Findings Of Fact Petitioner Hialeah, Inc. purchased the Hialeah Park Race Track from its previous corporate owner pursuant to an agreement entered into by the parties on November 8, 1976. At the time, the race track was mortgaged to petitioner Southeast First National Sank of Miami (Southeast) and another bank for whom Southeast acted as an agent; and the mortgage was in default. Simultaneously with the acquisition of the race track, at the closing in Miami, Florida, on March 4, 1977, petitioner Hialeah, Inc. executed a modification and assumption agreement by which it became obligated to pay the mortgagees, upon execution of the agreement, principal and accrued interest in the amount of $3,724,843.34, thereby reducing the indebtedness secured by mortgage to $9,000,000.00; and to pay the balance by a time later than it had originally been due, together with interest at rates different than had originally been agreed upon. Also at the time of the closing, the parties executed a separate novation agreement, releasing the previous owner of the race track from further liability for the obligations assumed by petitioner Hialeah, Inc.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the revised notice of proposed assessment be upheld. That respondent make a supplemental assessment to recover the full amount of documentary stamp tax owed on account of execution of the modification and assumption agreement. DONE and ENTERED this 15th day of December, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Robert C. Ward, Esquire 900 Concord Building 66 West Flagler Street Miami, Florida 33130 Marc Lipsitz, Esquire 800 Southeast First National Bank Building Miami, Florida 33131 William D. Townsend, Esquire Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32304
The Issue Whether or not the Respondent, Evers & Associates, Inc. and Dovard J. Evers, its President, a licensed mortgage broker in the State of Florida, has charged and accepted fees and commissions in excess of the maximum allowable fees or commissions on the transactions set forth in the administrative complaint, Exhibit "A," in violation of Sec. 494.08(4), F.S., and thereby subjected the Respondent to a possible suspension under the terms of 494.05(1)(g), F.S.
Findings Of Fact Evers & Associates, Inc. through the parson of Dovard J. Evers, its President, was a licensed mortgage broker in the State of Florida, during the time period contemplated by the administrative complaint. Subsequent to the time of receiving the mortgage brokers-license, Dovard J. Evers, on behalf of Evers & Associates, Inc., entered into an agreement with several other parties to sell notes secured by mortgages on real estate. One of the agreements was with David Edstrom, of a corporation known as S.E.T., Inc., Mr. Edstrom being the President of said corporation, and the location of that corporation being in Fort Lauderdale, Florida. A similar agreement was held with one Gary George of the Mortgage Consultants, Inc., Ocala, Florida. The agreement with Gary George involved a sale of mortgages for the benefit of the mortgagor, Washington Development Corporation. The third such agreement was with Phil Swan of Southeast Florida Corporation. The written conditions of the S.E.T., Inc. arrangement with Mr. Evers can be found in Respondent's Exhibits No. 2 through No. 5. Essentially, the arrangement was to have Mr. Evers, through Evers & Associates, act as a salesman for the benefit of S.E.T., Gary George and Phil Swan. Their agreement envisioned that Mr. Evers would be afforded a percentage discount varying from 14 percent to 16 percent of the amount of a mortgage loan which was a note secured by real estate. In actual , the contact was made between S.E.T., Gary George and Phil Swam Mr. Evers for purposes of placing notes that were for sale. The apparatus worked by having Mr. Evers contact mortgagees/investors who made a check payable to Evers & Associates for the full amount of the mortgage loan, whose price had been quoted by the intermediary; S.E.T., Gary George and Phil Swan. This amount was held in escrow until such time as the note and mortgage which secured the note could be drawn. The executed note and mortgage went directly to the third party mortgagee/investor without ever having the name of Mr. Evers or Evers & Associates, Inc., affixed to such documents. After this note and mortgage had been executed in behalf of the third party investor, Mr. Evers deducted a fee in favor of Evers & Associates, Inc., according to the percentage agreement with S.E.T., Gary George and Phil Swan and sent the balance of the money to S.E.T., Inc.; Washington Development Corporation through the person of Gary George and to Phil Swan of the Southeast Florida Corporation. The arrangement with Washington Development Corporation changed at a later date because Gary George was no longer involved and payments subsequent to his involvement were sent directly to Washington Development Corporation. The facts show that in the transactions found in Petitioner's Exhibit "A," the complaint, charges were made in behalf of Evers & Associates in the person of Mr. Evers which exceed the statutory allowance for fees and commissions in the amount stated in the column entitled overcharges. These overcharges are according to the percentage agreement between Mr. Evers and S.E.I., Inc., Gary George, and Phil Swan, minus adjustments made in behalf of the third party investor/mortgagee, as indicated in the testimony. This finding of facts, excludes the mortgage by M. Berkell which was stipulated between the parties as not being a matter for further consideration in the hearing. There was no evidence offered of the charge, if any, between S.E.T., Inc., Gary George, and Phil Swan in their dealings with their developer/mortgagors. At present the Respondent, Evers & Associates, Inc., and Dovard J. Evers, its President, have failed to renew the license in the current license period and, as of the moment of the hearing, have expressed no further interest in such renewal.
Recommendation It is recommended that the license of Evers & Associates, Inc., by Dovard J Evers, its President, be suspended for a period not to exceed 30 days. DONE and ENTERED this 8th day of June, 1976, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Fred O. Drake, III, Esquire Office of the Comptroller The Capitol Tallahassee, Florida 32304 Earl M. Barker, Esquire 218 East Forsythp Street Jacksonville, Florida 32202
The Issue Whether Respondents discriminated against Petitioner on the basis of sex when Respondents denied Petitioner's application to rent an apartment.
Findings Of Fact Mizner Park, located in Boca Raton, Florida, is a mixed use complex, consisting of apartments, retail stores, and offices. The apartment complex is owned and managed by Crocker Downtown Development Associates. Ms. Terrill Jaroszewicz (Jaroszewicz) is the property manager for Mizner Park. Ms. Mary Sims, who reports to Jaroszewicz, is in charge of the residential apartments in the complex. At the time in question, Ms. Jan Pratt (Pratt) was a leasing consultant for the apartments. Pratt's duties included taking applications from prospective tenants, processing the applications, and gathering the necessary information needed to make a decision on whether to approve the application. When Pratt had completed processing the application, she would take the application package to Sims, who would review the package and make a decision on whether to approve the application. Respondents, collectively referred to as Mizner, required that prospective tenants fill out an application form, agree to have a credit check performed, provide sufficient information to verify their current income, agree to a check of the tenants' residency history for the past two years, pay a $50, nonrefundable fee for processing the credit check, and provide a security deposit. Mizner wanted to rent its apartments to tenants who had a good credit history, had a monthly annual income of at least three times the amount of the lease amount, and had a good history as a tenant. On June 15, 1994, Petitioner, Sanford J. Gubernik (Gubernik), who is a male, met with Pratt and filled out an application to lease an apartment at Mizner Park. Gubernik had omitted his social security number when he completed the application. Pratt advised him that it would be necessary to have his social security number in order to do the credit check. Gubernik was reluctant to give Pratt his social security number and to have a credit check done. He gave Pratt a check for $50 for the credit check and a check for $885 as a security deposit. Gubernik is an independent contractor who works for a number of sunglass and eyewear companies. His annual income varies each year. When he filled out the application, Pratt asked Gubernik to provide her copies of his income tax returns for the last two years so that she could verify his income for the last two years. Pratt had a credit check run on Gubernik. Mizner's computers were down on the day that the credit check was performed so the company performing the credit check mailed her a copy of the credit report rather than having her receive the report via the computer, which was the normal method that Pratt received credit reports on prospective tenants. Gubernik had two federal income tax liens, which showed up on his credit report. One lien was dated October, 1993 in the amount of $10,058, and the other lien was dated February, 1991 for $36,829. Pratt advised Sims of the tax liens. Sims told Pratt that she should contact Gubernik and advise him that his credit was a problem. She further advised Pratt that if the credit report was correct and that Gubernik had not satisfied the liens or was not in good standing with the Internal Revenue Service that his application would be denied. Gubernik had traveled to New Orleans to visit clients. While there he received a message on his cellular telephone that Pratt needed to talk to him. He called Pratt and she advised him that there was a problem with his credit report and he should call the credit reporting company and get a copy of the report. Gubernik advised Pratt that the problem was two tax liens. Pratt advised him that they would hold the apartment but that he needed to come in and get the issue of the tax liens resolved by showing that he was trying to pay off the liens. When Gubernik returned from New Orleans he took copies of his income tax returns to Pratt. She advised him that she needed verification that he was making payments on the liens. Gubernik became very irate and told Pratt that he had never had a problem because of the tax liens and that he had no intention of paying them. Pratt advised Gubernik that his application was denied because of the tax liens. Still upset, Gubernik requested to see the manager. Sims was not in the office on that day so Pratt took the application file to Jaroszewicz and told her that a gentleman wanted to talk to her about the denial of his lease application. Jaroszewicz reviewed the application and immediately saw that the problem was the tax liens that appeared on the credit report. Pratt showed Gubernik to Jaroszewicz' office. Gubernik was visibly upset. Jaroszewicz told him that there was a problem with his credit report and that Mizner could not approve his lease application. Gubernik offered to pay his rent in advance. However, prepayment of rent was against Mizner's policy because of accounting reasons and the possibility of poor payment in the future when the prepayment amount was depleted. Gubernik offered to have his rent deducted from his monthly checks that he received from a sunglass company. Mizner's policy was not to have the rent deducted from the tenant's paycheck because the employee could change employers. Gubernik became more and more upset as the conversation with Jaroszewicz continued. Finally Jaroszewicz told Gubernik that there was no need to discuss the matter any further and showed him to the door. The apartment which Gubernik tried to rent was leased to a male in August, 1994. On June 2, 1994, a female applied to Mizner to rent an apartment. A credit check was done and revealed that the prospective tenant had two tax liens totalling approximately $36,000. The female's application was denied by Mizner because of the tax liens. In 1994, Mizner's first time rentals were divided about equally between single males, single females, and families. Gubernik claims that his application was denied not because he had tax liens but because he was a man. Mizner contends that the only reason that Gubernik's application was denied was because he had two tax liens for over $40,000 which represented meant to Mizner that Gubernik had a bad credit history.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding that Crocker Downtown Development Associates, Terrill Jaroszewicz, and Mizner Associates, Ltd. did not commit a discriminatory housing practice against Sanford J. Gubernik and denying his petition for relief. DONE AND ENTERED this 21st day of January, 1997, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 21st day of January, 1997. COPIES FURNISHED: Sanford J. Gubernik 212 Northwest 4th Avenue Boca Raton, Florida 33432 Patrick M. Muldowney, Esquire Shutts & Bowen 20 North Orange Avenue Orlando, Florida 32801 Sharon Moultry, Clerk Commission on Human Relations 325 John Knox Road, Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana Baird, General Counsel Commission on Human Relations 325 John Knox Road, Building F, Suite 240 Tallahassee, Florida 32303-4149
Findings Of Fact FHFC administers the Multifamily Mortgage Revenue Bond Program (Bond Program) as set forth in Chapter 420, Part V, Florida Statutes, and related administrative rules. Worthwhile timely filed an application in the 1999 Bond Program cycle which was assigned number 99-040 to finance a development called Heritage Apartments in Collier County, Florida. FHFC initially deemed said application to be incomplete for the reasons set forth in a letter dated February 4, 1999. Worthwhile timely filed a Petition for Formal Hearing challenging FHFC's determination that application number 99-040 was incomplete, which Petition was referred to the Division of Administrative Hearings (DOAH) and assigned Case No. 99-1518. Upon further review by FHFC and in consideration of the deposition testimony of FHFC representatives in this cause, the parties stipulate and agree that: Worthwhile's application number 99-040 was not incomplete as initially determined by FHFC; Worthwhile's application number 99-040 is complete and must now be further processed pursuant to appropriate rules and procedures; and If it qualifies after further processing, application number 99-040 is to be funded with the next uncommitted bond proceeds made available to FHFC for allocation.
Recommendation Based upon the foregoing, it is hereby RECOMMENDED that FHFC enter a Final Order which finds and concludes that: Worthwhile's application number 99-040 was not incomplete as initially determined by FHFC; Worthwhile's application number 99-040 is complete and must now be further processed pursuant to appropriate rules and procedures; and If it qualifies after further processing, application number 99-040 is to be funded with the next uncommitted bond proceeds made available to FHFC for allocation. DONE AND ENTERED this 8th day of October, 1999, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 8th day of October, 1999. COPIES FURNISHED: James C. Hauser, Esquire Skelding, Labasky, Corry, Hauser, Jolly & Metz, P.A. 318 North Monroe Street Tallahassee, Florida 32301 David A. Barrett, Esquire Barrett & Pelham, P.A. Post Office Box 930 Tallahassee, Florida 32302-0930 Brad Baker, Executive Director Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32399-1329 Stephen M. Donelan, General Counsel Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32399-1329 Michael J. Glazer, Esquire Ausley & McMullen 227 South Calhoun Street Tallahassee, Florida 32301
Findings Of Fact St. Petersburg Steel Corporation is a Florida corporation which manufactures and sells steel products in Florida and to out-of-state purchasers. During the three-year audit period ending May 31, 1981, some $1.9 million was billed by Petitioner for sales made. In conducting the audit for the period from June 1, 1978, through May 31, 1981, Respondent was provided all invoices and records of Petitioner. Due to the large volume of invoices involved, the auditor prepared the assessments by using Petitioner's sales register and did not check the entries therein with the source documents (invoices, bills of lading, sales slips, etc.). Some of the vendees were out of state, some were no longer in business, and the names of some could have been misread by the auditor since they were handwritten. Unless Petitioner was able to present a resale certificate for a vendee or the sales register did not show the sales tax paid, that sale was included in the assessment. Some of those vendees were no longer in business and could not be located by Petitioner to obtain their resale certificate numbers. Purchases for which Petitioner was assessed a use tax included some equipment such as fans and file cabinets and rent paid to its lessor on which Petitioner could not show a sales tax had been paid. Petitioner contended that the audit was improperly conducted because the source documents were not used as the basis for the assessment. The only evidence presented to support this contention was the testimony of Esposito, who did not qualify as an expert witness able to credibly present such opinion testimony. Petitioner further contended that he had remitted to Respondent some $1,900 in sales taxes improperly collected by him on out-of-state sales for which no tax was due. No claim for a refund of those taxes was made in these proceedings and no documentary evidence to support this contention was submitted by Petitioner.
Findings Of Fact Petitioner is Carl R. Glass, d/b/a Osceola Forge located at 2749 North Orange Blossom Trail, Kissimmee, Florida 34744. Petitioner is engaged in the business of manufacturing and fabricating burglar bars, steel gates, decorative plastic ornamental castings and injection moldings. Petitioner built and erected one double sided billboard on his business property at 2749 North Orange Blossom Trail, Kissimmee, Florida. It is anchored by its owns supports into the ground as a permanent improvement to Petitioner's real property. The size of the billboard is approximately 12' x 38', plus an apron that runs along the length of the bottom of the billboard. Petitioner leases the face and apron of each side of billboard to customers who are generally required to supply their own labor and material to create an advertising message. The billboard was built to provide double-sided advertising for lanes of traffic going northbound or southbound past Petitioner's place of business. Petitioner has rented the billboard to various lessees for a monthly rental fee over the relevant period. Petitioner did not charge or collect sales and use taxes on the rental fee. Respondent conducted an audit of Petitioner's entire business, for the period May 1, 1986 through April 30, 1991. There was only one item assessed as a result of the audit which was on the lease of the billboard located on Petitioner's business property. Petitioner was assessed sales and use taxes, interest and penalties totalling $6,142.38, including taxes ($4,017.76) with a per diem interest rate of $1.32 to be computed from 10/3/91 to the present. Additional interest due, as of July 1, 1993, was calculated to equal $842.16 (638 days x $1.32). The sales tax assessment was based on invoices and other information provided by the Petitioner and followed the Department of Revenue routine procedures required for all audits. From January 1987 through February 1991, Petitioner, or his secretary, made five telephone calls from Osceola Forge to the Taxpayer Assistance Number of the Department of Revenue's regional office located in Maitland, Florida, requesting assistance. On each occasion, the Department's employee advised Petitioner or his employee that they could call the Department's Tallahassee 800 taxpayer assistance number. On at least one occasion, Petitioner's secretary or Petitioner was advised that the transaction was tax exempt, and need not be collected. Petitioner was aware of the 800 taxpayer assistance number in Tallahassee and tried to call the number. However, he was unable to get through, and called the local office only. On April 9, 1992, Petitioner personally telephoned the Titusville office of the Department of Revenue. On each occasion, Petitioner inquired whether or not sales or use taxes should be collected on the rental of the billboard. A free, updated Sales and Use Tax Rules Book is available to any tax payer upon request. In addition, a taxpayer could personally appear and bring documentation relating to any questions relating to the sales and use tax at any regional office. Petitioner did not obtain an updated rules book or personally appear at a regional office. On April 30, 1992, Petitioner filed a Protest Letter with Respondent challenging the abovementioned tax assessment. Respondent issued to Petitioner a Notice of Decision dated December 1, 1992. On January 8, 1993, Petitioner filed a Request for a Formal Administrative Hearing with Respondent. To date, Petitioner has not paid any of the contested taxes, interest, and penalties to Respondent. Petitioner relied on information provided by his secretary, his accountant, and brief phone conferences with the DOR's Maitland office to determine that the rental fees were tax exempt, and did not collect the sales tax from his customers. The DOR Audit Supervisor testified that there is a clear distinction between the taxable rental of a billboard and the nontaxable services of placing an advertising message on the billboard. The rental of the face of the billboard is a taxable transaction. On the other hand, if a person rents or leases a billboard, then hires a third party to place an advertising message on the billboard, this advertising service is tax exempt.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Revenue enter a Final Order upholding its sales and use tax assessment, waive penalties and interest accrued prior to October 2, 1991, and assess a tax of $4,017.76, plus interst from the date due. DONE and ENTERED this 14th day of July, 1993, in Tallahassee, Florida. DANIEL M. KILBRIDE 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 14th day of July, 1993. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Proposed findings of fact submitted by Petitioner. Petitioner did not submit proposed findings of fact. Proposed findings of fact submitted by Respondent. Proposed findings submitted by Respondent are accepted except as noted below. Those proposed findings neither noted below nor included in the Hearing Officer's findings were deemed unnecessary to the conclusions reached. Rejected as argument: paragraphs 37, 38, 39 COPIES FURNISHED: Carl R. Glass 2749 North Orange Blossom Trail Kissimmee, Florida 34741 James McAuley, Esquire Assistant Attorney General Capitol Building Tallahassee, Florida 32399-1050 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact At the beginning of the hearing in this cause, it was stipulated and agreed to that certain pleadings and exhibits would constitute the factual basis for consideration of the case. Specifically, the parties agreed that the First Amended Petition and its parts that were admitted by the Respondent; together with interrogatories propounded by the Respondent to the Petitioner and the answers thereto; and Exhibits A and C attached to the First Amended Petition; would be the underlying facts that could be examined in arriving at a statement of the facts, and ultimate conclusions of law. A further refinement in the stipulation and agreement of the parties was their acceptance of the stated amount of $952.05 in surtax owed, if it were concluded that any amount of surtax was properly assessed. Finally, the parties agreed that copies of the aforementioned Exhibits A and C could be utilized in deliberating this case. (Copies of the First Amended Petition, Answer to that Petition, Interrogatories propounded by the Respondent and Answers provided by the Petitioner, and Exhibits A and C attached to the First Amended Petition, are hereby made a part of the record herein and forwarded to the agency head in lieu of a transcript.) The Petitioner in this action is Wisconsin Real Estate Investment Trust, whose address is Marine Plaza, 111 East Wisconsin Avenue, Milwaukee, Wisconsin 53202. On or about April 11, 1975 the Petitioner was a grantee in the certain Warranty Deed from James E. Russell, Jr., as trustee to Wisconsin Real Estate Investment Trust, dated April 11, 1975, and recorded May 20, 1975, in Official Records Book 2620, Page 1812, Public Records of Orange County, Florida (hereinafter referred to as the "Warranty Deed"). A copy of the said Warranty Deed is a part of the First Amended Petition found as Exhibit A. The conveyance of the property as set forth in the Warranty Deed was subject to certain mortgages described in detail upon Exhibit A attached to the Warranty Deed and identified briefly as follows, to wit: A first mortgage to Prudential Insurance Company of America in the amount of three million three hundred thousand dollars ($3,300,000); Four "Second" mortgages to the Petitioner herein, said mortgages being in the total amount of eight hundred sixty five thousand, eight hundred fifty four dollars ($865,854); A "third" mortgage granted by Orlando Quadrant Development Limited to United Associates, Inc. in the amount of five hundred thousand dollars ($500,000). Exhibit A to the Warranty Deed also contained the following provision: "It is the intent of the Grantor and the Grantee that this conveyance shall not cause a merger of the mortgages held by the Grantee which are described above, and the fee simple title of the Grantee received hereby in that said mortgage shall remain in full force and effect and shall continue to be a lien on the property." Documentary stamps were paid with respect to the full amount of the purchase price in the amount of four million, six hundred sixty five thousand, eight hundred fifty four dollars ($4,665,854.) and minimum stamps for surtax in the amount of fifty five cents ($.55) were paid. On or about August 20, 1975, the Respondent delivered to Petitioner a form letter styled "Request for Information and Response" requesting the reason why minimum surtax was paid. Petitioner replied that minimum surtax was paid because the transaction constituted a sale and not a deed in lieu of foreclosure. A copy of the "Request for Information and Response" was attached as Exhibit B to the First Amended Petition. On or about November 20, 1975, the Respondent sent to Petitioner a "Proposed Notice of Assessment" informing Petitioner of a proposed imposition of tax in the amount of nine hundred fifty two and 05/100 dollars ($952.05) and a penalty in the amount of nine hundred fifty two and 05/100 dollars ($952.05), for a total assessment of one thousand nine hundred four and 10/100 dollars ($1,904.10). A copy of the "Proposed Notice of Assessment" was attached to the First Amended Petition as Exhibit C. In response to the Proposed Notice, the Petitioner, through counsel, wrote to Respondent on December 11, 1975, questioning the necessity for surtax charge under the present status of Florida Law. In that letter there was a formal request for conference within thirty (30) days of the proposed assessment to discuss the assessment before it became final. A copy of the letter of December 11, 1975 was Exhibit D to the First Amended Petition. On December 24, 1975, the Petitioner wrote the Respondent with respect to a telephone conference that was held with Respondent wherein the Respondent indicated there was a legal authority for imposition of surtax against Petitioner. The Respondent sent the information to Petitioner under cover of a letter dated January 2, 1976, and the Petitioner responded to said letter by letter dated January 9, 1976 wherein the position of the Petitioner with respect to the imposition of the surtax was set forth in detail. A copy of the Petitioner's letter of January 9, 1976, was made Exhibit E to the First Amended Petition. Subsequent to the letter of January 9, 1976, Respondent requested by telephone that Petitioner provide Respondent with a copy of the Declaration of Trust of Petitioner, which said Declaration of Trust was sent to Respondent under cover letter dated June 7, 1976. On September 8, 1976, Respondent sent Petitioner a notice that a Tax Warrant and Execution had been prepared and would be filed. A copy of said letter of September 8, 1976 was made Exhibit F to the First Amended Petition. Informal efforts to resolve the dispute were not effective and this led to a formal hearing. A closer look at the events involved in the conveyance of the Warranty Deed points out that the first mortgage held by Prudential Life Insurance Company of America was in default at that time, and the institution of foreclosure proceedings was eminent. The Grantee, Petitioner, held three mortgages subordinate to the first mortgage held by Prudential Life Insurance Company, and it was felt that the conveyance from Grantor to Grantee was the best method of protecting Grantee's interest. The conveyance did not provide for merger of the ownership interest and the mortgage interest in favor of the Grantee, on the face of the Warranty Deed. In fact, the Warranty Deed disclaims such merger, as stated before. There was no agreement either in writing or verbally between the Grantor and the Grantee with respect to payment or non-payment of the second mortgages held by the Grantee, subsequent to the transfer. None of the second mortgages held by the Grantee, Petitioner, have been satisfied of record at the time of conveyance or since that time. There has been no payment of principal and interest on the second mortgages in question since the conveyance under the Warranty Deed. The Petitioner advances its argument in opposition to the documentary surtax premised on the assertion that such tax does not apply to amounts of existing mortgages on the real estate sold, and therefore no surtax should be levied, because the four second mortgages at issue are still in existence. In stating this position the Petitioner refers to 201.021, F.S. which states: "(1) A documentary surtax, in addition to the tax levied in s. 201.02, is levied on those documents taxed by s. 201.02 at the rate of 55 cents per $500 of the consideration paid; provided, that when real estate is sold, the consideration, for purposes of this tax, shall not include amounts of existing mortgages on the real estate sold. If the full amount of the consideration is not shown on the face of the document, then the tax shall be at the rate of 55 cents on each $500 or fractional part thereof of the consideration." The Petitioner also makes reference to Rule 12A-4.12(4)(e) pertaining to the definition of consideration as found in 201.021, F.S. The pertinent provision of that rule says: "For Consideration - Surtax: The term "consideration" under 201.021, F.S., includes but is not limited to: (e) Conveyance where outstanding mortgage debt, lien or encumbrance is cancelled, satisfied, or otherwise rendered unenforceable by the conveyance." According to the Petitioner the four subject mortgages are not cancelled, satisfied, or otherwise rendered unenforceable by the conveyance, and consequently there is no taxable "consideration". They rely on the aforementioned language of the Warranty Deed which disclaims the merger of the mortgage debt with the equity of redemption when the conveyance was made. Moreover, under the Petitioner's argument, because it has stated its intention not to have a merger that stated intention should control and no merger should apply. For this proposition the Petitioner cites the case of Friedman v. Pohnl, 143 So.2d 690, (3 DCA Fla. 1962). Within the language of the case is reference to the case of Jackson v. Relf, 26 Fla. 465, 8 So. 184 (Fla. 1890). The Jackson case, supra, states that it is the intention of the person in whom the debt and equity of redemption are united that determines if there is a merger of the mortgage debt and equity of redemption, or if the mortgage debt continues to be in force and effect. The Petitioner also argues that the reason it elected not to merge the debt claim and equity of redemption, was to protect its priority position under the second mortgages over the third mortgage holder in the case of any sale to any third party and assumption of a second mortgage by a third party or in the case of any formal foreclosure. The Respondent counters the Petitioner's argument by claiming that the four subject second mortgages have been extinguished, thereby entitling the Respondent to impose a documentary surtax under the authority of 201.021(1), F.S. and Rule 12A-4.12(4)(e) F.A.C. The Respondent feels that you may look behind the disclaimer statement found in the Warranty Deed and by the facts of the conveyance determine that there is a merger for purposes of taxation. The Respondent relies upon a series of case decisions in arriving at this position. The first two cases Gay v. Inter-County Tel & Tel. Co., 60 So.2d 22 (Fla. 1952) and Choctawhatchee Electric Corp. v. Green, 132 So.2d 556 (Fla. 1961), it argues, stand for the proposition that the Documentary Stamp Tax Act in Florida is similar to the Federal Act 26 U.S.C.A. 1800 et. seq. and the same construction given to the federal tax cases in the federal courts, may be given to the Florida documentary stamp tax cases in the Florida cases. Using that theory as a basis for the persuasiveness of the federal authority, the Petitioner then cites the cases of Mutual Life Ins. Co. of New York v. United States, 110 F Supp. 606 (1953) and Railroad Federal Sav. & Loan Ass'n. v. United States, 135 F.2d 290. According to the Respondent, the two federal cases were sufficiently close in their facts to be applicable to the case at bar. Furthermore, since these cases required the payment of federal documentary tax, the Respondent believes that the rationale used in those cases would sustain a claim for documentary surtax and penalty in the case sub judice. An examination of the two federal cases shows them to be distinguishable in their facts. Mutual Life, supra, is distinguishable for two reasons. The first reason being that certain mortgage debts spoken of in that case had clauses indicating that the mortgage on the property was not to merge with the fee and that the mortgage would remain with the property notwithstanding conveyance; however, in all those cases a covenant had been given not to sue on the mortgage debt, which extinguished the mortgage debt. No such covenant has been given in the case at bar, and consequently the consideration, constituted of the extinguishment found in Mutual Life, supra, is not found in the case at bar. There is a second distinguishing factor between the Mutual Life case and the present case. That pertains to the fact that the action in Mutual Life involved the laws of the State of New York, which were being applied to a different set of facts. Under the New York Law, consideration was also found to exist notwithstanding a clause which disclaimed any merger of the fee and mortgage. This situation pertained to five mortgage cases in which no covenant not to sue had been given. The New York Law, according to the opinion in Mutual Life, called for the extinguishment of the mortgages in those five cases, due to the statutory statement which prohibited deficiency judgments on the mortgage indebtedness, because the fair market value of the property exceeded the debt claim. Therefore under the statement of the case, the mortgage indebtedness was extinguished as a matter of law, by transferring the interest in the fee to the mortgagee. A tax was placed on that transfer, based upon the extinguishment of the mortgage debt as consideration. The law in Florida does not prohibit a foreclosure suit by the second mortgage holder in the way set forth in the New York Law. In addition, the five mortgages in the Mutual Life case were not surrounded by first and third mortgages as is the case herein. The existence of the first and third mortgages, is a legitimate reason to maintain the second mortgages held by the Petitioner, as a protection against the other mortgagees. The other federal case cited by the Petitioner is the Railroad Federal case, supra. This case involved a deed in lieu of foreclosure and the imposition of a tax on the balance of principal and accrued interest due on the mortgages plus any cash amount paid. These mortgages involved in the Railroad Federal case were later cancelled by the resale or the subsequent purchase subject to the mortgages. The deed also contained an agreement not to seek a deficiency judgment on the part of the mortgagee which made it clear that the mortgagee was taking the property in full satisfaction of the mortgage indebtedness. In fact the mortgagee did not seek a deficiency judgment, nor was any further interest paid or demanded. This is distinguishable from the case at bar, in that the clear intent of the mortgagor and mortgagee herein is to keep active the second mortgages. The Respondent cited several administrative cases namely: Friedman v. State of Florida, Department of Revenue, Case No. 75-1304: Hutner v. State of Florida, Department of Revenue, Case No. 75-1771; and Atico Mortgage Investors v. State of Florida, Department of Revenue, Case No 77-1124. Respondent cited too, Opinion of the Attorney General, 059-203. Without discussing those administrative cases and the Attorney General's Opinion, they are all distinguishable in their facts and would not appear to have application to the case at bar. Based on an analysis of the evidential facts and the argument of the parties, the position of the Petitioner is well founded and the documentary surtax and penalty should not be paid.
Recommendation It is recommended that the subject assessment of documentary surtax and penalty be set aside. DONE and ENTERED this 6th day of October, 1977, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: R. Lee Bennett, Esquire Lowndes, Peirsol, Drosdick & Doster, P.A. Suite 443, First Federal Building Post Office Box 2809 Orlando, Florida 32802 Edwin J. Stacker, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 John D. Moriarty, Esquire Department of Revenue Division of Administration Carlton Building Tallahassee, Florida 32304
The Issue The central issue in this case is whether Petitioners are entitled to recover against the Mortgage Brokerage Guaranty Fund and, if so, the priority of payment to be applied to their claim. A secondary issue is whether claimants who gave notice prior to Petitioners are entitled to payment or whether they have waived or abandoned their claims.
Findings Of Fact Based upon the stipulations filed by the parties and the documentary evidence, I make the following findings of fact: The Mortgage Brokerage Guaranty Fund (the "fund") was created in 1977 to provide recovery for any person who meets all of the conditions prescribed in Section 494.043, Florida Statutes. The Department is charged to disburse the fund according to Section 494.044, Florida Statutes. Section 494.043, Florida Statutes, (Supp.1986) provides: Any person who was a party to a mortgage financing transaction shall be eligible to seek recovery from the Mortgage Brokerage Guaranty Fund if: The person has recorded a final judgment issued by a Florida court of competent jurisdiction in any action wherein the cause of action was based on s. 494.042(2); The person has caused to be issued a writ of execution upon such judgment and the officer executing the same has made a return showing that no personal or real property of the judgment debtor liable to be levied upon in satisfaction of the judgment can be found or that the amount realized on the sale of the judgment debtor's property pursuant to such execution was insufficient to satisfy the judgment; The person has made all reasonable searches and inquiries to ascertain whether the judgment debtor possesses real or personal property of other assets subject to being sold or applied in satisfaction of the judgment, and by his search he has discovered no property or assets or he has discovered property and assets and has taken all necessary action and proceedings for the application thereof to the judgment, but the amount thereby realized was insufficient to satisfy the judgment; The person has applied any amounts recovered from the judgment debtor, or from any other source, to the damages awarded by the court. The person, at the time the action was instituted, gave notice and provided a copy of the complaint to the division by certified mail; however, the requirement of a timely giving of notice may be waived by the department upon a showing of good cause; and The act for which recovery is sought occurred on or after September 1, 1977. Recovery of the increased benefits allowable pursuant to the amendments to s. 494.044 which are effective October 1, 1985, shall be based on a cause of action which arose on or after that date. The requirements of paragraphs (1)(a),(b),(c),(d), and (e) are not applicable if the licensee or registrant upon which the claim is sought has filed for bankruptcy or has been adjudicated bankruptcy; however, in such event the claimant shall file a proof of claim in the bankruptcy proceedings and shall notify the department by certified mail of the claim by enclosing a copy of the proof of claim and all supporting documents. Pertinent to this case, Section 494.044, Florida Statutes, (Supp. 1986) Provides: Any Person who meets all of the conditions Prescribed in s 494.043 may apply to the department for payment to be made to such person from the Mortgage Brokerage Guaranty Fund in the amount equal to the unsatisfied portion of that person's judgment or judgments or $20,000, whichever is less, but only to the extent and amount reflected in the judgment as being actual or compensatory damages. As to claims against any one licensee or registrant, payments shall be made to all persons meeting the requirements of s. 494.043 upon the expiration of 2 years from the date the first complete and valid notice is received by the department. Persons who give notice after 2 years from the date the first complete and valid notice is received and who otherwise comply with the conditions precedent to recovery may recovery from any remaining portion of the $100,000 aggregate, in an amount equal to the unsatisfied portion of that person's judgment or $20,000, whichever is less, but only to the extent and amount reflected in the judgment as being actual or compensatory damages, with claims being paid in the order notice is received until the $100,000 aggregate has been fully disbursed. * * * (3) Payments for claims shall be limited in the aggregate to $100,000, regardless of the number of claimants involved, against any one mortgage broker or registrant. If the total claims exceed the aggregate limit of $100,000, the department shall prorate the payment based on the ratio that the person's claim bears to the total claims filed. The first notice received by the Department alleging a claim against Barry Koltun or Oakland Mortgage Company was filed on August 13, 1984. This notice was filed on behalf of John and Mary Ahern. The Department utilized this notice in computing the two-year period addressed in Section 494.044(1), Florida Statutes. For purposes of recovery from the fund, the individual mortgage broker (Koltun) and the company qualified by the broker (Oakland) are treated as one. Petitioners filed an initial notice of their claim against the fund on October 16, 1985. This claim was asserted against Oakland Mortgage Company, Barry Koltun and Robert Tamarro. On January 23, 1987, the Department issued a "Notice of Intent to Grant or Deny Payment from the Mortgage Brokerage Guaranty Fund Re Oakland Mortgage Company." This notice outlined the status of some thirteen claims which had given notice of their civil actions against the licensee within the two year period. Two claimants, Kusich and Szafran, had provided all documentation required by Section 494.043, Florida Statutes; consequently, they were approved for payment. The Petitioner's claim was denied because they had allegedly failed to satisfy the statutory requirements of Section 494.043, Florida Statutes and had failed to do so prior to August 12, 1986 (the end of the two year period). The Petitioners timely filed a petition for formal Chapter 120 proceedings challenging the Department's denial of their claim for payment. Subsequent to January 23, 1987, Petitioners completed the conditions precedent for recovery and submitted all documentation required to satisfy the requirements of Section 494.043, Florida Statutes. On July 6, 1987, the Department received notice and a claim from the Intervenors. This claim satisfied the requirements of Section 494.043, Florida Statutes. Of the thirteen original claims filed, only two claimants (Kusich and Szafran) completed all conditions of Section 494.043, Florida Statutes, on or before August 12, 1986.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Banking and Finance, Division of Finance, enter a Final Order finding the claims of Rusich and Szafran eligible for payment, and that the claim of Petitioners be evaluated as part of the second class established in Section 494.044(1), Florida Statutes, DONE and RECOMMENDED this 1st day of December, 1987, in Tallahassee, Florida. JOYOUS D. PARRISH 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 1st day of December, 1987. COPIES FURNISHED: Paul A. Zeigler, Esquire Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A. Suite 1010, Monroe Park Tower 101 North Monroe Street Tallahassee, Florida 32301 Paul C. Stadler, Jr., Esquire Department of Banking and Finance Division of Finance Suite 1302 The Capitol Tallahassee, Florida 32399-0350 Joseph Degance, Esquire 1995 East Oakland Park Boulevard Suite 101 Fort Lauderdale, Florida 33306 Jack F. Weins, Esquire Boca Bank Building Suite 200 855 South Federal Highway Boca Raton, Florida 33432 Morey Udine, Esquire 3111 University Drive Suite 425 Coral Springs, Florida 32065-6930 Hon. Gerald Lewis Department of Banking and Finance Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 Charles L. Stutts General Counsel Department of Banking and Finance The Capitol Tallahassee, Florida 32399-0350 =================================================================
