Findings Of Fact In June, 1975 Randall J. Conley, attempting to set his son and daughter-in-law up in business, arranged for them, with his help, to purchase Roger Sparks' business known as Sparky's Pizza. By Exhibit 6 dated June 17, 1975 the owner and lessor of the premises executed, with Randall M. Conley and his wife Sandra, a Consent to Assignment whereby the lease between the lessor and Mr. Spaghetti and Roger Sparks was assigned to the younger Conley and his wife and the previous lessees were released from further liability under the five year lease they had executed on April 30, 1974. (Exhibit 10) By Collateral Assignment Note dated 6-2-75 Randall J. Conley, Randall M. Conley and Sandra Conley obligated themselves to pay the Florida Center Bank $9750 over a five-year period and pledged the equipment and fixtures in the pizza business as security therefor. In October, 1975 Sandra, who had been operating the business, left for another job preparatory to separating from her husband. The business closed on November 1, 1975 and Defendant learned that the lessees were delinquent in the rent and payments on the chattel mortgage. Thereafter he attempted to sell the business. In November, 1975 Charles Hicks, the owner of a small fast-food chain, while looking for a site for a franchisee, saw the empty Sparky's Pizza and ascertained that information on occupying the property could be obtained from Defendant. He called Defendant's office and was told the rent was $260 per month. Arrangements were made for Defendant to show him the property the same afternoon. On November 25, 1975 Defendant showed Hicks and his putative franchisee, Ronald Beasley, the property. After being assured that the rental included the equipment and fixtures they agreed to accept an assignment of the lease if the lessor agreed and to bind the transaction Hicks gave Defendant a check for $200 made payable, at the request of Defendant, to Randall J. Conley. No written agreement was executed by the parties at this time. The check stated on its face that it was a deposit on lease of building here involved. The following day Defendant called Hicks and told him that the lessor had agreed with the assignment and that he should bring a check for $7,000 to pay for the equipment, plus a check for the rent. Hicks objected to the purchase of the equipment and demanded return of his $200 deposit. Defendant refused to return the money and Hicks immediately tried to stop payment on the check. When he did so he learned that his check had been cashed by Defendant as soon as the bank opened that morning, November 26. After Hicks was unsuccessful in getting his deposit returned he reported the incident to the FREC and the complaint here under consideration was filed. Defendant contends that he was operating as the owner of the lease and not in his capacity as a broker; that the consent to assignment of the lease did not result in an assignment; that by executing the collateral installment note he was part owner of the business; that when his daughter-in-law left and the business folded he acquired the leasehold by abandonment; and that he was entitled to retain Hicks' deposit of $200 as liquidated damages. One witness called by Defendant testified that the bank's policy on chattel mortgage loans was that they would only make such loans to the owners of the business. However, he acknowledged that he did not handle the loan here involved and never saw any documents showing Randall J. Conley having an interest in the leased premises, the equipment and fixtures for which was the subject of the loan represented by Exhibit 9. Defendant had advertised the sale of the lease in the newspaper and therein indicated the assignee of the lease would be required to assume payments on the equipment. Neither Hicks nor Beasley ever saw any such advertisement.
The Issue In relation to DOAH Case No. 05-0515, does the case involve the sale of securities as described in Chapter 517, Florida Statutes (2002), that would confer jurisdiction upon OFR to proceed to a hearing on the merits of the Administrative Complaint that forms the basis for DOAH Case No. 05-0515, and to what extent, if any, the named Respondents have been involved with the sale of securities sufficient to declare jurisdiction over their activities? Preliminary to that determination is the related issue concerning the possible pre-emption of OFR's regulatory authority by virtue of the regulatory action previously taken by the State of Florida, Department of Business and Professional Regulation, Division of Land Sales, Condominiums and Mobile Homes (DBPR) under authority set forth in Chapter 721, Florida Statutes (2002)? Argument has also been set forth concerning the significance of court cases as they might influence OFR's ability to declare their regulatory authority in this instance.
Findings Of Fact * * * 2. RESPONDENT is the 'creating developer' of the Universal Luxury Lease Plan, a personal property 'timeshare plan' as those terms are defined in sections 721.05(9)(a) and 721.05(37), Florida Statutes, located in the city of Sanford, Florida. * * * On or about July 10, 2003, DIVISION was made aware of a newspaper advertisement for Universal Luxury Lease Plan. This advertisement, promoted the purchase of a timeshare interest in the Universal Luxury Lease Plan as an investment that offered purchasers a 10 percent per year return on their investment. On July 25, 2003, DIVISION'S investigators were given an application package containing the Universal Luxury Lease Plan Enrollment Forms, CD-ROM, Public Offering Statement, Contracts and Motor Coach Brochures. The application package stated that it was advertising material being used for the purposes of soliciting timeshare interests. It described a component of the timeshare plan called the 'Affinity Rental Program' and stated that the program will typically produce a monthly income of 10 percent of the lease-hold ownership interest.
Recommendation Based upon the consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That an order be entered by OFR finding jurisdiction to proceed with the Administrative Complaint in DOAH Case No. 05- 0515 on its merits. DONE AND ENTERED this 6th day of January, 2006, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS 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 6th day of January, 2006.
The Issue Whether the Petitioner, Willis Phillips, may challenge the specifications of the invitation to bid at issue in this proceeding? Whether the Petitioner has standing to challenge the Department of Health and Rehabilitative Services' proposed award of lease number 590:2166 to the Intervenor, Rutherford Rentals, Inc.?
Findings Of Fact The Department issued an Invitation to Bid for Existing Facilities, lease number 590:2166 (hereinafter referred to as the "ITB"), seeking to rent office space in Madison, Florida. Responses to the ITB were to be filed with the Department by 2:00 p.m., March 6, 1990. Included as part of the ITB was a map of the City of Madison (hereinafter referred to as the "Map"). Joint Exhibit 1. On page 1, paragraph 3, of the Bid Submittal Form which was included as part of the ITB it was indicated that "[s]pace to be located in Madison, Florida within boundaries depicted in the attached map (Attachment B.) Bidder to mark location of site on map Attachment B." The ITB referred to the Map as a "Map showing bid zone boundaries." See page 4 of the ITB. The Map was labeled as "Attachment B" and included the following language at the bottom of the Map: "WITHIN CITY LIMITS WITH EXCEPTIONS OF UNDESIRABLE LOCATIONS AS INDICATED." The Map included two areas within the City of Madison which were cross- hatched. At the bottom of the Map the word "UNDESIRABLE" had been written in black. This word only appears below the larger of the two cross-hatched areas. The Department intended to exclude any office space located within both of the cross-hatched areas on the Map. The Petitioner spoke by telephone with Robert Smith, a Facilities Services Managers Assistant for the Department, prior to submitting a response to the ITB. The Petitioner initiated the conversation. Based upon this conversation, the Petitioner was aware that property located within either of the cross-hatched areas on the Map was excluded from consideration under the ITB. The property which the Petitioner intended to offer to the Department in response to the ITB is located in the smallest of the two cross-hatched areas on the Map. The Petitioner was informed by Mr. Smith that the property located within the smaller cross-hatched area was excluded as undesirable. Mr. Smith informed the Petitioner that he could not submit a response to the ITB offering to rent property located in the small cross-hatched area. The exclusion from consideration of property located in the areas within the City of Madison which were located in the two cross-hatched areas of the Map could have been more clearly designated. The Department's designation of the excluded areas, however, was not ambiguous. It was clear that the Petitioner's property was located in an excluded portion of the City of Madison and that the Petitioner was aware of the exclusion of his property. Despite the Petitioner's knowledged that his property was located within an excluded area, the Petitioner submitted a response dated March 6, 1990, to the ITB proposing property located in the smaller cross-hatched area. In the Petitioner's response to the ITB he did not indicate the location of his property on the Map. Instead, the Petitioner submitted a different map of a portion of the City of Madison which included his property. Rules 10-13.006 and 10-13.007, Florida Administrative Code, require that protests of the bid specifications of the Department must be filed within 72 hours of receipt of notice of the bid specifications. The ITB did not indicate that persons adversely affected by the ITB could challenge the specifications of the ITB or that any such challenge had to be filed within 72 hours of receipt of notice of the ITB. The following statement appears of the last page of the Bid Submittal Form included with the ITB and submitted by the Petitioner: I hereby certify as owner, officer, or authorized agent that I have read the Invitation to Bid Package and all its attachments, and agree to abide by all requirements and conditions contained therein. . . . This certification was signed by the Petitioner. The Department decided to award the lease to the Intervenor. The Department determined that the Petitioner's bid should be rejected because the proposed property was located in an excluded area. The Petitioner filed a Formal Protest and Petition for Formal Administrative Hearing on April 23, 1990, with the Department. The Petitioner challenged the Department's proposed award of the lease to the Intervenor and asserted that he was the lowest and best bidder. The Petitioner did not challenge the specifications of the ITB. The Department filed a Motion to Dismiss on Mazy 4, 1990. The Petitioner filed a Motion for Leave to File Amended Petition and an Amended Formal Protest and Petition for Formal Administrative Hearing on May 14, 1990. For the first time, the Petitioner challenged the specifications of the ITB.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order granting the Department's Motion to Dismiss and dismissing with prejudice the Formal Protest and Petition for Formal Administrative Hearing filed by the Petitioner. DONE and ENTERED this 12th day of July, 1990, in Tallahassee, Florida. LARRY J. SARTIN 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 12th day of July, 1990. APPENDIX The Petitioner and the Department have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1-2 See 9. 3-5 Not supported by the weight of the evidence. 6 6-7. 7 and 11 Not relevant. 8-10 and 12-15 These proposed findings are consistent with Ms. Goodman's testimony. Ms. Goodman's opinions, however, are not supported by the weight of the evidence. Although this proposed finding of fact is generally true, the weight of the evidence failed to prove that the Petitioner was not aware that both cross-hatched areas were excluded areas. See 9. The Department's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 1. 2 2 and hereby accepted. 3 5-8. 4 7. 5 6. 6 12. 7 9. 8 13 and 17. 9 4. 10 12. 11 17. 12 15. 13 16. 14 18 and hereby accepted. 15 20. 21 and hereby accepted. 22 and hereby accepted. Hereby accepted. Cumulative. Hereby accepted. Copies Furnished To: John C. Pelham, Esquire Gary Walker, Esquire Post Office Box 13527 Tallahassee, Florida 32317-3527 John L. Pearce, Esquire District Legal Counsel Department of Health and Rehabilitative Services 2639 North Monroe Street Tallahassee, Florida 32303-2949 Clay A. Schnitker, Esquire Post Office Drawer 652 Madison, Florida 32340 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0500
The Issue The questions presented here concern the entitlement of the Petitioner or Intervenor to be awarded lease rights under the Respondent's proposed Lease No. 590:8026, in that Petitioner and Intervenor have claimed that entitlement to the exclusion of the other party.
Findings Of Fact Respondent invited bid proposals for the provision of approximately 32,000 square feet of office space for its District VIII operation in Fort Myers, Florida. Petitioner, Chuck Bundschu, Inc., and Intervenor, Walter Lee Johnson d/b/a Walco Leasing Company, responded to the bid proposal by offering to provide the office space. Those responses may be found as part of the Composite Hearing Officer's Exhibit. Following the October, 1981, submittal of bid proposals, a bid evaluation committee was appointed by the Subdistrict Administrator for District VIII to consider the bids. In turn, he afforded guidance to that committee on the subject of the evaluation of the proposed bids offered by Bundschu and Walco, the only bidders for the project. The evaluation committee performed the task of weighing the bid proposals, in keeping with evaluation criteria which are outlined in Respondent's "Facilities, Acquisition and Management Manual" dealing with the procurement of lease space, which criteria are set forth in a form referred to as "HRSM 70-1, page A1-4-8," which is attached to chapter four of the manual. All criteria used for the evaluation process were drawn from that form with the exception of criterion No. 7, related to staff and client marking which was a product of this bid evaluation effort. (A copy of the HRS manual and forms may be found as Respondent's Exhibit No. 1, admitted into evidence. The evaluation committee's summarization utilizing the form criteria and the additional parking criterion may be found as a part of the Hearing Officer's Composite Exhibit, which is a replication of the original.) The HRS manual for procuring leased space is a publication of February, 1980, and establishes uniform guidelines by which bid proposals are considered by local officials who are part of Respondent's organization. Nonetheless, the exact weight to be afforded each criterion outlined in the manual is determined by the local evaluation committee. Weighing concerns the subject of awarding numerical values for beach bidder related to the various criteria with a maximum possible score being 100 points. On the basis of the evaluation performed by the committee, the Bundschu total was 88.25 points and the The Walco point total was 82 out of the possible 100 points. Consequently, the evaluation committee recommended that Bundschu be awarded the lease. Mark Geisler, in his capacity as Subdistrict Administrator, for District VIII, concurred in this evaluation as may be seen in his November 6, 1981, transmittal of the bid materials and associated evaluation, which transmittal may be found as pert of the Hearing Officer's Composite Exhibit. The District Administrator, District VII, in the person of Frances Clendenin, who was acting for the District Administrator, Ivor D. Groves, Ph.D., also recommended acceptance of the Bundschu bid. This position was made known by a memorandum of November 16, 1981. A copy of that recommendation is found as a part of the Hearing Officer's Composite Exhibit. The recommendations spoken to thus far were made known to Lester C. Missman, an official within the Division of General Services of the Department of Health and Rehabilitative Services. This division was, at the time of the bid proposals, and is now, headed by Dr. Homer Ooten, whose function within Respondent's organization includes the responsibility to evaluate lease proposals involving the Respondent agency and to make a final decision on the question of the lease award, based upon a review of the local subordinate unit's recommendation. By this, it is meant that the lease by Health and Rehabilitative Services as "user agency" is signed by Ooten based upon a delegation of authority to him through the vehicle of correspondence signed by the agency head. Ooten, upon considering the recommendation of the District Administrator's office, the Subdistrict Administrator and the evaluation committee, did not find fault with the criteria nor the point weighing scheme used in the evaluation process. He did question the cost analysis performed by the evaluation committee on the subject of client mileage for those clients receiving services from Respondent in a move from the HRS office in the Bundschu building where they were located at the time, to the building where Walco intended to let property. This was a distance of seven/tenths (7/10) of a mile and based upon the number of clients receiving services, there would be an estimated $100,000.00 in client mileage cost increase. This item was not deemed to be an appropriate consideration by Ooten and was disregarded in his review of the cost analysis performed by the evaluation committee. That cost analysis may be found as part of Respondent's Composite Exhibit No. 2, and includes interlineations by Ooten in his opinion on the subject of the cost analysis. That analysis had indicated an overall advantage of approximately $11,000.00 in favor of Bundschu and was premised upon costs related to Item 12 in the criteria, which criterion is cost of moving. It assumed a difference of over $131,000.00 in moving costs, the majority of which costs pertained to client inconvenience ($100,000.00), discounting $120,000.00 plus dollars related to the difference in the bid amount between the Walco and Bundschu bids which bid estimate was in favor of Walco. Ooten's opinion on the subject of the priority of including $100,000.00 plus dollars in clients' travel costs, when considered in the context of point awards under Item 12 in the criteria, lead Ooten to believe that the differential in point awards would not result in a 9.25 value of Bundschu versus a zero value for Walco. In his mind, the differential would be much less. Ooten made his own evaluation of moving costs per se, and through that process determined that approximately $15,600.00 would be necessary for a move into the Walco facility whereas $5,600.00 would be involved in the Bundschu move, which required the expansion of existing space in the Bundschu facility. Based upon an evaluation of the point differential in the rental rate criterion which was a differential of 2, that is 30 points out of a possible 30 for Walco and 28 points out of a possible 30 for Bundschu, Ooten also opined the this was an unreasonable assessment in view of the fact that the Walco bid amount was more than $120,000.00 less than the Bundschu bid. This taken together with the fact that there only existed approximately a $9,000.00 difference on moving costs between Bundschu and Walco, which was in favor of Bundschu, and there having been indicated a 9.25 out of a possible 10 point difference in Item 12 on the question of costs related to moving, led Ooten to believe that the true factual status of criteria Nos. 1 and 12 was not as depicted by the evaluation committee. Per Ooten, with proper assessment Walco would have received a higher point count than Bundschu through the process of applying the bid criteria, as well as being the lower bidder from the point of view of rental rates alone. After several exchanges with the District level personnel of Respondent who had been involved in the lease evaluation process, in which, on two (2) occasions, the local officials continued to support their initial opinion of the propriety of the award to Bundschu, a decision was made at the District VIII level to support the award of the lease to Walco as may be seen in the January 6, 1982, correspondence from the District Administrator to Missman, a copy of which may be found as Respondent's Exhibit No. 4, admitted into evidence. On January 6, 1982, Ooten issued a letter to the District VIII Administrative Services Director indicating the authority to award Lease No. 590:8026, formerly referred to as No. 590:1472, for the benefit of Walter Lee Johnson d/b/a Walco Leasing Company. Having learned of this decision and in keeping with the provision Subsection 120.53(5), Florida Statutes, Bundschu, through counsel, indicated opposition to that award on January 12, 1982, followed by a formal petition letter setting forth grounds for the opposition, which petition was filed on January 19, 1982. This series of documents is part of the Hearing Officer's Composite Exhibit, through copies. Subsequently, Items 4 and 6 in the petition letter were resolved between the parties without the necessity of a hearing and this is borne out by a copy of the February 1, 1982, correspondence from counsel for the Respondent to counsel to the Petitioner, part of the Hearing Officer's Composite Exhibit. The matter was then referred to the Division of Administrative Hearings for a formal Subsection 120.57(1), Florida Statutes, hearing by correspondence from the Assistant General Counsel for Respondent, dated February 4, 1982, a copy of which may be found as a part of the Hearing Officer's Composite Exhibit. There followed the intervention of Walter Lee Johnson as a party of record and the hearing was held on April 27, 1982. Petitioner's first contention deals with the idea of discounting the lease value based on the value of the "stream of future lease payments." This theory is contended for through Robert Sizemore, C.P.A., expert witness of the Petitioner. He would call for the discount of lease payments on the theory that present dollars will have a discounted value in the future, as the lease period unfolds. Taking into account the method of payment by the Respondent and the vicissitudes involved in attempting to establish the value of today's dollar at a future time, this theory of discounted dollars at a 10 percent or 12 percent rate per annum in succeeding years is not indicated. Assessment through the legislative appropriations process of sufficient funds to meet lease payment demands is not contingent upon the value of the dollar at any given point in the history of the lease. Therefore, the "stream of future lease payments" concept is inapplicable here. Likewise, trying to project the value of today's dollar at some future date is so tenuous as to be an unacceptable method to evaluate the competing lease proposals. Finally, even if this method was used, a 10 percent discount rate for inflation would leave approximately a $67,000.00 difference in the bid proposals and a 12 percent per annum discount rate related to inflation would leave approximately $52,000.00 difference in the bid proposals, in favor of the Walco bid. Petitioner has contended that Respondent failed to properly account for direct moving expenses. In that regard, the calculations made by Ooten on the question of moving expenses as reported above are accepted as fact. As a third claim, Petitioner has alleged the agency s disregard for recommendation of its evaluation committee in making the lease award. While the initial recommendations of the evaluation committee and staff were disregarded, the District Administrator eventually accepted the point of view of the Division of General Services within the Respondent's Department. Moreover, even if the local officials within the Respondent's Department had not accepted Ooten's viewpoint, the initial evaluation committee's development of criteria was flawed and the Ooten perception was correct, leading to a decision in favor of Walco. Finally, the contention by Petitioner that the agency did not seek adequate input from third parties affected by the relocation of the facility was not demonstrated through testimony. The method for review of the proposed lease was acceptable and to the extent that it required an appreciation and response to the needs of others not directly involved in the lease process, it has been amply afforded. Evaluation was in keeping with Respondent's "Facilities, Acquisition and Management Manual, HRSM 70-1, fourth chapter" and the award is based upon concurrence of the Division Director of the General Services Division of HRS pursuant to that chapter. Through argument, counsel for the Petitioner has also referred to the fact that in the initial evaluation process set forth in the sixth criterion, superior points of 2.5 for Walco as opposed to 2.25 for Bundschu had been awarded, when in fact the narrative summary of the reasons for such awards indicate an advantage to Bundschu. Even if the .25 points were allowed in the favor of Bundschu, this would not change the result.
The Issue Whether the Florida Fish and Wildlife Conservation Commission’s (“Respondent” or “FWC”) determination that Tallahassee Corporate Center, LLC (“Petitioner” or “TCC”), submitted a nonresponsive reply to FWC’s Invitation to Negotiate (“ITN”) No. 770-0235 is contrary to the Commission’s governing statutes, the agency’s rules or policies, or the solicitation specifications; and, if so, whether it was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact The following Findings of Fact are based on exhibits admitted into evidence, testimony offered by witnesses, and admitted facts set forth in the pre-hearing stipulation. ITN No. 770-0235 and Background FWC is a state agency that seeks office space to be occupied by personnel from six of FWC’s divisions. FWC currently leases office space from TCC, which expires in October 2019. On July 19, 2017, FWC issued ITN No. 770-0235, seeking vendors that could provide 53,000 square feet of office space for lease. FWC anticipates occupying the space by November 1, 2019. Between August 15, 2017, and November 2, 2017, FWC issued four addenda to the ITN, which contained amendments, modifications, and explanations to the ITN. There were no bidders that challenged the terms, conditions, or specifications contained in the ITN or its amendments. TCC and NLH were two of the potential lessors that submitted replies in response to the ITN. FWC seeks to lease either a building that already exists or a non-existing building to be constructed in the future. The ITN describes the proposals requested as follows: Competitive proposals may be submitted for consideration under this Invitation to Negotiate (ITN) for the lease of office space in either an existing building or a non- existing (build-to-suit/turnkey) building. NOTE: All buildings must comply with the Americans with Disabilities Act (ADA) as stated in Attachment A, Agency Specifications, Section 6.D., page 32. OPTION 1 - an ‘existing’ building: To be considered an ‘existing’ building, the facility offered must be enclosed with a roof system and exterior walls must be in place at the time of the submittal of the Reply. OPTION 2 - a ‘non-existing’ building: Offeror agrees to construct a building as a ‘build-to-suit’ (turnkey) for lease to FWC. Each applicant that submitted a proposal in response to the ITN was required to meet the specification in Attachment A of the ITN. The ITN provides as follows: FWC is seeking detailed and competitive proposals to provide built-out office facilities and related infrastructure for the occupancy by FWC. As relates to any space that is required to be built-out pursuant to this Invitation to Negotiate in accordance with this Invitation to Negotiate, see Attachment ‘A’ which includes the FWC Specifications detailing the build-out requirements. The specifications in Attachment A provided the basic requirements for the potential leased space such that proposals offering existing or non-existing building may be compared and evaluated together. The ITN included certain provisions to clarify the rights contemplated by the ITN, and included the following disclaimer: This ITN is an invitation to negotiate and is for discussion purposes only. It is not an offer, contract or agreement of any kind. Neither FWC nor the Offeror/Lessor shall have any legal rights or obligations whatsoever between them and neither shall take any action or fail to take any action in reliance upon any part of these discussions until the proposed transaction and a definitive written lease agreement is approved in writing by FWC. This ITN shall not be considered an offer to lease. The terms of any transaction, if consummated, shall not be final nor binding on either party until a Lease Agreement is executed by all parties. This ITN may be modified or withdrawn by FWC at any time. The ITN also included a provision expressly reserving FWC’s “right to negotiate with all responsive and responsible Offerors, serially or concurrently, to determine the best-suited solution.” The term “Offeror” was defined by the ITN to mean “the individual submitting a Reply to this Invitation to Negotiate, such person being the owner of the proposed facility or an individual duly authorized to bind the owner of the facility.” This reservation of rights placed interested lessors on notice that only responsive lessors could be invited to negotiations. While TCC and NLH were two of the potential lessors that submitted replies in response to the ITN, the bidders submitted different proposals. TCC submitted a proposal for an existing building, and NLH submitted a proposal for a non- existing building. During an initial review of all replies, FWC determined TCC’s reply to be nonresponsive based on TCC’s response to ITN section IV.G (Tenant Improvements) and a statement titled “Additional Response” that TCC submitted with its reply. As a result, FWC did not evaluate or score TCC’s reply. After TCC’s reply was declared nonresponsive, there were no further negotiations with TCC regarding the ITN. NLH’s reply passed the initial responsiveness review and was then evaluated and scored by FWC. FWC ultimately issued an intended award of the contract to NLH after conducting negotiations. Tenant-Improvement Cap The ITN prohibited vendors from proposing conditional or contingent lease rates that included a tenant-improvement cap, or allowance. A tenant-improvement cap reflects the maximum amount the landlord is willing to spend to make improvements to leased space. Mr. Hakimi asserted that the tenant-improvement cap would be an incentive to FWC to enter a lease. However, the tenant-improvement cap would also place a limit on improvements. According to ITN section IV.E, any reply offering a lease rate with a tenant-improvement cap would be deemed nonresponsive: FULL SERVICE (GROSS) RENTAL RATE The Offeror shall provide FWC with a Full Service (gross) lease structure. Therefore, the lease rate must include base rent, taxes, all operating expenses (including, but not limited to, janitorial services and supplies, utilities, water, insurance, interior and exterior maintenance, recycling services, garbage disposal, pest control, security system installation and maintenance, and any amortization of required tenant improvements to the proposed space). There shall be no pass through of additional expenses . . . . Offerors must provide their best, firm lease rates. Lease rates that are contingent, involve a basic rate plus “cap” or “range” for such things as tenant improvements will be deemed nonresponsive. The ITN also provided, in section IV.G, that any current lessor must meet all ITN requirements, including those set forth in ITN Attachment A: TENANT IMPROVEMENTS The State requires a “turn-key” build-out by the Landlord. Therefore, Offeror shall assume all cost risks associated with delivery in accordance with the required specifications detailed in this ITN, including Attachment A (see pages 28-45). Additionally, replies for space which is currently under lease with, or occupancy by, the Florida Fish and Wildlife Conservation Commission does not exclude the Offeror from meeting the requirements specified in this ITN document. Offeror agrees to provide “turn-key” build-out/improvements in accordance with the specifications detailed in this ITN. (use an X to mark one of the following): YES or NO TCC responded “NO” to the statement “Offeror agrees to provide ‘turn-key’ build-out/improvements in accordance with the specifications detailed in this ITN.” Additional Response Not only did TCC include a barred tenant-improvement cap, but TCC also attached an addendum to its proposal, which provided the following: The reality is that as the current Landlord, it would be impossible to ask FFWCC to move out of its existing office space in order to meet the requested Agency Specifications in Attachment A. If this condition makes our response to the Invitation to Negotiate (ITN) “non-responsive”, we stand willing to continue further negotiations with FFWCC. There was no provision in the ITN for additional responses outside what was requested in the ITN. More importantly, the addendum indicated TCC could not comply with the ITN, unless certain conditions were met. Mr. Hakimi confirmed the effect of what was written in the addendum when he testified that TCC is unable to meet Attachment A’s specifications because it presently has a tenant in place (i.e., FWC) that prevents it from constructing the building improvements necessary to comply with ITN Attachment A. Proof of Ownership of Property The ITN also provided that to be responsive, each lessor was required to submit certain documentation demonstrating the lessor’s control of the property proposed for the leased space: Replies must completely and accurately respond to all requested information, including the following: (A) Control of Property (Applicable for Replies for Existing and/or Non- Existing Buildings). For a Reply to be responsive, it must be submitted by one of the entities listed below, and the proposal must include supporting documentation proving control of the property proposed. This requirement applies to: The real property (land); The proposed building(s) (or structure(s); The proposed parking area(s). Control of parking includes the area(s) of ingress and egress to both the real property and the building(s). The owner of record of the facility(s) and parking area(s) – Submit a copy of the deed(s) evidencing clear title to the property proposed. The authorized agent, broker or legal representative of the owner(s) – Submit a copy of the Special Power of Attorney authorizing submission of the proposal. The Special Power of Attorney form was attached to the ITN as Attachment K. TCC’s certification was executed by TCC president, Lyda Hakimi. However, TCC did not execute Attachment K or include an executed power of attorney to demonstrate that TCC has control of the property. The evidence offered at hearing of the property’s ownership contained in TCC’s reply was a deed showing DRA CRT Tallahassee Center, LLC to be the property owner. Respondent argued that although TCC owns DRA CRT Tallahassee Center, LLC, the two are different legal entities. Because these were two different legal entities, TCC was required to provide a copy of Attachment K to its response to be deemed responsive. Broker Commission The ITN required lessors to agree to execute a broker- commission agreement, which was attached to the ITN as Attachment J: Offeror understands FWC is utilizing the services of a Tenant Broker representative for this lease space requirement and the successful Offeror shall execute a Commission Agreement, in coordination with FWC’s Tenant Broker representative, within fifteen (15) business days of notification of Award. Offeror agrees and acknowledges that a Tenant Broker Commission Agreement is a requirement and the successful Offeror shall be required to execute a Commission Agreement as described above. (use an X to mark one of the following): YES or NO The ITN included a schedule for the commission rate based on the total aggregate gross base rent that could be paid ranging from 2.50 percent to 3.50 percent. TCC conditioned its reply by agreeing to pay a two-percent broker commission, which is inconsistent with the commission schedule. By offering a lower commission rate, TCC could save money. TCC would then have a competitive advantage over other bidders. TCC’S Bid was Nonresponsive Based upon the foregoing, TCC’s bid submission added a tenant-improvement cap, failed to comply with the broker commission rate, failed to provide supporting documents to demonstrate proof of property ownership, and added additional conditions regarding compliance with the ITN requirements. The information requested and terms of the ITN were required for TCC’s bid to be responsive. TCC did not file a challenge to the specifications or any of the requirements of the ITN. It is now too late for such a challenge. TCC’s inclusion of a tenant-improvement allowance limits the amount that would pay for improvements. The lower broker commission increases the profit advantage for TCC more than for other bidders, which would be an unfair advantage over other bidders. TCC’s failure to comply with the terms of the ITN and failure to provide the required attachment to show proof of ownership were not minor irregularities, which FWC could waive. Therefore, FWC properly determined that TCC’s bid submission was nonresponsive. Standing TCC submitted a bid proposal that did not conform to the requirements of the ITN and it seeks relief that includes setting aside FWC’s rejection of its proposal. Therefore, TCC has standing to bring this protest. If it is determined that TCC was nonresponsive, NLH has standing to the extent the procurement process could be deemed contrary to competition.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Fish and Wildlife Conservation Commission enter a final order dismissing Tallahassee Corporate Center, LLC’s Petition. DONE AND ENTERED this 27th day of March, 2018, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of March, 2018.
The Issue Whether or not the actions of the petitioner in amending its lease agreement resulted in increased costs which are reimbursable by the Department of Health and Rehabilitative Services through an interim rate request.
Findings Of Fact Hallandale is a licensed nursing home facility located in Hallandale, Florida, and at all times material hereto, Hallandale was certified to and was participating in the Florida Medicaid Program. The participation was subject to a standard nursing home provider agreement entered into by the parties. Pursuant to the agreement, Hallandale provides nursing care for Medicaid recipients and receives as payment the recognized rate of Medicaid reimbursement established for Hallandale by HRS in accordance with the applicable state and federal laws, regulations, and guidelines. The agreement may be cancelled by either party after giving thirty (30) days notice. In 1971, Hallandale entered into a lease agreement with the owners of the nursing home facility and began operating the nursing home. The lease called for a payment of $84.00 per month, per bed, had no escalation clause, and would not expire until 1986. At the time the lease was negotiated, the owners had been operating the nursing home themselves at a loss. To avoid bankruptcy or having to sell the property at a loss, the owners leased the property to Hallandale. However, within seven or eight years the owners began to put pressure on Hallandale to renegotiate the lease because the owners did not think they were getting a fair return on their investment. In 1981, the owners and Hallandale entered into negotiations to amend the terms of the lease to provide an increased rental rate and an extension of the lease term. The negotiations were not successful, and finally, by letter dated July 6, 1983, the owners issued the following ultimatum: "Although the lease has a renegotiation clause six months prior to expiration, we must renegotiate the terms and conditions of this lease immediately. The partnership has made a decision that we will definitely not renew or extend your lease unless we can come to some satisfactory arrangement regarding terms and conditions, effective immediately." On December 13, 1983, Hallandale and the owners entered into an amendment to the original lease. The amendment increased the lease payments and extended the lease until August of 1998. The amended lease provided for a minimum rental of $110 per month, per bed, as of September 1, 1983, with increases in the rental every year thereafter. Saul Lerner has been president of Hallandale since 1975 and has been associated with the facility since it was first leased in 1971. Mr. Lerner is an astute businessman who has been involved in a variety of businesses for forty years. He was chiefly responsible for renegotiating the lease with the owners. Although the lease was renegotiated due to the owners' threats to sell the facility, 1/ Mr. Lerner did not merely accede to the owners' demands. There were several offers and counteroffers made before the final agreement was reached, and the renegotiated lease provided for a considerably lower rental rate than that demanded by the owners. Prior to entering into the lease amendment Mr. Lerner consulted with people in the industry, had a MAI appraisal performed, discussed the situation with James Beymer, a real estate broker specializing in nursing home and health related facilities, consulted with his accountants who had been in the health care field for 13 years, and talked with Sebastian Gomez of the Department of Health and Rehabilitative Services. Mr. Lerner consulted with his business associates, and the pros and cons of renegotiating the lease were carefully considered. Hallandale's determination to renegotiate the lease in 1983 was a reasonable and prudent business decision. By agreeing to increased rental payments for the three years that remained on the original lease, Hallandale gained an additional 12 years to operate the facility. This permitted Hallandale to project its costs and plan for the future. It could make additions and improvements to the building, buy new equipment, and provide for stability in staffing. On the other hand, had Hallandale refused to renegotiate the lease, it faced an uncertain future. There was a strong possibility that the owners would not be willing to renew the lease when it expired, which would result in Hallandale's losing the equipment and improvements it had put into the building. In addition, the owners were threatening to sell the property, and even though Hallandale had the right of first refusal, it would have had difficulty in obtaining the money required to purchase the property. Further, Hallandale realized that even if the owners would be willing to negotiate a new lease in 1986, Hallandale would not have the same leverage or bargaining power in 1986 as it had in 1983. Hallandale has participated in the Medicaid program continuously since 1971. At the time of the hearing the facility had 142 patients, of which 45 were Medicaid patients. 2/ Hallandale has never refused a Medicaid patient, and some of the patients have been there 8 or 9 years. The Medicaid patients are treated the same as the private patients, to such a degree that no one knows which patients are Medicaid patients. Although the agreement with HRS allows a provider to leave the Medicaid program with 30 days notice, Hallandale has no intention to ever discontinue participation in the Medicaid program. The extended term of the renegotiated lease is not only advantageous to Hallandale, it is also beneficial to Hallandale's patients, including Medicaid patients. It secures continuity of care for the patients and ensures that the patients will not have to be moved to a new facility in 1986. The transfer from one facility to another can be a very traumatic event for an elderly person; some patients have died within weeks of a transfer. Further, the patients benefit immediately because the extended term of the lease allows Hallandale to make improvements to the facility and buy equipment that it would not have been able to do without the security of a long term lease. The lease payments called for by the new lease are not out of line with lease payments made by similar institutions. Mr. Lerner looked at other lease payments being made in the community and found that $110 per bed per month was not an exorbitant amount. James Beymer leased nursing home facilities that were not as nice as the Hallandale facility for $138 per bed per month $166 per bed per month, and $225 per bed per month. Had Hallandale purchased the facility for $3 million, the price asked by the owners, the cost per month per bed would have been over twice the amount of the lease payment. 3/ Lease payments are included in a facility's "fixed costs." The fixed costs also include depreciation, real estate taxes and insurance. The state places a cap on reimbursement rates for fixed costs. In June 1983, prior to the renegotiation of the lease, Hallandale's fixed costs were $4.61 per patient day; under the renegotiated lease, the fixed costs would be $5.16 per patient day. Thus, even with the higher lease payment, the fixed costs are considerably under the state cap of $12.50 per patient day. A provider's reimbursement rate is determined by HRS from a cost report submitted by a provider. The rate is a prospective per diem rate. If, during the prospective period, the provider incurs an increase in costs, the provider has a right to submit an interim rate request to HRS. The Department uses the same principles to determine whether costs submitted in an interim rate request should be allowed as in determining whether costs submitted in a cost report should be allowed. Lease payments are allowable expenses under the Medicaid program subject to the Medicaid cost reimbursement principles. In calculating Hallandale's per diem rate, HRS allowed Hallandale $84 per month lease cost for each Medicaid patient in the facility based on the 1971 lease. Prior to executing the new lease, Hallandale contacted HRS to inquire if the new lease cost would be allowable and was informed that the new costs would probably not be allowable. On November 9, 1983, Hallandale submitted an interim rate request to cover the increased cost of the new lease payments. The interim rate request was procedurally correct. By letter dated May 30, 1984, HRS denied the interim rate request because "...the lease cost was negotiated for investment related reasons and is not related to patient care." On June 25, 1984, Hallandale filed its petition for a formal administrative hearing.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the interim rate increase requested by Hallandale be granted. DONE and ORDERED this 26th day of April, 1985, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS 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 26th day of April, 1985.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioner is a dentist and is also engaged in the business of leasing real property in Florida for commercial purposes. A tax auditor for the respondent, Mr. Eugene A. Soinski, notified petitioner that an audit of his books and records would be conducted to determine whether petitioner was remitting the appropriate amount of rental taxes to the respondent. At the time of the initial audit, Mr. Soinski was supplied with only bank deposit receipts and certain leases. The auditor had difficulty in determining which were mortgage payments and which were rental payments. Based upon the auditor's review of petitioner's deposit slips, lease agreements, a three-year audit prepared by petitioner and discussions with some of petitioner's tenants, as assessment for delinquent taxes was made. The initial assessment was reduced and the present dispute lies with the revised assessment dated October 2, 1978, in the amount of $5,316.35. In his amended petition for a hearing and at the hearing, petitioner alleged that no rent tax was due on three specific leases. Petitioner offered no evidence to refute the respondent's assessment on any other lease. All testimony and evidence adduced at the hearing was confined to the lease agreements between petitioner and three other businesses -- Suncoast Amusement, Product Movement Systems, Inc., and Staid, Inc. One of the three disputed items in the assessment concerned an agreement between petitioner and Suncoast Amusement, also referred to as Hot Foots. The lease agreement between Suncoast and petitioner was not made available at the hearing. According to the testimony of the petitioner, the tenant removed carpeting from the premises and installed new red carpeting in its stead. Certain other improvements were also made to the property. The petitioner testified that he received no actual benefit to the property from these improvements, and that the red carpet actually decreased the value of the property. The auditor, Mr. Soinski, remembered seeing the lease agreement and matching the rental payment amounts with the deposit receipts to arrive at the assessment. A copy of the first two pages of the "business lease" between petitioner and Product Movement Systems, Inc., was received into evidence as respondent's Exhibit 3. This agreement contains the stipulation that TWENTY-SECOND: Minimum of two room office, with air, will be built at tenant's expense and remain as part of the first years rent. According to petitioner, the tenant actually built eight to ten offices and this did not improve the real estate. It was, instead, a deterrent to future tenants, according to petitioner. A copy of the "business lease" between petitioner and Staid, Inc., was received into evidence as the respondent's Exhibit 2. The consideration for the agreement was a total rental of sixty thousand dollars, payable as follows: One thousand dollars per month in advance, plus 4 percent State tax. Two thousand dollars security deposit, receipt acknowledged. Also on the first of each month an amount equal to 1/60th of the total cost of all improvements of any kind, as approved by both parties, will be paid plus the above basic rent of $1,040. - per month. Also, the twenty-fourth stipulation and condition in said lease provides as follows . . . TWENTY-FOURTH: If during the life of this lease tenant has need of more space every effort will be made to provide some adjacent. If it is desirable to both parties a new building is necessary then such buildings will be to tenants specifications, the rent will be the total cost of such land and improvements including architect fee, cost of mortgage, paving, landscaping or any expense of any nature x 15 percent net, net. According to the petitioner, he made a loan to Staid, Inc., in the amount of $48,000.00 to enable Staid to pay for certain improvements to the property. This loan was to be repaid in installments of $800.00 per month for sixty months. It was petitioner's testimony that regardless of the wording contained in the lease agreement, the improvements were not considered a part of the rent, he derived no benefits from the improvements to the property, and part of the payment made by the tenant each month was for repayments of a loan, rather than rental on the property. It was the testimony of Mr. Soinski, the auditor, that the assessment of the three disputed leases was based on the total amount of rent paid by the tenants to the petitioner, which rent included any improvements to the property. Where lease documents were available, he utilized the amount of rent due from the face of the lease document. Where possible, he compared the lease documents with the petitioner's bank deposit slips. The revised notice of proposed assessment dated October 2, 1978, was received into evidence as the respondent's Exhibit 1. This document assesses a tax on rentals of real property in the amount of $4,215.40, a delinquent penalty in the amount of $210.79 and interest through October 2, 1978, in the amount of $890.16, for a total amount of $5,316.35.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the proposed assessment dated October 2, 1978, in the amount of $5,316.35 be upheld and that the relief requested by petitioner be denied. DONE AND ENTERED this 3rd day of January 1980 in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January 1980. COPIES FURNISHED: James W. Hickman 203 River Bend Longwood, Florida Linda Procta Assistant Attorney General Department of Legal Affairs The Capitol LL04 Tallahassee, Florida 32301 =================================================================
Findings Of Fact Mini-Warehouses At Kendall, Ltd., d/b/a A+ Mini-Storage (Petitioner) is a business located in Dade County, engaged primarily in the rental of storage space. Petitioner employs 20 to 21 employees and has been operating for 13 to 14 years. Petitioner's property on which its business is located consists of approximately four acres and abuts property owned by the Florida Department of Transportation (Respondent), known as Parcel 0739, which contains approximately .0986 acres. On June 28, 1985, Petitioner executed a written lease agreement leasing Parcel 0739 from Respondent. The lease terms provided that it was a year-to- year lease, automatically renewable yearly until terminated by either party upon a 30-day notice, and that the yearly rental cost was $2,400 plus tax. Petitioner leased Parcel 0739 from Respondent because the parcel provides better access to Petitioner's property from the rear and prevents water from encroaching onto Petitioner's property. The same lease agreement was renewed yearly until 1991. In 1991, prior to the expiration of the lease, Respondent notified Petitioner that a new lease form would have to be executed. Respondent provided Petitioner with its Lease Agreement Form 225-080-03, OGC-00031, dated 7/92 (Form Lease) for execution. The Form Lease was developed by Respondent's Office of General Counsel and the General Counsel of each of its Districts, so that there would be a standard lease form statewide with minimal review by Respondent. The Form Lease contains blanks to be completed by Districts to comport with their specific situations. The Form Lease dramatically changed the terms and conditions of leasing Parcel 0739. Petitioner attempted to modify Paragraphs 6 and 8 of the Form Lease, but Respondent refused to agree to any modifications. Paragraph 6 of the Form Lease provides: 6. Indemnification. Lessee shall indemnify, defend, save and hold Lessor, its agents and employees, harmless of and from any losses, fines, penalties, costs, damage, claims, demands, suits and liabilities of any nature, including attorneys fees (including regulatory and appellate fees), arising out of, because of, or due to any accident, happening or occurrence on the leased land or arising in any manner on account of the exercise or attempted exercise of Lessee's rights hereunder, whether the same regards person or property of any nature whatsoever, regardless of the apportionment of negligence, unless due to the sole negligence of Lessor. Lessee's obligation to indemnify, defend, and pay for the defense or at the Department's option, to participate and associate with the Department in the defense and trial of any claim and any related settlement negotiations, shall be triggered by the Department's notice of claim for indemnifica- tion to Lessee. Lessee's inability to evaluate liability or its evaluation of liability shall not excuse Lessee's duty to defend and indemnify within seven days after such notice by the Department is given by registered mail. Only an adjudication or judgment after the highest appeal is exhausted specifically finding the Department solely negligent shall excuse performance of this provision by Lessee. Lessee shall pay all costs and fees related to this obligation and its enforcement by the Department. Department's failure to notify Lessee of a claim shall not release Lessee of the above duty to defend. Under Paragraph 6, Respondent intended to limit lessee's liability to its (lessee's) own negligence or damages it causes. Paragraph 8 of the Form Lease provides: 8. Eminent Domain. Lessee acknowledges and agrees that its relationship with Lessor under this Lease is one of Landlord and Tenant and no other relationship either expressed or implied shall be deemed to apply to the parties under this Lease. Termination of this Lease for any cause shall not be deemed a taking under any eminent domain or other law so as to entitle Lessee to compensation for any interest suffered or lost as a result of termination of this Lease, including but not limited to (i) any residual interest in the Lease, or (ii) any other facts or circumstances arising out of or in connection with this Lease. Lessee hereby waives and relinquishes any legal rights and monetary claims which it might have for full compensation, or damages of any sort, including but not limited to special damages, severance damages, removal costs or loss of business profits resulting from its loss of occupancy of the leased property specified in this Agreement, or adjacent properties owned or leased by it, when any or all such properties are taken by eminent domain proceedings or sold under the threat thereof. This waiver and relinquishment applies whether (i) this Lease is still in existence on the date of taking or sale; or, (ii) has been terminated prior thereto. Under Paragraph 8, Respondent did not intend for the lessee to waive any of its eminent domain rights or relinquish such rights subsequent to the termination of the lease, which would be improper. Presently, Respondent refuses to lease the Parcel to Petitioner unless Petitioner executes the Form Lease without modification. However, at hearing Respondent admitted that it has no intention of requiring Petitioner to agree to Paragraph 8 of the Form Lease. Rule Chapter 14-19, Florida Administrative Code, sets forth Respondent's rules on right-of-way property management. Rule 14-19.002 provides that the purpose of Chapter 14-19 is to set forth standardized methods for, among other things, the leasing of surplus property owned by Respondent. In 1992, the Form Lease was incorporated by reference in Rule Chapter 14-19. Rule 14-19.0012 specifically provides that the Form Lease is one of the forms incorporated by reference in and made a part of Chapter 14-19. Moreover, Rule 14-19.013 requires the Form Lease to be used for short term leasing. Chapter 14-19 is silent as to whether the Form Lease must be used in any of Respondent's other lease situations. Rule 14-19.013, Florida Administrative Code, does not apply to the circumstances of this case. Respondent has a Right Of Way Manual (Manual) for statewide use. Chapter 10, Section 6 of the Manual, entitled "Right of Way Property Leases" and effective January 21, 1993, provides in its "Purpose" section that the purpose of Section 6 is to establish uniform procedures for leasing property owned by Respondent. Also, the Manual's "Procedure" section mandates the use of the Form Lease for all of Respondent's leases. Prior to this mandate, Respondent had no standard lease form for its leases. In October 1992, Respondent required the Form Lease to be used in surplus property leases. The Form Lease is applicable statewide and implements procedures and policies involved in leasing surplus property. Parcel 0739 is considered by Respondent to be surplus property. The Manual is silent as to whether the Form Lease may be modified. Since the implementation of the Form Lease for surplus property, Respondent's District Offices have modified the Form Lease but rarely. In the rare instances when modification has been made, it has been on a case-by-case basis and only with approval of the District General Counsel. Respondent's Office of the Right-Of-Way Administrator under which the responsibility for leasing falls has no authority to approve or disapprove modifications made to the Form Lease by District Offices. However, Respondent's Office of General Counsel does have such authority, but it has not exercised its authority in any of the District situations in which the Form Lease has been modified. Even though there have been modifications to the Form Lease by Respondent's District Offices, although rare, no District Office has modified Paragraphs 6 or 8. Respondent admits that Petitioner has standing in this proceeding.
The Issue The issues in this case are whether, and how, the Florida Real Estate Commission (FREC) should discipline the Respondent, Theresia Helton, on charges that she: failed to account and deliver rental payments and deposits; was culpably negligent and in breach of trust in her dealings regarding rental property; failed to escrow rental payments and deposits; failed to properly reconcile her escrow account; and failed to make transaction agreements and bank statements available for inspection.
Findings Of Fact At the time of the events giving rise to the Administrative Complaint in this case, the Respondent, Theresia Helton, held two Florida real estate broker licenses (BK 3077530 and BK 3248280) and was the owner and qualifying broker for 1010 Apartments, Inc., a real estate brokerage firm. However, on May 22, 2013, FREC entered a Final Order suspending those licenses for five years. The Final Order is on appeal by the Division, which seeks to revoke the Respondent's licenses, as recommended by the Administrative Law Judge in that case. Eileen and Ernest Armitage ("the Armitages") reside in New Jersey and own a condominium located at 15599 Latitude Drive, Bonita Springs, Florida ("the property" or "condo"). In 2010, the Armitages began communicating with the Respondent and asked her to find a tenant for the property. In return for the Respondent's services, the Armitages verbally agreed to pay her a commission of ten percent of the annual gross rent. In September 2010, the Respondent obtained a tenant, Marion Ward Bentson, to rent the property for $1,400 a month and pay a security deposit in the amount of one month's rent. The Respondent filled in a form lease to begin on September 14 of that year. On September 8, 2010, the lease was signed by Ms. Bentson and by the Respondent on behalf of the Armitages (in one place as their agent, and in another as landlord). The Respondent collected the $1,400 security deposit and $700 prorated first month of rent from Ms. Bentson. The lease directed the tenant to mail future rent payments to "Ilene [sic] Armitage/1010 Apartments, Inc." at the brokerage's address in Naples. The Respondent then submitted the lease to the homeowners association (HOA) for approval. The lease was approved by the HOA on September 14, 2010, and became effective on that date. The Respondent kept the $2,100 collected from the tenant in payment of the $1,680 commission, plus other charges. Some details of the 2010 transactions remain unclear. The Armitages testified that the Respondent sent the lease to them and that they made corrections, signed the corrected lease, and returned it to the Respondent. The Respondent testified that the HOA sent the lease to the Armitages after approval and that no corrected lease signed by the Armitages was returned to her. A corrected lease was introduced in evidence. It indicates that Eileen Armitage corrected the spelling of her name, clarified that the Armitages were the landlord under the lease, clarified that future rent and notices were to be sent to the Armitages in New Jersey, initialed the changes, and signed the corrected lease on September 15, 2010. The corrected lease apparently was not presented to the HOA for approval, and it is not clear what happened to it. It is, however, clear from the evidence that the parties' subsequent conduct was consistent with the corrected lease, and that the Armitages had no complaints about the Respondent's conduct with respect to the Bentson lease. In July 2011, Ms. Bentson stopped paying rent and gave notice that she was moving out. The Armitages contacted the Respondent and asked her to help them find a tenant to replace Ms. Bentson. It was agreed verbally, or assumed, that the Respondent again would be paid a commission of ten percent of the annual gross rent. The Armitages testified that there also was a verbal agreement that the commission on the Bentson lease would be prorated, entitling the Armitages to a refund. The Respondent denied that there was any agreement to prorate the Bentson lease commission. On this disagreement, the Respondent's testimony was more believable. The Armitages remained in communication with the Respondent while she attempted to find a new tenant. At the end of August 2011, Laurie Ungar contacted the Respondent regarding the Armitage property, and the Respondent arranged for Mrs. Ungar to see the condo. Mrs. Ungar noted that there were scuff marks on the walls, trash that needed to be removed, and carpet and a patio deck that needed cleaning. She expressed her interest in renting the condo, if those items were corrected. The Respondent reported to the Armitages, who were under the impression that the condo already was in good condition and did not agree to spend money for additional repairs. The Respondent decided to proceed with the lease negotiations and arrange for whatever work would be needed to satisfy the Ungars. The Respondent met with Mrs. Ungar on August 31, 2011, and negotiated on behalf of the Armitages. The Respondent filled in a form lease to begin on September 21, 2011. Mrs. Ungar signed for herself and her husband and gave the Respondent a check for $75 for the HOA application fee. The lease identified "Ilene [sic] Armitage" as landlord and provided for notices to be sent to her, although no contact information was included for her. The Respondent signed as landlord in one place on the form and as agent in another. She also initialed the lease as landlord. By checks dated September 1, 2011, Mrs. Ungar gave the Respondent $500 for the first month's prorated rent, $1,500 for the following month's rent, a security deposit in the amount of $1,500, and a pet security deposit in the amount of $250. The Respondent reported to the Armitages that the Ungars signed the lease. She then sent someone to touch up the scuff marks on the walls and clean up the apartment. Either the Armitages or the HOA apparently asked for a pet fee from the Ungars, which they delivered to the Respondent by check dated September 13, 2011. The Respondent then submitted the lease to the HOA for approval. The lease was approved by the HOA on September 19, 2011. The Ungars moved in at 3 a.m. on September 21, 2011. When the Ungars arrived, they still were dissatisfied with the condition of the condo. The walls had been touched up with the wrong color paint, so it looked like graffiti. There was still trash at the condo, and the patio deck and carpet still needed cleaning, in their opinion. They contacted the Respondent, who came over with a can of paint and removed some of the trash. The Ungars remained very dissatisfied with the condition of the condo. Shortly after the Ungars moved in, the Armitages began asking the Respondent for a copy of the lease. For reasons not clear from the testimony, they did not receive the lease or any money from the Respondent and became increasingly agitated about it. At the end of the month, the Armitages received a final bill from the utility company. When they inquired, they were told that the utilities had been transferred to another payor, who was occupying the condo. They contacted the Ungars directly, and the Ungars told them that they still were dissatisfied with the condition of the condo and wanted to terminate the lease at the end of October and get their deposits refunded. The Armitages told them that they did not have the deposits, as the Respondent still had not forwarded them any money. Mr. Ungar went to the Respondent's office, told her about the conversation with the Armitages, and demanded a refund of the deposits. She told him she already had sent the money to the Armitages. On October 6, 2011, the Respondent emailed the Armitages to report her conversation with Mr. Ungar and tell them it was up to them if they wanted to let the Ungars out of the lease, but that she had earned her commission. She stated that she had cleaned up the condo for the Ungars after the Armitages had declined and had mailed the Armitages a check for $1,500, which was what was left of the moneys paid by the Ungars after deducting her commission in the amount of $1,800, a cleaning fee of $150, another $150 for pressure-washing the patio deck, a painting fee of $200, and another fee of $200 for cleaning and hauling out trash. There was no evidence that those sums actually were incurred by the Respondent or that any of the work had been done, except for the poor touch-up of the scuff marks on the walls. After the Respondent sent the email, she thought better of sending the $1,500 check since both the Armitages and the Ungars were claiming it. The money remained in her operating account. She believed she was entitled to keep the balance of the $4,000 paid by the Ungars. She did not notify FREC of any deposit dispute. On October 7, 2011, the Armitages emailed the Respondent to again ask for a copy of the signed lease and listing agreement. On October 10, 2011, they emailed to again ask for the signed lease and ask for the invoices for the work done (or at least contact information for the vendors). By email dated October 12, 2011, they followed up to again request the information. They got no response from the Respondent, except to say that she did not mail the check referred to in the email on October 6, 2011. The Armitages and Ungars renegotiated the lease. The Armitages reduced the monthly rent to pay the Ungars for painting, cleaning, and other work they did at the condo to make it satisfactory to them. The Armitages sued the Respondent and settled for $2,700, which was paid by check dated July 12, 2012. The Armitages used $2,000 from the settlement to return deposits to the Ungars. During the Division's investigation, the Respondent was asked to provide a copy of her agreement with the Armitages and her escrow bank account records. There were no such records. Later, a subpoena was issued for the records for the Respondent's operating account, which were produced. There was no evidence that the Division asked for the records for the operating account before issuing the subpoena. The Respondent's license is suspended until May 21, 2018, because the Division proved charges that in the fall of 2010, she was culpably negligent, in violation of section 475.25(1)(b), and failed to account and deliver, in violation of section 475.25(1)(d)1. The Respondent is the single mother of two daughters, whom she was supporting by income earned as a real estate broker, as well as child support payments. The Division has incurred costs in the amount of $825 in prosecuting this case against the Respondent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order: finding the Respondent guilty as charged in Counts I through V of the Administrative Complaint; revoking her licenses; and assessing costs in the amount of $825. DONE AND ENTERED this 21st day of November, 2013, in Tallahassee, Leon County, Florida. S J. LAWRENCE JOHNSTON 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 21st day of November, 2013.
