The Issue The issues in this case are as follows: Was Respondent Daniel Oldfather legally responsible for accounting and refund? Were the refund provisions of the receipt form printed in type as required by Rule 21V-10.15, Florida Administrative Code? Was Richard Vanicek due a 75 percent refund? Was Vanicek due a complete refund because of inaccurate information given him? Did Vanicek make written demand for a refund, and was a written demand for the refund necessary?
Findings Of Fact In September of 1979, Sun Rentals and Management, Inc., was a corporate real estate broker holding license number 0208997 and doing business at 2703 East Oakland Park Boulevard in Fort Lauderdale, Florida. At that time, Victor Stevens was a licensed real estate salesperson employed by Sun Rentals. Stevens, as an employee of Sun Rentals, interviewed Richard D. Vanicek concerning Vanicek's rental needs. Vanicek entered into a contract with Sun Rentals (Petitioner's Exhibit number 1) under which he paid Sun Rentals $45 and Sun Rentals was to provide him with rental information on available rentals. Vanicek received a receipt (Petitioner's Exhibit number 3) which provided in pertinent part as follows: ... Notice, pursuant to Florida Law: If the rental information provided under this contract is not current or accurate in any material aspect, you may demand within 30 days of this contract date a return of your full fee paid. If you do not obtain a rental you are entitled to receive a return of 75 percent of the fee paid, if you make demand within 30 days of this contract date. ... It was agreed that the receipt was printed totally in ten-point type. Vanicek attempted to visit one of the listings provided to him by Sun Rentals. He encountered difficulty in locating the listing; however, his lack of familiarity with Fort Lauderdale may have contributed to his difficulties. Vanicek found a rental through his own efforts and requested a refund of 75 percent of his $45 fee by telephone. He made his request first to Stevens, who referred him to Daniel Oldfather pursuant to office policy. As a result of this referral Vanicek spoke with a man at Sun Rentals, who may have been Oldfather, and restated his request for a refund. His request was denied. Daniel Oldfather was the licensed broker/salesman for Sun Rentals during September, 1979. He was the office manager of Sun Rentals at that time. Martin Katz was broker for Sun Rentals in September of 1979 (Transcript; Page 261, L 21). Oldfather was the next man in authority at the office under Katz (Transcript; Page 235, L 6). Katz delegated to Oldfather the authority to make refunds. The rental forms, including the rental receipt form (Petitioner's Exhibit number 3), were submitted to the Board of Real Estate.
Recommendation Having found that Daniel Oldfather was not guilty of any of the allegations in the amended Administrative Complaint, it is recommended that Counts I, II and III against him be dismissed. Having found that Sun Rentals and Management, Inc., is not guilty of the allegations contained in Count III of the amended Administrative Complaint, it is recommended that Count III against Sun Rentals be dismissed. Having found that Sun Rentals is guilty of violating Sections 475.25(1)(d) and 475.453(1), Florida Statutes, it is recommended that the license of Sun Rentals be suspended for 60 days, during which time the officers and directors of said corporation may not engage in the practice of real estate sales or brokerage under their names or in any other corporate name. DONE and ORDERED this 4th day of May, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 4th day of May, 1982. COPIES FURNISHED: Robert F. Jordan, Esquire Post Office Box 14723 Fort Lauderdale, Florida 33302 James Curran, Esquire 200 SE Sixth Street, Suite 301 Fort Lauderdale, Florida 33301 C. B. Stafford, Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Samuel Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether Petitioners' rental property was licensed under Chapter 509, Florida Statutes (2003).
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following findings of fact are made: Petitioners, Robert Meller, Jr., and Kristine M. Meller, were owners of a rental property (a house located at 4516 Bowan Bayou) in Sanibel, Florida. In addition, they owned a condominium in the same area. Respondent Cross held a valid real estate license at all times material to matters at issue. Respondent Cross had a business relationship with Petitioners, which antedated the purchase of the Bowen Bayou house as a result of being the leasing agent for a condominium association with which Petitioners were associated. Respondent DBPR is the State of Florida agency which represents the FREC in matters such as this matter. In January 2000, Petitioners purchased the house in Sanibel located at 4516 Bowan Bayou. On or about January 20, 2000, Respondent Cross mailed a Rental Property Management Agreement to Petitioners for the property located at 4516 Bowan Bayou, Sanibel, Florida. The parties to this contract were Petitioners and Properties in Paradise, Inc. Petitioner, Robert Meller, Jr., signed the contract and returned the contract to Respondent Cross. Petitioners maintain that the Rental Property Management Agreement was not signed by Petitioner, Robert Meller, Jr., and that his name is forged. He maintains that he entered into an oral agreement with Respondent Cross, individually, to manage the property. From the purchase of the house in January 2000 through April 2001, Petitioners received correspondence, including a monthly "owner statement" reflecting short-term rental income, commissions, and debits for maintenance, from Properties in Paradise, Inc., regarding all aspects of the business relationship contemplated by the Rental Property Management Agreement. By letter dated January 20, 2000, Petitioner, Robert Meller, Jr., authorized "Revonda Cross of Properties in Paradise as my agent in establishing telephone and electrical service and so forth for my property on Sanibel Island at 4516 Bowen's [sic] Bayou Road." Thereafter, Petitioners received correspondence from Respondent Cross relative to the subject property wherein she is identified as "Operations Manager, Properties in Paradise, Inc." During the relevant time period, Petitioners' property was rented at least 22 times; once for 17 days, four times for 14 days, once for nine days, thirteen times for seven days, and once for five days. The frequency and term of these rentals qualify for the statutory definition of a "resort dwelling" and transient rental dwelling. Properties in Paradise, Inc., listed the property located at 4516 Bowan Bayou in the list of properties it provided the Division of Hotels and Restaurants as licensed in accordance with Chapter 509, Florida Statutes (2005). In April 2001, Properties in Paradise, Inc., through an attorney, notified clients that it had effectively ceased doing business. At that time, Petitioners were owed $11,588.06, which went unpaid. Petitioners made a claim in July 2001, against Respondent Cross to recover their loss from the Florida Real Estate Recovery Fund. In October 2003, Petitioners' claim was denied by the Florida Real Estate Recovery Fund.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Department of Business and Professional Regulation, enter a final order denying Petitioners' claim for recovery from the Florida Real Estate Recovery Fund. DONE AND ENTERED this 21st day of February, 2006, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 21st day of February, 2006. COPIES FURNISHED: Joseph A. Solla, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite 801N Orlando, Florida 32801-1757 Robert L. Meller, Jr., Esquire Best & Flanagan, LLP 225 South 6th Street, Suite 4000 Minneapolis, Minnesota 55402-4690 Revonda Stewart Cross 1102 South East 39th Terrace, No. 104 Cape Coral, Florida 33904 Nancy B. Hogan, Chairman Florida Real Estate Commission 400 West Robinson Street, Suite 801N Orlando, Florida 32801 Josefina Tamayo, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue The issues in these cases are whether Respondent, Cristal Coleman, committed the violations alleged in two separate four- count Administrative Complaints filed with the Petitioner Department of Business and Professional Regulation on April 17, 2009, and, if so, what disciplinary action should be taken against her Florida real estate associate license.
Findings Of Fact Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (hereinafter referred to as the “Division”), is an agency of the State of Florida created by Section 20.165, Florida Statutes. The Division is charged with the responsibility for the regulation of the real estate industry in Florida pursuant to Chapters 455 and 475, Florida Statutes. Respondent, Cristal Coleman, was at the times material to this matter, the holder of a Florida real estate associate license, license number 693909, issued by the Division. From January 4, 2005, until March 31, 2008, Ms. Coleman was registered as a sales associate with Cristal Clear Realty (hereinafter referred to the “Realty Company”). Cristal Clear Rentals, LLC., and Ms. Coleman’s Relationship Thereto. Cristal Clear Rentals, LLC (hereinafter referred to as the “CC Rentals”), is a Florida limited liability company registered with the office of the Florida Secretary of State, Division of Corporations. CC Rentals business consisted of marketing and renting for compensation transient rental properties. CC Rentals did not engage in the sale of real estate and, therefore, was not registered with the Division as a licensed real estate broker. Ms. Coleman became the sole managing member of CC Rentals as of December 5, 2007. As a managing member, CC Rentals office manager, rental manager, and accountant reported to her on a regular basis. The Richard Bloom and Greg Sousa Rentals. CC Rentals, at the times relevant, was managing two separate properties, one owned by Richard Bloom (hereinafter referred to as the “Bloom Property”), and one owned by Greg Sousa (hereinafter referred to as the “Sousa Property”). The nature of the role of CC Rentals in managing the Bloom Property and the Sousa Property was not proved. Whatever agreements existed as to the management of these properties was not proved. Nor was any evidence presented as to whether any money, in the form of a security deposit, rental fees, or any other form, was received or in the possession of CC Rentals at the times relevant to this matter. On or about May 6, 2008, a form email was sent from Ms. Coleman’s email address to clients of CC Rentals notifing clients of the financial demise of CC Rentals (hereinafter referred to as the “Email Notice”). The Email Notice was sent to Mr. Bloom and to Mr. Sousa. In pertinent part, the Notice Email stated: We regret to advise you that Cristal Clear Rentals, LLC is no longer sufficiently solvent to continue operating. The Company has ceased trading effective May 6, 2008. We have tried to weather a very difficult season where the economic crisis in our country has seriously impacted travel and especially rentals in the Florida Keys this year. Since the Company has no funds, we need to advise Owners: The contract between you and Cristal Clear Rentals, LLC is no longer valid and is terminated. There are no funds to pay Owners any rentals collected but not yet paid to Owners through April 2008. If there are current reservations we are providing the contact details below to allow you to make direct contact with your pending guests. Since there are no funds in Cristal Clear Rentals, LLC, the Company cannot refund any security deposits to the people who made the reservation. This means that any Owner accepting the reservation directly will need to reimburse the guest out of pocket for the amount of the Security Deposit after their stay. . . . . According the specific information included in Email Notices sent to Mr. Bloom and Mr. Sousa, there were tenants in the Bloom Property and Sousa Property of a term longer than a transient rental. Ms. Coleman was not, however, aware of either rental property or the nature of any agreement with Mr. Bloom and Mr. Sousa for the management of their properties.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Commission: Finding that the Division failed to prove any of the violations alleged in the Administrative Complaints; and Dismissing the Administrative Complaints. DONE AND ENTERED this 23rd of November, 2009, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 23rd day of November, 2009. COPIES FURNISHED: Jennifer Blakeman, Senior Attorney Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N801 Orlando, Florida 32801 Nicholas W. Mulick, Esquire Nicholas W. Mulick, P.A. 91645 Overseas Highway Tavernier, Florida 33070 Thomas W. O’Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N802 Orlando, Florida 32801 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Plotkin is the owner and operator of the Rendale Hotel located at 3120 Collins Avenue, Miami Beach, Florida, which has been operated by Plotkin, a family owned corporation, for more than twenty-five years. The apartment/hotel has 98 studio apartments. In the Spring of 1972, after Plotkin corresponded with DOR, it made the determination that it was exempt from the imposition of sales tax on the rentals it charges. Plotkin made the same determination for consecutive years through and including 1978. Early in September 1978, DOR caused an audit to be made of Plotkin's records and determined that Plotkin was not an exempt facility and that taxes were due for the three years prior to September , 1978, for all rentals to "non- permanent" guests. DOR's auditor utilized only the transcript of guest charges in making his determination. The transcript was compiled from April 1, 1975, a period beyond three years prior to the date of the audit. A transcript is a compilation generally prepared by the night clerk of all the active folio cards or guest ledge cards for that particular day. When tenants or guests were absent from the apartment hotel for various periods of time, they were not carried on the transcript. At times when a tenant had no charges for a particular day, the tenant was not carried on the transcript. As of April 1, 1975, Plotkin had 87 units occupied. As of June 30, 1975, it had 55 units occupied. Thirty of those units were occupied continually during that test period in 1975. As of April 1, 1976, 80 units were occupied and as of June 30, 1976, 55 units were occupied. Twenty-five units were continuously occupied during that three month test period. As of April 1, 1977, 95 units were occupied and as of June 30, 1977, 50 units were occupied. During the test period, 29 units were occupied for a continuous period of time.
The Issue Whether Respondent committed fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction as alleged in the Administrative Complaint in violation of Subsection 475.25(1)(b), Florida Statutes (2006).1
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.165 and Chapters 120, 455 and 457, Florida Statutes. Petitioner has jurisdiction over disciplinary proceedings before the Florida Real Estate Commission (FREC) and is authorized to prosecute administrative complaints against licensees within FREC’s jurisdiction. At all times material, Respondent was a licensed Florida real estate broker, license number 684990, under Chapter 475, Florida Statutes. The last license issued to Respondent was as a broker at Florida’s Best Buy Realty & Mortgage Lender, LLC, Post Office Box 551, Winter Park, Florida 32793. On or about February 15, 2007, Respondent entered into a contract to manage the single-family dwelling owned by Jacqueline Danzer. The property is located at 2979 Krista Key Circle, Orlando, Florida 32817 (Subject Property). The agreement was for the period February 15, 2007, until February 15, 2008. Respondent was authorized, under the management agreement, to seek a tenant for the property. Said management agreement authorized Respondent to be compensated at the rate of 10 percent of the rent due during each rental period. On or about March 27, 2007, Respondent negotiated a lease agreement with Veronica Valcarcel to rent the Subject Propery. The tenant applied through the federal Section 8 program, administered by the Orange County Housing and Community Development Division (Agency), for rental assistance in order to rent the Subject Property. Section 8 assists low-income families with their rent. A tenant who qualifies for Section 8 assistance is prohibited from paying more than 40 percent of his or her income for rent and utilities. On April 26, 2007, Respondent, acting on behalf of the landlord for the Subject Property, entered into and signed a “Housing Assistance Payment Contract” or “HAP” contract with the Agency as part of the Section 8 program. The HAP contract provided that for the initial lease term for the Subject Property (for the period April 1, 2007, until March 31, 2008), the initial monthly rent was $1,150 per month. This was determined to be the maximum payment the tenant could pay without exceeding 40 percent of her income. The HAP contract explicitly provides in its terms that “[d]uring the initial lease term, the owner may not raise the rent to tenant.” Respondent knew that he was prohibited from charging more than the monthly rent stated in the HAP contract. Respondent has had experience in the past with other tenants who participated in the Section 8 program. Respondent has previously signed other HAP contracts which contained the same restrictive language. Under the lease contract that the tenant Veronica Valcarcel signed with the property owner Jacqueline Danzer, the monthly rent would be $1,150 per month. The signature page in the lease contract is not the same page on which the monthly rental amount is written. The property owner Jacqueline Danzer asserts that the initials in the lease contract reflecting a monthly rental of $1,150 were not all her initials. Under the terms of the Exclusive Property Management Agreement, Respondent was being compensated at the rate of 10 percent per month after the first month. A monthly rental amount of $1,500 indicates that the property owner would receive a net of $1,350 per month. The property management agreement provided that Respondent would make payments to the property owner by direct deposit. The property management agreement lists a 12-digit bank account number, with the last four digits of “6034,” into which Respondent was to make direct deposits. At the hearing, property owner Jacqueline Danzer testified that she had received payments from Respondent for the Subject Property to her Bank of America savings account, with the account number ending in “6034.” The last four digits of the account number on the Bank of America Statement match the last four digits on the account number found on the Property Management Agreement. According to the Bank of America records, Respondent made the following payments to the property owner: a) $1,550 on May 9, 2007 b) $1,000 on May 9, 2007 c) $850 on June 12, 2007 d) $1,350 on July 11, 2007 e) $1,350 on September 10, 2007 On September 12, 2007, property owner, Jacqueline Danzer went to see Lois Henry, the manager of the Section 8 department for the Agency. During the course of that meeting, Dnazer advised that Respondent was collecting $1,500 a month rent from the tenant instead of $1,150 a month. On September 12, 2007, during the course of a telephone conference with Jacqueline Danzer and Lois Henry, Respondent admitted that he had been collecting $1,500 monthly rent for the Subject Property, retaining a commission of $150 and depositing the balance in Danzer’s account. Respondent denied making an admission during the telephone conference on September 12, 2007. He also denied that he was collecting $1,500 from the tenant, and further denied that he was violating Section 8 regulations. Respondent’s testimony is not credible. The witness Danzer’s testimony is credible. Petitioner has proven by clear and convincing evidence that Respondent violated the Housing Assistance Payments Contract. The total amount of investigative costs for the Petitioner for this case, not including attorney’s time, were $874.50.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Florida Real Estate Commission, enter a final order: Finding Respondent guilty of violating Subsection 475.25(1)(b), Florida Statutes; Revoking Respondent’s license, and imposing an administrative fine of $1,000.00; and Requiring Respondent pay fees and costs related to the investigation in the amount of $874.50. DONE AND ENTERED this 26th day of August, 2009, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE 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 26th day of August, 2009.
The Issue The issues in this matter are whether the Department of Business and Professional Regulation, Division of Real Estate (Petitioner) proved that Derek Welling (Respondent) is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes; and whether Petitioner proved that Respondent is guilty of failing to account and deliver funds in violation of Subsection 475.25(1)(d)1, Florida Statutes; and if so, what is the appropriate discipline?
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.165 and Chapters 120, 455, and 475, Florida Statutes. Respondent is a licensed realtor and has been at all times material hereto, having been issued license number 0582890 under Chapter 475, Florida Statutes. In 1989, Respondent founded UK Realty, a real estate brokerage firm, with his son-in-law, Russell Christner. From 1989 thru the summer of 1996, Respondent primarily served as UK Realty's international sales representative while Mr. Christner served as its qualified broker. Respondent traveled to various trade shows primarily in Europe and encouraged customers to purchase rental properties in the central Florida area. In 1991, Respondent and Mr. Christner formed a short- term rental property management company known as Connoisseur Homes, Inc. (Connoisseur) to manage the rental properties of UK Realty's domestic and international clients. In 1993, Respondent and Christner sold a one-third interest in Connoisseur to Mr. Graham Greene, who immediately became president of Connoisseur and served as its day-to-day operations manager. Although Respondent maintained a one-third ownership in Connoisseur, he remained the company's international sales associate. Respondent was generally not involved in the day-to-day management and operations of Connoisseur and had little personal knowledge of the factual circumstances surrounding the client complaints that form the basis of Petitioner's allegations. Each of the allegations levied against Respondent in Petitioner's Amended Administrative Complaint involves complaints filed by property owners relating to contract services with Connoisseur. There is no evidence in the record that any of the property owners was dissatisfied with the services of Respondent or Connoisseur prior to the summer/fall of 1996. Hart Property In 1994, Michael Hart, a resident of England, engaged the services of UK Realty and purchased a rental home property in Davenport, Florida. Mr. Hart was referred to Mr. Richard Wilkes, a representative of Connoisseur, to manage his property. On May 17, 1995, Mr. Hart contracted with Connoisseur to provide rental management services. Mr. Hart placed an initial deposit with Connoisseur to purchase various items and maintained a $1000 balance in an escrow account to pay the annual taxes and monthly expenses associated with the management of the property. Pursuant to his contract with Connoisseur, Mr. Hart received periodic statements from Connoisseur detailing all moneys collected from tenants, escrow balances, and any other activity in his account. According to the statements Mr. Hart received, Connoisseur booked nine persons to stay in his property between October of 1996 and January of 1997. While Connoisseur received approximately $9,844.60 for these rentals, Mr. Hart received none of the rental proceeds. On or about January 3, 1997, Mr. Hart received notice from the Polk County tax collector indicating that the "tourist development tax" associated with his property was delinquent for the months of September, October, and November of 1996. In addition, the letter indicated that Connoisseur made a payment to Polk County for September 1996 that was returned for insufficient funds. Shortly thereafter, Mr. Hart was advised that the cable and electricity to the property had been disconnected for non-payment. Glass Property In May 1993, Mr. Colin Glass purchased a rental home in Davenport, Florida, and contracted with Connoisseur to manage the property. Pursuant to the contract, Connoisseur agreed to advertise and list the property, manage the reservations and timely pay the rental property's expenses. Mr. Glass agreed to receive $500.00 for each week that the property was rented minus a cleaning fee. Pursuant to the contract, Mr. Glass placed a $1000 deposit with Connoisseur to pay the initial maintenance costs associated with the property. Thereafter, Mr. Glass received periodic statements from Connoisseur detailing the funds received, occupancy, and expenses paid to manage his property. The statement for the month ending November 30, 1996, indicates that Connoisseur collected $5,290.00 in rental proceeds from tenants who rented the property between August of 1996 and January of 1997 and paid $110 for cleaning services on November 8 and 21, 1996. In November, 1996, Mr. Glass requested a detailed accounting from Connoisseur regarding his property. On December 6, 1996, Mr. Glass received a written letter on Connoisseur stationary, signed by Kelleen Newman, a Connoisseur employee responsible for preparing accounting statements during the relevant period. The letter advised Mr. Glass that Connoisseur owed Mr. Glass approximately $1,750.00 for payments received pursuant to bookings under the names Beaumont and Tullet. To date, Mr. Glass has not received the rental proceeds. In addition, Connoisseur failed to pay the property tax bill associated with the Glass property as required by the management contract, and it became delinquent. Hamlyn Property On September 22, 1993, John Hamlyn purchased a home in Davenport, Florida. Five months later, on February 22, 1994, Mr. Hamlyn hired Connoisseur to manage his rental property. Pursuant to the contract, Connoisseur agreed to advertise and rent the property, manage the collections, and pay the operational expenses. Mr. Hamlyn placed a $500.00 deposit with Connoisseur to perform the contract and was required to maintain that balance in the account. In November of 1995, Respondent and Connoisseur increased the required escrow balance to $1000.00. In January of 1997, immediately following the demise of Connoisseur, Mr. Hamlyn maintained an escrow account with Connoisseur. Mr. Hamlyn did not receive an accounting of the escrowed funds or a refund of the balance. The evidence is undisputed that Mr. Hart, Mr. Glass, and Mr. Hamlyn each delivered funds in trust to Connoisseur which were not accounted for or returned. The evidence is undisputed that Connoisseur, in 1996, received rental proceeds as agents on behalf of Mr. Hart and Mr. Glass, which were not remitted to the owners. The evidence is undisputed that Connoisseur, in 1996, failed to pay certain utility bills and tax bills as required in its contracts with Mr. Hart and Mr. Glass. Connoisseur's Collapse Connoisseur's operational and financial failure surfaced on September 13, 1996, when Mr. Green, the company's co-owner and day-to-day operations manager, without notice, resigned as President of Connoisseur and formed a competing property management company. To make matters worse, within days, Mr. Green hired key staff away from Connoisseur including Richard Stanton, Connoisseur's office manager, accountant and licensed real estate broker, as well as Dyer Scott, the company's book-keeper. Shortly thereafter, Mr. Green's new company was operational and selectively securing new management agreements with Connoisseur's client list. In response, Respondent immediately evaluated Connoisseur's financial and operational status and attempted to manage its problems. Respondent advised all of Connoisseur's homeowners of the company's status, including the departure of the key operational owner and employees, but tried to assure them that the company was headed in the right direction. In fact, in a news update dated October 15, 1996, Respondent advised all of the clients, including Mr. Hart, Mr. Glass, and Mr. Hamlyn of the following: Upon investigation we were appalled to find that most of our homeowners are waiting on payments and upon further investigation we found that in many cases payment had never been collected from the tour operator. This situation is being corrected immediately and manual invoices are being prepared for collection . . . I'm happy to say that approximately $200,000 in back bookings will be properly allocated to our homeowners this month. Connoisseur did not recover. Within two months, 150 of Connoisseur's 270 homeowners cancelled their management contract with Connoisseur and on January 1, 1997, Respondent sold his interest in Connoisseur to Richard Wilkes and received a total of $15,000.00. Respondent experienced complete financial loss as a result of the demise of Connoisseur. His home was foreclosed and his vehicle was repossessed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Amended Administrative Complaint filed against Respondent in this matter be dismissed. DONE AND ORDERED this 3rd day of July, 2003, in Tallahassee, Leon County, Florida. S WILLIAM R. PFEIFFER 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 3rd day of July, 2003. COPIES FURNISHED: Victor L. Chapman, Esquire Barrett, Chapman & Ruta, P.A. 18 Wall Street Post Office Box 3826 Orlando, Florida 32802-3826 Christopher J. DeCosta, Esquire Department of Business and Professional Regulation Hurston Building, North Tower 400 West Robinson Street, Suite N809 Orlando, Florida 32801 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Nancy P. Campiglia, Acting Director Department of Business and Professional Regulation 400 West Robinson Street Suite 802, North Orlando, Florida 32801
Findings Of Fact Heede is in the business of leasing tower cranes as a distributor for Linden Tower Crane Company. It has been in this business for many years. In the early 1980's, Heede began subcontracting for the transportation, erection, and dismantling of the cranes it leased. Linden tower cranes are the "climbing cranes" found on all modern high- rise construction sites. They are initially installed by being mounted on a concrete pad and attached by bolts. During construction the crane is frequently "climbed" as the building construction goes up. The cranes are used for many functions as part of the construction process, including placing concrete forms and pouring cement. The crane does not become a permanent part of the building, but is dismantled and removed after construction, leaving the concrete pad and bolts at the site. It does not become a part of the building as tangible personal property affixed to or incorporated into the real property. These cranes are like other forms of construction equipment utilized in the erection of high-rise buildings. At issue here are seven Equipment Rental Agreements for separate jobs (Respondent's Exhibit 1) and seven corresponding sets of invoices relating to the freight-in (transportation from Heede's equipment yard), erection, dismantling, and freight-out (Respondent's Exhibit 2). Both parties relied on a summary of those invoices and charges, which is set forth below for ease of reference. NOTE: The chart attachment is in an unscanable format and therefore not shown in paragraph 5. of this Recommended Order. It is available for review from the Division's Clerk's Office. The audit period began after the first construction job, number 3050, had commenced so that only the dismantling and freight-out charges were covered by the audit. Similarly, the audit ended before the final two jobs were completed, job numbers 3090 and 3099. Therefore only the freight-in and erection portion of those invoices were subject to this audit. The parties filed a Joint Stipulation as to Amount in Controversy and therein stipulated that the amount in controversy is: Tax $12,071.77 Penalty $ 3,015.01 Interest through 5/20/91 $ 5,762.65 TOTAL $20,849.43 Daily interest continues to accrue at $3.97 per day. This Joint Stipulation was signed by the Department of Revenue and expressed in writing what the parties had agreed on throughout the proceedings, namely that the freight charges were not subject to tax based on the holding in Florida Hi-Lift v. Department of Revenue, 571 So.2d 1364 (1st DCA 1990). However, as will be discussed further in the Conclusions of Law supra, the Department, for the first time in its Memorandum of Law in Support of Respondent's Proposed Recommended Order, now seeks to be relieved from its stipulations and to include the freight charges in calculation of the tax due. The seven Equipment Rental Agreements are essentially similar in form. Attached to each is a separate typed sheet identified at the top as "Equipment Rental Agreement Continued" and also as "Additional Agreement Continued." With the exception of job number 3090, each of the printed forms provides on its face: Said equipment shall be shipped to Lessee at , on or about the day of , 19 , freight or delivery charges Collect from Port of Entry or from see additional agreement [or see attachment]. On the second page of the Equipment Rental Agreement, entitled Conditions of Lease, paragraph 13 provides: 13. TRANSPORTATION--The Lessor shall at its own expense load the equipment for transit to the Lessee and unload it upon its return. The Lessee shall at its own expense do all other loading, unloading, installing, dismantling and hauling and shall pay all transportation charges from and to Lessor's shipping and receiving points; provided, however, unless otherwise agreed, that the Lessee shall not pay return transportation charges greater than those necessary to return the equipment to the point from which it was originally shipped to the Lessee. The "Additional Agreement Continued" attached to each Equipment Rental Agreement essentially contains the following additional paragraphs: Lessor will freight to and from the project, erect, climb, dismantle, and remove the crane from the project. Tower crane operator to be furnished by lessee during erection, climbing, and dismantling. We hereby propose to furnish labor and material complete in accordance with the above agreement for the sum of [sum inserted]. Ira Schmidt, the Comptroller and Secretary/Treasurer and a shareholder of Heede, explained how the books and records of Heede are maintained and what is intended by the Additional Agreement. His testimony was uncontroverted and is accepted as fact. According to Schmidt, Heede leases the tower crane under a separate rental agreement which requires the lessee to transport, erect and dismantle and return the crane to Heede's yard. Numerous parties can bid for the performance of the transportation, erection, dismantling and freight-out at the time the crane is leased. Heede is one of those bidders. Heede generally gets the subcontract for the transportation, erection, dismantling, and freight- out because it has a trained crew that can perform the work less expensively on the Linden cranes. The cranes are loaded onto the convoy of trucks at Heede's yard by Heede personnel as part of the Rental Agreement. If Heede is the successful bidder for the subcontract, it pays the carrier for transportation to the job site and its crew travels by separate transportation to the site, arranging to meet the truck convoy on arrival. Arrangements are made to lease a truck crane from another subcontractor who provides an operator. With the use of the truck crane, Heede's crew then proceeds to erect and test the tower crane. After instructing the contractor's crane operator, the equipment is turned over to the contractor. After the job is completed, the Heede crew, again with the assistance of the subleased truck crane, dismantles and loads the tower crane equipment on a truck convoy to be returned to Heede's yard in Charlotte, North Carolina. On arrival, Heede personnel unload the truck convoy. The freight-in and freight-out costs in all seven of the transactions are F.O.B. Heede's yard, but all such freight charges on these particular rentals are paid by Heede as part of the Additional Agreement subcontract total charge. These freight charges are reflected by separate bills and invoices as shown in the sets of invoices found in Respondent's Exhibit 2. Heede has rented cranes to contractors who have subcontracted with others for the transportation, erection, dismantling, and freight-out. Heede has also bid on and been awarded the subcontract to transport, erect, dismantle and freight-out cranes that were not leased to the contractor by Heede. Job number 3090 is somewhat different in the handling of the transportation portion of the Rental Agreement and Additional Agreement. The lessee in job 3090 and job 3075 was the same. Job 3075 involved the lease of the tower crane at the Caribbean Condominiums in Daytona Beach, Florida, until October, 1987. Job 3090 involved the lease of the tower crane at the Ashley Condominiums in Daytona Beach, Florida, beginning in November, 1987. Because the lessee and the specific tower crane were the same, it would have been ridiculous to transport the crane to Heede's yard in North Carolina and then transport it back to Daytona Beach. The lessee deleted the transportation provisions in the Rental Agreement for job 3090 and entered into a subcontract with Heede for the transportation and erection of the crane at the new site. The transportation charges were then divided between the two jobs as shown in the separate invoices for these two jobs. The transportation charges for job 3090 are included in the parties stipulation as to the amount in controversy because of the deletion of the transportation provisions in that Rental Agreement and because the crane was not F.O.B. Heede's yard. The $675.00 freight charge for job 3090 is included in the tax assessment which the Department seeks and in the stipulated amount in controversy. The stipulated tax amount in controversy represents the tax allegedly due on the freight charge for job 3090 and for the erection and dismantling charges arising from the subcontracts, which includes the costs actually incurred by Heede (trucking and truck crane and operator) and the charges for labor, hotel, food, gas, truck expenses, insurance, and estimated profit.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a Final Order and therein reverse and deny the assessment, penalties and interest, against Heede Southeast, Inc., for the transportation, erection and dismantling services which were not a taxable part of the rental transaction. RECOMMENDED this 4th day of October, 1991, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4627 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Heede Southeast, Inc. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(7); 3(5); 4(6); 7(9&10); 8(12); 9(16); 10(13&14); 11&12(2); 13(15); and 15(2). Proposed findings of fact 2, 5, 6, and 14 are subordinate to the facts actually found in this Recommended Order. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Revenue Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: (1) and 5(9). Pproposed findings of fact 2, 3, 6, 7, 10, 12, and 13 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 8 and 11 are irrelevant. Proposed findings of fact 4 and 9 are unsupported by the credible, competent and substantial evidence. COPIES FURNISHED: J. Thomas Herndon Executive Director Department of Revenue 104 Carlton Building Tallahassee, FL 32399-0100 Vicki Weber General Counsel Department of Revenue 204 Carlton Building Tallahassee, FL 32399-0100 Bengamin K. Phipps Attorney at Law 802 First Florida Bank Tower Tallahassee, FL 32301 Lealand L. McCharen Assistant Attorney General Department of Legal Affairs Tax Section, The Capitol Tallahassee, FL 32399-1050
The Issue Whether Respondent Homes-R-Us, Inc.'s license as a corporate real estate broker, Respondent Vera McWeeney's license as a real estate broker, and Respondent Anthony Cutrona's license as a real estate salesman should be suspended or revoked, or the licensees otherwise disciplined for alleged violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint dated September 3, 1981. The Administrative Complaint herein alleges that the Respondents utilized a contract form in their business of negotiating rentals and furnishing information to prospective tenants which did not conform to Rule 2IV-10.30, Florida Administrative Code, therefore being in violation of various provisions of Chapter 475, Florida Statutes. The Complaint also alleges that Respondents employed various persons to conduct the business who were not licensed by Petitioner, and who were paid compensation, in violation of various provisions of Chapter 475, Florida Statutes. At the commencement of the hearing, the parties stipulated to the facts set forth in Paragraphs 2-4 of the Administrative Complaint, and that Respondents, in their business of furnishing rental information to prospective tenants for a fee, utilized a contract form which did not conform to Rule 2IV-10.30, Florida Administrative Code. As to Count II, the parties stipulated that during the times alleged in the Administrative Complaint, the corporate Respondent employed unlicensed personnel who performed certain activities, to include (1) acceptance of a rental fee provided in the contract, (2) receipting of the rental contract, delivery to the prospective customer of the "vacancy book" containing available rental properties, and (4) verifying the availability of various rental properties after selection by the customer by telephoning the prospective lessor of the property. Respondents Anthony R. Cutrona and Vera McWeeney testified at the hearing, and Petitioner called its investigator, Francis A. Maye, and a former investigator, Debbie J. Minutoli, as witnesses. Petitioner submitted eight exhibits in evidence and Respondent submitted one exhibit.
Findings Of Fact Respondent Homes-R-Us, Inc. is now, and was at all times relevant to the matters alleged in the Administrative Complaint, licensed as a corporate real estate broker, License No. 0212520, at 9000A North Florida Avenue, Tampa, Florida. (Stipulation) Respondent Vera McWeeney is now, and was at all times alleged in the Administrative Complaint, licensed as a real estate broker, License Nos. MI4 0058950 and MI4 021252, and the active firm member and officer of Homes-R-Us, Inc. (Stipulation) Respondent Anthony R. Cutrona is now, and was at all times alleged in the Administrative Complaint, licensed as a real estate salesman for Homes-R-Us, Inc., with License No. MI4 0328427. (Stipulation) Homes-R-Us, Inc. is a firm that solicits or otherwise receives from prospective lessors of residential property, information about such rentals which is then placed in a book and provided to prospective tenants who pay a fee to the firm in order to locate appropriate rental property. The firm advertises such available rentals in newspapers and secures customers in this manner. No fee is charged to the owner or prospective lessor of the property. The normal procedure employed by the firm is to receive payment of the fee from a customer, permit the customer to select any suitable properties from the descriptive information, and then seek telephonic confirmation of the continuing availability of the selected properties. The customer then proceeds to visit the property or otherwise contact the owner and negotiate a rental, if desired. If unsuccessful or unsatisfied with the properties, the customer can continue to avail himself of the "listings" maintained by Homes-R-Us, Inc. for a period of three months on a daily basis. (Testimony of Cutrona, Stipulation, Petitioner's Exhibits 2-3, 8) Respondent Cutrona has been the general manager of Homes-R-Us, Inc. since it was established in November, 1979. Respondent McWeeney was obtained as the firm broker on a gratuitous basis to supervise the activities of the firm. A form contract is used between Homes-R-Us, Inc. and the customer at the time the fee is paid by the customer to obtain rental information. The form was designed by Cutrona when the firm commenced business and was approved by McWeeney. The contract contained a provision that purportedly was included pursuant to law that read in part "If you do not obtain a rental, you are entitled to receive a return of 26 percent of the fee paid, if you make demand within 30 days of this contract date". Respondents used the figure of 26 percent for refund purposes based upon their interpretations of the requirements of Subsection 475.453(1), Florida Statutes. They were not aware of the fact that Petitioner's Rule 21V-10.30, Florida Administrative Code, (formerly Rule 21V-10.15) provided that such contracts should provide for a refund of 75 percent of the fee. Accordingly, the contract form was in violation of the applicable rule. (Testimony of Cutrona, McWeeney, Petitioner's Exhibits 2-3, Respondents' Exhibit 1) At the time Homes-R-Us, Inc. commenced business, in November, 1979, Respondent McWeeney was the only licensed employee in the firm. Cutrona received his license as a salesman in January, 1980. During the period February to August, 1980, the firm employed another licensed real estate salesman, but during the period from August to November 21, 1980, Respondents were the only licensed personnel. On the latter date, an employee, Brenda Serino, received her license as a real estate salesman. A branch office in Tampa had been opened in the spring of 1980, and Cutrona spent one day a week in that office. He was at the original Largo office during the other six days of the week. Respondent McWeeney periodically visited the office and kept in touch with activities by telephone communications. (Testimony of Cutrona) On November 10, 1980, Deborah Minutoli, an investigator for Petitioner, visited Respondents' office in an "undercover" capacity. Her investigation was prompted by several complaints that had been filed against the firm. She posed as a customer, signed the contract and paid a $45 fee to look through their listing book. She dealt with Brenda Serino, who was at that time an unlicensed employee of Homes-R-Us, Inc. Ms. Serino signed the contract on behalf of the Respondent firm. Ms. Minutoli told the employee that she was looking for a one- bedroom or efficiency-type, apartment and could pay about $180 rent per month. Ms. Serino explained a sample listing in the book and the type of information included in the listings. Ms. Minutoli then looked through the book and found five listings which she wrote on a piece of paper and gave to Ms. Serino. Several persons in the office, including Respondent Cutrona, made telephone calls to verify the listings, but only one person was able to be contacted at that time. An employee, Jackie Mourey, then presented Ms. Minutoli with a form showing the five rentals with addresses, telephone numbers, and rental prices, which both signed. The form also included a sixth rental which Ms. Mourey said was a new listing that had just come in and had not been placed in the book as yet, but since it was within the requested price range and location, it was placed on the form. Ms. Minutoli departed from the office and several days later examined one of the rental properties, drove past the other ones and returned to Respondents' office the following day. At this time, she requested that her fee be returned because the properties were unsatisfactory. Respondent Cutrona urged her to continue using the service, but gave her an "adjustment form" to fill out and told her that they would decide whether or not a refund was in order. She subsequently attempted to reach Cutrona by telephone, but was unsuccessful on several occasions. On November 21st, she spoke to him over the phone and he suggested that she fill out the "adjustment form". On November 24th, she, together with investigator Greg Clift, went to Respondents' office and gave the "adjustment form" to Cutrona, but he declined to make the refund. Subsequently, during the same month, Ms. Minutoli, together with another of Petitioner's investigators, Francis Maye, went back to Respondents' office. Maye posed as her uncle and again they sought a refund of the fee which had previously been paid, but again were unsuccessful. (Testimony of Minutoli, Maye, Petitioner's Exhibits 2-7) Investigator Maye had previously talked to Respondent Cutrona's wife at one of the offices concerning a refund complaint from another customer. At that time a refund was made in full. Maye had a conversation with Respondent Cutrona on November 25, 1980 concerning the percentage of fees payable to a customer on a refund. According to Cutrona, Maye questioned the use of a 26 percent refund amount, and told Cutrona he would get back to him later and verify the correct percentage of any refund, but never did so. Cutrona's testimony in this respect is considered credible. During the conversation, Maye did not advise Cutrona to cease using the 26 percent figure or to revise the contract form. Cutrona later talked to another employee of Petitioner who convinced him that Petitioner's regulations required a 75 percent refund and the firm thereupon revised its form to reflect the correct percentage. Investigator Maye also spoke to Respondent McWeeney in November, 1980 concerning the "seven services of real estate" and what services could be performed by unlicensed personnel in the rental office, but did not inform her concerning any suspected irregularities in the operation of Homes-R-Us, Inc. (Testimony of Maye, Cutrona, McWeeney) Respondents' employees were mostly part-time help who were compensated on an hourly basis, and it was therefore difficult to obtain licensed personnel who would remain with the firm. The clerical personnel do not provide any information to customers regarding leasing arrangements, but do receive listings called in to the office by landlords. Only licensed personnel solicit listings from prospective lessors, or owners of property. Additionally, unlicensed clerical personnel accept rental fees, prepare rental contracts, deliver the "vacancy book" to customers, and verify rental availabilities by telephone to the prospective lessors. (Testimony of Cutrona, Stipulation)
Recommendation That an administrative fine of $250.00 be imposed against Respondent Homes- R-Us, Inc., and that a public reprimand be issued to Respondent Vera McWeeney and Anthony Cutrona for violation of Subsection 475.25(1)(e), Florida Statutes. DONE and ENTERED this 25th day of February, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM 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 25th day of February, 1982. COPIES FURNISHED: Salvatore A. Carpino, Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Joseph R. Park, Esquire 33 North Ft. Harrison Avenue Clearwater, Florida 33515 Mr. C. B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801 Frederick H. Wilsen Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the pleadings on file, the following relevant facts are found: In the October 1, 1982 edition of the Florida Administrative Weekly, Volume 8, No. 39 at page 2685, notice was published of the respondent's proposed amendment of Rule 12A-1.61, entitled "Rental of Living Quarters, Sleeping or Housekeeping Accommodations." This notice contained the following language: "IF REQUESTED, A HEARING WILL BE HELD AT: TIME AND DATE: 9:00 a.m., October 22, 1982 PLACE: New Capitol, Lower Level" By letter dated October 7, 1982, the respondent received a request for a hearing and notification of an intent to appear at the hearing scheduled for 9:00 a.m. on October 22, 1982, for the purpose of protesting the proposed change in Rule 12A-1.61. This letter was not written by or on behalf of any of the petitioners in this proceeding. The respondent did not acknowledge that it received this request, nor did it schedule or hold the public hearing on October 22, 1982. On October 18 or 19, 1982, the petitioners in this proceeding filed with the respondent a "petition to convene separate proceeding pursuant to 120.54(16), Florida Statutes." Among other allegations, this petition states that: "3. Petitioners are particularly affected by the proposed rule and cannot adequately protect those interests merely by appearing at a public hearing. Petitioners intend to present extensive testimony from their own witnesses and from the staff of DOR. Requiring Petitioners to proceed at a hearing open to the public would so disrupt, hamper and frustrate Petitioners' presentation so as to unfairly restrain Petitioners' ability to adequately oppose adoption of the proposed rule. Petitioners must be afforded an individual proceeding where they would have complete and uninterrupted access to the staff of DOR and be able to present their own witnesses in an adversary-type proceeding, which cannot be done at a standard rule hearing. Only in this manner will Petitioners be afforded a fair hearing on the proposed rule. WHEREFORE Petitioners respectfully request that DOR suspend its rule- making proceedings and convene a separate proceeding under the pro- visions of Section 120.57." The respondent filed a Motion to Dismiss the petition to convene a separate proceeding pursuant to Section 120.54(16) on or about October 25, 1982. In the October 29, 1982, edition of the Florida Administrative Weekly, Volume 8, No. 43, at page 2976, the following announcement appears: "The Department of Revenue announces that the hearing scheduled for October 22, 1982 on Rule 12A-1.61--Rental of Living Quarters, Sleeping or Housekeeping Accommodations, has been deferred for one month. Notice of this Proposed Rule was given in the Florida Administrative Weekly Vol. 8, No. 39, dated October 1, 1982, on pages 2686-2689." By "Final Order Denying Rule-Making Hearing and Draw-out Proceeding" dated November 8, 1982, nunc pro tunc to November 3, 1982, the respondent denied the petitioners' requests for a Section 120.54(3) and a Section 120.54(16) hearing. It was concluded that the requests were filed beyond 14 days from October 1, 1982, the date upon which notice of the proposed rule was published, and thus were untimely. It was found that since no timely request for a Section 120.54(3) hearing had been received by the respondent (a fact which the respondent now admits was erroneous), the respondent was not required to schedule such a hearing and, indeed, had not exercised its option to schedule such a hearing. Therefore, the respondent concluded that there existed no rulemaking proceeding from which to "draw-out" and the petition for a Section 120.54(16) proceeding was therefore moot. No reference was made in the respondent's order to the announcement which had appeared in the October 29, 1982, Florida Administrative Weekly that the October 22, 1982, hearing on Rule 12A-1.61 had been deferred for one month. The respondent's Order also concluded that the request for a draw-out proceeding, even had it been timely filed, was fatally defective for its failure to affirmatively demonstrate that a Section 120.54(3) rulemaking proceeding would not provide adequate opportunity to protect the petitioners' substantial interest. On November 9, 1982, the Governor and Cabinet adopted challenged Rule 12A-1.61, 1/ after receiving comments from the petitioners and counsel for the petitioners in this case. The petitioners received notice that the Governor and Cabinet would take up the proposed rule on November 9, 1982, by way of a telephone call received approximately 24 hours before November ninth. No notice was published in the Florida Administrative Weekly that a public meeting would be held by the Department of Revenue on November 9, 1982, which was the second Tuesday of the month. Notices did appear in the October 8, October 22, and November 5, 1982 editions of the Florida Administrative Weekly that public meetings would be held respectively on October 22, November 3 and November 16, 1982. These notices state that the "Department of Revenue will act on matters duly presented on its Agenda, which may include approval of rules" and other matters. The rules which govern the organization and administration of the Department of Revenue provide that regular public meetings of the Governor and Cabinet to transact the business of the Department of Revenue shall be on the first and third Tuesdays of each month or at such other place or time as may be designated, and that a standard notice of the meeting must be published in the Florida Administrative Weekly at least seven (7) days in advance. Rule 12-1.03, Florida Administrative Code. Any agenda item "deferred must be re-agendaed for the next regularly scheduled meeting of the Governor and Cabinet unless a longer period of deferment is approved by a majority vote of the Governor and Cabinet." Rule 12-1.06, Florida Administrative Code. In summary form, the challenged rule provides, inter alia, that individual condominium units are considered, with certain exceptions, taxable transient rental facilities if rented for periods of less than six months in continuous duration. The rule purports to make owners and/or rental agents for owners of individually-owned condominium units liable for the collection and payment of the applicable sales tax due on the rental. The petitioners in this proceeding are owners and/or rental brokers or agents for owners of individually-owned condominium units in Sarasota, Florida. G & B Properties, Inc. and Sarasota Surf Vacation Rentals, Inc. each had over $1 million in gross rental revenues last year. Many, if not most, of their present leases and rental contracts were entered into prior to the effective date of the challenged rule and the five percent sales, or transient rental, tax was not incorporated into those rental contract terms. The challenged rule has or will cause certain changes in the operations of these petitioners. Additional staff and overtime work are required to notify lessees of the newly imposed tax. New bookkeeping materials are required to account for and handle the tax, and supplies on-hand can no longer be utilized. One real estate agent estimated the expense of changing his bookkeeping system to be $1,500. This agent also opined that a considerable block of renters has been lost due to the increased five percent charge and change in contract terms, and that there has been a loss of goodwill between himself, as a rental agent, and condominium owners and tenants who have entered into lease agreements in years past without the imposition of the tax. Prior to the adoption of the challenged rule, the respondent's rules did not address individual condominium units and a transient rental tax on such units was not collected from tenants, owners or rental agents by the Department of Revenue. The "summary of the estimate of economic impact of the rule" contained in the notice of the amendment of Rule 12A-1.61 appearing in the October 1, 1982, edition of the Florida Administrative Weekly, Volume 8, No. 39, page 2686, provides as follows: "None. The proposal contains amendments to existing rules and is predicated upon legislation enacted. The fiscal impact occurred upon the amendment to 212.03, F.S. by Chapter 97-359, Laws of Florida." The actual Economic Impact Statement prepared for the challenged amendment recites that the cost to the respondent of implementing the amendment is estimated at $15,122, and the "amount of paperwork is substantial." For the "estimated cost or economic benefit to persons directly affected by the proposed action," the Economic Impact Statement notes that the Revenue Estimating Conference has identified the revenue loss as $2,702,000. It lists those classes of persons (tenants) exempted from the tax as persons benefiting from the rule, and further states that the revenue loss of $2,702,000 will be offset by about $200,000 resulting from the taxable status of certain condominium rentals. The Economic Impact Statement provides that the rule "will not place any business at a competitive disadvantage, nor will it have any impact on the open market for employment." In its "statement of data and method used in calculating estimates," the Economic Impact Statement sets forth the basis for the $15,122 agency cost of promulgating and implementing the proposed rule. It then states that the "revenue impact is based on Revenue Estimating Conference consensus estimates." Neither the "Revenue Estimating Conference," its "consensus estimates" nor the basis or methodology utilized in its figures are further identified or explained in the respondent's Economic Impact Statement. According to the respondent's Director of Research, Planning and Budgeting, the Revenue Estimating Conference is an informal body under the Governor's office consisting of the State Economist and two legislative staff directors whose purpose is to develop revenue forecasts, impacts and estimates in a non-political environment. The figures utilized in the Economic Impact Statement for the challenged rule are taken directly from those utilized in connection with the passage of a 1979 amendment to Section 212.03, Florida Statutes, by Chapter 79-359, Laws of Florida. The respondent did not attempt to make its own estimate of revenues or costs or economic benefits to persons directly affected by the proposed rule, nor did the respondent request the Revenue Estimating Conference to revisit its 1979 estimate of economic impact. The instant petition challenging the validity of Rule 12A-1.61 was filed by the petitioners with the Division of Administrative Hearings on December 2, 1982. By Order of Assignment dated December 10, 1982, the undersigned was designated as the Hearing Officer. By letter dated December 14, 1982, the undersigned suggested a final hearing date of January 3, 1983. The undersigned was informed by telephone message from counsel for the petitioners that the parties were going to file a stipulation waiving the requirement that a hearing be held within thirty days. While a written stipulation was never received to this effect, it was the understanding of the undersigned that the parties did not desire to utilize the previously suggested hearing date of January 3, 1983. Through telephone conversations between the offices of the Division of Administrative Hearings and counsel for the petitioner, a hearing date of January 10, 1983, at 4:00 p.m. was originally made available and then was changed to January 14, 1983, because more hours were thought to be necessary to complete the hearing. On January 12, 1983, a notice of appearance as co- counsel for the respondent was filed, as was a Motion to Dismiss or, Alternatively, to Stay Proceeding on the ground that the Division of Administrative Hearings lacked jurisdiction to entertain this rule-challenge proceeding inasmuch as the hearing was not scheduled within the thirty days required by Section 120.56(2), Florida Statutes. Oral argument on this motion was heard prior to the commencement of the final hearing on January 14, 1983. Finding that counsel for the petitioner reasonably believed that respondent's counsel had agreed to waive the thirty-day hearing requirement and that respondent had not demonstrated that it had been prejudiced in any manner whatsoever by the four-day delay in commencing the final hearing, the Motion to Dismiss or Stay was denied.
