Findings Of Fact Based upon the oral argument of the parties and the evidence adduced at the hearing, as well as the pleadings, the following pertinent facts are found: On June 30, 1973, an agreement for purchase and sale was executed between Bayshore 21, Inc., as purchaser, and Arthree, Inc., as seller, for the purchase and sale of real estate commonly known as the Carriage House. This agreement was executed by Bayshore 21, Inc. in its corporate name, and not as a trustee or other representative capacity. The provisions of this agreement were individually guaranteed by Marvin Glick, the president and sole stockholder of Bayshore 21, Inc. The purchase and sale agreement discloses that the total purchase price of the property is $19,500,000, payable by taking subject to a first mortgage held by the Prudential Insurance Company with the remainder, subject to certain prorations, to be paid in cash. An earnest money deposit in the amount of $500,000.00 was placed in escrow by Bayshore at the time of execution of the purchase and sale agreement. Bayshore 21, Inc. represented and warranted in said agreement that it was a corporation duly organized and in good standing with full capacity to make and execute the agreement and to consummate the transaction embodied therein. Further, Bayshore warranted that there was no provision in its charter or bylaws, nor was it a party to any agreement, which would limit or prevent its consummation of the agreement. Also, Bayshore reserved the right to assign it's interests to any other party upon the assignee's assumptions of Bayshore's obligations or to direct Arthree, Inc. that the deed or other closing instruments would run in favor of a designated grantee other than Bayshore. Pursuant to the agreement for purchase and sale described above, Arthree, Inc. conveyed the Carriage House to Bayshore 21, Inc. by warranty deed dated August 17, 1973. There was evidence that the transaction was not closed until August 23, 1973. Bayshore 21, Inc. took title in its own corporate name, and not as a trustee or in a representative capacity. Proper documentary stamps were attached to this document. On either August 22 or 23, 1973, Bayshore 21, Inc. executed a $1,300,000.00 note and mortgage to Commercial Trading Company, Inc. and a $5,000,000.00 note and mortgage to Security Mortgage Investors. These notes and mortgages were in the corporate name of Bayshore 21, Inc. but were guaranteed by the petitioner and Marvin Glick. These guarantees contain language that the mortgagee may proceed directly against the guarantors in the event of default. There was evidence that utilization of Bayshore 21, Inc. to effectuate the loans from Commercial Trading Company and Security Mortgage Investors was required by said mortgagees because of the fact that the then prevailing interest rate levels were in excess of the noncorporate statutory interest limit. On August 23, 1973, a joint venture agreement was entered into between petitioner and Marvin Glick. This joint venture agreement provided that "The parties acknowledge that BAYSHORE 21, INC. has taken title to certain property as trustee for ZUCKERMAN-VERNON CORP. and MARVIN GLICK and, upon completion of the financing arrangements, will convey the property to ZUCKERMAN-VERNON CORP. and MARVIN GLICK, a fifty (50 percent) percent interest being conveyed to each party. The property that is the subject of this joint venture is the CARRIAGE HOUSE, located at 54th Street and Collins Avenue, Miami Beach, Florida, each party to this agreement having a fifty (50 percent) percent interest in said property." On August 27, 1973, title to the Carriage House was conveyed by quitclaim deed from Bayshore 21, Inc. to Marvin Glick and petitioner, each to have an undivided fifty percent interest. Minimal stamps were affixed to this document, which bore the notation "No documentary stamps are required on this Deed inasmuch as the Grantor took title solely as Trustee for the Grantees herein." Thereafter, the respondent Department of Revenue assessed the parties to this August 27, 1973 deed for the documentary stamp taxes due, based upon the $18,550,000.00 existing mortgages on the property at the time of the conveyance ($12,250,000.00 to Prudential, $5,000,000.00 to Commercial Trading Company and $5,000,000.00 to Security Mortgage Investors). The delinquent documentary stamp taxes were assessed in the amount of $55,649.70, and a penalty was assessed in a like amount, making the total amount due $111,299.40.
Recommendation Based upon the above findings of fact and conclusions of law, it is recommended that petitioner be assessed the taxes and penalties set forth In the proposed Notice of Assessment of Tax and Penalty under Chapter 201, Florida Statutes, dated April 23, 1975. Respectfully submitted and entered this 30th day of January, 1976, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. Ed Straughn Executive Director Department of Revenue Room 102, Carlton Building Tallahassee, Florida 32304 Paul R. Lipton, Esquire 17071 West Dixie Highway North Miami Beach, Florida Harold F.X. Purnell, Esquire Assistant Attorney General The Capitol Tallahassee, Florida
The Issue There are two issues raised in this case: Whether the transaction evidenced by the written instrument is taxable-under provisions of Sections 201.08, F.S., 201.01 and 201.08(1), F.S.; and Whether the amendment to the note and mortgage involved in this case is a promissory note taxable pursuant to Section 201.08(1), F.S.
Findings Of Fact There are two issues raised in this case: Whether the written document which evidences the transaction is taxable under the provisions of Sections 201.01 and 201.08(1), F.S.; and Whether the amendment to the note and mortgage involved in this case is a promissory mote or written obligation to pay money and taxable pursuant to Section 201.08(1), F.S. The facts are that on February 28, 1974, the Petitioners, except for Joe R. Hughes, III, and W. Comer Cherry, executed a promissory mote to Lewis State Bank for $405,000 with interest at 10 percent per annum, payable monthly, beginning March 1, 1974, with the entire amount of the principle ($405,000) due on or before February 28, 1975. Said Petitioners executed a mortgage to Lewis State Bank as security for said loan. On April 8, 1975, the due date of the principle was extended to August 28, 1975. The Lewis State Bank then assigned the note and mortgage to Thomas County Federal on July 7, 1975. On July 2 and July 7, 1975, the Petitioners including Hughes and Cherry, but not Rainey, signed the instrument in Tallahassee, Florida, upon which the tax being challenged is assessed. Rainey took the instrument which appears on its face to be an Amendment to the aforementioned Note and Mortgage dated February 28, 1974, to Thomas County Federal Savings and Loan, Thomas County, Georgia. The Amended Note and Mortgage was signed by Rainey and accepted by Thomas County Federal as assignee of said original note and mortgage in Thomas County, Georgia, on July 7, 1975. The other obligors who were jointly and severally liable had signed in Florida. See R-16-21. The purpose of the amendment to the note and mortgage was to refinance the Jefferson Towers Apartments project located in Tallahassee, Florida. See R-14. Thereafter, the money was tendered under the Amendment to Note and. Mortgage, in Georgia, by Thomas County Federal to the agent of the borrowers [Petitioners] Rainey. R-14. The Petitioners, on July 8, 1975, in Leon County, recorded the amendment to note and mortgage, the only instrument reflecting the new outstanding obligation of $412,000 and the only instrument setting forth the Petitioner's promise to pay this new obligation in O. R. Book 724, page 24, et. seq. The Petitioners affixed documentary stamp taxes in the amount of $10.50 on the amendment to the note and mortgage. (See R-21) Whether the instrument entered into between the Petitioners and Thomas County Federal is considered a new obligation or an amendment of the assigned note and mortgage, the essential factors are that the execution and delivery of the instrument, and exchange of the funds therefor occurred in Georgia. Based on the foregoing facts, the Department of Revenue finds as a matter of law that: To be taxed there must be a Florida transaction evidenced by a promissory note or written obligation to pay money. Sec. 201.08(1), F.S. The Amendment to Note and Mortgage involved in this case was made, signed and executed, in the State of Florida, save one signature of the multiple obligors, who were jointly and severally liable and the loan was used in Florida to refinance a Florida project which had been originally financed in Florida. The Amendment to Note and Mortgage, the only instrument reflecting the outstanding obligation of $412,000 and evidencing the Petitioners' promise to pay this new obligation, was recorded in Leon County, Florida, and has all essential factors of a Florida transaction percent thus subject to documentary stamp tax provided for in Sections 201.01 and 201.08(1), F.S. The Amendment to Note and Mortgage clearly evidences a transaction between the Petitioners and Thomas County Federal pursuant to which the Petitioners are obligated to pay suns of money to Thomas County Federal. Such a written obligation to pay money may be exempt if it meets the criteria of Sec. 201.09, F.S. The document in question does not meet the criteria of Sec. 201.09, F.S., because it did not extend or continue only the identical contractual obligations of the original promissory note but there was a substantial change in the principle amount. No documentary stamps have been affixed to the document which was recorded nor is there any notation on the document that said stamps were placed on any other document, except affixing of documentary stamps in the amount of $10.50; therefore, the document in question is subject to tax under Sec. 201.08(1), F.S., in the amount of $607.50 plus penalty at $607.50. Section 201.08(1) and Section 201.17(2), F.S. Regarding the issue of whether the document would have been taxable as an amendment to the original note and mortgage, the Department concurs with the findings of the Hearing Officer that the document does evidence a transaction in which the taxpayer would have been obligated to pay money to the lending institution. Because the principal amount was increased from $406,000 to $412,000 there was a substantial change in principal amount. Therefore, the exemption provision of Section 201.09, F.S., would not apply.
Conclusions The assessment of the Department of Revenue in the amount of $607.50 under Section 201.08(1), F.S., for delinquent documentary stamp taxes on the amendment to Note and Mortgage and the assessment for penalty under Section 201.17(2), F.S., in the amount of $607.50 are valid. CERTIFICATION I certify that the foregoing is the Final Order of the Department of Revenue adopted by the Governor and Cabinet on July 20, 1976. J. Ed Straughn, Executive Director State of Florida Department of Revenue Room 102, Carlton Building Tallahassee, Florida 32304 Dated this 21st day of July, 1976
Recommendation The Hearing Officer recommends based on the foregoing findings fact and conclusions of law, than neither the tax or penalty be assessed. Done and ordered this 10th day of May, 1976, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph C. Mellichamp, III, Esquire Assistant Attorney General Attorney for Respondent Department of Legal Affairs The Capitol Tallahassee, Florida 32304 Edgar M. Moore, Esquire Attorney for Petitioner Smith and Moore, P.A. P.O. Box 1169 Tallahassee, Florida 32302 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF REVENUE I. RAINEY, JR., et al., Mortgagors; THOMAS COUNTY FEDERAL, Thomasville, Georgia, Mortgagee, Petitioners, vs. CASE NO. 75-1899 DEPARTMENT OF REVENUE, Respondent. /
Recommendation Based on the foregoing findings of fact and conclusions of law the Hearing Officer recommends that the office of the Comptroller and the Department of Revenue honor the claims for refund of the documentary stamp taxes in the amount of $1,027.50 and the surtax stamp taxes in the amount of $376.75, refunding these amounts to the Petitioner. DONE AND ORDERED this 12th day of September, 1978 in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Maxie Broome Assist Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 G. Kristin Delano, Esquire Post Office Box 180 St. Petersburg, Florida 33731
Findings Of Fact The parties stipulated to the facts-of the case as follows: On March 2, 1972, the petitioners, Fred W. Baggett and John S. Miller, Jr., along with one Michael W. Duggar, incorporated a Florida corporation known as Tallahassee Properties , Inc. and filed Articles of Incorporation with the Secretary of State, State of Florida. On June 29, 1972, the above described corporation took title to the property described as follows: All that part of Lot Number 176 in the Original Plan of the City of Tallahassee, in the County of Leon, State of Florida, described as follows: to-wit: Begin at the Northwest corner of said lot and run thence East along the South line of College Avenue (formerly Clinton Street) 39 feet to the wall of a brick building, thence run South along the side of said building 60 feet, thence run West 39 feet to the East line of Adams Street, thence run North along the East line of Adams Street 60 feet to the Northwest corner of said Lot 176, being the point of beginning; from LeRoy Collins and Mary Call Collins, said deed being recorded in Official Records Book 532, Page 327 of the Public Records of Leon County, Florida. On that same date, Tallahassee Properties, Inc. executed a note and mortgage in the amount of $55,000 to Leon Federal Savings and Loan Association, said mortgage being recorded in Official Records Book 532, Page 328 of the Public Records of Leon County, Florida. The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Michael W. Duggar. On June 29, 1972, Tallahassee Properties, Inc. executed a note in the original principal amount of $72,405.84 to LeRoy Collins and Mary Call Collins secured by a second mortgage on the property and as recorded in Official Records Book 532, Page 376 of the Public Records of Leon County, Florida, The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Michael W. Duggar. On September 8, 1972, an agreement was entered into between Michael W. Duggar and Ronald C. LaFace of Tallahassee, Florida, wherein the said Michael W. - Duggar conveyed his interest in Tallahassee Properties, Inc. to Ronald C. LaFace and the said Ronald C. LaFace agreed therein to hold Michael W. Duggar harmless and relieve him of liability and indemnifying him for any liabilities which Michael W. Duggar may or could have as a result of his interest in Tallahassee Properties, Inc. This is the reason that the said Ronald C. LaFace is the proper party petitioner in this action. On April 18, 1973, Tallahassee Properties, Inc. executed an additional note to Leon Federal Savings and Loan Association in the amount of $17,500 which said note was also secured by that certain mortgage dated June 29, 1972 and recorded June 29, 1972 in Official Records Book 532, Page 328 of the Public Records of Leon County, Florida. The said note was personally endorsed by John S. Miller, Jr., Fredric W. Baggett and Ronald C. LaFace. On April 23, 1973 by an instrument recorded in Official Records Book 584, Page 94 of the Public Records of Leon County, Florida, Tallahassee Properties, Inc. conveyed an equal one-third interest in the subject property to John S. Miller, Jr., Fred W. Baggett and 5 Ronald C. LaFace. Affixed to the said deed were documentary surtax stamps in the amount of 55 cents and State of Florida documentary stamp tax in the amount of 30 cents. By letter dated September 24, 1975, the respondent, State of Florida, Department of Revenue, informed the petitioners that they had failed to pay an additional documentary stamp tax in the amount of $434.70 due on that certain warranty deed described above as having been recorded on April 23, 1973 in the Public Records of Leon County, Florida. This proceeding was initiated by petitioners after having received said letter from the respondent for a determination that the assessment was improper in that the subject conveyance was not a taxable event. Respondent has asserted that a tax of $434.70 is due and owing from the petitioners. In addition, they have assessed an additional 100 percent penalty for a total claim of $869.40 exclusive of interest or other penalties. The assessment was determined by the Department of Revenue on the basis of adding the original principal balance of the three above described notes secured by mortgages. The original principal amount of the notes was $144,905.84. By the application of the tax imposed by Section 201.02, Florida Statutes, if the petitioners have any liability for payment of the documentary stamp tax, then the determination of $434.70 as an assessment is a correct figure. Petitioners' exhibits 1 through 4, respondent's exhibit 1 and 2, and posthearing briefs of counsel are appended to the record.
Recommendation That petitioners be, found not liable for the proposed assessment of documentary stamp tax and penalty under Chapter 201, Florida Statutes. Done and Entered this 10th day of August, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Edwin J. Stacker, Esquire Department of Legal Affairs the Capitol Tallahassee, Florida 32304 Daniel J. Wiser, Esquire Post Office Box 1752 Tallahassee, Florida 32302
The Issue The issue in this proceeding is whether the Petitioners are entitled to refund of documentary stamp taxes paid pursuant to Sections 201.01 and 201.08 Florida Statutes.
Findings Of Fact Both Petitioners are limited partnerships validly existing and in good standing under the laws of the State of Florida. (Petitioner's exhibits No. 1 and No. 5.) Sugar Creek Business Center Phase I, Ltd. ("Sugar Creek") As to this Petitioner, the parties have further stipulated: On or about March 27, 1986, Petitioner and First Union National Bank, a national banking association, with its principal office located in Charlotte, North Carolina (the "Lender"), entered into a certain Construction Loan Agreement (the "Loan Agreement"). Pursuant to the Loan Agreement, Lender agreed to make and Petitioner agreed to accept a loan in the amount of $6,300,000.00 (the "Loan") to be used solely for the purpose of paying for the cost of developing and constructing a commercial building in Charlotte, Mecklenberg County, North Carolina. The Lender retained the law firm of Fowler, White, Gillen, Boggs, Villareal & Banker, P. A., Post Office Box 1438, 501 E Kennedy Boulevard, Suite 1700, Tampa, Florida 33602, as its Florida counsel in connection with closing the Loan. Petitioner retained the law firm of Peirsol, Boroughs, Grimm, Bennett & Griffin, Professional Association, Post Office Box 3309, Orlando, Florida 32802, as its counsel in connection with closing the Loan. On or about March 27, 1986, the General Partners of Petitioner executed a promissory note in the amount of $6,300,000.00 payable to Lender (the "Note"), a Deed of Trust and Security Agreement securing the Note in favor of Gibson L. Smith, Jr. Trustee, and First Union National Bank, Beneficiary (the "Mortgage"), and all other loan closing documents pursuant to the Loan Agreement. The Mortgage encumbers only land and the improvements thereon located in Charlotte, Mecklenberg County, North Carolina and was filed in the Public Records of Mecklenburg County, North Carolina on March 27, 1986, subsequent to closing upon the Loan Agreement. The proceeds of the Loan evidenced by the Note and secured by the Mortgage were used solely to develop and construct a commercial building upon the land encumbered by the Mortgage in Charlotte, Mecklenburg County, North Carolina. Florida documentary stamps were purchased from the area office of the Department of Revenue located in Tampa, Florida on May 1, 1986 and affixed to the Note to evidence payment of Florida documentary stamp tax with respect to the Note in the amount of $9,450.00 pursuant to Sections 201.00 and 201.08, Florida Statutes. (Petitioner's Exhibit No. 1) John Simpson, Jr., Esquire of Peirsol, Boroughs, Grimm, Bennett and Griffin, P. A. represented Sugar Creek in the purchase of property and the acquisition and closing of construction financing for improvements. The loan documents were mailed to him. He gave them to his client in Orlando, who signed and delivered them back to him in escrow. Simpson took the documents to Charlotte, North Carolina, for the closing on or around March 27, 1986. The purchase of property and loan closed simultaneously and the funds were disbursed in Charlotte. (Testimony of John Simpson, Jr., Esquire) One Dezavala Center, Ltd. As to this Petitioner, the parties have stipulated: On or about July 30, 1985, Petitioner and the First National Bank of Chicago, a national banking association, with its principal office located in Chicago, Illinois (the "Lender"), entered into a certain Construction Loan Agreement (the "Loan Agreement"). Pursuant to the Loan Agreement, Lender agreed to make and Petitioner agreed to accept a loan in the amount of $6,600,000.00 (the "Loan") to be used solely for the purpose of paying for the cost of developing and constructing four commercial buildings located in San Antonio, Bexar County, Texas. The Lender retained the law firm of Holland & Knight, 1200 Brickel Avenue, Post Office Box 015441, Miami, Florida 33101, as its Florida counsel in connection with closing the Loan. Petitioner retained the law firm of Peirsol, Boroughs, Grimm, Bennett & Griffin, Professional Association, Post Office Box 3309, Orlando, Florida 32802, as its counsel in connection with closing the Loan. On or about July 30, 1985, the General Partners of Petitioner executed a promissory note in the amount of $6,600,000.00 payable to Lender (the "Note"), a Deed of Trust, Mortgage, and Security Agreement securing the Note in favor of Harry M. Roberts, Jr., Esquire, Trustee (the "Mortgage"), and all other loan closing documents as required under the Loan Agreement. The Mortgage encumbers only land and the improvements thereon located in San Antonio, Bexar County, Texas and was filed in the Public Records of Bexar County, Texas on August 1, 1985, subsequent to closing upon the Loan Agreement. The proceeds of the Loan evidenced by the Note and secured by the Mortgage were used solely to develop and construct four commercial buildings on the land encumbered by the Mortgage in San Antonio, Bexar County, Texas. Florida documentary stamps were purchased from the area office of the Department of Revenue located in Miami, Florida on August 5, 1985, and affixed to the Note to evidence payment of Florida documentary stamp with respect to the Note in the amount of $9,900.00 pursuant to Sections 201.00 and 201.08 Florida Statutes. John Simpson, Jr., Esquire, also represented One Dezavala in the closing for the acquisition of the property and the loan. The note and other loan documents were signed in Orlando by Petitioner's General Partners. The documents were given to the lender's Florida Counsel in escrow, who sent the documents to the lender's Texas counsel. Closing on the acquisition of property and the loan took place simultaneously in San Antonio, Texas and the funds were disbursed in San Antonio. (Testimony of John Simpson, Jr., Esquire) Photocopies of the notes and stamps were admitted as Exhibits No. 3 and No. 7. The parties, by oral stipulation at the final hearing, agreed that before the Comptroller could be compelled to issue a Final Order authorizing the refund of such money as may properly be found owing Petitioners, Petitioners would make available to the Comptroller or his representatives, for inspection, cancellation and/or obliteration, the original documentary stamps forming the basis for the request for refund.
Findings Of Fact On January 15, 1975, Gerardo Benesch, Jitka Benesch, H. Albert Grotte, Regina Grotte, Milorad Dordevic, Catalina Dordevic, Milodrag Savovic and Marina Savovic executed an agreement associating themselves in a general partnership, Andean Investment Company. The stated purpose of the partnership was to engage in the business of real estate development, selling, renting, and dealing generally in real estate of all kinds. It was recited in the agreement that, by forming the partnership, the parties wished to reduce their prior expense of managing separate properties through separate managerial agreements. To this end, they transferred certain real estate by quit-claim deed to the partnership, and these properties represented its capital. The agreement provided in Article IV that the net profits or net losses of the partnership would be distributed or chargeable, as the case might be, to each of the partners in percentage proportions based on the amount of their investment in the partnership. The property consisted of warehouses located in Deerfield Beach and Fort Lauderdale, Florida, from which rentals were derived (Petition and Exhibits thereto). All of the properties were encumbered by mortgages of varying amounts and all but two of the quit-claim deeds transferred title subject to the mortgage thereon. Two deeds provided specifically that the partnership assumed the existing mortgage. Although Petitioner's counsel states that this was not intended and was a "scrivener's error", Petitioner partnership has, in fact, made the mortgage payments on all of the properties since their transfer under the aforesaid deeds (Composite Exhibit 1, Stipulation). Petitioner paid only minimal documentary stamp tax on the deeds. Respondent thereafter issued four proposed Notices of Assessment of Documentary Stamp Tax, Surtax, and Penalty against the Petitioner on January 6, 1976, in the total amount of $3,797.00. The tax was computed under Rule 12A-4.13(10)(c), F.A.C., based on transfers of realty (Composite Exhibit 2, Testimony of Dahlem). At the hearing, Petitioner disputed the manner in which Respondent had computed the documentary stamp tax in that each assessment dealt with a husband and wife who held individual percentage interests in the net worth of the partnership. Respondent's computation did not take into consideration the double interest in each assessment. The parties therefore agreed that a recomputation would be made by Respondent and submitted as a late-filed exhibit. This was done and the new computation reflects a total tax liability, including surtax and penalty, in the total amount of $4,053.40 (Composite Exhibit 3).
Recommendation That Petitioner's request for relief from tax liability be denied, and that Petitioner's liability for documentary stamp tax, surtax, and penalties in the total amount of $4,053.40 be sustained. DONE and ORDERED this 26th day of May, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs Tax Division, Northwood Mall Tallahassee, Florida 32303 Allan F. Meyer, Esquire Suite 1500 Post Office Box 14310 Ft. Lauderdale, Florida 33302 Zayle A. Bernstein, Esquire Post Office Box 14310 Fort Lauderdale, Florida 33302
Findings Of Fact Respondent married Barbara Hannon on October 31, 1970. On November 5, 1975, Barbara G. Reilly, as she was sometimes known during her marriage to respondent, executed a petition for dissolution of marriage and other relief in which she alleged that she "wishe[d] to resume her former surname of HANNON." On January 14, 1976, the marriage between respondent and Barbara Hannon was dissolved. Petitioner's exhibit No. 4. Effective October 1, 1973 through October 4, 1975, inclusive, respondent was registered as a real estate salesman in the employ of King's Point Realty, Inc. From October 5, 1975, to March 31, 1977, respondent was registered as a real estate broker at the same office. By deed dated May 1, 1975, Harry and Evelyn Litwin conveyed "CONDOMINIUM PARCEL NO. 508, KINGS POINT BRITTANY K" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 14. This deed reflects payment of documentary stamp tax in the amount of $49.50 and of documentary surtax in the amount of $1.65. By deed dated June 20, 1975, "BARBARA HANNON, a single woman" conveyed the same parcel to Robert and Meredith Nisenbaum. This deed reflects payment of documentary stamp tax in the amount of $52.50 and of documentary surtax in the amount of $19.25. Petitioner's exhibit No. 14. By deed dated September 29, 1975, Dorothy I. Fox, an un-remarried widow, conveyed "CONDOMINIUM PARCEL NO. 702, KINGS POINT SAXONY `O'" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 15. This deed reflects payment of documentary stamp tax in the amount of $34.50 and of documentary surtax in the amount of $2.20. By deed dated November 6, 1975, "BARBARA HANNON, a single woman," conveyed the same parcel to B & M Realty Trust II. This deed reflects payment of documentary stamp tax in the amount of $45.00 and of documentary surtax in the amount of $6.05. Petitioner's exhibit No. 15. By deed dated October 31, 1975, Myron and Sonia Spergel conveyed "Condominium Parcel No. 237 of FLANDERS `E'" to "BARBARA HANNON." Petitioner's exhibit No. 16. This deed reflects payment of documentary stamp tax in the amount of $45.60 and of documentary surtax in the amount of $17.05. By deed dated March 12, 1976, "BARBARA HANNON" conveyed the same parcel to Harry and Evelyn Tuckman. Petitioner's exhibit No. 8. This deed reflects payment of documentary stamp tax in the amount of $57.00 and of documentary surtax in the amount of $4.40. Mr. and Mrs. Tuckman, who still lived in the condominium at the time of the hearing, dealt with respondent when they acquired the property. In conversations with respondent, a price was agreed upon. The Tuckmans did not know who the seller was at the time they agreed to buy. By deed dated June 10, 1976, Ida Ellman, a widow, conveyed "Condominium Parcel No. 202 of Valencia `I' CONDOMINIUM" to "BARBARA HANNON, a single woman." Petitioner's exhibit No. 17. This deed reflects payment of documentary stamp tax in the amount of $57.00 and of documentary surtax in the amount of $8.25. On this deed, the grantee's post office address is stated as "P.O. Box 994, Delray Beach, Fl. 33444." According to post office records, respondent George F. Reilly rented Post Office Box 994 at the Delray Beach Post Office from on or about November 4, 1975, until on or about June 21, 1977. By deed dated August 4, 1976, "BARBARA HANNON, a single woman" conveyed the same property to Natale and June V. Lisi. Petitioner's exhibit No. 9. This deed reflects payment of documentary stamp tax in the amount of $69.00 and of documentary surtax in the amount of $25.30. Respondent represented the seller when Mr. and Mrs. Lisi purchased the condominium. Respondent never disclosed to Mr. and Mrs. Lisi that he and Barbara Hannon had been married. By deed dated September 30, 1976, Sidney and Jean Kessler and Charles and Sandra Bondar conveyed "Parcel No. 159 of TUSCANY `C' Condominium" to "BARBARA HANNON, a single woman. Petitioner's exhibit No. 5. The grantee's address appears on this deed as "P.O. Box 994, Delray Beach, Florida 33444." This deed reflects payment of documentary stamp tax in the amount of $67.50 and of documentary surtax in the amount of $7.70. Respondent asked John W. Hooker, Jr., to handle the transaction from the Kesslers and Bondars to Barbara Hannon. Mr. Hooker received a cashier's check drawn on the Barnett Bank of West Delray Beach in the amount of $6,305.37, petitioner's exhibit No. 6, and closed the transaction by mail. He never met Barbara Hannon and only learned afterwards that she and respondent had been married. Respondent never disclosed to the Kesslers or to the Bondars that he had been married to Barbara Hannon; and he later admitted this to Floyd M. Stevens, an investigator in petitioner's employ. The money used to purchase the cashier's check given to Mr. Hooker, petitioner's exhibit No. 6, came from respondent's savings account at the Barnett Bank of West Delray Beach. Petitioner's exhibit No. 19. By deed dated December 16, 1976, "BARBARA HANNON, A SINGLE WOMAN" conveyed "Parcel No. 169, of TUSCANY `C' CONDOMINIUM" to John L. Schmieder and James A. Schmieder. Petitioner's exhibit No. 10. In anticipation of the conveyance, John Schnieder had placed a deposit with respondent in the form of a money order in the amount of $1,000, payable to "GEORGE REILLY-KING'S POINT REALTY." Petitioner's exhibit No. 21. The seller's closing statement prepared on December 15, 1976, contains the item: "Brokerage Commission Kings Point Realty . . . [$]1,000.00." Petitioner's exhibit No. 11. According to the same closing statement, the balance due seller amounted to $9,200.64. Id. On December 16, 1976, respondent deposited $10,200.64 (1,000.00 + 9,200.64) to his savings account at the Barnett Bank of best Delray Beach. Petitioner's exhibits Nos. 20, 21 and 22. According to the Bank's records, respondent's mailing address was "P.O. Box 994, Delray Beach, Fla. 33444." Respondent never mentioned to the Schmieders that he and Barbara Hannon were in any way related. Respondent deposited the money order he had received from the Schmieders to his own savings account on December 16, 1976; and never earlier deposited the money order to any escrow account. On October 14, 1976, The Keyes Company mailed a check drawn in favor of Kings Point Realty, Inc. (Kings Point) in the amount of $500, to the offices of Kings Point in Delray Beach. This check never reached Kings Point's supervisor of accounts payable and was not processed through Kings Point's ordinary banking channels, although it was paid.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner revoke respondent's registration as a real estate broker. DONE and ENTERED this 19th day of July, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1979 COPIES FURNISHED: Kenneth M. Meer, Esquire Post Office Box 1900 Orlando, Florida 32802 George F. Reilly 8671 Sunset Strip Sunrise, Florida 33322 George F. Reilly Post Office Box 4525 Old San Juan Station Puerto Rico 00905
The Issue Whether or not the Respondent, State of Florida, Department of Revenue, is entitled to documentary stamp tax in accordance with Section 201.02, Florida Statutes, in the amount of $326.10 and penalty in the like amount of $326.10 in accordance with Section 201.17, Florida Statutes, for a transaction between Petitioners in an assignment of interest of Gallagher's of Miami, Inc., to the Petitioners.
Findings Of Fact The Petitioners were the stockholders of Gallagher's of Miami, Inc. Among the assets of Gallagher's of Miami, Inc., were the rights under a sublease undertaken between B.G.L. Corporation and Gallagher's of Miami, Inc. dated September 25, 1976 and recorded in Official Record Book 5663, at page 261 of the Public Records of Dade County, Florida. This sublease was an amendment to a sublease which was dated June 1, 1976, recorded in Official Record Book 4768, Page 176 of the Public Records of Dade County, Florida, between B.G.L. Corporation, a Florida corporation as lessor, and KSJ Corporation, a Florida corporation as lessee. One of the conditions of Gallagher's lease obligation was responsibility for the payment of a mortgage dated May 1, 1965, recorded in Official Record Book 4592, at Page 161, of the Public Records of Dade County, Florida, from KSJ Corporation, a Florida corporation to Joseph Z. Lipsky and Evalyn Lipsky, as amended by agreement dated August 30, 1965 between KSJ Corporation and Joseph Z. Lipsky and Evalyn Lipsky. Pursuant to a plan of liquidation of Gallagher's of Miami, Inc. that corporation executed and delivered to Petitioners an assignment of the lessee's interest in the aforementioned lease to which Gallagher's of Miami, Inc. was a party. The assignment of lease can be found as Exhibit A to the Petition filed by the Petitioners. The contents of such assignment are found to be fact. By letters of July 30, 1975 and March 10, 1975, the Respondent indicated its intention to assess tax in the amount of $326.10 upon the document representing the assignment between Gallagher's of Miami, Inc. and the Petitioners. The amount of documentary stamp tax was premised on the aforementioned mortgage which at the time of the proposed assessment was valued at $108,750. In addition the Respondent indicated its intention to impose a penalty in a like amount of $326.10. The assignment was in fact executed, pursuant to a plan of liquidation, which plan is shown as Petitioners' Exhibit C attached to the petition. The Petitioners' Exhibit C is established as fact. Petitioners in receiving the assignment in liquidation of Gallagher's of Miami, Inc. received such assignment in proportion to their stock holdings in that corporation. The assessments of $326.10 for documentary stamp tax and $326.10 in penalty on such assessment, and the challenge to the assessments are the subject matter in this cause. Subsequent to the assignment of leases and agreement between Gallagher's of Miami, Inc. and the Petitioners a further assignment was made between the Petitioners and Stan-Mil, Inc. of the same property which took place on December 16, 1974.
Recommendation It is recommended that the assessment of documentary stamp tax under 201.02 F.S. in the amount of $326.10 and the penalty in the amount of $326.10, as a penalty pursuant to 201.17 F.S. be set aside. DONE and ENTERED this 28th day of February, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of February, 1977. COPIES FURNISHED: Lewis M. Kanner, Esquire Williams, Salomon, Kanner & Damian 1003 DuPont Building 169 East Flagler Street Miami, Florida 33131 Caroline C. Mueller, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 =================================================================
The Issue This case involves the issue of whether the Petitioner, Robert P. Herring, should be required to pay documentary tax and documentary surtax on three quitclaim deeds transferring his ex-wife's interest in jointly owned property to the Petitioner. On May 3, 1982, the Department of Revenue, by letter, notified Mr. Robert P. Herring, through his counsel, Mr. Frank M. Townsend, that the Department intended to make an audit change pursuant to Chapter 201 of the Florida Statutes based upon a mortgage executed by Mr. Herring and recorded at Official Record Book 439, Page 654 of the Official Records of Osceola County. This mortgage was given by Mr. Herring in exchange for his ex-wife's transfer of her interest in the three parcels, which were the subject of the three quitclaim deeds referred to above. In response to the audit report, the Petitioner, on November 1, 1982, filed his request for a formal hearing and his written objection to the audit change. At the formal hearing in this matter, the Petitioner testified on his own behalf and called no other witnesses. The Respondent called as its only witness, Mr. John H. McCormick, a tax auditor for the Department of Revenue. The Petitioner offered and had admitted seven exhibits and the Respondent offered and had admitted nine exhibits. Counsel for the Petitioner and counsel for the Respondent submitted proposed findings of fact and conclusions of law for consideration by the undersigned Hearing Officer. To the extent that those proposed findings of fact and conclusions of law are not adopted in this order, they were considered by the Hearing Officer and determined to be irrelevant to the issues in this cause or not supported by the evidence.
Findings Of Fact Prior to June 20, 1979, the Respondent, Robert P. Herring, along with his wife, Patricia L. Herring, owned three parcels of real estate located in Kissimmee, Florida. Those three parcels were held by Mr. and Mrs. Herring as tenants in the entirety. The parcels are more fully described as: A certain lot or parcel of land known as S. Florida RR survey Block 19, beginning at the most Northerly corner of Lot 3 and running South 47 degrees East, 142 Ft. South, 43 degrees West, 25 ft. North, 47 degrees West, 142 Ft. North, 43 degrees East, 25 ft. to the point of beginning, and more particu larly described in that instrument recorded in OR Book 364, Page 340, in the Public Records of Osceola County, Florida. A certain lot or parcel of land known as St. Cloud Block 251, Lots 19 thru 22 and more particularly described in that instru ment recorded in OR Book 339, Page 155 and 158 of the Public Records of Osceola County, Florida. A certain lot or parcel of land beginning at a point 110 ft. West of the Easterly line of Gov. Lot 3, plus 15 ft. at right angle to the center line of the Old Highway South 33 degrees West, 62.3 ft. South, 53 degrees East, 60.9 ft. North, 33 degrees East, 34.3 ft. North, 42 degrees West along the highway to the point of beginning and more particularly described in that instru ment recorded in OR Book 314, Page 391 of the Public Records of Osceola County, Florida. On June 20, 1979, Patricia A. Herring executed three quitclaim deeds transferring all her right title and interest in the above three parcels to the Petitioner, Robert P. Herring. The transfer was part of a divorce settlement and the stated consideration in the three quitclaim deeds was "love and affection". (See Respondent's Exhibits 2, 3, and 4). Prior to the transfer, there was outstanding indebtedness on the three parcels and these debts were secured by mortgages. The Petitioner and his wife were both liable on these debts and mortgages. In exchange for the transfer of Patricia A. Herring's interest in the three parcels, the Petitioner executed and delivered to Patricia A. Herring a promissory note in the amount of $58,800 secured by a mortgage on the three parcels. The Petitioner, Robert Herring, also assumed full liability for the outstanding indebtednesses on the three parcels. The Petitioner is and has been since June, 1979, making monthly payments of $529.05 to Patricia A. Herring, his ex-wife, in payment on the $58,800 promissory note and mortgage. The mortgage executed by Respondent and recorded in Official Record Book 439, Pages 654-656 of the Official Records of Osceola County and the assumption of the outstanding indebtedness on the three parcels were valuable consideration paid by the Petitioner to Patricia A. Herring for her interest in the three parcels. At the time of recording the three quitclaim deeds, the Petitioner paid no documentary tax as defined in Florida Statute 201.02 (1977) and paid no documentary surtax as defined in Florida Statute 201.021 (1977) After an examination of the official records of Osceola County, the Department of Revenue determined that the Petitioner owed documentary tax on the three quitclaim deeds in the amount of $176.40. The Department determined that the Petitioner owed documentary surtax on the three parcels in the amount of $64.90. On April 13, 1982, the Department of Revenue issued its Notice of Intent to Make Documentary Stamp Tax Audit Charges to Petitioner assessing the documentary tax in the amount of $176.40 and documentary surtax in the amount of $64.90. The documentary tax and documentary surtax assessed by the Department of Revenue were based upon the $58,800 promissory note and mortgage as the sole consideration paid by the Petitioner for the transfer of the three parcels. (See Respondent's Exhibit 9). Based upon the consideration of $58,800, the Petitioner owes documentary tax of $176.40 and documentary surtax of $64.90 on the three quitclaim deeds.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Revenue enter a Final Order requiring Petitioner to pay the documentary tax in the amount of $176.40 and documentary surtax of $64.90, plus accrued penalties and interest. DONE and ENTERED this 31st day of May, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of May, 1983. COPIES FURNISHED: Frank M. Townsend, Esquire Post Office Box 847 Kissimmee, Florida 32741 Ms. Linda Lettera Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301 Mr. Randy Miller Executive Director Room 102, Carlton Building Tallahassee, Florida 32301
Findings Of Fact Petitioner Kenneth Blume, an unmarried man, purchased real property in his name on December 19, 1988. Petitioner Kenneth Blume obtained a mortgage on the property in his own name with PNC Mortgage Servicing Company. Petitioner Kenneth Blume married Petitioner Tina Blume on November 3, 1990. Thereafter, Petitioner Kenneth Blume contacted a title company, Advance Title, Inc. to refinance the property and transfer the property from himself, as sole owner, to himself and his wife, Petitioner Tina Blume. On June 19, 1992, as part of the refinancing transaction, Petitioner Kenneth Blume transferred his individual mortgage with PNC Mortgage Servicing Company to Foundation Financial Services, Inc. which paid off Petitioner Kenneth Blume's original mortgage. On June 19, 1992, Petitioner Kenneth Blume gave Petitioner Tina Blume a legal interest in the property by transferring half of the encumbered property to her by quit claim deed. Petitioner Kenneth Blume executed the deed in the presence of Cheryl Scott, a notary public and an employee of Advance Title, Inc. Said deed lists Petitioner Kenneth Blume as grantor and Petitioner Kenneth Blume and his wife, Petitioner Tina Blume, as grantees. On June 19, 1992, as part of the refinancing transaction, Petitioners created a new first mortgage on the subject property in favor of Foundation Financial Services, Inc. This mortgage is the obligation of both Petitioners. The quit claim deed was prepared by Advance Title, Inc. on Petitioners' behalf. The quit claim deed showed that the consideration paid for the transfer of the encumbered property was $10. On June 24, 1992, Advance Title, Inc. went to the Clerk of the Circuit Court's Office to record the quit claim deed. As a condition precedent to the recordation of any deed transferring an interest in real property, Section 201.022, Florida Statutes, requires that the grantor, grantee, or agent for the grantee, execute and file a return with the Clerk of the Circuit Court. The return is identified as a Form DR-219, Return for Transfer of Interest in Real Property. On June 24, 1992, Advance Title, Inc. filled out and signed the Form DR-219, Return for Transfer of Interest in Real Property, as the agent of Petitioners. Advance Title, Inc., as Petitioners' agent, did not disclose the full amount of consideration on Form DR-219 as required by question 3. Instead, Advance Title, Inc. wrote that the property was sold for $10. Advance Title, Inc. did not disclose the extinguished or refinanced mortgage on Form DR-219. In response to the question whether the sale was financed, Advanced Title, Inc. did not check the "yes" box on Form DR-219. Form DR-219 defines the word "consideration", in pertinent part, as follows: the purchase price of the property or the total amount paid or to be paid for the transfer of any interest in real property. Consideration includes: cash; new mortgages placed on the property to finance all or part of the purchase; existing mortgages on the property either assumed or taken subject to; mortgages that are cancelled, satisfied or rendered unenforceable, settled by the sale or transfer or in lieu or foreclosure . . . . This definition is consistent with the Legislature's definition of consideration set forth in Section 201.02(1), Florida Statutes (1991), applicable here. Advance Title, Inc., as Petitioners' agent, stated on Form DR-219 that documentary stamp tax in the amount of $.60 was due on the subject transfer of interest in real property. On June 24, 1992, Advance Title, Inc. presented the quit claim deed to the Clerk of the Circuit Court for recordation together with the Form DR-219. The Clerk recorded the quit claim deed and collected $.60 in documentary stamp tax based on information that Advance Title, Inc. provided on the Form DR-219. The Clerk did not tell Advance Title, Inc. or Petitioners that additional documentary stamp taxes were due on the transfer. Respondent conducted a routine audit of the Clerk's records and determined that additional documentary stamp taxes were due on the deed transferring an interest in the encumbered property to Petitioner Tina Blume. The record contains no competent substantial evidence to show that Petitioners fall within an exception to or exemption from paying the additional documentary stamp tax in question here. Moreover, there is no competent persuasive evidence that an agent of the state of Florida or Santa Rosa County misrepresented a material fact on which Petitioners relied to their detriment. Petitioners have not met their burden of proving by a preponderance of the evidence that they do not owe additional documentary stamp taxes on the real estate transaction at issue here.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is recommended that Respondent enter a Final Order upholding its assessments as revised in a Notice of Reconsideration dated January 9, 1995, of documentary stamp tax, plus applicable interest and penalties against Petitioners Kenneth and Tina Blume. RECOMMENDED this 23rd day of October, 1995, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD, Hearing Officer 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 23rd day of October, 1995. APPENDIX The following constitutes the undersigned's specific rulings pursuant to Section 120.59(2), Florida Statutes, on all proposed findings of fact submitted by the parties to this case. Petitioners' Proposed Findings of Fact Petitioners' proposed recommended order for the most part is a memorandum of law and does not designate proposed findings of fact. However, the undersigned rules as follows on statements of fact contained within Petitioners' memorandum: Accept that Petitioner Kenneth Blume chose to sign the quit claim deed. No competent persuasive evidence regarding the Clerk of the Circuit Court's directions to Advance Title, Inc. or Petitioners. Uncorroborated hearsay evidence. Accept that Petitioners were not aware of Respondent's hotline service at the time of the conveyance; however, irrelevant. Reject that Petitioners made prudent and reasonable attempts to learn the requirements of Section 201.02, Florida Statutes. Petitioners had constructive notice of the published statutes and rules which were in effect at the time of the conveyance. Reject that the "system" deceived Petitioners. No competent persuasive evidence to support this fact. Reject that the "system" or "state" failed to disclose the law controlling taxes on real estate transactions. Applicable statutes and rules read together with the definition of consideration set forth on the Form DR-219 constitute sufficient notice to Petitioners. The "system" or "state" did not draft the language in the quit claim deed; therefore, the state was not required to include any language relating to the cost of the transaction. The Form DR-219 included a definition of consideration which is consistent with the language in the applicable statutes and rules. Reject that the state added new terms or changed the terms of the agreement memorialized in the quit claim deed. The state was not a party to the agreement between Petitioners. Reject that the system failed to inform Petitioners of "all" the terms in the contract as "offered" by the state. Respondent's assessment does not involve a contractual relationship between Respondent and Petitioners with the Respondent as a "seller" and Petitioner Kenneth Blume as a "buyer." Respondent's Proposed Findings of Fact The undersigned accepts the substance of Respondent's Proposed Findings of Fact 1-28 as modified in Findings of Fact 1-23 of this Recommended Order. COPIES FURNISHED: Nancy Francillon, Esquire Mark T. Aliff, Esquire Office of the Attorney General The Capitol - Tax Section Tallahassee, FL 32399-1050 Kenneth and Tina Blume 159 W. 29th Court Fayetteville, AR 72701 Linda Lettera, Esquire Department of Revenue 204 Carlton Building Tallahassee, FL 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, FL 32399-0100
