to be a fixed-price contract. Respondent testified that even though the contract on its face is a fixed-price contract, he believed that he had an understanding with the Mastens that the contract was really a "cost-plus" contract. Respondent testified that despite what the contract said, the Mastens had agreed that they would pay whatever the ultimate costs were, even if the prices went up from his estimates, plus an additional $37,000 for Respondent's profit. Respondent testified that the only reason that the contract was written up as a fixed-price contract was to secure the bank loan. That suggestion would be troubling, if true, because the implication is that Respondent was a party to fraud or deception to induce the construction loan. However, there was no credible evidence to support Respondent's attempt to justify recovering full costs, plus full profit, when the fixed price he contracted for proved inadequate. Notwithstanding Mr. Colan's apparent view that there was a secret deal standing behind the written contract, he signed the written contract, is bound by the fixed-price term, and must bear the consequences of his inadequate cost estimations. At some point when the Mastens became concerned about the extent to which they were apparently exceeding the contract price while Respondent was still drawing bank funds from the Mastens' construction loan, Mrs. Masten testified that she told Respondent not to draw any more bank funds. The evidence did not clearly establish whether Respondent violated Mrs. Masten's instructions by withdrawing more bank funds after the instructions were given. The Administrative Complaint had alleged that the Mastens contacted the bank and ordered the bank to make no further disbursements, and that the next day, Respondent attempted to withdraw all remaining funds in the construction loan account. No evidence was presented to substantiate this allegation. Petitioner incurred total costs of $299.36 in the investigation of this matter, excluding costs associated with attorney time.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Construction Industry Licensing Board, finding that Respondent, Thomas Colan, d/b/a Thom Colan Construction, Inc.: Violated section 489.129(1)(g)3. and (1)(m), as charged in Counts Two and Three, and for those violations, imposing a total fine of $3,000.00; Requiring Respondent to pay restitution to the Mastens in the total amount of $30,083.04; Requiring Respondent to pay costs of $299.36; and further Dismissing Count One (based on Petitioner's voluntary dismissal) and Count Four (based on an absence of proof). DONE AND ENTERED this 14th day of April, 2011, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 2011.
Findings Of Fact Charles Schwartz, an unlicensed building contractor built several houses in St. Lucie County including the house now owned by Salvatore and Cecelia Patti. In early 1976, Schwartz was in serious financial trouble and after commencing construction of the house here involve and placing a mortgage in the amount of $29,600 on the property on February 20, 1976, found himself unable to make the mortgage payments. This mortgage provided for interest payments only until June 20, 1976 when both principal and interest payments would start. Patti had done work as a subcontractor for Schwartz and was aware Schwartz was anxious to dispose of the property subject to the above mortgage. In April, 1976, before the house was completely finished, Patti purchased the house from Schwartz but didn't obtain a deed or assignment of mortgage until a later date. Patti agreed to assume the mortgage and complete the unfinished work as consideration for transfer of the property. Schwartz advised Patti that he, Schwartz, would record the warranty deed and have it sent to Patti. This deed was recorded on June 1, 1976 and documentary stamp taxes in the amount of $0.30 and surtax stamps in the amount of $0.55 were placed on the deed. When Patti received a copy of the recorded deed he paid no attention to the documentary stamps that had been placed on this instrument. After recording the warranty deed upon the representation to the clerk that the property consisted of unimproved land, Schwartz left town and numerous creditors "holding the bag". Schwartz had also advised Patti that the ad valorem taxes for 1976 had been paid on the property. Patti learned in late 1976 that these taxes had not been paid and to remove the lien thereby created against the property in January, 1977 he redeemed the tax certificates sold for these taxes. Patti's first information that proper documentary stamp taxes had not been placed upon his deed was contained in NOTICE OF PROPOSED ASSESSMENT dated November 19, 1976 (Exhibit 1) which showed an assessment for documentary stamps in the amount of $86.70, penalty $86.70 and interest in the amount of $4.48 for a total of $177.88. Since Petitioner acknowledged the accuracy of the assessment of $86,70 this amount is found to be the proper assessment.
Findings Of Fact Respondent DeBellonia is president of Respondent CGFS, Inc. At all times material to these proceedings, the Respondents were business consultants who assisted their clients with the preparation and presentation of information for private lenders who were interested in making business loans. Their business offices were located at North Rocky Point Drive, Suite 800, Tampa, Florida. In late July or early August 1989, Constance J. Jones responded by telephone to an advertisement placed by Respondents in the Tampa Tribune newspaper. The ad communicated to her that the Respondent CGFS, Inc. was interested in providing business financing to new and established businesses. Upon receipt of the telephone call, a secretary at CGFS, Inc. scheduled an appointment for Mrs. Jones with Respondent DeBellonia for August 7, 1989. Mrs. Jones was excited about the appointment because the seller of commercial real property purchased by her and her husband had recently filed a foreclosure action to recover the property. The suit occurred because she and her husband had been unable to make the final balloon payment on the property. The seller had agreed to forebear the possibility of such a suit the year before when Mrs. Jones gave him twenty thousand dollars ($20,000.00) and the promise that she would obtain financing within a year's time and pay the outstanding balance in full. At the close of the year, Mrs. Jones had not been successful in her attempts to acquire the money to pay for the property. This appointment renewed her hopes that she could minimize her losses, settle the suit, and preserve her interest in the property. Prior to arranging her appointment with Respondent DeBellonia, Mrs. Jones had made applications for a loan at several banks. Her requests had been turned down because the banks had determined that the present value of the property was insufficient to provide the collateral needed for the secured loan she was seeking. When Mrs. Jones attended her meeting with Respondent DeBellonia, she voluntarily presented him with a copy of her agreement for deed, a property appraisal, and her owner's title insurance policy. Having submitted herself to a number of loan requests at various banks prior to this appointment, she assumed he would want to see the same documents that had been requested during those loan reviews. Respondent DeBellonia allowed Mrs. Jones to present her situation and her documentation to him in her own manner. He made copies of all of the papers offered to him and returned the originals. At the close of Mrs. Jones' presentation, Respondent DeBellonia agreed to be her business consultant and to assist her in her search for funding. Although Mrs. Jones originally stated that she needed to acquire $94,000.00, this amount was reduced to $20,000.00 when she was informed that the Respondents charge a professional service fee of ten percent of the loan amount ultimately accepted by the clients. To begin work on the funding project, the Respondents requested a non-refundable professional service fee of $1,900.00. Although Mrs. Jones did sign the business consultant agreement, she did not have the money with her to pay the non-refundable fee. When she informed Respondent DeBellonia that she did not have the money, he told her he needed the money as soon as possible so that he could go ahead and work on the transaction. He indicated that he could accomplish a fast transaction for the $20,000.00 in about three days time. According to Mrs. Jones, the seller of the commercial property was willing to forebear on the foreclosure for a while if she could give him $20,000.00 now and if she was actively pursuing a loan which would pay off the balance due. This proposal was another reason she changed her request from $94,000.00 to the $20,000.00 amount. Later that evening, Mrs. Jones telephoned Respondent DeBellonia and told him she needed a new document so that her husband could be on the agreement as well. When the second document was sent, the secretary mistakenly sent out the original agreement with a funding goal of $94,000.00 instead of the reduced request for $20,000.00. Mr. Jones' name had been placed on the document in order to obtain his signature. Both agreements given to Mrs. Jones clearly state that Respondent CGFS, Inc. is not a mortgage broker. Before Mrs. Jones returned a fully executed agreement to the Respondents with the non-refundable fee, she decided to call the Comptroller's Office in Tallahassee to get a business rating to see if this was a good-rated business for her own protection. Although nothing negative was stated by the Comptroller's Office, Mrs. Jones did not get the assurances she was seeking. After that, she decided not to retain the Respondents to provide their business consultant services. Without Mrs. Jones' presumption that the Respondents would eventually seek a mortgage on the real property she intended to purchase, there is no reliable circumstantial evidence which demonstrates that the Respondents were seeking to act as a mortgage broker under the set of facts presented at hearing. Even if the circumstantial evidence and ill-conceived presumptions were considered reliable, the evidence is outweighed by the clear statement within the consultant agreement that Respondent CGFS, Inc. is not a mortgage broker. In addition, if the Respondents had intended to see a mortgage for Mrs. Jones, they would have required her to have her husband sign the agreement because she was an equitable owner of the property in a tenancy by the entirety. Instead, it was Mrs. Jones who later requested that her husband's name be included on the agreement. Respondent DeBellonia clearly manufactured Respondents' Exhibit number E. If this proceeding had turned on his credibility versus the credibility of others, he would not have prevailed in the factual determination. Based upon the facts presented at hearing, the Department initially had reason to believe that the Respondents were violating or about to violate the law by acting as a mortgage broker and mortgage broker business without a license. However, the formal hearing process revealed that Mrs. Jones' impressions of what occurred during her meeting with Respondent DeBellonia were faulty. Documentary evidence prepared during the interview and Mrs. Jones' admissions during the cross-examination resolved the case in Respondent's favor. The actions taken by the Department in filing the Cease and Desist Order were proper, and were not harassment of the Respondents.
Recommendation Accordingly, it is RECOMMENDED: That the cease and desist order issued by the Department on February 20, 1990, be dismissed. DONE and ENTERED this 31st day of September, 1990, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of September, 1990. APPENDIX TO RECOMMENDED IN CASE NO. 90-1720 Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO number 1. Accepted. Reject the date of the interview. The rest is accepted. See HO number 2-number 6. Accepted. Accepted. See HO number 5. Accepted. See HO number 9 and number 10. Accept the first two sentences. See HO number 9. Reject the third sentence. Contrary to fact. Reject the fourth sentence. Irrelevant. 8. Accepted. See HO number 11 and number 12. 9. Accepted. See HO number 15 and number 18. COPIES FURNISHED: Stephen M. Christian, Esquire Office of the Comptroller Regional Service Center 1313 North Tampa Street, Ste. 615 Tampa, Florida 33602-3394 Michael C. Mone, Esquire 111 Eighth Street Belleair Beach, Florida 33535 Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves, Esquire General Counsel Department of Banking and Finance The Capitol, Room 1302 Tallahassee, Florida 32399-0350
The Issue Whether or not Petitioner (complainant) is entitled to recover $10,134.72 or any part thereof against Respondents dealer and surety company.
Findings Of Fact This cause is governed by the four corners of the November 2, 1993 complaint. It involves only two loads out of twenty loads of potatoes. Petitioners are growers of potatoes and qualify as "producers" under Section 604.15(5) F.S. Respondent A.F. Business Brokerage is a broker-shipper of potatoes and qualifies as a "dealer" under Section 604.15(1) F.S. A.F. Business Brokerage, Inc. is a corporation engaged in the business of brokering (purchasing and re-selling) potatoes and operates under one or more of the following names: A.F. Business Brokerage, Inc., Washburn Corp., and/or Ben Albert Farms. The contract at issue herein listed the name of the broker as "Albert Farms d/b/a Washburn Corporation." Payments made by the Respondent broker to Petitioner for potatoes received under the terms of the contract were in the form of checks drawn on the account of A.F. Business Brokerage, Inc. For purposes of this litigation, "Albert Farms d/b/a Washburn Corporation," and "A.F. Business Brokerage, Inc." will be considered as describing the same party. Although Titan Indemnity Company received notice of the filing of Petitioner's Complaint and failed to request a formal hearing pursuant to Section 120.57(1) F.S., no evidence or admission was presented at formal hearing which would permit a finding that Titan Indemnity Company was surety for Respondent A.F. Business Brokerage at all times material. That is not to say that Titan Indemnity is found not to be the surety for Respondent A.F. Business Brokerage. The foregoing finding only means that this case in the administrative forum cannot resolve the issue of indemnity as between Respondents because insufficient evidence on that issue has been presented, and it may be necessary for that issue to be litigated in Circuit Court pursuant to the surety contract/bond, if any. On or about December 28, 1992, Petitioner and Respondent broker confirmed in writing the terms of a telephoned agreement, whereby Petitioner agreed to sell and the broker agreed to purchase twenty truckloads of potatoes. The agreement/contract, prepared by Respondent broker was titled "Standard Confirmation of Sale". It specified in pertinent parts: "Unless the seller or buyer makes immediate objection upon receipt of his copy of this Standard Confirmation of Sale, showing that contract was made contrary to authority given the Broker, he shall be conclusively presumed to agree that the terms of sale as set forth herein are fully and correctly stated. Sale made (F.O.B. or Delivered): F.O.B. Special Agreement, if any: Potatoes shipped are for potato chipping and must cook on arrival to be subject to this agreement. This confirmation is issued and accepted in agreement with, and subject to the rules and regulations and definitions of terms as recognized and approved by the U.S. Secretary of Agriculture under the Perishable Agriculture Commodities Act. *4 Truckloads chipping potatoes, April $7.75 FOB 16 Truckloads chipping potatoes, May, June $7.00 FOB *Loads not shipped by seller in April apply to May, June portions of agreement." (Petitioner's Exhibit 1) Under Section 672.319 F.S., The Uniform Commercial Code, the abbreviation "F.O.B." means "free on board" and is interpreted differently, dependent upon what words follow the abbreviation. Regardless of what words follow the abbreviation, the term "F.O.B." places shipping responsibility and shipping costs upon a "seller" as opposed to the one accepting delivery, the ultimate buyer. Testimony and arguments by the parties at formal hearing and in their respective proposals suggest that if "F.O.B." had been used by itself, in place of the word "delivered," and without more, the contract would have signified that sale herein occurred at the time of pickup in the field by the broker/shipper, and that title to the produce would have transferred from the producer to the broker/shipper at that point in time as opposed to title transferring at the time the broker/shipper delivered the produce to its ultimate destination. However, here, the Respondent broker elected the term "F.O.B." and rejected the term "Delivered," and also added the requirement that the potatoes cook to chips at their destination. Petitioner made potatoes available for pick up by the broker at Petitioner's fields beginning in May, 1993 in accord with the contract and the price specified therein. Without incident, the broker picked up and accepted the first eighteen loads of potatoes which it had agreed to purchase. All arrangements for shipment of the potatoes at issue were controlled and paid for by the Respondent broker. These arrangements made and controlled by the Respondent broker included the method of transportation, the exact date when the potatoes would be picked-up from Petitioner's fields, the place to which the potatoes ultimately would be transported, and the time during which the potatoes would remain "in transit". This unilateral control by the broker suggests that the parties were treating the potatoes as if title thereto had passed to Respondent broker when it picked them up in Petitioner's field and clearly shows that the broker had control over what condition the potatoes were in when they reached the retailer at their ultimate destination. As of the time Petitioner began to honor the contract by making potatoes available for pick up by the broker, Petitioner could have sold potatoes on the "open market" for $25.00 per hundred-weight instead of the $7.00 per hundred-weight called for under the terms of the contract. Nonetheless, Petitioner honored its contract with Respondent broker by making potatoes available to the Respondent broker and by reserving a sufficient amount of Petitioner's crop so as to fulfill the entire contract with Respondent broker. As of the time the Respondent broker made arrangements for pick up of the last two loads of potatoes, potatoes on the open market were selling for $1.75 per hundred-weight, meaning that the broker was paying Petitioner more for potatoes under the terms of their contract than the broker would have had to pay to purchase similar potatoes on the "open market". Respondent broker contacted Petitioner immediately prior to June 17, 1993 and asked that Petitioner cancel the contract between them because of the reduced price potatoes were yielding on the open market. Petitioner rejected the proposal. This strongly suggests that the Respondent broker felt bound by the contract to pay Petitioner at the rate agreed under the contract regardless of what rate the broker sold the potatoes for upon delivery and also suggests that the parties were treating the potatoes as if title to the potatoes passed to the Respondent broker when the broker picked up the potatoes in Petitioner's field. The date selected by the Respondent broker for pick up of the last two loads of potatoes was unusual. The broker picked up the last two loads of potatoes on Thursday, June 17, 1993. However, the Respondent broker's standard practice was not to pick up potatoes in St. Johns County, Florida on Thursdays because of the increased risk that potatoes loaded in the fields on Thursdays would reach the ultimate retail destination assigned by this particular broker at a time when processing plants in that locale would be closed for the weekend, thereby increasing the time the loaded potatoes would remain enclosed in the transport truck and accordingly increasing the risk of spoilage. The method of transport selected by the Respondent broker for the potatoes loaded June 17, 1993 was also unusual and destined to increase the risk of spoilage. On that occasion, the broker sent "pigs" a/k/a "piggy-back rail cars" rather than conventional trucks or refrigerated trucks. On June 17, 1993, Petitioner also loaded two trucks for H.C. Schmieding Produce, a broker not involved in this litigation. Petitioner's potatoes loaded upon Schmieding's trucks and the potatoes loaded on Respondent broker's trucks came from the same fields and "lot" of potatoes. One of Schmieding's trucks was loaded before Respondent broker's trucks, and one of Schmieding's trucks was loaded after Respondent broker's trucks. The potatoes purchased and loaded by Schmieding on June 17, 1993 were received in good condition in Illinois and Tennessee, respectively, and Petitioner received full payment for them. Respondent broker's loads were ultimately refused in Massachusetts. June 21-23, 1993 were all weekdays, and presumably "work days." The best date that can be reconstructed for the date that the potatoes in question were dumped by the Respondent broker is June 22 or 23, 1993, so their "arrival" in Massachusetts must have preceded dumping. By undated letter postmarked June 28, 1994, the Respondent broker notified Petitioner of the rejection of the two loads of potatoes picked up by the Respondent broker from Petitioner on June 17, 1993. The letter also informed Petitioner of the broker's intent to assess charges for inspection and dumping of the potatoes and of the broker's intention not to pay Petitioner for the potatoes. This letter was the first notice received by Petitioner advising of the rejection of the two loads of potatoes in question, 1/ and contained a copy of a U. S. Department of Agriculture Inspection Report dated June 22, 1993 showing 60-100 percent soft rot. 2/ Petitioner's principal had left his home and place of business on June 24, 1993, a date clearly 24 to 48 hours after dumping had already occurred and probably much longer after arrival of the potatoes in Massachusetts. Petitioner did not learn of the Respondent broker's June 28, 1993 letter or the Inspection until July 4, 1993. By July 4, 1993 Petitioner had terminated all harvest operations and was not able to tender two replacement loads of potatoes to the broker. As of the time that Petitioner received the June 28, 1994 notice that the two loads in question were being rejected, the Respondent broker had already disposed of the potatoes. Consequently, Petitioner had no opportunity to avail itself of any alternative or other option regarding disposition of the potatoes. Prompt notification of the broker's rejection of the two loads of potatoes might have allowed Petitioner to negate its losses by marketing the potatoes at a reduced price to other processing plants in Massachusetts or to tender two replacement loads of potatoes to the Respondent broker. After all deductions and calculations, the rejected two loads of potatoes resulted in damages of $10,135.47 to Petitioner producer.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Department of Agriculture enter a final order that: Awards Petitioners $10,134.42 and binds A.F. Business Brokerage Inc. d/b/a Albert Farms d/b/a Washburn Corporation to pay the full amount to Petitioner. Sets out any administrative recourse Petitioner or Respondent broker may have against Titan Indeminity Co. RECOMMENDED this 19th day of July, 1994, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1994.
Findings Of Fact On or about January 9, 1974, Petitioners and their partners, Edward Mehler, and Sylvia Mehler, sold certain property located in Broward County, Florida, to Leo Koehler, Pat Manganelli, and Walter Urchison. A copy of the deed was received in evidence as Respondent's Exhibit 1. The Petitioners and the Mehlers took a $50,000 mortgage from the buyers as a part of the purchase price. The mortgage deed was received in evidence as Respondent's Exhibit 2. The face amount of the mortgage is $50,000. The buyers defaulted on the mortgage to the Petitioners and the Mehlers without having made any payments on the mortgage. The Petitioners and the Mehlers were unsuccessful in negotiating any payment from the buyers. The buyers were apparently irresponsible, and were unsuccessful in business. The buyers had given their deed to the property to a Mr. Frank Post. Mr. Post apparently took the deed in payment for a debt. The Petitioners and the Mehlers were unsuccessful in negotiating any payment on the mortgage from Post. The Petitioners and the Mehlers were unsuccessful in locating any market for the mortgage. The mortgage had no market value. Rather than foreclosing one the mortgage, the Petitioners and the Mehlers took a warranty deed from the original buyers and a quitclaim deed from Post. These deeds were received in evidence as Respondent's Exhibits 3 and 4. The deeds were taken in lieu of foreclosure, and the effect of the deeds was to discharge the $50,000 mortgage obligation. Petitioners and the Mehlers placed minimum Florida documentary stamp tax and surtax stamps on each deed, taking the position that the consideration for the deeds was nothing. The Respondent took the position that the consideration for the deeds was the discharge of the mortgage obligation, and assessed $410 in stamp tax, surtax, and penalty obligations upon the Petitioners. The petitioners subsequently commenced this action. The property which is the subject of this matter has very little market value. The property has been on the market for some time, and no buyer has been found. The property has been valued at $12,500, but its market value is less than that.
