The Issue The issues under consideration result from the attempt by The Beaches Leader, Inc., (Petitioner) to gain refund of sales tax paid to the State of Florida. That refund is sought from the State of Florida, Office of the Comptroller (Respondent). The theory of the pursuit of the tax claim is set forth in Section 212.08(6), Florida Statutes, in which there is provided an exemption from sales tax associated with the sale of newspapers. In this connection, the question is raised, whether Petitioner is a newspaper within the meaning of Rule 12A-1.08, Florida Administrative Code, in effect at the time that the refund was requested.
Findings Of Fact Petitioner, by this action, seeks a refund from Respondent for the payment of sales tax related to the cost of printing of the publication known as The Mirror. As publisher, Petitioner sought the refund in keeping with Section 215.26, Florida Statutes. The request dates from August 16, 1985. This application for refund is premised upon the Petitioner's belief that it is entitled to refund in that The Mirror is a newspaper within the meaning of Rule 12A-1.08(3), Florida Administrative Code, and as such is exempt from taxation associated with the cost of printing the publication. The statement of law dealing with exemptions from sales tax pertaining to newspapers is set forth in Section 212.08(6), Florida Statutes. Petitioner finds solace in the decision of Campus Communications vs. Dept. of Revenue, 473 So.2d 1290 (Fla. 1985). Petitioner believes the finding in that case in which the Florida Supreme Court upheld the claims of the publication, The Independent Florida Alligator, because it was a newspaper by definition found in the aforementioned rule and entitled to be exempt from sales tax requirements, applies to Petitioner's circumstance. The amount of refund claimed is $6,577.10. Having considered the request for refund, and being mindful of the case of Campus Communications, supra, Respondent denied the refund request upon the expressed belief that The Mirror is not a newspaper within the meaning of Rule 12A-1.08(3), Florida Administrative Code. This statement of denial dates from March 20, 1986. Petitioner made timely application for the tax refund ire question and has sought timely review of the Respondent's intent to deny that refund request. The Mirror is a civilian enterprise publication for the special interests of personnel of the United States Naval Station at Mayport, Florida. However, it does solicit and contain some news items of general interest to the community. The testimony of the witnesses and the documentary evidence, including the issues of The Mirror which were admitted into evidence, establish that The Mirror is published under a contract between Petitioner and the United States Navy. It is distributed free of charge to naval personnel at the Mayport Naval Station, Jacksonville, Florida. In addition to distribution throughout the Mayport Naval Station, it is available and is distributed to civilian employees of the United States Navy both on and off the naval base, and also to military dependents and visitors both on and off the Mayport Naval Station base. The Mirror is delivered to 1,200 off-base residences and distributed at the offices of the Beaches Leader, a newspaper sold to the general public. There, residents of the Duval County, Florida, beaches communities obtain copies of The Mirror. Finally, copies are mailed weekly to paid subscribers in Florida and five other states. The affected community served by and which is the principal audience for The Mirror is the United States Naval Station at Mayport and the surrounding beaches area. This community is composed of naval personnel, their dependents and civilian naval employees. There are other persons who have no direct connection to the Navy but who, as beaches communities residents, are affected by the naval presence in the beaches area and in the Jacksonville metropolitan area as a whole and who use The Mirror as a means of information and dissemination of information. Mr. Paul Henkemeyer, a civilian employee of the United States Navy who is responsible for maintaining and disseminating information concerning the economic and other impacts of the naval installations in the Jacksonville area, testified in the course of the hearing. He pointed out that the Navy has a very substantial economic and social impact upon the residents of metropolitan Jacksonville, Florida. The Navy employs over 37,000 military personnel in the Jacksonville area in addition to over 10,000 civilian employees. Its payroll in the Jacksonville area approaches $1.7 billion. The Navy and its related economic activity account for in excess of 10 per cent of the Jacksonville area economy. The witnesses Mr. Henkemeyer; Mr. Townsend Hawkes, a beaches area real estate broker; Mr. Simon A. Smith, Jr., former Chief Executive of the North Florida Council of the Boy Scouts of America; and Ms. Marion Perry, supervisor of services of the United Way, testified that The Mirror is considered by them to be a "newspaper" of general circulation and interest to the public in the Jacksonville beaches communities. They demonstrated that The Mirror disseminates information about local events, including the Boy Scouts, United Way, and other charitable interests, and religious news. This pertains to the beaches communities and is a routine activity within The Mirror. More specifically, Mr. Hawkes said that he regularly reads The Mirror to follow his interests and involvement with the Sea Cadets, a group of boys and girls from the community interested in sailing and nautical activities. He also promotes the activities of the Kiwanis Club related to a swim marathon sponsored by that club in the publication. He reads the publication in furtherance of his business as a real estate broker to determine current happenings in the beaches communities associated with the Navy as it affects his business interests. He is involved with paid advertisements in The Mirror. He noted several issues which are peculiarly beaches topics about the Navy. He referred to certain road development and transportation matters found in The Mirror. Mr. Smith indicated that he considers The Mirror to be a "newspaper" of general circulation to the beaches communities, because it provides extensive coverage of Boy Scout activities and is viewed by the Boy Scouts of America and other charitable and community institutions as a source of dissemination of news and press releases concerning their present and future activities. Ms. Perry, in her role with the United Way in which her unit serves several north Florida counties including Duval County, testified that The Mirror is considered by her and the United Way to be a "newspaper" of general circulation and public interest for the beaches communities. She indicated that it is included in the mailing lists for press releases by the Florida Press Association and the United Way. She testified that The Mirror is listed as a "newspaper" in the Media Guide prepared by her. She notes that The Mirror includes features and opinions to the editor pages. She explained that The Mirror regularly disseminates information about the activities and fund raising efforts of the United Way throughout Jacksonville and the beaches communities. Generally speaking, Mr. Hawkes, Mr. Smith and Ms. Perry testified that The Mirror is included among the list of newspapers to which information, including press releases is regularly and routinely distributed by the organizations with which they are now or have been affiliated. In summary, those individuals and their community organizations consider The Mirror to be a "newspaper" of general circulation which contains matters of current public interest to the general public, and of current events and news of interest to the general public. The testimony of Mr. Tom Wood, the chief executive officer of The Beaches Leader, Inc., which owns and publishes The Mirror, provided further insight into the operations and function of The Mirror. The publication has a designated employee who serves as editor and news reporter of The Mirror. This employee works on the base at the United States Naval Station Mayport where he collects news items from all sources, including not only those provided by the United States Navy, but also sources from the community at large and throughout Florida in the form of press releases. Mr. Wood's testimony was that The Mirror is a publication whose purpose and function is to disseminate the news. His testimony also established that it is not a "shopper" type of publication, and it is not given over principally to advertisements or personal classified advertisements. The Mirror contains a percentage of advertising which is less than the national average and regularly carries news items of general interest to the public and the beaches communities in particular. Mr. Wood conceded that the publication is decidedly directed to the special interests of the United States Naval Station Mayport, but he pointed out current events and news of current interest to the general public are found in the publication. Wood identified the fact that the Navy informs the publisher where it wishes to have its news items placed and indicates to the publisher which of those items must be placed in a given issue. Beyond this arrangement, the publisher may choose what it wishes to include in an issue based upon remaining available space. In this realm, the number of pages in each issue of the publication, as well as the advertising ratio, is controlled by contract between Petitioner and the Navy. In picking examples of issues of The Mirror presented at hearing, issues were selected which are particularly demonstrative of a broader base of news stories than would relate to the Navy. Wood describes Petitioner's contract with the Navy as allowing the Navy to take back articles that were initially provided for placement in The Mirror. Per the contract, no editorial cartoons can be used. The Navy may request to see the galley or paste-up of an issue of the publication but has yet to do so. As stated, The Mirror is published for the special interest of personnel of the U.S. Naval Air Station, Mayport, Florida. To this end, Mr. Wood explained that, "we do not expect to have readers, substantial number of readers who don't have some connection, interest in the Naval Air Station at Mayport." The Mirror does not contain any news stories gathered from either Associated Press (AP) or United Press International (UPI) wire service material. Mr. Wood indicated that The Mirror does not routinely cover news of the day; however, given that this is not a daily publication, this arrangement is not unexpected. A review of the issues of The Mirror admitted into evidence offered by both the Petitioner and the Respondent, reveals the nature of news of general interest to the public, including weekly religious and recreational columns and feature stories. The issues submitted include news reports about hurricane preparation, athletic events, Halloween safety programs, youth recreational league registration information, matters concerning important historical dates, information concerning the need for volunteers and other assistance in charitable works in the beaches communities, news concerning the public schools, news of Fire Prevention Week, news concerning Native American Week, as well as information pertaining to drug abuse and automobile safety, a recipe column, television information, as well as matters of national interest, including news concerning the disaster of the space shuttle Challenger, together with the efforts of the Navy associated with its recovery. The basic structure of the publication may be seen in Petitioner's Exhibits 1-12 and 17-19 and Respondent's Exhibits 1 and 2 admitted in evidence. Here are some subjects covered in those editions: The Mirror for the week of January 25, 1985, included religious columns, information on preventive dentistry and actions to be taken as precautions to colder weather, a story on African famine relief, reminders concerning taxes and matters pertaining to personal income tax, as well as an extensive classified section concerning both real property and personal property, in addition to the activities of the Boy Scouts in the beaches area. The Mirror issue of February 15, 1985, included feature story on the observation of Black History Month, as well as columns on recreation and religion. The issue of June 14, 1985, included articles on the restoration of the Statue of Liberty and a feature on Father's Day, in addition to the information on recreational activities and religious events. The Mirror issue of June 21, 1985, included coverage of religious activities. The Mirror issue dated June 28, 1985, included special features on the Fourth of July, a recreational feature on cave diving and safety measures, in addition to information on recreational and family activities and a feature on safety precautions concerning fireworks and their use. The September 6, 1985, issues of The Mirror contained features on square dancing, marriage counseling, carnival con-men and the surrender of the Japanese at the conclusion of World War II. The September 27, 1985, issue of The Mirror included a special feature on Native American Week, the dangers of cocaine, automobile safety and recreational and religious activities sections. The November 29, 1985, issue of The Mirror had a feature on toys for tots collections and year-end tax information, as well as the regular features on recreational, charitable and religious activities. The issues of The Mirror admitted in evidence for the dates January 31, 1986, and February 7, 1986, focused upon the disaster of the space shuttle Challenger and the extensive search efforts by the United States Navy and other vessels to locate the wreckage and to assist in determining the cause of the explosion. Extensive coverage of the shuttle disaster and NASA news was contained in those issues of The Mirror as well as in civilian newspapers which were introduced in evidence. The Mirror issue of February 21, 1986, contained a feature on Black Americans. The issue of August 8, 1986, focused upon the change in command of the United States Navy aircraft carrier Saratoga, which news was also the feature story of the local Jacksonville newspapers, The Florida Times Union and Jacksonville Journal, on that day. The issues of The Mirror regularly contain feature stories concerning the United States Navy and matters related to the Naval Station Mayport. The testimony of the witnesses makes it evident that naval happenings, especially as they relate to the activities and events at the Naval Station Mayport and other naval bases in Jacksonville, are news in metropolitan Jacksonville, Florida. Two issues of The Independent Florida Alligator, Petitioner's Joint exhibits 2 and 3, were admitted. A comparison of The Mirror and The Independent Florida Alligator shows in what ways they are similar and dissimilar. Both publications are publications of special interest to a particular community--the University of Florida in the case of The Independent Florida Alligator, and the United States Naval Station Mayport in the case of The Mirror. However, The Independent Florida Alligator has a much broader base in its reporting of news beyond its principal community and offers more extensive editorial comment. In addition, it serves the function of training student journalists in the newspaper business as the court in Campus Communications, supra, referenced in its favorable response to the claim for tax exempt status. No such role is played by The Mirror. The Independent Florida Alligator has a format that is more akin to a general circulation newspaper, whereas The Mirror is in many respects more of a news bulletin. The articles related to the Navy may preempt other news information and the reporting of other news events beyond the Navy's activities is secondary. The Navy exerts influence on the basic design and focus of The Mirror through the contract with its publisher. By contrast, the The Independent Florida Alligator has a wide-ranging set of topics in which there does not appear to be any outside entity predetermining space requirements or which has a say in what news is pursued by the student newspaper.
Findings Of Fact Petitioner corporation came into existence in April 1989. From that time until the present, Petitioner corporation has had possession or control of several beach concessionaire spots in Volusia County. Respondent Department of Revenue audited Petitioner for the five year period of November 1, 1985 through December 31, 1990. Petitioner had never obtained the certificate or receipt contemplated by Section 212.10(1) F.S., so Respondent's audit and assessment held Petitioner liable for all sales tax due from all predecessor owners. In response to the Notice of Intent to Audit, Petitioner made available for inspection all of its business records. Petitioner's records were found by the auditor to be both adequate and accurate for the period of time that Petitioner corporation had been in existence, with certain exceptions which included assigning the wrong tax rate on certain items. Respondent's auditor pointed out errors in collection and remittance of the tax by Petitioner during the period of April 1989 to the end of the audit period and Petitioner remitted the tax due with respect to each subject of the error. Respondent reviewed Petitioner's records and used such records to arrive at its estimate of Petitioner's tax liability. In assessing Petitioner's tax liability, Respondent's auditor, Albert E. Seyforth, projected backwards using all records provided by Petitioner to reach an estimate or projection of what the predecessor owners/sellers should have been paying in tax. To make this backwards projection, he worked from the Petitioner's current figures substantiated by their records which he deemed adequate and accurate for the period of April 1989 to the end of the audit period. Petitioner's records already indicated that two of the spots acquired by Petitioner were no longer actively utilized. He treated the Volusia County transfer fee and license fee as taxable rights in real estate pursuant to Rule 12A-1.070 F.A.C. He made allowance for Petitioner's misapplication of a sales tax rate. He calculated a 24-month projection rather than an 18-month projection to give Petitioner taxpayer the benefit of the doubt. He then applied an adjustment by allowing an arbitrary percentage reduction on compensable versus noncompensable units and allowing for market conditions, differences in inventory, or pricing. In applying this percentage reduction factor, he accepted Petitioner's oral unquantified anecdotal representations that (1) beach business overall had gotten progressively worse over the five- year audit period (which would lower sales figures) and (2) that Petitioner's current corporate operation which had eliminated business at certain spots and which was otherwise more efficient, was more profitable than prior businesses. (This latter assumption would raise sale figures). The percentage reduction factor the auditor devised was an arbitrary 25 percent because Petitioner did not provide any quantifiable way to measure its anecdotal oral representations on the foregoing business trends. The auditor did not accept or consider Petitioner's oral representations as to how many units Petitioner acquired from each seller because Petitioner produced no adequate "paper trail" to back up their oral representations as to what was acquired and because all concerned considered the concession business one in which physical inventory at each "spot" changed from day to day. Upon presentation of prior taxpayer identification numbers, Respondent gave Petitioner credit against the figure obtained by the foregoing methodology for prior taxes paid under those prior taxpayer identification numbers during the audit period. The foregoing assessment methodology, including credits, which was devised by Mr. Seyforth, was accepted as "reasonable" by Mr. Seyforth's superior auditor, Mr. Samuel B. Eckhardt, Jr. In approving Mr. Seyforth's methodology, Mr. Eckhardt considered two other standard methods of assessing business trends which could have been used instead of using an arbitrary 25 percent reduction factor. One alternative method would have been to assemble and apply information concerning the ramp toll census to the beach in each of the audit years. The other alternative method would have been to somehow devise a hotel/motel occupancy census and apply that information. Nonetheless, Mr. Eckhardt determined that the methodology applied by Mr. Seyforth and described in Finding of Fact 5 and the deduction of taxes actually paid as described in Finding of Fact 6 was appropriate and reasonable. At formal hearing, Petitioner did not affirmatively demonstrate how a formula for business trends on the beach could be more accurately derived from either the toll ramp census or the hotel/motel occupancy rate method. Specifically, it was not shown how the toll ramp census would relate number of cars to number of people to number of purchasers of concession products or how the hotel/motel occupancy rate would accurately reflect number of purchasers of concession products. While the 25 percent reduction figure utilized by the auditor might be "arbitrary," Petitioner did not affirmatively demonstrate how either of the alternative methods would be either more accurate or would lower the assessment figure. Petitioner presented evidence that Volusia County has always regarded the County's charge of seven percent of the purchase price on the transfer of a concession as an administrative fee. This fee was a negotiated charge agreed upon by the concessionaires, as a group. It was based on earlier such fees. However, Messrs. Seyforth and Eckhardt, on behalf of the Respondent state agency regarded this fee as a "lease or license of real property," pursuant to agency interpretation of Rule 12A-1.070 F.A.C. and treated it as such. Petitioner presented evidence that the license fee paid annually to Volusia County by each concessionaire in the amount of ten percent of gross sales or $1,000.00, whichever is greater, has always been regarded by Volusia County as a regulatory fee for use of a certain beach location and is utilized by Volusia County in lieu of occupational license fees, garbage disposal charges, and charges for other goods and services provided to the concessionaire. These services included licensed concessionaires having the right to ask Beach Rangers to move trespassing concessionaires out of the respective license-holders' assigned territories. Messrs. Seyforth and Eckhardt, on behalf of Respondent state agency regarded this fee as a "lease or license of real property" pursuant to agency interpretation of Rule 12A-1.070 F.A.C. and treated it as such. Petitioner presented evidence that it had acquired beach spots 128 and 130 and paid the Volusia County annual license fee on each but did not operate them in order to render Petitioner's entire "multi-spot operation" more efficient and profitable. Any physical business assets acquired at these locations were transferred to other spots. The license fee continued to be paid for these spots' respective locations, so as to eliminate competition. This factor was built into the agency's calculations, but Petitioner contended that the auditor's using a backward projection on these spots was unreasonable because it assigned a 75 percent profit to them which had never existed. Contrary to Petitioner's assertion, it is found that the auditor's 25 percent reduction figure lumped the unquantified increased efficiency of the whole of Petitioner's operation in with the unquantified decrease in beach traffic and thus made a reasonable adjustment for these unoperated "spots." Petitioner also contended that when it acquired beach concession spots 128 and 130 no "stock of goods" was also acquired, but Petitioner produced no "paper trail" to prove no goods were acquired. Petitioner also admitted to paying to acquire the "business" at each location and that in so doing Petitioner either directly or indirectly acquired the license to operate (or not operate) each of these spots. Section 212.10 F.S. is phrased in the disjunctive, "business or stock of goods." Petitioner produced certain books and records at deposition which were derived from the preincorporation proprietorship of Petitioner corporation's principals, and, presumably, the proprietorship/spot acquired from Mr. Harold S. Lloyd's parents, and the auditors dismissed these as inadequate. These particular records were not introduced at formal hearing. The only records of any prior owners of beach spots acquired by Petitioner which were introduced at formal hearing were certain documents from John Bowes and Richard Ruich. Mr. Bowes' records (Petitioner's Exhibit 2) are merely totals for various types of rentals and sales and are not adequate for the agency's detailed accounting procedures. They do not comply with the Unified Beach Code, and Mr. Bowes own accountant found them inadequate for federal income tax purposes. No expert witness credibly stated that they were adequate for assessment purposes. Mr. Bowes' records do not contain any prior taxpayer identification number which potentially could be linked to prior taxes paid so as to offset the assessment against Petitioner. Mr. Ruich's records (Petitioner's Exhibits 3 and 4) consisted only of monthly sales tax reports, called "DR-15's." No expert witness credibly stated that they were adequate for assessment purposes. The agency does not accept DR- 15's as proof of tax liability, but Mr. Ruich's DR-15's do contain Mr. Ruich's taxpayer identification numbers, 74-16-044761-07 and 74-16-038917-07. The record is not clear whether Petitioner was given credit for the taxes actually paid by Mr. Ruich under these taxpayer identification numbers. Since Respondent has established the precedent in this case for giving credit to Petitioner for taxes actually paid under predecessor taxpayer numbers during the audit period, Mr. Ruich's taxes actually paid during the audit period should be calculated and deducted from the assessment against Petitioner, if that has not already been done. Richard Ruich executed a sales agreement and an indemnification agreement in the sale of his business to Petitioner.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Revenue enter a final order sustaining the subject audit and assessment against Petitioner, less credit to Petitioner for prior tax paid, if any, during the audit period by predecessor in interest Ruich, Taxpayer I.D. Nos. 74-16-044761-07 and 74-16-038917-07, if credit therefore has not previously been afforded to Petitioner. RECOMMENDED this 1st day of April, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 1993. APPENDIX TO RECOMMENDED ORDER 92-2348 The following constitute specific rulings, pursuant to S120.59 (2), F.S., upon the parties' respective proposed findings of fact (PFOF) Petitioner's PFOF: 1 Accepted so far as it goes. Covered in Findings of Facts 4, 14. 2-4 Accepted but not dispositive, ultimate, or material, Covered in Findings of Facts 4-6, 14-17. 18,25,27-28 Accepted. Covered in Findings of Facts 5-12, 14. 5 Accepted but subordinate. Covered in Findings of Fact 14-17. 6-7,11-13 Rejected as stated because as stated it does not reflect the greater weight of the credible record evidence as a whole. Covered in Findings of Facts 5-9. 8,14,21-23 Rejected as out of context and misleading. Not supported by the greater weight of the credible record evidence as a whole. 9,10,24,26 Rejected as stated because as stated it does not reflect the greater weight of the credible record evidence as a whole, and because it attempts to state a Conclusion of Law. Covered in Findings of Fact 5-11, 14-17, and Conclusions of Law. 15-17,19-20,29-30 Accepted but subordinate and unnecessary. Respondent's PFOF: 1-11 Accepted except where subordinate unnecessary, or cumulative. COPIES FURNISHED: Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera, Esquire General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Michael L. Brewer, Esquire 500 Canal Street New Smyrna Beach, Florida 32168 Leland L. McCharen, Esquire Assistant Attorney General Tax Section Department of Legal Affairs The Capitol Tallahassee, Florida 32399-1050
The Issue The issue presented is whether HMY New Yacht Sales, Inc., is liable for the payment of use tax, together with penalty and interest, on a yacht which it purchased for resale and for use as a demonstrator.
Findings Of Fact Petitioner HMY New Yacht Sales, Inc., is a Florida cor-poration located in Dania, Florida. It is a franchise and an authorized dealer for several lines of new boats. Petitioner is registered as a dealer for Florida sales tax purposes and has a dealer decal. Petitioner became an authorized dealer for Davis Yachts, a manufacturer located in North Carolina, in 1985. In January 1990 Petitioner purchased a boat from Davis Yachts to be used for demonstration and promotional activities and for resale. The boat was a 47-foot fiberglass sports fisherman named "The Bandit." When the boat was delivered, Petitioner outfitted The Bandit with extensive electronics and fishing equipment, including a tuna tower, outriggers, a fighting chair, rocket launchers, and live wells. It took approximately two months (until the second week in March 1990) to outfit the boat to have it ready for its intended sports fishing purpose. The type of equipping done by Petitioner is typical of that done on every such boat when it is sold since such a boat cannot be used for its intended purpose without the electronics and other equipment. Petitioner, however, wanted the boat to be "ready to go," when Petitioner sold it rather than having the purchaser wait for the outfitting to be done before the purchaser could use the boat. Petitioner paid the factory approximately $520,000 for the boat. Petitioner's payments to local vendors for services and materials used in outfitting the boat brought Petitioner's cost to approximately $590,000. The Bandit was never documented or registered in the state of Florida. It was only operated under Petitioner's dealer registration and decal, as provided in Section 327.13, Florida Statutes. The boat was purchased with the intent to sell it, and it was always for sale from the first moment it was outfitted and ready to be shown. It was never Petitioner's intent to keep the boat. As soon as it was outfitted, the boat had on board, at all times, a file containing a complete inventory of the boat's equipment, including custom and standard options, and a color brochure with pictures of the boat to be given to potential customers. While Petitioner was attempting to sell the boat, it was also used by Petitioner as a sales promotional tool. Petitioner took the boat to various fishing tournaments and exhibited it at boat shows and open houses. Davis Yachts bore some of the expense of those activities since promoting the boat inured to the benefit of Davis as well as of Petitioner. When the boat was being used for promotional or sales activities, it would always have on board employees or salespersons of Petitioner or of Davis Yachts and customers. On occasion, family members accompanied Petitioner's salespersons on board the boat. The manner in which The Bandit was marketed--taking it to fishing tournaments and boat shows and having open house at various events--is typically the way new sport fisherman yachts are sold throughout the industry. The boat was shown to prospective customers at least once a month. Approximately 50 customers were taken on sea trials. The boat was never loaned or rented to anyone. It was used only under the direction of Petitioner or Davis Yachts. The only compensation received by Petitioner relating to the boat resulted from the occasions when Davis Yachts split some of the expenses for the promotional or sales activities. The boat did not sell as quickly as Petitioner hoped. In October 1990 Petitioner placed the boat on the Buck System, a multiple listing service which distributes information to other yacht brokers concerning boats which are for sale. Generally, boat dealers would not put new inventory in the multiple listing system. Petitioner did so in this instance, however, in order to quickly sell the boat because the government had announced a luxury tax proposal which Petitioner feared would result in a downturn in the boat market. Even with all the effort put into attempting to sell the boat, it did not sell until November 1991. In July 1992 the Department began a routine sales tax audit of Petitioner. The audit was completed in September 1992 and covered the period of time from March 1987 through February 1992. The Department auditor determined that Petitioner owed use tax on The Bandit because in November 1990, on the advice of its accountant, Petitioner took the boat out of its inventory account and placed it in its fixed assets account in order to take depreciation for federal income tax purposes. Based solely on Petitioner's treatment of the vessel on its corporate books, the auditor determined that Petitioner converted The Bandit to its own use and was, therefore, responsible for payment of the statutory use tax rate of 6 percent of the value of the boat as reflected on Petitioner's records. Based upon the audit, the Department issued its Notice of Proposed Assessment, assessing Petitioner $33,921.94 in tax, $8,480.50 in penalty, and $7,085.52 in interest through September 16, 1992. Interest continues to accrue at $11.15 per day.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered determining that Petitioner is not liable for payment of use tax, penalty, or interest on The Bandit, and withdrawing the assessment which is the subject of this proceeding. DONE and ENTERED this 2nd day of August, 1995, at Tallahassee, Florida. LINDA M. RIGOT, 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 2nd day of August, 1995. APPENDIX TO RECOMMENDED ORDER Petitioner's proposed findings of fact numbered 1-12, 15, and 19 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed findings of fact numbered 13, 14, and 18 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Petitioner's proposed findings of fact numbered 16, 17, and 20 have been rejected as being unnecessary to the issues involved herein. Respondent's proposed findings of fact numbered 1-3, 6, 8, and 9 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed findings of fact numbered 4, 5, and 10 have been rejected as not being supported by the weight of the competent evidence in this cause. Respondent's proposed finding of fact numbered 7 has been rejected as being unnecessary to the issues involved herein. COPIES FURNISHED: Cynthia S. Tunnicliff, Esquire Pennington & Haben, P.A. Post Office Box 10095 Tallahassee, Florida 32302-2095 Mark T. Aliff, Esquire Office of the Attorney General Tax Section, The Capitol Tallahassee, Florida 32399-1050 Linda Lettera General Counsel Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue Whether Respondent, James Michael Rossi, violated section 468.436(2)(b)2., Florida Statutes (2015),1/ as alleged in the Amended Administrative Complaint; and, if so, what penalty should be imposed.
Findings Of Fact The Department is the state agency charged with licensing and regulating Community Association Managers (CAMs), pursuant to sections 468.433 and 486.436, Florida Statutes, respectively. At all times material hereto, Respondent was a licensed Florida CAM, having been issued CAM license number 35631. At all times relevant hereto, Respondent was the CAM for Ocean Villa Condominium Association, Inc. (Ocean Villa). At times during Respondent’s tenure as Ocean Villa’s CAM, Respondent provided CAM services to other associations. During the relevant time period, Ocean Villa did not establish a credit card in its name. Respondent’s practice was to purchase goods for Ocean Villa using his personal credit card, and reimburse himself via check from the Ocean Villa checking account. Respondent submitted his credit card statements and some receipts as backup for the reimbursement checks. In December 2016, Ocean Villa obtained a debit card in its name and Respondent ceased the practice of making purchases on behalf of Ocean Villa using his personal credit card. In the Amended Administrative Complaint, the Department alleges as follows: On or about the following dates: May 2014; June 2014; March 2015; May 2015; and September 2015, Respondent wrote checks to himself from the Association’s checking account, for which Respondent failed to maintain and/or provide the corresponding receipts or invoices substantiating the total amount for each of those checks. The parties stipulated to introduction of seven checks Respondent wrote to himself allegedly in reimbursement for expenditures made by him on behalf of Ocean Villa. Check No. 1989 was written on May 13, 2014, in the amount of $519.00. The check stub indicates the payment was made for a “paint striper roll master,” a piece of equipment used in striping parking lots. As backup for the reimbursement, Respondent submitted an email from sales@paintsprayersplus.com to Respondent confirming an order placed May 13, 2014, for “Newstripe Rollmaster 1000 Parking Lot/Warehouse Line Striper” for a charge of $519.00. Under “payment information,” the email reads, “CREDIT (Denied).” The email further reads, “Your Credit Card payment has been denied. If you do not have a customer account, please contact sales@paintsprayersplus.com for assistance.” Respondent also introduced his June 2014 U.S. Bank credit card statement, which includes a charge on May 15, 2014, to Paintsprayersplus in the amount of $519.00. Respondent wrote Check No. 2043 on June 23, 2014, in the amount of $362.98. The check stub describes the purpose as “Reimburse Expenses.” As backup for the reimbursement, Respondent produced his June 2014 U.S. Bank credit card statement. The statement is redacted to exclude personal charges. The statement includes five separate charges at Office Depot, for a total amount of $147.64; a charge of $9.00 for conference call services; the charge of $519.00 from Paintsprayersplus; and a charge of $207.00 from Newstripe, Inc. Respondent testified the Newstripe, Inc. charge was for the paint used to restripe the parking lot at Ocean Villa. The redacted credit card statement contains Respondent’s handwritten note next to the Paintsprayersplus charge of $519.00 “PO 5-13-14 Ck# 1989,” indicating he previously reimbursed himself for that charge via Check No. 1989. The redacted credit card statement also contains Respondent’s handwritten note totaling the unredacted charges to $881.98, subtracting the $519.00 previously reimbursed for the restriper, leaving a remainder of $362.98 to be reimbursed. That amount matches the amount Respondent reimbursed himself via Check No. 2043. Respondent wrote Check No. 2361 on March 6, 2015, in the amount of $108.70. The check stub lists two invoices both dated March 6, 2015: $10.72 for “Phone cord for conference calls,” and $97.98 for “Copy paper and stamps.” As backup for the reimbursement, Respondent produced a receipt from Office Depot dated March 3, 2015, and a receipt from Home Depot dated February 26, 2015. The Home Depot receipt is for a “50’ white phone line cord” at $9.97, for a total of $10.72, after tax. The Office Depot receipt lists three separate charges: one for two boxes of 9 x 11 inch paper at $53.99 each; two quantities of U.S. postage stamps at $49.00 each; and another box of 9 x 11 inch paper at $53.99. All three boxes of paper were discounted $8.00 each, and the total, after tax, for the purchased items was $195.96. Respondent handwrote on the receipt after the total, “/2 97.98 Half to OV & Half to TP.” Respondent testified, credibly, that the supplies were purchased for both Ocean Villa and a second association for which he served as CAM. Respondent wrote Check No. 2371 on March 19, 2015, in the amount of $554.51. The check stub notes the purpose was reimbursement for three separate invoices dated March 19, 2015, for “office supplies.” The amounts corresponding with each invoice are $120.34, $386.28, and $47.89, respectively. As backup for the reimbursement, Respondent introduced his redacted U.S. Bank credit card statements for January and February 2015, as well as an Office Depot receipt dated March 7, 2015. The February 2015 bank statement contains the following unredacted charges: 01/16 Office Depot #2821 $24.48 01/18 Conf. Call Services $9.00 02/03 Office Depot #2821 $83.07 02/09 USPS $3.79 The total of the unredacted charges is $120.34, the same amount as the first invoice for office supplies noted on the check stub for February 10, 2015. The January 2015 bank statement contains the following unredacted charges: 12/10 Office Depot #2821 $28.20 12/11 USPS $134.33 12/15 Office Depot #2821 $49.00 12/24 Conf. Call Services $9.00 01/02 Lowes #02367 $22.00 01/06 Office Depot #2821 $143.75 The charges total $386.28, the same amount as the second invoice for office supplies noted on the check stub for January 12, 2015. The March 7, 2015 receipt from Office Depot lists two charges: No. 8 Envelopes at $36.99, and two of another item (unidentifiable based on the receipt) at $3.99 each for a total of $7.98. The total purchase, after tax, was $47.89, the same amount as the third invoice for office supplies noted on the check stub. Respondent wrote Check No. 2378 on March 20, 2015, in the amount $359.40. The check stub describes the purpose as “Miscellaneous.” As backup documentation for the reimbursement, Respondent introduced his March 2015 U.S. Bank credit card statement, which lists the following unredacted charges: 02/19 Conf. Call Services $9.00 02/24 USPS $12.35 02/25 Amazon Marketplace $113.56 02/27 Amazon Marketplace $176.60 03/07 Office Depot $47.89 Respondent testified, credibly, that the Amazon Marketplace charges were for personalized uniform jackets for Ocean Villa maintenance and security personnel, purchased at the direction of the Board. The unredacted charges total $359.40, the same amount as reimbursement Check No. 2378. Respondent wrote Check No. 2459 in the amount of $2,364.74 on May 22, 2015. The check stub lists nine separate purchases in April and May of 2015, including binders for Ocean Villa’s financial statements, an external hard drive, file folders, sun umbrellas and bases, and postage for certified mail. As backup in support of the reimbursements, Respondent introduced nine receipts from a variety of vendors, including Office Depot, Home Depot, WalMart, Sam’s Club, and USPS. The last check at issue is Check No. 2593 which Respondent wrote on September 24, 2015, in the amount of $471.50. The check stub lists four separate invoices for postage. As backup documentation for the reimbursement, Respondent introduced four separate USPS receipts which match the amount listed on the check stub for each invoice, and which total $471.50. In this case, the Department charges Respondent with two counts pursuant to section 468.436(2)(b)2., which subjects a licensee to discipline for violating any rule adopted by the Department. Count I In Count I of the Amended Administrative Complaint, the Department alleges Respondent violated Florida Administrative Code Rule 61E14-2.001(3)(d), which requires maintenance of the “official records” of an association as required by section 718.111(12), Florida Statutes. Specifically, the Department charges Respondent with failure to maintain “[a]ccurate, itemized, and detailed records of all receipts and expenditures,” as required by section 718.111(12). The Department introduced the testimony of Dawn Warren, a 16-year licensed CAM, who has been employed as CAM for two separate condominium associations, served as president of a condominium association complex for 15 years, and previously served on the Regulatory Council of Community Association Managers for eight years (three years as Chair). Through Ms. Warren’s testimony, the Department attempted to establish that a CAM must keep vendor receipts of each purchase in order to comply with the statutory requirement to maintain “[a]ccurate, itemized, and detailed records of all receipts and expenditures.” Ms. Warren testified consistently that the vendor receipt was the only appropriate record of what was purchased by, or on behalf of, the association. The Department admitted, through Ms. Warren’s testimony, that the backup documentation for Check Nos. 2361, 2459,3/ and 2593 were appropriate itemized records of what was purchased on behalf of the association. The Department’s allegations on Count I can be narrowed to whether Respondent failed to maintain “[a]ccurate, itemized, and detailed records of all receipts and expenditures,” based on the records associated with four checks: 1989, 2043, 2371, and 2378. Ms. Warren’s opinion that itemized receipts for each purchase are required hinges on her interpretation of the statute, summarized as follows: Well, right in 718, it does say itemized receipts and expenditures. So an itemized receipt would be something that’s itemized, which you – which I and anyone that I know that’s a CAM turns in a receipt, and it itemizes what they bought.[4/] Despite Ms. Warren’s depth of experience as a CAM, her testimony was not persuasive. Ms. Warren’s read of the statute is incorrect. It does not read, “itemized receipts,” it reads, “itemized and detailed records of all receipts and expenditures.” Further, Ms. Warren’s opinion that the vendor receipt is required because it is the only record of what was actually purchased, is not credible. With regard to Check No. 2361, Ms. Warren testified that, based on the receipt, she could identify that the three purchases were, in order, envelopes, postage, and paper. The first and third items on the receipt have the exact same product ID and description--196517 PPR,X- 9.11” .10. Yet, Ms. Warren testified that the first charge on the receipt was for No. 10 envelopes, while the last item on the receipt was for paper. She subsequently testified as to the first charge, “I don’t know what it is exactly.” Ms. Warren’s opinion that the vendor’s itemized receipt is the only allowable record of expenditures, because it is “the record of what was purchased,” was undercut by her own inability to identify from the vendor itemized receipt specifically what was purchased on behalf of the association. The Department’s focus on receipts is misplaced. As correctly identified by Respondent, the items purchased by him on behalf of Ocean Villa are expenditures, not receipts. The statute requires Ocean Villa, through its CAM, to maintain “itemized and detailed records of all . . . expenditures.” Respondent testified, credibly, that he maintains copies of all Ocean Villa expenditures organized by both date (month, day, and year) and by vendor, as well as QuickBooks records of all Ocean Villa documents. Further, with the exception of Check Nos. 2043 and 2378, the checkstubs entered into evidence are itemized as to the date of purchase, the amount paid, and a description of the item purchased. These are detailed, itemized records of the expenditures made. The check stub for Check No. 2043 lists an invoice dated June 23, 2014, in the amount of $362.98 to “Reimburse Expenses,” followed up with a redacted credit card statement listing five separate Office Depot charges, a charge from Newstripe, Inc., and a $9.00 charge for conference call services. At hearing, it was established that the $9.00 charge for conference call services was a recurring monthly charge to the association. It was also established that the $200.00 charge to Newstripe, Inc., was for the paint used to restripe the Ocean Villa parking lot. The record does not support a finding of what specifically was purchased at Office Depot for a total of $146.74. The check stub for Check No. 2378 lists one invoice in the amount of $359.40 for “Miscellaneous” expenses, to which Respondent attached his unredacted March 2015 credit card statement. The statement lists unredacted charges of $9.00 for conference call services, $12.35 for postage, $47.89 for purchases at Office Depot, and the Amazon Marketplace charges for uniform jackets totaling $290.16. Respondent introduced the March 7, 2015 Office Depot itemized receipt showing two purchases: one for envelopes at $36.99, and one for an unidentified product5/ at $3.99 each, for a total of $47.89. The record does not support a finding of what specifically was charged at Office Depot for $3.99 x 2. The Department did not prove Respondent failed to maintain “[a]ccurate, itemized, and detailed records of receipts and expenditures.” At most, the Department proved that Respondent reimbursed himself, through Check Nos. 2043 and 2378, for expenditures totaling $154.72 without a written itemized account of what was purchased. Count II In Count II of the Amended Administrative Complaint, the Department alleges Respondent violated rule 61E14- 2.001(2)(c), which requires a CAM to “perform all community association management services . . . to professional standards and to the standards established by Section 468.4334(1), F.S.” The Department argues Respondent failed to meet undefined “professional standards” by reimbursing himself for expenses incurred on behalf of the association without itemized vendor receipts for each expense. Ms. Warren testified repeatedly that Respondent did not submit itemized receipts to support reimbursement checks to himself for purchases made on behalf of Ocean Villa. She expressed her opinion that a CAM’s reimbursement records should include the itemized receipts for purchases for which reimbursement is sought, and that, in her 15 years as an association president, she would never sign a check to reimburse a CAM without the itemized receipt for the purchases made. Ms. Warren’s opinion was based solely on her practice and not on any standards or guidelines established by a professional organization. Ms. Warren’s testimony did not establish that her practice constituted recognized “professional standards,” because she was not able to identify at hearing the specific items purchased based on the Office Depot itemized receipt. Section 468.4334(1) requires, in pertinent part, as follows: A [CAM] and a [CAM] firm shall discharge duties performed on behalf of the association as authorized by this chapter loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees. In an apparent effort to prove Respondent violated the specific professional standards captured in section 468.4334(1), the Department introduced Respondent’s management services contracts with Ocean Villa, and testimony regarding his performance of his duties pursuant to the contracts. The testimony suggested that the checks at issue were reimbursement for expenses Respondent did not have Board approval to incur. For example, Christopher Arnold, who became Ocean Villa President in October 2017, testified that Respondent was limited by the contract to incur expenses for repairs up to $500.00 without Board approval. Mr. Arnold argued that, as none of the expenditures for which Respondent reimbursed himself were for repairs, Respondent did not deal honestly and fairly, or with good faith, in reimbursing himself for the expenses because he did not have Board approval to incur them. Mr. Arnold’s testimony was neither credible nor persuasive. Paragraph 4 of Respondent’s contract in effect beginning in June 2015, titled “Reimbursement of Expenses,” requires the association to reimburse the CAM for costs incurred “in providing services, material, and supplies to, or for the direct benefit of,” the association. Paragraph 4 contains no monetary limit on the amount of costs to be reimbursed. In contrast, paragraph 5.H. of the contract, upon which Mr. Arnold relied, requires the CAM to make repairs and perform other functions in order to “maintain and operate the Association,” and limits expenditures for repairs to $500 without “prior consent from the Board’s representative unless it is a budgeted item.” The Department did not introduce any credible evidence that Respondent’s reimbursements at issue in this case were contrary to any term of Respondent’s contract with Ocean Villa. Moreover, Respondent’s prior contract with Ocean Villa--which preceded the June 2015 contract--required the association to reimburse the CAM “for all reasonable expenses incurred by the [CAM] in the course of its engagement.” The Department did not introduce any evidence that Respondent’s reimbursements were not for “reasonable expenses incurred.” The record established that neither the Ocean Villa Board nor its President in office during 2014 and 2015 ever questioned Respondent’s reimbursements. The Department did not prove Respondent’s reimbursement of expenses by Check Nos. 2361, 2371, 2378, 2459, and 2593,6/ violated any professional standard, including those set forth in section 468.4334(1).
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation dismiss DBPR Case No. 2017-043696 against James Michael Rossi. DONE AND ENTERED this 27th day of September, 2018, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of September, 2018.
The Issue Whether Respondent's Leasing Manual HRS M 70-1 is a rule and, if so, is it an invalid exercise of delegated legislative authority?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The Department's Leasing Manual HRS M 70-1 (Manual) sets out the procedure to be followed when the Department is seeking to lease space of 2,000 square feet or more in privately owned buildings. Within this manual are the forms to be utilized for this purpose and, among other forms, is an Invitation to Bid (ITB) For Existing Facilities packet that contains a Bid Submittal Form (BSF) and, within the BSF is a page entitled Evaluation Criteria. The Department followed the procedure set forth in the manual in advertising for competitive bids on Lease No. 590:2029 for office space in Inverness, Florida service area of District Three and, in doing so, used the ITB For Existing Facilities packet that contained the BSF with the Evaluation Criteria page. The BSF, including the Evaluation Criteria page, is a slightly modified version of the Department of General Services' (DGS) Request For Proposal Submittal Form - BPM 4136, incorporated by reference in Rule 13M-1.015(3)(e), Florida Administrative Code, as a suggested format. The Evaluation Criteria page of the Department's BSF contains nine of the eleven evaluation criteria set forth on the evaluation criteria page of the BPM 4136, but does not place any limit on the weight of award factor as does BPM 4136 on two of the same criteria used by the Department. Both the BSF and BPM 4136 are used in bidding for space in existing facilities and, therefore, require a scaled floor plan showing present configuration, with measurements that equate to the net rentable square footage using the Standard Method of Space Measurement. The BSF does not attach a "floor plan for suggested configuration of offices and rooms" as does the BPM 4136 but does provide the number, types and sizes of rooms to be placed in the existing facility. Both forms leave the final configuration of the floor plan to the successful bidder and the lessee. The Department's reasoning for not including a "suggested floor plan" is that this may reduce the number of prospective bidders due to the varied configuration of existing facilities in the bid area. In accordance with the procedure set forth in the Manual an Evaluation Committee (Committee) was appointed to determine, among other things, the award factor (weight) to be placed on the nine evaluation criteria set forth on the Evaluation Criteria page of the BSF. The Committee determined the significance of the nine criteria on the Evaluation page to the Department's needs in regard to Lease No. 590:2029 and awarded a weight factor in accordance with the significance of the criteria. Those criteria most significant to the Department's needs received the highest weight. These award factors were added to the Evaluation page of the BSF at the time the ITB was advertised. The procedure and the forms set forth in the Manual and used by the Department, including the procedure followed by the Evaluation Committee, in putting together the ITB for Lease No. 590:2029 comports substantially with all substantive provisions of Rule 13M-1, Florida Administrative Code, and more specifically Rule 13M-1.015, Florida Administrative Code, adopted by DGS pursuant to Section 255.249(2), Florida Statutes. The differences, such as they are, are not substantial, nor is there any extrinsic or intrinsic divergence from the substance of the rule such as to mislead any potential bidder who sought to address the ITB. The Manual, including the ITB and BSF, sets forth the Department's policy and describes the procedure to be followed by the Department, including each Evaluation Committee selected, and all prospective bidders, in its leasing practices when the Department seeks to lease 2000 square feet of office space or more in privately owned buildings and, although the Manual has been reduced to writing, it has not been promulgated or adopted as a rule.
The Issue Whether the Petitioners are liable for sales tax, penalties and interest as assessed by the Department of Revenue (the Department) and if so, in what amount?
Findings Of Fact The parties have stipulated to the facts stated in paragraphs 2-59.1/ The Department of Revenue is an agency of the State of Florida, pursuant to Section 20.21, Florida Statutes, and is authorized to administer the tax laws of the state, pursuant to Section 213.05, Florida Statutes. The Department was authorized to conduct an audit of each of the Petitioners and to request information to determine their liability for taxes pursuant to Chapter 212, Florida Statutes. Legendary Holding, Inc. (Holding) is a corporation organized under the laws of Florida effective October 23, 1996, and was so organized from 1999-2003. Holding's corporate address is 4100 Legendary Drive, Suite 200, Destin, Florida 32541. Holding was subject to the Internal Revenue Code of 1986 as amended and in effect (IRC) during 1999-2003 and for federal income tax purposes, Holding was a subchapter "s" corporation during this time. Holding was also subject to Chapter 212, Florida Statutes, during 1999-2003. Petitioner Harry T's, Inc. (Harry T's), is a corporation organized under the laws of Florida effective November 9, 1998, and was so organized during Harry T's Audit Period, defined as December 1, 1999 through March 31, 2003. Harry T's was a wholly-owned subsidiary of Holding. During its Audit Period, Harry T's corporate address was 4460 Legendary Drive, Suite 400, Destin, Florida. Harry T's was subject to the IRC and for federal income tax purposes was a qualified subchapter S subsidiary of the s-corporation parent, Holding. Petitioner Beachside Inn Destin, Inc. (Beachside) was a corporation organized under the laws of Florida effective March 6, 2000, and was so organized during the Beachside Audit Period, defined as May 1, 2000, through May 31, 2003. Beachside, a wholly-owned subsidiary of Holding, was administratively dissolved on October 14, 2004, for failure to file an annual report. During the Audit Period, Beachside's principle place of business was 2931 Scenic Highway 98, Destin, Florida, 32541. Its corporate address was 4460 Legendary Drive, Suite 400, Destin Florida. Beachside was subject to the IRC and for federal income tax purposes was a qualified subchapter S subsidiary of the s-corporation parent, Holding, during the Beachside Audit Period. Petitioner Legendary Restaurant Associates, Inc. (Restaurant) is a corporation organized under the laws of Florida effective October 7, 1999, and was so organized during Restaurant's Audit Period, defined as December 1, 1999, through March 31, 2003. During this time Restaurant was a wholly owned subsidiary of Holding and Restaurant's corporate address was 4460 Legendary Drive Suite 400, Destin, Florida. Restaurant was subject to the IRC and for federal income tax purposes was a wholly-owned, qualified subchapter S subsidiary of the s-corporation parent, Holding, during the Restaurant Audit Period. Legendary, Inc. (Legendary) is a corporation organized under the laws of Florida during 1999-2003, and its corporate address was also 4460 Legendary Drive, Suite 400, Destin, Florida, during this time. Legendary was also a wholly-owned subsidiary of Holding. Legendary was subject to the IRC and for federal income tax purposes, was a qualified subchapter S subsidiary of the s-corporation parent, Holding. Legendary Resorts, LLC (Resorts), is a limited liability company organized under the laws of Florida and was so organized during 2000-2003. Resorts, whose corporate address was also 4460 Legendary Drive, Suite 400, Destin, Florida, was administratively dissolved on September 16, 2005, for failure to file an annual report. Legendary entered into a cooperative business agreement (CBA) with certain subsidiaries of Holding prior to or during 1999-2003. The terms of the CBA between Legendary and these subsidiaries were identical other than the name of the "manager" subsidiary and the percentage of compensation paid to Legendary and the formula for sharing profits varied from time to time. Legendary also entered into a management agreement with certain other of Holding's subsidiaries, and the terms of these agreements were identical. FACTS RELATED TO PETITIONER HARRY T'S AUDIT Harry T's was a registered dealer who filed form DR- 15 (Sales Tax Return) with the Department for each month of Harry T's Audit Period. Harry T's used the cash basis of accounting during its Audit Period. The Department sent Harry T's a Notification of Intent to Audit Books and Records (Form DR-840) to conduct an audit of Harry T's books and records for this purpose. The Department and Harry T's entered into an Audit Agreement agreeing that a sampling method is the most effective, expedient, and adequate method in which to conduct an audit of Harry T's books and records. Gina Imm, a Department tax auditor, examined and sampled the available books and records of Harry T's to determine whether it properly collected and remitted sales and use tax in compliance with Chapter 212, Florida Statutes. Harry T's was the tenant party in a lease with Legendary for the property upon which Harry T's operated its business prior to January 1, 2000. Under the terms of the lease agreement between Harry T's and Legendary, Harry T's paid rent equal to eight percent of the gross sales to Legendary. On January 1, 2000, the lease was terminated. On January 1, 2000, Harry T's entered into a CBA with Legendary, which was effective throughout Harry T's Audit Period. Harry T's operated a business on property owned by Holdings during Harry T's Audit Period. Accounting entries were made each month during the Audit Period to record the amount of CBA compensation that was accrued by Harry T's to Legendary under the CBA. However, no rent was recorded on the income tax or accounting books of either Harry T's or Legendary during the Audit Period. Further, no amount of money labeled as CBA compensation was transferred from Harry T's to Legendary during Harry T's Audit Period and no payments labeled as "rent" were transferred from Harry T's to Legendary. Based upon the business decisions of the Chief Financial Officer of Legendary, cash was transferred periodically from Harry T's to Legendary during the Audit Period. Based upon the business decisions of the Chief Financial Officer of Legendary, cash was also transferred from Legendary to Harry T's. During Harry T's Audit Period cash was also transferred from Legendary to Holdings. These amounts were reflected as dividend distributions and varied in amount and time from (a) Holdings insurance and mortgage indebtedness obligations associated with the property used by Harry Ts and owned by Holding, and (b) the amounts accrued under the CBA's. Any amounts collected by Harry T's and not paid directly to third parties were distributed periodically to Holdings as corporate dividends. The Department determined that the transfers of cash from Harry T's to Legendary reflected rental consideration paid as CBA compensation, and directed the Department's auditor to assess sales tax against the amounts recorded as CBA compensation accounting entries. Harry T's paid ad valorem taxes due on the property on which Harry T's operated during each year of Harry T's Audit Period. The Department auditor assessed sales tax on the amounts of ad valorem taxes paid by Harry T's on behalf of Holding. The Department determined that Harry T's owed $58,844.02 in additional sales tax for the CBA compensation and ad valorem taxes paid, plus statutory interest and penalties. On September 5, 2003, the Department issued to Harry T's a Notice of Intent to Make Audit Changes (form DR- 1215) for Audit No. A0233016246, stating that Harry T's owed $69,249.79 in taxes, $29,422.03 in penalties, and $6,612.44 in interest for a total of $94,330.64, and that interest continued to accrue on the unpaid assessment. By letter dated October 9, 2003, Harry T's agreed to the portions of the assessment related to food and beverage, but objected to the assessment for all other amounts including the CBA fees. Harry T's paid $10,953.62 for the uncontested assessment amounts. The Department issued its Notice of Proposed Assessment (NOPA) for audit number A0233016246 on January 27, 2004. The NOPA stated that the total owed by Harry T's was $69,249.79 in taxes, $29,422.03 in penalties, and $11,831.88 for a total of $110,501.72. The NOPA reflected a payment of $10,953.62 paid for the uncontested amounts of the audit assessment, and showed a balance due of $99,548.10 as of the date of the NOPA. The Department received Harry T's formal written protest on April 23, 2004. FACTS RELATED TO RESTAURANT'S AUDIT Petitioner Restaurant was a registered dealer who filed form DR-15 (Sales and Use Tax Return) with the Department for each month of the Restaurant Audit Period. Restaurant used the cash basis of accounting. The Department sent Restaurant a Notification of Intent to Audit Books and Records (Form DR-840) to conduct an audit of Restaurant's books and records for the purposes of Chapter 212, Florida Statutes. The Department and Restaurant entered into an Audit Agreement stipulating that a sampling method is the most effective, expedient, and adequate method by which to conduct an audit of Restaurant's books and records. Gina Imm examined and sampled the available books and records of Restaurant to determine whether Restaurant properly collected and remitted sales and use tax in compliance with Chapter 212, Florida Statutes. Restaurant was the tenant party in leases for the property upon which Restaurant operated its business prior to January 1, 2000. On January 1, 2000, Restaurant terminated its leases for these properties. Restaurant entered a CBA with Legendary prior to the beginning of Restaurant's Audit Period, December 1, 1999 through March 31, 2003. The CBA between Restaurant and Legendary was effective throughout the Restaurant Audit Period. Restaurant operated the "Crystal Beach Coffee Company" and "Tony's By the Sea" on property owned by Floridian Homes of Crystal Beach, Inc. (FHCB), an unrelated third party, during the Restaurant Audit Period. Restaurant operated "Blues" on property owned by an individual, Mr. Peter H. Bos, during the Restaurant Audit Period. 37. Restaurant operated "Rutherford's 465" on property owned by Regatta Bay Investor, Ltd., a Florida limited partnership, during the Restaurant Audit Period. Accounting entries were made each month during the Restaurant Audit Period to record the amount of CBA compensation that was accrued by Restaurant to Legendary under the CBA; however, no rent was recorded on the income tax or accounting books of either Restaurant or Legendary during the Restaurant Audit Period. No amount of money labeled as CBA compensation was transferred from Restaurant to Legendary and no payments labeled as "rent" were transferred from Restaurant to Legendary. Based upon the business decisions of the Chief Financial Officer of Legendary, cash was transferred periodically from Restaurant to Legendary, and cash was also transferred from Legendary to Restaurant during the Restaurant Audit Period. Any amounts collected by Restaurant during the Restaurant Audit Period and not paid directly to third parties were distributed periodically to Holdings as corporate dividends. The Department determined that the transfers of cash from Restaurant to Legendary reflected rental consideration paid as CBA compensation, and directed the Department's auditor to assess sales tax against the amounts recorded as CBA compensation accounting entries. Restaurant paid ad valorem taxes due on the property on which Restaurant operated during each year of the Restaurant Audit period. The Department assessed sales tax on the amounts of ad valorem taxes paid by Restaurant on behalf of Holding. The Department determined that Restaurant owed $17,880.71 in additional sales tax for the CBA compensation and ad valorem taxes paid, plus statutory interest and penalties. On September 5, 2003, the Department issued the Restaurant a Notice of Intent to Make Audit Changes (Form DR- 1215) for audit number A0231102584, stating that Restaurant owed $26,092.10 in taxes, $8,940.31 in penalties, and $1.808.87 in interest for a total of $36,841.28. The Department noted Restaurant's payment of $8,745.53 for the portions of the assessment related to food and beverage sales, leaving a balance due as of that date of $28,095.75. The Department informed Petitioner Restaurant that interest continued to accrue on the unpaid assessment. The Department issued its NOPA for audit number A0231102584 on March 17, 2004, to Restaurant. The total owed by Restaurant as stated in the NOPA was $26,092.10 in taxes, $8,940.34 in penalties, and $3,378.99 in interest for a total of $38,411.43, less the $8,745.53 already paid, for a total balance due on that date of $29,665.90. Restaurant protested the NOPA, and the Department referred the matter to the Department's Technical Assistance and Dispute Resolution Section. On March 28, 2005, the Department issued its Notice of Decision upholding the assessment of tax for the CBA fees and ad valorem taxes paid by Restaurant, and on April 6, 2005, the Department received the Restaurant's formal written protest. FACTS RELATED TO BEACHSIDE'S AUDIT Petitioner Beachside Inn Destin, Inc. (Beachside) was a registered dealer who filed form DR-15 (Sales and Use Tax Return) with the Department for each month during the Beachside Audit period, May 1, 2000, through May 31, 2003. Beachside used the cash basis of accounting during the Beachside Audit Period. Beachside and the Department entered into an Audit Agreement stipulating that a sampling method is the most effective, expedient, and adequate method by which to conduct an audit of Beachside's books and records. Gina Imm, a Tax Auditor for the Department, examined and sampled the available books and records of Beachside to determine whether Beachside properly collected and remitted sales and use tax during the Audit Period in compliance with the requirements of Chapter 212, Florida Statutes. Legendary Resorts, LLC (Resorts) entered into an Asset Purchase Agreement with FHCB and Lester J. Butler, Timothy Fulmer and Mitt Fulmer, three of Resorts' shareholders (the Shareholders), in April 2000, for the acquisition of the Beachside Inn assets by Resorts. Subsequent to the execution of the Asset Purchase Agreement, the parties discovered that a condition precedent to the agreement, i.e., the assumption by Resorts of the major indebtedness of FHCB could not be accomplished as contemplated because it would cause the existing lender to violate its loan consideration limits with respect to the Legendary Group. After discovering this problem, Resorts entered into a Triple-net Lease dated March 1, 2000, with the Shareholders for a beachfront lot and entered into a Triple-net Lease dated March 1, 2000, with FHCB for the Beachside Inn assets that were originally the subject of the Asset Purchase Agreement. These Triple-net Leases were designed to transfer control, and the benefits and burdens of ownership, of the Beachside Inn assets to Resorts pending resolution of the financing contingency and the closing under the Asset Purchase Agreement. Beachside entered into a CBA with Legendary prior to the beginning of the Beachside Audit Period, which was effective throughout the Beachside Audit Period. Although Resorts was the party entitled to all rights, and subject to all obligations, under the Triple-net Leases and Asset Purchase Agreement, the financial accounting and cash management functions and activities during the terms of the Leases were handled by and recorded in Beachside because these leases were designed to permit the Legendary Group to take over the operations of the Beachside Inn assets pending closing and because the Legendary Group intended to place the assets in Beachside under the Asset Purchase Agreement upon the closing of the asset purchase. Resorts and Beachside operated the Beachside Inn assets on property owned by FHCB and the Shareholders during the Beachside Audit Period. Accounting entries were made each month to record the amount of CBA compensation that was accrued by Beachside to Legendary under the CBA but no rent was recorded on the income tax or accounting books of either Beachside or Legendary during the Beachside Audit Period. No money labeled as CBA compensation was transferred from Beachside or Resorts to Legendary and no payments labeled as "rent" were transferred from Beachside or Resorts to Legendary. Based on the business decisions of the Chief Financial Officer of Legendary, cash was transferred periodically from Resorts and/or Beachside to Legendary and from Legendary to Resorts and/or Beachside during the Beachside Audit Period. After Resorts and Beachside operated the Beachside Inn assets for a period of time at a material loss, Resorts was not able to arrange for suitable substitute financing to close on the purchase of the Beachside Inn assets under the Asset Purchase Agreement. Resorts, FHCB and the Shareholders reached an agreement on or about August 15, 2003 (the Termination Date), whereby Resorts terminated its rights under the Asset Purchase Agreement and the two leases. In exchange, the Shareholders transferred ownership of the beachfront lot to Resorts. Federal income tax returns for calendar years 2000, 2001, and 2002 were filed by Resorts which reflected the results of operating the Beachside Inn assets. Following the Termination Date, all of the historic accounting entries made by Beachside reflecting the operation of the Beachside Inn assets were moved from its books and records to the books and records of Resorts for administrative reasons and consistency with the legal documents. Beachside and Resorts made insurance payments on behalf of the owners of the property upon which Resorts operated its business for each year of the Beachside Audit Period. They also made payments for loans on behalf of the owners of the property and paid ad valorem taxes due on the property upon which Resorts operated for each year of the Beachside Audit Period. The Department assessed Beachside sales tax on the amounts of ad valorem taxes, insurance payments and loan payments paid by Beachside on behalf of FHCB and the Shareholders. On October 27, 2003, the Department issued Beachside a Notice of Intent to Make Audit Changes (form DR- 1215) for audit number A030582778, stating that Beachside owed $69,436.01 in taxes, $30,606.77, and $7,635.33 for a total of $107,678.11. The Department noted Beachside's payment of $8,936.01 for the portions of the assessment related to sales of good and beverage, and reflected a balance due after payment of $98,742.10, with interest continuing to accrue.2/ Beachside made an additional payment of $8,936.01 toward the balance due on the uncontested amount of the assessment. On February 19, 2004, the Department issued its Notice of Proposed Assessment for audit number A030582778, stating that the total amount owed by Beachside was $69,436.01 in taxes, $30,606.77 in penalties and $8,917.55 in interest for a total of $108,960.33, less $17,872.02 previously paid by Beachside, for a balance as of that date of $91,088.31. On April 16, 2004, Beachside protested the NOPA, and the Department referred the matter to the Department's Technical Assistance and Dispute Resolution Section. On March 28, 2005, the Department issued its Notice of Decision upholding the assessment of tax for the payment of ad valorem taxes, insurance and loans by Beachside on behalf of Holding. On April 6, 2005, the Department received the Beachside's formal written protest of audit number A030582778. ADDITIONAL FACTS In addition to the Stipulated Facts submitted by the parties, the undersigned makes the following findings based upon the stipulated exhibits submitted. With respect to the CBAs, the documents provided "the Co-Operator and Manager have agreed to enter into this Agreement for each to provide certain assets to the Business and for Manager to provide, on a cost effective basis, Management Services as required from time to time by the Business." The Agreements state that "each have various assets including fixtures, employees, contractual relationships, knowhow and real estate which they wish to combine to operate a restaurant and bar (the Business)." The CBAs do not name a physical location and do not have provisions for care and repair of the premises; for rights of access and inspection; for eminent domain or condemnation; for default; for provision of utilities or for subletting, all provisions typically seen in a commercial lease. By contrast, the Triple-Net Lease for the Beachside Inn Assets (Stipulated Exhibit 10) contains all of these provisions. The CBAs provide for payment of management services, expenses of the business, and all services and assets necessary for the operations of the business. They are clearly not limited to provision of a location. With respect to the Beachside Assets, the Triple-Net Lease (the Beachside lease) was entered after the Asset Purchase Agreement and expressly acknowledges the existence of that document. However, the Beachside lease by its terms does not provide a right of purchase at a nominal sum at the end of the lease. It provides options to extend the term of the three-year lease for five additional terms of three years each, governed by the same terms and provisions. It also provides a right to purchase the premises at any time during the term of the lease and up to six months after any extensions of the lease which shall be exercised by affecting a closing under the Asset Purchase Agreement. The Beachside Lease for the Beachside Inn assets has other provisions that are relevant to these proceedings. For example, the Beachside Inn lease defines the term "rent" as including the base rent ($100 per month) plus any state sales tax imposed "upon any and all rents or other payments provided in this lease." It provides for surrender of the premises at the expiration of the lease, including terms for removal of any trade fixtures, personal property and signs. Most importantly, the Beachside Inn lease expressly states the following: 26. a. The Lease does not create the relationship of principal and agent or of partnership or of joint venture or of any association between Landlord and Tenant, the sole relationship between the parties hereto being that of Landlord and Tenant. * * * c. This Lease and the Exhibits, if any, attached hereto and forming a part hereof, constitute the entire agreement between Landlord and Tenant affecting the Premises and there are no other agreements, either oral or written, between them other than are herein set forth. . . .
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That the Department of Revenue enter a final order finding that: The Department's assessment for additional sales tax, penalties and interest against Petitioner Harry T's is sustained for the portion attributable to payment of ad valorem taxes only; The Department's assessment for additional sales tax, penalties and interest against Petitioner Legendary Restaurant Associates, Inc., is sustained for the portion attributable to payment of ad valorem taxes only; and The Department's assessment for additional sales tax penalties and interest against Petitioner Beachside Inn, Inc., be sustained in its entirety. DONE AND ENTERED this 27th day of July, 2006, in Tallahassee, Leon County, Florida. S ___________________________________ LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 2006.
The Issue Whether the license of Respondents should be revoked or suspended or other discipline imposed.
Findings Of Fact Upon consideration of the evidence received, the testimony elicited at the hearing, argument of counsel and memoranda submitted by the parties, I find: Respondent, Florida Coast Realty, Inc., was issued License Number 0168325 as a registered real estate broker corporation. Respondent Steven R. Myer, holds license number 0110787 as a registered real estate broker. Respondent Myer is an Active Firm Member for Respondent, Florida Coast Realty, Inc. In general, the contention of the Petitioner Commission is that the Respondents failed to pay an employee, Sam Blumner, a real estate commission due him on two occasions contrary to certain provisions in Chapter 475, Florida Statutes. The contentions of the Respondents are that the dispute was contractual and not within the jurisdiction of the Petitioner, that they tried to avoid an information being filed against them, and that the alleged offense's are insufficient to justify suspension or revocation. On November 1, 1976, Florida Coast Realty, Inc., by Steven R. Myer, entered into a contract agreement with Sam Blumner whereby Mr. Blumner was to receive a fee earned as a result of service performed by Mr. Blumner as a real estate salesman with Florida Coast Realty, Inc. Subsequently, on January 13, 1977, Sam Blumner was terminated as a salesman with Florida Coast Realty, Inc., and a notice of registrant change was nailed by the corporation to the Pompano Beach-Deerfield Beach Board of Realtors and received by the Board on January 18, 1977. A transaction pertinent to subject hearing was entered into on or about November 11, 1976 in which Walter Ross and Sam Blumner were the "listing" salesmen for property owned by Frank S. Holsclaw and Florence Holsclaw. It was ultimately purchased by Dennis F. and Dione Dicataldo, but subsequent to the termination of the employment of Blumner by Respondents. Mr. Blumner made a claim for $297.00 which represented one-half the listing, or twelve and one-half percent of the office profit. He testified that he was listed on the office "log" as co-lister. Nothing was paid to Mr. Blumner although Mr. Walter Ross, a broker formerly associated with Respondent Florida Coast Realty, Inc. and the co-lister was paid twelve and one-half percent of the office profit. Mr. Ross estimated that he received between $250.00 and $260.00 as "half" listing commission. Mr. Blumner's name did not appear on the listing contract in the transaction because he had not yet been listed as a member of the Board, and only the name of Walter Ross was listed as "salesperson". Mr. Ross testified that he and Sam Blumner were listed together on the transaction and that he himself received half of the listing commission. A registered realtor associate who worked for Respondent, Florida Coast Realty, Inc. at the time, Dorothy E. Reagan, testified that Walter Ross and Sam Blumner were the listing salesmen on the Holsclaw-Dicataldo transaction. The Respondents did not dispute the fact that Walter Ross was paid but one-half the listing commission although they pointed out his was the only name on the written contract. No evidence was entered by the Respondent showing that the remaining one-half of the listing commission was paid by Respondents to anyone. A second transaction pertinent to this hearing was entered into on December 31, 1977 with Mr. and Mrs. Haarar as sellers, and Mr. and Mrs. Grimes as buyers. The closing was several months later and after Mr. Blumner had left the employment of Florida Coast Realty, Inc. Mr. Blumner was the salesman who first showed the purchaser the home later purchased by Mr. and Mrs. Grimes, and was the "procuring cause" of the sale. He made an offer to the seller and counter offer of the seller to the buyer. He related to the Grimes the offer of $27,000, which was the final purchase price of the home and showed these purchasers other property for sale. Mr. Blumner was not paid a commission for the sale of the home. Both Mr. Ross and Mrs. Reagan testified that Mr. Blumner was the salesman on the transaction. Mr. Jerome T. Myer of the Respondent Florida Coast Realty, Inc., stated that Mr. Blumner should have been paid, but not the full commission inasmuch as he had not done the follow-up work involved after the initial procurement of a purchaser for the property. The Respondent, Steven R. Myer and his brother Jerome T. Myer did the follow-up work on the sale of the property in the Haarar-Grimes transaction. Mr. Blumner contends that he made demands for his money both as a co- lister and a salesman, but that no money was paid him. He testified that he would have foregone his commission as a co-lister in the amount of some $260.00 had he received a commission as salesman in the Haarar-Grimes transaction, a sum of some $567.00. Mr. Blumner testified that he endeavored to talk to the Respondent Steven R. Myer about the commission but was interrupted by Jerome Myer, and that he told the Respondents he would have to seek redress through the Petitioner, Florida Real Estate Commission, if he did not receive a commission. A letter was sent to the Petitioner by Respondent Myer on April 7, 1977 requesting information as to the jurisdiction of Petitioner relative to "a dispute with one of my former associates regarding commission money". The Commission acknowledged the correspondence and Respondent Myer was informed that the Commission had received a complaint against him alleging he had failed to account or deliver a commission to a salesman, and that it was being assigned for investigation. The Respondents made little or no effort to settle the dispute prior to the hearing.
Recommendation Suspend the license of the Respondents until the commission has been paid to Sam Blumner as co-lister in the Holsclaw-Dicataldo transaction and a settlement has been made in regard to the Haarar-Grimes transaction. DONE and ENTERED this 21st day of November, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings 101 Collins Building Mail: 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph A. Doherty, Esquire Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Steven L. Josias, Esquire P. 0. Box 23536 Fort Lauderdale, Florida 33308 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA FLORIDA REAL ESTATE COMMISSION FLORIDA REAL ESTATE COMMISSION, an agency of the State of Florida, Petitioner, vs. CASE NO. 78-812 Progress Docket No. 3321 FLORIDA COAST REALTY, INC., and Broward County STEVEN R. MYER, Respondents. /
The Issue Whether Respondent discriminated against Petitioner on the basis of physical disability.
Findings Of Fact On May 8, 1998, Brill, June Faris, Allen Watson, and Alice Corbett arrived at the Ocean View Villas, a motel in Deerfield Beach, Florida. Ms. Faris is Brill's daughter. Mr. Watson is a friend of Ms. Faris. Ms. Corbett is a paid caretaker for Brill, who had had a stroke and was confined to a wheelchair. Ocean view is owned and operated by Ramona and John Jakubaez. Brill and her party checked in without incident and paid for their stay in advance on Brill's VISA credit card. Mr. Jakubaez was aware that Brill was in a wheelchair when they checked into the motel. Brill used a portable toilet chair because her wheelchair would not fit through the bathroom door. She also wore disposable diapers as a precautionary measure. Ms. Corbett placed pads on the mattress and on the sitting chair in Brill's room in case of accidents. When Mr. Jakubaez and his wife cleaned Brill's room, they noticed the presence of the toilet chair and became worried that Brill might soil the room. Ms. Jakubaez stated: Well we saw Ms. Brill sitting in her wheelchair. She had diapers on and all kinds of pads around her and she seemed to be very disoriented. We couldn't communicate with her, but she was there and she had someone to take care of her. Around 11 o'clock on the morning of May 9, 1998, Brill and her party were having breakfast on the patio at the motel, when the water sprinklers came on. The sprinklers were scheduled to come on automatically for two hours beginning at 9 a.m. Because the sprinklers were wetting them, they left the patio area. Ms. Faris wheeled her mother out to the front of their rooms so that Brill could get some sun. Mr. Jakeubaez came by and asked whether it was a good idea for Brill to be sitting outside. Ms. Corbett went to do some laundry at the motel's laundry facilities which were available for the motel guests to use. While Ms. Corbett was doing the laundry, which included the pads that Brill used, Ms. Jakubaez came to the laundry area and told Ms. Corbett that she could not use the laundry facilities because the clothes stank. Other motel guests were using the laundry facilities at the same time as Ms. Corbett, and Ms. Jakubaez did not tell them they could not use the laundry equipment. Ms. Faris and Mr. Watson left Brill with Ms. Corbett and went to the beach. While Ms. Faris and Mr. Watson were away, Mr. Jakubaez came to Brill's room and told Ms. Corbett that he did not want Brill to soil his mattress and chair. Brill was sitting in the chair at the time. Ms. Corbett told Mr. Jakubaez that she had the chair padded and showed him the mattress with no urine stains. Ms. Corbett helped Brill out of the chair into her wheelchair and showed Mr. Jakubaez the chair, which was undamaged. Brill began to cry at this point. Mr. Jakubaez told Ms. Corbett to tell Ms. Faris that she had to pay an additional $100 if they continued to stay at the motel. After Mr. Jakubaez left the room, Brill continued to cry until she fell asleep. When Ms. Faris returned from the beach, Ms. Corbett relayed what Mr. Jakubaez had said about an additional $100 payment. Ms. Faris and Mr. Watson went to the motel office to speak to Mr. Jakubaez. When Ms. Faris confronted Mr. Jakubaez, he indicated that he wanted her to pay an additional $300 as a damage deposit should Brill damage the room with her incontinence. Ms. Faris explained that her mother was not incontinent. Mr. Jakubaez further told Ms. Faris that Brill belonged in a nursing home and should not be on a vacation. Mr. Jakubaez told her that he did not know why they had a person like Brill staying in a hotel. When Mr. Jakuabez told Ms. Faris that they would have to leave if she did not pay the $300, Ms. Faris asked who would determine if she got the $300 back. Mr. Jakubaez replied that he would get a third party to inspect the room after they vacated it. Ms. Faris would not agree to pay the additional $300 and called the police. The police declined to become involved because it appeared to be a civil matter. Brill and her party left Ocean View in late afternoon of May 9, 1998, and went to the Suez Motel in Miami Beach, Florida, where they checked in and stayed through May 12, 1998. The cost of the rooms at the Suez Motel totaled $426.63. When Brill left Ocean View, there was no damage to the carpet, mattress, or chair because of incontinence. Ms. Faris bought groceries for their use during their stay at Ocean View. Because of the groceries, she was unable to get the wheelchair in the car when they left Ocean View. The wheelchair was placed on the top of the car, and the movement of the wheelchair during the trip to the Suez Motel damaged the top of the car. No evidence was presented as to the amount of the damage.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Ocean View Villas discriminated against Isabell C. Brill based on her physical disability and awarding her $1,426.63 in damages. DONE AND ENTERED this 22nd day of November, 2000, in Tallahassee, Leon County, Florida. Susan B. Kirkland Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of November, 2000. COPIES FURNISHED: June B. Faris c/o Isabel C. Brill 11017 Howland Drive Reston, Virginia 20191 Mark M. Heinish, Esquire Ritter, Chusid, Bivona & Cohen, LLP 7000 West Palmetto Park Road Boca Raton, Florida 33433 Dana A. Baird, General Counsel Florida Commission on Human Relations 325 John Knox Road, Building F Suite 240 Tallahassee, Florida 32303-4149 Sharon Moultry, Agency Clerk Florida Commission on Human Relations 325 John Knox Road, Building F Tallahassee, Florida 32303-4149
