Findings Of Fact At all times pertinent to the allegations contained herein, Respondents were licensed real estate salesmen in the State of Florida, with Mr. Blanc's license being 0406481 and Ms. Kirkland's license being 0399466. The Division of Real Estate is a state government licensing and regulatory agency charged with the responsibility of regulating the practice of real estate in this state. In November, 1985, Mr. and Mrs. William A. McKie were owners of Week 43 in Unit 1 of a time share condominium located at the Anchorage Resort and Yacht Club in Key Largo, Florida. About that time, they received a card issued by the Florida Bay Club to visit a time share condominium there. Because they were somewhat disappointed in the condition of their Anchorage unit, they went to see the Florida Bay Club facility and met with Respondent Kirkland who took them on a tour of the facility and the model apartment. Mrs. McKie was quite impressed with it, but indicated she could not afford it, because she and her husband already owned a time share unit at the Anchorage. When told that, Ms. Kirkland introduced the McKies to Respondent Blanc, who in the course of his sales presentation, suggested that the McKies use their ownership at the Anchorage as a trade-in worth $4,000 off of the in excess of $11,000 price of the Florida Bay Club unit. The McKies agreed and signed certain documents incident to the purchase including a worksheet, purchase agreement, disclosure agreement, and settlement statement, all prepared by Respondent Blanc. The worksheet reflected that the unit being purchased by the McKies, Week 44 in Unit A-5, had a purchase price of $6,500 toward which the McKies made a down payment of $650 by three separate charges to their Master Card and Visa cards, two for $300 each and one for $50. This left a mortgage balance to be financed of $5,850 payable for 7 years at 15 1/2 percent with monthly payments of $114.54. No reference was made in the worksheet to a trade in of the Anchorage unit. The purchase agreement also signed by the McKies and by Respondent Kirkland for the Florida Bay Club reflects a purchase price of $6,500 with a down payment of $650. The truth in lending form reflects that the amount financed would be $5,850 at 15.5% resulting in a finance charge of $3,771.36 with a total monthly payment amount of $9,621.36 which, when added to the $650 deposit, showed a total sales price of $10,271.36. The settlement statement signed by the McKies reflects a sales price of $6,500 with a $650 deposit. At no place, on any of the documentation, is the $4,000 trade-in for the Anchorage unit reflected. As a part of the transaction and at the suggestion of Respondent Blanc, the McKies were to sign a quitclaim deed to him as the representative of the seller to receive credit for the $4,000 trade-in. The documents, except for the quitclaim deed, were signed by the McKies on their first visit to Florida Bay Club on November 17, 1985. Mrs. McKie does not recall either Respondent signing the documentation, but there is evidence that Ms. Kirkland signed the purchase agreement and the worksheet and Mr. Blanc approved the worksheet. Neither the disclosure statement, the settlement statement nor the quitclaim deed, which was prepared by Respondent, Blanc, and furnished to the McKies on their second visit, was signed by either Respondent. The McKies went back to Florida Bay Club approximately a week later to sign for the prize they had been notified they had won and to sign the quitclaim deed, which had not been ready for them on their first visit. Respondent Blanc explained what the quitclaim deed was for and according to both McKies, they would not have purchased the property at Florida Bay Club had they not been able to trade-in their Anchorage unit. They definitely could not afford to pay for both units, a fact which was repeatedly explained to Respondents on both visits. Mrs. McKie believed that when she signed the quitclaim deed to the Anchorage unit, she would no longer be responsible for making payments there and in fact, the McKies notified the Anchorage Resort Club that Respondent Blanc had assumed their Week at the Anchorage, a fact which was confirmed by the Anchorage to Mr. Blanc by letter dated February 13, 1986. It is further noted that on January 30, 1986, Ms. Berta, general manager of the Florida Bay Club, by letter of even date, notified Mr. Blanc who was no longer an employee of Florida Bay, that the McKies' payment book, invoices for taxes due on the Anchorage property, and the quitclaim deed were being forwarded to him as evidence of the change of ownership of the Anchorage Resort unit from the McKies to Respondent Blanc. In this letter, Blanc was requested to notify the Anchorage of the change so the McKies would not be dunned for continuing payments. At the closing of the Florida Bay unit, when Mrs. McKie and her husband signed the quitclaim deed, Respondent Blanc told her she would continue to get payment notices from the Anchorage while the transfer was being processed, but she should bring those payment notices to him at the Florida Bay Club and he would take care of them. When Mrs. McKie received the first notice, she brought it to the Florida Bay Club to give to Mr. Blanc, but he was no longer located there. On this visit, she spoke to Ms. Berta, who advised her that the Florida Bay Club did not take trades. Ms. Berta called Respondent Blanc at his new place of business by phone in Mrs. McKie's presence and Respondent indicated at that time that he would buy the Anchorage unit himself and assume the payments. As a result, Mrs. McKie sent the delinquent notices to him at his new place of business, Gulf Stream Manor. In the meantime, she continued to make her new payments at the Florida Bay Club. Notwithstanding Respondent Blanc's agreement to assume payments, Mrs. McKie continued to receive mortgage payment delinquent notices from the bank for the Anchorage unit. During later negotiations with the bank regarding this, Mrs. McKie was told that she would still be responsible for making the payments even if Respondent Blanc took over and didn't pay and as a result, in order to relieve herself from this impending burden, she made arrangements to pay off the entire amount due for the Anchorage unit. After that she made several efforts to get Respondent Blanc to pay her back for the amount paid. Respondent Blanc agreed to make the payments and said he would pay the taxes on the unit, but he never reimbursed the McKies for any of the amount they had to pay. The McKies now own the Anchorage unit and have worked out a settlement agreement with the Florida Bay Club to get out of the responsibility for the unit there. Review of the quitclaim deed in question, prepared by Respondent Blanc and signed by the McKies, reflects that the McKies are both the grantors and grantees of the property and that Respondent Blanc's name nowhere appears on the document. It is of no force and effect. Respondent contends that when the McKies indicated they were unable to purchase a new unit since they still had a prior unit to pay for, relying on his understanding that the marketing organization selling the Florida Bay Club units had in the past taken a unit in trade, he discussed the matter with his supervisor who advised that he could offer up to $4,000 in trade on the unit. In order to do this, Respondent Blanc had to price the new unit at $10,500 and credit the McKies with $4,000. However, none of the documentation shows this was ever done. At no place on any of the documentations is the $4,000 trade-in referenced. It is clear the offer of a trade-in was a sham to induce the McKies to purchase a unit at Florida Bay Club. Ms. Berta, who was manager at Florida Bay Club at the time in question, indicated that no trade-ins were ever taken by the club. The prior trade-in referenced by Mr. Blanc was a unit which was completely paid for as opposed the McKies' which still had a substantial outstanding balance on it. Respondent Kirkland who was not a party to any of the negotiations subsequent to her initial interview with the McKies indicates that she "probably" quoted the McKies a price of $10,500. When Mrs. McKie indicated that they could not afford such a high price, she turned them over to Mr. Blanc who thereafter handled the entire transaction. Respondent Blanc tells a somewhat different story about the reaction of the McKies when his failure to assume responsibility for the trade-in unit at the Anchorage Bay Club came to light. He indicates that it was never intended that he would take title to this unit at first. The trade in was to be absorbed by the marketing company, Resort Sales International, for whom he worked, and he assumed, when he left the following week to go to a different facility, the company would follow through with its agreement to assume the McKie's Week at the Anchorage. He was quite surprised, he contends, to learn that this had not been done and since he wanted a unit in the Key Largo area anyway, he agreed to then assume it personally after first offering Mrs. McKie the opportunity to back out of the purchase. When she said that she wanted to be at Florida Bay Club, he was sent the payment books and the deed. He called the bank to notify them that he was going to assume responsibility for the loan, but the bank would give him no information regarding it and the bank official, Ms. Brown, was adamant in her representation that the McKies could not quitclaim deed the property to him. No reason was given for this, however. Mr. Blanc claims he made a series of telephone calls between January 30 and March 31, 1986, in an attempt to straighten out the difficulty involved. These included sixteen calls to Ms. Berta, eight calls to his former supervisor at Resort Sales, four calls to the Anchorage, three calls to the bank and three calls to Mrs. McKie. Mrs. McKie denies receiving calls from the Respondent and contends that her numerous calls to him remained unanswered. In a call he made after she paid off the loan on the Anchorage and settled with Florida Bay Club for approximately $2,183, Mrs. McKie advised Blanc to forget about it, that they were tired of messing with him and with the property. As a result, he admittedly gave up and did and heard nothing more regarding the property until he was contacted by a DPR investigator. On January 30, 1988, Mr. Blanc offered to buy Mrs. McKie's unit at the Anchorage for $2,900 which was exactly the amount owed on the property when she paid it off. She refused to accept that offer since she had paid $6,800 for the unit initially.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Administrative Complaint against Respondent Sandra Kirkland be dismissed and that Respondent Blanc's license as a real estate salesman in Florida be suspended for six months. RECOMMENDED in Tallahassee this 19th day of April, 1988. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 1988. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Darlene F. Keller Department of Professional Acting Executive Director Regulation DPR, Division of Real Estate Division of Real Estate Post Office Box 1900 Post Office Box 1900 Orlando, Florida 32801 Orlando, Florida 32801 Sandra S. Kirkland Post Office Box 9264 Panama City, Florida 32407 John G. Blanc 17501 West Highway 98 Panama City, Florida 32407
The Issue Whether Respondent violated Sections 112.313(6), Florida Statutes, by using a Riviera Beach Housing Authority credit card for personal use and, if so, what penalty is appropriate.
Findings Of Fact At all times pertinent to this proceeding, Respondent was a member of the Board of Commissioners of the Riviera Beach, Florida Housing Authority (Housing Authority/Board). Respondent was appointed to the Housing Authority by the mayor of Riviera Beach, Florida, and served from January 1994 until September 1996. In that public position, Respondent was subject to the requirements of Part III, Chapter 112, Florida Statutes, the Code of Ethics for Public Officers and Employees. The Housing Authority is empowered to operate and make decisions relative to housing projects located in the City of Riviera Beach, Florida. The property operated by the Housing Authority constitutes an area of approximately 14.5 acres or about three city blocks. In February 1995, the Housing Authority voted to obtain and issue credit cards to its commissioners and staff members. At this meeting, it was made clear that these credit cards were to be used by commissioners and staff members exclusively for travel expenses incurred while engaged in business related to the Housing Authority. Respondent attended the February 1995 meeting at which the credit card issue was presented and approved by the Housing Authority and, also, participated in the vote on this issue. Accordingly, Respondent was aware of the intended and appropriate purpose for which these credit cards could be used. Although the Housing Authority credit cards were issued in the individual names of commissioners and staff members, they were kept at the Housing Authority office. When a commissioner or staff member needed to use the credit card, that individual had to go the Housing Authority office to retrieve the card. Prior to obtaining their credit cards, commissioners or staff members were required to sign a log, indicating the date the card was checked out. Upon completion of the Housing Authority related travel and business, the commissioner or staff member was required to return the credit card to the Housing Authority office. Individual commissioners and staff members were not required to pay the credit card bills. Rather, under procedures implemented by the Housing Authority, these credit card bills were sent to and paid by the Board. At all times relevant to this proceeding and while serving as a Commissioner of the Housing Authority, Respondent worked as a confidential informant for the Palm Beach County Sheriff's Office. In her capacity as a confidential informant, Respondent worked on cases in West Palm Beach as well as in Riviera Beach, Florida. Respondent was sometimes compensated by the Palm Beach Sheriff's Office for information that she provided. At all times relevant hereto, Owen Dixon was the Executive Director of the Housing Authority. In this capacity, Mr. Dixon was responsible for approving and authorizing all business related travel for commissioners of the Housing Authority. Commissioners were required to obtain prior approval for all Board related travel expenses if they wanted to use the credit cards issued by the Housing Authority and expected the Board pay the expenses. Mr. Dixon authorized Respondent to use her Housing Authority credit card to rent a vehicle for a one-day trip to conduct business associated with the Board. Based upon Respondent’s request and Mr. Dixon's authorization, the trip was to be taken on or about April 27, 1995. The reason Mr. Dixon approved use of the credit card for this one-day trip was that it was: (1) related to Housing Authority business and (2) appropriate under the guidelines established by the Housing Authority. On April 27, 1995, Respondent went to the Housing Authority office and signed out the Authority credit card bearing her name. On this same day, Respondent went to Payless Car Rental, and using her Board-issued credit card, rented a vehicle. Although Respondent's request and Mr. Owen's approval was for a one-day trip, Respondent kept the Payless rental car until May 4, 1995. During this one-week period, Respondent put 513 miles on the vehicle that she rented from Payless. On May 4, 1995, after returning the Payless rental car, Respondent rented a vehicle from National Car Rental. When Respondent rented the car from National Car Rental, she used her Housing Authority credit card. On May 4, 1995, after returning the Payless rental vehicle and renting a vehicle from National Car Rental, Respondent returned the Housing Authority credit card that had been issued in her name. Mr. Dixon never authorized Respondent to keep the Payless rental vehicle for more than the one day. Furthermore, Respondent neither sought nor obtained approval from Mr. Dixon or anyone else connected with the Housing Authority to rent a vehicle from National Car Rental on or after May 4, 1995. Moreover, there were no Housing Authority matters that required Respondent to rent a car for the period between April 28 through May 4, 1995, and any time period subsequent thereto. On June 5, 1995, the Housing Authority received a bill from Visa for charges incurred by Respondent for renting a vehicle from Payless Car Rental. The cost for Respondent's renting the Payless vehicle from April 27 through May 4, 1995, was $296.61. This total amount was charged to the Visa credit card issued by the Housing Authority to Respondent in her name. It was only after this bill was received by the Housing Authority did Mr. Dixon learn that Respondent had kept the Payless vehicle for one week, rather than the one day that he had authorized. On June 6, 1995, Mr. Dixon wrote a letter to Respondent asking her to reimburse the Housing Authority $288.70, the part of the total bill that was not attributable to Housing Authority business. In response to the letter, Respondent made partial reimbursement to the Housing Authority in the amount of $200 on June 23, 1995. Respondent fully reimbursed the Housing Authority for the Payless car rental on July 10, 1995, when she remitted $100 to the Housing Authority. Upon payment of the $100, Mr. Dixon's secretary, Marion White, told Respondent that she had overpaid by $11.30 the amount owed to the Housing Authority. Respondent then directed Mrs. White to "just hold on to" the balance. Approximately two weeks after Respondent fully reimbursed the Housing Authority for the Payless car rental, the Housing Authority received a bill from Visa, dated July 28, 1995. This Visa bill reflected charges of $188.84 incurred at National Car Rental that had been made on Respondent's Housing Authority credit card. Several days later, in a courtesy reminder dated July 31, 1995, Visa notified the Housing Authority that the credit limit on Respondent's credit card had been exceeded. The courtesy notice showed additional billing to the account of $997 from National Car Rental. Within a few days, the Housing Authority received a bill for additional charges of $214.99 from National Car Rental that had been made on Respondent's credit card. Respondent charged a total of $1,400.94 to her Housing Authority credit card for the National car rental. This amount represents the cost for Respondent's renting a vehicle from National Car Rental for approximately eighty (80) days. As of the date of the final hearing, Respondent had not reimbursed the Housing Authority for the National Car Rental bill. On or about July 4, 1995, Respondent signed up for membership in National Car Rental's "Emerald Club." Membership in the Emerald Club was available to individuals who had been or were customers of National Car Rental. Emerald Club members were entitled to discounts and express service, and were required to have a primary credit card number listed with National Car Rental. Because prospective Emerald Club members had been or were customers of National Car Rental, the primary credit card number could be obtained from the company's computer system based on credit card information acquired during prior transactions. On May 4, 1995, when Respondent initially rented a vehicle from National Car Rental, she used her Housing Authority credit card. Thereafter, Respondent's Housing Authority credit card number appeared in National Car Rental's computer system and was listed as the primary credit card for Respondent's Emerald Club membership. Respondent never used a personal credit card when she rented a vehicle from National Car Rental. The expenses incurred by Respondent as a result of renting a vehicle from National Car Rental were never billed to any credit card other than her Housing Authority credit card. Also, upon returning the vehicle rented from National Car Rental, Respondent never paid a sufficient amount in cash to prevent a balance from being billed to her Housing Authority credit card. There is no dispute that Respondent incurred the charges for car rental from National Car Rentals. In fact, at a meeting held in late July 1995, and attended by Mr. Owens, the Mayor of Riviera Beach, a Housing Authority Commissioner, the attorney for the Housing Authority Board, and a Palm Beach Sheriff's deputy, Respondent admitted that she had rented a vehicle from National Car Rental. It was during this meeting that Respondent first divulged that she was a confidential informant. According to Respondent, she had been using the car rented from National in connection with her work as an informant. However, Respondent indicated that she had paid the bills incurred as a result of the National Car Rental expenses. Despite this representations, Respondent never provided documentation that she made such payments. Prior to the meeting held in late July 1995, no one connected with the Housing Authority knew that Respondent has worked as a confidential informant. Likewise, neither Mr. Dixon nor anyone associated with the Housing Authority ever authorized Respondent to use the Housing Authority credit card for such purpose. After Respondent stated that she was using the Housing Authority credit card in her work as a confidential informant, Respondent was told that such use was improper. Nonetheless, Respondent kept the car rented from National Car Rental for several more days. Moreover, Respondent allowed these as well as the other National Car Rental expenses to be charged to her Housing Authority credit card. When Respondent returned the car to National Car Rental, because she did not pay the bill, the car rental expenses were billed to and, eventually, paid by the Housing Authority. Respondent's use of the Housing Authority credit card for car rental for personal use or travel, or for work as a confidential informant or any other private employment is contrary to the mission and public purpose of the Housing Authority. On August 4, 1995, the Board rescinded Respondent's authorization for future travel related to the Housing Authority due to her misuse of Housing Authority resources. At this meeting, Respondent again told Commissioners of the Board that she had paid the National Car Rental bills. However, again, no documentation supporting this claim was presented by Respondent. The Palm Beach County Sheriff's Office never directed nor required Respondent to rent a vehicle to conduct her work as a confidential informant. In cases where the Palm Beach Sheriff's Office determines that it is necessary for an informant to have a rental car, that agency must give prior approval for such rental. Also, any costs associated with such an authorized and approved car rental are paid by the Palm Beach County Sheriff's Office.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Final Order and Public Report be entered by the Florida Commission on Ethics finding that Respondent, Delphine Gissenter, violated Section 112.313(6), Florida Statutes, and imposing a civil penalty of $3000; issuing a public censure and reprimand; and requiring restitution to the Riviera Beach Housing Authority in the amount of $1400.94. DONE AND ENTERED this 29th day of December, 1997, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 1997. COPIES FURNISHED: Virlindia Doss Assistant Attorney General Attorney's General's Office The Capitol, Plaza 01 Tallahassee, Florida 32399-1050 Kerrie Stillman Complaint Coordinator Florida Commission on Ethics Post Office Box 15709 Tallahassee, Florida 32317-5709 James Green, Esquire One Clearlake Centre, Suite 1503 250 Australian Avenue West Palm Beach, Florida 33401 Bonnie Williams Executive Director Florida Commission on Ethics Suite 101 2822 Remington Green Circle Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Phil Claypool, General Counsel Florida Commission on Ethics Suite 101 2822 Remington Green Circle Post Office Drawer 15709 Tallahassee, Florida 32317-5709
The Issue The issue in this case is whether Respondent unlawfully discriminated against Petitioner in connection with Petitioner’s employment by Respondent on the basis of his national origin.
Findings Of Fact Petitioner Leneve Plaisime (“Plaisime”), whose country of origin is Haiti, was employed as a busboy and room service attendant at the Marriott Key Largo Bay Resort (“Marriott”)1 from 1995 to 1997. On September 13, 1997, upon returning to work after a vacation of several weeks, Plaisime was fired by a manager named Eric Sykas who said to him: “There is no job for you because the owner says he’s not interested in Haitians.”2 This statement was overheard by a co-worker of Plaisime’s named Fito Jean, who testified at the final hearing, corroborating Plaisime’s account.3 In around the middle of October 1997 (approximately one month after his discharge), Plaisime found a new job at Tak Security Corporation (“Tak”). Evidence introduced by Plaisime shows that he earned $7,862.52 at Marriott in 1997, which reflects an average monthly wage of about $925. Had he worked the entire year at Marriott, Plaisime would have earned a total of approximately $11,100. In contrast, working for Tak in 1998 Plaisime earned $11,396 (or approximately $950 per month)——a 2.7% increase in his annual income. There is no evidence showing what Plaisime’s likely income would have been in 1998 had he remained in the employ of Marriott. Ultimate Factual Determinations Marriott discharged Plaisime because of his national origin. Thus, Marriott committed an unlawful employment practice in violation of Section 760.10(1)(a), Florida Statutes. The actual economic loss that Plaisime suffered as a result of Marriott’s unlawful discrimination against him was one month’s pay, or $925.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the FCHR enter a final order declaring that Marriott discharged Plaisime on the basis of his national origin, in violation of Section 760.10(1)(a), Florida Statutes; prohibiting Marriott from committing further such violations; and awarding Plaisime $925 to relieve the effects of the unlawful discrimination that Marriott perpetrated against him. DONE AND ENTERED this 14th day of February, 2003, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 14th day of February, 2003.
Findings Of Fact The Florida Hotel and Motel Association, Inc. (Association or petitioner) is a non-profit corporation whose membership includes various hotels and motels throughout the State of Florida. The organization has been in existence since the 1950's. As of July, 1980, the Association had approximately 600 members. There are currently in excess of 6,000 licensed properties in the State that are eligible to join the Association. Mr. David Arpin was employed in various capacities by the Association for more than twenty years. His last position was that of executive vice president. Because of an illness, Mr. Arpin's full time activities with the petitioner ceased in December, 1977. However, he continued to receive compensation from the Association until June 30, 1978, on a "sickness leave of absence." (Exhibit No. 1). His employment with the Association was terminated on that date. (Exhibit No. 4). On November 7, 1977, a memorandum was prepared for Mr. Arpin by the Association's secretary which advised him that the name "Florida Hotel and Motor Hotel Association, Inc." was available for reservation in the Division of Corporations. (Exhibit No. 5). Mr. Arpin claims he did not read the memorandum at that time. However, he acknowledged that sometime after January 1, 1978, he became aware of the availability of the corporate name in question. On June 26, 1978, Mr. Arpin, through his counsel, reserved the name "Florida Hotel and Motor Hotel Association, Inc." Because of the controversy with petitioner, the respondent has been unable to utilize the name since that time. Since the cessation of his relationship with the Association, Mr. Arpin has operated an organization known as the Florida Lodging and Food Service Association, Inc. It is comprised of approximately 100 members, of which the majority are hotels and motels. It is in direct competition with petitioner for memberships. The logo used by the corporation is also strikingly similar to that used by petitioner. If the name "Florida Hotel and Motor Hotel Association, Inc." is awarded Mr. Arpin, he intends to use it in conjunction with an industry newsletter to be distributed to hotels and motels, or to substitute it in lieu of the corporate name now being used. He will continue to compete with petitioner, and solicit memberships from motels and hotels that are now members of the Association. Until July 1, 1980, the uncodified practice of the Division relative to the awarding of corporate names was that there be at least a one word difference in a corporate name from another in order to enjoy its use. Under this informal guideline, the Division took the position that the inclusion of the words "motor hotel" in lieu of "motel" constituted the necessary name difference for awarding the name to Mr. Arpin. Prior to the 1960's, a distinction existed between the terms "motel" and "motor hotel". Typically, a motor hotel was larger than a motel, and offered a full range of services that a motel did not, such as food, beverages and a night club. In contrast to a motel, a motor hotel did not have doors leading from each room directly to the parking lot. Since 1960, this distinction has evaporated within the hotel-motel industry, and the words are used interchangeably in the trade and have the same meaning.
Findings Of Fact At about 4:00 o'clock on the afternoon of May 8, 1979, petitioner's officers David William Shomers and Muriel Snipes Waldmann, entered respondent's place of business. At that time, Sherry Ann Armetto was behind the bar. When Officers Shomers and Waldmann asked Ms. Armetto for a meal she told them that the cook had not yet arrived. Officer Shomers and Officer Waldmann then each ordered a Scotch and soda, and both were served. At about 5:00 o'clock, the cook was still nowhere to he found. Officer Shomers counted the places available for people to sit down and eat, including seats in the bar, and determined that there were only 161 such places. Even though Ms. Armetto had worked for respondent as a bar tender for five or six months before the inspection on May 8, 1979, she had never been advised to refrain from selling alcoholic beverages when the kitchen was closed. She was so advised, however, after the events of May 8, 1979. Ricardo John Gutierrez had worked for the business four or four and one half years as of May of 1979. He was never told not to sell alcoholic beverages while meals were not sold. Petitioner initiated the present proceedings on or about July 3, 1979. In May of 1979, respondent Pete Rose Corporation held license number 16-790 SRX, an "ALCOHOLIC BEVERAGE LICENSE FOR THE PERIOD OCTOBER 1, 1970, THRU SEPTEMBER 30, 1979." Petitioner's exhibit No. 1. Respondent has not renewed the license since. As a condition of this beverage license, respondent was required to maintain at least 4,000 square feet, sufficient tables, chairs, china, other equipment and personnel to serve food to 200 persons, Officer Shomers testified.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner dismiss the notice to show cause, thereby terminating these proceedings and allowing respondent's license to expire; and then cancel respondent's license. DONE and ENTERED this 15th day of February, 1980, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: James Watson, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Pete Rose Corporation d/b/a Fat Cats 2590 S. State Road 7 Miramar, Florida
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, post- hearing memoranda and briefs, and the entire record compiled herein, thereby make the following relevant factual findings. At all times material to the allegations and charges in this proceeding, Respondent, Riviera Resort Hotel Associates, Ltd., was the holder of a valid alcoholic beverage license No. 16-615-S, Series 4-COP, located at 2080 South Ocean Drive, Hallandale, Broward County, Florida. On May 8, 1984, at about 9:30 p.m., Officer D'Ambrosia entered the licensed premises in an undercover capacity with a confidential source (CI). Based on a telephone complaint, Officer D'Ambrosia was requested by his supervisors to conduct an investigation to determine if the complaint was meritorious. The main lounge in the licensed premises has a front and back entrance. The front entrance is through the main lobby and the back door leads to a parking lot. Upon entering the premises, Officer D'Ambrosia and CI approached the main bar. Sergeant Pat Roberts was at the main bar area as a backup officer. There were approximately four other patrons at the bar. Officer D'Ambrosia and CI made contact with the on-duty bartender, Tommy Brownyard. After Brownyard served them drinks and the three of them engaged in general conversation, CI asked Brownyard if he had the "stuff" and if the price of $80.00 was still the same. Brownyard affirmed, stating that it would be in three bags, a one-gram and two half gram bags. CI then turned to Officer D'Ambrosia and stated the price of two grams would be $160.00. Officer D'Ambrosia counted out eight $20.00 bills and laid them on top of the bar counter. Brownyard left the bar area and entered the men's bathroom. After two or three minutes, Brownyard left the restroom, walked back to the bar and approached Officer D'Ambrosia and CI. Brownyard placed what looked like a pack of Marlboro cigarettes on top of the counter. Officer D'Ambrosia spread out the eight $20.00 bills on top of the counter in a manner that Brownyard could see it and Brownyard picked up the money while facing Officer D'Ambrosia and counted it behind the bar. Brownyard placed the currency in his pants pocket. Officer D'Ambrosia picked up the Marlboro box, opened it, and pulled out three clear plastic zip-lock-bags containing a white powdery substance. After looking at the bags, Officer D'Ambrosia placed them back into the box and placed a box in his shirt pocket. Sergeant pat Roberts observed the transaction. The three plastic bags which Officer D'Ambrosia purchased from Brownyard contained cocaine, a controlled substance under Chapter 893, Florida Statutes. As stated, the lounge only had, at most, four patrons besides Officer D'Ambrosia, CI and Roberts. The conversation with Brownyard about drugs occurred in a normal tone of voice. Officer D'Ambrosia did not attempt to conceal the purchase of drugs at the bar. Before Officer D'Ambrosia and CI left the bar, they spoke to Brownyard about the best time to buy more cocaine. Brownyard stated that Thursday (May 10, 1984) would be good but that Officer D'Ambrosia or CI should first call. Brownyard said that if Officer D'Ambrosia or CI wanted one gram of coke, to call and say "Is the one girl in there tonight?" and if Officer D'Ambrosia or the CI wanted two grams of cocaine, to call and ask "If the two girls are tonight." Brownyard would respond yes or no to the questions. After Officer D'Ambrosia and CI left, Sergeant Roberts had a conversation with Brownyard. Brownyard told Sergeant Roberts that he worked "directly for the owners" and that he "ran the placed" apparently referring to the lounge. On May 10, 1984, at about 9:20 p.m., Officer D'Ambrosia and CI went to the licensed premises and took seats at the bar. Officer Olive had arrived about 15 minutes earlier to be the backup officer. Officer Oliva was seated at the bar across from Officer D'Ambrosia and CI with a clear view of both D'Ambrosia and CI. There were at most five unidentified patrons at the bar on that evening. Brownyard was attending the bar. Officer D'Ambrosia and CI greeted at bar and, after approximately ten minutes, Brownyard approached Office D'Ambrosia and CI and stated "Those two girls are here if you are interested." Officer D'Ambrosia affirmed and Brownyard told Officer D'Ambrosia and CI that the cocaine would be in 2 one-gram bags. Brownyard then left the bar and walked to the area of the men's restroom. After approximately one minute, Brownyard left the area of the restroom and walked back to the bar. Brownyard approached Officer D'Ambrosia and CI. Brownyard placed a matchbox on the top of the bar and looked at Officer D'Ambrosia. Officer D'Ambrosia placed $160.00 on the bar counter and picked up the matchbox. Brownyard picked up the money and, after counting it, placed it in his pocket. Officer D'Ambrosia opened the matchbox and noticed two clear plastic zip-lock bags containing a white powdery substance. Office Olive observed the transaction. The two plastic bags bought and received from Brownyard contained cocaine. The conversation with Brownyard about drugs occurred in a normal tone of voice and Officer D'Ambrosia made no effort to conceal the sale on the premises. On May 14, 1984, at approximately 9:15 p.m. Officer D'Ambrosia entered the Riviera Resort Motel. Officer D'Ambrosia walked to the bar and sat down. Officer Wheeler had arrived before Officer D'Ambrosia as the backup officer. Officer D'Ambrosia entered into a conversation with the on-duty bartender named Janette about Brownyard. Janette stated that Brownyard had been fired. Janette told Officer D'Ambrosia that Brownyard had been fired by Chi Che, the bar manager (Arturo Muniz). At approximately 9:45 p.m., a patron later identified as Benee Scola entered the bar. Approximately 15 minutes later, Janette received a phone call from Brownyard. Janette advised Brownyard that Officer D'Ambrosia was at the bar looking for him. Brownyard told Janette that he would be at the bar in approximately 45 minutes. Janette relayed this information to Officer D'Ambrosia and at approximately 10:45 p.m., Brownyard entered the bar and sat down. D'Ambrosia and Janette approached and greeted Brownyard. Office D'Ambrosia asked Brownyard if "The two girls were around." Brownyard affirmed and stated that the price would be $80.00 per gram. Janette was in a position to hear this conversation. Officer Wheeler moved to a different part of the bar to get a better view of D'Ambrosia, Brownyard and Janette and to talk to Benne Scola. Brownyard asked D'Ambrosia if he was still interested in the "two girls" and Officer D'Ambrosia affirmed. Brownyard then obtained two matchboxes from Janette, who asked him (Brownyard) if one of the matchboxes was for her. Brownyard said yes. Brownyard left the bar and walked toward the men's restroom. Approximately two minutes, Brownyard returned and sat next to D'Ambrosia, placing a matchbox on top of the bar counter. The two clear plastic zip-lock bags containing cocaine were inside the matchbook cover. Officer D'Ambrosia pulled some currency from his pocket, counted out eight $20.00 bills and handed Brownyard the money below the bar counter. Officer D'Ambrosia picked up the matchbook, examined the contents, and placed it in his shirt pocket. Officer Wheeler did not see the exchange of money but observed the remaining portion of the transaction. On that evening, Chi Che entered the premises and set down two bar stools from Brownyard. Brownyard told D'Ambrosia that he had an argument with Chi Che about the liquor to carry at the bar and about accepting bad traveler's checks. After five or ten minutes, Chi Che left the bar. Janette asked Brownyard to watch the bar while she used the restroom. Brownyard agreed. Brownyard left the bar area after Janette returned from the restroom. D'Ambrosia states that Scola asked him (D'Ambrosia) if he knew where she could get some "blow." D'Ambrosia stated that she would have to talk to Brownyard. Brownyard returned to the bar and Scola approached him and asked about the going rate for blow. Brownyard stated $80.00 for a gram and $40.00 for a half gram. Brownyard said that he could handle a half gram right now. Scola agreed and handed Brownyard some currency. Brownyard took the currency, left the bar, existed the premises and returned approximately five minutes later. Brownyard handed Scola a small plastic baggie. Officer D'Ambrosia left the bar at approximately 7:30 and Officer Wheeler left approximately 15 minutes later. The conversations between Brownyard, Janette and Officers D'Ambrosia, Wheeler and Scola concerning the purchase of drugs occurred in normal tones of voice. Officer D'Ambrosia made no attempt to conceal the transaction. On May 18, 1984, at approximately 11:30 p.m., Officer D'Ambrosia entered the licensed premises in an undercover capacity. Janette was tending the bar. Officer Phillips was seated at the bar as the backup officer. Brownyard and Scola were also at the bar. Officer D'Ambrosia sat down and Brownyard approached him. D'Ambrosia asked Brownyard if he had any "stuff" with him tonight. Brownyard said "sure." D'Ambrosia asked if it was still the same price and Brownyard said "yes." D'Ambrosia said "OK." Brownyard left the bar and walked away from D'Ambrosia's view. About three minutes later Brownyard returned and placed a matchbox on the bar counter in front of D'Ambrosia. Officer D'Ambrosia pulled out four twenty dollar bills from his pocket and paid Brownyard. D'Ambrosia opened the match box up, lifted out a clear plastic zip lock bag containing suspected cocaine. Janette was in a position to see this transaction. Officer Phillips also observed this transaction. While tending bar, Janette spoke to Scola, "You want to go halves with me?" Scola stated that she would think about it since she had previously arranged a one half gram buy with Brownyard before officers D'Ambrosia and Phillips entered the bar. Janette later remarked that her boyfriend was later coming in with some medicine. Officer Phillips heard Scola and Janette discussing a cocaine deal. Janette told Scola it would be $35. Janette walked over to her boyfriend, Jeff Acosta, who gave her a small packet of aluminum foil. Janette gave the foil to Sonia and reminded her it was $35. Scola gave Janette two U.S. currency bills and told her to keep the rest as a tip. Janette gave Jeff the requested amount of the money. Scola later walked to the women's restroom. Officer Phillips later entered the women's restroom and observed Scola standing next to a toilet tank cover with an open packet of aluminum foil containing the suspected cocaine. Scola asked Officer Phillips to do a "line" with her, but Officer Phillips declined. Conversations at the bar area concerning the use of drugs occurred in a normal tone of voice. On May 25, 1984, at about 9:20 p.m., Officer Jenkins entered the licensed premises as a back up officer to Officer D'Ambrosia. At that time there were approximately six patrons in the bar area. Officer D'Ambrosia entered the premises approximately 9:25 and spoke to Janette about cocaine. Janette was told by Officer D'Ambrosia that the cocaine he bought from Brownyard was "poor quality" whereupon Janette allegedly admitted she was now dealing through her boyfriend Jeff. D'Ambrosia asked Janette if she would talk to Jeff about getting him some coke and she complied stating she would talk to him at about 10:10 p.m. when he (Jeff) entered the bar. D'Ambrosia approached and asked Jeff if he could get him an ounce and Jeff replied that he could. Later that night, D'Ambrosia and Jeff made a deal for one gram of coke that would be a sample for a future one ounce deal. According to D'Ambrosia, the purchase of one gram would take place on the next night, May 26, 1984. During that evening, Chi Che Muniz, the restaurant and lounge manager, entered the bar area. Officer D'Ambrosia approached Chi Che and told him that maybe Chi Che could pick up a woman if he did a couple of lines of coke. Chi Che refused. On May 26, 1984, at approximately 8:45 p.m., Officers D'Ambrosia and Jenkins entered the licensed premises. Shortly thereafter, Officer Aliva and Sergeant Roberts entered the bar. D'Ambrosia greeted Janette and had a general conversation with her. Janette asked D'Ambrosia if he had scored any cocaine and he reply "no." Janette stated that she would try and contact Jeff by phone because he had beeper. Janette made a short phone call from the bar and later told D'Ambrosia that she had left a message that he (D'Ambrosia) was at the bar. At approximately 9:30 p.m., a person later identified as Bill Hawkins entered the licensed premises. Bill approached Janette and told her that he was trying to locate some cocaine for her. Janette stated that she would buy a half from Bill for $35.00. Bill left the bar area and walked to the men's restroom. Officer Oliva went to the men's restroom. As Officer Oliva entered the restroom, he observed Bill changing clothes putting on a security uniform, complete with badge and night stick. Bill left the restroom and returned to the area. Bill told Officer D'Ambrosia that he worked part time as a security guard for Respondent on an as needed basis. At that time there were approximately 15 people in the lounge area. Bill Hawkins told Janette that the cocaine would be on the premises but that he would have to leave for a while to pick it up. Bill left for approximately 30 minutes and returned to the bar area. When he returned, he engaged in conversation with Bob Skirde. Janette later handed D'Ambrosia a small clear plastic zip-lock bag and asked D'Ambrosia to give it to Bill and tell him it was from me. D'Ambrosia complied with Janette's request. D'Ambrosia asked Bill if he had an extra half gram and Bill replied no that he could give D'Ambrosia "a nose full." Bill Hawkins then walked to the men's restroom where he found Officer Oliva who had previously arranged to buy a half gram of cocaine from Bill for $35. Bill asked Officer Olive to hold the door leading into the men's restroom while he did a line of coke. Officer D'Ambrosia observed Bob Skirde walk to the men's restroom and attempt to enter. Skirde was unable to enter the restroom inasmuch as Officer Olive was holding the door shut. Bill later approached Janette and asked her to get something to put it in. "Get me something." Janette handed Bill a napkin. Bill placed an object in the napkin, wrapped it up and gave it to Janette. Janette took the napkin and placed it in her purse. Janette later left the bar area and went to the restroom with what appeared to be the napkin she had received from Bill. Chi Che watched the bar while Janette was away. Officer D'Ambrosia states that he asked Janette "how was it?" and she replied "OK, but not as good as Jeff's." Later, Bill asked Officer D'Ambrosia to go to the men's restroom with him. Inside the restroom, Bill pulled out a clear plastic zip-lock bag containing suspected cocaine. Bill asked D'Ambrosia to do a couple of lines with him and he (D'Ambrosia) refused. D'Ambrosia asked Bill if he could purchase a half gram from him and Bill stated yes he would look into it. On June 1, 1984, at approximately 11:30 p.m., Officers D'Ambrosia and Jenkins separately entered the bar area. Officer Olive and Sergeant Roberts were there as back-up officers. D'Ambrosia talked to Jeff in Janette's presence about setting up a deal for an ounce of cocaine. Bill entered the premises and walked directly to Officer Jenkins. Bill and Officer Jenkins discussed cocaine and set up a deal for one gram to occur the next night at 7:00 p.m. On June 2, 1984, at approximately 7:10 p.m., Officer Jenkins entered the Riviera Resort Motel. Officer Jenkins asked an employee at the front desk if the bar was closed. The employee stated that it would be opened soon and suggest that she go to the patio bar. Sergeant Roberts was at the patio bar. Bill Hawkins called Officer Jenkins and they both walked to the patio bar. Janette was sitting on the patrons' side of the bar. At approximately 7:30 p.m., Janette left the patio bar to open the inside bar. Bill asked Beth, the patio bar attendant for a straw. Beth gave Bill a straw and stated that she knew Bill was not going to use it for his beer. Bill cut the straw to a length of approximately two inches and stated to Officer Jenkins "Let's go take care of business." Officer Jenkins and Bill walked to the inside bar. Janette was tending the bar and approximately two patrons were there. Officer Jenkins paid Bill $80 with money from her purse. Officer Jenkins extended the money to Bill over the bar counter and asked how the cocaine was packaged. Bill said "in a small plastic bag" and thereupon reached in his back pocket and pulled out his wallet. Bill laid the wallet on the bar counter and pulled back a flap which exposed a small clear plastic zip-lock bag containing suspected cocaine. Later analysis revealed the substance was in fact cocaine. This transaction was observed by Officer Roberts. Janette later came over to Bill and asked "if he wanted to work as a bell boy tonight because the front desk had called her." Bill was offered fond and drink for his services of helping with the luggage of the guests at the hotel. On June 4, 1984, Officer D'Ambrosia entered the Riviera Resort Motel and talked to Janette, the on-duty bartender. D'Ambrosia asked why Jeff was not at the bar. Janette replied that she would call Jeff about 10:30 or 11 p.m. and tell him that Officer D'Ambrosia was there at the bar. According to D'Ambrosia, Janette acknowledged that Jeff was to sell him (D'Ambrosia) a gram of cocaine. Officer D'Ambrosia left the bar and returned at approximately 10:45 p.m. D'Ambrosia and Jeff talked about setting up a deal for an ounce. On June 5, 1984, at about 8:10 p.m., D'Ambrosia telephoned Jeff at the Riviera Resort Motel to reschedule the drug deal to January 8, 1984 at 11:00 p.m. On June 8, 1984, at approximately 8:45 p.m., Officer D'Ambrosia arrested Tommy Brownyard outside the Rodeo Lounge. A search of Brownyard's person produced a quantity of cocaine. Between 10:00 and 10:30 p.m., Officer D'Ambrosia, Jenkins, Oliva, Wheeler, and Sergeant Roberts entered the Riviera Resort Motel and proceeded to the bar area. D'Ambrosia talked briefly with Jeff. D'Ambrosia pulled $1500 from his wallet and showed the money to Jeff. Jeff told D'Ambrosia that it would take him approximately 10 minutes to get the cocaine and he (Jeff) left. Jeff came back to the bar area in approximately 15 minutes. Jeff was then carrying a short black leather jacket over his shoulder. Sergeant Roberts observed a large clear plastic bag with cocaine stuck inside the jacket. Officer D'Ambrosia and Sergeant Roberts placed Jeff under arrest. The weight of the cocaine was determined to be 28.18 grams. The Respondent's Defense When Bob Skirde became responsible for total management of the Riviera, he inherited a security agreement with a service operated under contract with "Chief Bill Heinklein." The service provided one guard stationed at Riviera for patrol seven nights per week from 10:00 p.m. till 6:00 p.m. This service was terminated with Chief Heinklein's company on March 15, 1984 due to a seasonal decline in the occupancy in the hotel and due to unsatisfactory performance by guards supplied by Chief Heinklein. William (Bill) Hawkins was hired by the "Chief" in January of 1984 and was terminated on March 15, 1984 because he was sleeping on duty while at the Riviera. Subsequent to terminating the relationship with Heinklein's company, Robert Skirde hired security on an as needed basis when heavy occupancy was anticipated such as the Memorial Day weekend. In this regard, Walter Patskanick was hired to provide security services during that weekend. During the weekend of May 26, 1984, William Dale Hawkins was at the facility and offered to "help out" in a conversation with Chi Che in exchange for food and drink. Bill Hawkins did not receive any monetary compensation for any services he provided. Employees Chi Che hired Tommy Brownyard as a bartender on February 19, 1984. His pay was $25 per shift. His employment application indicated that he had worked as an internal revenue service agent from January, 1976 until January, 1982. On May 12, 1984, Brownyard was fired by Chi Che for failure to observe company rules and policy. On April 1, 1984, Chi Che hired Janette Hawkins to work the patio bar. Her pay was set at $25 per shift. Her employment application, as did the application of Tommy Brownyard, indicated that she had never been convicted of a crime. Following May 12, 1984, when Brownyard was fired, Janette was transferred to the inside lounge to work as bartender. Respondent denies having any knowledge of any specific work being performed by Bill Hawkins on June 1, 1984. In this regard, the evidence revealed that Bill was not on Respondent's payroll and did not receive any pay on that date. Further, Respondent denies that Bill Hawkins was an employee at any time following his termination on March 15, 1984. Upon the retention of Robert Skirde as the general manager of the Riviera Resort Motel, he (manager Skirde) immediately started to refurbish the facility and to generally upgrade the facility to serve the tourist market and to attract international tourists. The facility increased its occupancy more than 200 percent above the occupancy level that existed while the prior operator, Lodging Unlimited, operated the hotel. Manager Skirde has completely refurbished the lobby; has renovated the plumbing; has recarpeted all of the villas; has painted selected areas of the facility to "change the theme"; has repaired the south side of the roof; has spent in excess of $12,000 in landscaping has published another brochure which is being forwarded to travel agencies and, as stated earlier herein, has retained the services of the Hallandale Police Department to rid the facility of derelicts. Manager Skirde has been in the hotel business in excess of 24 years and in Florida for more than 12 years in that business. He started his employment in the Industry with the Sheraton Hotel Chain and has worked at several large tourist hotels in the area before being retained by the Respondent. Manager Skirde is the incoming President of the HSMA, a trade association of hotels and motels. Respondent has installed an electronic device which can contact police during an emergency, as needed. While Respondent used Chief Heinklein's services to provide security at the facility, manager Skirde reviewed a log book which was maintained by the security personnel, a daily basis, immediately after he got to the facility each morning. During May, 1984, occupancy declined significantly at the hotel and, for that reason, manager Skirde cut back on security and other areas until the season picks up during mid- July, 1984. Prior to that time, there had been no evidence of any drug transactions either by employees or patrons, by management or other persons involved in the operation of the Respondent's facility. During manager Skirde's tenure, he has issued several memos concerning problems with security and other means of maintaining security at the facility. At his arrival at the facility each morning, he usually "walked the property off and has instructed all employees that they can contact him on a 24- hour basis if needed." Manager Skirde has a policy of prohibiting employees from being on the property after their normal work hours have ended. Additionally, manager Skirde has instructed employees to contact him at any hint of drug activity. Manager Skirde has never overheard any conversation regarding drug use on the premises of the Riviera motel. Manager Skirde has not seen any memo published by the Petitioner as to a drug educational program for licensees. Elvis Reyes, a resident of New York City, New York, is employed by DBG properties, the owner of the Respondent's facility as an internal security officer. As part of his duties as an internal security officer, Reyes visits various properties owned by DBG properties unannounced and, in that connection, visited the Riviera Motel on May 2, 1984. Part of his instructions were not to divulge his affiliation with the parent company. During Reyes' visit to the Riviera Resort Hotel on May 2, 1984, he was there for the specific purpose of trying to find drugs on the property, either through the use by patrons or the sale of drugs in the bar areas. When Reyes went to the facility, he visited the lounge on May 2 and while in the bar lounge, there were 3 people present, 2 of whom were bartenders and 1 patron. Reyes asked the bartenders and the 1 patron if they knew where he could get some "toot" or some "blow." On each occasion, Reyes got a negative response. Reyes returned to the lounge on May 3 and again tried to buy some drugs from both the on-duty bartenders and the patrons without any success. Mr. Reyes filed a report with his superior, a Mr. Fruitbind of DBG properties in New York City, and related to him that there was no evidence of drugs being used on the premises by either patrons or employees. (Respondent's Exhibit 5.) Dr. Robert Baer is the holder of a doctorate degree in Public Affairs and Administration and is employed at Nova University in Ft. Lauderdale. Dr. Baer has extensive educational training and experience in drug detection training and experience in the installation of security measures at hotel facilities. Dr. Baer served as a police officer with the Metro-Dade County Police Bureau from 1971 through 1977. He has served as an Officer in the Narcotics Unit and in the Organized Crime Bureau. Dr. Baer was received as an expert in these proceedings in surveillance, drugs and narcotics usage in hotels. Based on Dr. Haer's interview of Respondent's management team and the security service in force at the facility, he concludes that the security at Respondent's facility is at least average or better than average. His opinion was based on his study of the area which is a low crime area, the fact that police officers frequent the area in the lounge and they regularly are seen patroling the area. Based on the following reasons, Dr. Baer felt that security at the Respondent's facility was more than adequate: The security personnel are told not to go into the bar area; The Security Director goes into the bar on a daily basis; Brownyard was fired for dereliction of duties; There was a penetration study conducted by Internal Security Officer Hayes, and Management was unaware of any problems relative to drug usage by either employees or patrons.
The Issue Whether Petitioners, Miryam Hathaway and Benjamin Hathaway, were subject to a discriminatory housing practice by Respondents, Gerlinde 1 All statutory references are to Florida Statutes (2019), unless otherwise noted. Wermuth and Horst Wermuth, based on a handicap, in violation of Florida's Fair Housing Act.
Findings Of Fact Petitioners own a condominium in Parkway Villas Condominiums ("Parkway Villas") located in Bradenton, Florida. Petitioners have lived in Parkway Villas since 2012. Parkway Villas, as described by Petitioner, Mrs. Hathaway, is a "nice elderly community" of 225 units.5 Parkway Villas is governed by the Parkway Villas Condominium Association, Inc. (the "Association"), a homeowners' association formed in approximately 1970. At the final hearing, Mrs. Hathaway testified that she suffers from a physical disability from a work injury that occurred many years ago. Supporting this claim, Mrs. Hathaway produced several medical records documenting an issue with her right shoulder and elbow, specifically acromioclavicular ("AC") joint arthropathy, which includes tendinosis, tendinopathy, and a partial tendon tear. Mrs. Hathaway asserts that this 3 By requesting a deadline for filing post-hearing submissions beyond ten days after the transcript filing date, the 30-day time period for filing the recommended order was waived. See Fla. Admin. Code R. 28-106.216(2). 4 Petitioners subsequently filed a document on September 10, 2020, which was not considered. 5 Petitioner Benjamin Hathaway did not participate in the final hearing. Nor did Petitioners produce any evidence regarding the discrimination claim he is pursuing against Respondents, or a specific disability from which he suffers. Consequently, when evaluating Petitioners’ allegations and cause of action in this FHA matter, any reference to "Petitioners" only concerns the representations and testimony of Miryam Hathaway. condition causes her chronic pain, and she has difficulty lifting more than five pounds with her right arm. Mrs. Hathaway also expressed that she suffers from depression, high blood pressure, and hypertension. Mrs. Hathaway claims that from approximately January 2018 through July 2019, Respondents (the "Wermuths") discriminated against her based on her disability by denying her the use and enjoyment of certain community amenities (the Association's pool), and then failing to make a reasonable accommodation to enable her to use those amenities.6 The Wermuths also reside in Parkway Villas. Gerlinde Wermuth is currently President of the Association's Board of Directors. Mrs. Wermuth served as Board President during all times relevant to Petitioners' FHA claim. Horst Wermuth is Gerlinde Wermuth's husband. Mr. Wermuth, however, has never served or held any position on the Association Board. The Association's Board of Directors has seven members. All Board members are residents of Parkway Villas. All Board action requires at least four affirmative votes of its members. The Board may not take any action without a quorum of four members. Petitioners point to Mrs. Wermuth as the primary perpetrator of the alleged wrongdoing based on her position as Board President. Petitioners contend that Mrs. Wermuth has severely abused her authority and mistreated Mrs. Hathaway for years. Petitioners' issues raised in this matter began in April 2016. That month, Petitioners applied to the Board for approval to enlarge the patio 6 Petitioners also alleged in their complaint filed with the Commission that Mrs. Hathaway, who is from Columbia, South America, was discriminated against based on her race and national origin, as well as retaliation. However, no evidence in the record supports a claim that the Wermuths took any actions or supported any Board decisions that were motivated by Mrs. Hathaway’s race or national origin or in retaliation for a protected activity. Petitioners further allege that the Wermuths committed a number of non-FHA indiscretions, which are not considered in this administrative proceeding, including abuse of power, defamation, elder abuse, emotional distress, extortion, intimidation, and invasion of privacy. outside their back door. Petitioners included with their application specific plans, diagrams, and measurements to allow the Board to determine whether the patio would fit within the community's aesthetics. The Board approved the patio construction on May 1, 2016, and Petitioners proceeded to construct their patio. On December 14, 2017, several Board members and unit owners, including Mrs. Wermuth, trooped across the Parkway Villas property inspecting the community for potential "Carport/Patio Violations." According to Mrs. Wermuth, the Board regularly surveys the grounds to ensure consistent compliance with the Association's Policies, Rules, and Regulations ("Association Rules"). Petitioners, as residents and owners of a Parkway Villas dwelling, are members of the Association and subject to the Association Rules. The survey revealed approximately 60 potential violations of the Association Rules. Thereafter, the Board determined that 23 of those potential violations warranted sending the unit owner a notice letter. Included on this list was Petitioners' unit (#115), about which was recorded "patio not approved." The Board determined that Petitioners' newly constructed patio departed from the plans that the Board reviewed and approved in May 2016.7 Following a Special Board Meeting held on January 5, 2018, the Board notified Petitioners of their findings. The Board warned Petitioners that they faced a fine of up to $1,000 unless they brought "their patio up to the agreed upon specifications." Petitioners were advised that they could appear before the Board's Compliance Committee on January 31, 2018, "to explain why you feel a fine should not be imposed." 7 Association Rules, General Rules number 3, states: "Villa owners must obtain written Board approval before constructing add-ons, patios, or making any alterations to the common element." On January 31, 2018, the Compliance Committee, of which Mrs. Wermuth is not a member, convened to review the status of the 23 violations identified in the survey done the previous December. By the time of the meeting, Petitioners were the only unit owners who had not voluntarily corrected their violation. At the Compliance Committee meeting, Petitioners acknowledged that the patio they constructed differed from the design they submitted in April 2016. Primarily, their patio exceeded the dimensions shown in the previous design and exceeded standard dimensions acceptable to the Board. The Board allowed Petitioners until March 31, 2018, to adjust the size of their patio. The Board also offered to work with Petitioners to bring their patio into compliance. At the final hearing, Mrs. Hathaway readily agreed that Mrs. Wermuth was very helpful in this process. Mrs. Hathaway relayed that Mrs. Wermuth made several welcomed suggestions advising how Petitioners could arrange their plants, and how to adjust uneven stone pavers. In the meantime, on February 1, 2018, Mrs. Hathaway requested a private meeting with three Board members, including Mrs. Wermuth. During this gathering, Mrs. Hathaway revealed that Petitioners had installed an "emergency" half bathroom in their condominium in January 2016 without the Board's knowledge. The Board later learned that the construction of the bathroom involved cutting through the concrete foundation of Petitioners' unit to connect the bathroom's pipes and plumbing to the Association's sewer system, as well as other significant plumbing and electrical work. Further, Petitioners never obtained the appropriate permits from Manatee County for the project, and the bathroom was constructed by an unlicensed contractor. In addition, Petitioners had taken a number of broken chunks of concrete from the unit's foundation and were using them as "decorative stones" around the plants on their patio, which the Association Rules prohibit. On March 12, 2018, the Board voted to impose three separate fines on Petitioners for violating Association Rules, one for installing a bathroom without Board approval, one for constructing the patio contrary to the approved design, and one for placing the concrete chunks, as well as hanging wind chimes, adjacent to their patio.8 The Board also suspended Petitioners from using the community common areas, which included the laundry room, the clubhouse, the exercise facilities, the showers, and the pool. On March 28, 2018, the Compliance Committee met during a Special Board Meeting to consider Petitioners' multiple violations. During the meeting, the Compliance Committee found that Petitioners, as of that date, had properly reduced the size of their patio. The Compliance Committee also recognized that Petitioners had removed the concrete chunks and wind chimes from their patio area. Thereafter, the Compliance Committee voted to eliminate all fines imposed for those two violations. Regarding the bathroom, however, the Compliance Committee concluded that the unapproved installation was too significant to overlook. The Compliance Committee was concerned that the structural alterations and plumbing necessary to construct Petitioners' new bathroom might have compromised the unit's infrastructure and potentially damaged the neighbor's adjoining unit. Consequently, the Compliance Committee upheld a fine of $1,000 for that violation. Mrs. Wermuth abstained from any vote on the matter. In addition to the $1,000 fine, the Board upheld the suspension of Petitioners' use of Association amenities and common areas, including the clubhouse, exercise room, laundry room, and community pool. The suspension was to remain in effect until Petitioners paid the $1,000 fine and until Manatee County inspected the bathroom's construction and deem it sufficient 8 The Parkway Villas Combined Amended and Restated Declaration of Condominium, section 9.3, directs that: "The Villa Owner shall be required to inform the Board in writing of any electrical, plumbing, or structural changes." for permitting, as well as Petitioners' payment, in full, of any outstanding fine (the $1,000). The Board decided that any unauthorized use of the common areas by Petitioners during the suspension period would result in additional fines. The Board formally notified Petitioners of its decision by letter dated March 29, 2018, and signed by Mrs. Wermuth. The letter expressly stated that any violation of the suspension from using the common areas "will be considered a separate finable violation of the association's condominium documents," which would have to be paid in full prior to restitution of full use. Sometime around March 2018, Petitioners took steps to have their bathroom appropriately inspected. Unlike her experience with the patio modifications, however, Mrs. Hathaway testified that Mrs. Wermuth was most unhelpful in this process. Mrs. Hathaway charged that Mrs. Wermuth ordered her to obtain inspections from both an electrician and a plumber. Based on this imperative, Petitioners proceeded to pay an electrician, a plumber, as well as a professional engineer to inspect their bathroom. They also contacted Manatee County to acquire the appropriate building permits. Petitioners ultimately secured several reports confirming that the bathroom was competently constructed, as well as a Certificate of Completion from Manatee County indicating that the bathroom complied with applicable building code requirements. (The evidence adduced at the final hearing was unclear as to exactly when Petitioners presented the results of these inspections to the Board. Mrs. Hathaway urged that she provided all the information to the Board before the March 29, 2018, Board meeting, and produced a bill from a plumber dated March 8, 2018. However, the building permit Petitioners received from Manatee County was not issued until April 3, 2018. More significantly, as described below, the Board did not consider the inspection results until well over a year later in July 2019.) On April 2, 2018, Petitioners paid the $1,000 fine to the Board for the unapproved construction of their half bathroom. Petitioners subsequently appeared before the Board in April and May 2018, to contest paying the fine, as well as the imposition of the suspension. Notably, at neither of these meetings did Petitioners specifically request an accommodation to allow Mrs. Hathaway to use the community pool while their dispute was pending the Board's review. Neither did they express Mrs. Hathaway's desire to use the pool in relation to a disability. Following Petitioners' payment of the $1,000 fine in April 2018, Mrs. Hathaway began using the pool. (In fact, the evidence indicates that she never stopped using the pool.) However, because the Board had not yet conducted its review of the bathroom inspections and permits, her suspension from accessing the common areas remained in effect. The Board later addressed Petitioners' violations during a meeting on April 23, 2018. At that time, the Board noted that Petitioners had not provided any paperwork demonstrating that their new bathroom had been proficiently constructed. Therefore, the Board moved to require Petitioners to have a licensed plumber inspect the connection between their bathroom and the Association's sewer line, and also to have a licensed electrician inspect the electrical work. Thereafter, Mrs. Wermuth, in her role as Board President, directed the Board Secretary to prepare a letter notifying Petitioners that, while the inspections remained outstanding, they faced a "$50 per day fine for violating the suspension from use of the clubhouse and pool areas." The letter, dated April 25, 2018, also alerted Petitioners that their current fine totaled $500, and further warned Petitioners that if they persisted "in using the pool and clubhouse areas before [the Board has] removed the suspension and approved your half-bath project, the fine may increase to the maximum of $1,000. The suspension will not be lifted until fines are paid in full." At the final hearing, Mrs. Wermuth explained that the Board imposed the fine to motivate Petitioners to comply with the Board's request as quickly as possible. However, once Petitioners proved that their bathroom adhered to Association Rules, Mrs. Wermuth represented that the Board fully intended to set aside the penalties. Despite her suspension, Mrs. Hathaway continued to regularly (perhaps daily) use the Association pool. Mrs. Hathaway explained that several medical professionals had advised her that the joint pain in her right shoulder and arm would benefit from physical therapy in the pool. To support her testimony, Mrs. Hathaway produced a doctor's letter from May 2017, which recommended that she "would benefit from use of the community pool to assist in her joint pain therapy." A year later in May 2018, Mrs. Hathaway visited a local hospital emergency room complaining of pain. Upon her discharge, the physician told her that using the pool "would assist with [her] joint pain therapy." Mrs. Hathaway credibly testified that, in May 2018, she provided both the doctor's letter and the discharge instructions to a member of the Association Board (not Mrs. Wermuth). However, Mrs. Hathaway admitted that, other than passing on these two documents, she did not communicate directly or indirectly with any Board member about her disability or health. Neither does the evidence establish that Mrs. Hathaway furnished these documents to the Board for the Board's consideration. More pertinently, Mrs. Hathaway conceded she never directly delivered these documents to either Mrs. or Mr. Wermuth. During her testimony, Mrs. Hathaway also described an incident on October 20, 2018, when she was exercising in the pool. (Mrs. Hathaway was still suspended from accessing the community's common areas.) That day, another Parkway Villas Board member (not Mrs. Wermuth) "viciously" yelled at her and demanded to know why she was using the pool when she was not allowed to be there. When Mrs. Hathaway did not exit the pool in a timely fashion, the resident called the Manatee County Sheriff's Office, who responded to the scene. The sheriff registered the complaint, but did not arrest Mrs. Hathaway. Petitioners never paid the fine for Mrs. Hathaway's unauthorized use of the pool during her suspension, which eventually reach the maximum amount of $1,000. Mrs. Hathaway explained that Petitioners felt that paying anything beyond the initial fine of $1,000 for the unapproved bathroom installation was "extortion" and simply not fair. Finally, on June 26, 2019, Petitioners sent a letter to the Board requesting the Board reconsider the outstanding sanction. The letter, addressed to Mrs. Wermuth, specifically expressed: [W]e would like to know when the sanctions no to use pool – fitness – laundry – comun [sic] areas that you ordered last year 3-26/18 after we paid $1,000 fine and present to you all the documentation from Manatee County 3-26/18 following the regulation's to instaled [sic] 1/2 bath on January 2016 and was approved with all Professional Plumbing – Electrician etc. On July 1, 2019, the Board held a Special Board Meeting to consider Petitioners' request. During the meeting, the Board determined that Petitioners had presented sufficient proof that their bathroom was installed in a professional manner and complied with all necessary building code and Manatee County permitting requirements. The Board also acknowledged that Petitioners had produced a Certificate of Completion from Manatee County and had paid the maximum $1,000 fine for the initial violation. Therefore, the Board voted to rescind the suspension of Petitioners' use of the pool, as well as all fines associated with Mrs. Hathaway's repeated violation of the suspension. Mrs. Wermuth presided over the meeting. However, she once again abstained from the vote. The Board notified Petitioners of its decision by letter, dated July 1, 2019, which stated that, "Any pending fines or suspensions to the Association's Common Elements are rescinded." The Board also posted its action on the Association website. In addition, the Board emailed the meeting minutes of the vote to the Parkway Villas residents and placed a copy of the minutes on the community bulletin board in the clubhouse. With Petitioners' right to access the Association's common areas reinstated, Mrs. Hathaway has been free to use the pool since July 2019. Despite the July 2019 publication of the Board's vote to lift Petitioners' suspension, at the final hearing Mrs. Hathaway complained that she has experienced a number of confrontations with other Parkway Villas residents who still believe that she is barred from using the pool. Mrs. Hathaway declared that she has been told to leave the pool; she has been yelled at in the laundry room; and, most significantly, "many people attack me, attacking us, at the pool." Mrs. Hathaway expounded that confrontations such as the one on October 20, 2018, are not uncommon. She proclaimed that, "people start to attack us because Mrs. Wermuth talk to everyone, she circulate all the information to all the residents." Mrs. Hathaway relayed that Parkway Villa residents have reported her to the Manatee County Sheriff's Office approximately seven times since March 2018. Mrs. Hathaway asserted that she has implored Mrs. Wermuth to re-notify the residents that the Board has rescinded Petitioners' suspension. However, Mrs. Wermuth allegedly has refused to do so. Therefore, as part of the relief for her FHA claim, Mrs. Hathaway desires all harassment related to her use of the pool to stop. Because Mrs. Hathaway believes that Mrs. Wermuth is responsible for imposing the sanctions in the first place, she asserts that Mrs. Wermuth should be ordered to spread the word that Petitioners are no longer prohibited from using the common areas. Accordingly, Mrs. Hathaway seeks an administrative order directing Mrs. Wermuth to inform all Parkway Villas residents that Petitioners are no longer forbidden from using the pool. Mrs. Hathaway also alleged several other instances of harassment by Respondents including: December 2017, Bicycle Incident: Mrs. Hathaway complained that Mr. Wermuth rode his bicycle too close to her as she walked down a sidewalk. Mrs. Hathaway described the incident as intentionally intimidating. Pictures of Petitioners' Unit: Mrs. Hathaway complained that Mr. Wermuth photographed her villa and complained about its condition. (This activity prompted Mrs. Hathaway to initiate a small claims court action against him.) Mrs. Hathaway's Use of the Laundry Room: Mrs. Hathaway claimed that in March 2018, Mr. Wermuth harassed her while she was doing laundry. Mrs. Hathaway claims that Mr. Wermuth took pictures of her in the laundry room and raised his voice at her. In addition to this FHA matter, Petitioners initiated several unrelated, but parallel, legal actions against Respondents in or about February 2018. These matters involved separate complaints in Manatee County small claims court against both Mrs. and Mr. Wermuth. In particular, on February 8, 2018, Mrs. Hathaway sued Mrs. Wermuth for discrimination, retaliation, intimidation, and harassment based on a "fine for no violations." See Miryam Hathaway v. Gerlinde Wermuth, Twelfth Judicial Circuit in and for Manatee County, Florida, Case No. 2018 SC 679. On April 5, 2018, Mrs. Hathaway sued both Mr. and Mrs. Wermuth for "harassment issues." See Miryam Hathaway v. Horst and Gerlinde Wermuth, Twelfth Judicial Circuit in and for Manatee County, Florida, Case No. 2018 SC 1509. These civil matters were dismissed in December 2018.9 However, Mrs. Wermuth was awarded over $20,000 in attorney's fees and costs spent in defending the matter against Mrs. Hathaway. At the final hearing, Respondents denied that they ever took any action against Petitioners based on Mrs. Hathaway's disability. They also rejected any allegation that they ever participated in a decision that refused or failed to accommodate Petitioners' alleged disability. Mrs. Wermuth testified that, while she did serve as Board President throughout the time of Petitioners' fines and suspension, she does not personally administer, control, or manage the Association. Further, as an individual Board member, she does not have the authority to unilaterally penalize a unit owner who has violated Association Rules. Neither can she personally suspend a unit owner's common use rights. Similarly, she does not have the power to reinstate the use of the Association's common elements, or grant any request for a disability accommodation, however reasonable. Regarding the Board's decision to impose the suspension on Petitioners, Mrs. Wermuth maintained that as a Board member, she must participate in the Board's actions to enforce the Association Rules. Mrs. Wermuth asserted that the Board does so in a consistent, fair, and uniform manner to all Parkway Villas residents. Regarding Petitioners' specific allegations, Mrs. Wermuth denied that she had any knowledge that either Petitioner suffered from a disability. She further denied any knowledge of a request from Mrs. Hathaway to use the pool for the express purpose of treating her shoulder pain. On the contrary, 9 In granting the Wermuths’ motion to dismiss, the judge noted that Mrs. Hathaway’s "claim surrounds a sequence of events that have occurred between approximately December 2017 to April 2018, wherein [Mrs. Hathaway] believes the Defendants have harassed, discriminated against, and intimidated her by approaching her, yelling at her, 'stalking' her, taking photos of her, and participating in the HOA board’s decisions denying her request to replace her patio, fining her for failing to bring her patio up to agreed-upon specifications, and suspending her common area privileges. [Mrs. Hathaway] claims that these events have caused her medical issues." Mrs. Wermuth expressed that, throughout the time period covered by Petitioners' complaint, she has seen Mrs. Hathaway physically active around the community. Mrs. Wermuth has observed Mrs. Hathaway walking, exercising in the pool, hosting a Latin dancing party, and taking part in exercise classes in the clubhouse. Mrs. Wermuth vigorously refuted the allegation that any of the Board's enforcement actions against Petitioners were administered unfairly. On the contrary, Mrs. Wermuth asserted that the fines and suspension were necessary to enforce the Association Rules, as well as to ensure that Petitioners adhere to them. Mrs. Wermuth explained that, in her experience, suspending a resident's access to the common areas is the most effective method to bring about compliance with Association Rules. Mrs. Wermuth further declared that none of the Board's actions regarding Petitioners were based on her personal feelings. Instead, Mrs. Wermuth recused herself from most of the Board's decisions addressing Petitioners' issues and consistently voted to "abstain." For his part, Mr. Wermuth testified that he does not hold, nor has he ever held, any decision-making authority with the Association or its Board. He has never served as a member of the Board or worked as an Association agent, committee member, or employee. Mr. Wermuth expressed that he has never made, nor has he ever had the power to make, housing determinations affecting Petitioners. Neither has he ever had any responsibility to determine Petitioners' access to community facilities. Petitioners did not present any evidence establishing that Mr. Wermuth participated in any vote of the Board to impose the fines or suspension on Petitioners. Further, as with his wife, Mr. Wermuth attested that he had no knowledge of any disabilities claimed by Petitioners prior to learning of their Petition filed with the Commission. On the contrary, he too has observed Mrs. Hathaway walking around the community, exercising in the pool, and using the fitness equipment in the Association's clubhouse. Mrs. Hathaway admitted that she had not spoken to Mr. Wermuth about her health or disability. Neither did she present any evidence that she requested an accommodation from him, or that he played any role in the Board's suspension of her use of the community pool. As to Mrs. Hathaway's complaints of other transgressions: Bicycle Incident: Mr. Wermuth did not recall ever riding his bicycle too close to Mrs. Hathaway while she was walking on a sidewalk. He specifically denied that he ever intentionally rode by her in an attempt to threaten or intimidate her. Mr. Wermuth offered that if his bicycle ever did pass too close to Mrs. Hathaway, it would have been unintentional and had nothing to do with her disability. Pictures of Petitioners' Unit: Regarding Mrs. Hathaway's complaint that he once photographed her villa, Mr. Wermuth testified that he frequently takes pictures of the Parkway Villas community as part of an ongoing scrapbook of his homes and neighborhoods. Mr. Wermuth stated that during the incident in question, he was simply taking pictures of the community's Christmas lights. He denied that he ever intended to agitate Petitioners. Similarly, no evidence shows that Mr. Wermuth photographed Petitioners' condominium based on Mrs. Hathaway's disability or some discriminatory animus. Mrs. Hathaway admitted that Christmas lights were strung up next to her unit at the time. Based on the competent substantial evidence in the record, the preponderance of the evidence does not establish that the Wermuths discriminated against Petitioners (Mrs. Hathaway) based on a handicap, or failed to provide a reasonable accommodation for the same. Accordingly, Petitioners failed to meet their burden of proving that the Wermuths committed unlawful discrimination in violation of the FHA.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations issue a final order determining that Respondents, Gerlinde Wermuth and Horst Wermuth, did not commit a discriminatory housing practice against Petitioners and dismissing their Petition for Relief. 14 See Gooden v. Internal Rev. Serv., 679 Fed. Appx. 958, 966 (11th Cir. 2017)("[G]eneral allegations, based on mere speculation and hunches, in no way establish that any alleged [discriminatory activity] was race-, gender-, or disability based."). 15 Similarly, Mrs. Hathaway’s complaints about Mr. Wermuth riding his bicycle too close to her on the sidewalk or taking pictures of the side of her villa, at most, reflect a misunderstanding between neighbors, not a discriminatory housing practice. DONE AND ENTERED this 5th day of October, 2020, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER 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 5th day of October, 2020. COPIES FURNISHED: Tammy S. Barton, Agency Clerk Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399-7020 (eServed) Miryam Hathaway Benjamin Hathaway Post Office Box 15103 Sarasota, Florida 34277 Kimberly Valashinas, Esquire McGuinness & Cicero 3000 Bayport Drive, Suite 560 Tampa, Florida 33607 (eServed) Cheyanne Costilla, General Counsel Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399 (eServed)
Findings Of Fact Petitioners, Leon Motor Lodge, Houston Motor Lodge, and Taylor Motor Lodge, are three Georgia corporations operating motels located in Leon County, Florida, Taylor County, Florida and Escambia County, Florida, respectively. In 1982, 1983 and 1984, each hotel corporation held a franchise from Howard Johnsons. All three corporations were wholly owned by David Shapiro and Company, Inc. David Shapiro and Company, Inc., is also a Georgia corporation with its principal office in Valdosta, Georgia. David Shapiro, Victor Shapiro and Carl Shapiro are officers and directors of the parent corporation, David Shapiro and Company, Inc., and are also officers and directors of each of the three subsidiary hotel corporations. David Shapiro and Company also engages in other business activities not related to the hotel corporations. All four corporations use the accounting services of Gerald Henderson, C.P.A. Charles Hanlon, an employee of the Department, conducted an audit of David Shapiro and Company, Inc., and its wholly owned subsidiaries, Leon Motor Lodge, Houston Motor Lodge, and Taylor Motor Lodge. The audit concerned the taxable years ending September, 1982, 1983 and 1984. Mr. Hanlon's audit determinations did not treat Petitioners as a unitary business group. Paul Craft, C.P.A., was Mr. Hanlon's audit supervisor. Mr. Craft reviewed Mr. Hanlon's audit workpapers and determined that Hanlon's audit improperly disallowed Petitioners the use of a federally reported deduction and overlooked the existence of a unitary business group. After determining that Mr. Hanlon's original audit work was flawed, Mr. Craft made arrangements with the Petitioners' designated representative, Gerald Henderson, C.P.A., to personally redo Hanlon's field audit work. The field audit work was performed at Mr. Henderson's office in Valdosta, Georgia. Over a one week period, Mr. Craft reviewed the Petitioners' computer printouts of journals and ledgers as well as Petitioners' summary business records. Mr. Henderson was consulted for assistance in explaining the Petitioners' accounting controls, records organization, and in locating various records. As a result of the audit, on April 18, 1986, the Department issued revised notices of intent to make audit changes, with supporting workpapers, and delivered the same to the Petitioners' representative, Gerald Henderson. Afterwards, Gerald Henderson and Paul Craft discussed the revised audit determinations and Mr. Craft explained the audit changes to Mr. Henderson. The Department's revised notices of intent to make audit changes involved basically four audit determinations or issues. The audit determinations were: a determination that the Petitioners had not properly used three factor apportionment; a determination that David Shapiro and Company, Inc., Leon Motor Lodge, Inc., Taylor Motor Lodge, Inc. and Houston Motor Lodge, Inc. constituted a "unitary business group" for the taxable years ending 1983 and 1984; a determination that interest earned on installment sales income should be excluded from the sales factor of the apportionment formula, and; a determination that Taylor Motor Lodge could not carry-forward its net operating loss to the 1982 taxable year. 1/ The Department subsequently issued its notices of proposed assessment based upon these four revised audit changes. 2/ The Department's notices of proposed assessment were based on the revised audit work of Paul Craft and not on Ray Hanlon's original audit work. These notices of proposed assessment were timely mailed to the Petitioners. The Petitioners protested the notices of proposed assessment. Upon review of the protest, the Department issued and timely mailed a Notice of Decision to the Petitioners which sustained the Department's position on all issues. The Petitioners' petition for reconsideration resulted in the timely issuance and mailing of a Notice of Reconsideration which again sustained the Department's position and rejected the Petitioners' protest position. After the filing of the Petitioners' request for a formal administrative hearing, but prior to hearing, the Department revised the original proposed assessments. The revisions consisted of the following: the inclusion of interest on installment sales income in the apportionment fraction; and, the correction of a math error. The revisions served to reduce the total sums originally assessed by approximately $18,000.00. No new tax liability was created by these "revisions". Revised notices of proposed assessments were prepared and timely mailed to Petitioners. During taxable years ending 1982, 1983 and 1984, the Petitioners had payroll, property and sales in Florida. The payroll was attributable to employees involved in the operation of Leon Motor Lodge, Taylor Motor Lodge and Houston Motor Lodge. The sales consisted primarily of motel rents and receipts from the sale of food in the restaurants which adjoined the motels. Sales also included some installment sales income from the earlier sale of apartments and motels. The property factor consisted of the three motels and the restaurants associated with those motels. All such property was located in Florida. During the tax years in question, multi-state corporations, such as the corporations involved in this case, were subject to an income tax based on the share of that taxpayer's adjusted federal income tax which was attributable to Florida. In order to determine the amount of a taxpayer's adjusted federal income tax attributable to Florida, the legislature established a statutory three factor apportionment method whereby a taxpayers' "adjusted federal income" is apportioned among the states by reference to a weighted formula consisting of payroll, property and sales factors. The "apportioned" share of a taxpayers' "adjusted federal income" is then taxed by Florida. A taxpayer must use the statutory three factor apportionment formula unless the taxpayer can establish that the statutory three factor apportionment formula "does not fairly represent" the degree of that taxpayer's economic activity in Florida and that whatever apportionment method the taxpayer used fairly represents that taxpayers degree of economic activity in Florida. See, Sections 220.13, 214.71, Florida Statutes (1983). Petitioners used a three factor apportionment method similar to the statutory three factor apportionment method used by the Department. However, the Petitioners' method was not precisely the same method as the statutory three factor apportionment method used by the Department. The Petitioners' method, in fact, yielded a lower tax for Petitioners. No substantive evidence was submitted which demonstrated that Petitioners' departure from the statutory three-factor apportionment method was justified. Therefore, since the evidence demonstrated that Petitioners deviated from the statutory three factor apportionment method and since the evidence did not demonstrate any reason for not utilizing that statutory method, the Department's revised assessment on this issue should be sustained. For taxable years ending 1983 and 1984, Florida had enacted Section 220.03(1)(bb), Florida Statutes (1983). That section established a special type of apportionment for businesses which constituted a "unitary business group." A "unitary business group" was defined as "a group of taxpayers related through common ownership whose business activities are integrated with, are dependent upon, or contribute to a flow of value among members of the group." Factors to be looked at in determining whether a group of taxpayers constituted a unitary business group included, but were not limited to, whether there was common purchasing of equipment, common accounting facilities, common legal representation, intercompany financing, joint efforts in expanding the business, shared officers and directors, submission of monthly financial statements, a uniform management theory, or an interchange of knowledge and expertise among the companies. See Rule 12C-1.51, Florida Administrative Code, and DR-Form F- 1061, "Instructions for Filing Under the Unitary Reporting Method". When, as in this case, a parent company owns or controls 50 percent or more of the outstanding voting stock of its subsidiaries, then the taxpayers have the burden to clearly establish that they are not a unitary business. Section 220.03(1)(bb), Florida Statutes. In this case, there was common ownership among the subsidiaries in that during the pertinent taxable years ending 1983 and 1984, David Shapiro and Company, Inc., owned or controlled all of the issued and outstanding voting stock of Leon Motor Lodge, Inc., Houston Motor Lodge, Inc. and Taylor Motor Lodge, Inc. Additionally, the directors and officers of the parent corporation and the subsidiary corporations were the same individuals and these dual officers made the decisions regarding the selection of managers, and the employment and replacement of managers. The hotel corporations did not maintain offices at the motel site for any of the officers or directors of the parent corporation or any of the officers of the individual hotel corporations. When these officers visited the motels, they would use whatever office or facilities were available. Local managers were responsible for the day to day operations of that manager's hotel. The day to day operations included decisions on the hiring and firing of employees, the disciplining of employees, the salaries of employees, and the hours, duties and responsibilities of employees. The managers made all decisions with regard to the advertising and public relations for that manager's motel 3/ Each manager was authorized to write checks from the manager's account associated with that manager's hotel. Each manager wrote all checks paying for the normal operational expenses incurred by that manager's hotel. Disbursements which were typically made by the local managers included soap, toilet tissue, replacement linens, maid's uniforms, kleenex and other minor purchases such as the purchasing of one television, as well as, minor repairs to rooms if needed. Each hotel had a bookkeeper or auditor who kept the books and recorded the sales receipts and disbursements for the hotel. The evidence was not clear whether such purchases and decisions were made independently by the local manager of each hotel or whether such purchases above a certain amount of money required the local manager to confer with the officers or directors of David Shapiro and Company, Inc., in Valdosta. Additionally, there was no substantial exchange of personnel between the hotel corporations. The parent corporation did not have a training program for its managers or employees. However, Howard Johnsons' did require that the managers attend a Howard Johnsons' management school to become acquainted with the requirements of Howard Johnsons' franchise agreements. Finally, each of the hotel corporations was represented by local counsel in each of the cities where that corporation was located. However, it should be noted that the Petitioners were commonly represented at the hearing by Larry Levy. The evidence also established that the corporate minute books of Petitioners and of the parent company were commonly maintained by one law firm, Kilpatrick and Cody, in Atlanta Georgia. The cost of these common legal services was included in the management fee which David Shapiro and Company charged each of the Petitioners. Considering all of the above factors, it would appear that, at least on the surface, each hotel corporation was a separate entity from its parent corporation and from its sister corporations. However three very important pieces of evidence substantially erode the reality of this surface independence. First, all major decisions regarding the three hotel corporations were made by David Shapiro and Company, Inc. Specifically, these decisions were made by the principal officers of the Shapiro company, each of whom were members of the Shapiro family. In the words of Carl Shapiro, "all the major purchases, we did ourselves." For example, the decision to buy cash registers from NCR, rather than from another supplier, and the shopping of such a purchase was made by either Victor Shapiro or Carl Shapiro. Major purchases such as fifteen beds, television sets, air conditioners, or the decision to incur the expenses involved in refurbishing one of the hotels to conform to Howard Johnsons' standards 4/ were made by the officers of the Shapiro company and not by the local managers of the three hotel corporations. Major repairs and purchases such as was caused at the Leon Motor Lodge by severe flooding were also made by the officers of the parent corporation. 5/ One prime example of the control of the parent corporations over the hotel subsidiaries occurred when the hotel corporations purchased the restaurant associated with that hotel. Originally, the Petitioners only operated the motels. The restaurant at each motel was operated by Howard Johnsons. However, prior to the period of the audit, Howard Johnsons, for business reasons, decided it would no longer operate the restaurants associated with its hotel franchises. While the purchase of the restaurants was not required by Howard Johnson's, the franchise owner/operators were forced to purchase and take over the operation of the restaurants in order to avoid having an empty and closed restaurant in front of the motels. David Shapiro and Company, Inc., believed that such closed restaurants in front of the motels would cause the operation of the motels to suffer drastically. Therefore, the Shapiros' decided that each hotel corporation would purchase and assume operation of that motel's adjoining restaurant. After the restaurants were acquired and operation commenced the restaurants were at all times managed by a manager who was a different person from the manager of the motel. Each restaurant manager had authority and control over that restaurant's operation similar to the managers of each hotel. Likewise, separate bank accounts and separate books of receipts and expenditures were maintained for each restaurant. Second, the bank accounts of each motel in each city consisted of (1) the manager's account which was sometimes referred to as a petty cash account; (2) the main account which was the account into which receipts from sales and rental of rooms were deposited on a daily basis; and (3) the bank credit card account which received credit card deposits. As indicated earlier, the managers of each subsidiary motel only had the ability to sign checks on a separate subsidiary account which was referred to as a petty cash account or managers account. The normal operational expenses incurred by the motel were written by the managers out of these manager's accounts. Funds in the manager's accounts varied and could range from $7,500.00 to as high as $12,000.00 or $15,000.00. Importantly, the manager's account for each hotel would be reimbursed from the hotel's main account on a regular basis. The checkbook for each hotel's main account, was maintained at the offices of David Shapiro and Company, Inc. in Valdosta, Georgia. The managers lacked any authority to write checks upon these accounts. The managers would ordinarily exhaust all funds in that manager's account in one week to ten days. Therefore, replenishment of the funds in a manager's account occurred every week to ten days. The manager's accounts required replenishment because deposits from sales and rentals were made daily into the main accounts. All of the main accounts were controlled in Valdosta by David Shapiro and Company. Daily, each manager or bookkeeper submitted a list of receipts and disbursements together with statements of purchases to Jerri Tomlinson, the office manager for Shapiro and Company, Inc. Ms. Tomlinson would mathematically verify the information she received from the hotels and computer code these records. These accounting reports and ledgers were then compiled by David Shapiro and Company's C.P.A. into computer printouts. These printouts were then delivered to Shapiro and Company, in Valdosta Georgia, which retained the data compilations for its records. Gerald Henderson's firm not only compiled the data described above, but it also functioned as the auditor for the parent and its subsidiary corporations. By this uniform system of management and integrated accounting controls, David Shapiro and Company, Inc. not only had access to vital management information, but also exercised the ability to control the level or amount of cash in each manager's petty cash account. In addition to the daily data it received, David Shapiro and Company, Inc., regularly reviewed a weekly report submitted by each hotel's manager and then determined how much money to transfer into that manager's account from the main account and whether the amount requested by management was "warranted." There is no question that by maintaining main accounts at the parent level, David Shapiro and Company, Inc. was able to directly control the expenditures of each hotel. That is, the main accounts were not only used to replenish the managers' operating accounts, but also, to directly control that manager's ability to make purchases for the hotel. Third, the parent corporation and its subsidiaries engaged in financially helping each other out when one corporation's sales were not sufficient to meet its overhead. This intercompany financing took the form of loans between and among the parent corporation and the subsidiary corporations. All the loans were interest bearing loans and met Federal IRS requirements. All of these loans were made at below market rate. An example of this intercompany financing occurred during the audit period. Leon Motor Lodge was losing money, and Taylor and Houston Motor Lodges were making money. There were several loans back and forth between the subsidiary companies. In referencing these loans, Carl Shapiro stated in his deposition that "there was a lot of them, and there were some big ones. I guess ten or fifteen or twenty thousand sometimes. It could amount to that much." This intercompany financing creates a material "flow of value" between and among the parent corporation and the subsidiary companies and demonstrates the unitary nature of Petitioners' businesses. Additionally, all three of the facts mentioned above, demonstrate that Petitioners applied a routine management theory to the hotel corporations in that routine day to day decisions were delegated to subsidiary managers but ultimate control over the family business was retained at the David Shapiro and Company level. This uniform management was accomplished through family control over main accounts, control over major purchasing or expansion decisions, control over the hiring and firing of local on site managers, and the level of funds to be entrusted to any given manager. Likewise, the shared officers of the subsidiary companies resulted in an interchange of knowledge and expertise among the corporations since the experiences learned by the Shapiro family in managing one hotel could be directly applied to the operations of the other corporations. Finally because of the Shapiro's uniform management and integrated accounting controls, significant economies of scale resulted. To begin with, the companies had the ability to make intercompany loans at below market rates. In addition, by maintaining the bank accounts of each hotel at the same bank, the companies enjoyed an economy of scale which resulted in discounts on banking service charges in excess of the discounts available to any of the subsidiaries individually. Similar economies of scale resulted in discounts to Petitioners on insurance rates. These discounts create a "flow of value" resulting from the unitary operations or pooling of resources by Petitioners. Clearly when all the facts are considered, Petitioners constituted a unitary business group as defined in Section 220.03(1)(bb), Florida Statutes. Therefore, the Department's revised assessments on this issue should be sustained.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is accordingly recommended that the Department of Revenue enter a Final Order sustaining the Department's revised assessments against Leon Motor Lodge, Inc., Taylor Motor Lodge, Inc., and Houston Motor Lodge, Inc., with the exception of the corporate income tax assessment against Taylor Motor Lodge, for the taxable year ending 1982, which has already been withdrawn. RECOMMENDED this 31st day of May, 1991, in Tallahassee, Florida. DIANE CLEAVINGER 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 31st day of May, 1991.
