The Issue Whether Respondent, a certified general contractor, violated the construction industry licensing law, by: (1) acting in the capacity of a contractor under a name other than as set forth on his certificate; (2) diverting construction funds resulting in his unwillingness or inability to perform pursuant to a construction contract; and (3) abandoning three construction projects, and if Respondent is guilty of such violations, the appropriate disciplinary penalty which should be imposed by the Construction Industry Licensing Board. Conclusions and Recommendation Conclusions: Respondent is guilty of the charges that he (1) acted in the capacity of a contractor under a name other than as set forth on his certificate, and (2) abandoned a single construction project; he is not guilty of the charges that he abandoned two other projects, and diverted construction funds which resulted in his unwillingness, or inability to perform pursuant to a construction contract. Recommendation: That Respondent's certified general contractor's license be SUSPENDED until such time as Respondent furnishes to the Board satisfactory evidence of having made restitution to purchasers entitled to the return of their deposits made pursuant to Hands High Ranchettes and Bass Creek of Boynton residential purchase agreements.
Findings Of Fact Respondent Fuller holds a currently active certified general contractor's license, no. CG C009750. Fuller is authorized by his certification to perform contracting only under his proper name, or the name of Bass Creek Corporation. (Testimony of Kehr, Fuller) At all times material hereto, Fuller was a general partner in two Florida limited partnerships: Bass Creek of Boynton Associates, Ltd. and Hands High Ranchettes, Ltd. These partnerships attempted to develop and construct two residential subdivisions in Palm Beach County -- Hands High Ranchettes and Bass Creek. In furtherance of this undertaking Fuller, or his agents, executed written contracts to sell lots within the developments and construct residences thereon. The Board alleged, and presented evidence at hearing for the purpose of establishing, that Fuller violated Chapter 468, Florida Statutes (1978) by his actions relating to contracts executed with three individuals -- Muriel F. Mason, Rozeanne E. White, and George C. Mitchell. (Testimony of Mason, White, Fuller, Petitioner's Exhibits 1 - 6). [AS TO MURIEL F. MASON] On September 10, 1978, Hands High Ranchettes, Ltd. entered into an Agreement of Purchase of Sale with Muriel F. Mason. By this agreement, Mason agreed to purchase a lot, with residence to be constructed thereon, in the Hands High Ranchettes residential development. The contract purchase price was $75,930.00. By January, 1979, Mason had paid into the Hands High Escrow Account, pursuant to the contract, an initial deposit of $3,915.00. (Testimony of Mason, Fuller, Petitioner's Exhibits 5, 6) Early in 1979, the bank rejected her application for a mortgage loan to finance purchase of the property. Consequently, under the contract, Fuller was not required to commence construction on the property. Moreover, Mason subsequently notified Hands High Ranchettes that she no longer wished to proceed with the contract, and requested return of her initial deposit. Under such circumstances, the purchase contract requires, and Fuller admits, that Mason is entitled to the full return of her $3,515.00 deposit. (Testimony of Mason, Fuller, Petitioner's Exhibit 5). During early July, 1979, Fuller notified Mason that 1e intended to return her $3,815.00 deposit, and that he would send her a letter to that effect. Fuller has recently earned substantial monies by selling land and completing a construction project which should enable him to return Mason's deposit no later than October, 1980. (Testimony of Mason, Fuller) [AS TO ROZEANNE WHITE] On August 19, 1975, Hands High Ranchettes, Ltd. entered into a similar Agreement of Purchase of Sale with Rozeanne White, aid her husband. By the agreement, White agreed to purchase a lot, with residence to be constructed thereon, in the Hands High Ranchettes subdivision. The purchase price was $75,000.00. By March, 1979, pursuant to the agreement, White had paid into the Hands High Ranchettes Escrow Account a $7,500.00 initial deposit. (Testimony of White, Fuller, Petitioner's Exhibit 1) In March, 1979, White obtained the necessary mortgage loan to finance purchase of the lot and construction of the residence. Hands High Ranchettes, however, except for clearing the lot and constructing foundation forms, never constructed the residence specified in the Purchase Agreement. (Testimony of White, Fuller). In July, 1979, Fuller told White that due to severe financial problems associated with the development, he would be unable to construct her residence, and would refund her deposit within thirty days. Fuller's failure to timely construct the residence imposed a severe burden on White and her family. In anticipation of her new home being built, she had sold her existing residence. When the new residence was not constructed, she had to move her family into an 18' travel trailer for seven weeks during the summer. At the time she was pregnant, and was accompanied by her husband and two children. After Fuller failed to return her deposit, she filed a suit for damages and obtained a civil judgment against Hands High Ranchettes, Fuller, and Bass Creek Corporation for $43,000.00. In satisfaction of the judgment she ultimately accepted a settlement offer of $10,000.00 plus attorney fees. (Testimony of White) [AS TO GEORGE MITCHELL] On April 28, 1979, George Mitchell and his wife entered a similar Agreement of Purchase of Sale with Fuller's other limited partnership -- Bass Creek of Boynton Associates, Ltd. The agreement covered the purchase of a lot and construction of a new residence in the Bass Creek subdivision. The purchase price was $68,301.00 and, pursuant to the contract, Mitchell paid an initial deposit of $1,001.00 (Testimony of Fuller, Petitioner's Exhibit 2). Due to no fault of Mitchell's, the residence specified in their agreement was never constructed. Fuller admits that he defaulted on his obligation under the Agreement of Purchase and that Mitchell is entitled to the refund of his $1,001.00 initial deposit. (Testimony of Fuller, Petitioner's Exhibits 3, 4) [ACTIONS OF GEORGE FULLER] Fuller, d/b/a Hands High Ranchettes, Ltd. and Bass Creek of Boynton Associates, Ltd. used the initial deposits received under the Purchase Agreements with Mason, White, and Mitchell to pay for clearing the lots, constructing foundation forms, and associated engineering and architectural fees. (Testimony of Fuller) Fuller, by his own admission, failed to perform his contractual obligation to return the initial deposits to Mason, White, and Mitchell. He promises to refund, by the end of October, 1980, any deposit monies due Mason, White, Mitchell, and other persons who entered into agreements to purchase land and construct residences within the two subdivisions. Fuller's failure to perform his contractual obligation to convey lots and construct the promised residences is not due to unwillingness or bad faith on his part, or a motive to avoid his contractual responsibilities. Rather, it is due to serious and complex financial difficulties he encountered in developing the two residential subdivisions. The two events primarily responsible for these financial difficulties were: (1) another party's breach of its contractual obligation to construct road improvements within the subdivisions; and (2) failure of the limited partner in these two ventures, Housing Capital Corporation of Washington, D.C., to furnish, as promised, $650,000.00 in interim development funds. In an effort to complete the developments, Fuller expended virtually all of his personal assets. (Testimony of Fuller) Fuller has engaged in general contracting for over forty years; charges have never before been brought against him in connection with his construction activities. For approximately twelve years he constructed numerous buildings for the Catholic Diocese of Brooklyn, N.Y. and has a wide range of experience in constructing schools, commercial buildings, residences, and apartment buildings. Since obtaining his Florida license, he undertook and successfully completed a 153-home residential development in Delrey Beach, Florida. His professional livelihood and economic well-being are dependent on his continued ability to engage in general contracting. (Testimony of Fuller).
Findings Of Fact At all times pertinent to the issues herein, Petitioner John Crawford, operated Crawford and Son's Farms located in or near Lakeland, Florida, on which he grows produce including, inter alia, beans of the variety in controversy here. Respondent, Wishnatzki, is a produce broker located in Tampa, Florida, and has been in the business of brokering produce grown by Florida farmers throughout the United States for three generations. Petitioner and Respondent have done business together in the past on many occasions, without controversy, and have, over the years, developed an amicable business and well as personal relationship. For a substantial portion of that time, including the time in issue, the parties' transactions were consummated under a "written statement of terms and conditions" which called on the broker, Wishnatzki, to act as the grower's agent on the basis of "gross proceeds of a sale, less carrier, cooling, packing and palleting charges, if any, and a Grower's Agent's customary commission." At some time prior to April 28, 1994, Mr. Crawford, who was, at the time, carrying a bucket full of the beans later sold through Respondent, saw Mr. Wishnatzki who, he claims, indicated the beans could be worth $25.00 per bushel. The beans at hand were the earliest produced from the Petitioner's fields, however, and the main crop was not yet ready for harvesting. Mr. Crawford acknowledges this comment by Mr. Wishnatzki was no guarantee of price but merely an opinion, and Mr. Wishnatzki claims it was Crawford, not him, who stated a figure. Several days later, however, on or about May 3, 1994, while his beans were being picked, Mrs. Crawford spoke with Mr. Wishnatzki who said he needed beans and had a truck going to New York. According to Mrs. Crawford, Mr. Wishnatzki advised her they could probably get $20.00 per bushel for the beans if Crawford could get them in. Mrs. Crawford immediately went to Petitioner and told him what Respondent had said, and within two days, on May 3 and 4, 1994, Mr. Crawford delivered to Mr. Wishnatzki 164 bushels of beans. The beans were shipped up north, but in the interim, the price of beans, according to the Department of Agriculture's price report, dropped considerably from a price near $18.00 per bushel. Records maintained by Respondent reflect that between May 4 and May 7, 1994, Respondent sold the entire 164 bushels, in varying amounts, to six different customers, as follows: 5/4/94 Scarmardo Produce. 40 bu at $14.00/bu 5/5/94 C & S Wholesale Gro. 73 bu at 12.00/bu 5/5/94 C & S Wholesale Gro. 2 bu at 0.00/bu 5/5/94 Watson's Produce 5 bu at 16.00/bu 5/6/94 Scott Street Tomato Co. 5 bu at 16.00/bu 5/6/94 Sy Katz Produce 5 bu at 16.00/bu 5/7/94 Tamburo Bros. 34 bu at 4.00/bu Respondent received a total of $1,812.00 for the sale of all Petitioner's beans consigned to it for an average price of $11.04 per bushel. Notwithstanding Respondent was entitled, by the terms of the agreement between it and Petitioner, to deduct a commission on the sale, because of the long- standing harmonious relationship which had existed between them, and because Respondent felt it important to support its growers and insure their financial well-being, Respondent, nevertheless paid Petitioner the full amount it received, and an additional sum as well, for a total payment of $2,132.00. In other words, though Respondent received only an average of $11.04 per bushel from its customers for Petitioner's beans, it nevertheless paid Petitioner an average of $13.00 per bushel for the beans it received from him. Petitioner is not satisfied with the amount received, however, and claims Respondent sold the beans at a price below market. He refers to Mr. Wishnatzki's comment in passing in late April that the beans could bring $25.00 per bushel. He also notes that the market should have been good because of an infestation of bean virus due to white flies. He further contends that Respondent should not have sold the beans for such a low price; that Respondent should have checked with the northern markets, and if there was a problem with his beans, Respondent should have procured a government inspection of them. While he admits beans were in a downward fall, he does not believe the price dropped to $13.00 per bushel on a first hand picking. In support of his position, he refers to two separate market reports, the first dated May 4, 1994, and the other dated May 6, 1994. The former reflects a "fairly light" demand for beans, with handpicked beans selling between "16.00 and 18.65, mostly 16.65 few 12.00", and the latter reflects, for handpicked beans, a "fairly light" demand with sales at "14.00 - 16.65 few 12.00 occasional lower." Petitioner does not claim he should have received $18.00 per bushel which he cites, inaccurately, was the fair market price according to the Florida Market Reports cited above, but claims he could have come off that price if he had been contacted to negotiate price. However, the $18.00 price he cites was not, according to the evidence, the usual price received. The usual price was around $16.65, with some lower. In any case, the terms of the brokerage agreement does not provide for price negotiation after delivery is made to the broker. Further, Mr. Wishnatzki did not call Petitioner when he saw the beans were not selling well because they had already been picked and were in Respondent's hands. Not much could have been done at that point, and he had other growers to deal with as well. In addition, Mr. Crawford has access to the market report and knew the price was falling. He did not call Respondent to set a minimum price. According to Mr. Wishnatzki, the price paid to the growers is based upon the price his company receives for the produce. However, Respondent does not wait until it has been paid before paying its growers. When the produce is sold, the grower is paid, and Respondent receives payment from the buyer after that. There is no way to say with certainty when the grower delivers produce to Respondent what price an ultimate buyer will pay for that produce. Many factors come into play, including quality of the produce, current market price, supply and demand and the like. A market bulletin, published at the end of each market day, gives some idea of what the next day's price is likely to be, but only market conditions control the price. Review of the prices received by Respondent for the first 130 bushels of beans sold reflect a price of from $12.00 for the 73 bushels sold to C & S, to $14.00 for the 40 bushels sold to Scarmardo. The 15 bushels sold to three different brokers for $16.00 per bushel is but a small amount of the total. The remaining 34 bushels sold to Tamburo for $4.00 per bushel brought the average price received down, as did the two bushels for which no payment was received. Respondent claims they received only $4.00 per bushel from Tamburo because of a constant decline in the market during the entire week the beans were for sale, and the sale to Tamburo was, in effect, a distress sale. Wishnatzki started the week out offering the beans at $18.00 per bushel. The price was reduced each day until the final Saturday when it is usual to sell what they have left over for what they can get. On Saturday, May 7, Wishnatzki still had 34 bushels of beans left and Tamburo sold them at the lower price. It was lower that Wishnatzki had expected, but consistent with the agreement they had with Tamburo who had the beans on consignment. Mr. Wishnatzki asserts the sale at that price was a judgement call he had to make, but were he confronted with the same situation, he would do it again. At no time did Mr. Wishnatzki advise Mr. Crawford he could, or would, sell a given quantity of beans at a certain price. If he had known what price he would get for the beans at later sale, he would have paid Mr. Crawford on the spot, in advance. Further, even though at the beginning of the week in question the market reports showed beans selling for a good price, sales can not always be made at the reported market price. The price he gets is what his customers are willing to pay. His procedure is to send out a daily inventory sheet to each of his customers, nation-wide, by FAX. At the time these beans were delivered to Respondent, the demand was light, witnessed by the fact that it took a whole week to dispose of 164 bushels. That is not a large volume. While he understands Mr. Crawford's disappointment, it is a result of the fact that Crawford's expectations were higher than reality delivered. This has happened to growers before, and it will, no doubt, happen again.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner, Crawford & Son's Farms' claim against Respondent, Wishnatzki & Natel, Inc. and Continental Insurance Company, in the amount of $824.00, be denied. RECOMMENDED this 22nd day of November, 1994, in Tallahassee, Florida. COPIES FURNISHED: John Crawford d/b/a Crawford & Son's Farms 2545 Sleepy Hill Road Lakeland, Florida 33809 ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of November, 1994. David L. Lapides, Esquire W. Edwin Litton, II, Esquire Annis, Mitchell, Cockey, Edwards & Roehn, P.A. Post Office Box 3433 Tampa, Florida 33601 The Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800
Findings Of Fact The Petitioner is an agency of the State of Florida charged with licensing and regulating the practice of real estate salesmen and brokers by the various provisions of Chapter 475, Florida Statutes. Included in those duties and enforcement authorities is the duty to investigate conduct by realtors allegedly in violation of Chapter 475, and related rules, and prosecuting administrative proceedings filed as a result of such investigations in order to seek imposition of disciplinary measures against the licensure status of miscreant realtors. The Respondents, at all times pertinent hereto, were licensed real estate brokers or salesmen in the State of Florida, having been issued the license numbers depicted in the Administrative Complaint. Respondent Hurbanis last was issued a license as a broker/salesman located at Sanibel Realty, Inc., Sanibel, Florida. Respondent Pauline Seely was last licensed as a broker/salesman located at VIP Realty Group, Sanibel, Florida. Respondent John M. Parks was licensed as a broker/salesman, last issued for a location at The Realty Shoppe of Lee County in Fort Myers, Florida. Respondent Jean Maxwell was licensed as a broker/salesman located at Suite 205, 1619 Periwinkle Way, Sanibel, Florida. At all times pertinent hereto, the Respondents were licensed and operating in the real estate brokerage business in the employ of VIP Realty Group, Inc., a licensed corporate real estate broker. Concerning the charges in Count I, one Eric Rosen, a real estate salesman employed by VIP Realty Group, Inc., the same firm employing Respondent Pauline P. Seely, obtained Nicholas Fontana and John Priebbe as purchasers of a certain piece of property by sales contract which was owned by Clarence Liebscher and Joseph Kubosch. The sales contract was entered into June 3, 1983, and reflected a purchase price of $315,000, including the sale of certain furniture and other personal property. The complaint alleges that former Respondent Rosen and Respondent Hurbanis, together with the purchasers and sellers, conspired to enter into a second bogus sales contract (so called "double contracting") substantially similar to the first contract, except the sales price was shown to be $350,000 and the terms concerning sale of furniture and other personalty was deleted. It is alleged that this contract was prepared by Rosen under the direction and approval of Respondent Hurbanis for the purpose of obtaining a mortgage loan from a lending institution in an amount greater than the normal percentage of the sales price that the banking laws and policies of such lenders provide as the maximum amount of mortgage financing which can be obtained on a given piece of property. It is alleged that these Respondents were thus attempting to obtain a loan commitment in an amount greater than could have been obtained had the actual sales price of $315,000 been revealed to the lender. The bogus contract showing the $350,000 sales price was allegedly submitted to the lender, AmeriFirst Savings and Loan Association, without the Respondents notifying AmeriFirst that the actual sales price was $315,000. Although witness Rosen for the Petitioner, testified that he believed the contracts involved in this count had been discussed with Mr. Hurbanis he could not say for certain and could not recall the conversation. In fact, another Petitioner witness, Brandy Vallois, stated several times that Mr. Hurbanis was on vacation during the time that the contract was negotiated, executed and submitted to the lender and that, although Respondent Hurbanis was the office manager at VIP Realty Group at the time, others were serving in his stead at the time he was on vacation (the time of the incident alleged in Count I). Although the Department elicited testimony to the effect that seminars had been given where the Respondent, as well as other realtors, had discussed "creative financing," there was no testimony or other evidence that such lectures by the Respondent or others advocated a policy of "double contracting" or in effect deluding lenders into lending more money for real estate purchases than they normally would have if true purchase prices were disclosed. In any event, both the seller and buyer were aware of the situation concerning this transaction and the lender was never deceived or misled because in fact the loan never closed and no funds were disbursed. There was no evidence that the true particulars of this transaction were not disclosed to the lender. Count II Count II concerns a transaction in which Respondent John Parks was the listing and selling salesman and Respondent Hurbanis was the office manager with the same real estate firm. Allegedly, Respondent Hurbanis directed and approved Respondent Parks' preparation of two sales contracts on or about December 16, 1982, calling for the purchase and sale of certain real estate by Mike Volker from Dr. Robert Pascotto and Gaspar Turanna. Both contracts were similar and pertained to the same parcel of property, but one reflected an actual sales price of $149,000, whereas the allegedly bogus, second contract reflected a total sales price of $157,000. It is thus alleged that these two Respondents conspired with the purchasers and sellers to enter into the higher priced, bogus contract for the purpose of obtaining a mortgage loan commitment principal amount at a greater percentage of the sales price than could have been obtained if the actual sales price had been disclosed to the lender. It is alleged that these two Respondents submitted the bogus contract reflecting the $157,000 false sales price together with loan application documents to First Federal Savings and Loan Association of Fort Myers without informing that institution that the actual sales price was $149,000. No competent, substantial evidence was offered, however, to show that Respondent Parks was anything other than the listing salesman. It was not established that he drafted the contract nor that he submitted either contract to the lender. Concerning Respondent Hurbanis, although it was shown that he was the office manager at the time of the incident, it was not established that he directed or approved the drafting of either contract, directed or approved the submission of either contract to the named lender nor that he was involved in the negotiation or closing stage of the transaction in any way. In fact, although the two contracts show differing purchase prices, neither contract depicts any different amount to come from mortgage financing by First Federal. In fact, both contracts reflect that a mortgage would be obtained from First Federal in the amount of $125,600. Nothing any different was disclosed to First Federal. The difference comes in a differing deposit amount held in escrow by VIP Realty Group, Inc., according to the terms of the contract. One contract, that with the lower purchase price, reflects $7,000 in deposit money toward the purchase and the second contract reflects $15,000 deposit money held toward the purchase. This accounts for the $8,000 difference in the amount of the two contracts, but, in any event, the amount to be obtained by mortgage funds from First Federal was the same on each contract. There was no evidence to prove that the deposit amounts depicted on either contract were bogus or other than the result of bona fide arm's length negotiations between the parties. In any event, there was no evidence that First Federal or its lending officers were not aware of any of the particulars in the transaction. There was no showing that that the lender relied on either contract to its detriment. Count III Respondent Pauline Seely, as listing salesman and owner of certain real property, with former Respondent (since dismissed) James O'Neill as selling salesman, and allegedly with Respondent Charles Hurbanis' direction and approval, prepared and obtained execution of two sales contracts on or about December 30, 1982, for the purchase and sale of her real property by Thomas and Sheila Floyd. Both contracts were substantially similar and pertained to the same parcel, but one contract reflected an actual earnest money deposit of $8,660 and a purchase money mortgage in the amount of $24,000, whereas the supposed bogus, second contract reflected a total earnest money deposit of $14,000 and a purchase money mortgage in the principal amount of $18,660. It is alleged that the Respondents then submitted this to the lending institution for the purpose of obtaining a greater percentage of the sales price in mortgage funds than could have been obtained had the actual sales price, terms and conditions been revealed to the lender. In fact, testimony of record and Respondent Seely's Exhibit 2 reveals that the lender was furnished all documents with regard to this transaction which revealed to the lender, as the loan officer involved stated in the letter constituting this exhibit, that the buyers and the seller had agreed that the seller would take back a second mortgage in the amount of $24,000 and that a contract addendum existed (which is in evidence) reflecting this second agreement. Thus, AmeriFirst, the lender, did in fact have a copy of the agreement stating that the seller would hold the second mortgage for the above amount and that AmeriFirst was aware of all details concerning the transaction. In point of fact, both contracts in evidence, one of which reflects a purchase money mortgage of $18,660 which the seller would hold and which reflects that $7,000 would be paid in cash to the seller at the time of contracting, and the second contract, are identical as to purchase price. The second contract also shows a purchase price of $125,000, the difference being essentially that the second contract shows the $24,000 purchase money mortgage amount instead of the figure of $18,660 shown on the first contract. Both contracts merely call for assumption of a mortgage already made in favor of AmeriFirst in the amount of $92,340. There is no evidence that any additional funds are being sought from AmeriFirst at all. There was no evidence that any action by the Respondents would result in any impairment of the security of AmeriFirst's first mortgage lien on the premises. The purchase money mortgage referenced in the testimony and evidence, regardless of its ultimate amount as that relates to the manner in which the total purchase price would be paid the seller, would, in all events, be a subordinate mortgage lien and it is difficult to see how AmeriFirst could rely on either contract to its detriment, even had it not known of one of the contracts. They both represented a purchase price of $125,000 and merely varied as to ways the purchase price would be paid, over and above the $92,340 outstanding first mortgage loan (which was to be assumed). In all events, however, AmeriFirst and its lending officer was fully aware of all details of this transaction and had no objection to the manner in which the transaction was to be closed and disbursements made, nor to the conditions of the assumption of its mortgage. The so called "double contract" that Ms. Seely is alleged to have entered into was shown thus to be an innocent modification of terms of the original sales contract. No wrongdoing or concealment was shown to have been committed by Respondent or any person who participated in the sale of Pauline Seely's property to Thomas and Sheila Floyd. Count V Concerning Count V, it is alleged that Respondents Seely, Parks and Hurbanis obtained two sales contracts on or about January 24, 1983, for the purchase and sale of certain real property by Computer Maintenance Corporation, purchaser, from James and Loretta Cottrell as sellers. Both contracts pertain to the same piece of real property. Both contracts showed a "purchase price" item of $310,000. One contract, however, actually reflected a total price of $344,000, arrived at by combining a $279,000 "90 percent mortgage loan" with a $60,000 purchase money mortgage and a $5,000 cash deposit. This contract contains a notation at the bottom that the "seller agrees that a separate contract for purchase will be given to the Savings and Loan for loan approval." The other contract related to this sale lists a total purchase price of $310,000 only, with a $5,000 deposit noted with no purchase money mortgage being shown, rather there is shown, in addition to the $279,000 90 percent mortgage loan, a balance of $26,000 cash being paid to the seller. This contractual situation is somewhat mysterious and it may indeed be that an attempt was made to conceal the $60,000 purchase money mortgage on the first contract and make it appear to the lender that the purchaser was actually putting up an additional $26,000 in cash at the closing as an inducement to obtain the principal first mortgage of $279,000 from Naples Federal Savings and Loan, AmeriFirst or some other lender. In point of fact, however, the witness, Ms. Heavener, from AmeriFirst indicated that the bank did not act upon the advice contained on the face of the contract, but rather loaned a percentage of their own independent appraisal value and thus did not act to its detriment upon any information contained on the face of either contract. She indicated that that lender was fully informed about all aspects of this transaction in any event. The evidence does not reflect that Mr. Hurbanis nor Ms. Seely had any part in drafting the contract nor presenting it to the lender. Seely's only involvement was as listing agent, that is, the realtor who obtained the listing from the sellers. There is no evidence to indicate that she participated in any fashion in the sale of the property, the negotiations, nor the drafting or presenting of the contracts. No evidence was offered to show for what purpose, whether illicit or innocent, the two different contracts were drafted. In any event, Ms. Seely was not involved in the preparation of the contracts. Mr. Hurbanis was not connected by any competent, substantial evidence, with any activity concerning the drafting of the contracts nor the presenting of them to the lender. A representative of the lending institution testified that she did not recall any discussions at all with Mr. Hurbanis concerning this transaction and upon cross-examination clearly indicated that the lending institution had protected itself against a "double contract" situation by reliance upon its own independent appraisal in making its lending decision, rather than the contract or contracts themselves. Count VI In this count, it is alleged that Hurbanis obtained a sales contract on January 22, 1983, between T N T Partners, a general partnership as seller and Christopher Smith as purchaser. The pertinent terms of the sale were $30,000 total purchase price, $3,000 deposit and $4,500 cash to be allegedly furnished at closing, together with a $22,500 new note and mortgage on the property. It is alleged, in essence, that Respondent Hurbanis falsely represented to Naples Federal Savings and Loan Association that the purchaser would pay $4,500 cash at closing. The transaction closed on April 15, 1983, but instead of the cash, the seller took back a purchase money mortgage in the amount of $4,500. Thus, the issue here is whether the $4,500 mortgage was properly disclosed to the lender. The evidence is silent as to any connection of Mr. Hurbanis with this transaction. In any event, however, it would appear from the face of the contract itself that the lending institution could not have been deceived by the parties to the contract nor any realtor involved, since the contract itself does not require cash in the amount of $4,500 but rather requires "cash or equivalent at closing." Thus, even if there had been a participation by Respondent Hurbanis in this transaction, which was not proven, it is impossible to detect any concealment or deception since the words "or equivalent" would clearly not preclude the use of a purchase money mortgage in the amount of $4,500 as consideration for this portion of the purchase price, rather than actual cash. Indeed, any other thing of equivalent value could have been used as consideration in this particular without violating the terms of the contract, of which the lender clearly had notice.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the candor and demeanor of the witnesses and the evidence of record, it is, therefore RECOMMENDED that the Administrative Complaint be dismissed in its entirety as to all Respondents. DONE and ORDERED this 7th day of October, 1987, in Tallahassee, Florida. P. MICHAEL RUFF 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 7th day of October, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-0140 Petitioner: Petitioner filed no Proposed Findings of Fact and Conclusions of Law. Respondent Hurbanis: The Proposed Findings of Fact by Respondent Hurbanis are subsumed in those made in this Recommended Order to the extent that that Respondent's submissions constitute bona fide Proposed Findings of Fact. In the main, the "Findings of Fact" in the Post-Hearing Submission by this Respondent constitute largely recitations of evidence and testimony, discussion of the weight thereof, inextricably intermingled with Proposed Findings of Fact which cannot be separately ruled upon because of multiple factual findings, legal argument and evidence discussion intertwined in the same paragraph. Respondents Maxwell's and Seely's Proposed Findings of Fact: 1-12. Accepted. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 John P. Milligan, Jr., Esquire Suite 201, Royal Palm Square 1400 Colonial Boulevard Fort Myers, Florida 33907 Kenneth G. Oertel, Esquire Suite C 2700 Blair Stone Road Tallahassee, Florida 32301 Johnny W. Parks c/o The Realty Shoppe of Lee County 12635 Cleveland Avenue Fort Myers, Florida 33907 Tom Gallagher, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
The Issue The issue in this case is whether the Respondent, Joseph E. Stalls, Jr., committed the violations alleged in an Administrative Complaint issued by the Petitioner, Department of Business and Professional Regulation, Division of Real Estate, on July 19, 2000, and, if so, the penalty that should be imposed.
Findings Of Fact Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (hereinafter referred to as the "Department"), is the state agency charged the duty to prosecute administrative complaints pursuant to Section 20.125, and Chapters 120, 455, and 475, Florida Statutes (2000). At the times material to this proceeding, Joseph E. Stalls, Jr., was a licensed Florida real estate salesperson. Mr. Stalls license number is 0125262. For his last issued license, Mr. Stalls was an active salesperson c/o Jim See Realty, Inc., located at 206 North 6th Avenue, Wauchula, Florida 33873. Prior to 1999, Mr. Stalls was actively engaged in growing, harvesting, and selling citrus. Mr. Stalls engaged in this business through a corporation, Stalls Fruit Co., Inc. (hereinafter referred to as "Stalls Fruit"). Mr. Stalls owned half of the stock of Stalls Fruit and was its president. Stalls Fruit elected coverage for its workers' compensation insurance through the Florida Fruit & Vegetable Association Self-Insurers' Fund (hereinafter referred to as the "Fund"). On or about August 21, 1998, an Information was issued in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida, charging Mr. Stalls with engaging in a scheme to defraud the Fund "to-wit: workers' compensation coverage from Florida Fruit & Vegetable Association Self- Insurer's Fund pursuant to policy number 840-8844-01, as valued by the diminution in premium payments resulting from said fraud or fraudulent pretenses or representations, with an aggregate value of $50,000 or more, in violation of Florida Statute 817.034(4)(a)." On or about February 17, 1999, Mr. Stalls pled guilty to the charge of the Information, which constitutes a felony. The court, upon the entry of Mr. Stalls' plea, withheld adjudication, ordered Mr. Stalls to serve one day in the Orange County Jail, with credit for a day already served, placed Mr. Stalls on Community Control for one year, followed by ten years of supervised probation, ordered Mr. Stalls to perform 500 hours of community service within a three-year period, and ordered that he make restitution in the amount of $738,566.00. The requirement that Mr. Stalls make restitution has placed an extreme financial hardship on him. Mr. Stalls, unaware that he was required to inform the Florida Real Estate Commission of his plea, and based upon his incorrect understanding of the consequences of adjudication being withheld, failed to report these events to the Florida Real Estate Commission.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the a final order be entered finding that Joseph E. Stalls, Jr., violated Section 475.25(1)(f) and (p), Florida Statutes (1999), and that his salesperson license be revoked. DONE AND ENTERED this 20th day of May, 2002, in Tallahassee, Leon County, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of May, 2002. COPIES FURNISHED: Donna K. Ryan, Esquire Department of Business and Professional Regulation Division of Real Estate Hurston North Tower 400 West Robinson Street, Suite N308 Orlando, Florida 32801-1772 Joseph E. Stalls, Jr. 1165 36th Avenue Vero Beach, Florida 32960 Jack Hisey, Deputy Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-22202
The Issue Whether Respondent violated certain provisions within chapter 520, Florida Statutes (2010),1/ as alleged in Petitioner’s Administrative Complaint; and, if so, what penalty should be imposed.
Findings Of Fact Sam’s Car is a motor vehicle retail installment seller based in Pensacola, Florida, and is governed by chapter 520. Mirza Ahmad is the president and 50-percent owner of Sam’s Car. Between January 7, 2009, and December 31, 2010, Sam’s Car held license number MV0902721 enabling it to conduct business as a motor vehicle retail installment seller. In other words, Sam’s Car could offer financing so that its customers could purchase vehicles through installment payments. At some point in 2010, Mr. Ahmad decided to convert the sole proprietorship named Mirza Aftab Ahmad, d/b/a Sam’s Car, into a corporation named Sohail Enterprises, Inc., d/b/a Sam’s Car. If a sole proprietorship licensed as a motor vehicle retail installment seller wishes to convert to a corporation, the new corporation must file a new application to be licensed as a motor vehicle retail installment seller. Accordingly, Mr. Ahmad filed an application in December of 2010 for a motor vehicle retail installment seller’s license on behalf of Sohail Enterprises, Inc., d/b/a Sam’s Car. Mr. Ahmad did not renew license number MV0902721, and the license went into inactive status on December 31, 2010. Sam’s Car could not enter into retail installment contracts with an inactive license. OFR ultimately issued license number MV9905731 to Sohail Enterprises, Inc., d/b/a Sam’s Car, and that license became effective on March 16, 2011. Sam’s Car never moved to re-activate license number MV0902721, and OFR deemed that license to have retroactively expired on December 31, 2010. Sam’s Car was not licensed to enter retail installment sales contracts between January 1, 2011, and March 15, 2011. OFR licenses motor vehicle retail installment sellers such as Sam’s Car and is responsible for ensuring that licensees comply with chapter 520. OFR may conduct examinations and investigations to determine whether any provision of chapter 520 has been violated. In March of 2014, OFR contacted Mr. Ahmad and notified him that OFR would soon be conducting an on-site examination of Sam’s Car. During an on-site examination, OFR examiners visit a motor vehicle retail installment seller’s office, identify themselves, and examine various records in order to verify that the licensee complied with chapter 520 during the time period in question. OFR examiners arrived at Sam’s Car on March 19, 2014, and spent approximately six hours examining and scanning particular records of Sam’s Car. The examiners began by requesting that the office manager of Sam’s Car provide them with all the motor vehicle installment contracts that Sam’s Car had entered into in 2011 and 2012 (“the examination period”). Some of the requested records were at Mr. Ahmad’s home rather than at Sam’s Car. Accordingly, one of the examiners returned to Sam’s Car on April 9, 2014, to scan those documents after they had been retrieved from Mr. Ahmad’s home. The examiners reviewed 20 to 25 records from Sam’s Car and determined that several of the sales contracts utilized by Sam’s Car were not the form contract that had been approved as an industry standard by the Florida Independent Auto Dealer Association. There was a period of time during the examination period when Sam’s Car was utilizing a sales contract that it had essentially created from scratch. The examiners determined that the sales contracts in question did not have several of the items required by chapter 520. On September 5, 2015, OFR issued an Administrative Complaint alleging that Sam’s Car violated four provisions within chapter 520. In Count I, OFR alleged that Sam’s Car violated section 520.07, Florida Statutes, by failing to ensure that all motor vehicle retail installment contracts executed by Sam’s Car during the examination period satisfied all of the requirements of section 520.07. The contracts reviewed by OFR allegedly failed to contain the “Notice to Buyer,” the “total amount of payments,” and a specific statement that liability coverage is not included. OFR further alleged in Count I that several of the contracts failed to ensure that the contract had been signed by the buyer and the seller. Finally, OFR also alleged in Count I that there were two instances in which Sam’s Car failed to ensure that the contract was completed before it was signed. OFR alleged in Count II that several of the reviewed contracts violated section 520.07(6) by enabling Sam’s Car to collect delinquency/collection charges or late fees in excess of five percent of the installment payment due. In Count III, OFR alleged that Sam’s Car violated section 520.07(3), and Florida Administrative Code Rules 69V- 50.001 and 69V-50.002 because there were instances in which Sam’s Car had failed to document that it refunded or credited title charges collected from the buyer that exceeded the actual charges. Finally, OFR alleged in Count IV that Sam’s Car violated section 520.03(1) by selling motor vehicles on installment payments between January 1, 2011, and March 16, 2011, without an active license. The following findings are based on the documentary evidence and testimony received at the final hearing conducted on March 11, 2016. OFR proved by clear and convincing evidence that the retail installment sales contracts in OFR Exhibits 1 through 20 do not have the notice to buyer required by section 520.07(1)(b). OFR proved by clear and convincing evidence that the retail installment sales contracts in OFR Exhibits 1 through 20 do not have the specific statement about liability insurance coverage required by section 520.07(1)(b). OFR proved by clear and convincing evidence that the retail installment sales contracts in OFR Exhibits 1 through 20 do not set forth the “total of payments” as required by section 520.07(2)(c). OFR proved by clear and convincing evidence that the retail installment sales contracts in OFR Exhibits 6 through 8, 11, and 14 through 18 were not signed by the seller as required by section 520.07(1)(a). OFR proved by clear and convincing evidence that the retail installment sales contracts in OFR Exhibits 18 and 20 were not complete prior to being signed as required by section 520.07(1)(a). In sum, OFR proved all of the allegations in Count I of its Administrative Complaint by clear and convincing evidence. With regard to Count II, OFR proved by the clear and convincing evidence set forth in OFR Exhibits 6, 7, and 21 that Sam’s Car violated section 520.07(6) by collecting a delinquency/collection charge in excess of five percent of each installment. As for Count III, OFR proved by the clear and convincing evidence set forth in OFR Exhibits 1 and 14 that there were two occasions during the examination period when Sam’s Car did not refund the overcharges on the estimated title, tag, and registration fees. Accordingly, OFR proved that Sam’s Car violated rule 69V-50. With regard to Count IV, OFR proved by the clear and convincing evidence set forth in OFR Exhibits 22, through 25 that Sam’s Car violated section 520.03(1), by entering into retail installment contracts with four separate buyers during the period when Sam’s Car did not have a motor vehicle retail installment seller’s license (i.e., January 1, 2011, through March 15, 2011). Even though OFR proved the allegations in its Administrative Complaint by clear and convincing evidence, there was no indication that those responsible for Sam’s Car’s operations intentionally committed the aforementioned violations. Instead, the testimony presented at the final hearing demonstrated that the violations resulted from inadvertence and/or an incomplete understanding of chapter 520’s requirements.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of Financial Regulation enter a final order imposing a $1,000 administrative fine on Sohail Enterprises, Inc., d/b/a Sam’s Car. DONE AND ENTERED this 16th day of May, 2016, in Tallahassee, Leon County, Florida. S G. W. CHISENHALL 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 16th day of May, 2016.
Findings Of Fact Joseph Rodriguez, Respondent's President, is a licensed dealer in agricultural products under the provisions of Sections 604.15 to 604.30, Florida Statutes, and acts as a negotiating broker between the producer and the buyer. Respondent is bonded through Aetna Casualty & Surety Company, co-Respondent in this case, as required by Section 604.19, Florida Statutes. Respondent acted as broker on thirty sales of Petitioner's cabbage between May 21 and June 7, 1984. On each occasion, Respondent provided Petitioner with a written confirmation of sale which specified the buyer, the place of delivery, the amount of cabbage sold and the terms of the sale, the name of the company supplying the truck to pick up the cabbage and who was supplying the truck. On several occasions, Respondent supplied the truck. However, on all written confirmations provided by Respondent, the following appears: BROKER ARRANGES TRUCK FOR GROWER FOR CONVENIENCE PURPOSES ONLY. On June 8, 1984, Respondent contacted Petitioner's salesman, Donald Waters and ordered 150 bags of cabbage to be sold to Harvey Kaiser, Inc. Respondent was acting as a broker in this transaction between the buyer and seller. Respondent contacted Patterson Truck Brokers and ordered a truck to pick up the cabbage at Petitioner's farm on June 9 and make delivery under the terms of the sale. Petitioner could only provide 121 bags of cabbage. Respondent agreed to this lesser amount and was invoiced accordingly by Petitioner on June 9 in the amount of $272.25. The truck from Patterson Truck Brokers never arrived to pick up the cabbage. Petitioner's father, Donald A. Dunn, Jr., testified that he contacted Joseph Rodriguez on two occasions by telephone to find out where the truck was, and was told that Patterson would be sending it. Rodriguez testified that Patterson Truck Brothers had agreed to provide a truck but when they were unable, he then contacted other trucking companies, as well as other buyers, in an attempt to get a truck on June 9 or 10, or to arrange another sale of Petitioner's cabbage. However, he was not successful and the cabbage went bad. Although there was no completed sale of this cabbage and therefore he earned no brokerage fee on the transaction, Respondent paid Petitioner one-third of the invoice amount for this cabbage, $86.21, on July 23, 1984, as an act of "good faith" and in recognition of the good business relationship they had. He also informed Petitioner that Patterson Truck Brothers and Donald Waters had each also agreed to pay one-third and Petitioner should contact them for payment. Petitioner contends that it should be Respondent's responsibility to pay the entire amount still owing, $172.43. Acting as a broker, Respondent earns no commission for making arrangements to supply a truck for the convenience of the seller. He invoices the buyer, collects the total amount due from the buyer, remits the freight charge to the shipping company, and pays the seller minus his brokerage fee.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Agriculture issue a Final Order dismissing the complaint. DONE and ORDERED this 30th day of May, 1985, in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 1985. COPIES FURNISHED: Joseph Rodriguez President Golden Touch Corporation 950 Colorado Avenue Stuart, FL 33497 The Aetna Casualty & Surety Company 151 Farmington Avenue Hartford, CT 06115 Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee FL 32301 Donald A. Dunn, III Route 2, Box 68 Sanford, FL 32771 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, FL 32301
The Issue Pursuant to chapter 287, Florida Statutes, and section 255.25, Florida Statutes,1/ the Department of Management Services (DMS) released an Invitation to Negotiate for a contract to provide tenant broker and real estate consulting services to the State of Florida under Invitation to Negotiate No. DMS-12/13-007 (ITN). After evaluating the replies, negotiating with five vendors, and holding public meetings, DMS posted a notice of intent to award a contract to CBRE, Inc. (CBRE) and Vertical Integration, Inc. (Vertical). At issue in this proceeding is whether DMS’s intended decision to award a contract for tenant broker and real estate consulting services to CBRE and Vertical is contrary to DMS’s governing statutes, its rules or policies, or the ITN’s specifications, or was otherwise clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Based on the demeanor and credibility of the witnesses and other evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Background5/ DMS released Invitation to Negotiate No. DMS-12/13-007 on March 18, 2013, and released a revised version of the ITN on May 14, 2013, for the selection of a company to provide tenant broker and real estate consulting services to the State of Florida. Thirteen vendors responded to the ITN. The replies were evaluated by five people: Bryan Bradner, Deputy Director of REDM of DMS; Beth Sparkman, Bureau Chief of Leasing of DMS; Rosalyn (“Roz”) Ingram, Chief of Procurement, Land and Leasing of the Department of Corrections; Clark Rogers, Purchasing and Facilities Manager of the Department of Revenue; and Janice Ellison, Section Lead in the Land Asset Management Section of the Department of Environmental Protection. Five vendors advanced to the negotiation stage: Cushman (score of 87), JLL (score of 87), CBRE (score of 87), Vertical (score of 89), and DTZ (score of 86). DTZ is not a party to this proceeding. The negotiation team consisted of Beth Sparkman, Bryan Bradner, and Roz Ingram. Janice Ellison participated as a subject matter expert. DMS held a first round of negotiations and then held a public meeting on July 16, 2013. DMS held a second round of negotiations and then held a second public meeting on August 1, 2013. A recording of this meeting is not available, but minutes were taken. Also on August 1, 2013, DMS posted Addendum 8, the Request for Best and Final Offers. This Addendum contained the notice that “Failure to file a protest within the time prescribed in section 120.57(3) . . . shall constitute a waiver of proceedings under chapter 120 of the Florida Statutes.” The vendors each submitted a BAFO. DMS held a final public meeting on August 14, 2013, at which the negotiation team discussed the recommendation of award. All three members of the negotiation team recommended Vertical as one of the two vendors to receive the award. For the second company, two of the three negotiation team members recommended CBRE and one negotiation team member recommended JLL. DMS prepared a memorandum, dated August 14, 2013, describing the negotiation team’s recommendation of award. The memorandum comprises the following sections: Introduction; The Services; Procurement Process (subsections for Evaluations and Negotiations); Best value (subsections for Selection Criteria, Technical Analysis, Price Analysis, and Negotiation Team’s Recommendation); and Conclusion. Attached to the memorandum as Attachment A was a memorandum dated April 30, 2013, appointing the evaluation and negotiation committees, and attached as Attachment B was a spreadsheet comparing the vendors’ BAFOs. DMS posted the Notice of Intent to Award to CBRE and Vertical on August 16, 2013. Cushman and JLL timely filed notices of intent to protest the Intent to Award. On August 29, 2013, JLL timely filed a formal protest to the Intent to Award. On August 30, 2013, Cushman timely filed a formal protest to the Intent to Award. An opportunity to resolve the protests was held on September 9, 2013, and an impasse was eventually reached. On October 10, 2013, DMS forwarded the formal protest petitions to DOAH. An Order consolidating JLL’s protest and Cushman’s protest was entered on October 15, 2013. Scope of Real Estate Services in the ITN Prior to the statutory authority of DMS to procure real estate brokerage services, agencies used their own staff to negotiate private property leases. Section 255.25(h), Florida Statutes, arose out of the legislature’s desire for trained real estate professionals to assist the State of Florida with its private leasing needs. The statutorily mandated use of tenant brokers by agencies has saved the state an estimated $46 million dollars. The primary purpose of the ITN was to re-procure the expiring tenant broker contracts to assist state agencies in private sector leasing transactions. Once under contract, the selected vendors compete with each other for the opportunity to act on behalf of individual agencies as their tenant broker, but there is no guarantee particular vendors will get any business. The core of the services sought in the ITN was lease transactions. The ITN also sought to provide a contract vehicle to allow vendors to provide real estate consulting services, including strategies for long and short-term leases, space planning, and space management as part of the negotiation for private leases. As part of providing real estate consulting services, vendors would also perform independent market analyses (IMAs) and broker opinions of value (BOVs) or broker price opinions (BPOs). In almost all instances, this would be provided at no charge as part of the other work performed for a commissionable transaction under the resulting contract. However, the resulting contract was designed to allow agencies to ask for an IMA or BOV to be performed independently from a commissionable transaction. In addition to the primary leasing transactions, the contract would also allow state agencies to use the vendors for other services such as the acquisition and disposition of land and/or buildings. These services would be performed according to a Scope of Work prepared by the individual agency, with compensation at either the hourly rates (set as ceiling rates in the ITN), set fees for the service/project, or at the percentage commission rate negotiated between the vendor and the individual agency. However, these services were ancillary to the main purpose of the contract, which was private leasing. In Florida, most state agencies are not authorized to hold title to land. However, the Department of Environmental Protection (DEP) serves as staff for the Board of Trustees of the Internal Improvement Trust Fund (“Board”), which holds title to land owned by the State of Florida. In that capacity, DEP buys and sells land and other properties on behalf of the Board. DEP recently began using the current DMS tenant broker contract for acquisitions and dispositions. The process was cumbersome under the current contract, so DEP asked to participate in the ITN in order to make the contract more suitable for their purposes. The ITN was revised to include DEP’s proposed changes, and DMS had Ms. Ellison serve first as an evaluator and later as a subject matter expert. At hearing, Ms. Ellison testified that she was able to participate fully, that her input was taken seriously, and that the proposed contract adequately addressed DEP’s concerns. While DEP anticipated that under the proposed contract it would use more BOVs than it had previously, there was no guarantee that DEP would use the proposed contract. DEP is not obligated to use the contract and maintains the ability to procure its own tenant brokers. Additionally, administration and leadership changes may cause a switch of using in-house agency employees instead of tenant brokers to perform real estate acquisition and disposition services. Specifics of the ITN The ITN directed vendors to submit a reply with the following sections: a cover letter; completed attachments; pass/fail requirements; Reply Evaluation Criteria; and a price sheet. The Reply Evaluation Criteria included Part A (Qualifications) and Part B (Business Plan). Qualifications were worth 40 points, the Business Plan was worth 50 points, and the proposed pricing was worth 10 points. For the Business Plan, the ITN requested a detailed narrative description of how the vendors planned to meet DMS’s needs as set forth in section 3.01, Scope of Work. The ITN requested that vendors describe and identify the current and planned resources and employees to be assigned to the project and how the resources would be deployed. Section 3.01, Scope of Work, states that the primary objective of the ITN is to “identify brokers to assist and represent the Department and other state agencies in private sector leasing transactions.” The ITN states that the contractor will provide state agencies and other eligible users with real estate transaction and management services, which include “document creation and management, lease negotiation and renegotiation, facility planning, construction oversight, and lease closeout, agency real estate business strategies, pricing models related to relocation services, project management services, acquisition services, and strategic consulting.” Id. The ITN also specifies: Other real estate consulting services such as property acquisitions, dispositions, general property consulting, property analysis and promotions, property marketing, property negotiation, competitive bidding or property, property auctions and direct sales or those identified in the reply or negotiation process and made part of the Contract (e.g., financial services, facilities management services, lease v. buy analyses). The ITN lists the following duties the contractor will perform: Act as the state’s tenant broker, to competitively solicit, negotiate and develop private sector lease agreements; Monitor landlord build-out on behalf of state agencies; Provide space management services, using required space utilization standards; Provide tenant representation services for state agencies and other eligible users during the term of a lease; Identify and evaluate as directed strategic opportunities for reducing occupancy costs through consolidation, relocation, reconfiguration, capital investment, selling and/or the building or acquisition of space; Assist with property acquisitions, dispositions, general property consulting, property analysis and promotions, property marketing, property negotiation, competitive bidding property, property auctions and direct sales; and Provide requested related real estate consulting services. The ITN set the commission percentage for new leases at 4 percent for years 1-10 and 2 percent for each year over 10 years; 2 percent for lease renewals, extensions, or modifications; and 2 percent for warehouse or storage space leases. Id. For “other services,” the ITN states: With respect to all other services (e.g., space management services, general real estate consulting services, property acquisitions, dispositions, general property consulting, property analysis and promotions, property marketing, property negotiation, competitive bidding or property, property auctions and direct sales), compensation will be as outlined in an agency prepared Scope of Work and will be quoted based on hourly rates (set as ceiling rates in this ITN), set fees for the service/project or by percentage commission rate as offered and negotiated by the broker and the using agency. The ITN also required that vendors specify the number of credit hours to be given annually to DMS. Each vendor gives a certain number of credit hours at the start of each year under the contract. The state earns additional credit hours as the vendors perform transactions. DMS manages the pool of accumulated credit hours and gives them to individual agencies to use on a case-by-case basis as payment for individual projects. These credit hours are commonly allocated to pay for IMAs and BOVs that are not part of commissionable transactions. With the exception of one legislatively mandated project, DMS has never exhausted its pool of credit hours. The ITN further specified that IMAs and BOVs must be offered at no cost when performed as part of a commissionable transaction. Historically, most IMAs and BOVs are performed as part of a commissionable transaction. They have only been performed separately from a commissionable transaction a handful of times under the current contract, and many of these were still provided at no cost through the allocation of free credit hours available to the agencies. Therefore, most IMAs and BOVs to be performed under the proposed contract will likely be at no cost. The ITN states that points to be awarded under the price criterion will be awarded based on the number of annual credit hours offered and the commission rate paid per transaction per hour of commission received. The ITN further provides that DMS will evaluate and rank replies in order to establish a competitive range of replies reasonably susceptible to award, and then the team will proceed to negotiations. Regarding negotiations, the ITN states: The focus of the negotiations will be on achieving the solution that provides the best value to the state based upon the selection criteria and the requirements of this solicitation. The selection criteria include, but are not limited to, the Respondent’s demonstrated ability to effectively provide the services, technical proposal and price. The Department reserves the right to utilize subject matter experts, subject matter advisors and multi-agency or legislative advisors to assist the negotiation team with finalizing the section criteria. The negotiation process will also include negotiation of the terms and conditions of the Contract. The ITN also states: At the conclusion of negotiations, the Department will issue a written request for best and final offer(s) (BAFOs) to one or more of the Respondents with which the negotiation team has conducted negotiations. At a minimum, based upon the negotiation process, the BAFOs must contain: A revised Statement of Work; All negotiated terms and conditions to be included in Contract; and A final cost offer. The Respondent’s BAFO will be delivered to the negotiation team for review. Thereafter, the negotiation team will meet in a public meeting to determine which offer constitutes the best value to the state based upon the selection criteria. The Department does not anticipate reopening negotiations after receiving BAFOs, but reserves the right to do so if it believes doing so will be in the best interests of the State. The ITN and draft contract permit subcontractors to perform under the contract and provide an avenue for a contractor to add subcontractors by submitting a written request to DMS’s contract manager with particular information. Best and Final Offers After the conclusion of negotiations, the negotiation team requested each vendor to submit a BAFO, to be filled out in accordance with the RBAFO format. The RBAFO noted that each vendor would get a set percentage commission for leasing transactions, but asked vendors to submit their prices for IMAs, BOVs, and BPOs performed outside a commissionable transaction and to submit the number of annual credit hours vendors would give DMS at the start of the new contract. In an effort to increase potential savings to the state, DMS lowered the percentage rates of the commissions for lease transactions in the RBAFO below the rates initially set in the ITN. By selecting only two vendors instead of three, the additional potential volume for each vendor on the contract could support the lower commission rates being requested of tenant brokers. The state would ultimately save money due to the impact of the reduced commissions on the overall economic structure of each lease. Beth Sparkman, Bureau Chief of Leasing of DMS, expounded on the rationale for reducing the number of vendors under the new contract to two: The Court: To me, it’s counterintuitive that having fewer vendors would result in more favorable pricing for the state of Florida; and yet you said that was the anticipated result of reducing the number of vendors from three to two – The Witness: Correct. The Court: -- for the new contract. I’m unclear. Tell me the basis for the team’s anticipation that having fewer vendors would result in better pricing. The Witness: When the original ITN was released, it had the same percentages in there that are under the current contract. And I’ll talk, for context, new leases, which right now is at 4 percent. So the discussion was – and 4 percent is typical of the industry. That’s typical for what the industry pays across the board. So the desire was to reduce the commission, to reduce those commission amounts to drive that percentage down. So we went out with the first BAFO that had a range that said for leases that cost between zero – and I can’t remember – zero and a half million, what would your percentage be? Thinking that when we had a tiered arrangement, those percentages would come down. They really didn’t. So when we sat down as a team and discussed: Well, why didn’t they – and you know, because typical is 4 percent. So we came back and said: Well, if we reduce the percentage on new leases to 3.25 but restrict the reward to two vendors, each vendor has the potential to make as much money as they would have made at 4 percent, but the savings would be rolled back into the state. Each of the five vendors invited to negotiate submitted a BAFO, agreeing as part of their submissions to comply with the terms and conditions of the draft of the proposed contract and agreeing to the lowered set percentage commission rates in the RBAFO. The RBAFO listed selection criteria by which the vendors would be chosen, to further refine the broad criteria listed in the ITN. The RBAFO listed the following nine items as selection criteria: performance measures (if necessary), sliding scale/cap, IMA set fee, broker’s opinion of value, balance of line (can be quoted per hour or lump sum), contract concerns, credit hours (both annual and per deal hour), hourly rates, and vendor experience and capability. CBRE’s BAFO submission followed the format indicated in the RBAFO, but CBRE included an additional section giving its proposed commission rates for acquisitions and dispositions of land. These rates were also submitted by other vendors at other parts of the procurement process, but CBRE was the only vendor to include such rates as part of its BAFO submission. DMS considered this addition a minor irregularity that it waived. In its BAFO submission, Cushman offered a three-tiered approach to its pricing for IMAs and BOVs. For the first tier, Cushman offered to perform IMAs and BOVs for free as part of a commissionable transaction. This is redundant, as the ITN required all vendors to perform IMAs and BOVs at no cost when part of a commissionable transaction. For the second tier, Cushman offered to perform IMAs and BOVs at no cost when the user agency has previously hired Cushman on tenant representative work. Ms. Sparkman testified that this provision was unclear, as Cushman did not define the scope of this provision or what amount of work qualified the agency for free services. For the third tier, Cushman offered to perform IMAs and BOVs for $240 when not part of a commissionable transaction for an agency with which it had never done business. Best Value Determination The five BAFOs were sent to the negotiation team for review on August 8, 2013, and on August 14, 2013, the team met in a public meeting to discuss the BAFOs, consider the selection criteria, discuss the team’s award recommendation, and draft a written award recommendation memorandum. During the August 14, 2013, meeting the team determined that CBRE and Vertical represented the best value to the state, by a majority vote for CBRE and by a unanimous vote for Vertical. Ms. Sparkman stated at the meeting that, from her perspective, CBRE and Vertical represented a better value than the other vendors because they were more forward thinking in their long term business strategies for managing Florida’s portfolio. Also at this meeting, Ms. Sparkman noted that CBRE’s prices for IMAs and BOVs were somewhat high but that she would attempt to convince CBRE to lower its prices during the contract execution phase. This was part of an attempt to equalize costs to ensure user agencies selected vendors based on individual needs rather than cost. However, CBRE represented the best value to the state regardless of whether its pricing changed. At hearing, Ms. Sparkman testified that if CBRE had refused to lower its pricing, DMS would still have signed a contract with them based on the pricing submitted in its BAFO. Ms. Sparkman also stated at the public meeting that if she were unable to come to contract with both CBRE and Vertical, she would arrange for another public meeting to select a third vendor with whom to proceed to the contract execution phase. This statement did not refer to DMS selecting a third vendor to replace CBRE should CBRE refuse to lower its price, but rather reflected the possibility that during the contract execution phase, DMS and either one of the vendors could potentially be unable to sign a contract because the vendor was unwilling to execute the written terms and conditions. The “contract negotiations” referenced during the public meeting are the remaining processes to be worked out during the contract execution phase and are distinct and separate from the negotiation phase. At hearing, Ms. Sparkman testified that in the past, vendors have refused to sign a contract because their legal counsel was unwilling to sign off on what the business representatives agreed to. Thus, if either CBRE or Vertical refused to sign the contract altogether, DMS would potentially have selected a third-place vendor in order to have a second vendor on the contract, according to Ms. Sparkman. International experience weighed in favor of CBRE and Vertical, according to team member comments made at the public meeting. Although the phrase “international experience” was not specifically listed in the selection criteria of the ITN or RBAFO, many vendors highlighted their international experience as part of the general category of vendor experience. Vendor experience and capability is specified in both the ITN and RBAFO as part of the selection criteria. Ms. Sparkman testified that international experience is indicative of high quality general vendor experience because international real estate market trends change more rapidly than domestic market trends. None of the negotiation team members recommended Cushman for a contract award, and in fact, Cushman's name was not even discussed at the award meeting. The Award Memorandum Also during the August 14, 2013, public meeting the negotiation team prepared a memorandum setting forth the negotiation team’s best value recommendation of CBRE and Vertical, and many of its reasons for the recommendation. There was no requirement that the memorandum list every single reason that went into the decision. For example, the memorandum did not state that the team found CBRE and Vertical’s focus on long term strategies more impressive than Cushman’s focus on past performance under the current contract. The award memorandum included a “Selection Criteria” section which simply repeated the nine selection criteria that had been previously identified in the RBAFO. The memorandum then went on to include a section labeled “B. Technical Analysis” that stated: Analysis of pricing is provided in section C below. As to the remaining selection criteria items, the Team identified the following key elements for the service to be provided: Long term strategies Key performance indicators Management of the portfolio Top ranked vendors had comprehensive business plans Pricing on the BOV and IMAs. The selection criteria provided above were used by the Team to make its best value recommendation. Ms. Sparkman testified that while the choice of wording may have been imprecise, the items listed in the Technical Analysis section were simply elaborations of the selection criteria in the ITN and RBAFO, and not new criteria. The first four are subsumed within vendor experience and capability, and the fifth was specifically listed in the RBAFO. Indeed, Cushman’s Senior Managing Director testified at hearing that Cushman had addressed the first four items in their presentation to DMS during the negotiation phase to demonstrate why Cushman should be chosen for the contract. The memorandum failed to note that CBRE had included non-solicited information in its BAFO regarding proposed rates for the acquisition and disposition of land. However, the negotiation team considered CBRE’s inclusion of these proposed rates a minor irregularity that could be waived in accordance with the ITN and addressed in the contract execution phase, since those rates were for ancillary services, and there was no guaranteed work to be done for DEP under that fee structure. The memorandum included a chart, identified as Attachment B, that compared the proposed number of credit hours and some of the pricing for IMAs and BOVs submitted by the vendors in their BAFOs. The chart listed Cushman’s price for IMAs and BOVs as $240 and failed to include all the information regarding the three-tiered approach to IMAs and BOVs Cushman listed in its BAFO. However, Ms. Sparkman testified that the chart was meant to be a side-by-side basic summary that compared similar information, not an exhaustive listing. The Cushman Protest Negotiations After Award of the Contract Cushman alleges that DMS’s selection of CBRE violates the ITN specifications because DMS selected CBRE with the intent of conducting further negotiations regarding price, which provided CBRE with an unfair advantage. Cushman further argues that the procedure of awarding to one vendor and then possibly adding another vendor if contract negotiations fail violates Florida’s statutes and the ITN. Amended Pet. ¶¶ 23, 28 & 31. Section 2.14 of the ITN specifically reserved DMS's right to reopen negotiations after receipt of BAFOs if it believed such was in the best interests of the state. Specifically, section 2.14 A. provides: The highest ranked Respondent(s) will be invited to negotiate a Contract. Respondents are cautioned to propose their best possible offers in their initial Reply as failing to do so may result in not being selected to proceed to negotiations. If necessary, the Department will request revisions to the approach submitted by the top-rated Respondent(s) until it is satisfied that the contract model will serve the state’s needs and is determined to provide the best value to the state. The statements made by Ms. Sparkman at the August 14, 2013, public meeting and in the award memorandum, that DMS would attempt to reduce CBRE's prices for ancillary services during the contract execution process were not contrary to the ITN or unfair to the other vendors. Both Ms. Sparkman and Mr. Bradner, the two negotiation team members who voted to award to CBRE, testified that they recommended CBRE as providing the best value even considering its arguably higher prices for ancillary services. Ms. Sparkman further confirmed that even if CBRE refused to lower its prices during the contract execution phase, DMS would still sign the contract, as CBRE's proposal would still represent the best value to the state. The anticipated efforts to obtain lower prices from CBRE were simply an attempt to obtain an even better best value for the state. Ms. Sparkman also testified that section 2.14 F. allowed continued negotiations, even though it was silent as to timeframe. Paragraph F states: In submitting a Reply a Respondent agrees to be bound to the terms of Section 5 – General Contract Conditions (PUR 1000) and Section 4 – Special Contract Conditions. Respondents should assume those terms will apply to the final contract, but the Department reserves the right to negotiate different terms and related price adjustments if the Department determines that it provides the best value to the state. Ms. Sparkman also cited section 2.14 I. as authority for reopening negotiations following receipt of the BAFO’s. That section provides: The Department does not anticipate reopening negotiations after receiving the BAFOs, but reserves the right to do so if it believes doing so will be in the best interests of the state. Ms. Sparkman’s statement that if DMS failed, for any reason, to successfully contract with either of the two vendors selected, it would consider pulling in another vendor, is not inconsistent with the clear language of the ITN. Selection Criteria Cushman alleges that DMS used criteria to determine the awards that were not listed in the ITN or the RBAFO. Amended Pet. ¶ 25. Section 2.14 E of the ITN established broad selection criteria, stating: The focus of the negotiations will be on achieving the solution that provides the best value to the state based upon the selection criteria and the requirements of this solicitation. The selection criteria include, but are not limited to, the Respondent's demonstrated ability to effectively provide the services, technical proposal and price. The Department reserves the right to utilize subject matter experts, subject matter advisors and multi-agency or legislative advisors to assist the negotiation team with finalizing the selection criteria. The negotiation process will also include negotiation of the terms and conditions of the Contract. (emphasis added). Following the negotiations, and with the assistance of its subject matter expert, the negotiation team provided in the RBAFO additional clarity as to the selection criteria, and identified the "Basis of Award/Selection Criteria" as follows: Performance Measures (if necessary) Sliding scale/cap IMA set fee Broker's opinion of value Balance of line (can be quoted per hour or lump sum) Contract concerns Credit hours (both annual and per deal hour) Hourly rates Vendor experience and capability The foregoing selection criteria, as well as the selection criteria stated initially in the ITN, make clear that pricing was only one of the criteria upon which the award was to be made. Indeed, Cushman's representative, Larry Richey, acknowledged during his testimony that criteria such as "Performance Measures," "Contract Concerns," and "Vendor Experience and Capability" did not refer to pricing, but rather to the expected quality of the vendor's performance if awarded the contract. As the principal draftsman of the ITN and DMS's lead negotiator, Ms. Sparkman explained that the RBAFO's statement of the selection criteria was intended to provide greater detail to the broad selection criteria identified in the ITN, and was used by the negotiation team in making its best value determination. Ms. Sparkman further testified that the best value determination resulted from the negotiation team's lengthy and extensive evaluation of the vendors' initial written replies to the ITN, review of the vendors' qualifications and comprehensive business plans, participation in approximately two and a half hours of oral presentations by each vendor (including a question and answer session with regard to the proposed implementation and management of the contracts), and a review of the vendors' BAFOs. Applying the selection criteria contained in the ITN and the RBAFO, the negotiation team selected Vertical for several reasons, including its performance indicators, employees with ADA certification, computer programs and employee training not offered by other vendors, its presence in Florida, and the strength of its business plan and presentation. Similarly, the negotiation team selected CBRE for an award based on the strength of its ITN Reply, its broad look at long-term strategies, its key performance indicators, the experience and knowledge of its staff, the comprehensiveness of its proposal and business plan, size of its firm, and creative ideas such as use of a scorecard in transactions. Ms. Sparkman observed that both Vertical and CBRE specifically identified the CBRE staff who would manage the state's business and daily transactions, while it was not clear from Cushman's ITN reply and related submissions who would actually be working on the account. Cushman likewise did not discuss out-of-state leases and how such leases were going to be handled, which was a significant concern because DMS considered out-of-state leases to be particularly complex. Ms. Sparkman also noted that with respect to the vendors' business plans, both Vertical and CBRE focused primarily on strategic realignment and plans for the future, whereas Cushman discussed their current transactions at length, but did not demonstrate forward thinking to the negotiation team. Cushman's reply to the ITN also included various discrepancies noted at the final hearing. While Cushman's ITN reply identifies a Tallahassee office, Cushman does not in fact have a Tallahassee office, but instead listed its subcontractor’s office.6/ Additionally, two of the business references presented in Cushman's ITN Reply appear not in fact to be for Cushman, but instead for its subcontractor, Daniel Wagnon, as Cushman's name was clearly typed in above Mr. Wagnon's name after the references were written. Finally, Cushman failed to provide in its ITN Reply the required subcontractor disclosure information for at least one of its "Project Management Partners," Ajax Construction. Based on all of the above, DMS's decision to award contracts to Vertical and CBRE as providing the best value to the state was not arbitrary, capricious, clearly erroneous, or contrary to competition. Simply stated, and as the negotiation team determined, the submissions by Vertical and CBRE were more comprehensive and reasonably found to offer better value to the state than Cushman's submission. Indeed the negotiation team did not even mention Cushman as a potential contract awardee, but instead identified only Vertical, CBRE and JLL in their deliberations as to best value. Cushman's argument that DMS award memorandum improperly relies on the following as "key elements" related to services does not alter this analysis: Long term strategies Key performance indicators Management of the portfolio Top ranked vendors had comprehensive business plans Pricing on the BOV and IMAs. While Ms. Sparkman acknowledged that the choice of language in the memorandum could have been better, it is clear that the foregoing are indeed "elements" of the selection criteria stated in the ITN and RBAFO, as the first four elements plainly relate to the vendors' ability to effectively provide the services, their technical proposal, performance measures, and vendor experience and capability, while the last element relates to the pricing portion of the criteria. Cushman also argues that the award memorandum failed to inform the final decision-maker that Cushman offered IMAs and BOVs at no charge when Cushman was engaged in a commissionable transaction or was performing other work for an agency under the contract. As a result, Cushman asserts, the Deputy Secretary was provided with inaccurate information relating to price. Cushman's argument that the award process was flawed because the pricing chart attached to the award memorandum did not accurately reflect Cushman's proposed pricing is without merit. As Ms. Sparkman testified, the chart was prepared by the negotiation team to provide for the decision-maker an apples-to- apples broad summary comparison of the vendor's proposed pricing for the proposed ancillary services. The chart was not intended to identify all variations or conditions for potential different pricing as proposed by Cushman.7/ Best Value Determination Cushman contends that the negotiation team’s decision to award a contract to CBRE did not result in the best value to the state. Amended Pet. ¶¶ 26, 28 & 29. Cushman further argues that DMS did not meaningfully consider differences in proposed pricing. The failure to consider price for potential ancillary services, Cushman argues, was contrary to competition as it gave an unfair advantage to CBRE whose prices were higher than Cushman’s prices in all but one category. Although pricing for the potential ancillary services was relevant, the ITN's initial scoring criteria made clear that DMS was primarily focused on evaluating the experience and capability of the vendors to provide the proposed services. For this reason, the ITN's initial scoring criteria awarded 90 percent of the points based upon the qualifications and business plan of the vendors, and only 10 percent of the points based on the pricing for potential ancillary services. The negotiation team members testified that this same focus on qualifications and the vendors' business plan continued during the negotiation phase and award decision, although without reliance on the mathematical scoring process utilized during the initial evaluation phase. Nothing in the ITN specifications altered this focus, and the negotiations were directed to gaining a greater understanding of the vendors' proposed services, the qualifications and bios of individuals who would actually do the work, vendors' approach to the work and parameters the vendors would use to evaluate their performance. Pricing remained of relatively minor significance primarily because the RBAFO established a uniform lease commission rate for all vendors, effectively removing pricing as a means to differentiate between the vendors. As a result, vendors were required to quote pricing only for certain potential ancillary services, including IMAs and BOVs, and the number of free credit hours to be provided to the state. Pricing for these potential ancillary services was not considered particularly important, since historically these services were seldom used, and the ITN required all vendors to provide IMAs and BOVs free of charge when related to a commissionable transaction (thereby greatly reducing the impact of any "free" IMA or BOV services). For these reasons, the negotiation team considered the potential ancillary services and pricing for these services not to be significant in the award decision and only incidental to the core purpose and mission of the intended contract, to wit, leasing and leasing commissions. As a result, the negotiation team referred to these potential ancillary services as "balance of line" items which were nominal and added little value to the contract. Notwithstanding Cushman's argument that it should have been awarded the contract because it offered the lowest pricing for these ancillary services, its prices were not in fact the lowest offered by the vendors. Indeed JLL offered to provide all IMA and BOV services (with no preconditions) at no cost. Cushman's pricing for the ancillary services also was not materially different than CBRE's pricing. CBRE's consulting services rates are comparable, if not lower, than Cushman's rates, and the difference between Cushman's and CBRE's proposed charges for IMAs and BOVs is only a few hundred dollars. When considered in terms of the anticipated number of times the ancillary services will be requested (rarely, based on the prior contract), the total "extra" amount to be spent for CBRE's services would be at most a few thousand dollars. The negotiation team reasonably considered this to be insignificant in comparison to the multimillion dollar leasing work which was the core purpose of the intended contract.8/ Because pricing for the potential ancillary services was of lesser significance to DMS's award decision, Cushman's position that DMS should have awarded Cushman a contract based upon its pricing for ancillary services is not consistent with the ITN and does not render DMS's intended awards to Vertical and CBRE arbitrary, capricious, clearly erroneous or contrary to competition. To the contrary, DMS articulated a rational, reasonable and logical explanation for the award. CBRE’s Proposal Non-Responsive to ITN and RBAFO? Cushman alleges that CBRE’s BAFO was not responsive to the ITN and the RBAFO because CBRE included a set rate for acquisitions and dispositions in its proposal. Amended Pet. 30. Since CBRE's BAFO materially deviated from the ITN's specifications, CBRE’s proposal should have been deemed non- responsive and therefore rejected, Cushman argues. The ITN originally requested pricing related only to credit hours as the ITN set the rates for leases. The ITN stated that “other services” would be determined on a case-by- case basis as negotiated by the agencies. However, as part of the ITN process, DMS discussed with the vendors the potential for them to assist the state in the sale and acquisition of property, and what commission rates might be charged for this work. For this reason, CBRE included proposed commission rates for acquisition and disposition services in its BAFO. DMS considered the inclusion of potential rates for acquisitions and dispositions to be a minor irregularity which did not render CBRE's BAFO non-responsive. This determination is consistent with the terms of the ITN, which at section 2.14(g) states "[t]he Department reserves the right to waive minor irregularities in replies." The form PUR 1001 incorporated by reference into the ITN likewise reserves to DMS the right to waive minor irregularities and states: 16. Minor Irregularities/Right to Reject. The Buyer reserves the right to accept or reject any and all bids, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if the Buyer determines that doing so will serve the state's best interests. The Buyer may reject any response not submitted in the manner specified by the solicitation documents. Consistent with the above-cited provisions, the negotiation team noted at its August 14, 2013, meeting that CBRE's inclusion of the proposed rates was not material, and that during the contract execution process, DMS would either exclude the proposed rates from the contract, or possibly include such as a cap for these services. Both of these alternatives were available to DMS given CBRE's commitment to follow the terms of the draft contract, which specifically stated that fees for acquisitions and dispositions would be negotiated on a case-by-case basis. Finally, CBRE's inclusion of proposed commission rates for acquisitions and dispositions did not give CBRE an advantage over the other vendors, or impair the competition, because Cushman and JLL also submitted, as part of their ITN responses, proposed commission rates for the acquisition and disposition of property. Do the ITN Specifications Violate Section 255.25? Cushman's final argument is that the ITN specifications, and the proposed contract, violate section 255.25(3)(h)5., Florida Statutes, which states that "[a]ll terms relating to the compensation of the real estate consultant or tenant broker shall be specified in the term contract and may not be supplemented or modified by the state agency using the contract." Cushman's argument has two components. First, Cushman argues that the specifications included at Tab 5, page 13 of the ITN violate the statute by providing: "With respect to all other [ancillary] services, . . . , compensation shall be as outlined in an agency prepared Scope of Work and will be quoted based on an hourly rate (set as ceiling rates in this ITN), set fees for the service/project or by a percentage commission rate as offered and negotiated by the using agency.” Cushman also argues that the language in the award memorandum stating that the BOV rates are "caps" and "may be negotiated down by agencies prior to individual transactions," violates the statute. This latter reference to "caps" correlates to the "ceiling rates" stated in the above quoted ITN specification. Section 120.57(3)(b), Florida Statutes, requires vendors to file a protest to an ITN’s terms, conditions, or specifications within 72 hours of the release of the ITN or amendment; failure to protest constitutes a waiver of such arguments. DMS included this language with the release of the ITN and each amendment, so Cushman was on notice of its protest rights. Cushman's challenge to the ITN specifications as violating section 255.25 is untimely and has been waived. Having been fully informed of this specification since May 14, 2013, when the revised ITN was published, Cushman could not wait until the ITN process was completed some four months later, and then argue that the ITN specifications do not comply with section 255.25 and must be changed. Such argument plainly constitutes a specifications challenge, and such a challenge is now time-barred. Even were Cushman’s challenge not time-barred, it would still fail. Section 255.25 requires only that "[a]ll terms relating to the compensation of the real estate consultant or tenant broker shall be specified in the term contract," and not that all terms identifying the compensation be specified. The challenged ITN specification, actually added via Addendum 2 at the request of DEP and its subject matter expert, does specify the approved methods by which the state could compensate the vendor, which DMS determined would best be determined on a case-by-case basis. By stating the approved methods which can be used by the state agencies, the ITN specifications and term contract did specify the terms "relating to" the compensation of the vendor, i.e., an hourly rate (set as ceiling rates in the ITN), set fees for the service/project, or a percentage commission rate. DMS established these terms because the exact compensation would best be determined by the state agency on a case-by-case basis in a Statement of Work utilizing one of the specified compensation methods.9/
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered denying the petition of Cushman & Wakefield of Florida, Inc., and affirming the Notice of Intent to Award to CBRE, Inc., and Vertical Integration, Inc. DONE AND ENTERED this 24th day of January, 2014, in Tallahassee, Leon County, Florida. S W. DAVID WATKINS 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 24th day of January, 2014.
Findings Of Fact The Petitioners own and operate a farm in St. Johns County, Florida. During the 1991 potato-growing season, they grew atlantic chipping potatoes on their 400-acre farm, as well as on approximately 30 acres leased from another party by their daughter and son-in-law. The Petitioners' business is known as Pacetti Farms. Rubin is an Illinois corporation licensed to do business in Florida as a broker or dealer in agricultural products. Rubin customarily purchases potatoes from growers throughout the country at the appropriate season for resale, typically to various potato chip manufacturing companies. Mr. Rubin appeared at the hearing and testified on behalf of Rubin and as an adverse witness on behalf of the Petitioners. Rubin is licensed and bonded with a surety bond from Continental in accordance with the statutory authority cited below, enforced and regulated by the Department of Agriculture and Consumer Services ("Department"). On December 22, 1990, the Petitioners and Rubin entered into a written contract for the sale and purchase of 50,000 CWT of Florida atlantic chipping potatoes. That contract is in evidence as Exhibit 3 and is also known as the "set price contract". The contract called for shipment of the potatoes at a stated price of $6.35 per CWT, although the parties have stipulated and agreed that the actual contract price was intended as $6.00 per CWT. That figure is not in dispute in this proceeding. Shipment was to be made during the harvesting season between the dates of April 27, 1991 and June 15, 1991. The contract contained an escape clause or exception for "acts of God", with an explanatory parenthetic clause indicating that that was intended to mean circumstances beyond the control of the parties, such as flood, freeze, hail, etc. On or about February 15, 1991, severe cold weather struck the potato- growing area of St. Johns County, Florida. Temperatures ranged from 25 degrees to 19 degrees on that day, with a high wind blowing and very dry conditions. This resulted in soil being blown away from the newly-set potatoes under very cold temperatures. Because of this, the Petitioners had to work with tractors and cultivators far into the night to turn the blown-away soil back into the potato "sets". The Petitioners feared that this would cause some "dry eyes" and, therefore, lowered potato plant and potato production. In fact, however, upon observing the maturing plants during April of 1991, it appeared that the Petitioners would have a healthy, normal crop. The prior year the Petitioners had grown 133,000 CWT of potatoes on their 400 acres (excluding the Kirkers' 30 acres). With this background of an apparently-healthy crop in mind, the Petitioners were approached by Rubin on April 25, 1991 and negotiations ensued which resulted in the sale and purchase from Petitioners to Rubin of six additional loads of potatoes at the open market price of $19.50 per CWT. The six additional loads were in addition to the 50,000 CWT of potatoes agreed upon in the main contract entered into on December 22, 1990. This separate oral agreement for the six loads of potatoes at the market price of $19.50 per CWT was entered into prior to the Petitioners initiating delivery under the terms of the written contract of December 22, 1990. The parties thus agreed for the sale and purchase of six loads of potatoes at that market price to be delivered on Monday, Tuesday, and Wednesday of the following week, April 29th, April 30th, and May 1, 1991. Part of the consideration for that oral contract was the Petitioners' ability to furnish the six truckloads of potatoes on short notice, on the dates that Rubin required them. In other words, Rubin needed them in a hurry; and it was apparently worth $19.50 per CWT for him to get the potatoes delivered immediately on the dates requested. In the process of negotiating this oral contract, the Petitioners assured Rubin that he would have sufficient potatoes to meet his 50,000 CWT obligation under the written contract of December 22, 1990. This was not a misrepresentation on the part of the Petitioners, at this time, because the Petitioners, in good faith, believed they would be able to meet the 50,000 CWT set price contract and the oral contract for six additional truckloads, because of their belief concerning their crop estimate. This belief was based upon their observance of an apparently healthy crop and their knowledge that on their 400 acres, the year before, they had grown 133,000 CWT, as well as upon their knowledge that a normal crop estimate for the entire 430 acres at this location, under all of the prevailing circumstances, was 120,400 CWT. In fact, the Petitioners only contracted for 116,650 CWT of potatoes which, based upon a reasonable and appropriate crop estimate for this site and circumstances, would have allowed them to meet all their contracts, including the 50,000 CWT contract between the Petitioners and Rubin, although not all of the market sales for the Kirkers. After having thus assured Mr. Rubin that they could meet the contract of December 22, 1990 and still perform the oral contract for the six truckloads at market price, the Petitioners proceeded to carry out that oral agreement. It was a separate and distinct contract from the written contract dated December 22, 1990. Under the separate oral contract, they delivered the six truckloads of potatoes requested by Rubin. Rubin received them and paid $19.50 per CWT for them. On May 2, 1990, the Petitioners began delivering potatoes to Rubin under the terms and conditions of the written contract of December 22, 1990 and continued the deliveries throughout the remainder of the harvesting season. The first was shipped from Pacetti Farms on May 2, 1991 and the last load delivered to Rubin on that contract was shipped on June 1, 1991. During the 1991 growing and harvesting season, the area, including St. Johns County, experienced substantial crop damage due to excessive frost, rain, hail, and wind, which occurred during February of 1991 and then after April 25, 1991, with particular regard to excessive rainfall in May of 1991. This resulted in the area being declared an agricultural disaster area by the United States Department of Agriculture for that growing season. The Petitioners suffered damage to their crop as a result of these elements in February of 1991, as described above, and by excessive rainfall during May of 1991. Excessive rainfall caused root damage to their crop, which resulted in a lowered yield even though the plants viewed above ground appeared to be normal. This was aggravated by the fact that the Petitioners and other growers were legally unable to use the pesticide "Temik", for control of nematodes, during that growing season. Because of the nature of the crop involved, which grows underground, the potato yield is difficult to estimate at any given point in harvesting. The exact nature and extent of damage caused by weather conditions to a single crop is hard to estimate in advance. This difficulty is further compounded by differing soil types and climate conditions present within a particular growing area, especially with regard to farmers such as the Petitioners, who have their crops spread over multiple fields and farms. In mid-May of 1991, the Petitioners realized that there would be a crop shortage. The crop was damaged due to the weather-related factors mentioned above. The Petitioners notified Rubin that they expected their potato crop to fall short of expectations and that they would probably be unable to completely fill the contract with Rubin for the entire 50,000 CWT contracted for on December 22, 1990. In the meantime, before the 1991 planting season began, the Petitioners and Renee and Keith Kirker had entered into an agreement, whereby the Kirkers initiated their own farming operation on 30 acres of potato-growing land. The Kirkers leased that acreage from Diane Ross and received operating assistance from the Petitioners in the form of advances of all their operating costs, pursuant to an agreement between the Petitioners and the Kirkers, whereby the Petitioners would be repaid the estimated production costs for that 30-acre crop in the amount of $1,776.85 per acre, upon the sale of those 30 acres of potatoes. Potatoes are planted and harvested in the same sequence. Since the Petitioners assisted the Kirkers in planting their potatoes prior to the planting and completion of their own fields, the Petitioners borrowed some of the Kirkers' potatoes to fill their own contracts because those potatoes matured earlier, with the understanding that the Kirkers would be repaid in kind from the Petitioners' own fields during the remainder of the harvesting season. This is a common practice according to Ronald Brown, who testified for the Petitioners as an expert witness on farming practices. However, after the heavy rains in May of 1991, the Petitioners discovered that it would be necessary, in their view, to retain a portion of their last acreage in order to have potatoes to pay back the Kirkers for the potatoes borrowed. These potatoes would be sold by the Petitioners at market price, as agreed with the Kirkers. Upon discovering that their crop would not meet their contract obligations, the Petitioners attempted to prorate their remaining potatoes between their remaining contract customers in what they considered a fair and reasonable manner. On behalf of the Kirkers, the potatoes allocated for repayment to them were offered to Rubin, who, through its President, Mr. Rubin, declined to purchase them at the market price at which they were offered (higher than the contract price). The Petitioners' expert, Ronald Brown, established that, based upon accepted growers practices and his experience in the Hastings area, the Petitioners should have anticipated the yield for their 1991 crop at no more than 280 CWT per acre for the Petitioners' 430 acres (30 acres of which was the Kirkers' land). It is customary farming practice in the area, according to Brown, to enter into contracts for no more than 80% of the maximum anticipated yield of potatoes. The anticipated yield on the entire 430 acres of the Petitioners' and the Kirkers' land was, therefore, 120,400 CWT of potatoes. The principle of contracting no more than 80% of a maximum anticipated yield is designed to protect contracting parties in the event a smaller than anticipated yield occurs. A 280 CWT per acre yield is the generally-accepted yield amount under good growing conditions, according to Mr. Brown. The year before, the Petitioners had produced a total yield of 133,000 CWT on only 400 acres. The Petitioners entered into a total of six separate contracts for delivery of a total of 116,650 CWT of potatoes out of a reasonably anticipated maximum yield for the 430 acres of only 120,400 CWT. Thus, the Petitioners contracted 97% of the customary, accepted, anticipated maximum yield for the 430 acres for 1991. Thirty (30) of those acres, however, represent the potatoes which the Petitioners were obligated to the Kirkers to sell on their behalf at market price, rather than contract price. In spite of the fact that the Petitioners contracted 97% of the accepted, projected crop yield for 430 acres, the Petitioners, in fact, produced 117,000 CWT (approximate) on those 430 acres. Therefore, had they not diverted a certain amount of the crop to open market sales, they could have met their 116,650 CWT contractual obligations to the six contracting parties, including Rubin. It is also true, however, that that 117,000 CWT actual yield included the 30 acres of potatoes which the Petitioners were separately obligated to sell at open market price to repay the Kirkers. Notwithstanding the fact that the Petitioners had contracted 97% of the commonly-accepted, projected maximum yield, the Petitioners diverted 10,301.6 CWT of the 1991 crop on the entire 430 acres from contract sales to open market sales at much higher prices. Of those open market sales, 2,789.5 CWT were sold at market price after the last contract sales were made to Rubin. Had the Petitioners sold the entire 10,301.6 CWT of potatoes on contract, instead of at open market, all of the Petitioners' contractual requirements could have been met, including the contract with Rubin, although they would not then have been able to meet their obligations to the Kirkers. Based upon the above Findings of Fact supported by competent evidence, it is found that the preponderant evidence in this case does not support the Petitioners' contention that the Petitioners were unable to fulfill their contract obligation to Rubin due to an act of God. Although it is true that the Petitioners established that poor weather conditions, coupled with the absence of the ability to use the pesticide "Temik", had a deleterious effect on their crop production. The record shows that in spite of this, the Petitioners had the ability to fulfill their contract with Rubin if only approximately 5,000 CWT of the 10,301.6 CWT of potatoes sold on the open market had instead been allocated to the Petitioners' contract with Rubin to fill out the difference between the approximately 45,000 CWT honored under the contract and the contractual obligation to supply 50,000 CWT. The Petitioners produced on their own 400 acres 108,000 CWT. The remainder of the 117,582.5 CWT of potatoes from the total crop represented the potatoes grown on the Kirkers' 30 acres. Thus, the Kirkers' land produced approximately 8,600 CWT. The Petitioners supplied approximately 3,000 CWT under the separate, oral contract at market price and which were delivered to Rubin on April 29th, 30th, and May 1st (six loads at approximately 500 CWT per load). Then, the Petitioners sold the remainder of the total of 10,301.6 CWT of the entire Pacetti/Kirker crop or approximately 7,301.6 CWT on open market sales to others. The remainder of the 108,000 CWT grown on the Petitioners' own 400 acres, not sold to Rubin under the contract of December 22, 1990 or under the oral contract of April 25, 1991 (the six loads at market), were contracted out to other buyers. The ultimate effect of these contracts was that the Petitioners had contracted for 116,650 CWT. Thus, the Petitioners had imprudently contracted approximately 97% of the accepted, projected crop yield of 120,400 CWT, knowing that they were obligated to sell the Kirkers 8,600 or so CWT at market price and not on contract. Thus, the Petitioners clearly over- contracted the crop yield which they reasonably should have expected on the total 430 acres under the generally-accepted method of calculation of crop yield, under good growing conditions, of 280 CWT per acre, established by expert witness, Brown. This over-contracting practice, together with selling an excess amount of potatoes at market price (over and above those sold at market by the separate, oral contract with Rubin at the initial part of the harvesting season), is what actually prevented the Petitioners from fulfilling Rubin's contract of 50,000 CWT, rather than an act of God, predetermined condition for claiming impossibility of performance on that contract due to the above- described weather conditions. Even though the Petitioners were obligated to sell the Kirkers' entire 30 acres of yield, approximately 8,600 CWT, at market price, the Petitioners would still have had enough potatoes, even with their less-than-expected yield of 108,000 CWT represented by their own 400 acres, to have filled out the Rubin contract if they had not contracted out so many potatoes to other contracting buyers and had not sold as many potatoes at market price off contract as, indeed, they sold. Since the act of God condition is not what prevented the Petitioners from filling the written contract with Rubin for 50,000 CWT, it is clear that the Petitioners thus breached that contract. In this connection, it should be pointed out that the written contract with Rubin was entered into before any of the other contracts for the potato crop in question. The two contracts with Rubin are, however, separate contracts. The Petitioners established that there was a separate oral agreement entered into on April 25th between the Petitioners and Rubin and that the consideration flowing from the Petitioners to Mr. Rubin was that he needed the six loads of potatoes on short notice delivered on specific dates, April 29th, 30th, and May 1st, for which he was willing, therefore, to pay the $19.50 market price, knowing that it was for other potatoes that he contracted at $6.00. The Petitioners performed by providing the loads of potatoes when he wanted them and he paid for them in full. Thus, that contract was executed by consideration passing from each party to the other, and the contract was completed. The written contract with Rubin dated December 22, 1990 for the 50,000 CWT was the contract which the Petitioners breached for the above-found reasons. Rubin would, therefore, be entitled to damages for that breach based upon the facts proven in this case. There is no counterclaim or other action pending in this forum by Rubin against the Petitioners, however. Consequently, any damages proven by the breach of the written contract can only, at best, be applied against the amount due and owing the Petitioners for the billed, but unpaid, loads; that is, against the amount in controversy of $40,015.20. Rubin, however, has not produced any evidence to show what his damages might be. The record establishes, as found above, that, of the 48,361 CWT of potatoes delivered to Rubin, approximately 3,000 of which were delivered under the separate oral contract for six loads, Rubin only received approximately 45,000 CWT under the 50,000 CWT written contract. Thus, Rubin would appear to be entitled to damages caused by failing to get the last approximately 5,000 CWT of potatoes. The record, however, does not establish what those damages might be because it is not established whether Rubin had to purchase potatoes from another source at a higher price to meet the remainder of the 50,000 CWT amount, or, conversely, whether Rubin was able to purchase them from another source at a lower price than the $6.00 per CWT contract price, so that Rubin would actually benefit by the Petitioners' breach of that contract. Neither does the record reflect another possible scenario whereby Rubin might have simply accepted the approximate 5,000 CWT shortage and simply lost customers and potential profits represented by that amount of potatoes, or, finally, whether he simply did not purchase the shortage of 5,000 CWT from another source and had no missed sales for that amount of potatoes anyway and, therefore, no loss and no damage. The record simply does not reflect what Rubin's damages might have been because of the shortage under the written contract deliveries. In any event, the record evidence establishes that the oral contract was fully performed, with consideration flowing to each of the parties and that those potatoes were fully paid for at the market price. Then, the Petitioners delivered the written contract loads at $6.00 per CWT to Rubin represented by the claimed $40,015.00. That remains unpaid by Rubin. Rubin is obligated to pay that amount because Rubin was obligated to, and received those potatoes at the $6.00 contract price. Rubin would then appear to be entitled to claim damages if, indeed, any were suffered, for the breach of that written contract by the Petitioners' failure to supply the last (approximate) 5,000 CWT due Rubin under that contract. That resolution of their dispute, however, cannot be performed in this forum because of insufficient evidence, as delineated above, and remains to be resolved by another action by Rubin in another forum.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, RECOMMENDED that the Respondents, Jack Rubin & Son, Inc. and Continental Casualty Co., Inc. be found jointly and severally liable for payment of $40,015.20 to the Petitioners for potatoes delivered to the Respondent, Jack Rubin & Son, Inc., for which payment has not yet been made. DONE AND ENTERED this 20th day of November, 1992, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF 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 23rd day of November, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-548A Petitioners' Proposed Findings of Fact 1-16. Accepted. Respondent's Proposed Findings of Fact 1. Accepted, in part, but subordinate to the Hearing Officer's findings of fact on this subject matter because the evidence establishes that 30 acres of potatoes belonged to the Kirkers even though Pacetti Farms was responsible for all operations with regard to planting and harvesting those 30 acres, furnishing costs, operational expertise, equipment and labor as an advance against the Kirkers' crop sale. 2-5. Accepted, except that it is not found that the entire 430 acres of potatoes were the Petitioners' potatoes. 30 acres of potatoes belonged to the Kirkers. Rejected, as not entirely in accordance with the preponderant weight of the evidence and subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and not entirely in accordance with the preponderant weight of the evidence, to the extent that the 97% of the accepted projected crop yield contracted for by the Petitioners represents an inclusion of the 30 acres of the Kirkers' potatoes in that percentage of crop yield projection. This is erroneous because the 30 acres were the Kirkers' potatoes which the Petitioners were handling for them. Accepted in concept, but subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and not entirely in accordance with the preponderant evidence of record. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as not entirely in accordance with the preponderant weight of the evidence and as subordinate to the Hearing Officer's findings of fact on this subject matter. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, Esq. General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810 John Michael Traynor, Esquire Charles E. Pellicer, Esquire 28 Cordova Street St. Augustine, Florida 32084 C. Holt Smith, III, Esquire 3100 University Boulevard So. Suite 101 Jacksonville, FL 32016
Findings Of Fact On September 19, 1974 Eleanor Van Treese, as agent for Futrell Company, obtained a listing on a residence located at 12250 S. W. 67th Avenue in Miami, Florida from Newton J. Mulford and Elizabeth N. Mulford, the record owners of said property. A copy of this sales management agreement was admitted into evidence as Exhibit number 1. Thereon was shown one existing mortgage with Coral Gables Federal, with a balance of approximately $47,500. At the time the Mulfords executed Exhibit number 1, a second mortgage in the amount of some $25,000 was also recorded against this property and foreclosure proceedings had been instituted. The holder of the second mortgage was James V. O'Connor. George Bender, a Miami attorney, was aware that foreclosure proceedings had been instituted against this property prior to the time that Futrell obtained the listing agreement. He called Mulford to inquire about purchasing the property, but apparently his offer was not high enough to interest Mulford. After the Futrell sign was placed in front of the house, Mrs. Capps met Mrs. George Bender at a social affair. When Mrs. Bender learned that Mrs. Capps was a real estate salesperson working for Futrell Company, she asked if she would show her the Mulford house. In late November or early December Mrs. Bender was shown the house and thereafter her husband also was shown the premises. On January 2, 1975 a final judgment of foreclosure was entered in the Circuit Court of the Eleventh Judicial District of Florida. Therein the court found that James V. O'Connor was the holder of a second mortgage on the premises in the principal sum of $25,000 together with interest accrued thereon from August 15, 1970 in the amount of $12,976.34. The court also awarded O'Connor $500 as a reasonable attorney's fee. The judgment further provided that the defendant, O'Connor, or any of the parties to the suit, may become bidders for purchase of the premises at the forthcoming sale thereof; and that the court would retain jurisdiction of the cause for the purpose of entertaining a Motion for Deficiency Judgment and "settle all other questions under the proceedings not settled by this order." O'Connor thereafter called Eleanor Van Treese to advise her that he had obtained the foreclosure order and that he would bid on the property when the judicial sale was held on the 15th of January. He further advised that he was anxious to turn over the property and get his money out of it. Mrs. Van Treese telephoned Mary Capps on January 10, 1975 to advise her of the information she had received from O'Connor. Not understanding the legal implication thereof Mrs. Capps decided that she should come to Mrs. Van Treese's house and the two of them talk to O'Connor regarding the property. This was done; and, with the two salespersons on the telephone with O'Connor, he read to them the judgment that he had obtained; advised them that he would be bidding on the property on January 15th and expected to purchase same; and that he would consider offers to purchase the property from him. Mrs. Capps, that same evening, called Mrs. Bender to advise that O'Connor was going to bid on the property on January 15th and was interested in selling the property. When Mr. Bender came home, Mrs. Bender and he discussed the purchase of the property and decided to submit an offer. Mrs. Bender so advised Mrs. Capps. The following morning, on Saturday, January 11th, Mr. and Mrs. Bender sent to the Futrell Company office and Mrs. Capps typed an offer to Purchase the property which the Benders executed. This was the deposit receipt and sales purchase agreement dated January 11, 1975 admitted into evidence as Exhibit number 2. While at the office Mr. Bender called another attorney, William A. Friedlander, who he considered to be more knowledgeable in real estate transactions than himself, for legal advice in the premises. Friedlander advised him that it was proper to submit an offer to O'Connor although O'Connor did not have present title and was therefore unable to execute a valid deed for the property until after he purchased the property at the foreclosure sale. Friedlander considered the contract would be based upon a condition subsequent, viz: the acquisition of title by O'Connor, and such contract would be enforceable. Friedlander was also aware that several judgments had been entered against Mulford and that Mulford would be unable to execute a contract and deliver clear title at the amount Bender was offering. This was so because the sum of first mortgage, second mortgage, real estate commission, and other judgments that had been entered against Mulford exceeded the amount Bender was offering to pay for the residence. He advised Bender that, if the foreclosure suit had joined all necessary parties, the deed obtained by O'Connor at the foreclosure sale would be good and O'Connor would be able to give a good and merchantable title. He further advised Bender that a contract with Mulford would have been futile due to the amount of the offer and unworkable due to the short period of time before the foreclosure sale in which to obtain the cash necessary to provide Mulford sufficient funds to pay off all his creditors and the mortgages. At the time the Benders executed the contract for the purchase of the residence in question it was their intention that the offer be presented only to O'Connor. Mary Capps presented this offer by the Benders (Exhibit 2) to O'Connor who accepted same on January 11, 1975. The $6,000 earnest money deposit was delivered by Mrs. Capps to the Secretary of the Futrell Company for deposit in the Futrell Escrow Account. No evidence was presented that the earnest money deposit has ever been refunded to the Benders or that they have requested this earnest money deposit to be refunded. Mr. and Mrs. Mulford were not advised of the existence of the offer to purchase dated January 11, 1975 until long after O'Connor purchased the property at the foreclosure sale.
