Findings Of Fact Respondent, James Barker (Barker), has been a city commissioner for the City of Coral Gables (City) since 1989. 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 at 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. Occasionally Barker would stop by the Country Club for cocktails or brunch. For more than twenty years the Country Club has traditionally 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 receive memberships. Over a hundred free memberships were granted. In February, 1989, Mr. Sakolsky wrote to 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 change holders of complimentary memberships such as Barker $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 pubic. The only privilege members received over non-members was a discount on their meals. A non-member could be given a complimentary membership after 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 building proposed a higher rate, which the City did not accept. The City vacated the building and rented space elsewhere. Barker has been a member of the Country Club since 1986, and was a member when he was elected to the City Commission in 1989. Barker's private employment is in marketing. Until he was elected to the City Commission, Mr. Barker's employer paid his membership dues. Subsequent to his election, Barker's membership was changed by the Country Club to a complimentary membership. Under the terms of the complimentary membership, Barker 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. The Country Club dues were paid by Barker's employer until Barker was elected to the City Commission. Barker understood that the complimentary memberships were a tradition in the City. No one from the Country Club ever asked him for favors. No vote concerning the Country Club was pending before the City Commission when Barker received his complimentary membership. The only vote concerning the Country Club in which Barker participated while a Country Club member was a vote to postpone action. No one from the Country Club ever asked Barker for any favors. No vote concerning the Executive Club was pending before the City Commission when Barker received his complimentary membership. Barker thought that his membership to the Executive Club was a public relations gesture. He viewed the Executive Club not as a private club but as a restaurant. Barker usually went to the Executive Club as someone else's guest. Barker never voted on a matter concerning the Executive Club. The Executive Club and Country Club memberships were given to a variety of private community leaders as well as City officials. Barker cancelled his complimentary memberships when the State advised him of his position regarding a conflict of interest.
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 James Barker 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 $750 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 $3,100. The civil penalty for the violation involving the Country Club is mitigated due to the advice given to Barker by the City Attorney that there was no conflict of interest. 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: Advocate'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. Paragraph 28: Accepted. Paragraph 29: The first sentence is accepted. The second sentence is Rejected as unnecessary. Paragraphs 30-34: Accepted. Paragraph 35: The first sentence is Rejected as constituting a Conclusion of Law. The remainder of the paragraph is accepted in substance. There is no paragraph 36. Paragraphs 37-38: Rejected as constituting argument. Paragraph 39: Accepted. Second Paragraphs 38-39: Accepted. Paragraph 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 a 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 42-43: Accepted. Paragraph 44: 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 45-46: 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 as substance. Paragraphs 14-15: Accepted in Substance. Paragraph 16: Accepted. 10 Paragraph 17: Accepted in Substance. Paragraph 18: Accepted. Paragraphs 19-23: Accepted in Substance. Paragraph 24-25: Accepted. Paragraph 26-34: Accepted in Substance. Paragraph 35: The first sentence is Accepted in Substance. The second sentence is Rejected as unnecessary. Paragraph 36: Accepted. Paragraph 37: 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 Respondent, Robert Hildreth (Hildreth), was a city commissioner for the City of Coral Gables (City) from 1983 through 1993. 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 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. There is only one honorary member of the Country Club, a founding member who was also at one time mayor of the City. The difference between what the Country Club calls a complimentary membership and an honorary membership is the difference in the duration of the membership. A complimentary membership is given on a year-to-year basis and ends when the person no longer holds the position which entitled him to have the free 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. Hildreth has been a member of the Country Club since October 1, 1982, and was a member when he was elected to the City Commission in 1983. Subsequent to his election, Hildreth's membership was changed by the Country Club to a complimentary membership. Under the terms of the complimentary membership, Hildreth 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. Hildreth understood that the complimentary memberships were a tradition in the City. Hildreth did not report the Country Club membership as a gift on his 1989 or 1990 financial disclosure statements. He was told by the City Attorney, Robert Zahner, that the membership was not a gift and was not required to be reported. Hildreth relied on that advice in deciding not to report the membership on his financial disclosure form. Hildreth used the Country Club for meetings of the Tenth Holer's Club, which is golf social club. In order to belong to the Tenth Holer's Club, a person must also belong to the Country Club. Hildreth also used the Country club eight times in ten years for dining purposes. He did not use the swimming pool, the workout room, the tennis courts, or the cardroom. Hildreth paid his own initiation fees. The County Court has dismissed criminal charges against Hildreth and two other members of the City Commission as well as City Attorney, Robert Zahner, concerning alleged violations of Section 2-11.1(e) of the Dade County Code. That section mirrors the provisions of Section 112.3148, Florida Statutes. Those cases are currently on appeal. The County Court refused to dismiss an identical charge against City Police Chief, Charles Skalaski.
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 Hildreth violated Section 112.313(4), Florida Statutes, for accepting a free membership in the Coral Gables Country Club and Section 112.3148, Florida Statutes for failing to disclose the free membership in 1989 and 1990 on his financial disclosure statement. I recommend a civil penalty of $750 and restitution of $750 for violation of Section 112.313(4), and a civil penalty of $1.00 for each of the failure to report violations, for a total penalty of $1502. The civil penalty is mitigated for the Section 112.313(4) violation because of the advice which Hildreth received from the City Attorney concerning a conflict of interest. The civil penalties for each of the disclosure violations is mitigated by Hildreth's seeking advice from the City Attorney on whether the membership had to be disclosed and relying on the City Attorney's advice that the membership was honorary and did not have to be disclosed. 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 23th day of May, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3908EC To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Advocate'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. Paragraphs 34-35: Rejected as unnecessary. Paragraph 36: The first sentence is accepted. The remainder of the paragraph is accepted in substance. Paragraph 37: Rejected as unnecessary. Paragraphs 38-39: Accepted. Paragraph 40: The first sentence is accepted. The remainder of the paragraph is rejected as constituting argument. Paragraphs 41-42: Rejected as constituting argument. Respondent's Proposed Findings of Fact. Paragraphs 1-4: Accepted. Paragraphs 5: Rejected as subordinate to the facts actually found. Paragraph 6: Rejected as unnecessary. Paragraphs 7-8: Accepted. Paragraph 9: The first three sentences are accepted. The last sentence is rejected as unnecessary. Paragraph 10-13: Accepted. Paragraph 14: The first and third sentences are accepted in substance. The last sentence is rejected as constituting a conclusion of law. The remainder of the paragraph is rejected as not supported by the greater weight of the evidence. Paragraph 15: Accepted in substance. Paragraphs 16-17: Rejected as unnecessary. Paragraph 18: Accepted. Paragraph 19: The first two sentences are accepted. The last sentence is accepted in substance. Paragraphs 20-23: Accepted in substance. Paragraph 24: Accepted. 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
The Issue This case concerns the issue of whether Respondent's alcoholic beverage license should be revoked, suspended, or otherwise disciplined for violations of Chapter 849, Florida Statutes, which prohibits gambling. At the formal hearing, the Division of Alcoholic Beverages and Tobacco called as witnesses Beverage Lieutenant Thomas Stout and Beverage Officer Stephen Tompkins. The Respondent called as witnesses Jack Bent, Wade Byington, Sam Fritz, Daniel Cronin, John Hengerle, Ward Hill, Earl Martel and Neal Mills. The Petitioner offered and had admitted seven exhibits and the Respondent offered and had admitted three exhibits. A drawing of the licensed premises as contained in the Division of Alcoholic Beverages official records was placed into evidence as Hearing Officer's Exhibit No. 1. Counsel for the Petitioner and counsel for the Respondent submitted proposed findings of fact and conclusions of law for consideration by the undersigned Hearing Officer. To the extent that these proposed findings and conclusions of law are inconsistent with the findings and conclusions herein they were considered by the Hearing Officer and rejected as being unsupported by the evidence or unnecessary to a resolution of this cause.
Findings Of Fact At all times material to this proceeding, Respondent held Beverage license No. 18-67, Series 11C issued to the licensed premises at 629 Tamiami Trail, N.W., Port Charlotte, Florida. Elks Lodge No. 2153 is a local chapter of the National Elks Lodge. It is a fraternal organization having 2,994 members in the local lodge. The licensed premises at 629 Tamiami Trail, N.W., is the club facility where the members hold meetings and also socialize together. The lodge building is a large building consisting of a lobby, lounge area with bar, kitchen, and large dining and meeting room. Additionally, there is a smaller room which is located behind the lounge area. This small room is called the "Stag Room" and is open to and used only by the local members of Elks Lodge No. 2153. No guests, wives, or nonmembers are allowed in the Stag Room. The Stag Room contains a pool table area, card table area with several tables, a shuffleboard court, a bar, and an area of tables for just lounging. The bar is tended by a bartender. The local lodge is governed by a Board of Governors which sets policy for the lodge and a Board of Trustees which is responsible for the financial matters and building and other physical assets of the lodge. The chief operating officer of the lodge is elected by the members and has the title of "Exalted Ruler." The manager of the club facility is hired by the Board of Governors. On January 27, 1983, at approximately 11:30 a.m., Beverage Officer Tompkins, of the Ft. Myers District, visited the licensed premises of the Respondent. His purpose was to investigate a complaint that the lodge had sold kegs of beer to another club. After speaking with the manager of the club facility, Officer Tompkins made a routine inspection of the licensed premises. As a part of his routine inspection, Officer Tompkins entered the Stag Room and first checked the bar area of that room. Behind the bar, he found a slip of paper (Petitioner's Exhibit 1) which reflected bets between unknown individuals on the Super Bowl game to be played within a few days between the Washington Redskins and the Miami Dolphins. The sheet was undated and unsigned and was laying in the open on a counter behind the bar. After checking the bar area, Officer Tompkins proceeded to inspect the contents of a cabinet located between the pool area and the card playing area. In that cabinet, Officer Tompkins found several items which he seized as evidence. In the top drawer of the cabinet, Officer Tompkins found three white pieces of paper, each appearing to be scoresheets for a game of some sort. On the first sheet (Petitioner's Exhibit 2-A) appears the first names of six individuals in columns with scores or running totals under each name. These totals consist of plus and minus numbers which after each round totaled zero. These numbers appear to represent amounts owed to and from each player and at the bottom of five of the columns is the entry "Pd." This sheet was used to keep track of winnings and losses in some type of game. No evidence was presented which identified the individuals named or the date the sheet was prepared. The second sheet (Petitioner's Exhibit 2b) contains several paired columns titled "We" and "They" at the top of each pair. These columns contained numbers which appear to be scores in some type of game. Some of these numbers contain decimal points, such as "14.67" which appear to represent dollar amounts. The third sheet (Petitioner's Exhibit 2c) is similar to Petitioner's Exhibit 2b, but does not contain decimal numbers or numbers that appear to represent dollar amounts. In that same drawer Officer Tompkins found three yellow envelopes with writing on the front of each envelope. The first envelope (Petitioner's Exhibit 3a) was empty and on the outside of the envelope was written "3 players." The second envelope (Petitioner's Exhibit 3b) also was empty and bears the notation "4 players." The third envelope (Petitioner's Exhibit 3c) bears the notation "tally sheets" and contained two sheets of paper that appear to be tally sheets for some type of game. In the same cabinet, but not in the drawer, Officer Tompkins found two paper bags bearing the business name "Quick Print." (Petitioner's Exhibits 4a and 4b). Each bag contained several hundred blank tally sheets. These sheets are similar to tally sheets used in card games such as bridge. These sheets were not purchased by the Respondent. Also in the same cabinet in Respondent's Stag Room, Officer Tompkins found a yellow folder, Petitioner's composite Exhibit No. 5, containing a typewritten rule book called "Eight Ball Tournament House Rules" dated August 23, 1982, with a notation that it was amended October 8, 1982. The rule book provides that "[e]xcept for the rules specified herein, the Official Book of Rules in the Stag Room will apply." The book further provides that the players' positions on the singles and doubles elimination sheets will be determined by lot. Also contained within the yellow folder, Petitioner's composite Exhibit No. 5, were original elimination sheets designed for tracking the players, drawn by lottery, through various levels of play in a pool tournament. These elimination sheets are titled "Elk's Lodge 2153 Pool Tourney." (See Petitioner's composite Exhibit No. 5). In that same cabinet in the Stag Room of Respondent's licensed premises Officer Tompkins found a manila envelope containing Petitioner's Exhibit No. 6, a handwritten registration sheet titled Registration - 8 Ball Tournament 22 Jan 83 Doubles Fee: $3.00. This sheet contains four columns - two titled "Name" and two titled "Fee Paid." In the first column entitled Name are listed five names after which, in the Fee Paid column, is listed the amount of $3.00. This sheet further indicates that the listing was made as of 11 a.m. on 22 Jan 83 and that the money was refunded. Also found within that manila folder were "Guidelines for Coordinator on Day of Play." (See Petitioner's Exhibit No. 7). Those guidelines provide that if less than 12 players sign up for the tournament, the tournament will be cancelled and the money refunded. Those guidelines further provide that, using the registration sheets, names will be drawn by use of numbered pills and given a position on the elimination sheet. The guidelines provide for prizes for first and second place winners in the doubles and for first, second and split third place winners in the singles. While play is underway, the coordinator is to calculate prize money by arriving at the "kitty" with $2.00 per player for the 12 to 15 players, then deduct $3.00 for the coordinator's services. The balance of the kitty would be divided with 45 percent going to the first place winner, 30 percent going to the second place winner, and 25 percent going to the third place winner to be split 50/50 between the two third place winners. A different method for calculating allocation of the kitty is provided for the doubles play. (Petitioner's Exhibit No. 7). Also contained within that folder found in the cabinet in the Stag Room of Respondent's licensed premises were copies of the original elimination sheets previously seen in Petitioner's composite Exhibit No. 5. The above described guidelines were prepared for a proposed pool tournament which did not take place. Sometime in the fall of 1982, the officers of the Respondent club became aware that a pool tournament was being planned. Upon learning of this, the Exalted Ruler, the chief presiding officer, cancelled the pool tournament and instructed those persons who were planning the tournament that such an event could not be held in the lodge. The Respondent has a policy against gambling on the lodge premises. Section 210 of the annotated statutes of the Grand Lodge of Elks prohibits gambling, in any and all forms, in any lodge room, club room or social parlor connected with a lodge. Failure to abide by a section of the annotated statutes can result in revocation of the local lodge's charter. The officers of Respondent were not aware of any gambling taking place on the lodge premises and after receiving notice from Officer Tompkins that he suspected gambling was occurring, the Lodge published an article in its monthly newsletter reminding its members of their duty to not gamble and to abide by the annotated statutes of the lodge. Petitioner presented no evidence that gambling had actually been observed by anyone on the licensed premises. No gambling had been observed by the officers or trustees of the lodge.
Recommendation Based upon the foregoing findings of fact and conclusions of law it is RECOMMENDED: That the Respondent be found not guilty of the charges alleged in the Notice to Show Cause and that such charges be dismissed. DONE and ORDERED this 27th day of October 1983, in Tallahassee, Florida. MARVIN E. CHAVIS 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 27th day of October, 1981. COPIES FURNISHED: Janice G. Scott, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Robert M. Bader, Esquire 209 Conway Boulevard, N.E. Port Charlotte, Florida 33952 Howard M. Rasmussen, Director Division of Alcoholic Beverages and Tobacco 725 South Bronough Street Tallahassee, Florida 32301
Findings Of Fact The Subject Property. The Applicant is the owner of approximately 799.58 acres of land (hereinafter referred to as the "Country Club Property"), located on Loch Rane Boulevard, Clay County, Florida. In the early part of 1987, the Applicant applied to rezone the Country Club Property as a planned unit development district (hereinafter referred to as a "PUD"). The Country Club Property is to be developed in phases. At issue in this proceeding is that portion of the Country Club Property other than Unit One, which consists of lots 1 through 295. Development of the Property; Government Action Relied Upon by the Applicant. Prior to approving the rezoning of the Country Club Property requested in the early part of 1987, Clay County advised the Applicant that it would be required to commit to resignalize and expand the Loch Rane/Blanding Boulevards interchange as a condition to Clay County approving the rezoning of the Country Club Property as a PUD. Clay County approved the requested rezoning of, and the master land use plan for, the Country Club Property on March 24, 1987. The master land use plan specifies that the Country Club Property will include development of the following: (a) up to 599 single-family dwelling units within the residential portion; (b) ten acres of commercial uses, including retail shops, a day-care center and a restaurant; (c) a sales center; and (d) a golf course and club facilities. Engineering plans for phase one of the proposed development were submitted to Clay County in 1987. As part of the engineering plans, the Applicant obtained permits from the Army Corps of Engineers, the St. Johns' River Water Management District and the Florida Department of Environmental Regulation. The plat for phase one of the Country Club Property was submitted to Clay County and on May 12, 1987, Clay County approved the final plat for phase one. In April, 1989, the Applicant applied for building permits for construction of the golf course clubhouse, pool facilities and the golf cart storage barn. Permits for these facilities were issued by Clay County in October, 1989. In 1991, engineering plans for phase two of the Country Club Property were submitted to Clay County. They were approved effective January 1, 1992. On February 12, 1993, Clay County issued a Vested Property Certificate for phase one of the development, Lots 1 through 295 of Unit One, pursuant to Section 20.8-6 of the Vested Rights Review Ordinance of Clay County, Florida. The Applicant's Detrimental Reliance. In reliance on Clay County's actions in approving the PUD rezoning and accompanying master plan and the engineering plans for phase one and phase two, the Applicant constructed master infrastructure improvements for the project. Improvements have included drainage, water and sewer systems, a master road system designed and sized to serve the entire development at a cost of approximately $4,972,670.00. These improvements were made between November, 1988 and April, 1990. The Applicant has also constructed the entry features for the Country Club Property, master recreational facilities, including an eighteen-hole golf course, golf course clubhouse, pool and tennis facilities and a sales center. Total costs of these improvements were approximately $7,224,917.00. These improvements were made between November, 1988 and April, 1990. Finally, the Applicant has resignalized and expanded the Loch Rane/Blanding Boulevards interchange. The cost of these improvements was approximately $72,000.00. These improvements were made between October, 1991 and January, 1992. Rights That Will Be Destroyed. Pursuant to the Clay County 2001 Comprehensive Plan, the portion of Blanding Boulevard impacted by the Country Club Property development does not have sufficient capacity to develop the property as proposed. To comply with the comprehensive plan will require considerable delays in completion of the project which will result in a substantial adverse financial impact on the Applicants. Procedural Requirements. The parties stipulated that the procedural requirements of the Vested Rights Review Process of Clay County, adopted by Clay County Ordinance 92-18, as amended by Clay County Ordinance 92-22 have been met.
The Issue Appellants raised several issues on appeal, including: (1) whether Appellee retroactively applied the LDC to Appellants' lawfully established non-conforming vacation rental use; (2) whether Appellee violated Appellants' right to due process by applying Ordinance 004-1997, and its 2016 counterpart, retroactively to events which occurred and were established as a matter of record prior to 1997; (3) whether the Appellee erred by requiring compliance with Ordinance 004-1997, and its 2016 counterpart, in light of the doctrine of laches and equitable estoppel; (4) whether Appellants acquired vested rights when Ordinance 004-1997 was enacted, and the circuit court opinion judicially recognized those vested rights; and (5) whether Appellants' compliance with Ordinance 004-1997 and its 2016 counterpart, would be unduly burdensome.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background Petitioner, John's Island Club, Inc. (petitioner or the club), is a not-for-profit corporation which owns and operates a private country club facility in the John's Island residential development in Indian River County, Florida. It provides a variety of recreational facilities to its members. Among the amenities are three golf courses, nineteen tennis courts, a tennis building, a beach club, a club house, a swimming pool, and dining facilities. Respondent, Department of Revenue (DOR), is a statutorily created agency charged with the administration of the state revenue laws, including Chapter 212, Florida Statutes, and rules promulgated thereunder. As a result of an amendment made in 1991 to Subsection 212.02(1), Florida Statutes, DOR is authorized by law to impose an admissions tax on "dues and fees" paid to private membership clubs providing recreational facilities. As a private membership club, petitioner is subject to this tax. Beginning on July 1, 1994, petitioner made an assessment on each member to raise capital for the purpose of repairing and replacing many of its physical facilities. During the six month period ending December 31, 1994, $10,441,897 was collected from the members and made available to the club. Rule 12A- 1.005(d)1.b., Florida Administrative Code, which was adopted by DOR in December 1991 to implement the admissions tax on dues and fees, imposes a tax on "(a)ny periodic assessment (additional paid-in capital) required to be paid by members of an equity or non-equity club for capital improvements." Under the authority of that rule, DOR required that petitioner pay the applicable sales tax on the assessment collected through December 31, 1994, or $730,932.79, and that it continue to pay the tax as other similar assessments are made in the future. Claiming that the rule exceeds DOR's grant of rulemaking authority, and it modifies, enlarges, and contravenes the law implemented, petitioner filed a petition for administrative determination of invalidity of existing rule. DOR denies all allegations and asks that the validity of its rule be upheld. The Club and the Assessment The composition of the club The club began operation in 1969 but was purchased by its members in 1986. It is an equity private membership club but issues no stock. The club has two types of memberships: golf and sports social. Currently, the cost of a golf equity membership is $85,000 while the cost of a sports social membership is $30,000. After payment of these fees, the member receives a membership certificate, which represents his or her equity ownership interest in the club. At the present time, there are 1125 golf memberships and 257 sports social memberships. Of the 1125 golf memberships, the original developer still owns 67. In addition to having to purchase a membership, members must also pay annual dues. A golf member pays $4,875 in annual dues while a sports social member pays $2,760 in annual dues. A sales tax is also collected on these dues. The dues are used to cover operating expenses such as insurance, administrative costs, staff salaries, and maintenance costs. In addition, members pay fees for additional services such as golf cart use, golf bag storage, locker room use, and golf and tennis lessons. When a member decides to resign or retire from the club, he or she may resell the membership to the club (but not a third party) and receive the greater of (a) the initial amount paid by the retiring member, or (b) 80 percent of the current membership cost (with the remaining 20 percent retained by the club in a separate capital improvement account). The assessment In 1992, the club began studying the feasibility of repairing and replacing many of its physical facilities. The total cost of the proposed work was set at $16,372,000. By majority vote taken in the spring of 1994, the members decided to raise capital for the work by imposing a capital assessment on each current member. It was agreed that the capital contribution would be $12,000 from each golf member and $11,150 from each sports social member. However, the payment of the capital contribution was not intended to, and did not result in any, decrease in the dues which members were required to pay for the use of the club's facilities. A failure to pay the assessment would result in suspension from the club. Three different options were made available to the members for the manner of payment of the capital contribution. The options included (a) a single payment, (b) payment over a three-year period, or (c) payment of interest only until such time as the member either sold the membership or left the club. After making payment in full, the member would be issued a certificate of capital contribution. It is noted that the developer was required to pay the capital contribution for his 67 golf memberships. Further, any person joining the club after the imposition of the assessment would likewise be required to pay the assessment. Beginning in July 1994, the club began collecting the capital contribution from its members. From July through December 1994, some $10,441,897 was collected. A total sales tax of $730,932.79 has been paid on those collections. Shortly thereafter, petitioner opted to file this rule challenge. The Rule and its Origin Rule 12A-1.005(5)(d)1.b. provides as follows: (d)1. Effective July 1, 1991, the following fees paid to private clubs or membership clubs as a condition precedent to, in conjunction with, or for the use of the club's recreational or physical fitness facilities are subject to tax. * * * b. Any periodic assessments (additional paid in capital) required to be paid by members of an equity or non equity club for capital improvements or other operating costs, unless the periodic assessment meets the criteria of a refundable deposit as provided in sub-subparagraph 2.e. below. * * * Under the terms of the rule, the capital contri- bution assessed by the club does not qualify as a refundable deposit. This is because any difference between the amount collected by the club upon the sale of a membership to a new member, and the amount which was paid to the retiring member, is retained by the club. Because Rule 12A-1.005, Florida Administrative Code, covers a wide array of items subject to taxation, the DOR cites Sections 212.17(6), 212.18(2), and 213.06(1), Florida Statutes, as the specific authority for adopting the rule, and Sections 212.02(1), 212.031, 212.04, 212.08(6) and (7), 240.533(4)(c), and 616.260, Florida Statutes, as the law implemented. There is no dispute between the parties, however, that in adopting sub-subparagraph 1.b., which contains the challenged language, the agency was relying principally on Subsection 212.02(1), Florida Statutes, as the law being implemented. That subsection defines the term "admissions" for sales tax purposes. Although the parties did not specifically say so, DOR relies on Section 212.17(6), Florida Statutes, as its source of authority for adopting the rule. That subsection authorizes DOR to "make, prescribe and publish reasonable rules and regulations not inconsistent with this chapter . . . for the enforcement of the provisions of this chapter and the collection of revenue hereunder." For the purpose of assisting DOR in administering the Florida Revenue Act of 1949, which imposes a sales and use tax on various transactions, Section 212.02, Florida Statutes, provides definitions of various terms used in the chapter, including the term "admissions." Prior to the 1991 legislative session, subsection 212.02(1) read in pertinent part as follows: The term "admissions" means and includes . . . all dues . . . paid to private clubs and membership clubs providing recreational or physical fitness facilities, including, but not limited to, golf, tennis, swimming, yachting, boating, athletic, exercise, and fitness facilities. During the 1991 legislative session, the definition of the term "admissions" was expanded by the addition of the following underscored language: The term "admissions" means and includes . . . all dues and fees . . . paid to private clubs and membership clubs providing recreational or physical fitness facilities, including, but not limited to, golf, tennis, swimming, yachting, boating, athletic, excercise, and fitness facilities. Thus, the legislature added the term "fees" to the term "dues" for those amounts "paid to any private clubs and membership clubs" which would be subject to the admissions tax. Prior to the above change in substantive law, rule 12A-1.005(5), as it then existed, provided that dues paid to athletic clubs which provided recreational facilities were taxable. However, subparagraph (5)(c) of the rule also provided that (c) Capital contributions or assessments to an organization by its members are not taxable as charges for admissions when they are in the nature of payments made by the member of his or her share of capital costs, not charges for admission to use the organization's recreational or physical fitness facilities or equipment, and when they are clearly shown as capital contributions on the organization's records. Contributions and assessments will be considered taxable when their payment results in a decrease in periodic dues or user fees required of the payor to use the organization's recreational or physical fitness facilities or equipment. Therefore, capital contributions were not taxable unless they resulted in decreased dues. That is to say, if a club levied an assessment on members and concurrently lowered its monthly dues, the assessment would be deemed to be taxable and in contravention of the rule. Thus, the effect of the rule was to prevent a club from renaming "dues" as "capital contributions" or "assessments" in order to avoid paying a tax on the dues. After the change in substantive law, the DOR staff began preparing numerous drafts of an amendment to its rule to comply with the new statutory language. At one stage of the drafting process, a DOR staffer recommended that, because the legislature had not provided a definition of the term "fee," the DOR should adopt a rule which provided that capital contributions be "not taxable if assessed under an equitable membership." Relying on what it says is the legislative intent, the DOR eventually proposed, and later adopted, the rule in its present form. In doing so, the DOR relied upon the terms "capitalization fees" and "capital facility fees" which are found in certain legislative history documents pertaining to the new legislation. Legislative History of the Law Implemented Although a number of bills related to the subject of a sales tax on admissions, the bill enacted into law was identified as Committee Substitute for House Bill 2523 (CS/HB 2523). The legislative history of the various bills relating to this subject has been received in evidence and considered by the undersigned. In early 1991, the House and Senate considered bills which addressed amendments to the sales tax on admissions. The first time the issue was addressed was at a meeting on February 21, 1991, of the Subcommittee on Sales Tax of the House Committee on Finance and Taxation. The discussion at the meeting indicated that the intent of the bill was to close a loophole that allowed physical fitness facilities to change their pricing structure to charge a higher initiation fee, which was not taxable, and thereby reduce their monthly dues, which were taxable, so as to reduce the revenue below that originally anticipated by this tax on admissions. This is corroborated by the bill analysis of the proposed committee bill that was offered, PCB FT 91-3A, which summarized the problem and solution as follows: Section 212.02(1), F. S. was amended during the 1990 Legislative Session to include in the definition of admissions those "dues" of "membership clubs" providing "physical fitness" facilities. Some clubs have attempted to avoid the tax (on dues) by shifting a substantial portion of the members' payments from "dues" to "initiation fees." Section 212.02(1), F. S., is amended to include "fees" as well as "dues" in the definition of admissions. All fees, including initiation fees and capitalization fees, paid to private clubs and membership clubs providing recreational or physical fitness facilities would be subject to the sales tax on admissions. It is unclear, but likely, that PCB FT 91-3A became House Bill 2417 (HB 2417). The bill analysis and economic impact statement on HB 2417, which was prepared by the House Committee on Appropriations, contained identical language to that in the bill analysis on PCB FT 91-3A. At the same time, the Senate was considering Senate Bill 1128, which later became Committee Substitute for Senate Bill 1128 (CS/SB 1128). On March 14, 1991, a staff analysis and economic impact statement on CS/SB 1128 was prepared by the Senate Committee on Finance, Taxation and Claims. It provided that: Section 212.02(1), Florida Statutes, defines "admissions" for sales and use tax purposes. Monthly fees of clubs with major facilities such as tennis courts, a swimming pool or a golf course have always been subject to the sales tax. During the 1990 Legislative Session this statute was amended to include dues on membership clubs providing physical fitness facilities, and not having these other major facilities. According to the DOR, such clubs have attempted to avoid payment of this tax by shifting a substantial portion of the members payments from dues to initiation fees which are not taxed. Accordingly, the purpose of the proposed statutory amendment was "to include initiation fees as well as dues in the definition of admissions." HB 2417 was passed by the House on April 17, 1991, and was sent to the Senate, where it was referred to the Committee on Finance, Taxation and Claims. HB 2417 died in that Committee. CS/SB 1128 was passed by the Senate on April 4, 1991, and was sent to the House, where it died in messages. A separate bill, Committee Substitute for House Bill 2523, which addressed similar issues to those addressed in HB 2417 and CS/SB 1128, was passed by the House on April 4, 1991, and was sent to the Senate where it was passed with amendments. The Bill was then returned to the House where further amendments were adopted. The Bill was again sent to the Senate with a request for the Senate to concur with the House amendments. The Senate refused to concur and the Bill was sent to a conference committee. The conference committee on finance and taxation met on April 19, 1991. The entirety of the discussion of the committee on this issue is as follows: Senator Jenne: The - - going down to number 21, admissions, initiation fees. The House includes capitalization fees. Representative Abrams: Which is this? Mr. Weiss: The Senate bill just states initiation fees are additionally included. The House bill, I believe, says that it's just all fees, which would include whether they called them initiation fees or capital facility fees or whatever. Representative Abrams: Because we are using something other than initiation - - Mr. Weiss: It's a fee that is going to be included. Representative Abrams: Yes, they were using - - they were breaking down categories of fees to avoid the tax, I think is what the deal was there. That gets us how much? Senator Jenne: Okay, well, it doesn't matter, because you can do it. Representative Abrams: Okay, good. Although the terms "capital facility fees" and "capitalization fees" were used during the discussion, contrary to DOR's assertion, it is far from clear that the intent of the amendment was to make taxable all capital contributions and assessments paid by members of private clubs providing recreational facilities. When placed in context with the prior debate before the committees and their staff analyses, it is much more likely that the intent was to close a loophole then used by physical fitness clubs who were renaming dues as fees in order to avoid taxes. The report of the conference committee was received by both houses on April 30, and CS/HB 2523 was passed by both houses the same day. The conference committee report for the bill contains only the following language describing the sales tax on admissions/initiation fees: Includes all recreational or physical fitness facility fees in the definition as admissions. The official conference committee report contains no reference to the terms "capitalization fees" or "capital facility fees." Neither does it make reference to the terms "assessment" or "paid in capital," which are the terms used by DOR in its rule. In the final bill analysis and economic impact statement prepared by the House Committee on Finance and Taxation for CS/HB 2523 on June 12, 1991, or 43 days after the bill was passed, the analysis states that subsection 212.02(1) was amended to include: "fees" as well as "dues" in the definition of admissions. All fees, including initiation fees and capitalization fees, paid to private clubs and membership clubs providing recreational or physical fitness facilities would be subject to the sales tax on admissions . . . This amendment should also limit further attempts to avoid taxation by renaming the fees collected from members. The staff analysis was obviously not available to members of the House or Senate when they voted on the bill on April 30, 1991. Although the final bill analysis used the term "capitalization fees," no where in any of the legislative history is there evidence of any legislative consideration of what was actually meant by that term. This is also true of the term "capital facility fees" which surfaced on one occasion prior to the passage of the bill. Capitalization Fees and Their Significance The sole basis for the DOR including the tax on assessments for capital improvements was the appearance in the legislative history of the terms "capitalization fees" and "capital facility fees." Neither term has any meaning to tax accountants. However, the accounting witnesses for both parties agreed that, from an accounting perspective, the phrase "capital facilities" would be understood to be assets having a life longer than one year. A capital contribution is typically a one time payment for the purchase of assets. It does not entitle the member to use the club. It is an equity transaction, not an income transaction, and it represents an intent to make an investment to improve the value of the membership assets separate and apart from the payment of annual expenses for the receipt of some service. "Dues" are a member's contribution to the operating costs of a club. They are assessed over an annual period and they are recurring. They also represent the payment that a member pays for admission to the organization. A capital contribution paid by a member of an equity membership club is not "dues." "Fees" as applied to a club are user charges. They are voluntary so that a member can decide whether or not to incur the charge based on whether the member uses the particular service to which it relates. A capital contribution is not a "fee."
The Issue Whether Petitioner was the subject of unlawful discrimination in the terms, conditions, privileges, or provision of services in connection with the rental of a dwelling from Respondent, based on her race, in violation of section 804(b) or 804(f) of Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Act of 1988 and the Florida Fair Housing Act, chapter 760, Part II, Florida Statutes (2011).
Findings Of Fact Respondent owns and manages the Country Club Woods residential community in Starke, Florida. Country Club Woods is a racially-mixed community. The current residential mix includes 29 African-American families and 6 white families. County Club Woods receives low-income housing subsidies in the form of tax credits through the Florida Housing Finance Corporation. Some residents qualify for federal Section 8 housing subsidies. Petitioner is African-American. On February 4, 2011, Petitioner signed a lease agreement for a home in Country Club Woods. Rent was $698.00 per month. The home was vacant, and power and water had been turned off. Respondent asked Petitioner to activate power and water so that repairs and unit preparation could be performed, and she did so. Petitioner?s rent for February was partially prorated to account for the period during which she did not occupy the unit. The lease agreement required that all occupants of the house be listed, and provided that “[n]o other occupants are permitted.” Guests were limited to stays of no more than 14 consecutive days. Due to the status of Country Club Woods as an affordable housing community, it is subject to restrictions on the income and criminal history of its residents. Therefore, all permanent occupants are required to undergo income and background screening to ensure that the low income housing tax credit rules are being met. The failure to do so could jeopardize the tax credits. When she signed the lease, Petitioner knew what the lease required regarding the occupancy of the house. Petitioner listed Aulettia Russ and Aarian Russ, her daughter and son, as occupants with her in the home. After the lease contract was signed, Respondent performed a few repairs and updates to prepare the unit for Petitioner. Mr. Sam Baker, who performed maintenance services for County Club Woods, fumigated the house and painted some of the interior walls. He performed a minor repair to the roof, which consisted of applying tar around the cracked rubber boot of the roof drain vent. Mr. Baker moved a stove into the house from another unit because there was no stove when the lease was signed. He also replaced the toilet with a new one. Petitioner moved into the unit on February 16, 2010. She was joined by her fiancé, Kevin Sampson, and her older son, Kelsy Roulhac, neither of whom were listed as occupants. Mr. Sampson was on probation for several felony offenses. Both Mr. Sampson and Mr. Roulhac were residents for the entirety of Petitioner?s tenancy. At no time during the tenancy did Petitioner seek to add Mr. Sampson or Mr. Roulhac to the lease. Petitioner testified that Rebekkah Baker, the property manager, knew that Mr. Sampson was a permanent occupant, but had no objection. Ms. Baker denied that she consented to his occupancy, given that it would have been a violation of Country Club Woods policy against leasing to persons with a criminal history in the past seven years. Given the consequences of failing to meet the occupancy and background screening requirements, Ms. Baker?s testimony is credited. When Petitioner moved in, there were still problems with the unit. Problems noted by Petitioner included a broken dishwasher, mildew on a number of surfaces, dead insects -- likely from the fumigation -- in the cabinets, a hole in the foyer wall caused by the adjacent door?s doorknob, a ceiling stain from the roof leak, a missing shower head, a broken light fixture, and a missing smoke alarm. In addition, the carpet was stained and in generally very poor condition. Petitioner resolved the mildew problem by cleaning the affected surfaces with Tilex. Petitioner?s son, Mr. Roulhac, got rid of the dead insects and cleaned the cabinets. Petitioner replaced the showerhead on her own. Shortly after she moved in, Petitioner notified Respondent that her roof was leaking. Mr. Baker went to the house, advised Petitioner?s daughter that he was there to fix the roof, and went onto the roof. He determined that the leak was occurring at the location of his previous repair. He completed the repair by re-tarring the roof drain vent boot. Petitioner testified that the roof continued to leak after heavy rains. She indicated that she made a subsequent complaint via a message left on Ms. Baker?s telephone answering machine. Ms. Baker testified that she received no subsequent complaints, and there is no other evidence to suggest that Respondent received any subsequent complaints regarding the roof. Mr. Baker performed no further repairs. Petitioner complained that the dishwasher was holding water. She testified that Respondent never came to fix the dishwasher. Both Mr. Baker and Ms. Baker testified that Mr. Baker was tasked to repair the dishwasher, but upon arriving at the house was denied entry, with the explanation that the dishwasher had been fixed by a friend, and the problem resolved by removing a plastic fork that had clogged the drain. From the time Petitioner moved in, until the time she vacated the home, Mr. Baker fixed the hole in the foyer wall and the broken light fixture. In addition, Mr. Baker came to the house to fix the refrigerator, which was a problem that was not on the original list. From the beginning of her tenancy, Petitioner complained of the carpet. The carpet was badly stained and worn. In addition, the carpet contained a dye or some other substance that aggravated Aarian Russ?s asthma. It was Petitioner?s desire to have the carpet replaced before the time of her daughter?s graduation. Respondent agreed to replace the carpet, and had employees of a flooring company go to Petitioner?s house to measure for new carpet. The flooring company employees were allowed entry to the house by Petitioner?s daughter. They measured the rooms, except for Petitioner?s bedroom, which was locked. Respondent advised Petitioner that the measurements of the bedroom of an identical unit could be provided to the carpet company. It is not known if that was done. Due to difficulties on the part of the flooring company, the new carpet was not installed before Petitioner vacated the unit. There was no evidence offered to suggest any relationship between the failure to install new carpet and Petitioner?s race. Petitioner complained that she had not been given notice that the flooring company employees were coming, and complained that Respondent had not performed a background check on the workers. She argued that she was entitled to have a background check done on anyone providing services before she would have to allow them into her home. There is no relationship between Petitioner?s complaints regarding the lack of a background check on the workers and Petitioner?s race. The lease agreement provides that “[m]anagement will make repairs . . . after receipt of written notice.” Respondent occasionally prepared work orders describing the nature of the problem at a unit, and the work done to resolve the problem. However, the evidence demonstrates that written work orders were likely the exception rather than the rule. It appears that most problems were reported by verbal requests, and resolved by Mr. Baker?s maintenance and repairs. Most of Petitioner?s requests for repairs and maintenance were made verbally. At some point, due to the number of items, Petitioner provided Respondent with a list of items for repair. There is no evidence that any repairs at Petitioner?s home were documented with a work order. In any event, there was no evidence that the failure to document the work, which was common, was the result of Petitioner?s race. Petitioner did submit seven work orders in evidence. Six of the work orders reflected repairs made by Respondent to the homes of African-American families upon verbal requests. One of the work orders reflected repairs made by Respondent to the home of a white family upon a verbal request. Petitioner questioned why none of her repairs were memorialized in work orders. The work orders do not substantiate that Petitioner was discriminated against on account of her race, and in fact serve to indicate that Respondent provided maintenance services equally, without any consideration to the race of the person requesting such services. Petitioner complained that Mr. Baker did not have “credentials,” and questioned him regarding any education or licenses that qualified him to perform maintenance, including electrical work. Whether qualified to do so or not, Mr. Baker performed maintenance for all of the residents of Country Club Woods, regardless of their race. There is no relationship between Petitioner?s complaints regarding Mr. Baker?s credentials and Petitioner?s race. Beginning in April, 2011, Petitioner began to fall behind on her rent. Petitioner was paid bi-weekly, though how that affected her ability to plan for monthly rental payments was not clearly explained. On April 21, 2011, Ms. Baker posted a notice on Petitioner?s door demanding that the $279.60 balance of the April rent payment be made. Petitioner denied having seen the notice. However, the copy of the notice put in evidence includes the notation from Ms. Baker that “[p]romised to pay balance w/ May 2011?s rent.” On May 9, 2011, Ms. Baker posted a notice on Petitioner?s door demanding that the rent payment be made. The amount in arrears was calculated to be $1,077.60, which included a late fee. Petitioner denied having seen the notice. However, the copy of the notice put in evidence includes the notation from Ms. Baker that “pd. $698 on 5/11/11.” On June 1, 2011, Ms. Baker posted a notice on Petitioner?s door demanding that the rent payment be made. The amount in arrears remained at $1,077.60. Petitioner denied having seen the notice. On July 27, 2011, Respondent provided a notice to Petitioner indicating that due to unauthorized occupants and $1,975 in unpaid rent, Petitioner had until August 1, 2011, to vacate the premises, or Respondent would commence eviction proceedings. Petitioner admitted to having received that notice. Respondent?s resident history report indicates that by the time Petitioner vacated the home on August 31, 2011, her rent was $2,075.60 in arrears. Some of that was due to assessed late charges, but the majority reflected unpaid rent. When Petitioner vacated the unit, Petitioner?s security deposit was applied, the remaining arrearage was assigned to a collection company, and Respondent?s books were cleared. Ms. Sheila Palmer and Ms. Tynesha Epps testified at the hearing. They have been residents of Country Club Woods for 16 years and for 1 year and 3 months, respectively. Both are African-American. Both testified that they had never been refused maintenance at their homes, and that Respondent was responsive to their requests for maintenance which were generally verbal. Neither Ms. Palmer nor Ms. Epps was aware of any instance in which management of Country Club Woods had discriminated against any tenant due to their race, though neither personally knew Petitioner. Ms. Headrick, Ms. Baker, and Mr. Baker each testified that they never denied or limited repair and maintenance services to any resident of Country Club Woods account of their race. They each testified convincingly that race played no factor in their duties to their tenants. Ultimate Findings of Fact There was no competent, substantial evidence adduced at the hearing that Respondent failed or refused to provide services to Petitioner under the same terms and conditions that were applicable to all persons residing in the Country Club Woods community. There was not a scintilla of evidence that, in providing services to Petitioner, Respondent deviated from its standard practice of providing maintenance services to all residents of Country Club Woods regardless of their race, income, or any other reason. The evidence does support a finding that Petitioner materially breached the terms of the lease agreement, both by allowing undisclosed persons to reside at the house, and by failing to timely pay rent. Petitioner?s race had nothing to do with the timing or manner in which maintenance and repair services were provided to her by Respondent, and it is expressly so found. The evidence did not demonstrate that Respondent discriminated against Petitioner on the basis of her race. Therefore, the Petition for Relief should be dismissed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations issue a final order dismissing the Petition for Relief filed in FCHR No. 2012H0004. DONE AND ENTERED this 16th day of February, 2012, in Tallahassee, Leon County, Florida. S E. GARY EARLY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 2012. COPIES FURNISHED: Eulinda M. Russ Post Office Box 902 Starke, Florida 32091 Sean Michael Murrell, Esquire Murrell Law, LLC 4651 Salisbury Road South, Suite 503 Jacksonville, Florida 32256 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Larry Kranert, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
Findings Of Fact Petitioner is the state agency charged with the enforcement of the provisions of Part VIII of Chapter 468, Florida Statutes, and of Chapter 61B-55, Florida Administrative Code. At all times material to this proceeding Respondent, Robert Rosen, was licensed as a community association manager and held license number 3371 issued by Petitioner. At the time of the formal hearing, Respondent had been performing community association management services for approximately fifteen years. Respondent has had extensive participation in community association management education and training activities and was, at all times pertinent hereto, aware of the duties imposed on community association managers by statute and by rule. Part VIII of Chapter 468, consisting of Sections 468.431 - 468.437, Florida Statutes, pertain to the regulation and licensure of Community Association Management. Section 468.431, Florida Statutes, provides the following definitions pertinent to this proceeding: "Community association management" means any of the following practices requiring substantial specialized knowledge, judgment, and managerial skill when done for remuneration and for the public and when the association or associations served contain more than 50 units or have an annual budget or budgets in excess of $100,000: controlling or disbursing funds of a community association, preparing budgets or other financial documents for a community association, assisting in the noticing or conduct of community association meetings, and coordinating maintenance for the residential development and other day-to-day services involved with the operation of a community association. A person who performs clerical or ministerial functions under the direct supervision of a licensed manager or who is charged only with performing the maintenance of a community association and who does not assist in any of the management services described in this subsection is not required to be licensed under this part. "Community association manager" means a person who is licensed pursuant to this part to perform community association management services. A person performing community association management services to one or more associations containing more than 50 units or having an annual budget or budgets in excess of $100,000 must possess a community association manager's license. Licenses to act as a community association manager are issued by Petitioner to individual persons. Licenses are not issued to corporations. An individual who is a community association manager within the meaning of Section 468.431(3), Florida Statutes, is required by the provisions of Section 468.432(1), Florida Statutes, to be licensed by the Petitioner, as follows: A person shall not manage or hold himself out to the public as being able to manage a community association in this state unless he is licensed by the department in accordance with the provisions of this part. . . . Corporations that provide community association management services through licensed employees merely have to register with the Petitioner pursuant to Section 468.432(2), Florida Statutes, which provides, in pertinent part, as follows: Nothing in this part prohibits a corporation, partnership, trust, association, or other like organization from engaging in the business of community association management without being licensed if it employs licensed natural persons in the direct provision of community association services. Such corporation, partnership, trust, association, or other organization shall also file with the department a statement on a form approved by the department that it submits itself to the rules of the department and the provisions of this part which the department deems applicable. Petitioner has rule making authority pursuant to the provisions of Section 468.433(3), Florida Statutes. Petitioner has the authority to enforce its rules and statutes pursuant to the provisions of Section 468.436, Florida Statutes. Pursuant to its rule making authority, Petitioner has enacted Rule 61B- 55.007, Florida Administrative Code, which provides, in pertinent part, as follows: Standards of Professional Conduct. All licensees and registrants shall adhere to the following provisions and standards of professional conduct, and such provisions and standards shall be deemed automatically incorporated, as duties of all licensees and registrants, into any written or oral agreement for the rendition of community association management services, the violation of which shall constitute gross misconduct or gross negligence. Definitions. As used in this rule, the following definitions apply: The word "control" means the authority to direct or prevent the actions of another person or entity pursuant to law, contract, subcontract or employment relationship with a community association, its board of directors, any committee thereof or any member of any board or committee. "Licensee" means a person licensed pursuant to section 468.432(1), Florida Statutes. "Registrant" means an entity registered pursuant to section 468.432(2), Florida Statutes. The word "funds" as used in this rule includes money and negotiable instruments including checks, notes and securities. * * * (6) Records. (a) A licensee or registrant shall not withhold possession of any books, records, accounts, funds, or other property of a community association when requested by the community association to deliver the same to the association upon reasonable notice. It shall be presumed that reasonable notice shall extend no later than 7 business days after receipt of a written request from the association. The provisions of this rule apply regardless of any contractual or other dispute between the licensee and the community association, or between the registrant and the community association. It shall be considered gross misconduct, as provided by Section 468.436(2), Florida Statutes, for a licensee or registrant to violate the provisions of this subsection. The purpose of the community association manager licensing and regulation statute is to protect the public in general, and community association members in particular. Its primary goal is to ensure that managers who receive licenses from the state are trustworthy and have some degree of professional competence. Rosen Management Service, Inc., is a corporation that is not a party to this proceeding. Robert Rosen, in addition to being a licensed community association manager, is the president of Rosen Management Service, Inc. Throughout this proceeding, Robert Rosen acted through his corporation in providing community association management services to the associations involved in this proceeding. Prior to the termination of the management agreements between Rosen Management Service, Inc., and the six associations involved in this proceeding, Robert Rosen was a member of and an ex officio officer of each association. At all times pertinent to this proceeding, Rosen Management Service, Inc., employed licensed community association managers in addition to Robert Rosen. There was no evidence that any licensed community association manager employed by Rosen Management Service, Inc., other than Robert Rosen provided services to the six associations that are involved in this proceeding. At all times pertinent to this proceeding, Robert Rosen controlled the management of Rosen Management Service, Inc. The six separate community associations involved in this proceeding are located in Dade County, Florida. Rosen Management Service, Inc., began providing community association management services to each of these associations on January 1, 1991. The services provided to each association by Rosen Management Service, Inc., included the management and control of each association's finances. Those six associations are: Moors Master Maintenance Association, Inc. Moors Town Villas Maintenance Association, Inc. Moors Garden Homes Maintenance Association, Inc. Moors Pointe Condominium Association, Inc. Moors Village Homes Maintenance Association, Inc. Moors Patio Homes Maintenance Association, Inc. At issue in this proceeding are certain bank accounts that were opened in the Dadeland branch office of Southeast Bank by Rosen Management Service, Inc. Southeast Bank was acquired by First Union National Bank of Florida in 1992 after intervention by the Federal Deposit Insurance Corporation. The subject accounts became accounts in the Dadeland branch of the First Union National Bank after the acquisition. At the time these accounts were opened, Robert Rosen was a member of and ex officio officer of each association and had the authorization of each association to open each account in the manner in which it was opened. Moors Master Maintenance Association, Inc. The Moors Master Maintenance Association, Inc., and Rosen Management Service, Inc., entered into a management agreement that was effective January 1, 1991. By that agreement, Rosen Management Service, Inc., agreed to provide community association management services to the Moors Master Maintenance Association, Inc. The agreement provided for the termination of the agreement by either party with or without cause upon sixty days written notice. The agreement was executed by Robert Rosen as president of Rosen Management Service, Inc. On January 9, 1991, Robert Rosen caused an interest bearing checking account, account #018-690008, to be opened at the Dadeland branch of the Southeast Bank. The owner information was completed as follows: "Rosen Management Service, Inc., as agent for The Moors Master Maintenance Association, Inc." Robert Rosen was the only person authorized to sign on this account. The operating funds of the association were deposited into that account. On October 8, 1991, the Moors Master Maintenance Association, Inc., voted to terminate the management agreement with Rosen Management Service, Inc., and notified Robert Rosen of that action. On October 9, 1991, the attorneys representing the Moors Master Maintenance Association, Inc., notified Robert Rosen, as president of Rosen Management Service, Inc., that it had terminated the contract and demanded a return of the Association's books and records. This letter also stated: ". . . effective immediately no additional checks are to be written by you on any of the accounts at (sic) the Association." The Moors Master Maintenance Association, Inc., caused its attorneys to write a letter to Southeast Bank dated October 10, 1991, concerning account #018-690008 which stated, in pertinent part, as follows: . . . At a meeting of the Board of Directors held on Tuesday, October 8, 1991, the Board voted to terminate its management agent, Rosen Management Service, Inc. Accordingly, please be advised that effective immediately, no further activity with respect to the above referenced account is to be initiated by Rosen Management Service, Inc. and/or Robert Rosen. The Moors Master Maintenance Association, Inc., wrote to Southeast Bank a letter dated November 19, 1991, which stated, in pertinent part, as follows: This letter is to inform you that at a Board of Directors meeting held on Tuesday, October 8, 1991, the Board of Directors of the Moors Master Maintenance Association terminated their contract with Rosen Management. This refers to the contract that went into effect January 1, 1991. Rosen Management is no longer an agent of the above mentioned association. Please transfer all monies in the Associations' account #018-690008 to the new account we opened . . . On November 19, 1991, the president of the Moors Master Maintenance Association advised the Southeast Bank that it had opened a new account and requested that the funds in account #018-690008 be transferred to the new account. Moors Town Villas Maintenance Association, Inc. The Moors Town Villas Maintenance Association, Inc., and Rosen Management Service, Inc., entered into a management agreement that was effective January 1, 1991. By that agreement, Rosen Management Service, Inc., agreed to provide community association management services to the Moors Town Villas Maintenance Association, Inc. The agreement provided for the termination of the agreement by either party with or without cause upon sixty days written notice. The agreement was executed by Robert Rosen as president of Rosen Management Service, Inc. On January 9, 1991, Robert Rosen caused an interest bearing checking account, account #018-690024, to be opened at the Dadeland branch of the Southeast Bank. The owner information was completed as follows: "Rosen Management Service, Inc., as agent for The Moors Town Villa Homes Maintenance Association, Inc." Robert Rosen was the only person authorized to sign on this account. The operating funds of the association were deposited into that account. On October 22, 1991, the Moors Town Villas Maintenance Association, Inc., voted to terminate the management agreement with Rosen Management Service, Inc., and notified Robert Rosen of that action. By letter dated November 13, 1991, the association advised Robert Rosen, as president of Rosen Management Service, Inc., that all records, documents, files, contracts, and invoices belonging to the association should be turned over to the new management company. The Moors Town Villas Maintenance Association, Inc., wrote to Southeast Bank a letter dated November 21, 1991, which stated, in pertinent part, as follows: This letter is to inform you that at a Board of Directors meeting held on Tuesday, October 22, 1991, the Board of Directors of the Moors Town Villas Maintenance Association terminated their contract with Rosen Management. This refers to the contract that went into effect January 1, 1991. Rosen Management is no longer an agent of the above mentioned association. Please transfer all monies in the Associations' account #018-690024 to the new account we opened . . . Moors Garden Homes Maintenance Association, Inc. The Moors Garden Homes Maintenance Association, Inc., and Rosen Management Service, Inc., entered into a management agreement that was effective January 1, 1991. By that agreement, Rosen Management Service, Inc., agreed to provide community association management services to the Moors Garden Homes Maintenance Association, Inc. The agreement provided for the termination of the agreement by either party with or without cause upon sixty days written notice. The agreement was executed by Robert Rosen as president of Rosen Management Service, Inc. On January 9, 1991, Robert Rosen caused an interest bearing checking account, account #018-689992, to be opened at the Dadeland branch of the Southeast Bank. The owner information was completed as follows: "Rosen Management Service, Inc., as agent for The Garden Homes of the Moors Maintenance Association, Inc." Robert Rosen was the only person authorized to sign on this account. The operating funds of the association were deposited into that account. On October 24, 1991, the Moors Garden Homes Maintenance Association, Inc., voted to terminate the management agreement with Rosen Management Service, Inc., and notified Robert Rosen of that action. By letter dated November 7, 1991, the association advised Robert Rosen, as president of Rosen Management Service, Inc., that all records, documents, files, contracts, and invoices belonging to the association should be turned over to the new management company. The Moors Garden Homes Maintenance Association, Inc., wrote to Southeast Bank a letter dated November 21, 1991, which stated, in pertinent part, as follows: This letter is to inform you that at a Board of Directors meeting held on Tuesday, October 24, 1991, the Board of Directors of the Moors Garden Homes Maintenance Association terminated their contract with Rosen Management. This refers to the contract that went into effect January 1, 1991. Rosen Management is no longer an agent of the above mentioned association. Please transfer all monies in the Associations' account #018-689992 to the new account we opened . . . Moors Pointe Condominium Association, Inc. The Moors Pointe Condominium Association, Inc., and Rosen Management Service, Inc., entered into a management agreement that was effective January 1, 1991. By that agreement, Rosen Management Service, Inc., agreed to provide community association management services to the Moors Pointe Condominium Association, Inc. The agreement provided for the termination of the agreement by either party with or without cause upon sixty days written notice. The agreement was executed by Robert Rosen as president of Rosen Management Service, Inc. On January 9, 1991, Robert Rosen caused an interest bearing checking account, account #018-689984, to be opened at the Dadeland branch of the Southeast Bank. The owner information was completed as follows: "Rosen Management Service, Inc., as agent for The Moors Pointe Condominium Association, Inc." Robert Rosen was the only person authorized to sign on this account. The operating funds of the association were deposited into that account. On October 24, 1991, the Moors Pointe Condominium Association, Inc., voted to terminate the management agreement with Rosen Management Service, Inc., and notified Robert Rosen of that action. The letter terminating the management agreement was dated October 31, 1991, and advised Robert Rosen, as president of Rosen Management Service, Inc., that all books and records for the association should be turned over to the new management company. The Moors Pointe Condominium Association, Inc., wrote to Southeast Bank a letter dated November 21, 1991, which stated, in pertinent part, as follows: This letter is to inform you that at a Board of Directors meeting held on Tuesday, October 25, 1991, the Board of Directors of the Moors Pointe Condominium Association terminated their contract with Rosen Management. This refers to the contract that went into effect January 1, 1991. Rosen Management is no longer an agent of the above mentioned association. Please transfer all monies in the Associations' account #018-689984 to the new account we opened . . . Moors Village Homes Maintenance Association, Inc. The Moors Village Homes Maintenance Association, Inc., and Rosen Management Service, Inc., entered into a management agreement that was effective January 1, 1991. By that agreement, Rosen Management Service, Inc., agreed to provide community association management services to the Moors Village Homes Maintenance Association, Inc. The agreement provided for the termination of the agreement by either party with or without cause upon sixty days written notice. The agreement was executed by Robert Rosen as president of Rosen Management Service, Inc. On January 9, 1991, Robert Rosen caused an interest bearing checking account, account #018-690032, to be opened at the Dadeland branch of the Southeast Bank. The owner information was completed as follows: "Rosen Management Service, Inc., as agent for The Moors Village Homes Maintenance Association, Inc." Robert Rosen was the only person authorized to sign on this account. The operating funds of the association were deposited into that account. On October 24, 1991, the Moors Village Homes Maintenance Association, Inc., voted to terminate the management agreement with Rosen Management Service, Inc., and notified Robert Rosen of that action. The Moors Village Homes Maintenance Association, Inc., wrote to Southeast Bank a letter dated November 21, 1991, which stated, in pertinent part, as follows: This letter is to inform you that at a Board of Directors meeting held on Tuesday, October 25, 1991, the Board of Directors of the Moors Village Homes Maintenance Association terminated their contract with Rosen Management. This refers to the contract that went into effect January 1, 1991. Rosen Management is no longer an agent of the above mentioned association. Please transfer all monies in the Associations' account #018-690032 to the new account we opened . . . Moors Patio Homes Maintenance Association, Inc. The Moors Patio Homes Maintenance Association, Inc., and Rosen Management Service, Inc., entered into a management agreement that was effective January 1, 1991. By that agreement, Rosen Management Service, Inc., agreed to provide community association management services to the Moors Patio Homes Maintenance Association, Inc. The agreement provided for the termination of the agreement by either party with or without cause upon sixty days written notice. The agreement was executed by Robert Rosen as president of Rosen Management Service, Inc. On January 9, 1991, Robert Rosen caused an interest bearing checking account, account #018-690016, to be opened at the Dadeland branch of the Southeast Bank. The owner information was completed as follows: "Rosen Management Service, Inc., as agent for The Moors Patio Homes Maintenance Association, Inc." Robert Rosen was the only person authorized to sign on this account. The operating funds of the association were deposited into that account. On October 22, 1991, the Moors Patio Homes Maintenance Association, Inc., voted to terminate the management agreement with Rosen Management Service, Inc., and notified Robert Rosen of that action. The letter terminating the management agreement was dated October 31, 1991, and advised Robert Rosen, as president of Rosen Management Service, Inc., that all books and records of the association should be turned over to the new management company. The Moors Patio Homes Maintenance Association, Inc., wrote to Southeast Bank a letter dated November 21, 1991, which stated, in pertinent part, as follows: This letter is to inform you that at a Board of Directors meeting held on Tuesday, October 22, 1991, the Board of Directors of the Moors Patio Homes Maintenance Association terminated their contract with Rosen Management. This refers to the contract that went into effect January 1, 1991. Rosen Management is no longer an agent of the above mentioned association. Please transfer all monies in the Associations' account #018-690016 to the new account we opened . . . The Collateral Litigation. In November 1991, Rosen Management Service, Inc., (plaintiff) brought suit against the Moors Master Maintenance Association, Inc., (defendant) in circuit court seeking compensatory damages in the amount of $927,553.24 and punitive damages in the minimum amount of $2,782,659.70. That proceeding was pending at the time of the formal hearing held in the instant proceeding. In December 1991, the six associations (plaintiffs) sued Rosen Management Service, Inc., and Robert Rosen (defendants) in circuit court seeking temporary and permanent injunctive relief requiring the defendants to turn over the books and records of the plaintiffs. On December 19, 1991, a special master was appointed in this circuit court proceeding. The special master was ordered to take possession of the books and records of the six associations, including the six bank accounts. The attorney for the defendants in that circuit court proceeding consented to the transfer of the control of the six bank accounts to the special master. Before the transfer could be effectuated, the circuit court proceeding was voluntarily dismissed by the plaintiffs. Consequently, the special master never took possession of the funds in these bank accounts. Robert Rosen was aware that the special master never took possession of these bank accounts. On or about March 31, 1993, a separate proceeding was filed in circuit court by the six associations (plaintiffs) against Rosen Management Service, Inc. That proceeding was pending at the time of the formal hearing held in the instant proceeding. The Manager of the Bank. In reaction to the letters from the six Moors associations and their attorneys, Diego Rodriguez, the manager of the Dadeland branch of the Southeast Bank, advised Mr. Rosen that he no longer had any authority over the account and that the bank would not take any instructions from him. This information was conveyed to Mr. Rosen by Mr. Rodriguez in October 1991, in April 1992, and on September 3, 1992. On September 3, 1992, Mr. Rodriguez wrote a letter to Sharon Malloy, Assistant Bureau Chief for Petitioner's Bureau of Condominiums. That letter corroborates the Respondent's testimony as to information provided to him by Mr. Rodriguez. That letter stated, in pertinent part, as follows: "All went fine [with the six accounts] until October 1991, when we received a certified letter from the Law Firm of Becker & Poliakoff stating that they represented the six Moors Associations, and instructed this banking center to remove Mr. Robert Rosen as an authorized signer on the six accounts. The letter further stated that this bank could no longer accept any instructions what- so-ever from Rosen and not to discuss any of these accounts with him. Ms. Malloy, our branch has done just that. We informed Mr. Rosen that he no longer had any control, custody, jurisdiction, or any other authority on these accounts. That was in October 1991, and we've told that to Mr. Rosen on at least a dozen occasions since then, including April 1992 when we confirmed this in writing to Mr. Rosen, and again today, September 3, 1992. We specifically told Mr. Rosen that in view of these circumstances, we would require a Court Order before we could accept any instructions from anyone as to these accounts. Your staff must have misinterpreted my letter of April 1992, which clearly stated that Mr. Rosen has been removed as a signer on these accounts. This doesn't mean he just can't sign; it means that he has no control, no custody, no jurisdiction, no power of any kind on these accounts. These accounts have each been coded so as not to allow Mr. Rosen either access to the funds or information on these accounts. This Bank will not take any instructions from him!!! (Emphasis in the original.) The Attorneys for the Bank. Southeast Bank, and later First Union Bank, asserted the position that it could not transfer the funds or otherwise release the funds in the six accounts without the written consent of a duly authorized representative of Rosen Management Service, Inc. On May 12, 1992, Steve Gillman, the attorney for First Union Bank advised the attorneys for the associations in writing that the transfer of the bank accounts established by Rosen Management Service, Inc., could be transferred to the new bank accounts established by the associations if an authorized representative of Rosen Management Service, Inc., as the account party executed an appropriate transfer request. On May 13, 1992, the attorneys for the associations forwarded to the attorney for the Respondent a copy of the May 12, 1992, letter from the bank's attorney. Enclosed with that letter was a simple, single page authorization form by which Robert Rosen, on behalf of Rosen Management Service, Inc., could consent to the transfer of the funds in the six association bank accounts to new bank accounts controlled by the associations. Robert Rosen received a copy of this letter and the enclosures. This letter of May 13, 1992, provided, in pertinent part, as follows: . . . As you can see an appropriate transfer request from your clients is all that is required to return the funds to their beneficial owners. Pursuant to the foregoing, we make final demand upon your clients to provide authorization to the bank to transfer the funds on deposit beneficially owned by the respective Moors associations to the new accounts at First Union/Southeast already established for the purpose of facilitating such a transfer. Toward this end, I have enclosed an authorization for your clients to sign forthwith. Robert Rosen knew that the six associations were unable to withdraw the funds from the six bank accounts because of the repeated demands of the associations. Prior to the position asserted by the bank as reflected by Mr. Gillman's letter of May 1992, there was some confusion as to what Respondent could or should do to transfer these accounts. This situation was exacerbated by the collateral litigation filed by Rosen Management Service, Inc., and by the associations, the voluntary dismissal of the suit by the associations after the special master had been appointed, and by the erroneous advice given by Mr. Rodriguez. Notwithstanding the position asserted by Mr. Rodriguez, Mr. Rosen knew after he received copies of the letters from Mr. Gillman, that his authorization was all that was required to transfer the funds from the old accounts to the new accounts. Robert Rosen failed to execute that simple authorization form until August 18, 1993, thereby blocking access by the associations to their funds in these bank accounts. There was a meeting on July 1, 1992, involving the Respondent, his attorney and attorneys and representatives of the six associations. During that meeting, Respondent was again asked to sign the consent form necessary to transfer the funds in the six accounts at issue in this proceeding to accounts controlled by the respective associations. Despite repeated demands for him to do so, Respondent did not sign the consent form that he knew was required to transfer the funds in the six bank accounts to the respective associations until August 1993. As a result of Robert Rosen's failure to sign the consent form in his capacity of President of Rosen Management Service, Inc., or to instruct some other qualified representative of Rosen Management Service, Inc., sign the form, these six associations were deprived of access to their funds until August 1993. Robert Rosen testified that he delivered an executed copy of this form to the First Union Bank Dadeland branch office shortly after he received it in May 1992. This self-serving testimony lacks credibility and is rejected as being contrary to the clear and convincing evidence that he did not execute the consent form until the first day of the formal hearing. On August 18, 1993, the first day of the formal hearing that was held in this proceeding, Robert Rosen signed the one-page document that authorized the transfer of all six association bank accounts to the respective associations. This authorization form was the same one-page document that had been forwarded to Respondent's counsel, and subsequently to Respondent, on May 13, 1992. Respondent had been repeatedly asked to execute this authorization form. On August 19, 1993, the funds that had been in account #018-690008 were transferred to a new account of the Moors Master Maintenance Association, Inc. The balance in the account at the time of the transfer was approximately $108,000.00. On August 19, 1993, the funds that had been in account #018-690024 were transferred to a new account of the Moors Town Villas Maintenance Association. The balance in the account at the time of the transfer was in excess of $100,000. On August 19, 1993, the funds that had been in account #018-689992 were transferred to a new account of the Moors Garden Homes Maintenance Association. The balance in the account at the time of the transfer was in excess of $100,000. On August 19, 1993, the funds that had been in account #018-689984 were transferred to a new account of the Moors Pointe Condominium Association The balance in the account at the time of the transfer was approximately $40,000. On August 19, 1993, the funds that had been in account #018-690032 were transferred to a new account of the Moors Village Homes Maintenance Association. The balance in the account at the time of the transfer was approximately $41,000. On August 19, 1993, the funds that had been in account #018-690016 were transferred to a new account of the Moors Patio Homes Maintenance Association, Inc. The balance in the account at the time of the transfer was approximately $75,000. Robert Rosen did not turn over and did not cause his corporation to turn over the funds of the six associations to those associations within seven business days of a written request to do so. Robert Rosen did not execute and did not cause his corporation to execute the written authorization form that was required to transfer the funds to the six associations within seven business days of a written request to do so. Because the six associations did not have access to their funds during the approximately two years that this matter was in dispute, the associations had to impose special assessments on their members, had to delay paying bills, and had to use reserve funds for operating bills. The associations also incurred attorneys' fees in attempting to secure the return of their funds. Robert Rosen has not been previously disciplined by the Petitioner. At all times pertinent to this proceeding, the funds were in interest bearing accounts. All funds in the six association accounts, including accrued interest, were turned over to the respective associations on August 19, 1993.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the licensure of Robert Rosen as a community association manager be revoked. DONE AND ORDERED this 1st day of February 1994 in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 1st day of February 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-0344 The following rulings are made on the proposed findings of fact submitted by Petitioner. The proposed findings of fact in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 24, 25, 28, 29, 31, 32, 33, 43 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 22, 30, 34, 35, 36, 37, 38, 39, 40, 41, 42, 44, 45, 46, 47, 48, 49, 50 are rejected as being subordinate to the findings made. The proposed findings of fact in paragraph 23 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraphs 26 and 27 are adopted in part by the Recommended Order. The proposed findings in the last sentence of each paragraph are rejected as being argument as to the interpretation of written documents and unnecessary to the conclusions reached. The proposed findings of fact in paragraph 36 are adopted in part by the Recommended Order, and are subordinate in part to the findings made. The proposed findings of fact in paragraphs 51, 52, 53, 54 are subordinate to the conclusions reached. The following rulings are made on the proposed findings of fact submitted by Respondent. The following references are to paragraphs 1-14 contained in Respondent's Proposed Recommended Order in the section styled "General Findings of Fact and Conclusions of Law." The conclusions in paragraph 1 are rejected as being unnecessary as findings of fact and as being contrary to the conclusions reached. The proposed findings of fact and conclusions in paragraphs 2, 7, and 10 are rejected as being contrary to the conclusions reached or as being contrary to the conclusions reached. Findings of fact are made in the Recommended Order as to how the respective bank accounts were opened. The proposed findings of fact in paragraph 3 are adopted to the extent that the proposed findings are consistent with the findings made. The remainder of paragraph 3 is rejected as being contrary to the conclusions reached or to the findings made. The proposed findings of fact in paragraph 4 are adopted in material part by the Recommended Order or are subordinate to the findings made. Paragraph 5 consists of argument that is inappropriate as findings of fact. The proposed findings of fact in paragraph 6 are adopted in material part by the Recommended Order or are subordinate to the findings made. Paragraphs 7, 8 and 9 consist of argument or conclusions that are rejected as being contrary to the conclusions reached or to the findings made. The proposed findings of fact in paragraph 10 are adopted in part by the Recommended Order by the findings that Rosen Management Service, Inc., authorized the transfer of the funds to the special master. The proposed findings are otherwise rejected as being contrary to the findings made. Findings are made in the Recommended Order as to contacts Respondent made with the bank. The proposed findings of fact in paragraphs 11 and 12 are adopted to the extent the proposed findings are consistent with the findings made, but are otherwise rejected as being unnecessary to the conclusions reached since it was not established that Respondent's inquiries were directed toward returning the funds to the associations. The reference to December 1990 is unnecessary to the conclusions reached and apparently a misreading of the letter sent by Mr. Rodriguez to Ms. Malloy dated September 3, 1992. Findings are made in the Recommended Order pertaining to the collateral litigation. The proposed findings of fact in paragraph 13 are adopted to the extent the proposed findings are consistent with the findings made, but are otherwise rejected as being contrary to the greater weight of the evidence or as being contrary to the conclusions reached. The remainder of paragraph 13 consists of argument that is rejected as being contrary to the conclusions reached or as being unnecessary to the conclusions reached. Paragraph 14 consists of argument that is rejected as unnecessary as findings of fact and, in part, contrary to the conclusions reached. The following references are to paragraphs 1-15 contained in Respondent's Proposed Recommended Order in the section styled "Findings of Fact and Conclusions of Law on Termination of Agency Issue and Other Issues Relating to Charges." The proposed findings of fact in paragraphs 1, 2, 5 are adopted in material part by the Recommended Order. Paragraph 3 consists of argument or conclusions that are unnecessary as findings of fact. Paragraph 4 consists of argument or conclusions that are contrary to the findings or to the conclusions reached. The proposed findings of fact in paragraphs 6 and 7 are adopted in part by the Recommended Order or are subordinate to the findings made. The proposed findings of fact in paragraphs 6 and 7 are rejected to the extent they are inconsistent with the findings made in the Recommended Order. The proposed findings of fact in paragraph 8 are adopted in part by the Recommended Order. The remainder of paragraph 8 consists of argument that is unnecessary as findings of fact. Paragraph 9 consists of argument that is unnecessary as findings of fact. The proposed findings of fact in paragraph 10 are subordinate to the findings made. The proposed findings of fact in paragraph 11 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 12 are adopted in part by the Recommended Order. The remainder of paragraph 12 is rejected as being unnecessary to the findings made and to the conclusions reached. The proposed findings of fact contained in paragraphs 13 and 14 are either adopted by the Recommended Order or are subordinate to the findings made. The remainder of both paragraphs consists of argument that is inappropriate to incorporate as findings of fact. The proposed findings of fact in Paragraph 15-1 are adopted in material part by the Recommended Order. The remainder of paragraph of paragraph 15 is rejected as being predicated on self-serving testimony that lacks credibility and is contrary to the clear and convincing evidence presented by Petitioner. COPIES FURNISHED: Jeanne M. L. Player, Esquire Department of Business and Professional Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 Franklin D. Kreutzer, Esquire 3041 Northwest 7th Street, Suite 100 Miami, Florida 33125 Henry M. Solares, Director Division of Florida Land Sales, Condominiums and Mobile Homes 1940 North Monroe Street Tallahassee, Florida 32399-0792 Jack McRay, Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
