Findings Of Fact This case concerns what is-called a "Turnkey Lease". The program was developed by the State of Florida in 1971. It encompasses a situation where by agencies seeking space for their operations may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building thereon sufficient to-meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to DGS, DGS reviews the supporting documents required by the provision of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into; it is then sent back to DGS for review and approval as to the conditions; and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy as well as code compliance. Section 255.249 and Section 255.25, Florida Statutes, set forth the requirements for soliciting and awarding bids for lease space in an amount in excess of 2,500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DCS utilizes that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, the District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a Certification of Need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983, and after project review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 p.m., on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Services Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest hid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional higher bids would be evaluated if the four lowest bids were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc., Kenneth R. McGurn, one of the Intervenors (McGurn submitted five prices scheduled for his bid and of these, only one was considered); Elizabethan, Petitioner herein; and TSU. Only three bids are pertinent to the discussion here. They are #8-C (McGurn); #11 (Elizabethan); and #12 (TSU). In pertinent particulars, these bids provided as to rental costs: 8-C 11 12 1st yr $14.00/$220,808 $8.95/$ 61,916.10 S 7.16/$ 49,532.88 2nd yr 14.00/ 220,8088 8.95/ 141,159.40 7.35/ 115,924.20 3rd yr 14.00/ 220,808 8.95/ 141,159.40 7.62/ 120,182.64 4th yr 14.00/ 220,808 8.95/ 141,159.40 8.08/ 127,437.76 5th yr 14.00/ 220,808 8.95/ 141,159.40 8.33/ 131,380.76 6th vr 14.00/ 220,808 8.95/ 141,159.40 8.59/ 135,481.48 7th yr 14.00/ 220,808 8.95/ 141,159.40 8.86/ 139,739.92 8th yr 14.00/ 220,808 8.95/ 141,159.40 9.19/ 144,944.68 9th yr 14.00/ 220,808 8.95/ 141,159.40 9.58/ 151,095.76 10th yr 14.00/ 220,808 8.95/ 141,159.40 10.09/ 159,139.48 Renewal Option 1st yr3.00/47,316 9.93/ 156,615.96 10.51/ 165,763.72 2nd yr3.00/47.316 9.93/ 156,615.96 10.99/ 173,334.28 3rd yr3.00/47.316 9.93/ 156,615.96 11.48/ 181,062.56 4th yr3.00/47.316 9.93/ 156,615.96 11.99/ 189,106.28 5th yr3.00/47.316 9.93/ 156,615.96 12.51/ 197,307.72 Total Basic Overall Lease 1-15 yrs $1,971,500 $2,115,430.50 $2,181,434.12 Average Sq.Ft. for 15 yrs $8.60 $9.20 $9.58 A recommendation by the evaluation committee which met at DHRS District III, that McGurn's bid be selected, was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, upon completion of the committee's evaluation was also evaluated by Ms. Goodman in the Bureau of Property Management of DGS. She also considered the McGurn bid to be the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGurn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS headquarters as well. In her evaluation of the proposal and the bids, Ms. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisement for bids, and any information pertinent to the site selection process. In determining the McGurn's bid was the lowest as to cost of all the bids, Ms. Goodman compared the average rate per square foot per year for each. This did not take into con- sideration pro-ration of costs per year, but strictly the average over the fifteen year probable term of the lease (ten years basic plus five year option). According to Ms. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Ms. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for may years and many of the bidders here have bid before using this same system. All bidders are considered on the same footing in an evaluation. They are notified of what information will be considered along with that of all the other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. Petitioner contends that McGurn's bid does not conform to either the normal bidding procedure followed by contractors in this type of procurement over the past years or to the normal bidding procedures adopted by Respondent, DHRS. It urges that the questioned bid is non-responsive and front-end loaded to the detriment of DHRS. With regard to the front-end loading objection, Mr. Taylor, testifying for Petitioner, attempted to indicate by graphic evidence that Elizabethan's bid, which he claims is not front-end loaded, is cheaper to the State than that of McGurn. Due to the large rental cost of the McGurn bid in the opening years of the lease, the State would have to borrow money to make the large rental payments; the interest cost of which, when added to the $3.00 cost in the option years, raises the cost considerably and makes the bid not the lowest. Though Mr. Taylor testified to this he failed to produce any independent evidence to support it. In addition, Taylor urges, under the McGurn schedule, McGurn would recoup his entire construction debt (approximately $423.00 plus interest) in the first four years of the lease: Comparing the two bids, it appears that the State would pay McGurn approximately $494,500.00 more than it would pay Elizabethan for the same period during the first seven years of the lease. Considering this, it is Taylor's belief that McGurn's profit after the fourth year is excessive. He contends also that when, after the tenth year, McGurn's rental rate drops to $3.00 per square foot for the remaining five years which constitutes the option period of the lease, the State could not afford to leave the low figure and as a result, the ten year lease is converted to a l5 year lease which is unresponsive. Further, the $3.00 figure for the last years, which would ostensibly show a loss to McGurn, is misleading in that there would be sufficient income from the advance profit garnered in years 5 to 10, when invested, to cover the soft costs and more in these later years. Admitting that because of its involvement in other turnkey projects in Florida, Elizabethan is aware of the State policy on cost evaluation, Taylor contends that while his bid does not violate State policy, McGurn's bid does because it would be fiscally irresponsible for the State to pay so much up front. This conclusion is his opinion, however, and not supported by any independent evidence. Both expert witnesses, Respondents Scott and Perry, who testified for the Intervenor, TSU, agree that the present value of money should be considered in evaluating rental costs. Their major point of difference is in the percentage of discount rate to be applied. Dr. Perry urges that use of the 10% rate mandated by the U. S. Government in its procurements of this nature. Dr. Scott, on the other hand, considers this to be too high and urges a rate in the area of 3% be used. The significance of this is that at the lower of the range spread, McGurn's bid is lowest. At the higher end, TSU's bid is lowest. From 5.7% up to below 6%, Petitioner's bid is lowest. Whichever would be appropriate, the State has not adopted the present value of money methodology and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There is, in addition, no prohibition against front- end loaded bids encompassed within this policy. By the same token, there is nothing in the bid package issued to all prospective bidders that in any way stipulates the method of computing lease costs or prohibits from loaded bids. DGS zone rates, criteria stipulating the maximum agencies can send on rent without approval by DGS, are not part of the bid package and do not constitute a factor in determining whether a bid is conforming or not. These zone rates may be waived by DGS at the time the proposed award is submitted for DGS approval. In practice, within the memory of Joseph Lambert, HRS' Administrator of Facilities Services, who administers the Department's leasing program, he cannot recall DGS ever denying a DHRS request for waiver of the maximum zone rate in any case where it was pertinent. In this case, since the lease payments at-least in the second through tenth years-of the McGurn bid exceed the zone limits, the award would have to be approved by the Governor and Cabinet in addition to DGS. It has not yet been placed on the Cabinet agenda because of the protests filed. As was stated before, there are no rules governing the evaluation of bids for leases of this nature. Oral instructions given to each agency, when applied here, reveal that the McGurn bid, as was seen above, has an average cost of $8.86 per square foot per year. TSU's bid costs $9.58 per square foot per year, and Elizabethan's bid costs $9.29 per square foot per year. These same calculations are followed on all turnkey and non- turnkey leases in the State. The reason the State uses this process instead of the present value of money methodology is that it is easy. DGS statistics indicate that at least 50% of the landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State follow this procedure. In the opinion of Ms. Goodman, the costs involved in utilizing the present value of money methodology would far outweigh the paper savings to be gained, notwithstanding the testimony of Dr. Perry to the contrary. With regard to the option issue, it was the position of DGS in reviewing the proposals that the very low $3.00 lease cost per square foot in the last five years (the option period) did not make the McGurn bid unresponsive. There were no limits imposed upon the bidders except that a five year option to a ten year lease be included. Were it not there, the bid would be unresponsive. DGS would issue approval for a ten year lease with a five year option but not a fifteen year lease. Ms. Goodman cannot recall a situation in which an option was not exercised by it if the need for the space continued though there have been some instances where option costs have been renegotiated.
Recommendation Based on the foregoing, it is, therefore; RECOMMENDED THAT DHRS License Number 590:8030 be awarded to Kenneth R. McGurn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkwav Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood 8Oulevard Tallahassee, Florida 32301 Morgan Staines, Esquire 2204 East Fourth Street Santa Ana, California 92705 Thomas D. Watry, Esquire 1200 Carnegie Building 133 Carnegie Way Atlanta, Georgia 30303 Steven W. Huss, Esquire Department of Health and Rehabilitative Services 1317 Winewood boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301 Steven W. Huss Assistant General Counsel Department of Health and Rehabilitative Services 1317 Winewood Blvd. Tallahassee, Florida 32301 Gary J. Anton, Esquire P.O. Box 1019 Tallahassee, Florida 32302 Harden King, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 406 Tallahassee, Florida 32301
Findings Of Fact At all times material, Respondent, Gary Dean Upton, was a licensed real estate broker having been issued license number 0090905. Respondent was the broker for the other Respondent herein, Dean Upton Realty, Inc., which has its offices situated at 7045 W. Broward Blvd., Ft. Lauderdale, Florida. At times material herein, Respondent, Dean Upton Realty, Inc., was a corporation licensed as a real estate broker having been issued license number 0213092. On March 11, 1983, a hearing was held before an arbitration panel of the Ft. Lauderdale Area Board of Realtors in response to a complaint filed by Respondent herein, Upton, claiming a commission from another realtor based upon an exclusive rental agreement for property owned by Rex and Martha Anderson. (Tr pages 23, 28) Subsequently, the Ft. Lauderdale Area Board of Realtors filed a complaint with the Department of Professional Regulation alleging possible perjury in connection with Upton's testimony at the hearing or forgery in connection with the exclusive listing agreement with the Andersons. Unrefuted testimony shows that during a meeting at Anderson's home in October, 1982, Rex Anderson initialed a listing brochure for the Anderson property. (Tr page 111-112; Respondents' Exhibit 3; Anderson deposition at page 9; referring to the March 22, 1983 letter at Petitioner's Exhibit 3, page 60, paragraph 3) Anderson claimed he did not intend to give Upton an exclusive listing. However, because of the strain he was under at the time the agreement was purportly executed, he could not swear that he did not initial the document. Anderson's testimony about being under a "severe strain" and unable to remember what occurred in connection with the exclusive listing agreement is not inconsistent with that of the only other eye witness who has testified regarding the transaction, Kevin Scott, a former associate of Upton who is presently involved in hotel management at the Royal Orleans Hotel in New Orleans, Louisiana. (Tr page 108) The day Upton visited the Anderson residence to obtain the listing, Rex Anderson, who had been laid off from his job as an airline pilot, appeared "very upset," and appeared to be drinking. (Tr page 110) Thereafter, Upton and Scott left the Anderson residence for a brief period. When they returned, Anderson was a "very flustered, very nervous and an agitated individual." (Tr page 114) The credible testimony of persons familiar with Upton's reputation for honesty in the community evidenced that he was not reputed to be a person who would forge someone's name on a listing agreement. (Testimony of Clemente, Apuna and Marion Upton at Tr pages 126, 143 and 145, respectively) Based on Respondent's testimony that Anderson initialed the exclusive listing agreement, Kevin Scott's testimony which was corroborative of Respondent Upton's testimony and Anderson's inability to state, without evasiveness, what occurred in connection with the exclusive listing agreement respecting the subject property, there is no competent and substantial evidence herein to establish that Respondent Upton either forged Rex Anderson's initials to the exclusive listing agreement or that he gave perjured testimony before the Fort Lauderdale Area Board of Realtors. On October 17, 1984, Respondent Upton pleaded nolo contendere to the felony offense of possession of an unlawfully issued driver's license. (Petitioner's Exhibit 5) The plea resulted in a withheld adjudication and a sentence of 18 months probation plus the payment of fines and court costs. In making the nolo contendere plea, Respondent Upton considered that such was in his best-interests; however, he felt that he was not guilty and has been a model probationer since October, 1984. (Testimony of Susan Jean Davis, Respondent Upton's correctional officer) Respondent has completed a 30-day residential treatment program for alcoholism at the Beachcomber in Delray Beach, Florida. Since that time, he has also participated successfully in the Broward County Commission of Alcoholism, Inc. DWI program. (Respondents' Exhibits 4, 5 and 8) Those persons who have had the opportunity to observe Respondent since his bout with alcoholism consider him a reformed alcoholic. (Testimony of former judge, Lawrence C. Roberts; Marion Upton and former Broward sheriff and judge, George Brescher) Kendall D. DeVeaux, Broward County's chief evaluator for the substance abuse program had the opportunity to evaluate and supervise Respondent Upton since his DWI and drug abuse offenses. DeVeaux's testimony corroborates that of Roberts and Marion Upton respecting Upton's reformation. Based on the foregoing factual findings and conclusions, and the mitigating factors introduced herein, I hereby make the following:
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Respondent Gary Dean Upton's real estate broker's license number 0090905 be suspended for a period of six (6) months. In all other respects, it is RECOMMENDED that the complaints in Case Numbers 84-0138 be DISMISSED. RECOMMENDED this 8th day of October, 1985, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1985.
Findings Of Fact The Respondent, Stephen A. McLeod, is holds a license that makes him eligible to act both as a real estate broker and as a real estate salesperson in the State of Florida. Between February, 1989, and March 12, 1990, the Respondent operated as the broker for McLeod Realty Group, Inc., a/k/a MRG, Inc. (MRG), a real estate brokerage of which he was the sole owner and corporate officer. At some point before March 12, 1990, the Respondent and MRG agreed to locate a commercial lease in Tampa, Florida, for Harold Calhoun, doing business as HC Associates. Subsequently, the Respondent contacted Theodore Blauvelt concerning an open listing that a limited partnership called SB II/Fidelity Silo Bend #008 had for the lease of 30,000 square feet of space which the limited partnership owned in an industrial park in Tampa. Blauvelt was the President of a TCC Tampa Industrial #2, Inc., a Trammell Crow Company which was the general partner of the Silo Bend #008 limited partnership. On March 12, 1990, the Respondent deactivated the broker license of MRG, and the Respondent went to work as a broker-salesman for another broker, Centres Commercial Realty Group, Inc. (Centres Commercial). Nonetheless, and despite the deactivation of the license under which the Respondent had been authorized to act as the broker for MRG, the Respondent and MRG continued to act as a broker separate and apart from Centres Commercial. It is not clear from the evidence exactly when the Respondent and MRG initiated negotiations between HC Associates and the limited partnership and became the procuring cause of any lease that might be concluded between them. But it is found that negotiations probably were initiated after March 12, 1990. Negotiations clearly continued after March 12, 1990. On or about May 7, 1990, HC Associates and the limited partnership concluded negotiations for a lease on the 30,000 square feet of space, and the limited partnership executed a Broker Commission Agreement with MRG, Inc., under which the limited partnership would pay MRG a $45,000 commission, payable half on execution of the lease and half when HC Associates occupied the leasehold space. On May 9, 1990, HC Associates signed a Lease Agreement for the 30,000 square feet of space, and Blauvelt secured and delivered to the Respondent a $22,500 check on an account of the Crow Trammell Companies, made payable to MRG, for the first half of its commission. The Lease Agreement was fully executed when Blauvelt signed it on behalf of the lessor on May 16, 1990. The May 16, 1990, Lease Agreement had a start date of June 1, 1990. However, it also provided for a $400,000 "Tenant Finish Allowance," payable $75,000 on May 21, $100,000 on June 1, and $225,000 on July 1, 1990. On or about June 14, 1990, Blauvelt and McLeod executed a second "Lease Agreement" for the 30,000 square feet of space. They testified that Blauvelt's company lost the May 16, 1990, Lease Agreement and that they had to execute a duplicate. Calhoun was out-of-town when the question of having to execute another Lease Agreement came up, and he authorized the Respondent to take care of whatever details were necessary. He did not specifically authorize the Respondent to sign Calhoun's name, or anyone's name other than the Respondent's, to the second Lease Agreement. On June 14, 1990, the Respondent signed the name Mark Thompson, purportedly as vice-president of HC Associates, as lessee on the second Lease Agreement. Blauvelt testified that he thought the Respondent had the authority to sign on behalf of HC Associates. Blauvelt did not know who Mark Thompson was. Mark Thompson was not vice-president of, or in any way connected with, HC Associates. The Respondent and Calhoun testified that the Respondent knew Thompson as being in the same business as Calhoun (liquidating foreclosed assets) and that the Respondent suggested to Calhoun that Calhoun and Thompson should collaborate in the business of HC Associates. Calhoun actually never met or spoke to Thompson. Although the Respondent and Blauvelt testified that the second Lease Agreement was for the sole purpose of replacing the lost first Lease Agreement, they made significant modifications. First, the start date was postponed to November 1, 1990. Second, without explanation, the provision regarding the $400,000 "Tenant Finish Allowance" was deleted. Nonetheless, the $400,000 was paid to Calhoun in accordance with the first Lease Agreement. Calhoun in turn paid those sums over to the Respondent, who testified that he acted as HC's "consultant" in supervising the tenant improvements. In accordance with the second Lease Agreement, on November 1, 1990, Blauvelt's company paid MRG the second half of its commission under the Broker Commission Agreement. Like the check for the first half of the commission, the check for the second half of the commission, in the amount of $22,500, was drawn on a Trammell Crow Companies account and was made out to MRG, Inc. The Respondent cashed both commission checks. He did not pay any part of the commissions over to Centres Commercial, the broker for whom he worked. He testified that Centres Commercial did not want any of MRG's commissions, and the DBPR did not call as a witness, or even interview, anyone from Centres Commercial to contradict the Respondent. The Respondent testified that Centres Commercial was not interested in any part of the commission for two reasons: first, it hired the Respondent as a tenant representative; second, it did not want to be liable for anything the Respondent or MRG had done before Centres Commercial hired the Respondent. Although HC Associates was paid the entire $400,000 "Tenant Finish Allowance," HC Associates and the Respondent only have been able to account for approximately $82,000 as actually having gone into lease improvements. Although MRG was paid the entire $45,000 commission, it is unclear whether HC Associates ever actually occupied the leased premises. The lessor has sued HC Associates, Calhoun, the Respondent, and Blauvelt for breach of the lease and on various other grounds. As of the time of the final hearing, no one knew the whereabouts of the purported Mark Thompson.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a final order: (1) finding the Respondent guilty of violating Sections 475.25(1)(b) and 475.42(1)(a), and therefore also Section 475.25(1)(e), Fla. Stat. (1989); (2) imposing a $1,000 fine on him; (3) suspending him for four years; (4) requiring him to complete 30-hour broker management course; and (5) placing him on probation for one year after being reinstated. RECOMMENDED this 3rd day of May, 1995, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 3rd day of May, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-3509 To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Accepted but conclusion of law, subordinate and unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. 3.-6. Accepted and incorporated. Accepted and incorporated. (It was not clear how much "negotiation" was required, but there were significant changes between the two versions of the Lease Agreement.) Accepted and incorporated. Rejected as not proven that HC never took possession; otherwise, accepted and incorporated. Accepted and incorporated. Respondent's Proposed Findings of Fact. (For purposes of these rulings, consecutive numbers have been assigned to the unnumbered paragraphs starting on page 2 of the Respondent's proposed findings of fact.) Accepted and incorporated. Accepted that "tenant representation" is one way to describe it, but subordinate and unnecessary. Conclusion of law. First two sentences and first clause of the third sentence, accepted but subordinate and unnecessary. The rest is rejected as contrary to facts found and to the greater weight of the evidence. First sentence, unintelligible. (Not a complete sentence.) The rest is rejected as contrary to facts found and to the greater weight of the evidence. Rejected as contrary to facts found and to the greater weight of the evidence. (It was not clear how much "negotiation" was required; but, technically, there were "negotiations" because there were significant changes between the two versions of the Lease Agreement.) Subparagraph 1: Rejected as contrary to facts found and to the greater weight of the evidence that the Respondent procured the lease before March 12, 1990; otherwise, accepted and incorporated. Subparagraphs 2-3: Rejected as conclusion of law. Subparagraph 4: First sentence, rejected as conclusion of law; second sentence, accepted and incorporated. Accepted and incorporated that Centres Commercial agreed to the disbursement to MRG; otherwise, rejected as conclusion of law and argument. Conclusion of law. First sentence, rejected as contrary to facts found and to the greater weight of the evidence. Second sentence, accepted but subordinate and unnecessary. As to fraud, irrelevant and unnecessary since fraud was not charged. Otherwise, accepted and incorporated. (However, as found, the evidence was that HC transferred the money received from Trammell Crow over to the Respondent.) First sentence, conclusion of law; second sentence, irrelevant and unnecessary since fraud was not charged. First sentence, rejected as contrary to facts found and to the greater weight of the evidence. (It was not the Respondent's only "mistake.") Otherwise, as to fraud, irrelevant and unnecessary since fraud was not charged. Accepted and incorporated. COPIES FURNISHED: Steven W. Johnson, Esquire Senior Attorney DPR-Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Stephen A. McLeod Post Office Box 76325 St. Petersburg, Florida 33734 Darlene F. Keller Director, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Linda Goodgame, Esquire General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issue in this case is whether, in making an award of a lease for office space, the Respondent acted according to the requirements of law.
Findings Of Fact In February, 1993, the Department of Labor and Employment Security ("Department") issued a Request for Proposal and Bid Submittal No. 540:0969 ("RFP") seeking to lease approximately 18,684 square feet of office space in Jacksonville, Florida, for a period of six years. The space was to house the Office of Disability Determinations ("ODD"), which processes disability claims and determines whether claimants are eligible for Social Security and Supplemental Income benefits. The office has minimal contact with the general public. The RFP provided that all bids were subject to conditions stated within the RFP. Bids not in compliance with RFP conditions were subject to rejection. RFP Article D, General Provisions, Paragraph 8 provides as follows: The Department reserves the right to reject any and all bid proposals for reasons which shall include but not be limited to the agency's budgetary constraints; waive any minor informality or technicality in bids' to accept that bid deemed to be the lowest and in the best interest of the state, and if necessary, to reinstate procedures for soliciting competitive proposals. A pre-bid conference was conducted by the Department on February 16, 1993. Representatives from the vendors involved in this proceeding attended the conference. Bids were opened on March 5, 1993. The Department received five responses, three of which were deemed to be responsive and which were evaluated. The remaining two responses were determined to be nonresponsive and were not evaluated. On or about March 10, 1993, based on the evaluations, the Department proposed to award the bid to Koger Properties, Inc. On or about March 17, 1993, the Department notified the vendors of the intended award. The Petitioners filed timely notices protesting the intended award. TOWNCENTRE PROPOSAL Paragraph 13 sets forth conditions to which a bidder must agree in order to be awarded a bid. Subsection "a" of the paragraph states, "[i]f successful, bidder agrees to enter into a lease agreement on the Department of General Services Standard Lease Agreement Form BCM 4054 (Attachment F - Do not complete)." The copy of the Department of General Services Standard Lease Agreement Form which was included in the RFP was a poorly reproduced copy. Article III of the Lease Agreement Form provides as follows: III HEATING, AIR CONDITIONING AND JANITOR SERVICES 1.a. The Lessor agrees to furnish to the Lessee heating and air conditioning equipment and maint(illegible) in satisfactory operating condition at all times for the leased premises during the term of the lease at the (illegible) of the Lessor. b. The Lessor agrees to maintain thermostats in the demised premises at 68 degrees Fahrenhe(illegible) the heating season and 78 degrees Fahrenheit during the cooling season; and certifies that boilers the(illegible) been calibrated to permit the most efficient operation. The Lessor agrees to furnish janitorial services and all necessary janitorial supplies for the leased (illegible) during the term of the lease at the expense of the Lessor. All services required above shall be provided during the Lessee's normal working hours, whic(illegible)marily from 7:30 a.m. to 5:30 p.m., Monday through Friday excluding state holidays. Also attached to the RFP was a copy of an addendum to the lease, also poorly reproduced. The addendum provides as follows: Article III, Paragraph III Addendum for Full Service Lease The lessor and lessee mutually agree that the described prem(illegible) leased in this lease agreement shall be available to the department (lessee) for its exclusive use twenty four (24) (illegible) per day, seven (7) days per week during the lease term. T(illegible) space to be leased by the department will be fully occupied during normal working hours from 7:30 a.m. to 5:30 p.m., Mo(illegible) through Friday, excluding holidays, Saturdays and Sundays, (illegible) may be fully or partially occupied during all other periods (illegible) time as necessary and required at the full discretion of th(illegible) department. Accordingly, services to be provided by the le(illegible) under the terms of the lease agreement, including electrici(illegible) other utilities, will be provided during all hours of occup(illegible) at no additional cost to the department (lessee). Although the copy of the lease agreement and addendum included in the RFP were poorly reproduced, it is clear that the addendum modifies the paragraph of the lease agreement related to provision of heating, air conditioning and janitorial services to require that HVAC services be provided throughout the premises during all hours of occupancy at no additional cost to the Department. The proposal submitted by Towncentre included an "Attachment Z" which states as follows: The following represent exceptions and/or clarifications to the terms of the Request for Proposal and Bid Submittal Form ("RFP") for the referenced Lease. Except as noted herein, Bidder shall comply fully with the terms of the RFP..." Item #7 of Attachment Z states as follows: The Building in which the space is offered is serviced by central heating, ventilating and air conditioning; therefore, no separate thermostats will be provided in the space other than in the computer room. However, the required temperature standards will be maintained and satisfied. The computer room HVAC shall be available 24 hours a day. Otherwise, after-hours HVAC is billed at $80 per hour. Attachment Z also included additional exceptions to the provisions of the RFP. Contrary to the requirements set forth in the addendum attached to the lease form included in the RFP, the Towncentre proposal included additional charges for after hours uses. The Department determined that the Towncentre proposal was nonresponsive and disqualified the proposal from further consideration. Because the Towncentre proposal includes HVAC charges which are specifically prohibited under the terms of the RFP, the Towncentre proposal is nonresponsive to the RFP. Towncentre asserts that other sections of the RFP indicate that, within the leased premises, only the computer room is required to be heated or cooled on a continuous basis. Vendors had an adequate opportunity to direct questions regarding the RFP to Department officials. There is no evidence that Towncentre sought clarification from the Department related to this matter prior to submitting the bid proposal. In the notification to Towncentre that the bid had been determined to be nonresponsive to the RFP, the Department identified the other exceptions as additional reasons for the determination of nonresponsiveness. At hearing Towncentre introduced no evidence related to the remaining items included within Attachment Z. BRYAN SIMPSON JR. FOR P.V. ASSOCIATES The Simpson bid was deemed to be responsive and was evaluated. The evaluations were performed by three Department employees, Dorea Sowinski, Albert Cherry, and Tom Mahar. On March 9, 1993, the evaluators visited the physical locations of the three responsive bids. (Although the bid had been declared nonresponsive, they also visited the Towncentre site, apparently as a courtesy.) The Simpson space is located in downtown Jacksonville. After completion of the site visits, the evaluators separately and independently completed their evaluation sheets. The evaluators awarded a total of 262 points to Koger Properties and 248 points to Simpson. Page 7 of the RFP sets forth the evaluation criteria which were considered in awarding evaluation points. The RFP stated as follows: The successful bid will be the one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated below: Rental, using Present Value methodology for basic term of lease (See D, General Provisions Items 3 and 4) applying the present value discount rate of 5.6 per cent. (Weighing: 35) Conformance of and susceptibility of the design of the space offered to efficient layout and good utilization and to the specific requirements contained in the Invitation to Bid. (Weighing: 20) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the Departmental operations planned for the requested space. (Weighing: 20) Offers providing contiguous space within preferred boundaries. (Weighing 5) Frequency and availability of satisfactory public transportation within one block of the offered space. (Weighing 15) Availability of adequate dining facilities within one mile of the offered space. (Weighing: 2) Proximity of offered space to the clients served by the Department at this facility. (Weighing: 3) Proximity of offered space to other Department activities as well as other public services. (Weighing: 0) TOTAL POINTS: 100 Simpson asserts that the evaluators acted improperly in awarding points in categories 3, 5, 6 and 7. Category 3 relates to the effect of environmental factors, including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the Departmental operations planned for the requested space. Although Simpson asserts that category 3 is vague and ambiguous, there was no objection to the category prior to the submission of the bid responses and the announcement of the proposed lease award. Each evaluator could award up to 20 points in this category for a total of 60 available points. Koger was awarded 55 points. Simpson received 27 points. As to individual evaluators awards, Tom Mahar awarded Simpson five points, Albert Cherry awarded Simpson ten points, and Dorea Sowinski awarded Simpson 12 points. Based on the written memo dated March 10, 1993, identifying the reasons for the recommended bid award, two of the three evaluators considered the Koger space to be located in a safer area than the Simpson facility, and, at least in part, based their point awards on this factor. The two evaluators cite minimal anecdotal information in support of their opinions. The evaluators undertook no investigation related to safety issues and there are no facts to support their opinions. Their award of points for "environmental factors" is arbitrary. Category 5 relates to the frequency and availability of public transportation within one block of the offered space. Each evaluator could award up to 15 points in this category for a total of 45 available points. Both Koger and Simpson received the maximum 45 points. RFP Page Two, question 8 provides as follows: Public Transportation availability: BIDDER RESPONSE: (Check appropriate box) Taxi , Bus , Frequency of service closest bus stop . Both Koger and Simpson indicate service by taxi and bus. The Koger proposal indicates a frequency of service as "8 BUSES" and the closest bus stop as "IN FRONT OF BUILDING ON WOODCOCK DRIVE." Simpson indicates a frequency of service as "15 minutes" and the closest bus stop as "front of building." The Department asserts that the Koger level of transportation access, albeit less than that serving the Simpson site, is satisfactory and therefore entitled to an award of all points available. Simpson asserts that the greater availability of public transportation to the Simpson site should result, under the terms of the evaluation criteria, in Simpson receiving more points than the Koger site for this category. The evaluation criteria clearly requires consideration of both the frequency and availability of satisfactory public transportation. Simpson asserts that in considering the transportation category, the evaluators should have reviewed local public transportation schedules. Review of such schedules establishes that the Simpson site is served more frequently by public bus transportation than is the Koger site, and further establishes that the number of bus routes directly serving the Simpson property far exceeds the routes serving the Koger site. Simpson did not include the schedules in the RFP response. The Simpson site is also located nearby the downtown public transportation transfer station at which point many, perhaps all, local bus routes connect. Simpson did not denote the location of the transfer station in the RFP response While the evaluation committee is not required to consider the bus schedules in reviewing bid proposals, the evaluation committee failed to consider the substantially greater frequency and availability of public transportation to the Simpson site relative to the Koger site, as set forth in the respective RFPs. The Department's position is contrary to the specific criteria identified in the RFP. The award of equivalent points for transportation access to both Simpson and Koger is unsupported by fact or logic and is arbitrary. Category 6 relates to the availability of adequate dining facilities within one mile of the offered space. Each evaluator could award up to two points in this category for a total of six available. Koger was awarded six points. Simpson received one point. When the evaluators rated the adequacy of dining facilities, they considered only those dining facilities which were located within two blocks of the offered space. Such is contrary to the clear terms of the RFP. The Department offered no rationale for the decision to amend the RFP criteria after submission of the proposals. The Simpson RFP response states only that there are adequate dining facilities within walking distance of the offered facility. The Koger response states that there are "three (3) sandwich shops within walking distance in the Koger center and other numerous restaurants within one (1) mile." As to individual evaluators awards, Tom Mahar awarded Simpson one point, while both Albert Cherry and Dorea Sowinski awarded Simpson zero points. Mahar's award was based on his opinion, again based on alleged safety concerns, that employees would be hesitant to walk to nearby restaurants and that driving and parking presented a problem in the downtown location. Cherry voiced a similar opinion. As to alleged safety concerns, Mahar and Cherry again based their opinions on minimal anecdotal information, supported by neither fact nor logic. Neither evaluator undertook any factual analysis of the safety issues relative to the proposed site. Their award of points for this category is arbitrary. On the other hand, Sowinski did not see any restaurants close to the Simpson site during the site visit. In excess of 40 restaurants are located within one mile of the Simpson site. The restaurants provide a variety of dining options both as to expense and fare. Sowinski's failure to observe restaurants located across the street from the Simpson site is, although difficult to understand, apparently a simple mistake on her part. Category 7 relates to the proximity of offered space to the clients served by the Department at this facility. Each evaluator could award up to three points in this category for a total of nine available. Simpson offered no evidence that the determination of points awarded for category 7 was inappropriate.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Labor and Employment Security enter a Final Order DISMISSING the protest filed by Towncentre Venture, and WITHDRAWING the proposed award of lease contract based on the Request for Proposal and Bid Submittal No. 540:0969. DONE and RECOMMENDED this 28th day of June, 1993, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 28th day of June, 1993. APPENDIX TO CASES NO. 93-2015BID and 93-2106BID The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner Towncentre Venture Towncentre Venture's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 4. Rejected, second sentence is irrelevant. 5-7. Rejected, irrelevant. Taken as a whole, the RFP indicates that HVAC services are to be provided throughout the leased premises during all hours of occupancy at no additional cost to the Department. The evidence fails to establish that the vendors were confused about the terms of the RFP. There were apparently no related questions addressed to Department personnel during the pre-bid conference or at any time subsequent to the conference and prior to the bid opening. 10. Rejected. Not supported by the document cited which does not identify the attachment by letter. 13. Rejected, irrelevant. The standard form lease included in the RFP was a sample document. None of the blank spaces were completed. 16. Rejected, irrelevant. The attendees at the conference were provided an opportunity to inquire as to all matters. There were apparently no questions asked related to the RFP's requirement that HVAC services be provided throughout the facility during all hours of occupancy at no additional cost to the Department. 17-18, 20-21. Rejected, irrelevant. The terms of the RFP are clear. 19. Rejected, irrelevant. The terms of the addendum for full service lease clearly indicate that such HVAC services were to be provided at no additional charge, not just in the computer room, but throughout the entire leased facility. 22. Rejected. The Towncentre bid was nonresponsive to the terms of the RFP. Petitioner Bryan Simpson, Jr., for P. V. Associates P. V. Associates' proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3. Rejected, not supported by the greater weight of the evidence which establishes that the RFP was issued seeking space for the Jacksonville Office of Disability Determinations. 4, 23, 24. Rejected, unnecessary. Respondent Department of Labor and Employment Security The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 17. Rejected. The decision to award equivalent points for public transportation access fails to reflect the substantially greater access provided to the Simpson site and is arbitrary. 20-21. Rejected, not supported by greater weight of evidence which establishes no evidence that safety concerns were based on a reasonable evaluation of facts. There are no facts to support the conclusion that the Simpson location if less safe than the Koger site. COPIES FURNISHED: Shirley Gooding, Acting Secretary Suite 303, Hartman Building 2012 Capital Circle S.E. Tallahassee, Florida 32399-2152 Cecilia Renn Chief Legal Counsel Suite 307, Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2152 Thomas M. Jenks, Esquire Pappas and Metcalf, P.A. 1 Independent Drive, Suite 3301 Jacksonville, Florida 32202 Nathan D. Goldman, Esquire Marcia Maria Morales, Esquire 200 Laura Street Post Office Box 240 Jacksonville, Florida 33202 Edward Dion, Esquire Assistant General Counsel Suite 307, Hartman Building 2012 Capital Circle S.E. Tallahassee, Florida 32399-2189
The Issue The issue for determination in this case is whether the Respondent Wayne E. Belton violated Section s. 475.25(1)(b), Florida Statutes (1979), by inserting an option provision into a lease agreement without the specific authorization of the tenants and subsequent to the tenants signing the original agreement. At the hearing, Petitioner's Exhibits 1-10 were offered and admitted into evidence. Leslie and Glenn Strickland, the tenants and complainants, testified on behalf of the Petitioner. Wayne Belton testified on his own behalf. Proposed Recommended Orders have been submitted by the parties. Those findings not incorporated in this Recommended Order were not considered relevant to the issues, were not supported by competent and substantial evidence or were considered immaterial to the results reached.
Findings Of Fact The Respondent Wayne E. Belton is a licensed real estate broker with his principal place of business at 337 Northeast Second Avenue, Delray Beach, Florida. On or about November 23, 1979, the Respondent prepared a one-year rental agreement or lease for property located at 2717 Southwest Sixth Street, Delray Beach, Florida, which was owned by Mrs. Margaret Finlay. Mr. and Mrs. Glenn Strickland executed the agreement as the tenants. The lease was prepared pursuant to an open listing by the owner for either sale or lease. When the Stricklands signed the original agreement it did not contain any provision concerning purchasing the property in the future through an option agreement. Although the Stricklands had discussed an option agreement with the Respondent, they did not specifically agree to an option agreement which required the deposit of additional monies in escrow which would not be refunded if the option were not exercised. The owner of the property, Mrs. Finlay, was primarily interested in selling the property and demanded that Respondent obtain a binding option from the Stricklands. When faced with the conflicting demands of the tenants and the owner, the Respondent inserted an option provision in the lease agreement after the Stricklands had signed the original lease which did not contain such a provision. When the Stricklands failed to deliver the $1,500 option money required by the option provision, Mrs. Finlay, through her attorney, threatened to take legal action against the Respondent. In response to the owner's demand, the Respondent through his attorney, demanded that the Stricklands pay $1,500 for the option pursuant to the lease agreement. When the Stricklands received the demand letter from Respondent's counsel, they contacted an attorney who eventually settled the matter. The Stricklands were required to expend $138.00 in attorney's fees to correct the problem caused by the Respondent. The Respondent admitted inserting the option provision into the lease agreement after the Stricklands executed it, but denied acting with any intent to alter the agreement contrary to what he believed the parties intended. Rather, the Respondent believed that he was remedying his original omission to conform to what he believed the parties had orally agreed to.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Petitioner enter a final order finding that Respondent Wayne E. Belton violated Section 475.25(1)(b), Florida Statutes (1979) and imposing a reprimand and an administrative fine. DONE and ORDERED this 7th day of June, 1982, in Tallahassee, Florida. SHARYN L. SMITH, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of June, 1982. COPIES FURNISHED: Michael J. Cohen, Esquire Suite 101 2715 East Oakland Park Boulevard Fort Lauderdale, Florida 33306 Stephen G. Melcer, Esquire Suite 500 First Bank Building 551 Southeast Eighth Street Delray Beach, Florida 33444 Frederick H. Wilsen, Esquire Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Carlos B. Stafford Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32801 Samuel R. Shorstein Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Respondent Cherylyn Stoppler, at all times pertinent hereto, was licensed as a real estate saleswoman in the State Of Florida, holding license No. 0467803. Her last and current license was issued authorizing practice at Escambia Realty, Inc., 310 South Pace Boulevard, Pensacola, Florida 32501. Respondent Dorothy Diane Owens, at all times pertinent hereto, was a licensed real estate broker in the State of Florida, holding license No. 0380831. Respondent Escambia Realty, Inc., at all times pertinent hereto, was a licensed corporate real estate brokerage holding license No. 0232503. Its address is 310 South Pace Boulevard, Pensacola, Florida 32501. The Petitioner is an agency of the State of Florida charged with enforcing the provisions of Chapter 475, Florida Statutes, related to the licensure of real estate brokers and salesmen, the real estate professional practice standards embodied in that chapter and with prosecuting alleged violators of those standards. On April 13, 1986, Kenneth and Linda Williams, also known as Linda Brewer, requested that Cherylyn Stoppler show them rental property consisting of a single family residence located at 6853 Lake Charlene Drive in Pensacola. They had observed the Respondent corporate broker's sign on the front of that premises, advertising it for rental. Respondent Stoppler, Respondent Owens and the Escambia Realty, Inc. represented the owners of the property. Kenneth and Linda Williams examined the property and decided that they wanted to rent it. In their discussion with Cherylyn Stoppler concerning the terms of the rental arrangement, they requested that they be allowed to paint the premises and that the garage door be repaired. Respondent Stoppler agreed to this and indicated the owners would supply two gallons of paint and the prospective tenants, the Williamses, could do the painting with the owners ensuring repair of the garage door. Respondent Stoppler and the Williamses agreed to those terms and to the rental amount of $625 per month. They also agreed to pay Respondent Stoppler a $400 deposit, on behalf of the owners. Ms. Stoppler informed the Williamses that if they did not consummate the lease arrangement, upon which they had verbally agreed, the $400 would be retained and remitted over to the owners of the property. The Williamses agreed to this arrangement. The Williamses and Ms. Stoppler returned to Ms. Stoppler's office and she noted these terms on a lease agreement form with the additional term that the owner would steam clean the carpet in the house. The lease terms also provided that the premises would be used by no more than two adults and "zero" children, but the lease agreement has the "zero" stricken through indicating that that term was to be deleted. The striking of the zero on the term concerning the number of children to occupy the premises appears to have been executed with the same pen, inasmuch as the ink is the same color as the rest of Mrs. Stoppler's handwritten terms on the lease form. In any event, the Williamses were anxious to return to their home in Louisiana directly from the Respondent's office that same afternoon and to accommodate them Ms. Stoppler agreed to mail the lease form to them to be executed, urging them to send it back immediately. When they left the premises that day, Respondent Stoppler removed her firm's sign from the front of the premises and also told the Williamses that the property would be off the market as of that day, hence her admonishment to them to waste no time in returning the executed lease since the property would be off the market during the interim on the strength of the verbal agreement. The Williamses did not inform Ms. Stoppler that Mr. Williams had two children who might visit them from time to time or live with them at the premises. The Williamses returned to Louisiana and the lease was mailed to them by Ms. Stoppler. The Williamses decided not to execute the lease and to not consummate the rental arrangement. They informed Ms. Stoppler of this by phone on April 24, 1986, as well as communicating on that day with Respondent Owens. They indicated they did not desire to rent the premises and one reason given was that they felt that the two children were precluded by the lease terms from living on the premises for any period of time with them. In fact, the Williamses had never mentioned that they had any children and had sought to negotiate a reduction in the rent when they originally discussed the matter with Ms. Stoppler on the basis that only the two of them would live in the premises. The terms and conditions of the rental arrangement were those given to Ms. Stoppler by the Williamses themselves. When they conferred with Ms. Owens and Ms. Stoppler, they were again informed that the $400 would be retained and transmitted to the owners, to which they did not then object. In fact, they never did make any demand upon the Respondents for return of the $400 which was actually communicated to the Respondents. There is a letter in evidence (Petitioner's Exhibit 6) which the Respondents never received, as is shown by the certified mail receipt card and by Respondents' and Ms. Celano's testimony. The Williamses objected to consummating the lease because they contended that Ms. Stoppler had assured them that they could 1ive in the premises rent- free from the beginning of the lease, April 26, until May 1, during the time in which they would be painting the house and instead they were being charged $84 for those days. Mrs. Williams' testimony is somewhat equivocal in this regard in that she exhibited an incomplete memory regarding certain critical dates in the transaction, for example, the date she allegedly called Mrs. Stoppler to inform her of their refusal of the rental and the date she believed the lease was to commence. Mrs. Stoppler's testimony was corroborated by that of Ms. Owens, and was not refuted by the Williamses. It is accepted over that of Mrs. Williams in establishing that indeed the lease period and the rental there for was to commence on April 26. The Respondents' testimony shows that the house was off the rental market from April 13, when the verbal agreement with Ms. Williams was entered into and the sign was removed from the property and that both Respondents informed Mrs. Williams on two occasions that the $400 was not refundable but would be remitted to the owners of the property. The Respondents also established that Escambia Realty, Inc. followed a consistent policy of retaining deposit monies and remitting them to the owners without refund to prospective tenants when the tenants agreed to lease the premises after being informed that the deposit would be retained and the property taken off the market, when such tenants elect of their own volition to negate a lease or rental agreement. The Williamses additionally maintained that they did not want to consummate the lease arrangement because, in their view, the Respondents and the owners would not permit any children unrestrictedly visit or to live on the premises. That was established not to be the case. They also objected because they would not be allowed to live in the premises rent-free for several days during the time in which they were painting the premises. Additional objections involved various inconsequential technical deficiencies, such as misspellings, in the content of the lease. The employment position Mr. Williams was to have taken in the Pensacola area, and which was in large measure their reason for moving to Pensacola and renting the subject premises, failed to materialize. Ultimately, however, the Williamses moved to Pensacola and rented a different house at the lower rate of $600 per month. In short, the complaining witnesses contend that they did not want to execute the lease because of the problem of the $84 prorated rent required of them by the Respondents and the owners for the days when they thought they would live rent-free while painting the premises, because they felt that Mr. Williams' children by a previous marriage were precluded from unrestricted visits at the rental premises and because they felt that the proffered lease did not contain the proper initial date of tenancy. Thus, the Williamses breached the agreement because the Respondents refused to "correct" the lease according to the Williamses' desires. Those desires were not communicated to the Respondents until, at the very earliest, the phone conversations of April 24, 1986, some twelve days after the verbal agreement to rent the premises to the Williamses had been entered into and the $400 deposited with the Respondents on behalf of the owners. During that time, and longer, the property was taken off the rental market and the Respondents and the owners forbore the opportunity to secure other tenants. The Williamses themselves acknowledged that the letter by which they sought return of the $400 deposit was never actually received by the Respondents. Further, Ms. Williams in the telephone conversation on April 24, 1986, acknowledged that the owners were entitled to the $400 deposit. Even so, Ms. Owens waited approximately 25 days before remitting the funds over to the owners. Thus, no dispute as to the deposit was ever communicated to the Respondents, and the Respondents never misrepresented to either Mr. or Mrs. Williams the manner of disbursement of the deposit funds. It is noteworthy that Mrs. Williams is a licensed realtor herself and had some experience in similar real estate transactions. The Respondents carried out their portion of the bargain. Finally, it has been demonstrated that Respondent Owens is a well- respected real estate practitioner in the Pensacola area, having served as an officer and director of her local board of realtors and having been accorded a number of honors and certifications in connection with her professional performance as a realtor and her securing of advanced training in the field of real estate brokerage. Ms. Stoppler is relatively new to the profession, but neither she nor Ms. Owens have been shown to have ever engaged in any questionable practice or conduct in the course of their practice and neither have been shown to have been the subject of any other complaint of any nature resulting from a real estate transaction.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore RECOMMENDED that the Administrative Complaint against Respondents Cherylyn Stoppler, Dorothy Diane Owens and Escambia Realty, Inc. be dismissed in its entirety. DONE and ORDERED this 28th day of 1987, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3982 Petitioner's Proposed Findings of Fact: 1-4. Accepted. Rejected as a recitation of testimony and not a Finding of Fact. Rejected as to its material import. 7-9. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced. 10-11. Accepted. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced. Accepted. Rejected as a recitation of testimony and not a Finding of Fact. Also rejected as to its material import and as not in accord with the credible testimony and evidence adduced. Accepted. Rejected as to its material import. 17-18. Accepted. 19. Rejected as to its material import. 20-21. Accepted. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced. Rejected as a recitation of testimony and not a Finding of Fact. Also rejected as to its material import and as not in accord with the credible testimony and evidence adduced. Rejected as to its material import. Rejected as a recitation of testimony and not a Finding of Fact. Also rejected as to its material import. Accepted, but rejected as to its material import. Accepted. Rejected as to its material import. 29-30. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced. 31. Accepted, but not as to its material import. 32-35. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced. Rejected as to its material import. Accepted, but not to the effect that a demand for refund was made. Rejected as to its material import and as not in accord with the credible testimony and evidence adduced. 39-41. Rejected. Respondents' Proposed Findings of Fact: Specific rulings are not separately made here because Respondents' Proposed Findings of Fact are inseparably entwined with legal argument and recitations of, and arguments concerning, the weight and credibility of testimony and evidence. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Cherylyn Stoppler Dorothy Diane Owens Escambia Realty, Inc. 310 South Pace Boulevard Pensacola, Florida 32501 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Joseph A. Sole, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
The Issue Whether or not the Respondent, State of Florida, Department of Revenue, is entitled to documentary stamp tax in accordance with Section 201.02, Florida Statutes, in the amount of $1,450.50 and a penalty in the amount of $1,450.50 under Section 201.17, Florida Statutes; and documentary surtax under Section , Florida Statutes, in the amount of $531.85 and penalties thereon in the amount of $531.85, pursuant to Section 201.17, Florida Statutes; as entered by the Respondent, State of Florida, Department of Revenue, on a transaction between Petitioners and Stam-Mil, Inc., are proper.
Findings Of Fact The Petitioners were the stockholders of Gallagher's of Miami, Inc. Among the assets of Gallagher's of Miami, Inc., were the rights under a sublease undertaken between B.G.L. Corporation and Gallagher's of Miami, Inc. dated September 25, 1976 and recorded in Official Record Book 5663, at page 261 of the Public Records of Dade County, Florida. This sublease was an amendment to a sublease which was dated June 1, 1965, recorded in Official Record Book 5768, Page 176 of the Public Records of Dade County, Florida, between B.G.L. Corporation, a Florida corporation as lessor, and KSJ Corporation, a Florida corporation as lessee. One of the conditions of Gallagher's lease obligation was responsibility for the payment of a mortgage dated May 1, 1965, recorded in Official Record Book 4592, at Page 161, of the Public Records of Dade County, Florida, from KSJ Corporation, a Florida corporation to Joseph Z. Lipsky and Evalyn Lipsky, as amended by agreement dated August 30, l65 between KSJ Corporation and Joseph Z. Lipsky and Evalyn Lipsky. Pursuant to a plan of liquidation of Gallagher's of Miami, Inc. that corporation executed and delivered to Petitioners an assignment of the lessee's interest in the aforementioned lease to which Gallagher's of Miami, Inc. was a party. The assignment of lease can be found as Exhibit A to the petition filed by the Petitioners. The contents of such assignment are found to be fact. By letters of July 30, 1975 and March 10, 1975, the Respondent indicated its intention to assess tax in the amount of $326.10 upon the document representing the assignment between Gallagher's of Miami, Inc. and the Petitioners. The amount of documentary stamp tax was premised on the aforementioned mortgage which at the time of the proposed assessment was valued at $108,750. In addition the Respondent indicated its intention to impose a penalty in a like amount of $326.10. The assignment was in fact executed, pursuant to a plan of liquidation, which plan is shown as Petitioner's Exhibit C attached to the petition. The Petitioners' Exhibit C is established as fact. Petitioners in receiving the assignment in liquidation Gallagher's of Miami, Inc. received such assignment in proportion to their stock holdings in that corporation. Subsequent to the assignment of leases and agreement between Gallagher's of Miami, Inc. and the Petitioners a further assignment was made between the Petitioners and Stan-Mil, Inc. of the same property, which took place on December 16, 1974. The Petitioners executed and delivered to Stan-Mil, Inc. a Florida corporation, the assignment of lease of lessee's interest in a lease, as shown in Petitioner's Exhibit A attached to its petition challenging the assessment in the transfer of Petitioners' interest to Stan-Mil, Inc. The facts of Exhibit A are admitted. The assignment was excluded pursuant to an agreement for the sale of a restaurant (Gallagher's Restaurant) , the lease assignment being of the assets of the restaurant which was sold. A copy of the closing statement, upon the sale of the restaurant, a copy of the bill of sale of all assets sold and a copy of an appraisal report allocating the purchase price for the restaurant, among all of the assets sold is attached as Petitioner's Exhibit D to the petition challenging the assessment on the transaction between the Petitioners and Stan-Mil, Inc. The facts of Exhibit D are admitted. The Respondent, through its letter of March 8, 1976, proposes to assess documentary stamp tax under 201.02 F.S. in the amount of $1450.50 and a penalty in like amount under 201.17 P.S. In addition the letter notices a proposed assessment of documentary surtax under 201.021 F.S. in the amount of $531.85 and a penalty of $531.85 pursuant to 201.17 F.S. These amounts represent the tax on the appraised value of the lease-land and building in the amount of $83,500.00 and the leasehold improvements in the amount of $400,000.00. These lease-hold improvements are to be distinguished from such tangible items as furniture, fixtures, equipment, dishes and silverware, which were separately appraised in the valuation of the assets of the restaurant, known as Gallagher's of Miami, Inc. The Petitioners are challenging the proposed assessment of tax on the transaction between the Petitioners and Stan-Mil, Inc.
Recommendation It is recommended that the documentary stamp tax in the amount of $1450.50 and a like penalty of $1450.50, and the documentary surtax in the amount of $531.85 and a like penalty of $531.85, as assessed against the Petitioners, be upheld. DONE and ENTERED this 28th day of February, 1977, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Lewis M. Kanner, Esquire 1003 DuPont Building 169 E. Flagler Street Miami, Florida 33131 Caroline E. Mueller, Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304 ================================================================= AGENCY FINAL ORDER =================================================================
Findings Of Fact From on or about December 13, 1976, up to and including the date of the hearing, Robert C. Duff was the holder of license no. 13-87, series 1-COP, held with the State of Florida, Division of Beverage. This license was held for purposes of trading as Bob's Bait and Tackle and the business was located at 2211 Hwy. 231, N/O Panama City, Bay County, Florida. Mr. Duff wanted to transfer the license and the Division of Beverage was in the process of investigating this request for license transfer in December, 1976. In the course of this investigation it was revealed that Robert C. Duff did not own the premises upon which his business was located. Mr. Duff did not try to conceal the fact that he did not own the licensed premises. Moreover, Mr. Duff and a Mr. Charles Hoskins, President of Better Brands, Inc., told of a discussion between them and the investigating agent of the Division of Beverage at the time Duff received his license, in which the agent was told that Duff did not actually own the property. This licensing was in 1968. In fact, Hoskins has been leasing the licensed premises to Duff since 1968 for a lease rental amount ranging from $200.00 to $250.00. That lease agreement was still in effect at the time of the hearing. One final comment on the statement of ownership pertains to Petitioner's Exhibit #2 admitted into evidence at the hearing. This is an affidavit signed by Robert Duff showing him to be the owner of the licensed premises. This affidavit was executed at the time of the license application in November, 1968. Duff claims he was unaware that he signed such an affidavit and points to the fact that the reviewing agent, with the knowledge of his lack of ownership in 1968, recommended the approval of the license application and the license was issued. Charles Hoskins owns the premises upon which the license is operated, in his personal name, and there was no showing that any other principals were involved in the ownership of the property, either directly or indirectly. Charles Hoskins was from 1968, through and including the date of the hearing, the President of Better Brands, Inc., which holds license no. 13-233, J-DBW with the State of Florida, Division of Beverage. This license is a license for a distributor. In addition, Hoskins from the beginning date and up to and including the date of the hearing has held between 10 percent and 20 percent of the stock owned by Better Brands, Inc. Both Robert C. Duff and Better Brands, Inc., have been charged with violations of 561.42(1), F.S. which states in pertinent part: "No licensed manufacturer or distributor of any of the beverages herein referred to shall have any financial interest, directly or indirectly, in the establishment or business of any vendor licensed under the Beverage Law." The facts of this case do not reveal that Better Brands, Inc., as a licensed distributor has any financial interest, directly or indirectly in the establishment or business of Robert C. Duff, a vendor licensed under the Beverage Law. Robert C. Duff and Better Brands, Inc., have also been charged with a violation of Rule 7A-4.18, F.A.C., which states: "Rental between vendor and distributor prohibited. It shall be considered a violation of Section 561.42, Florida Statutes, for any distributor to rent any property to a licensed vendor or from a licensed vendor if said property is used, in whole or part as a part of the licensed premises of said vendor or if said property is used in any manner with said vendor's place of business." The facts in this matter do not show that Better Brands, Inc., rented any property to Robert C. Duff, the licensed vendor.
Recommendation It is recommended that the charge against Robert C. Duff, Respondent, be dismissed this 15th day of July, 1977. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Charles Collett, Esquire Division of Beverage 725 South Bronough Street The Johns Building Tallahassee, Florida 32304 Franklin R. Harrison, Esquire 406 Magnolia Avenue Panama City, Florida 32401
Findings Of Fact The Declaration of Condominium for Oaks of Broward was filed by Margen, a Florida Partnership, in May, 1974 in the Public Records of Broward County and with the Petitioner. All documents required to be filed by Margen with Petitioner were filed and the fees paid. Simultaneously a recreational lease was filed of property adjacent to the condominium in which Barnett Bank of Hollywood was named as Trustee and Lessor, and The Oaks Condominium Association, Inc. of Broward as Lessee. Between May 1974 and early 1976 Margen sold to individuals 39 condominium units at Oaks of Broward. In early 1976, Housing Investment Corporation, mortgagee, began foreclosure proceedings which resulted in title to all of the Oaks condominium property, except for the 39 units previously sold, being taken by The Oaks of Broward, Inc., Respondent. Thereby Respondent became successor in title to the previously unsold 75 units in the building and to the position of the Lessor on the long-term recreational lease. On or about August 1977, Respondent offered for sale the 75 condominium units pursuant to prospectus admitted into evidence as Exhibit 2. In addition thereto and as part of the sales effort Respondent executed and recorded the Declaration Waiving Rents, a copy of which was admitted into evidence as Exhibit Neither of these documents was filed with Petitioner. The 75 units owned by Respondent were sold with the recreational lease rents waived. Pursuant to the terms of the recreational lease the original 39 buyers pay $20 per month, either to the Association or directly to the Lessor. This lease is a net/net lease, which means the Lessor performs no services except to provide the premises themselves. The Condominium Association is responsible for and pays all maintenance, taxes, upkeep and expenses for the operation of the Recreation Area. All condominium units, the original 39 as well as the remaining 75, pay to the Association, as part of the common expenses, their pro rate share of those operating expenses. It is this disparate treatment of the two groups of unit owners with respect to the recreational lease rent payment of $20 per month that is one subject of Petitioner's request for a cease and desist order. The second subject of the Petition for a cease and desist order is Petitioner's contention that Respondent is a Developer and is required to file documents and pay a $10 filing fee for each of the 75 condominiums sold, regardless of whether fees for these 75 units were paid by Respondent's predecessor in title.
Findings Of Fact At all times pertinent to these proceedings, Respondent, Private Money Mortgage Company (PMMC), was a mortgage brokerage business in the State of Florida holding License Number HB592732699 that had been issued by Petitioner. At all times pertinent to these proceedings, Frank Donahue was a licensed mortgage broker in the State of Florida holding License Number HA267474770 that had been issued by Petitioner. The Department of Banking and Finance, the Petitioner in these proceedings, is the agency of the State of Florida charged with the responsibility of enforcing the provisions of Chapter 494, Florida Statutes. In 1985, Mr. and Mrs. A. Charles Cinelli bought a house in Palm Beach County, Florida, and moved from upstate New York to Palm Beach County, Florida. Respondent, Frank Donahue, assisted Mr. and Mrs. Cinelli in obtaining financing for the home the Cinellis purchased in Palm Beach, County. In connection with this 1985 transaction, Mr. Donahue forwarded to the Cinellis an "Exclusive Broker Agreement", which they executed and returned to him. Because this 1985 transaction involved a purchase, Mr. Donahue ordered an appraisal for this property and charged its cost as a part of the Cinelli's closing costs. Subsequent to that transaction, Mr. Donahue and his wife, Brenda, saw Mr. and Mrs. Cinelli at occasional social events. Franklin T. Smith is a certified public accountant who performed professional services for Mr. and Mrs. Cinelli and for Mr. and Mrs. Donahue. Mr. Smith referred the Cinellis to Mr. Donahue in 1985 and advised the Cinellis during the transaction that is the subject of this proceeding. Prior to December 2, 1988, Mr. Cinelli contacted several mortgage brokers in the Palm Beach County area to discuss the possibility of obtaining a mortgage on certain real property located in upstate New York. Mr. Cinelli contacted Mr. Donahue by telephone and discussed with him his desire to raise capital to begin a business in Florida. Mr. Cinelli estimated that he would require approximately $1,000,000 to start this business. Mr. Cinelli told Mr. Donahue that he and Mrs. Cinelli owned certain commercial real property in upstate New York and that State Farm Insurance Company held an option to purchase this property for the sum of $1,450,000. Mr. Cinelli did not want to wait to learn whether State Farm intended to exercise this option to purchase and he discussed with Mr. Donahue the possibility of obtaining the desired capital by securing a mortgage on this property. Mr. Donahue advised Mr. Cinelli that he could expect to secure a mortgage for approximately $700,000 (which was approximately 50% of the amount of the option contract) and that he would need a current appraisal. Mr. Donahue also informed Mr. Cinelli that he would require the sum of $2,500 as a non-refundable deposit to begin seeking such a commitment. On or about December 2, 1988, Mr. Cinelli provided Mr. Donahue with a copy of the option agreement with State Farm and with a copy of the agreement dated September 21, 1988, which extended the time within which State Farm could exercise its option for an additional six months. Mr. Cinelli reiterated to Mr. Donahue that the option price was for $1,450,000 and that he wanted to mortgage the property for $1,000,000. Mr. Cinelli also provided Mr. Donahue with the name, address, and telephone number of Mr. Wayne Lupe, who was represented by Mr. Cinelli to be his MAI appraiser in Schenectady, New York. On December 15, 1988, Mr. Donahue sent to Mr. Cinelli a letter which attached an "Exclusive Broker Agreement" that had been executed by Mr. Donahue on December 15, 1988. This was the same "Exclusive Broker Agreement" form that Mr. Donahue had used for the 1985 Cinelli transaction. The body of the letter provided as follows: Enclosed please find a copy of my exclusive brokers agreement detailing the probable terms of the loan which you are seeking. This agreement is the same agreement which you signed when you purchased your current resi- dence. The agreement calls for both you & Joan to sign and return along with a nonrefundable deposit in the amount of $2500.00 to Private Money Mortgage Corp. The above noted deposit shall be credited towards your closing costs at the time of closing, if a commitment is offered. I have spoken to several of my investors about your concerns and I am awaiting confirmation of their substantial interests prior to ordering the appraisal. I will contact you as soon as I have received the return of this agreement along with your deposit in order to fill you in on our efforts to secure you the most competitive loan on your desired terms. The Exclusive Broker Agreement reflected that the amount of the mortgage would be $700,000 and disclosed that the total estimated costs that would be incurred in securing the mortgage was $78,346, which included a broker's fee of $35,000 and an estimated appraisal fee of $3,500. The Exclusive Broker Agreement, signed by Mr. Donahue on December 15, 1988, contained the following provision: DEPOSIT: In consideration of the sum of $2,500, receipt of which is hereby acknowledged, and in compliance with Chapter 494, Florida Statutes, Broker accepts this application and agrees to exert his/her best effort to obtain a commitment for loan in accordance with the terms and conditions set forth herein. This deposit shall be credited toward closing costs at the time of closing the permanent loan or commitment, less Broker's expenses. Among the "Standards" which were incorporated as terms and conditions of the Exclusive Broker Agreement was the following: Deposit. Client simultaneously with execution of this agreement has deposited with broker the amounts stated in this agreement in order to secure the obligations owed by client to broker in the event of default of client as provided in the agreement and to reimburse broker of any and all expenses, including telephone charges, lodging, and administrative fees for credit checks and processing appraisals and the like, including upon any cancellation by client, reimbursement for broker's time expended incurred by broker, whether or not a loan commitment is obtained by broker. Mr. Cinelli was concerned that he would be incurring substantial fees and costs if Mr. Donahue obtained a commitment and Mr. Cinelli decided not to accept it. Mr. Smith advised Mr. Cinelli that the estimated expenses were not abnormally high, but he suggested that his liability should be limited. In response to those concerns, Mr. Donahue prepared and delivered between December 15, 1988, and the end of the year an addendum to the Exclusive Broker Agreement that would have limited Mr. Cinelli's liability to the sum of $7,500. That addendum provided, in pertinent part, as follows: It is hereby understood and agreed by the parties that in the event a loan commitment is offered to the applicants & they decide to refuse this commitment, the applicants liability will be limited to the sum of Five Thousand Dollars plus the original deposit of $2,500.00 for a total amount of $7,500.00. It is further understood that said commitment must bear approximately the same terms and conditions as the attached agreement. Mr. and Mrs. Cinelli gave Mr. Smith the sum of $2,500 in cash to deliver to Mr. Donahue, but there is conflicting testimony as to when this money was delivered to Mr. Smith for delivery to Mr. Donahue. Mr. Cinelli testified that the money was delivered before the Exclusive Broker Agreement dated December 15, 1988, was prepared. Mr. Donahue testified that the money was delivered after both the Exclusive Broker Agreement and the addendum thereto had been delivered to Mr. Cinelli. Mr. Donahue also testified that the statement contained in the Exclusive Broker Agreement that he signed on December 15, 1988, acknowledging his receipt of the $2,500 deposit was false. He did not explain why the addendum referred to the sum of $2,500 as "the original deposit". Mr. Smith did not recall when he delivered this money to Mr. Donahue, but he did recall having delivered the cash the same day he received it from the Cinellis. While his testimony is that he received the $2,500 during his initial meeting with Mr. and Mrs. Cinelli (which would be before Mr. Cinelli received the Exclusive Broker Agreement) this testimony lacks credibility because of Mr. Smith's lack of certainty as to dates. In addition, this testimony conflicts with the letter Mr. Smith wrote to Mr. Donahue at Mr. Donahue's request on August 28, 1989, which clearly indicates that the $2,500 was not paid until after the addendum to the Exclusive Broker Agreement had been prepared. This conflict is resolved by finding that the greater weight of the evidence establishes that the sum of $2,500 was delivered by Mr. Smith to Mr. Donahue after Mr. Cinelli had received both the Exclusive Broker Agreement and the addendum thereto. Mr. Donahue did not provide the Cinellis with any type of written agreement, other than his letter of December 15, 1998, the Exclusive Broker Agreement, and the addendum when he received the cash from Mr. Smith. There was no written receipt for these funds, nor was there any written memorandum of understanding between Mr. Donahue and the Cinellis as to whether payment for the appraisal that Mr. Donahue and Mr. Cinelli had discussed would be made from the $2,500. Mr. Cinelli was of the belief that $2,000 of the $2,500 deposit would be earmarked for the payment of the appraisal. Mr. Donahue was of the belief that the $2,500 was a non-refundable retainer and he treated that sum as an earned fee. There was no meeting of the minds between Mr. Cinelli and Mr. Donahue as to the nature of the $2,500 deposit, other than it was non-refundable. Specifically, there was no agreement as to what costs, if any, would be paid from that deposit. Mr. Donahue's normal business practice in transactions involving a refinance of property is different than his practice in transactions involving a purchase of property. In purchase transactions (such as the 1985 Cinelli transaction), Mr. Donahue arranges for the appraisals and treats the costs of the appraisal as an expense to be paid by the purchaser at closing. In refinance transactions (such as the 1988 Cinelli transaction), it is his practice to require his customer to deal directly with the appraiser in ordering and paying the costs of the appraisal. Respondents failed to establish that in the subject transaction, Mr. Donahue made it clear that Mr. Cinelli would be responsible for ordering and paying the cost of the appraisal. Mr. Cinelli believed that $2,000 of the $2,500 he later gave Mr. Donahue would be earmarked for the payment of the appraisal. Neither Mr. Donahue's letter of December 15, 1998, the Exclusive Broker Agreement, nor the addendum clearly resolved the dispute. There was a dispute between Mr. Donahue and Mr. Cinelli as to who ordered the appraisal. Mr. Cinelli denied that he ordered the appraisal and that his calls to his appraiser, Mr. Lupe, was only to advise him of Mr. Donahue's forthcoming call. Mr. Donahue denied that he ordered the appraisal and that his contacts with Mr. Lupe were after Mr. Cinelli had ordered the appraisal. Mr. Donahue contends that his contacts with the appraiser were merely to give the appraiser instructions as to the information that should be reflected by the appraisal. This dispute is resolved by finding that Mr. Cinelli ordered the appraisal through Mr. Lupe and that Mr. Donahue advised Mr. Lupe as to the information that should be reflected by the appraisal. It was determined from conversations between Mr. Donahue and Mr. Lupe that Mr. Lupe was not qualified to perform the appraisal and that Mr. Lupe would engage Albert L. Friedman, MAI and William J. McEvoy of Capitol Real Estate and Appraisal Company of Schenectady, New York, on Mr. Cinelli's behalf to perform the work. Messrs. Friedman and McEvoy prepared the appraisal and certified the same to Mr. Cinelli on March 13, 1989. The appraised value of the property was $2,100,000. As of the date of the formal hearing, the appraiser's bill of $2,000 had not been paid. Capitol Real Estate and Appraisal Company had billed both Mr. Donahue and Mr. Cinelli and an attorney representing Capitol Real Estate and Appraisal Company had written Mr. Cinelli a demand letter. It was the dispute over the payment of the appraiser's fee that prompted the complaint the Cinellis filed against Respondents. The Cinellis did not execute the Exclusive Broker Agreement and the addendum because they wanted to wait on the appraisal to see if the appraised value would permit them to borrow more than $700,000 and because they were not satisfied with the amount of the projected costs of consummating the transaction. Mr. Cinelli misled Mr. Donahue as to his intentions to execute these agreements. Mr. Donahue made several requests to the Cinellis that they execute the Exclusive Broker Agreement and addendum and return them to him. Despite the absence of an executed brokerage agreement, Mr. Donahue exerted considerable effort to seek a commitment consistent with the Exclusive Broker's Agreement and succeeded in securing such a commitment in April 1989. No part of the $2,500 Mr. Donahue received from Mr. Smith on behalf of the Cinellis was placed in escrow by Mr. Donahue. Respondents have made no accounting of the $2,500 and have paid no part of the appraisal bill. Mr. Donahue claims the deposit as a non-refundable earned fee, despite the absence of a written agreement to that effect. The Cinellis sold the subject property to State Farm in June 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered by Petitioner which finds: that Respondents violated the provisions of Rule 3D-40.006(5), Florida Administrative Code, by accepting the $2,500 deposit from the Cinellis without a written agreement as to the disposition of those funds; that Respondents violated the provisions of Section 494.055(1)(e), Florida Statutes, and Rule 3D-40.006(6)(a), Florida Administrative Code, by failing to place said deposit in escrow; and that Respondents violated the provisions of by Section 494.055(1)(f), Florida Statutes, by failing to account for said deposit. It is further recommended that an administrative fine be levied against Respondents in the total amount of $1,000.00 for said violations. It is further recommended that the final order place the licenses of Respondents on probation for a period of one year with three special conditions of probation. The first special condition of probation would require Respondents to pay Capitol Real Estate and Appraisal Company the sum of $2,000 within sixty days of the Final Order. The second special condition of probation would terminate Respondents' probation upon timely compliance with the first special condition of probation. The third special condition of probation would prohibit Respondents from conducting any business as mortgage brokers within the State of Florida for a period of six months should Respondents fail to timely comply with the first condition of probation. RECOMMENDED in Tallahassee, Leon County, Florida, this 9th day of January, 1991. CLAUDE B. ARRINGTON 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 9th day of January, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-4708 The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. The proposed findings of fact in paragraphs 1, 3-10, and 13 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 2 and 11 are adopted in part by the Recommended Order, and are rejected in part as being contrary to the findings made. The proposed findings of fact in paragraph 12 are adopted in part by the Recommended Order, and are rejected in part as being argument. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. The proposed findings of fact in paragraphs 1-3 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 4-6, 14, and 17 are rejected as being subordinate to the findings made. The proposed findings of fact in paragraph 7 are adopted in part by the Recommended Order. The characterization of the Cinellis having a "long standing relationship" with Mr. Donahue is rejected as being ambiguous and unnecessary to the conclusions reached. The proposed findings of fact in paragraph 8 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraphs 9-11 are adopted in part by the Recommended Order, but are rejected to the extent that they are subordinate to the findings made. The proposed findings of fact in paragraphs 12 and 13 are rejected as being recitation of testimony or as being subordinate to the findings made. The proposed findings of fact in paragraph 15 are rejected as being subordinate to the findings made or as being contrary to the findings made or to the conclusions reached. The proposed findings of fact in paragraph 16 are adopted in part by the Recommended Order, and are rejected in part as being unnecessary to the conclusions reached. COPIES FURNISHED: Deborah Guller, Esquire Office of the Comptroller 111 Georgia Avenue, Suite 211 West Palm Beach, Florida 33401-5293 Marie A. Mattox, Esquire Douglass, Cooper, Coppins & Powell Post Office Box 1674 Tallahassee, Florida 32302-1674 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves General Counsel The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350
