Findings Of Fact 1. Petitioner, Atlantic Social Club, Inc., is a corporation organized under the laws of Florida on July 27, 1972. Its Articles of Incorporation, filed with the Secretary of State, reflect it is a corporation not for profit and its purpose is to be concerned with: . . . the needy and underprivileged and to promote and be charitable to those in distress . . . . Petitioner registered with the Florida Department of Revenue on May 31, 1983, and on June 1, 1983, filed an application with DABT for an 11-C alcoholic beverage license which may be issued to, inter alia, social clubs, nonprofit corporations, or clubs devoted to promoting community development, without limitation on the number of licenses issued in this category. Organizations, to qualify, must meet certain standards set out by rule and statute. At the time of filing the application, Petitioner submitted several personal questionnaires executed under oath by the then corporate officers. The questionnaires signed by two officers, Elzie Lee Jackson and David Daniel Riles, indicated that they had never been arrested, charged, or convicted of any offense. However, on April 12, 1977, Mr. Riles had been charged by the State Attorney in Miami, with, on February 12, 1977, carrying a concealed firearm (felony); possession of a firearm by an intoxicated person; and trespass after warning. Documentation submitted also reveals that on October 16, 1982, Mr. Jackson had been arrested at the Atlantic Social Club by state beverage officers for the sale of alcoholic beverages without a license. Neither individual is currently an officer, director, or member of the club. Upon receipt of Petitioner's application, on June 29, 1983, Respondent, in writing, requested that Petitioner submit certain specified additional information necessary for investigation of the application. The information was to be submitted by July 23, 1983. The requested information consisted of a list of club members and a copy of its bylaws. In the interim, Investigator Oliva attempted, by telephone, to contact Mr. Riles to set up an appointment for an interview but could not reach him. When the deadline for submitting the requested information had passed without compliance, Oliva met with Petitioner's representative, Mathew Bothwell, at Respondent's Miami office on July 25, 1983. At this time Bothwell provided the requested membership lists and bylaws as well as records of meetings. At the meeting, Bothwell stated that Petitioner donated money to various charitable organizations, churches, and needy individuals. When asked for records of these donations, Bothwell indicated they did not normally exist but that he would try to provide them. The documentation submitted by Petitioner for consider- ation of the Hearing Officer indicates charitable contributions on: December 30, 1977 - Variety Children's Hospital $200.00 March 28, 1980 - Variety Children's Hospital $100.00 January 16, 1981 - Variety Children's Hospital $100.00 January 7, 1982 - Variety Children's Hospital $100.00 February 28, 1982 - New Jerusalem PBC $200.00 Mr. Bothwell, by affidavit, also contends that the Club has continued to help the needy and unemployed by providing meals and foodstuffs but there is no evidence confirming this from even one recipient of this assistance. Petitioner did produce other club records which included a copy of the bylaws dated July, 1983, the minutes of one meeting held on January 18, 1983, and a list of six members dated July 19, 1983. The bylaws are extremely limited and provide very little guidance for club operation. Certain provisions ordinarily required by rule, such as the method by which members are elected, are missing. Mr. Bothwell explained that the records of meetings, other than that submitted for January 18, 1983, were kept by the Club's secretary and were not available even though they had been requested by Respondent several weeks earlier. At the close of the July 25, 1983 meeting between Oliva and Bothwell, Bothwell was informed that in order for the processing of the Club's application to progress, it would be necessary for Respondent to be furnished: written minutes of all meetings; accounting records, receipts, and other documentary proof of the Club's charitable activities; and affidavits from Riles and Jackson indicating why they had failed to include their arrests on the personal questionnaires they submitted with the application. These requested documents were not furnished to Respondent, but, on October 16, 1980, pursuant to the Order dated October 4, 1984, counsel for Petitioner submitted the membership records, documentary evidence of the $700.00 in contributions referenced above, and affidavits from Bothwell and Singletary to the effect that neither Riles, nor Jackson has any current affiliation with the organization. The membership records provided, kept in a spiral notebook, which go no further than July 12, 1983, reflect 13 members. They also reflect that the 9 older members paid dues of $10.00 per week and in addition, paid money in for savings and dances. The earliest records on membership submitted were dated in January, 1981, and reflected activity from that time up to July 12, 1983. The Club's bank book, which, as of the last entry on May 31, 1983 showed a balance of $94.56, reflected a balance in October, 1982 of almost $6,400.00. No explanation was given for how this sum was disposed of. When, on August 28, 1983, as a part of the ongoing investigation of the license application, Agents Oliva and Delmonte went to Petitioner's indicated address to get the information requested of Bothwell on July 25, they found both front and rear doors locked. Repeated knocking on all doors failed to get a response and it appeared as if the building was unoccupied. As of the present date, Petitioner has failed to provide Respondent with its federal employer's identification number though it promised to do so in the past. On November 28, 1983, Respondent denied Petitioner's application.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the application of the Petitioner, Atlantic Social Club, Inc., for an 11-C alcoholic beverage license be DENIED. RECOMMENDED this 27th day of November, 1984, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of November, 1984. COPIES FURNISHED: William A. Hatch, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 George J. Tallianoff, Esquire Suite 600C, Office in the Grove 2699 South Bayshore Drive Miami, Florida 33133 Captain John J. Harris Department of Business Regulation 1350 Northwest 12th Avenue, Room 552 Miami, Florida 33136 Gary R. Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Howard M. Rassmussen, Director Department of Business Regulation Division of Alcoholic Beverages and Tobacco 725 South Bronough Street Tallahassee, Florida 32301
Findings Of Fact The Petitioner, Florida Golfweek, Inc., was incorporated in March of 1975. During the year 1975 it began to publish "Florida Golfweek" which is a weekly publication concerning the golf industry in Florida. The Petitioner has published "Florida Golfweek" continuously since 1975, and it now has approximately 10,000 paid subscribers from every state and some foreign countries. Eighty-five to ninety percent of these subscribers are Florida residents. The Petitioner started a golf tournament called "Florida Women's Open" in 1978. This tournament was held at Errol Estate at Apopka in 1978, and in 1979, at Rolling Hills at Fort Lauderdale in 1980, at Plantation Inn in Crystal River in 1981 and 1982, and at Grenelefe Resort in Haines City in 1983. The Petitioner sets the dates for this tournament each year, and engages the golf courses. The event is publicized in its publication "Florida Golfweek," and in daily newspapers throughout the state, as well as on radio stations. Posters are printed and are circulated for display at golf courses. Entry blanks for the tournament are published in "Florida Golfweek" and these are sent to all Florida golf courses, about 60 of them. The entry blanks show the entry fee and where it should be mailed, normally to the Petitioner's address in Winter Haven, Florida. Both professionals and amateurs from the State of Florida play in this tournament, which has been established for Florida women golfers. A total of 260 played in the 1983 event. There has never been a fee charged for spectators, and the tournament has never been named anything but "Florida Women's Open." The Petitioner pays the prize money to the tournament winners, checks to the professionals and merchandise to the amateurs. It arranges for cocktail parties, and bears all of the expenses of the tournament including the golf course, carts, and green fees since 1978. The Petitioner makes a profit from this tournament, and as the field of players grows the profit potential will increase. There is a projection that a total of 400 golfers will participate in this tournament eventually. The Petitioner does not intend to abandon either the tournament or its name "Florida Women's Open." The Petitioner moves the tournament around Florida so as to return some business to golf courses and organizations which advertise in "Florida Golfweek," and also in deference to the participants, to get the event into their area. In March of 1983 the Petitioner learned that Plantation Inn at Crystal River intended to put on a similar tournament which had been named "Florida Women's Open," and that a corporation had been formed with the name Florida Women's Open, Inc. This tournament was put on by the Respondent at Plantation Inn at Crystal River in October of 1983. The Petitioner's president received a brochure about the Respondent's tournament, and he saw this brochure at a number of golf courses in Florida. He received telephone calls at the office of "Florida Golfweek" about the two opens, inquiring which is which. He also saw articles in the St. Petersburg Times publicizing the Respondent's tournament. These are the facts which have been found as a result of the Petitioner's proof. From the pleading presented by the Department of State's Division of Corporations, it is also found that the Respondent was issued Charter No. G11537 permitting the use of the corporate name Florida Women's Open, Inc., on December 3, 1982, and that on April 19, 1983, Mark Registration No. 929223 was issued to the Petitioner, Florida Golfweek, Inc., permitting the use of the trademark "Florida Women's Open" by the Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of State enter its Final Order finding that on the evidence presented the Respondent is entitled to use the corporate name Florida Women's Open, Inc., and that the Petition of Florida Golfweek, Inc., be denied. THIS RECOMMENDED ORDER entered on this 26th day of October, 1983, in Tallahassee, Florida. WILLIAM B. THOMAS, 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 October, 1983. COPIES FURNISHED: Randall G. Blankenship, Esquire Post Office Box 917 Winter Haven, Florida 33882 W. T. Green, Esquire Route One, Box 403 Crystal River, Florida 32629 Carole J. Barice, Esquire General Counsel Department of State The Capitol Tallahassee, Florida 32301 George Firestone Secretary of State The Capitol Tallahassee, Florida 32301
The Issue Whether petitioner should rescind its approval of prospectus amendments contained in amended prospectuses petitioner accepted for filing on June 23, 1988?
Findings Of Fact Respondent (Water Oak) manages a mobile home park in Lake County known as Water Oak Country Club Estates (the park). The previous owner envisioned phased development of an eventual total of 1,479 lots, and so stated in the original or "P" prospectus filed with petitioner's Bureau of Mobile Homes (the Bureau). The "P" prospectus contemplated a 587-lot "Golfside Villas" section when phase II of the park was developed. The "P" prospectus disclosed plans to build a separate recreational complex for Golfside Villas, leaving the main recreational complex for the exclusive use of other park residents. But the "P" prospectus stated: Water Oak Estate Mobile Home Park has a clubhouse, swimming pool, tennis courts and a shuffleboard center, which will be available for use by the park residents. The maximum number of lots that will use these shared facilities at the present time is 1,479, which is the total number of lots within the park. The Golfside Villas Section will use these facilities until November 1, 1987, at which time they will use their own facilities, and will no longer use Water Oak Estate facilities except by invitation from the Water Oak Residents' Association, or the Park Management. After Water Oak, Ltd. acquired the park, respondent or its agent filed an amended prospectus ("P86") with the Bureau. The "P86" prospectus differed from the "P" prospectus only to the extent required by the 1986 amendments to Chapter 723, Florida Statutes (1989), and did not alter disclosures regarding recreational facilities. A third Water Oak prospectus ("P2"), preserved the Golfside Villas concept and the idea of a separate recreational complex. As filed with the Bureau, however, the P2 prospectus stated: The recreational and other common areas discussed above are completed and available for use by the residents. The maximum number of home sites that are presently entitled to use these facilities is 590. FUTURE IMPROVEMENTS-- Water Oak Country Club Estates will build an additional clubhouse, a swimming pool, and a shuffleboard center, which will be for and in the Golfside Villas Section. Management may increase or decrease the size or modify the use of any of the shared facilities to serve the changing needs of the community, as determined by management. Petitioner's Exhibit No. 4, p. 7. In due course, the Bureau approved all three prospectuses, "P", "P86" and "P2", one after another. In approving prospectuses "P86" and "P2", the Bureau implicitly deemed them consistent with earlier approved prospectus(es). Because of considerations not pertinent here, Water Oak decided to abandon the idea of a discrete Golfside Villas section with its own exclusive recreational complex. Instead, it proposed, in developing phase II, to build the recreational complex contemplated in prospectuses "P", "P86" and "P2" (the original prospectuses) but to make both the phase II recreational complex and the original complex available to all residents of the park. Accordingly, Water Oak proposed amendments to the original prospectuses outlining its revised plans, and on April 16, 1988, filed them with the Bureau. Water Oak's cover letter explained: More specifically, a new clubhouse, heated swimming pool and shuffle board center open to all park residents will soon be available for use and so information concerning those facilities has been moved from the "Future Improvements" sections of these documents to the "Recreational and Other Common Areas" section. The proposed amendments are designed to make the "RECREATIONAL AND COMMON FACILITIES" section of all these prospectuses identical, and thus the existing versions of that section are deleted in their entirety in each prospectus and the new language substituted. . . . One other point is relevant to your consideration in this matter. The original owner of Water Oak Country Club Estates intended to designate a section of the park as the "Golfside Villas." However, no such section was ever developed ant the current owner has decided not to develop that section as such. Therefore, the Golfside Villas section of the park will not be created. Thus, all references to the Golfside Villas are now proposed to be deleted from all of the prospectuses in use in the park. No homeowner has leased a lot in an area designated as "the Golfside Villas," nor has any resident received any lease or other notification stating that his lot is in an area known as the Golfside Villas. Petitioner's Exhibit No. 3 (Emphasis in original.) Bureau personnel reviewed the amendments and approved the applications. Respondent's Exhibits Nos. 4 and After the approval, Water Oak gave prospective lessees amended P2 prospectuses, and entered into 60 or more leases with new residents to whom they had furnished amended prospectuses. Petitioner's Exhibit No. 7, a printed map of the park that is not part of any prospectus, labels a shaded portion in the northeast as "GOLFSIDE VILLAS AREA." Margerie Monski received a copy of the map on August 4, 1987, (T.411) before she and her husband leased a lot depicted on the unshaded portion of the map, in phase I. Respondent leased lot No. 2472 to Mr. and Mrs. Edward Reposa on April 4, 1988. T. 445; Petitioner's Exhibit No. 11. When respondent filed proposed prospectus amendments two days later, it had leased no other lot within the shaded area on Petitioner's Exhibit No. 7. Respondent leased lot No. 2510 to Mr. and Mrs. Alador Kurucz on April 20, 1988, and lot No. 2519 to Mr. and Mrs. Lloyd W. Wunder on June 8, 1988. Petitioner's Exhibits Nos. 12 and 13. Lots Nos. 2472, 2510 and 2519 all lie within the part of the park represented by the shaded area on Petitioner's Exhibit No. 7. But, as far as the evidence showed, none of the three lots' lessees has ever seen Petitioner's Exhibit No. 7 or any other map of the park on which Golfside Villas was depicted as a discrete section. No prospectus ever indicated that lots had been or were being leased in Golfside Villas. Unbeknownst to Water Oak, Mel Bishop Enterprises, Inc., the predecessor in interest who initially continued as park manager for Water Oak, filed a map similar to Petitioner's Exhibit No. 7 with the Bureau on October 27, 1987 (a prerequisite to its lawful use as advertising.) Petitioner's Exhibit No. 6. Lots depicted in the shaded area number far fewer than the 587 mentioned in the original prospectuses. The three original prospectuses, "P", "P86" and "P2", contain maps of phase I only. Front, back, left side and right side lot dimensions are listed for phase I, lot by lot. With respect to Golfside Villa lot dimensions, only the following appears: Front Left Side 1-587 - - - - 56 90 Petitioner's Exhibit No. 4. On April 6, 1988, respondent's principals were under the impression that no specific area within the park had ever been officially designated as Golfside Villas. Nothing in any of the materials they reviewed when respondent acquired the park located Golfside Villas at a particular spot on the land reserved for development in phase II. Testifying at hearing, petitioner's personnel conceded that respondent had no intention to mislead the Bureau with regard to any fact material to approval or acceptance of respondent's prospectus amendments. Nor did the evidence show that the fact that the respondent leased three lots depicted within the shaded area on Petitioner's Exhibit No. 7 would have been material in the Bureau's original decision to approve respondent's prospectus amendments.
Recommendation It is, accordingly, RECOMMENDED: That petitioner dismiss its notice and order of rejection. DONE AND ENTERED this 21st day of November, 1990, in Tallahassee, Florida. ROBERT T. BENTON, II 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 21st day of November, 1990. APPENDIX Petitioner's proposed findings of fact Nos. 1, 2, 3, 4, 5, 7, 8, 9, 11, 12, 13, 14, 16, 17, 18, 26, 30, 31, 32, 35, 37, 38, 41, 45 and 49 have been adopted, in substance, insofar as material. With respect to petitioner's proposed finding of fact No. 6, the pertinent part of the letter is quoted. Petitioner's proposed findings of fact Nos. 10, 15, 28, 33, 34, 39, 40, 42 and 50 pertain to immaterial matters. With respect to petitioner's proposed finding of fact No. 19, 24, 27, 43 and 44, no prospectus located a "Golfside Villas section of the park" at any specific place. Petitioner's proposed findings of fact Nos. 20, 21, 22, 23, 25 and 47 pertain to subordinate matters. With respect to petitioner's proposed finding of fact No. 29, Mr. Stoppa made the allegation, but no prospectus located a "Golfside Villas section of the park" at any specific place. With respect to petitioner's proposed finding of fact No. 36, only two such leases were proven. With respect to petitioner's proposed finding of fact No. 46, see paragraph 10 of the findings of fact. With respect to petitioner's proposed finding of fact No. 48, it was not clear from the evidence what the basis was. Respondent's proposed findings of fact Nos. 1, 2, 3, 5, 6, 7, 8, 9, 11, 12, 21 22, 24, 28, 29, 30, 31, 34, 35, 37, 38, 42, 43, 44 and 45 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 4, the number was 587. Respondent's proposed findings of fact Nos. 10, 25 and 39 pertain to immaterial matters. Respondent's proposed findings of fact Nos. 13, 14, 15, 16, 17, 18, 19, 20, 26, 27, 32, 33, 36 and 41 pertain to subordinate matters. With respect to respondent's proposed finding of fact No. 23, it is not clear what petitioner's policy was at any given time. With respect to respondent's proposed finding of fact No. 40, petitioner failed to prove its materiality. Copies furnished: Debra Roberts, Esquire Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32301 Daniel C. Brown, Esquire Katz, Kutter, Haigler, Alderman Davis, Marks & Rutledge, P.A. 215 South Monroe Street First Florida Bank Bldg., Suite 400 Tallahassee, FL 32301 E. James Kearney, Director Department of Business Regulation Florida Land Sales, Condominiums, and Mobile Homes 725 South Bronough Street Tallahassee, FL 32399-1000 General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1000
The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint filed against him, and, if so, what disciplinary action should be taken against him, if any.
Findings Of Fact At all times material hereto, Respondent Elbert Cecil Wright, III, has been licensed in the state of Florida as a state certified residential appraiser. He has been appraising residential property in Central Florida since 1983. On May 31, 2005, Respondent issued an appraisal report for vacant land known as Lot 212, Bella Collina West, Montverde, Florida. SunTrust Mortgage was Respondent's client and the intended user of the report. SunTrust made no complaints to Petitioner or to Respondent regarding the appraisal Respondent prepared. Bella Collina, Bella Collina East, and Bella Collina West are subdivisions which were being developed by the same developer. They are separated from each other by roads. In preparing his appraisal report, Respondent consulted MicroBase and MLS, the multiple listing service. He researched the public records and found there were no prior closed sales in Bella Collina West, where the subject property was located. Moreover, Respondent spoke to the sales staff at Bella Collina and was advised that there were no prior closed sales in Bella Collina West. Similarly, in researching the public records, Respondent found that the plat for Bella Collina West had not yet been uploaded so that it was accessible to the public. He did obtain the first page of the 19-page plat from the sales staff at Bella Collina. Respondent obtained the dimensions of Lot 212 from the sales staff. He was told the lot was 50' by 140' as were most of the lots in Bella Collina West. Respondent used these dimensions in determining the value of the lot and in his appraisal report. Unfortunately, Lot 212 was one of the few lots in the subdivision that was only 40' by 140'. The evidence is undisputed that the difference in the size of the lot between its represented size and its actual size had no impact on its value. Since the public records reflected no prior closed sales in Bella Collina West and since the sales staff told him there had been no closings, Respondent prepared his report using four comparable properties. Comparable 4 was in Bella Collina West as was the subject property but the sale on comparable 4 was still pending. Comparables 1, 2, and 3 were located in Bella Collina, not Bella Collina West. He used those comparables because of the proximity of the two subdivisions and because they were both considered upscale and unusual for subdivisions in that county. Even though Bella Collina West did not yet have paved roads, he drove by the subject property, taking photographs, and he viewed the comparables he located. The lot sizes for comparables 1, 2, and 3 were each approximately 50,000 square feet. Lot 212, the subject property, was thought by Respondent to be only 7,000 square feet but in actuality was only 5,600 square feet. Accordingly, it was necessary for Respondent to adjust or "offset" the value of the subject property because it was a much smaller lot. On the other hand, Lot 212 was located on the golf course which, along with the clubhouse and a number of other amenities, was part of Bella Collina West and not part of Bella Collina. Lot 212's location on the golf course substantially increased its value even though it was a small lot. Respondent determined based on the closed sales on comparables 1, 2, and 3 that $40,000 was the appropriate adjustment in value to make to offset the smaller size of Lot 212. He also considered the pending sale price for comparable 4 as an indicator although it lacked the reliability of a closed sale price. In determining the value of Lot 212, Respondent, therefore, considered size, location, and view. He also used the best information available to him as provided by the sales staff at a time when that information could not be verified by public records. Because the larger lots were similar in price with the smaller golf course view lot, Respondent computed an offset between a larger lot and a lot with a golf course view. In his appraisal report, he explained the basis for his offset theory and the amount he chose for the offset. No evidence was offered that the intended user of the report did not understand Respondent's explanation or disagreed with it. Although the comparables Respondent used had much bigger lots than the subject property, the comparables sold for only a slight difference in price. Lot 212's sales price was $665,900, and Respondent's comparable 1 sold for $685,000, a $20,000 difference despite the larger lot. Respondent's comparable 2 sold for $625,000 in March 2005, $40,900 less than the subject property despite its larger lot size. Comparable 3 sold for $695,000, a $30,000 difference despite its larger lot size. The pending sale on comparable 4 was for $665,000. As to comparable 2, with its closed sales price in March 2005 of $625,000, there appeared to be a subsequent sale two months later for $850,000. However, Respondent could not determine if it had actually closed because of conflicts in dates as to when it closed, which appeared to be subsequent to recordation. If it had not closed when he prepared his report, he was not required to include it in his report. Respondent decided not to include the $850,000 sale because in his professional opinion, it was not a legitimate sale. As a vacant lot in a subdivision being developed, the subject property had no street address. In the address section of his appraisal report, Respondent made an error and failed to indicate that the property was located in Bella Collina West, stating instead that the property was in Bella Collina. However, Respondent did accurately provide the legal description which clearly indicated the subject property was located in Bella Collina West. No evidence was offered that the intended user of the appraisal report did not know the subject property was located in Bella Collina West or was confused by Respondent's error. Although Petitioner's expert would have used different comparables, no evidence was offered to show that the appraised value placed on Lot 212 was inaccurate, negligent, or misleading in any way.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding Respondent not guilty and dismissing the Administrative Complaint filed against him in this cause. DONE AND ENTERED this 1st day of April, 2009, in Tallahassee, Leon County, Florida. S LINDA M. RIGOT 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 1st day of April, 2009. COPIES FURNISHED: Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N802 Orlando, Florida 32801-1757 Ned Luczynski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Donna Christine Lindamood, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801-1757 Daniel Villazon, Esquire Daniel Villazon, P.A. 1420 Celebration Boulevard, Suite 200 Celebration, Florida 34747
Findings Of Fact Respondent, Robert Zahner (Zahner), has been the city attorney for the City of Coral Gables (City) since 1967. The Country Club of Coral Gables (Country Club) was established by City founder George Merrick, prior to the City's incorporation. Since 1929, the City which owns the land and buildings from which the Club operates, has leased the property to private entities. Since 1935, the lessee of the property has been the Country Club, a non-profit corporation run by a board of directors elected by the Country Club membership. Between 1935 and 1958, the lease underwent various modifications and extensions. In 1958, the City Commission voted to extend the lease to July 31, 1990. Under the terms of the lease, the Country Club paid three percent of its gross annual income, but in no case less than $5,000 per year, to the City as rent. In 1977, the Country Club again came before the City Commission requesting a lease extension, this time to the year 2002. There was no change in the rent amount. The request for extension was to allow the Country Club to borrow money for construction, and the request was approved. In 1978 the Country Club asked the City Commission for rezoning so that it could expand its tennis courts. This request was approved. In May, 1980, the Country Club asked the City Commission for a $23,000 loan to repair its roof. The City Attorney advised that the City could not lawfully make such a loan, and no further action was taken on the matter. In 1981 the Country Club asked to expand its tennis club facilities, and this request was approved. In 1983 a significant portion of the Country Club burned down. A request by the Country Club to support its efforts to raise funds from citizens for the Country Club, was on the July 26, 1983, City Commission agenda, but was not taken up. A discussion of the status of the building was held on that date, but no action was taken. Instead of rebuilding the burned section with the insurance money, the Country Club decided to construct an already planned new section. On November 22, 1983, representatives of the Country Club presented a plan for restoration to the City Commission, which on motion of Commissioner Kerdyk approved the plan. On March 27, 1984, the City Commission authorized the City Manager to sign an affidavit needed by the Country Club to obtain a building permit. In April 1984, the Country Club requested extension of its lease to the year 2020. On motion of Commissioner Kerdyk, the City Commission agreed to the extension. In September 1984, the Country Club asked that the lease be reworded in order to satisfy the lending institutions from which the Country Club was borrowing money for renovations. The request was approved. When the Country Club initially undertook its restoration and remodeling plan, the Country Club leadership believed that there would be sufficient funds to accomplish both the rebuilding and the new construction. Cost overruns, diminishing membership, and other factors combined, however, to leave the Country Club with a new section, an old, burned-out section, and a significant debt. In 1987, the Country Club asked the City Commission to assist it, by contributing funds or otherwise, in overcoming that debt. On November 24, 1987, the City Commission met and discussed the problem. The only action taken was to invite the Country Club leadership to an up coming City Commission meeting to discuss proposed improvements. On January 26, 1988, the City Commission met with the Board of Directors of the Country Club to discuss the Country Club's request. The City Commissioners were informed that the Country Club's rent payments had been generating approximately $40,458.64 per year in income to the City. The Country Club vice-president proposed that the City rebuild the outside shell of the building, at a cost of $1,000,362 and the Country Club finance the remainder of the construction, about $1,900,000. The City Attorney advised that the City could not loan funds to the Country Club, because it was a private club. However, he opined that the City could participate in the rebuilding because it was the owner of the property. Action was postponed until the next meeting. On February 3, 1988, the Country Club made an offer to the City to increase its rent payment from three percent to six percent, if the City would rebuild the shell. The matter was raised at the February 9, 1988, meeting of the City Commission. Mayor Corrigan proposed that the City finance the rebuilding, but made no motion. Commissioner Wolff proposed that the City obtain funds from the Sunshine State Governmental Financing Commission and lend that money to the Country Club. The motion was seconded by Commissioner Kerdyk, and ultimately the City Commission resolved to refer the matter to the acting city manager to "work out financing without using taxpayer dollars." At the February 9 meeting, discussion was had on the issue of whether the City Commissioners had conflicts of interest, since they all had complimentary memberships to the Country Club. Mr. Zahner, the City Attorney, advised that they had no conflict. The issue of conflict of interest was again raised in subsequent meetings. Alternative proposals identified by the City Manager for funding the Country Club's rebuilding were discussed at the City Commission's March 8, 1988 meeting, but no action was taken. On June 30, 1988, the Country Club proposed that the City forgive lease payments until the year 2000. On August 30, 1988, the City Commission voted to suspend the lease payments, with the funds going instead to the maintenance and reconstruction of the facility. Membership in the Country Club is open to any person, provided they can pay the initiation fee and membership dues. At all times pertinent to this proceeding, the initiation fee was $1,000, although it sometimes was reduced to $500 during membership drives. The annual fee was $750. Membership entitles the member and his or her family to use the swimming pool, health club, tennis courts, and bar and restaurant. Members must pay for their meals. For more than twenty years the Country Club traditionally has awarded memberships to city officials and various other persons. The Country Club bylaws provide for such memberships. The bylaws provide for honorary memberships and complimentary memberships. Only one honorary membership has been given. The only difference between what the Country Club calls a complimentary membership and an honorary membership is the duration of the membership. Complimentary memberships run from year to year. Persons awarded complimentary memberships include the City Commissioners, Mayor, City Manager, Assistant City Managers, the City Clerk, City Attorney, Director of Public Works, Finance Director, City Architect, Fire and Police Chief, the University of Miami President, Football Coach, and Assistant Athletic Director, the Golf Pro at the City golf course, and the editor of the local social magazine. The complimentary memberships are reviewed each year and are not renewed after the recipient leaves his or her office. The Coral Gables Executive Club (Executive Club) is located in an office building at 550 Biltmore Way. The building and the Executive Club are owned by Albert Sakolsky, a local real estate developer. The Executive Club, which opened in the late 1980's, consists of a dining room and health club. Membership costs $700.00 initiation, and $50.00 per month dues. Mr. Sakolsky hired a public relations firm to promote the Executive Club. The firm recommended that complimentary memberships be given to community leaders and developed a list of persons who would receive the memberships. Over a hundred free memberships were granted. In February, 1989, Mr. Sakolsky wrote to Coral Gables City Manager Jack Eads, presenting the City with a "permanent corporate membership." Although the letter appeared to infer that the use of the health facilities would be free to those applying through the City's corporate membership, the practice was to charge holders of complimentary memberships such as Zahner $30 a month for the use of the health facilities if they desired to use them. With his letter, Mr. Sakolsky included membership applications for all the City Commissioners, as well as the Mayor the City Attorney, and Mr. Eads. Mr. Sakolsky and the City had had numerous disputes over the years on various issues. His presentation of the free corporate membership was an effort to, in his words, "bury the hatchet." A complimentary membership entitled the member to use the dining facilities. Soon after its inception, the Executive Club was opened to the public. The only privilege members received over non-members was a discount on their meals. A non-member could be given a complimentary membership after his first visit, thereby entitling him to receive a discount on subsequent visits. In September, 1989, the City Commission voted to lease space in the 550 Building. The rental rate was $20 per square foot. When the lease expired, the owner of the builder proposed a higher rate, which the City did not accept. The City vacated the building and rented space elsewhere. Zahner has been a member of the Country Club for more than 35 years and served as city attorney for the City for 26 years. Subsequent to his appointment as city attorney, Mr. Zahner's membership was changed by the Country Club to a complimentary membership. Under the terms of the complimentary membership, Zahner was not allowed to vote in Country Club elections or hold an office in the Country Club, but continued to retain all the other benefits he had been entitled to as a paying Country Club member. Zahner paid for his initiation fees to the Country Club, and paid his own dues until he became city attorney. Zahner used the Country Club for meetings of the Tenth Holder's Club, which is a golf social club. In order to belong to the Tenth Holder's Club, a person must also belong to the Country Club. About once a month, he went to dinner at the Country Club. Zahner had always considered the complimentary Country Club memberships honorary. As City Attorney, he advised several City Commissioners that receiving the Country Club membership created no conflict and that the membership did have to be reported on the financial disclosure forms. Zahner has no vote on the City Commission. No vote concerning the Country Club was pending before the City Commission when Zahner received his complimentary membership. Zahner was not involved in negotiating or drafting the lease with the Country Club, or any of the amendments to the lease; however, he did approve the amendments. Zahner understood that the complimentary memberships were a tradition in the City. He thought that the Country Club wanted more members from the city. No one from the Country Club ever asked him for any favors. No vote regarding the Executive Club was pending before the Commission at the time he was given the membership. Zahner believed that the complimentary membership was given to him to generate business for the Executive Club. No one connected with the Executive Club or the 550 Biltmore Building has ever asked Zahner for any favors. Zahner was not involved in negotiating the lease with the 550 Biltmore Building; however, he did approve the final draft.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Ethics enter a final order and public report finding that Robert Zahner violated Section 112.313(4), Florida Statutes, by accepting a free membership to the Coral Gables Country Club and by accepting a free membership to the Executive Club. I therefore recommend a civil penalty of $1,000 and restitution of $750 for the violation involving the Coral Gables Country Club and a civil penalty of $1,000 and restitution of $600 for the violation involving the Executive Club for a total penalty of $3,350. The restitution in both cases is the amount a member of the general public would have had to pay for one year's dues. DONE AND ENTERED this 23rd day of May, 1994, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 23rd day of May, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3911EC To comply with the requirements of Section 120.59(2), Florida Statutes, (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact Paragraphs 1-18: Accepted. Paragraph 19: The first sentence is rejected as unnecessary. The remainder of the paragraph is accepted in substance. Paragraph 20: The first sentence is accepted. The second sentence is accepted in substance. Paragraph 21: Accepted. Paragraph 22: The first sentence is accepted. The second sentence is accepted in substance. Paragraphs 23-26: Accepted. Paragraph 27: Accepted in substance. Paragraphs 28-33: Accepted. Paragraph 34: The first sentence is rejected as constituting a conclusion of law. The second sentence is accepted. The third sentence is rejected as constituting argument. The fourth sentence is accepted in substance. Paragraphs 35-36: Rejected as constituting argument. Paragraphs 37-40: Accepted. Paragraph 41: The first and second sentences are accepted in substance. The third sentence is accepted in substance to the extent that the city officials who were receiving complimentary memberships through the City's corporate membership could use the health facilities for an additional fee of $30 per month but rejected to the extent that it implies that the city officials could use the health facilities at no cost. Paragraphs 42-44: Accepted. Paragraph 45: The first sentence is rejected as constituting a conclusion of law. The second sentence is accepted. The third sentence is rejected as constituting argument. Paragraphs 46-47: Rejected as constituting argument. Respondent's Proposed Findings of Fact Paragraphs 1-4: Accepted. Paragraph 5: Rejected as subordinate to the facts actually found. Paragraph 6: Rejected as unnecessary. Paragraph 7: Accepted. Paragraph 8: The last sentence is rejected as unnecessary. The remainder of the paragraph is accepted. Paragraphs 9-12: Accepted. Paragraph 13: The last sentence is rejected as constituting a conclusion of law. The remainder of the paragraph is accepted in substance. Paragraph 14: Accepted in substance. Paragraphs 15-16: Accepted. Paragraphs 17-19: Accepted in substance. Paragraphs 20-21: Accepted. Paragraphs 22-29: Accepted in substance. COPIES FURNISHED: Raoul G. Cantero, Esquire Suite 1600 2601 South Bayshore Drive Miami, Florida 33133 Virlindia Doss, Esquire Department of Legal Affairs The Capitol, PL-01 Tallahassee, Florida 32399-1050 Bonnie Williams Executive Director Florida Commission On Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Phil Claypool, Esquire General Counsel Ethics Commission 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahasee, Florida 32317-5709
Findings Of Fact At all pertinent time Country Meadows Estates, Ltd. (Country Meadows), a Florida limited partnership, has been the park owner of Country Meadows Mobile Home Park (the Park) which is located in Plant City, Florida. Century Realty Funds, Inc. (Century), is the general partner of Country Meadows Estates, Ltd. Century has been in the business of operating adult and retiree mobile home parks for approximately seven years. It operates over 20 different parks. Country Meadows has been in existence for approximately five years. Approximately 510 lots have been offered for rent or lease in the Park. When the last phase of the Park is completed, approximately 750 lots will have been offered for rent or lease. Yearly rental increases at Country Meadows equate to the increase in the consumer price index, or a $5 minimum increase, whichever is greater. This rental agreement is guaranteed by Century for the lifetime of the mobile home owners as long as they reside in the Park. Charge Of Failure To Deliver Approved Prospectus. Century retained a law firm to provide assistance in securing approval of its proposed prospectus, lease agreement and park rules and regulations and paid the law firm a fee for its services. On November 27, 1984, Country Meadows filed with the Department of Business Regulation, Division of Land Sales, Condominiums and Mobile Homes (the Division), a prospectus for the Park. In order to be able to increase rent in January, 1985, as provided in existing lot leases, Country Meadows tried to get a copy of the filed prospectus to all existing lot lessees by the end of 1984. Starting December 31, 1984, Country Meadows began delivering a copy of this prospectus to each new lessee of lots in the Park. On January 7, 1985, the Division notified Country Meadows of deficiencies in the prospectus. Century, often through its supervisor of property management operations, and its legal counsel held numerous telephone conferences with the Division and numerous conferences among themselves regarding the notice of deficiencies. On February 25, 1985, Country Meadows sent the Division a revised prospectus addressing the deficiencies. Country Meadows substituted the revised prospectus as the prospectus delivered to new lessees of lots in the Park after February 25, 1985. On March 13, 1985, the Division sent Country Meadows another notice of deficiencies. The deficiencies found this time were in the original prospectus but were not noted in the first notice of deficiencies. On March 15, 1985, Country Meadows stopped delivering a prospectus to new lessees of lots in the Park after March 15, 1985. Country Meadows believed the law prohibited it from delivering an unapproved prospectus after that date but did not believe that it was prohibited from continuing to do business until a prospectus was approved. Rather, Country Meadows believed the law allowed it to continue to enter into new lot leases in the Park without an approved prospectus after March 15, 1985, but that it would have to deliver a prospectus when approved and give lessees the right to rescind their lot leases after review of the approved prospectus. On May 22, 1985, Country Meadows sent the Division a second revised prospectus. On November 6, 1985, Country Meadows sent the Division yet another revised prospectus that distinguished between increase in base rent on a lot and increase in other fees associated with rental of a lot. On November 21, 1985, the Division approved Country Meadows' last revised prospectus for the Park. Between March 16 and November 5, 1985, Country Meadows entered into 79 new Park lot rental agreements without delivering a prospectus to the lessee. Instead, the applicable filed but not yet approved prospectus was made available for inspection. Within 45 days after approval of the third revised prospectus on November 21, 1985, Country Meadows distributed an approved prospectus to all lessees, including those who entered into leases between March 16 and November 5, 1985. Century made a good faith effort to correct the deficiencies the Division cited in its proposed prospectuses. Charge Of Failure To File Advertising. In late summer or early fall, 1985, William and Nancy Hines responded to an advertisement in a magazine and asked for information. Century sent them documents. Some were not identified. One was entitled Greetings From Sunny Florida! (Petitioner's Exhibit 7). Century generally gives this document to persons who express an interest in Country Meadows, inviting them to pursue their interest and make a visit to the Park, free of charge. Later, Century sent a follow-up letter giving new information, further "selling" the benefits of Century parks, and finally asking the Hineses to indicate if they were still interested. (Petitioner's Exhibit 10). The Hineses arranged to make a visit to the park on November 15, 1985. At the Park, a County Meadows sales representative spoke with the Hineses and gave them a document entitled "Approximate Monthly Living Expenses At Country Meadows" (Petitioner's Exhibit 9). Country Meadows gives this document to persons who request information about Country Meadows. During the visit, the Hineses also were given a document entitled "Before You Purchase A Home: Questions And Answers You Should Know" (Petitioner's Exhibit 8). Country Meadows (and Century in general) usually sends this document to persons who express an interest in Country Meadows (or another Century park). It poses and answers general questions about mobile home parks and, in so doing, touts Century and its mobile home park developments. None of the documents (Petitioner's Exhibits 7, 8, 9 and 10) were filed with the Division. The Hineses entered into a lease agreement on November 15, 1985. In late winter or early spring of 1985, Elmer and Adele Johnson also saw an advertisement in a magazine and arranged to visit Country Meadows. At the visit, a Country Meadows sales representative gave the Johnsons a copy of a document entitled "Century: Mobile Home Communities, Affordable, Award-Winning, Adult Mobile Home Living-Now offering 11 outstanding Central Florida Mobile Home Communities for your inspection!" (Petitioner's Exhibit 11). It identified and listed information on each of the eleven parks, including Country Meadows. After the visit, Country Meadows sent the Johnsons a follow-up letter giving new information, further "selling" the benefits of Century parks and finally asking the Johnsons to indicate if they were still interested. (Petitioner's Exhibit 10). The letter is a standard letter (addressed "Dear Friend") used to re- contact prospective customers who have visited a Century park (as, for example, hundreds have visited Country Meadows). On March 15, 1985, the Johnsons returned to Country Meadows. They were given a copy of Petitioner's Exhibit 8 and entered into a lease agreement. None of these documents (Petitioner's Exhibits 8, 10 and 11) were filed with the Division. Petitioner's Exhibit 11 also was used and given to Myre Lutha Tillman, a prospective purchaser, in approximately July, 1985. From at least May 29, 1984, through October 6, 1986, a billboard sign advertising Country Meadows (a picture of which is Petitioner's Exhibit 4) was located on Frontage Road and could be seen from Interstate 4, approximately six miles east of Plant City. Century admits the billboard was advertising that was not filed with the Division. The billboard was removed some time after October 6, 1986, and no longer is in use. Country Meadows also placed newspaper advertisements of the Park in the Tampa Tribune on Sunday, February 2, and Sunday, February 26, 1986 (Petitioner's Exhibits 5 and 6, respectively). Century admits that this advertising was not filed with the Division. Some of the information Century gave prospective purchasers including Petitioner's Exhibits 7, 8, 9, 10 and 11-- was given only to persons who expressed an interest in a Century mobile home park or at least requested information. Century's supervisor of property management operations did not think this information was "public" and therefore not "advertising" under the mobile home park statutes. This partially explains why Century did not file this information with the Division. Charge Of False Or Misleading Advertising. Century admits that it used a pamphlet entitled "Country Meadows: The Golden Dream" (Petitioner's Exhibit 12), which it properly filed with the Division, as advertising distributed to the public. The pamphlet advertises "Exercise Facilities & Locker Rooms" and "Security with Access Gatehouse." The only locker rooms ever at Country Meadows were small package lockers located in the mailroom. The pamphlet, while technically not false, was misleading because it gives the impression of a locker room that would be used to change clothes in conjunction with the exercise room. There always has been "Security with Access Gatehouse" at Country Meadows. Initially, the gatehouse was placed at the entrance of the Park and was manned by paid residents of the Park. The gatehouse was manned during the day until early evening hours and on weekends (in part to direct visitors and guests to residents.) Later, approximately in early 1986, the gatehouse was moved back from the entrance and was equipped with automatic security gate arms. The residents were given an access code which, when punched in at the gatehouse, would automatically open the gate arm on either entering or leaving the Park. Country Meadows no longer hired residents to man the gatehouse but hired a full- time security guard who roves Country Meadows and an adjacent Century park that now has approximately 100 home sites leased. The security guard's hours of employment include the early morning and the evening hours. Sometime after installation of the new gatehouse (no witness could say when), lightning struck the gate and blew out the computer that controls the gate arm. The computer was fixed and was operative for a while without access codes. It was anticipated that the access code mechanism would be operative and new access codes would be given to the residents by the end of August, 1987. Again, no witness could testify to more precise time frames in which these events took place. Century also admits that it used another pamphlet or brochure, similar to Petitioner's Exhibit 12 but not filed with the Division, for advertising to the general public. This other pamphlet or brochure was entitled "The Golden Dream: Country Meadows" (Petitioner's Exhibits 13). It was given to Gerald Gott, among others, at a seminar in Merrillville, Indiana, sometime between October 10 and December 20, 1985. Like Petitioner's Exhibit 12, Petitioner's Exhibit 13 includes a color-coded map of Country Meadows showing: (1) "Home Sites Sold"; (2) "Home Sites Available"; and (3) "Final Phase, Future Home Site." In other colors, the map shows one clubhouse and one pool located between the first two color-coded areas (and bordered on the third side by golf course), and a second clubhouse and second pool nestled inside the third color- coded area (the "Final Phase"). Neither of the two pamphlets (or brochures) use the word "proposed" to describe the second clubhouse or second pool. The "Final Phase" of Country Meadows now is underway, and it will include a clubhouse and pool. The clubhouse will be a closed pavilion with a patio. The billboard advertising Century used for at least from May 29, 1984, through October 6, 1986, (Petitioner's Exhibit 4) stated: "Price [$29,900] Includes: Golf-Lakes-Pool- Clubhouse." However, Country Meadows actually was selling homes (and leasing lots) in the Park without golf included in that price. (Golf is optional for purchasers who pay an additional golf membership fee.) When prospective purchasers made an issue of the billboard advertising, Country Meadows on at least one occasion made an accommodation, including in the purchase price two years of free golf on the "gold card program" and charging $240 per year for golf privileges after that. The Tampa Tribune newspaper advertising (Petitioner's Exhibits 5 and 6) included the statement: "Free *Golf For 5 Years [under certain conditions]." The asterisk was intended to refer the reader to an asterisk near the bottom of the ad that said: "*No Free Golf On $32,900 Homes." Mitigation. Century has made reasonably diligent efforts in many respects both to cooperate with the Division to achieve compliance with the statutes and rules and to address and resolve the complaints and desires of residents of the Park.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Petitioner, Department of Business Regulation, Division of Land Sales, Condominiums and Mobile Homes, enter a final order: Dismissing the first and fourth charges alleged in the Notice To Show Cause; Holding the Respondent, Century Realty Funds, Inc., d/b/a Country Meadows Estates, Ltd., guilty of the violations alleged in the second and third charges in the Notice To Show Cause; Ordering the Respondent to cease and desist from the use of unfiled and false or misleading advertising; and Ordering the Respondent to pay to the Petitioner a total civil penalty in the amount of $5000 for the violations for failure to file advertising and false or misleading advertising. RECOMMENDED this day of September, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of September, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0165 Explicit rulings on the parties' proposed findings of fact are made to comply with Section 120.59(2), Florida Statutes (1985): Petitioner's Proposed Findings Of Fact: 1.-4. Accepted and incorporated. 5.-6. Subordinate and unnecessary. 7.-26. Accepted and incorporated to the extent necessary and not subordinate. Accepted and incorporated. Rejected as not within the charges in the Notice To Show Cause. 29.-30. Rejected as contrary to facts found. Subordinate to facts found. Accepted and incorporated. Rejected as irrelevant and not within the charges in the Notice To Show Cause. Accepted and incorporated. Subordinate to facts contrary to those found. 36.-38. Subordinate to facts found. 39.-41. Accepted and incorporated. 42.-44. Subordinate to facts found. 45.-47. Accepted and incorporated to the extent necessary and not subordinate. 48.-53. Accepted and incorporated. Rejected as contrary to facts found. There are lockers in the mailroom, but the advertising is misleading. Subordinate to facts found. Subordinate. Respondent's Proposed Findings Of Fact: 1-8 Accepted and incorporated. Unnecessary. Except that the reasonableness of the fee was not the subject of any evidence, accepted and incorporated. 11.-12. Accepted and incorporated. 13. Unnecessary. 14.-18. Accepted and incorporated. 19. Rejected as not proven if, when or why a third revision was demanded. The evidence proves only that the third revision provides some information the Division had requested. 20.-21. Accepted and incorporated. Rejected as contrary to fact found. (It was not simply a matter of Century waiting for the Division to approve a filed prospectus.) Accepted and incorporated. 24.-31. Irrelevant and unnecessary. (As to 29. to 31., the issues were not the same as in this case.) 32.-35. Subordinate to facts found (except it was not proven that every reasonable effort was made.) 36.-40. Accepted and incorporated except, as to 38, "financial security" was not an issue in the Notice To Show Cause and is irrelevant.) 41. Accepted and incorporated (but the lockers were in the mailroom, and the advertisement of them is misleading.) 42.-43. Accepted and incorporated. Irrelevant and unnecessary. Subordinate to facts found. Rejected as contrary to facts found. Irrelevant and unnecessary. Accepted and incorporated. See 47, above. Rejected as contrary to facts found. (Petitioner's Exhibit 12 was.) Accepted and incorporated. Accepted and incorporated (although the first notice of deficiency, while incomplete, was timely.) Rejected as not proven precisely what Century's decision, i.e., the understanding of its supervisor of property management operations, was based on. 54.-59. Accepted and incorporated. Unnecessary. Accepted and incorporated. Rejected as conclusion of law. 63.-64. Accepted and incorporated except to the extent conclusion of law. 65. Rejected as not proven. COPIES FURNISHED: Debra Roberts, Esquire Paul Thomas Presnell, Jr., Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1927 Ronald L. Clark, Esquire Michael A. Tewell, Esquire MURPHY & CLARK, P.A. Post Office Box 5955 Lakeland, Florida 33807-5955 Richard Coats, Director Division of Florida Land Sales, Condominiums and Mobile Homes The Johns Building 725 South Bronough Street Tallahassee, Florida 32399-1927 James Kearney, Secretary Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32399-1927 Thomas A. Bell, Esquire General Counsel Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32399-1927
The Issue Does the Department of Business and Professional Regulation, Division of Condominiums, Timeshares and Mobile Homes’ (“the Division”), approval of timeshare developers’ requests to provide purchasers with a public offering statement via a website link amount to an unadopted rule within the meaning of section 120.52(8)(a), Florida Statutes (2017).1/ Also, does the Division’s approval of timeshare developers’ requests to provide purchasers with public offering statements via a website link amount to an invalid exercise of delegated legislative authority within the meaning of section 120.52(8)(c).
Findings Of Fact The following findings of fact are based on exhibits accepted into evidence, admitted facts set forth in the pre- hearing stipulation, and matters subject to official recognition. Relevant Statutes and Rules Pertaining to Timeshares Chapter 721 of the Florida Statutes is known as the “Florida Vacation Plan and Timesharing Act” (“the Act”). § 721.01, Fla. Stat. The Florida Legislature intends for the Act to “[p]rovide full and fair disclosure to the purchasers and prospective purchasers of timeshare plans.” § 721.02(3), Fla. Stat. The Division is the state agency responsible for enforcing the Act. Section 721.10(1), Florida Statutes, provides that a purchaser2/ can cancel a contract to purchase a timeshare interest “until midnight of the 10th calendar day following whichever of the following days occur later: (a) The execution date; or (b) The day on which the purchaser received the last of all documents required to be provided to him or her ” (emphasis added). Section 721.10(1) further provides that “[t]his right of cancellation may not be waived by any purchaser or by any other person on behalf of the purchaser. Furthermore, no closing may occur until the cancellation period of the timeshare purchaser has expired.” A “public offering statement” is the term describing a single-site timeshare plan or a multisite timeshare plan, including any exhibits attached thereto as required by sections 721.07, 721.55, and 721.551. Section 721.07(6)(a) requires that a timeshare developer “shall furnish each purchaser” with “[a] copy of the purchaser public offering statement text in the form approved by the division for delivery to the purchasers.” (emphasis added). Florida Administrative Code Rule 61B-39.004(1) provides that “a developer of a single-site timeshare plan shall deliver to every purchaser of the single-site timeshare plan a single-site purchaser POS.” (emphasis added). Rule 61B-39.004(1) mandates that a public offering statement shall contain: A copy of the single-site registered public offering statement text as prescribed in Section 721.07(5), Florida Statutes, and Rule 61B-39.003, F.A.C.; A copy of the exhibits prescribed in Sections 721.07(5)(ff)1., 2., 4., 5., 8., and 16., Florida Statutes, as applicable. Pursuant to Section 721.07(6)(b) and Section 721.07(5)(ff)19., Florida Statutes, if the single-site is one created as a tenancy-in-common, the purchaser shall receive the document or documents creating the tenancy-in-common, including at a minimum a Declaration of Covenants, Conditions and Restrictions; and Any other exhibit that the developer has filed with the division pursuant to Section 721.07(5), Florida Statutes, and Rule 61B-39.003, F.A.C., which the developer is not required but elects to include in the purchaser POS pursuant to Section 721.07(6)(d), Florida Statutes. In short, a public offering statement contains all of the documents that a timeshare developer is required to give to a purchaser. Its purpose is to apprise a purchaser of everything that he or she needs to know about a timeshare. As a result, a public offering statement can be as much as 100 pages long. Section 721.07(3)(a)1. requires that: Any change to an approved public offering statement filing shall be filed with the division for approval as an amendment prior to becoming effective. The division shall have 20 days after receipt of a proposed amendment to approve or cite deficiencies in the proposed amendment. If the division fails to act within 20 days, the amendment will be deemed approved. The Division allows timeshare developers to provide purchasers with a POS through “alternative media.” As set forth in rule 61B-39.008(1), Developers may provide purchasers with the option of receiving all or any portion of a single-site or multi-site purchaser POS through alternative media in lieu of receiving the written materials in the format prescribed in Rule 61B-39.004 or 61B- 39.006, F.A.C., as applicable. The purchaser’s choice of the delivery method shall be set forth in writing on a separate form which shall also disclose the system requirements necessary to view the alternative media, which form shall be signed by the purchaser. The form shall state that the purchaser should not select alternative media unless the alternative media can be viewed prior to the 10 day cancellation period. The alternative media disclosure statement shall be listed on the form receipt for timeshare documents in the manner prescribed in DBPR Form TS 6000-7, Receipt for Timeshare Documents, or DBPR Form TS 6000-7, Receipt for Multisite Timeshare Documents, as both of which are referenced in Rule 61B-39.003, F.A.C. Rule 61B-39.001(1) defines “alternative media” as “any visually or audibly perceptible and legible display format which may require the use of a device or a machine to be viewed, including CD-ROM, microfilm, electronically transferred data, computer disk, computer or electronic memory, cassette tape, compact disk or video tape.” Rule 61B-39.008(3) provides that: Prior to delivery of the purchaser POS through alternative media, the developer must submit to the division a copy of the purchaser POS through the alternative media proposed to be used by the developer together with an executed certificate, using the form prescribed in DBPR Form TS 6000-8, the Certificate of Identical Documents, referenced in Rule 61B-39.003, F.A.C., certifying that the portion of the purchaser POS delivered through the proposed alternative media is an accurate representation of and, where practical, identical to the corresponding portion of the written purchaser POS. Facts Specific to the Instant Case Orange Lake Country Club, Inc. (“Orange Lake Country Club”), is the “developer” within the meaning of section 721.05(1) for the timeshare plans known as Orange Lake Country Club Villas, a Condominium (“Orange Lake”); Orange Lake Country Club Villas III (“Orange Lake III”); and Orange Lake Country Club Villas IV, a Condominium (“Orange Lake IV”). The aforementioned timeshare plans shall be collectively referred to as the “Orange Lake Timeshare Plans.” The Orange Lake Timeshare Plans are “single-site timeshare plans” as defined by rule 61B-39.001(13). Via letters dated April 24, 2015, Orange Lake and Orange Lake III filed amendments to their alternative media disclosure statements with the Division. In addition to providing for purchasers to receive documents such as the POS in writing or via CD-ROM, the amended alternative media disclosure statements gave purchasers the option of receiving documents through the internet at http://orangelake.com/legaldocuments/index.php. The amended alternative media disclosure statements contained a notice that a PDF reader and one of three web browsers (Internet Explorer 9 or above, Google Chrome, or Firefox) were required. The amended alternative media disclosure statements instructed purchasers how to access documents through the link: Open the link, http://orangelake.com/ legaldocuments/index.php. in your web browser. Enter the user name: hoEXliday and password: welcome! Follow the following steps: Step 1: Please select the link to your resort. Step 2: Please select the Condominium, if applicable. Step 3: Please select the State where you purchased. Step 4: Please select the Public Offering Statement. Via letters dated April 28, 2015, the Division approved the amended alternative media disclosure statements “for filing and use in the timeshare plan.” Before retiring, Mr. Rudisill worked as a regional service manager for York International. He oversaw 50 service technicians and sales engineers. Mr. Rudisill used a computer at work and had an e-mail address associated with his position at York International. Mr. Rudisill acquired his first home computer 35 to 40 years ago and has owned a home computer ever since. He currently has an e-mail address and internet access via three different web browsers. Ms. Rudisill has no reported employment history. She uses a home computer and has an e-mail address. The Rudisills maintain a permanent residence in Georgia but travel to Florida for vacations. Between 2002 and 2015, the Rudisills purchased approximately 11 timeshare interests for use as vacation residences. Neither Mr. Rudisill nor Ms. Rudisill read any of the public offering statements associated with the aforementioned timeshare purchases. Ms. Rudisill considers she and her husband to be well- versed with the process of purchasing timeshares. On June 14, 2015, the Rudisills executed purchase agreements to acquire week 32 for unit 5280 at Orange Lake and week 29 for unit 87911 at Orange Lake III. These purchases were made so that they would have vacation residences. Both acquisitions utilized the alternative media disclosure statements that had been approved by the Division on April 28, 2015. As noted above, the Rudisills had the option to receive documents in written format, via a CD-ROM, or through a website link. The Rudisills placed their initials next to a box indicating they agreed to accept documents electronically via a link to http://orangelake.com/legaldocuments/. On June 14, 2015, the Rudisills executed documents pertaining to the Orange Lake and Orange Lake III timeshares stating that “[t]he undersigned acknowledges that the items listed below have been received and the timeshare plans and specifications have been made available for inspection.” The aforementioned items included “Public Offering Statement Text.” However, neither Mr. Rudisill nor Ms. Rudisill ever attempted to access the link provided to them by the Orange Lake Country Club. Neither Mr. Rudisill nor Ms. Rudisill ever asked for the documents to be provided in a different format. The Rudisills initiated the instant litigation in order to cancel the purchase agreements. They cannot afford the timeshares and are unable to travel. There is no allegation that Orange Lake Country Club coerced the Rudisills into purchasing the timeshares at issue or took advantage of them in any way.
Findings Of Fact Respondent Albert Wade Anderson holds a business degree from Washington University and a theology degree from Princeton University. After six years, he left the ministry to sell insurance. In 1965, he was licensed to sell life insurance in Minnesota, and continued selling life insurance after he moved to Fort Myers, Florida, in 1967. Respondent is licensed in Florida as an ordinary life, including disability, insurance agent and as a general lines agent. Petitioner's Exhibit No. 1. In May of 1980, Mr. Anderson, newly licensed by petitioner to sell property and casualty insurance, took a job with Atlas Insurance Agency's Fort Myers office. Atlas Insurance Agency paid respondent a weekly salary of $200 plus "$6.75 per program or deal," (T. 62), i.e., per customer. Almost invariably, respondent sold a motor club membership to any customer who bought a personal injury protection policy; Mr. Anderson could not recall with certainty a single exception. (T. 66.) "A motor club is an organization which provides certain designated services to motorists, including such things as guaranteed arrest bond certificates, towing and labor for disabled automobiles, map drawing services, often accidental death benefits, and similar related services . . . [for] motorists." Deposition of Andrew M. Beverly (Deposition), p. 6. Among motor club membership benefits are many services which are not included in "standard coverage." Deposition, p. 7. Motor club membership is "an important coverage . . . [An] insured should be made aware of this coverage." Deposition, p. 9. An insurance agent "should explain the different [motor club] coverages and options to a potential insured." Deposition, p. 19. COUNT ONE Jeanne Whyte, assistant head nurse at Lee Memorial Hospital on the 11- to-7 shift, came into the Fort Myers office of Atlas Insurance Agency on June 10, 1980. Ms. Whyte graduated from high school and has attended about a year's worth of college courses from time to time, in addition to her training as a nurse. When she went to the Atlas Insurance Agency, it was with the intent to purchase the least expensive automobile insurance available. She was already a member of the American Automobile Association. Respondent Anderson persuaded her, however, that she should also purchase liability insurance to protect her home and other assets. In explaining her potential benefits, Mr. Anderson said "something about towing, but [Ms. Whyte] didn't connect it with . . . a club or anything." (T. 27.) Before she left the office, she wrote a check for $275, and signed documents, including a membership application for American Touring Association, Inc., Respondent's Exhibit No. 1. Of the $275, $186 was used to purchase bodily injury liability, property damage liability, and personal injury protection, in the form of a combination automobile policy from Kenilworth Insurance Company, No. C-1-826686, Petitioner's Exhibit No. 3; $75 was used to purchase a membership in American Touring Association, Petitioner's Exhibit No. 4; and $14 was not accounted for by the evidence. When Ms. Whyte discovered that $75 had been used to purchase a membership in American Touring Association, she tried to obtain a refund from Atlas Insurance Agency, originally without success; but she eventually obtained a $75 refund, after contacting the Insurance Commissioner's office. This experience notwithstanding, Ms. Whyte purchased automobile insurance a year later from respondent, who by that time was employed with another insurance agency, "because [she didn't really think it was his idea to put [her] in the American Touring Club." (T. 29.) COUNT THREE When James Hanney, a high school graduate, entered Atlas Insurance Agency's office in Fort Myers, on or about August 11, 1980, he was under the impression that his parents' membership in the American Automobile Association inured to his benefit. Whether this impression was accurate was not clear from the evidence. In any case, Mr. Hanney told the woman he found in the Atlas Insurance Agency office that he wanted minimal insurance coverage. She sold him a $10,000 personal injury protection policy with an $8,000 deductible, issued by Fortune Insurance Company, No. AP 1-10-02821 with a premium of less than $50, and a membership in the Nation Motor Club for $35. Respondent and Mr. Hanney each signed the insurance policy. Petitioner's Exhibit No. 7. Among other documents, Mr. Hanney signed an application for membership in the Nation Motor Club, Inc., Respondent's Exhibit No. 2. COUNT FIVE On or about May 17, 1980, James Allen Foster, a high school graduate, went to the Fort Myers office of the Atlas Insurance Agency to buy whatever insurance was necessary to register the car he and Barbara Gonzalez (now Foster) had recently purchased. He did not ask for a motor club membership and would not have purchased such a membership if he had known it was optional. He did, however, sign an application for membership in the American Touring Association, Inc., Respondent's Exhibit No. 3, among other documents. After telling Mr. Foster and Ms. Gonzalez about potential benefits, including "towing and lost key coverage, Mr. Anderson sold them a $10,000 personal injury protection policy with an $8,000 deductible written on the American Specialty Insurance Company, No. PA 02 03 59, Petitioner's Exhibit No. 9, with a premium of $44, in addition to the membership in the American Touring Association. Howard Vogel and Kevin Cox were the principals of Atlas Insurance Agency, a Florida corporation owned by Cox, Vogel, Inc., during the time respondent Anderson worked for the agency. They instructed respondent to attempt to sell motor club memberships along with every automobile insurance policy he might sell, and told him how to go about it. The "technique was to package the benefits and quote one price," (T. 56; Testimony of Respondent), the aggregate of the motor club membership fee and the policy premium. Respondent was told by his employers "to not emphasize" the motor club memberships. Jeanne Whyte, James Hanney, and James Allen Foster each signed a form application for motor club membership, but only the application Mr. Hanney signed listed the membership fee or otherwise indicated that a separate fee or premium was being charged for the motor club membership. Respondent deliberately withheld this fact from Ms. Whyte and Mr. Foster when making his oral presentation and no document furnished to Ms. Whyte or to Mr. Foster disclosed the fact. Neither did respondent offer either of these customers a choice between memberships in different motor clubs. An insurance "agent has an absolute duty to the insured to explain to him what he is selling him and what it does for him," Deposition, p. 14, although the name of the policy is not nearly as important as the explanation of the coverage. Simply omitting the formal policy name would not fall below "the minimum standards of the business, the industry." Deposition, p. 16. "[T]he important thing is to explain to the insured he's buying something, and that what he is paying for is this." Id. Before making a sale, the insurance "agent owes it to the insured to explain each coverage and tell him he's paying for it and what the benefits of the coverage are." Deposition, p. 22. Both petitioner's recommended order to hearing officer and respondent's proposed order have been given careful consideration. Findings proposed by the parties which are not included in the foregoing findings of fact have been rejected as inconsistent with the evidence or omitted as irrelevant.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner suspend respondent's licensure under Chapter 626, Florida Statutes (1979), for a period of sixty (60) days. DONE AND ENTERED this 16th day of December, 1981, in Tallahassee, Florida. ROBERT T. BENTON, II 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 16th day of December, 1981. COPIES FURNISHED: David A. Yon, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 Thomas F. Woods, Esquire Suite 112 1030 East Lafayette Street Tallahassee, Florida 32301 The Honorable Bill Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32301
The Issue All cases involve loan funding in the 2002 funding cycle for the HOME Rental program. The issue in DOAH Case No. 02-4137 is whether Respondent properly determined that Petitioner's application for the Magic Lake Villas development failed to meet the applicable scoring threshold. If Petitioner fails to prevail in DOAH Case No. 02-4137, DOAH Case No. 02-4594 is moot. If Petitioner prevails in DOAH Case No. 02-4137, the issue in DOAH Case No. 02-4594 is whether Respondent's rescoring of the application of the competing developer of the Brittany Bay development erroneously placed the Brittany Bay application ahead of the Magic Lake Villas application. The issue in DOAH Case No. 02-4726 is whether Respondent's rescoring of the application of the competing developer of the Brittany Bay development erroneously placed the Brittany Bay application ahead of Petitioner's application for another development, Magnolia Village. The 2002 funding cycle is closed, so, pursuant to Rule 67-48.005(4), Florida Administrative Code, Petitioner's application or applications would be included in the 2003 funding cycle, if it prevails in DOAH Case No. 02-4594 or 02-4726.
Findings Of Fact Respondent is a public corporation whose purpose is to administer programs for the financing and refinancing of affordable housing in Florida. The HOME Rental program is one of the programs administered by Respondent. Petitioner is a not-for-profit corporation that is in the business of developing affordable residential housing in Florida. Petitioner filed two applications for funding in the 2002 HOME Rental funding cycle. Petitioner's Magic Lake Villas application sought $5 million in HOME funds for a development costing about $6.5 million, and Petitioner's Magnolia Village application sought $3 million in HOME funds for a development costing about $3.5 million. Respondent receives funds for the HOME Rental program from the U.S. Department of Housing and Urban Development (HUD). Because the federal funds allocated to Florida are insufficient to meet demand, Respondent has adopted a competitive process for the allocation of these funds to developers seeking to develop qualifying projects. Rules 67-48.004 and 67-48.005, Florida Administrative Code, detail the scoring procedure applicable to HOME Rental applications. The application for the HOME Rental program 2002 funding cycle contains certain threshold items. Respondent rejects any application that fails to pass the threshold items. The scoring process for qualifying applications starts with a preliminary score for each application. Applicants may challenge these preliminary scores assigned to competing applications for scoring errors by issuing Notices of Possible Scoring Error (NOPSEs). After examining the NOPSEs filed against its application, as well as Respondent's proposed decision concerning each NOPSE, a developer may submit supplemental information, which is known as a Cure. The Cure information is limited to material responsive to the NOPSEs or preliminary scoring. After the applicant has submitted a Cure, competing applicants may issue Notices of Alleged Deficiencies (NOADs) to challenge the information submitted as a Cure. Respondent then rescores each application, issues a final score, and ranks all applications based on their final scores. Aggrieved applicants may challenge these pre-appeal scores in formal or informal hearings. After the conclusion of the hearings, Respondent issues the post-appeal scores and the final rankings of the applications. If a challenger prevails after the final rankings are approved by Respondent, the challenger's approved application is assigned to the next year's funding cycle. In these cases, Respondent issued the final rankings on October 8, 2002. In DOAH Case No. 02-4137, Petitioner challenges Respondent's determination that its Magic Lake Villas application fails to meet the threshold requirements. The Magic Lake Villas application is for funding to construct a 72-unit garden apartment complex in Ocala. Item III.A.3 of the HOME Rental Application (Application) requires the applicant to indicate the type of development design by checking a box next to one of eight categories. The categories are: "garden apartments," "townhouses," "high rise (a building comprised of 7 or more stories)," single family," "duplexes/quadraplexes," "mid-rise with elevator," "single-room occupancy," and "other." Petitioner selected "garden apartments" to describe the 11 one-story buildings that it was proposing to develop on 9.67 acres for a gross density of 7.45 units per acre. The proposed development nearly encircles a lake that is used for drainage. Item II.B.1 of the Application requires the applicant to "Provide the Developer's Prior Experience Chart behind the tab labeled "Exhibit 11." Exhibit 11 contains a certification, which Petitioner executed, that represents, among other things: "I have developed and completed at least two affordable housing developments similar in magnitude to the Development proposed by this Application as evidenced by the accompanying prior experience chart." The "Chart of Experience" that Petitioner attached as part of Exhibit 11 lists information under six columns: "Name of Development," "Location (City/State)," "New Const. or Rehab.," "Design Type," "# of Units," and "Affordable/Subsidized market." Petitioner's chart supplies four rows of information, by development. The first development is "Citrus County Scattered Sites," which comprise 40 single-family units of new construction in Citrus County under the HOME program. The second development is "Marion County Scattered Sites," which comprise 40 single-family units of new construction in Marion County under the HOME program. The third development is "Heron Woods Homeownership," which comprises 49 single-family units of new construction in Inverness, Florida. The fourth development is Heron Woods Rental, which comprises 50 single-family units of new construction in Inverness, Florida. Item II.B.1.c of the Home Rental Application Instructions and Information (Instructions) addresses the requirement of developer experience. The Instructions require: The Developer or principal(s) of Developer must demonstrate experience in the completion of at least two affordable housing developments of similar magnitude by providing a prior experience chart behind a tab labeled "Exhibit 11." The chart must include the following information . . .. For the developer-experience chart, the Instructions require: "Name of Development," "Location (City & State)," "Construction Category (New Construction or Rehabilitation)," "Design Type: garden, townhouses, high-rise, duplex/quad., mid- rise w/ elevator, single family, or other (specify type)," and "Number of Units." The ninth Threshold Requirement contained in the Instructions states: "Experience of the Development team must be demonstrated." Petitioner has failed to prove that any of its listed single-family development experience is similar in magnitude to garden apartment development. Petitioner has thus failed to satisfy the threshold requirement of prior developer experience. Garden apartments are a form of multifamily residential development--usually involving 6-12 units per building and a limited number of buildings, which may be one to three stories. As reflected by the itemization contained in the instructions, each of these types of development represents differences in developed density and development difficulty. In ascending order of developed density and development difficulty, the typical order would be single family, townhouses, duplex/quadraplex units, garden apartments, mid-rise with elevator, and high-rise. Petitioner's development experience has involved single-family construction, which contains simpler draw schedules than does multi-family construction. Petitioner's development experience has involved projects that were all consistent with the zoning, which may often not be the case with higher-density development. Petitioner's development experience has been limited to providing the typically less-demanding infrastructure needs of the relatively low-density single-family development. Higher-density multi-family development normally requires more planning for stormwater management, common area and facilities, parking and roads, and central water and sewer. Petitioner has failed to prove that its single-family development experience, as reflected on its application, was of a similar magnitude to the garden apartments that it proposed as Magic Lake Villas. Petitioner has thus failed to prove that Respondent incorrectly determined that Petitioner's Magic Lake Villas application failed to pass the threshold requirement of developer experience. This determination moots DOAH Case No. 02-4594. In DOAH Case No. 02-4726, Petitioner challenges Respondent's decision to fund another development, rather than Magnolia Village. Petitioner's Magnolia Village application passed the threshold requirements and received 82.65 points, which would have been sufficient for funding, until Respondent, following an informal hearing, rescored the application for the Brittany Bay, which is located in Collier County. The rescoring raised Brittany Bay's score from 81.55 points to the maximum available 86 points. To prevail, Petitioner must prove that Respondent erroneously added at least 3.35 points to Brittany Bay's score. Although Petitioner has identified two issues concerning the rescoring of Brittany Bay's application, one of them involves only 0.4 points, so it is irrelevant to this case, given the point spread of 3.35 between Petitioner's Magnolia Village score and Brittany Bay's rescore. The other issue is relevant because it involves 4.45 points. If Petitioner demonstrates that Respondent improperly awarded these points to the Brittany Bay application, Petitioner's Magnolia Village application would receive funding in the 2003 funding cycle. Respondent assigned the Brittany Bay application 4.45 more points because it qualified for a nonfederal match. In this case, Petitioner must prove that the match identified in the Brittany Bay application did not qualify as match under applicable law. Item III.F of the Instructions addresses match and states in relevant part: Insert requested HOME loan amount and calculate the state required match amount. HUD regulation 24 CFR Part 92.220 requires Florida Housing to match funds for each HOME dollar spent on a Development. Applicants who can provide the full 25 percent match requirement will receive the maximum score of 5 points. For information on eligible match sources and instructions on how to calculate match, refer to the HUD HOME regulations at 24 CFR Part 92.220. . . . Provide amounts of each source of match. For each source of match funding identified, Applicant must provide a signed statement from the source detailing the type of contribution, amount, and how it was calculated. If the amount of contribution is determined based upon a present value calculation, include the actual present value calculation as described in 24 CFR 92.220. No points will be awarded for any source for which a narrative and documented evidence are not provided. This documentation must be provided behind a tab labeled "Exhibit 28." The specific references to 24 CFR Section 92.220 do not relieve the applicants or Respondent from the necessity of complying with all applicable HUD regulations. The first sentence of the Instructions states: "All Applicants are encouraged to review Rule 67-48, F.A.C., 24 CFR Part 92 and the following instructions before completing this Application." The original Brittany Bay application contained no documentation for Exhibit 28 because the developer was not seeking points for match. Even though no NOPSE addressed match, the Brittany Bay developer added match information in its Cure, pursuant to a practice--endorsed by Respondent and unchallenged by Petitioner--in which developers may add match to a Cure even though their original applications omitted match. The Cure contains three elements in describing the match for which points are sought. First, the Cure states: "Collier County's commitment to or issuance of $10,200,000 in Multi-Family Housing Revenue Bonds will result in $5,100,000 in eligible HOME match. This match created by other affordable housing communities is being made available to Brittany Bay . . . by the Housing Finance Authority of Collier County." Second, the Cure states that "tax-exempt bond financing may be utilized to provide HOME match equal up [sic] to 50% of the amount of tax-exempt financing," again noting Collier County's "commitment to provide up to 50% of the tax- exempt financing issued or committed to on [sic] behalf of other multi-family projects in 2002 to Brittany Bay . . . for purposes of a HOME match." Third, the Cure incorporates a letter dated June 26, 2002, from the general counsel of the Housing Finance Authority of Collier County, which states: The Housing Finance Authority of Collier County (the "Authority") has committed to or has issued Multifamily Housing Revenue Bonds totaling $10.2 million for two affordable housing communities this year. It is our understanding that fifty (50) percent of the loan amounts made from bond proceeds to multifamily affordable housing developments quali[f]y as HOME Match funds under the HUD regulations. Based upon this understanding, we are requesting that [Respondent] consider the appropriate percentage of our Multifamily Housing Revenue Bonds as eligible match for the HOME loan requested for Brittany Bay . . .. The Authority is pleased to support this community . . . without an allocation of Region Eight Private Activity Bond Allocation or other Collier County resources. This Cure drew several NOADs. One NOAD notes that the Brittany Bay project is self-funded and was not using any tax- exempt bonds, but the claimed match was from tax-exempt bonds. This NOAD contended that bonds from unrelated developments do not qualify for match. Another NOAD asserts that the Brittany Bay developer does not claim to be receiving any funds from the Collier County tax-exempt bond proceeds, which are instead going to two other developments. This NOAD states that bond proceeds qualify as match only if the proceeds are made available to the development seeking the match. A third NOAD stresses that "match contributions must be attributed directly to the proposed HOME financed development and used to reduce the cost of the affordable housing development." A fourth NOAD notes that a non-participating jurisdiction is not authorized to commit match without providing bonds to the development purporting to receive the match. This NOAD states that HUD officials agreed that Brittany Bay would not qualify for match under these circumstances. The factual contentions of these NOADs are true. Unmoved by the Cure materials seeking match, Respondent's staff declined to award the Brittany Bay developer any points for match. The reason for declining to award points for the match was: "Per HUD, the Bond match which applicant requests in the cure can be considered as match is not eligible match. Funds from a HOME-like development which is not under control of [Respondent] is [sic] not eligible." Upon the request of the Brittany Bay developer and, due to the absence of disputed issues of fact, an informal hearing took place on, among other things, the accuracy of Respondent's refusal to assign Brittany Bay any points for the claimed match, as described above. The transcript of the hearing reveals that the parties addressed the issue addressed in DOAH Case No. 02-4726--whether the Brittany Bay application should be awarded points for match--but they focused on largely different arguments. In defending the decision not to recognize Brittany Bay's claimed match, Respondent raised questions concerning the technical sufficiency of the Cure materials. Respondent challenged the general counsel's letter. Respondent argued that the letter inadequately described the source of the funds and thus failed to preclude the possibility of a source that was a Section 501(c)(3) organization, from which a match cannot be derived for the HOME Rental program. Respondent also contended that the Brittany Bay developer was relying on information not contained in the Cure or other application materials to obtain the points for match. Respondent's proposed recommended order in the Brittany Bay case does not explicitly rely on the points raised by Petitioner in this case. Brittany Bay's proposed recommended order incorrectly asserts that the sole federal regulation governing match, as suggested by the portion of the Instructions covering match, is 24 CFR Section 92.220. Addressing directly the severance of the recipient of the match from the recipient of the funds used to generate the match, Brittany Bay's proposed recommended order contends that 24 CFR Section 92.220 does not so limit match and that Respondent agrees that this severance may take place, even when the recipients of the funds are not HOME-assisted. The recommended order succinctly addresses the complicated match issue by reciting the three elements of the Cure pertaining to "nonfederal match sources" and concluding: "Petitioner properly documented well in excess of $1,562,500 in non-federal match funds issued by the Collier County Housing Finance Authority for affordable housing." The final order adopted the recommended order without elaboration. It would have been a reasonable inference for the hearing officer to determined that Respondent's argument concerning a possible Section 501(c)(3) source of the funds was too improbable. But that inference, alone, would probably not account for the decision. If, as seems likely, the hearing officer also relied on the assurances of the general counsel, a problem would arise because the general counsel's assurance was expressly conditioned on "our understanding" that the match would qualify under HUD regulations--which is exactly the issue in question. As implied by the Cure and stated by the NOADs, Collier County attempted to provide Brittany Bay match out of bond proceeds that were allocated to two unrelated projects, Saddlebrook Village and Sawgrass Pines. In other words, Collier County attempted to sever the match, by sending it to Brittany Bay, from the funds, which were going to two projects that are not HOME-assisted. Neither Collier County nor the Collier County Housing Finance Authority was a participating jurisdiction, as designated by HUD, at the time of the allocation of the match to the Brittany Bay developer. HUD imposes upon Florida and other states certain match requirements. However, Florida currently maintains a large surplus in match, surpassing all HUD match requirements through a multifamily rental bond program unassociated with the HOME Rental program. As one of Respondent's witnesses testified, Florida could go years without any new match and continue to meet HUD match requirements. Based on these facts, Respondent does not now object to Brittany Bay acquiring more points by using the match that arises out of revenue bonds, whose proceeds are allocated to two developments having nothing to do with Brittany Bay. On the other hand, regardless whether Florida needs match, the purpose of awarding points to an applicant demonstrating qualifying match is to recognize some superior quality in its proposed development in terms of meeting the goals of the HOME Rental program. It is questionable whether qualities suitable for recognition include the mere fact that a development would be located within the jurisdiction of a funding entity or that the developer somehow succeeds in obtaining from the funding entity a designation that does not carry with it the expenditure of any of the entity's funds, but confers competitive advantage to that developer in seeking limited HOME Rental funding from Respondent. If match is untethered from funding, there may be sufficient available match for local governments to provide the maximum match points to all applicants for HOME Rental funding, so that the match criterion would become meaningless.
Recommendation It is RECOMMENDED that the Florida Housing Finance Corporation enter a final order: Dismissing Petitioner's challenge in DOAH Case Nos. 02-4137 and 02-4594; and In DOAH Case No. 02-4726, determining that Petitioner's Magnolia Village application should have been included in the funding range for the 2002 funding cycle of the HOME Rental program and funding the application in the next funding cycle, subject to the requirements of credit underwriting. DONE AND ENTERED this 14th day of May, 2003, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of May, 2003. COPIES FURNISHED: Mark Kaplan, Executive Director Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 Elizabeth Arthur, General Counsel Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 Jon C. Moyle, Jr. Cathy M. Sellers Moyle Flanigan Katz Raymond & Sheehan, P.A. 118 North Gadsden Street Tallahassee, Florida 32301 Paula C. Reeves Deputy General Counsel Hugh R. Brown Assistant General Counsel 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that the respondent Division of Beverage issue the type 11-C license to petitioner without further delay. Respectfully submitted and entered this 24th day of March, 1976, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. Charles A. Nuzum Division of Beverage Johns Building. Tallahassee, Florida
