Findings Of Fact Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the state of Florida, in particular Section 20.30, Florida Statutes; Chapters 120, 455 and 475, Florida Statutes and the rules promulgated in accordance with those statutes. Respondent is now and was at all times associated with this administrative complaint a licensed real estate broker in the state of Florida having been issued license number 0251002 under the authority of Chapter 475, Florida Statutes. Respondent's last license was issued as a real estate broker with the firm of Eastern Marketing, Inc. which is located at 17841 U.S. Highway 441, 3 Mount Dora, Florida 32757. RESPONDENT'S ROLE At the time of the hearing, Respondent had been involved in the real estate profession for approximately 18 years. This real estate practice has been exclusively in the state of Florida. In addition to being a real estate broker, Respondent is licensed as a general contractor in Florida and as a mortgage broker in the state. His general contractor's license is a certified license. At times relevant to this inquiry, Respondent was a real estate broker with Collins and Associates, Inc., a real estate brokerage firm. He also had affiliation with Collins Builders, Inc., a licensed general contracting firm. He was a one half owner in Tallahassee Properties, a Florida general partnership in which the other ownership was held by W. Ronnie Collins, Respondent's brother. All of these firms did business in Florida and particular as these firms are involved with the issues in dispute, they did business in Tallahassee, Florida. At times relevant to this inquiry, Respondent was involved in a sales promotion program which has been referred to as a trade-in program. In essence, this program was designed to allow persons who had purchased residences from a firm or through affiliated Collins companies to turn over the initial residence to Tallahassee Properties in exchange for a new home bought from Collins Builders, Inc. with the builder using the real estate services of Collins and Associates, Inc. to sell the new home. The house that was being traded was deeded to Respondent or one of the companies with which he was affiliated. In this case, the company with which Respondent was affiliated with which had property deeded to it was Ralco, Inc. Those persons who were trading one home for another had been solicited by Collins and Associates, Inc. as a realtor in an advertising program. No realtor was involved in making commissions associated with the closing that took place between the sellers who were trading in a home and Tallahassee Properties, Respondent and Ralco, Inc. with whom he was affiliated. This arrangement was designed to stimulate sales of the new home being purchased. The traded homes typically had mortgages. Tallahassee Properties not only took possession of the traded or exchanged homes but was responsible for the activities associated with the closing of the transaction, to include assumption and payment of mortgages associated with the exchanged property. As grantee on the deeds in the traded homes Respondent and Ralco, Inc. were also responsible for assumption and payments. As Respondent identified in his testimony, he and his brother W. Ronnie Collins; Collins and Associates, Inc.; Collins Builders, Inc. and Tallahassee Properties were anticipated as being the individuals to apply for the assumption of loans with the lending agencies who held the mortgages on the traded property. W. Ronnie Collins was also one of the names in the overall scheme in which the traded-in property could be placed as grantee. Approximately 80 homes were traded over a period of 6 or 7 years. The properties in dispute in this case were among them. Respondent had authorized Tallahassee Properties and in particular his brother W. Ronnie Collins as managing partner of that partnership, to place the properties in Respondent's name, W. Ronnie Collins' name or any of several companies affiliated with Respondent in furtherance of identifying a grantee that the mortgage holder would allow to assume the mortgage. Respondent's expectation was that Tallahassee Properties and the title company involved in the closing of the transaction associated with the traded property would facilitate the assumption arrangement with the mortgage holder. The title company used in the cases that are at issue here was Capital Abstract and Title, Inc. In the closings for the traded homes, which are at issue in this case, the evidence presented at hearing which may be relied upon for fact finding did not reveal what attempts were made to have the mortgage holders for the traded homes ultimately accept the substitution of Respondent, his brother or one of the companies with which he was affiliated as parties responsible for the existing mortgages on the traded properties. The reason which Respondent gave for allowing his brother, W. Ronnie Collins to act in his behalf in Tallahassee Properties was that he felt that it was impossible for him to involve himself in that business and its day to day process and at the same time be active in Collins and Associates, Inc. and Collins Builders, Inc. Therefore, he allowed W. Ronnie Collins to act for him in the business of Tallahassee Properties. This explanation has not been disputed and being tenable is credited as true. In accepting deeds related to the traded property, as will be described in the individual instances that follow, Respondent recognized that he had obligated himself to take the responsibility for assumption of and payment of the mortgage. Respondent has no direct knowledge of whether any of the trade-in transactions were followed up by gaining permission from the mortgage holder to allow someone other than the original mortgagor to become responsible for the mortgage payments. The contracts for obtaining the traded-in homes were executed by Tallahassee Properties. Nonetheless, as described, Respondent was given a deed to some of the properties purchased, to include properties in dispute here. Respondent never orally or in writing advised the sellers of the traded property that the routine mortgage payments associated with the traded property and the overall mortgage obligation would no longer be the responsibility of those sellers. In one of the cases which is at issue here involving the trade-in property of John M. and Jeanne B. Miller, Respondent stated that he received their traded property as grantee on the deed. In fact Ralco, Inc. was grantee. When asked about whether he had assumed the obligation for the mortgage that existed on that home, Respondent replied that he had assumed the loan. When asked if he explained the fact to that assumption to the Millers, he pointed out that he had never talked to the individuals. When asked if he had directed anyone in any of his companies or his real estate company in particular to explain the details of the transaction, Respondent pointed out that Collins and Associates, Inc. as realtor, and as a licensed broker had trained each associate to explain all of the rules and procedures associated with Fannie Mae, Freddie Mac, FHA, VA and HUD loans and that Respondent as the broker of those associates would expect that the associates would explain everything to the Millers. Whether the Millers were informed about such matters by Collins and Associates, Inc. employees was not proven. The traded in properties were rented, repaired and sold or kept in inventory by Tallahassee Properties. After purchase of the traded-in properties, Respondent's expectations as a partner in Tallahassee Properties was that the partnership would take possession of the properties and manage them and make payments on existing mortgages associated with any of those properties. Respondent believes that until the latter part of 1985 when he and some of his operations were involved in a Chapter 11 Federal Bankruptcy declaration, payments on the existing mortgages for traded properties were being made, in that had it not been so that he would have been notified. The record offers no proof that can be relied upon to satisfactorily corroborate or rebut this assumption on his part. The Chapter 11 bankruptcy proceeding was not caused by problems associated with the traded properties. Ralco, Inc. was not involved in the bankruptcy. Some of the traded properties in question were owned by Ralco as grantee. Although Ralco was not involved in the bankruptcy, it was unable to make payments because of the bankruptcy in that the houses in question had a negative cash flow and Respondent was unable to take funds from the bankruptcy court and place them with Ralco, Inc. to make the payments on mortgages that existed on the traded properties. Collins Builders, Inc. and Collins and Associates, Inc. were not involved in the closings of the traded property. Their involvement was with the new house being purchased following the trade. The closing associated with the new house under purchase was a separate closing and Collins and Associates, Inc. received a real estate commission for its participation. None of the exact details of the solicitation process by Collins and Associates, Inc. in which homeowners were encouraged to trade existing residences on other homes built by Collins Builders, Inc. were made known, so that it might be understood whether Collins and Associates, Inc. promised to make the attempt to have the lender accept a substitute for the original mortgagor on the mortgage indebtedness, to include the possibility of the outright release of the original mortgages from the debt obligation. Therefore, that solicitation process has no part to play in examining the issue of Respondent's conduct associated with the closings of the traded homes. In the latter part of 1985, following the filing of the petition under Chapter 11, Bankruptcy Laws, Respondent and Duval First Corporation with which he was affiliated were granted an order of relief on December 23, 1985 in Case Nos. 85-07179B and 85-07178C, respectively in the United States District Court, Northern District of Florida, Tallahassee Division. As part of the disposition in front of the bankruptcy court, the bankrupt estates and Real Estate Financing, Inc. agreed that the bankruptcy estates would surrender certain properties and the automatic stay in all expressed injunctions associated with those properties were lifted. The bankruptcy court held that pursuant to 11 U.S.C. 506, Real Estate Financing, Inc. would not be entitled to an unsecured claim against the bankrupt estates for debts secured by the lien on those properties. Those properties had been encumbered by a first mortgage in favor for Real Estate Financing, Inc. The Court found that the value of those properties was equal to or exceeded the debts secured by the mortgage lien of Real Estate Financing, Inc. as of the date of the Order for Relief. In that Order for Relief, Real Estate Financing, Inc. was allowed a secured claim for the full extent of the debt due as of the date of the Order for Relief plus interest accrued up to the extent of the value of each property and up to the date of November 18, 1986. The bankruptcy court did not hold that Real Estate Financing, Inc. was entitled to any unsecured claim for any pre-petition debt that was secured by the lien on its mortgages. Among the properties affected by this action were those properties of David Walsh, Troy Brewer, Sam Hinson, Harold C. Miller, Peter Hartman, and John Miller, all of whom are listed as individuals whose transactions with Respondent are found in the Administrative Complaint and about which Respondent is said to have violated the aforementioned disciplinary provisions of Chapter 475, Florida Statutes. By this arrangement in bankruptcy court, Respondent hoped to avoid the circumstance by which the mortgage was foreclosed leaving a deficiency against the original mortgagor/homeowner of the traded-in property which would in turn lead to some claim against the bankruptcy estates for the amount of the deficiency. Nonetheless, Real Estate Financing, Inc. proceeded to foreclose on its mortgages as subsequently discussed in commenting on the individual counts to the Administrative Complaint pertaining to individual homeowners. While the bankrupt estates would have preferred to deed back the property in lieu of foreclosure, it accepted the foreclosures given the protections to the bankrupt estates that have been identified in this discussion. It should also be mentioned that two of the accounts in the Administrative Complaint pertaining to Eric Larsen and Robert Aubin, to be discussed, were not part of this arrangement in the bankruptcy court associated with Real Estate Financing, Inc. At the closings on the traded homes in question some explanations about the mortgage assumptions were made by persons who may have been representing Tallahassee Properties or other Collins affiliates, but these persons are not clearly identified in the record as to their actual position with those organizations and how Respondent was accountable for their remarks. Those remarks will be discussed in the assessment of the individual counts that follow. Respondent, following the petition for bankruptcy in his own name and that of companies with which he was associated, wrote to advise homeowners who had traded in their homes about his perception of the homeowners' status following that bankruptcy. These letters were written on February 18, 1986 on stationary of the Respondent and were signed by him. In this correspondence, which is the same format in all instances, he would make reference to the date upon which the transaction closed at which time the homeowner deeded over the traded property to Respondent or a company with which he was affiliated. He described the existence of the prior mortgage to Real Estate Financing, Inc. with a loan number and the existence of the paragraph 17, "due on sale" clause and, according to the letter, that the loan was not paid off at the time of the closing and the assertion that the lender would not allow the assumption of that loan by Respondent or one of his companies. Again this record is silent on the subject of what attitude the lender held about this, or even the matter of whether an attempt was made to have the lender accept a new obligor. He described how the lender was not considering Respondent or his company as purchaser but that the original mortgagor was being considered. This was taken to mean that Respondent was trying to express that the lender was looking to the original mortgagor as a responsible entity on the mortgage. The letter described how Respondent or one of his companies had been renting and making payments since the time of closing until December 23, 1985 when declaration of the Petition in bankruptcy went forward. It described how the Respondent and his companies were unable to continue funding payments related to the mortgages on the traded property which was in the name of the homeowners who had traded the property. The letter went on to describe how the payments would be brought current until February 28, 1986. The letter is interpreted to suggest that beyond that point, the property would either be deeded back to the original owner or the lender would foreclose. The letter expressed a preference by Respondent that because, interpreting the letter again, there was no cash flow that he preferred to see the property deeded back to the original owner. The name Bobbie May was given as a contact person and a telephone number provided for the homeowners to call regarding the return of the property back to the original homeowner. The letter goes on to describe an apology from Respondent to the homeowners. Movaline Hill who was a property manager for Tallahassee Properties traded in homes, to include the homes in discussion in the Administrative Complaint, offered her testimony at hearing. The principal business of Tallahassee Properties as established in her testimony was to rent homes. Ms. Hill advertised the property for rent, collected the rent, made payments on existing mortgages on the homes, and took care of maintenance matters. Tallahassee Properties took the rent and put the payments in escrow. One of the homes that Ms. Hill was involved with had belonged to David Walsh. It was a traded home and she had discussed with Walsh getting payment cards or coupons for the mortgage that existed on the traded home. The mortgage company had sent these cards or coupons to Walsh and Hill desired to have them so that the payments on the mortgage could be made. In this connection, Hill wrote Walsh a letter. A copy of that letter may be found as Petitioner's Exhibit 20. It indicates enclosure of a recorded deed on the traded property of Mr. Walsh showing Respondent as having the title in his name. It further states that Mr. Walsh should sign and mail a pre-prepared letter to Real Estate Financing, Inc. telling that lender to change the mailing address and requesting new payment cards. The letter describes that Real Estate Financing, Inc. did not know that the title was no longer in Mr. Walsh's name and that the lender would not transfer the mortgage to anyone and asks Walsh not to send the copy of the deed to the Respondent to the lender. Emphasis is placed in this correspondence on not sending that information to the lender. Ms. Hill was not instructed by anyone to write the letter. The reason why Ms. Hill said that she put an indication in the letter that the transfer of the mortgage could not be done was based upon her assertion that she had been told this by the lender. What connection Respondent had with the letter, if any, was not established. The cards that she received from Mr. Walsh on coupons for payments would have his name struck over and Respondent's name placed on it and Hill would send the check to the mortgage company for payment of the mortgage. With Real Estate Financing, Inc., Ms. Hill was sending one or two checks per month that dealt with 15 or 20 mortgages. There would be a lump sum payment with account numbers and backup materials sent with the check. The backup materials would include the payment cards or coupons. During Ms. Hill's tenure with the Tallahassee Properties, she says that she kept the mortgage payments current. No evidence was presented to the contrary which is competent. From this it is found that mortgage payments were kept current for a period of time which is not specifically shown. She received no contact from the mortgage companies on the topic of any assumption packages for these loans being assumed. She did receive some coupon books with the Respondent's name affixed. Those latter circumstances were not shown to be associated with any of the traded properties that are at issue in this case. Charles O. Middleton testified at the hearing. He had worked in 1981, 1982 and up to September, 1983, with Capitol Abstract and Title, Inc. which served as a closing agent on traded properties that were picked up by Tallahassee Properties. His recollection of the events is that, as closing agent for the title company, he worked from a contract which identified the terms of the transaction. His recollection is that the transactions associated with a trade property and the new home being purchased after trade was handled together. This is in contrast to the understanding of those homeowners whose traded properties are the subject of this Administrative Complaint and Respondent. The explanation by those homeowners and Respondent that two separate closings were held, one for the traded property and one for the newly purchased property is accepted as factually correct. Middleton recalls that explanations were given by him as closing agent concerning the nature of the transaction to include the matters of the paragraph 17 "due on sale" clause. He describes this arrangement as involving an affidavit or hold harmless agreement that had to be signed. This included the initialing of the paragraphs within that agreement by the buyer and the seller. Again, none of the homeowners who sold traded property that is described in the Administrative Complaint recalls such explanations and documents and their recollection is deemed more creditable and is accepted in lieu of the comments by Mr. Middleton. Likewise, the document for purposes of explanation which was offered as Respondent's Exhibit 8 containing disclaimers about the paragraph 17, "due on sale" clause, while admitted, offers no insight into the nature of what the homeowners were told in the cases that are at issue here because it isn't the same form that Middleton recalls using in the transactions he participated in as closing agent and hasn't been shown to be a form used in any of the cases here. Middleton explained that in the transactions he was involved in, the homeowners were provided a copy of every document to be utilized in the closing and that the original documents had their pages turned while the copies for the homeowners were being examined at the same time. A brief explanation would be given about each document and the homeowners were asked if they wished to take some time to read the documents and to ask any questions. Middleton as closing agent would offer to answer questions or put them in touch with the lender and let the lender answer questions. In Middleton's estimation, it was the closing agent's responsibility to make sure that necessary documents were presented to the lenders in the assumption of the mortgage for the traded in property. Respondent had not instructed Middleton in any of the closings on the topic of what to do with closing documents that were used at the time of transaction. Middleton said that he was unable to produce any of the documents of explanation concerning the closings which he participated in for Capital Abstract and Title, Inc. because he has no access to those files. Middleton identified the fact that in a circumstance in which a home had a mortgage and an assumption was called for, an assumption packet would be customarily ordered at the time of the request for assistance in the closing, which he refers to as an order. Middleton identifies the fact that he is only vaguely familiar with the transactions that are at issue in this Administrative Complaint. He thinks he may have closed some of them but he has no specific recollection about that. As a consequence, he has no worthwhile knowledge of how many of those transactions had assumption packages completed. COUNT I Samuel Hinson, Jr. owned property in Arbor Hills which he had bought from Collins Builders, Inc. on June 30, 1982. This house was taken in trade for a house on Starmount. This Starmount home was also purchased from Collins Builders, Inc. and Collins and Associates, Inc. served as the real estate firm for the purchase of the new home as agent for the seller. Andrew Jackson Federal Savings financed the new purchase. The traded in home was sold to Tallahassee Properties with Capital Abstract and Title, Inc., serving as closing agent according to documents presented at hearing. Mr. Middleton did not appear for Capital Abstract at that closing. In the purchaser's closing statement, W. Ronnie Collins is shown as the representative for Tallahassee Properties. Two warranty deeds were made from Hinson in selling his Arbor Hill property. In deeding his Arbor Hill property on May 20, 1983, one of those went to the Respondent and the other to Tallahassee Properties. In both warranty deeds, the grantee promised to assume and pay an existing mortgage in favor of Real Estate Financing, Inc. The existing mortgage on the Arbor Hills property had the paragraph 17 clause which absent certain exceptions allowed Real Estate Financing, Inc. at its option to declare all sums secured by the mortgage to be immediately due and payable, if the property was sold or transferred without prior written consent from the lender. None of the exceptions pertained to this transaction between Hinson and either Respondent or Tallahassee Properties. The paragraph 17 clause also stated that the mortgage holder was considered to have waived its option to accelerate if prior to the sale or transfer, the mortgage holder reached agreement with the purchaser in writing that the credit of the purchaser was satisfactory to the mortgage holder, thus allowing the purchaser to become responsible for the mortgage. In that instance, interest payable on the sum secured by the mortgage would be at the rate requested by the mortgage holder. The mortgagor, Hinson, would be released from all obligations under the mortgage note if the purchaser was substituted on prior written approval. Hinson went into the transactions involving the sale of his Arbor Hill house and the purchase of the Starmount house with the impression that he had to sell the Arbor Hill house in order to purchase the Starmount house. This was his surmise. Money realized in the sale of the Arbor Hill house was used as a down payment for the Starmount home. Petitioner believed that he had an arrangement to purchase the Starmount home with Ralph Collins. In reality, he was purchasing the home from Collins Builders, Inc. with Collins and Associates, Inc. being the seller's broker. In Mr. Hinson's mind, Respondent and Collins Brothers, Inc. and the then Collins real estate firm through Century 21 were all the same. Going into the transaction, Hinson was not familiar with Tallahassee Properties and its business purpose. Respondent was at both closings, the closing to sell the Arbor Hill house and the closing to purchase the Starmount home. No one discussed the matter of the assumption of the mortgage associated with the Arbor Hills house during the course of the closing of that home. Hinson got the impression from events that Respondent had bought his Arbor Hills house and that everything was being paid off. This impression was not based upon anything Respondent said to him. Hinson, after the closings, requested his insurance company to write to First Alabama concerning the cancellation of his homeowners policy on Arbor Hills. His understanding was that the insurance company sent a letter to do this and that First Alabama sent back a letter saying that they needed certain information. That latter correspondence was then taken to the Respondent. Respondent, under those circumstances, stated to Hinson that it was a mistake and that he would handle it, but that it would take some time to get some of the paper work done. Respondent did not comment to Mr. Hinson on that occasion that he had not assumed the mortgage for the Arbor Hill property nor did he indicate that none of the companies with which he was affiliated had assumed the mortgage. Respondent made no comment whatsoever about assumption of the mortgage in this conversation shown by facts presented at hearing. Hinson then got a new payment book from First Alabama, which he received a couple of days after the insurance letter. This was taken to Respondent and Respondent said that he would take care of it, that it was just a mistake. Again, what was meant by this remark was not developed at hearing. Hinson got one of the February 18, 1986 letters from Respondent that has been referred to previously. Having received this correspondence, Hinson complained to the Tallahassee Board of Realtors. Out of the process of his complaint, Hinson met with Keith Kinderman, Respondent's counsel and the Respondent together with Eric Hoffman, counsel to Hinson. Respondent told Hinson he would help get information and that his counsel, Mr. Kinderman would help in getting some form of restitution and help clear Hinson's name and seek relief from the Capital Abstract and Title, Inc. who had closed the Arbor Hill home. In attempting to obtain a Visa credit card and a Sears credit card, Hinson has been denied that credit. The reason given for the denial is the circumstance associated with the Arbor Hills home and non-payment of the mortgage. The exact circumstance of the Arbor Hills property, concerning who holds it now was not proven at hearing by evidence that can be relied upon for fact finding. COUNT II David P. Walsh and Leila DeJarnette Walsh, his wife bought a home in Huntington Woods from Collins Builders, Inc. on December 23, 1981. This home was financed through Real Estate Financing, Inc. and carried a mortgage from that lender. The mortgage included a paragraph 17 whose language was the same as the Hinson home financed by Real Estate Financing, Inc. The Walshes traded in the Huntington Woods property for a home on Faversham Drive which was financed by Citizens and Southern Mortgage Company. Separate closings were conducted. One was for the sale of the Huntington Woods property with Respondent receiving a warranty deed for that property which property was to be taken over by Tallahassee Properties. The second closing was associated with the sale of the Faversham Drive property from Collins Builders, Inc. to the Walshes. In executing the warranty deed in favor of Respondent as grantee pertaining to the Huntington Woods property, a condition of the warranty deed was an agreement by the grantee to assume the mortgage held by Real Estate Financing, Inc. and pay Capital Abstract and Title, Inc. through some person other than Middleton was the closing agent at the transaction involving the sale of the Huntington Woods property, according to documents at the hearing. Both that sale and the purchase of the Faversham Drive property took place on March 30, 1983. The Walshes signed a document reference the escrow account held by Real Estate Financing, Inc. on its Huntington Woods property. There is no indication whether this was or was not signed by Tallahassee Properties or the Respondent and sent to the Real Estate Financing, Inc. pertaining to funds in the escrow account and insurance coverage being transferred from the Walshes to Tallahassee Properties or Respondent as contemplated by the form. The separate closing associated with the Faversham Drive property was done through Tallahassee Title Company. Respondent was at the closing associated with the homes. Mr. Walsh is not in a position to pay for mortgages on two homes. Mr. Walsh's understanding of the trade in of his Huntington Woods home for the Faversham Drive home was to the effect that he could buy a new home from the transaction and that he would no longer be liable for the traded home, that all paperwork would be taken care of. Some salesman involved in these transactions made these remarks to Mr. Walsh; however, he doesn't know who that person was. Consequently, it is not possible to attribute responsibility for those remarks to Respondent. Subsequent to the closings, the Walshes received correspondence purportedly from First Alabama having to do with Real Estate Financing, Inc.'s mortgage held on the Huntington Woods' property. This correspondence of April 4, 1983, by its terms, reminds the Walshes that the mortgage holder has received notification of cancellation of the homeowner's policy and that the Walshes were to provide insurance coverage at all times. What the real circumstances of the homeowners policy was is not proven by competent evidence. In connection with the transactions, Mr. Walsh describes that he felt that he was dealing with a reputable real estate broker and that they had his best interest in mind. He was not represented by counsel at the closings. Mr. Walsh received one of the February 18, 1986 letters from Respondent as previously described. Mr. Walsh hired a lawyer to try to address the situation of the Huntington Woods property without success in the endeavor. To his knowledge the Huntington Woods property has been foreclosed on. No proof which is competent has been presented in the hearing to describe the exact nature of the developments with the property. Nonetheless, Mr. Walsh has had problems receiving credit twice since that time. Before the situation with the property he had never had credit problems. Mr. Walsh was proceeding in these transactions on the basis on the belief that Tallahassee Properties and the Respondent were the same entities. COUNT III Troy A. Brewer and Tina J. Brewer, his wife purchased a home from Collins Builders, Inc. in Huntington Woods on December 30, 1981. This home was financed by Real Estate Financing, Inc. A mortgage was given by the Brewers in favor of Real Estate Financing, Inc. and it included a paragraph 17 assumption clause as described in the Hinson mortgage financed by that lender. On March 25, 1983, the Brewers traded their Huntington Woods property for a home on Faringdon Drive. The seller of the Faringdon Drive property was Collins Builders, Inc. In these transactions, the Huntington Woods property was deeded to Respondent with the provisor in the warranty deed that Respondent would assume and agree to pay for the mortgage in favor of Real Estate Financing, Inc. Mr. Brewer is not in a position to meet mortgage payments associated with two mortgages; one on the Huntington Woods property and one on the Faringdon Drive property. Therefore, he would not knowingly obligate himself to assume mortgages associated with both of those properties. In the transactions associated with the traded property and new home purchased, Mr. Brewer proceeded on the basis that the first home was being taken over by the Respondent and that the mortgage would be paid off after a month or so as a means for him to purchase the second home. What led him to believe this is not clear. Mr. Brewer's recollection is that he was told that everything would be taken care of and he would not have to worry about anything and there wouldn't be any problems about the house being traded and that he could stay in the home that he was selling until the new home had been built and that once built, all transactions would be taken care of. Both the traded property and the property being purchased were financed by Real Estate Financing, Inc. He was not represented by an attorney in these matters. Some undisclosed realtor had told Mr. Brewer he could have an attorney but that he really didn't need one. As shown in the testimony of Mr. Brewer given at hearing, he had spoken to Respondent at closing. He also had conversations with Jackie Collins whom he believed to be a representative of Respondent. Jackie Collins was understood by Mr. Brewer to be a realtor. Again, the exact nature of the affiliation of Jackie Collins to the Respondent or his companies was not established in this hearing. Mr. Brewer did state that at the closing he was told by Respondent that there would be no problems. The nature of that remark was not further developed under interrogation of the witness. Nor was the matter of Mr. Brewer's comment to the effect that he had questioned the fact that his first mortgage on the Huntington Woods home was not assumable and had made that question known at the closing, other than to state that in response "they" had assured him everything would be taken care of and he wouldn't have to worry about it. This was associated with some remarks to the effect that Mr. Brewer should not worry that "we" would take it all in and that "they" would transfer everything over and take it out of the Brewers' name, again not pursued as to who "they" and "we" were and whether Respondent was a "they" or "we" or was in attendance when a "they" or "we" made the comments if he was not a "they" or "we." On this subject, Mr. Brewer was of the understanding that the transfer of the mortgage from Mr. Brewer to Respondent had in fact been tentatively approved by Real Estate Financing, Inc. but this was not proven by competent proof either. Mr. Brewer received one of the February 8, 1986 letters from Respondent as previously described. He in turn composed a letter of complaint concerning the transactions associated with the traded property. The complaint is dated March 31, 1986 and is addressed "To whom it may concern". As a result of the non-payment of the Huntington Woods property, Mr. Brewer received a letter purportedly from First Alabama for Real Estate Financing, Inc. dated February 13, 1986 that indicated that payment for the mortgage in the Brewer property had not been paid in January and February, 1986 and under paragraph 18 of the mortgage, Mr. Brewer was being notified of the failure to make payments and the possibility of the pursuit of these delinquent payments through legal means. Whether the assertions in this unauthenticated hearsay document are true was not proven by competent evidence. Beyond that date, in an action in which Respondent and the Brewers were named as defendants, Federal National Mortgage Association by and through its agent Real Estate Financing, Inc. obtained a Summary Final Judgment of foreclosure on the Huntington Woods property on June 1, 1988. This points out that the Brewers were not released from the mortgage obligation as envisioned by paragraph 17. It does not address what attempts were made by Respondent or his companies to gain their release. As a result of the foreclosure, Mr. Brewer has had problems with his credit. Notwithstanding the foreclosure on the Huntington Woods property, there has been no deficiency judgment entered against Mr. Brewer, to his knowledge. COUNT V On November 30, 1983, Collins Company of Pensacola, Inc. conveyed property at Eldorado Drive in Pensacola, Florida to Harold C. Miller, Jr., a Collins employee. That property was subject to a mortgage from Real Estate Financing, Inc. which included a paragraph 17 as included in the facts pertaining to the Hinson transaction involving that lender. This house was purchased because of a transfer of Mr. Miller to Pensacola as a condition of his employment with the Collins Company. The Collins Company of Pensacola was responsible for paying the mortgages during that time frame. In conversation with Respondent, it was determined that Miller would buy the house and the Respondent would buy it back and in the interim, Mr. Miller would live rent free. On May 23, 1985, a quit claim deed was executed by Mr. Miller in favor of the Respondent returning possession of the Pensacola home. Because Respondent had told Mr. Miller that Respondent would make payments on this home, Mr. Miller did not make any payments. Mr. Miller speaks of a contract that was in writing and was involved in the closing on the Pensacola home when it was purchased and that there was a promise to assume the mortgage held by Real Estate Finance, Inc. This comment is made in a deposition of Mr. Miller which was entered as Exhibit 71 by the Petitioner. Whether this refers to an assumption by the Respondent or someone else is not clear. As pointed out by the deposition testimony, more importantly, this contract was not produced then and is not available now for consideration in the deliberation of this case. Mr. Miller bought another house from Collins Construction in Leon County which is at Foxcroft. At the time of the deposition it was occupied by Susan, Mr. Miller's wife. Real Estate Financing, Inc. sued the Respondent and Harold C. Miller, Jr. and Susan F. Miller, his wife, in a foreclosure associated with the Pensacola property and received a Final Judgement for foreclosure on May 11, 1988. This points out that the Millers were not released from the mortgage obligation. By the circumstances, Mr. Miller was persuaded that the Respondent would take care of the mortgage on the Pensacola home until it was paid off. What the payment history was on the mortgage prior to foreclosure has not been established in this record. In terms of any promises from Respondent about further obligations on the mortgage on the Pensacola home, Mr. Miller describes that Respondent never told him that he was relieved of that obligation or that he wasn't. Mr. Miller did not question the Respondent about this because he trusted him. COUNT VI On September 25, 1981, Collins Builders, Inc. sold a home to Peter A. Hartmann at Grantham Lane in Tallahassee, Florida. Mr. Hartmann borrowed money from Real Estate Financing, Inc. to purchase that home secured by a mortgage that included paragraph 17 the language of which is the same as in the Hinson transaction with Real Estate Financing, Inc. That property was subsequently deeded to Respondent on March 25, 1983. In the deed Respondent as grantee promises to assume and pay the Real Estate Financing, Inc. mortgage on the property. The Hartmann property upon which Real Estate Financing, Inc. held a mortgage was foreclosed upon in a suit by Federal National Mortgage Association by and through its agent Real Estate Financing, Inc. against Respondent and in Peter A. Hartmann. Action was taken by order of court on May 3, 1988 and the property sold on May 27, 1988 as evidenced by a Certificate of Sale from the Clerk of the Circuit Court, Second Judicial Court in and for Leon County, Florida. This points out that Mr. Hartmann was not released form the mortgage obligation. There is a potential for a deficiency judgement against Mr. Hartmann following that sale. The details of the Hartmann transaction were not presented at hearing through his testimony or anyone else. COUNT VII On April 22, 1982, Collins Builders, Inc., sold John A. Miller and Jeanne B. Miller, his wife, a home in Lakewood Estates. That home was secured by a mortgage in favor of Real Estate Financing, Inc. It contained a paragraph 17 which had the language set out in the Hinson transaction with Real Estate Financing, Inc. which has been described. The home at Lakewood Estates was traded for a home in Huntington Woods II. Those transactions took place on March 2, 1984, and on that date the Millers executed a deed to Ralco, Inc., one of Respondent's companies. The warranty deed contained language to the effect that Ralco, Inc. promised to pay on the mortgage held by Real Estate Financing, Inc. Bobbie G. May signed the contract for sales and purchase as representative of Ralco, Inc. The Huntington Woods II property that was bought by the Millers was bought from Collins Builders, Inc. with Bobbie G. May serving as representative for Collins Builders, Inc. in the contract for sale and purchase. The payments were not made as promised by Ralco, Inc. and Respondent sent the Millers one of the February 18, 1986 letters as previously described. Ultimately, Florida National Mortgage Association through Real Estate Financing, Inc. sued Ralco, Inc. and the Millers in foreclosure and obtained a summary Final Judgement of Foreclosure against those defendants. This points out that the Millers were not released from the mortgage obligation. This as with other foreclosures does not speak to attempts by Ralco, Inc. to be allowed to assume the mortgages in a novation. The property at Lakewood Estates which had been traded in was then sold June 28, 1988, as evidenced by a Certificate of Sale from the Clerk of the Circuit Court of the Second Judicial Circuit, in and for Leon County, Florida. That judgment against the Millers is shown on the credit report of John Henry Miller. Mrs. Miller understood that the mortgage payments on the traded home would be made until the property was sold by Ralco, Inc. Visits to the neighborhood where that traded home was found did not indicate any activities toward the sale by way of for sale signs. No one was living in the traded home at that time. The Millers were not represented by counsel during the course of the closings associated with the two homes. They were represented in the foreclosures suit. In reference to the credit circumstance of the Millers, in trying to buy a vehicle they had been denied credit once. They were eventually able to buy the vehicle. The Millers had been told when purchasing the initial home at Lakewood Estates that the reason for buying it would be the possibility of being able to trade for a larger home at some later date if needed. Again, it is not clear who made those statements to the Millers. On the day before the closing of the traded home, Mrs. Miller spoke with Sissie Collins whom she understood to be affiliated with Respondent or one of his companies. The record does not show what that affiliation would have been, if anything. In this conversation with Sissie Collins, Mrs. Miller pointed out to Ms. Collins that the loan with Real Estate Financing, Inc. was not assumable without qualifying. Moreover, Mrs. Miller believed that Respondent did not qualify for the loan and that it was not assumable unless he did. Sissie Collins stated that this was not a problem and that Real Estate Financing, Inc. or First Alabama allowed Respondent to assume a mortgage and make the payments until the property was sold and the mortgage was paid off and that Real Estate Financing, Inc. was fully aware of the circumstance. Whether this was true or not was not proven by competent evidence. What Respondent knew about these matters wasn't shown either. At the time of hearing, the Millers had not been called upon to pay any deficiencies associated with the foreclosure of their Lakewood Estates property. COUNT VIII Eric R. Larsen and Young Oak Larsen, his wife, purchased a home from a Collins Company in Huntington Woods Unit II. That house was eventually traded for a home in Cross Creek. The traded home was deeded to Respondent with the promise that Respondent would assume an existing mortgage on the Huntington Woods Unit II property which is owed to Andrew Jackson State Savings and Loan Association and make payments. The closing associated with the traded property took place on December 2, 1982. The new home was being purchased through the same lending institution as the traded home. The Larsens were not represented in the closings associated with the traded home and the purchased home. The closing of the traded home took place in offices of the Respondent's business. The second closing for the purchased home took place at the Andrew Jackson Federal Savings. When Mr. Larsen asked why the deed for his Huntington Woods II property was being made to the Respondent, he was told that it was to facilitate the assumption of the mortgage. By his remarks, Mr. Larsen is not clear on whether the Respondent attended the closing associated with the traded property. He does recall someone whose name is Chip who he thought was the real estate broker who worked with Respondent was at the closing. No further indication of who this man named Chip might be as to association with Respondent or his companies was shown in this record. The Larsens received a February 18, 1986 letter from Respondent as previously described, when the problems occurred about payments for the traded property, and at that time the mortgage was shown as being held by Colonial Mortgage Company. Mr. Larsen also received a letter on April 8, 1987, purportedly from Colonial Mortgage Company, which states that Mr. Larsen is not released from liability on the traded property and some comment about assumption packages having been sent on various dates and reminds Mr. Larsen that the loan could not be assumed without the prospective purchaser's credit having been approved. The letter describes other perceptions about the ability of the Respondent to take over responsibility for the mortgage on the traded property. All of the matters set out in this unauthenticated correspondence are hearsay and they cannot form the basis of fact-finding in terms of whether Respondent or his companies were ever allowed to assume the mortgage on the traded property. People who had a direct knowledge of the mortgage circumstance with Colonial Mortgage Company pertaining to this traded property as with other traded property on which a lender held mortgages and sent letters have not been presented to explain that circumstance by competent evidence. Likewise, the outcome of what has happened with the traded property in the Larsen transaction has not been proven by competent evidence. The explanation of the outcome with that property is hearsay which may not be used as a basis for fact finding. COUNT IX Robert R. and Patricia A. Aubin, husband and wife, traded property under the program which Respondent was affiliated with for taking in one residence and selling another. Mr. Aubin thought that this kind of transaction was common and that led to his telling his financing institution that the same builder was taking back the original home in order to build Mr. Aubin another house, thinking that this might simplify the transaction. In speaking to someone about the obligation to deal with the existing mortgage on the traded property, he identifies the person he was talking to as Ed Hines. Again, it is not clear what Mr. Hines' association was with the Respondent and his companies. The traded home was going to be given to Tallahassee Properties. Mr. Aubin was not certain of the arrangement Respondent had with his individual companies. Ultimately, there was a problem with the payments on the house that had been traded in. Respondent wrote the Aubins one of the February 18, 1986 letters reference the property at Huntington Woods Unit I. An arrangement was being made whereby Real Estate Financing, Inc. received $3,704.48 from Ralco, Inc. by a check of June 26, 1986. That check was issued after Ralco, Inc. conveyed the traded property back to the Aubins on June 17, 1986 and this resolved the problem for the Aubins.
Recommendation In consideration of the facts found and the conclusions of law reached, it RECOMMENDED: That a Final Order be entered which dismisses the Administrative Complaint. DONE and ENTERED this 20th day of October, 1989, at Tallahassee, Florida. CHARLES C. ADAMS, 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 20th day of October, 1989. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 89-3850 The following discussion is given concerning the proposed fact-finding offered by the parties. PETITIONER'S FACTS Paragraph 1 is utilized. Paragraph 2 is not necessary to the resolution of the dispute. Paragraph 3 is not necessary to the resolution of the dispute. 4-5. Paragraphs 4 and 5 are set out in the findings of fact. 6-10. Paragraphs 6-10 are subordinate to facts found. Paragraph 11 has not been proven. Paragraph 12 is correct in terms of Hinson's decision to convey the property; however, what Hinson was allowed to believe concerning the matter of assumption as it might show culpability on the part of the Respondent has not been proven. This matter set forth in paragraph 13 has not been proven. Paragraph 14 is not necessary to the resolution of the dispute. Paragraph 15 is not necessary to the resolution of the dispute. Paragraph 16 has not been proven as to any financial losses due to dishonest acts or false promises of the Respondent. Hinson was found to have been denied credit cards. The latter sentence in paragraph 16 is speculation and not fact. Paragraph 17 is subordinate to facts found. Paragraph 18 in the suggestion that the Respondent through his real estate office and salesmen made representations and promises to the Walshes was not proven in the sense that persons involved with the Walshes and the transaction to trade in the home were not sufficiently identified to understand how those persons were affiliated with the Respondent. Paragraph 19 is accepted as to the documents and promises by the Respondent. Again, what the association was of the other person identified as the salesman may have been is not clear in this transaction. Paragraph 20 is subordinate to facts found. Paragraph 21 is subordinate to facts found. Paragraph 22 is not proven in the first sentence. The second sentence is subordinate to facts found. Paragraph 23 was not proven. Paragraph 24 is subordinate to facts found. Paragraph 25 is subordinate to facts found except in its suggestion that the Walshes had been deceived in the sense of the idea of the mortgage not having been assumed or attempts made to have it assumed. Paragraph 26 is contrary to facts found. Paragraph 27 is subordinate to facts found. Paragraph 28 is subordinate to facts found except as it identifies the nature of the salesperson and what the affiliation was with Collins and Associates insufficient proof was made to show the true nature of the position of the salesperson in Collins and Associates, Inc., if any, and what Respondent had in mind and any instructions to this person who was reportedly the salesperson. Paragraph 29 is subordinate to facts found as to promises in the document system responsibilities of Respondent. Otherwise it is not accepted. Paragraph 30 is subordinate to facts found except as to its suggestion that deceit has been proven relating to the Respondent's attempts to have the mortgage assumed. Paragraph 31 is subordinate to facts found. Paragraph 32 is subordinate to facts found. Paragraph 33 is subordinate to facts found. Paragraph 34 is subordinate to facts found except as to the suggestion that this problem of the foreclosure dissolved the marriage. Paragraph 35 in its first sentence is contrary to the Impression of the facts. There was a discussion and a decision reached to buy the house, whether Respondent was acting as a real estate broker individually or as a builder developer is unclear. Whether he made his employee buy the house or directed him to is not accepted as a fact. Paragraph 36 is subordinate to facts found. Paragraph 37 is subordinate to facts found. Paragraph 38 was not proven on the issue of whether Respondent applied for an assumption. The Final Judgment of closure was proven. Paragraph 39 is subordinate to facts found. Paragraph 40 is subordinate to facts found. Paragraph 41 is subordinate to facts found in a suggestion of an agreement to take over the Huntington Woods property. Reference to the allegations and the foreclosure petition are not necessary to the resolution of the dispute and do not constitute an explanation of how Respondent may have carried out his promise to take over responsibilities for the mortgage and the traded property which is the true issue. Likewise, paragraph 42 where it is acknowledged in that suit the agreement to assume the mortgage does not answer the issue of whether attempts were made to bring about that assumption. Paragraph 43 is subordinate to facts found. Paragraph 44 and its suggestion as to any intended action on the part of a mortgage insurer has not been proven by competent evidence. Paragraph 45 is subordinate to facts found. Paragraph 46 is subordinate to facts found. Paragraph 47 in the suggestion of activities by a salesperson of Collins and Associates has not been shown in terms of the affiliation with the Respondent's companies or with the Respondent in terms of the details of that affiliation sufficient to show that Respondent is culpable for any acts of his employees. Respondent through Ralco, Inc. had agreed to assume and pay for the existing mortgage on the traded property. Paragraph 48 is subordinate to facts found. Paragraph 49 is subordinate to facts found. Suggestion by counsel that Respondent's admission of 86 coincide with the fact finding in paragraph 50 is erroneous as is reference to page 11 in the transcript which speaks of the admissions. Paragraph 51 is subordinate to the facts found. Paragraph 52 is subordinate to the facts found with the exception that the Respondent was not shown to have been deceitful in saying that the mortgage had not been allowed for assumption in that no competent proof was offered as to the attitude of the lender concerning the assumption. Paragraph 53 is subordinate to the facts found. Paragraph 54 is correct in terms of the credit report on foreclosure, otherwise it is rejected as heresay. Paragraph 55 is inaccurate when it suggests that proof was made that Respondent did not take care of the assumption in the Larsen trade-in property. Paragraph 56 is subordinate to the facts found. Paragraph 57 constitutes legal argument. RESPONDENT'S FACTS 1-7. Paragraphs 1-7 are subordinate to facts found. The first sentence of Paragraph 8 is contrary to facts found. The remaining sentences within paragraph 8 are subordinate to facts found. Paragraph 9 is subordinate to facts found. In paragraph 10, Charles Middleton was not shown to have been the closing agent for Capital Abstract and Title, Inc. in the transactions which are at issue here. In paragraph 11, Respondent was responsible for applying for the mortgage assumptions but the proof was not made that he did not do so or that he did. Paragraph 12 is subordinate to the facts found. Paragraph 13 is subordinate to the facts found. Paragraph 14 is hearsay and may not form the basis of the fact finding. Paragraph 15 is hearsay and may not form the basis of the fact finding. Paragraph 16 is subordinate to the facts found. Paragraph 17 is subordinate to the facts found. Paragraph 18 is subordinate to the facts found. Paragraph 19 is subordinate to the fact found. Paragraph 20 is not accepted. Paragraph 21 is not accepted. Paragraph 22 is subordinate to the facts found. Paragraph 23 is not relevant. Paragraph 24 is the reputation of the Respondent is only relevant if culpability has been shown. It has not been. 25. Paragraph 25 is subordinate to facts found. Paragraph 26 is not accepted in terms of what position Chip Miller held and what capacity he was acting in when involved in the Hinson transaction as employee of Collins and Associates, or Tallahassee Properties or exactly what capacity. Paragraph 27 is subordinate to the facts found. Paragraph 28 is subordinate to the fact found. Paragraph 29 is heresay and not accepted. Paragraph 30 is contrary to the impression of the credit circumstance of Mr. Hinson. Whatever the current credit report may say, Mr. Hinson's credit had been hurt. Paragraph 31 is true. Paragraph 32 is subordinate to the facts found except for deprivation of credit. Paragraph 33 is not necessary to the resolution of dispute. Paragraph 34 is subordinate to facts found. Paragraph 35 is subordinate to facts found. Paragraph 36 is contrary to facts found. Paragraph 37 is contrary to facts found. Paragraph 38 is subordinate to facts found. Paragraph 39 is subordinate to facts found. Paragraph 40 is subordinate to facts found. Paragraph 41 is subordinate to facts found, except as to credit. Paragraph 42 is subordinate to facts found. Paragraph 43 is subordinate to facts found, except in its suggestion of what capacity Sissie Collins really served which is not established. Paragraph 44 is subordinate to facts found, except not proven that mortgage assumption tentatively approved. He did make representations as the mortgage grantee. Paragraph 46 is subordinate to the fact found. Paragraph 47 is subordinate to the facts found. Paragraph 48 is contrary to facts found. There is no paragraph 49. Paragraph 50 is subordinate to the facts found. Paragraph 51 is subordinate to the facts found, except as to credit. Paragraph 52 is subordinate to the facts found. 53.-55. Paragraphs 53-55 are subordinate to the facts found. Paragraph 56 is contrary to facts found. Paragraph 57 is subordinate. Paragraph 58 is not necessary to the resolution of the dispute. Paragraph 59 is subordinate to the facts found. 60.-62 Paragraphs 60-62 are subordinate to the facts found. 63.-64. Paragraphs 63-64 are subordinate to the facts found. Paragraph 65 is subordinate to facts found. Paragraph 66 is subordinate to the facts found. Paragraph 67 is subordinate to the facts found. Paragraph 68 is subordinate to the facts found. Paragraph 69 is subordinate to the facts found. Paragraph 70 is subordinate to the facts found. 71.-72. Paragraphs 71-72 are subordinate to the facts found. Paragraph 73 in the first sentence is subordinate to the facts found. The second sentence has to do with whether Andrew Jackson gave preliminary approval for the assumption of the mortgage on the traded property and is heresay not accepted. Paragraph 74 is not necessary to the resolution of the dispute. Paragraph 75 is subordinate to the facts found. 76.-77. Paragraphs 76 and 77 are accepted as true but are not needed. 78.-79. Paragraphs 78-79 are subordinate to the facts found. 80. In this instance and all that have discussed before, Respondent did make representations through the February 18, 1986 letters. 81-82. Paragraphs 81-82 are subordinate to facts found. 83. Paragraph 83 is subordinate to facts found. 84.-85. Paragraphs 84-85 are subordinate to facts found. Suggestion that the paragraph 86 relates back to initial paragraphs is acknowledged and accepted in the manner that has been described in the discussion at the paragraphs set forth in the proposed fact finding. Paragraph 87 is legal argument. COPIES FURNISHED: Darlene F. Keller, Executive Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 James H. Gillis, Esquire DPR-Division of Real Estate Legal Section 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32817 William M. Furlow, Esquire Katz, Kutter, Haigler, Alderman, Eaton, Davis, Marks, P.A. Post Office Box 1877 Tallahassee, Florida 32302-1877 Keith Kinderman, Esquire 906 Thomasville Road Tallahassee, Florida 32303 Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 =================================================================
Findings Of Fact Charles Edward James in the relevant period of time considered by these proceedings was an insurance agent licensed by the State of Florida in the categories of ordinary life, general lines, and disability. In that same time period Respondent was the president, director, and registered agent for Friendly Auto Insurance of Panama City, Inc., located at 704 West Eleventh Street, Panama City, Florida. He was also the president, director, and registered agent of All Auto Insurance of Quincy, which operates from 101 East Jefferson, Quincy, Florida. At various times in the critical period, Respondent had five other employees in Panama City in the Friendly Auto Insurance Agency. Among those employees was Alton McCollum, Jr., a licensed general lines agent in the State of Florida. His tenure with the Panama City office was from approximately February or March, 1982, until April, 1983. Anita Prevost worked in the Panama City operation commencing August, 1981, and was employed at the time of hearing as the office manager. Michelle Tolden started working in the Panama City office in February, 1982, as a clerk. At the time of the hearing she was excused from her employment on maternity leave. Tina Clark worked as a clerk in the Panama City office, but resigned prior to the hearing date. Carmen Browning was an employee in the business whose length of employment is unknown. McCollum, as a licensed general lines agent, had been hired by Respondent to operate the Panama City office and allow Respondent to do business in Quincy. At the time James employed McCollum, he gave no specific instructions as to how McCollum would supervise the Panama City office. James basically told McCollum that he wanted McCollum there so that McCollum's agent's license could be utilized to allow the Panama City office to remain open. McCollum spent a couple of hours a day operating the office. His time was primarily devoted to review of applications received by office employees. When he was not available in the office, McCollum could be contacted by phone by other office personnel. When he arrived, he assumed that the employees who were not agents understood how to conduct the business in the sense of giving quotes for automobile insurance over the phone and filling out the necessary forms. In the beginning, he was not familiar with the sale of motor club benefits, having never worked with that type of offering. The motor club memberships that were being sold at the time that McCollum was serving as the agent for Friendly Auto called for commissions to Friendly in the amount of 70 to 80 percent of the premium. Eventually, McCollum determined that the motor club sales through the Panama City operation were questionable. He discovered that customers were not being told that they were getting a motor club membership in addition to their requests for basic automobile insurance. In effect, what he found was that the other employees in Respondent's Panama City office were quoting a single price to customers requesting basic automobile insurance which included the cost of the basic insurance premium and the price of membership in the motor club. As McCollum realized motor club is not part of basic automobile insurance coverage in Florida. McCollum then attempted to have other employees within the Respondent's office specify to customers the particulars of what they were receiving, i.e., that motor club memberships were separate from automobile coverage. He also instructed the other employees in selling motor club memberships to explain to the customers that they were purchasing a motor club membership and specifically indicate what the cost was of that plan. As a result, Friendly Auto sold fewer auto club memberships while under the supervision of McCollum. McCollum also discovered that the other employees in the Panama City office were inappropriately filling out the applications in the sense that the name, address, driving history, and other background information were filled out but that portion related to premium costs and the break out of those costs was not being completed at the time the customer was in the office. That information was being placed in the application at a later date. The normal procedure was for the customer to be provided with a copy of the application which did not contain the specific itemized costs related to premium payments. Once McCollum discovered the problem with the applications, he instructed the employees in the office to fill out the application forms completely to include specifying the premium costs in the application and providing the customer with a completed copy of the application to include a break out of these premium charges. Tina Clark in particular did not readily accept the suggested changes for improving the integrity of the operation. McCollum had suggested that James fire this employee. Instead, Respondent decreased the hours available for that employee to work in the office based upon his belief that she would leave voluntarily and the employee left several months later, indicating that she could not accept reduced hours of work. Anita Prevost was hired by Respondent and trained by Carmen Browning. Before McCollum's involvement with the Panama City office, Prevost, in taking applications for automobile insurance, would quote a cost which included motor club membership as well as the automobile premium costs, even if the customer simply requested insurance necessary to receive a license and tag for an automobile. At the time of filling out the automobile insurance form it would be signed, the motor club membership application form would be signed, and a rejection form related to coverages not requested in the automobile policy line would be signed. Prevost and other employees would not refer to the motor club membership by that name. Instead, at most benefits of the motor club membership would be explained, such as towing, rental reimbursement, accidental death benefits, and emergency road service. The idea of explaining the coverage and not referring to the motor club membership as such was that of the Respondent. When an individual discovered that they had purchased a motor club membership, Prevost and other employees per Respondent's instructions would provide a full refund of the membership costs to that customer. Prevost, and other employees, in dealing with PIP coverage routinely filled out a deductible in the amount of $8,000 after asking a customer if they had hospitalization and without regard for the customers' response. When confronted with a customer who was not interested in that amount of deductible, they would offer a lesser deductible or no deductible. This technique was in keeping with instructions given by Respondent. Later, in dealing with the PIP purchase, Prevost and other employees in the agency would ask if the customer had hospitalization. If they said yes, an $8,000 deductible PIP would be suggested; otherwise, it would be recommended that the customer purchase the PIP coverage that did not carry a deduction. This new policy was established by the Respondent in early 1982 but was not always adhered to as seen in subsequent facts. When Michelle Tolden took applications for persons who wanted basic automobile insurance, she explained the limits of liability in the coverage; coverage related to PIP and its limitations and the benefits related to motor club memberships to include road service, rental, towing reimbursement and any accidental death benefits. The words "motor club" were not mentioned and Tolden has not deviated from the practice from this decision not to mention motor clubs. She feels that the customer understands better what is involved without mentioning the term "motor club." This technique is contrary to the instructions given by McCollum. Tolden, prior to her maternity leave, dealt with the question of the sale of $8,000 deductible PIP in the same fashion as described in the facts related to Prevost. Respondent, in his training in Port Myers, Florida, prior to coming to Panama City, had utilized the technique of packaging minimum automobile insurance coverage necessary with a ¬or club membership when a customer sought "tag" insurance. He and his employees pursued this technique at the time he operated as the general lines agent with Friendly Auto from June 1981 to March 1982. This packaging did not tell a customer specifically that the customer was purchasing an unnecessary and unrequested motor club membership. The resulting confusion and deception related to the aforementioned packaging is seen in the following factual account related to select customers mentioned in the complaint. According to James, in selling PIP $8,000 deductible the realized return was $3.00 with a cost of service of between $20 and $25. As a consequence, he decided to package automobile coverage and the motor club membership in view of the fact that the motor club paid 70 percent or better as commission for the agency in the sale of memberships. This enabled the agency to realize a profit in the combination of the sale of minimum automobile coverage and motor club memberships. The average return for commissions on automobile insurance policies generally is 15 percent. COUNT I LINDA C. SMITH In May, 1982, Linda C. Smith went to Respondent's Panama City office to purchase the necessary automobile insurance to obtain a tag. Smith desired to have PIP and liability coverage; however, in the face of a quoted cost of $79 for the insurance, she determined that she could only afford PIP. She paid $79 for what she assumed was PIP coverage upon a quote of that amount by an employee in Respondent's office. Only $29 related to automobile insurance coverage, the balance was for motor club membership. No mention was made to Smith on the subject of the purchase of a motor club membership and Smith would not have purchased it in view of the fact that she had a friend who was in the wrecker business. That friend was Robert Griffiths. Smith did sign a slip pertaining to a motor club membership which may be found as Petitioner's Exhibit 8. She does not remember seeing the membership fee of $50 reflected on that form. Subsequently, Smith discovered that she had purchased a motor club membership. Had she realized that the $50 had been spent on motor club membership, she would have utilized that payment to purchase liability insurance in lieu of the motor club membership. After complaining to the Insurance Commissioner's office in Panama City, she was contacted by Friendly Insurance and received a $50 refund related to her purchase of a motor club membership. At the time of the transaction, Smith did not read the entire explanation on documents provided to her. Smith's determination to purchase the no fault deductible in the amount of $8,000 was on the basis of the signing of a form provided by the agency which is known as a rejection of liability coverages. The particular form in question may be found as Respondent's Exhibit 11, admitted into evidence. Smith does not recall checking the block which shows the $8,000 deductible PIP. Nonetheless, one of he items on that form related to the $8,000 deductible and it indicates the significance of the deductible, in that it reduces the amount of PIP benefits paid to the purchaser or resident relatives. The form also indicates that this kind of deductible is not recommended for those persons who do not have other coverages which would respond adequately to payments for injuries received in automobile accidents. In addition to this information, the employee who assisted the customer had asked about hospitalization for the benefit of Linda Smith. Smith did have health insurance or medical insurance at the time of purchasing the automobile insurance policy. In addition that form as signed by Smith, had a portion which stated "I understand the accidental death benefit through the life insurance company is a separate item, that pays in addition to my auto insurance policy. I understand the additional charge to this coverage is included in with my downpayment." Smith did not equate this latter item with motor club membership. COUNT II JACKIE MERCER Jackie Mercer went to the Panama City office of Respondent in order to purchase necessary insurance to obtain a driver's license. This explanation was made to the employee who assisted the customer at Friendly Auto. The amount of quotation for the premium was $581, which was paid by Mercer. An automobile insurance application form was signed by Mercer and a copy of that may be found as Petitioner's Exhibit No. 13 admitted into evidence. The coverage was for one year, commencing April 17, 1982. No mention was made to Mercer of the purchase of a motor club membership and Mercer would not have knowingly accepted that unsolicited membership. Nonetheless, as part of the package of coverage, $25 was charged for each of two vehicles that were being insured for a total of $50 for membership in a motor club. The real automobile insurance policy amounts for the two cars for the one year period was $531. At the time that the purchase was made, Mercer did not understand that he had paid a separate amount for motor club, notwithstanding signing two forms which are constituted as Petitioner's composite Exhibit No. 15 indicating application for motor club membership. Mercer has no recollection of signing the forms related to motor club. Mercer spent 10 to 15 minutes in the office in applying for the insurance coverage and did not read the various documents presented to him in applying for the insurance. As related in Respondent's Exhibit No. 6, Mercer signed that aspect of the rejection of liability coverages pertaining to the fact that accidental death benefits were a separate item from the overall automobile insurance coverage for which there was an additional charge. This related to the motor club membership benefits; however, Mercer was unaware of this. The automobile insurance application, Petitioner's Exhibit No. 13, does not break down the various charges related to premium payments for insurance for the two automobiles. On the other hand, the application which was presented to the insurance company and is found as part of Petitioner's Exhibit No. 14, dated April 16, 1982, carries a quotation for the total premium payments for both cars as being $431. Eventually, Mercer was notified of the cancellation of his coverage with Protective Casualty related to the two automobiles for reason of nonpayment of additional premium. It was at that time that he learned from the Florida Department of Insurance that the overall charge of $581 made by Respondent's Panama City operation included $50 for motor club memberships which were not desired by Mercer. COUNT III RENATA DOTSON On October 26, 1981, Renata Dotson went to the Panama City office of Respondent and purchased automobile insurance by dealing directly with the Respondent. She told James that she wished full coverage and paid the $289 quoted price with the expectation of receiving six months' coverage for automobile insurance. She did not wish to purchase motor club membership which is not part of automobile insurance. The cost of auto coverage was $214. Petitioner's Exhibit No. 17, entered into evidence is a copy of the application form which was used in requesting insurance from Colonial Insurance Company This item was not filled out by Dotson. She did sign the document on the second page. Ms. Dotson did not obtain a copy of the original of the application form upon leaving the agency. Dotson also signed an application for membership in the Nation Motor Club. A copy of that application may be found as Petitioner's Exhibit No. 20, admitted into evidence. She did not fill out the other information set forth on the form. At the time of requesting automobile insurance on October 26, 1981, through James' agency, in addition to not requesting to join a motor club, she recalls no discussion of joining a motor club. She would not have desired membership in the Nation Motor Club because her parents were involved in another motor club that to her understanding would cover her car. Dotson did not understand that she had signed an application for a motor club membership. Likewise, Dotson does not recall the discussion of an $8,000 deductible PIP which eventually was written into the policy or any other discussion related to deductibles. Dotson did not carefully read all papers presented to her at the time she was in Respondent's office on October 26, 1981. Dotson later discovered that she had paid $75 for motor club membership and upon that discovery, Friendly refunded her $75. As reflected in Respondent's Exhibit No. 4, Dotson signed that aspect of the rejection of liability coverages dealing with accidental death benefits and the fact that this was a separate item promoting an additional charge for coverage. She did not equate this as being unrelated to automobile insurance requested by her and related to purchase of a motor club membership. Her understanding was that the questions related to naming a beneficiary for the accidental death benefit was part of the purchase of the automobile insurance. COUNT IV EMMETT FOWLER Emmett Fowler was interested in obtaining less expensive automobile insurance that he presently held and based upon a television advertisement, he purchased automobile insurance from Friendly Auto in Panama City. When he bought the insurance, he was of the opinion that he had paid for a full year when in fact he had paid for six months' coverage. When inquiring about this misunderstanding, it was revealed that he had purchased motor club membership. He had not understood that he had purchased that membership prior to this subsequent inquiry and would not have desired the membership in that he had been a member of another motor club for fifteen years. He was reimbursed $50 for the motor club membership when he informed Friendly that he was not interested in that benefit. The actual automobile insurance premium was $52 and he had paid $102 which had been quoted as the price of automobile insurance. The other $50 was for motor club membership. Fowler had signed the application for the automobile policy, a copy of which is found as Petitioner's Exhibit No. 26 and for the motor club membership, a copy of which is Petitioner's Exhibit No. 28. At the time of purchasing the policy, no discussion was entered into on the question of purchase of a motor club membership. The employee who assisted Fowler in the purchase of the automobile insurance indicated that in view of the fact that Fowler had retired from the military, that the $8,000 deductible on personal injury protection would make the policy cheaper. Having heard this explanation, Fowler chose an $8,000 deductible PIP. The total time involved in the purchase of the automobile insurance was 10-15 minutes. Fowler did not read the documents presented to him in this session very carefully. At the time of purchase, accidental death benefits were discussed; however, Fowler was unaware that this matter pertained to motor club membership and not the insurance policy. Fowler also signed the rejection of liability coverages form which is Respondent's Exhibit No. 7, admitted into evidence. In particular, his signature appears on that portion of the form related to the fact that accidental benefits are a separate item and that there is an additional charge for that coverage. The motor club application which is Petitioner's Exhibit No. 28, does not reflect the fact of the $50 fee related to that membership. A copy of that application produced by the Respondent from his records which is admitted as Respondent's Exhibit No. 8, shows a charge of $50. The conclusion of fact to be drawn from this discrepancy is to the effect that the $50 was placed on the application form subsequent to the time that Fowler made application and without his knowledge. COUNT V MAXIE REEDER On June 4, 1982, Maxie Reeder made an application with Friendly Auto, Panama City, for automobile insurance and paid the $200 which had been quoted as the price of the insurance. Of that $200, $175 actually pertained to the automobile insurance premium and the remaining $25 paid for membership in a motor club. Reeder purchased the insurance based upon a need to have sufficient insurance to obtain a tag for her automobile. Reeder was unaware that she had purchased a motor club membership until she received notification of her membership from the motor club. Reeder also experienced problems with trying to gain benefits of her automobile insurance coverage in that she had difficulty gaining assistance from the Respondent following an automobile accident that she had in late June. The automobile policy was not received by Reeder until August 1982. Eventually, Reeder cancelled the automobile insurance policy. She requested that Friendly Auto provide her a refund for the motor club and received a refund in the amount of $25. Petitioner's Exhibit No. 30 is a copy of the application for automobile insurance which was signed by Reeder on June 4, 1982. It does not reflect the exact cost of the various elements of the automobile insurance policy premium. Those premium amounts are broken out on Petitioner's Exhibit No. 31, which is a copy of the application as completed by someone in the Friendly Auto Insurance Agency and submitted to the insurance company after Reeder left the agency. It reflects the various charges and the total charge of $175. Through this scheme of completing the form later, Reeder was not aware that the full amount of the automobile insurance was $175, not the $200 quoted, nor did she recognize that the remaining $25 of the money that she paid was for motor club membership. Reeder would not have knowingly joined an automobile motor club because she was not financially able. The transaction for the purchase of the automobile insurance on June 4, 1983, took approximately 45 minutes and the customer did not read the documents involved carefully. Reeder was eventually paid $140 related to the automobile insurance premium which represented the amount of premium not yet used at the point of her cancellation. As reflected in Respondent's Exhibit No. 9, admitted into evidence, Reeder signed that portion of the rejection of liability coverages referred to as the accidental death benefit separate item and the fact of additional charge for that coverage. Notwithstanding that signature on the rejection of liability coverage, Reeder and all other customers in this complaint did not understand the separate nature of the automobile insurance coverage and the motor club membership. Moreover, nothing that was done by the employees at Friendly Auto had as its purpose explaining the meaning of the aforementioned statement signed by the customer and the fact that the automobile club membership was not necessary in order to obtain the so-called tag insurance. In the Reeder transaction and the others, even in the face of a separate application for motor club membership and automobile insurance and the purported identification of the separateness of automobile insurance and motor club membership found in the rejection of liability coverage form signed by the customer, the overall technique used in responding to the customer's request for automobile insurance was one of obscuring the distinction between automobile coverage and motor club membership. Actions by Respondent and his employees in dealing with Reeder and the other named customers camouflaged the fact that motor club membership was not necessary to meet the requirements of law for the purchase of a tag. By these actions, Respondent and employees at Friendly Auto were making a misrepresentation to the public related to necessary coverage for obtaining automobile tags and the cost of automobile insurance and motor club membership. COUNT VII ROBERT GRIFFITHS Based upon advertising, Robert Griffiths went to the Friendly Auto to purchase full automobile insurance coverage. This visit was on February 12, 1982. At that time, he paid Friendly Auto in Panama City $168 for what he was led to believe was automobile insurance coverage requested. The copy of the application made on February 12, 1982, may be found as part of composite Exhibit No. 72 by the Petitioner. It does not reflect the exact charges related to the automobile insurance. This is a copy which was obtained by the Griffiths when they purchased the insurance. In actuality, the cost of the insurance was less than $168 paid. Griffiths signed an item requesting an application for membership in Nation Motor Club which is part of Petitioner's composite Exhibit No. 40 admitted into evidence. Notwithstanding the fact that he signed this application form, he did not understand that he had purchased a motor club membership and would not have desired that in that he operated a wrecker and would not need the towing service provided by the motor club membership. At the time of purchase of automobile insurance in February, 1982, Mr. Griffiths and his wife thought that the motor club membership was part of the automobile insurance without charge, in that the copy of the application which was received did not indicate a membership fee. This is seen in a xerox copy of the membership application which is part of composite Exhibit No. 40 as contrasted with the agency's yellow copy of the membership application and part of the composite Exhibit No. 40. The latter item contains a $25 membership fee. It is concluded that the fee quote was placed on the application form submitted to the Nation Motor Club at a time subsequent to the Griffiths' departure from Friendly Auto on the date in February, 1982. Moreover, Petitioner's Exhibit No. 73 is a copy of the basic service contract for the motor club which was received by the Griffiths and the fee amount is whited out further leading the Griffiths to believe that there was no charge for that coverage. There was no discussion on February 12, 1982, between the employee of Friendly and Griffiths on the question of joining a motor club. In the February application process, when Robert Criffiths signed the motor club membership application form and the application for insurance he did not read those matters carefully. Griffiths also signed the rejection of liability coverage acknowledgement form, Respondent's Exhibit No. 10, admitted into evidence, related to separateness of the accidental death benefit and the additional charge for that coverage. Griffiths, in asking for full insurance coverage did not wish to have the $8,000 deductible PIP at the time of purchasing insurance in February. The automobile insurance protection which was requested on the application was shown to be worth $153 and the actual policy amount was finally determined by the insurer to be $150 including the policy fee. This is reflected in Petitioner's Exhibit No. 39, admitted into evidence which is a copy of the application for insurance policy and the statement of policy declarations. The period of coverage was for six months commencing February 13, 1982. In August, Griffiths returned to Friendly Auto Insurance to renew the automobile insurance policy. On this second visit, Griffiths' wife was with him and she concluded the transaction and Griffiths returned to work. When the application for renewal was applied for in August, 1982, and Mr. Griffiths left, he left after revealing to the employee at Friendly that his duties included that of operation of a wrecker. On this second visit in August, 1982, no discussion was entered on the question of continuing the $8,000 deductible PIP which had been purchased at the time that the automobile insurance was obtained from Friendly in February, 1982. Had Mrs. Griffiths known, she would not have applied for an $8,000 deductible PIP at the time of renewal, acting in her husband's absence. She did not feel that she could afford to pay the $8,000 deductible if the insurance was needed. In addition, the automobile insurance policy renewal was not promptly forwarded to the insured even though application was made on August 17, 1982. As a consequence, when Mrs. Griffiths had an accident on August 20, 1982, she was not covered by the policy. The problem with lack of coverage of the accident on August 20, 1982, and the deficit in the coverage related to PIP were rectified by Friendly and the motor club fee was returned. COUNT VIII BRENDA D. HENDERSHOT/BRUMFIELD On January 15, 1982, Brenda Hendershot, now Brumfield, looked the Friendly Auto Insurance Agency up in the phone book and through the telephone process received a quote for insurance and decided to purchase automobile insurance to obtain an automobile tag. The purchase price quoted of $153 included motor club membership, unknown to the customer. Petitioner's Exhibit No. 44, admitted into evidence, is a copy of the application for automobile insurance. It does not reflect a break down of the cost related to the policy, although there are spaces provided for those entries. This document was signed by Brumfield at the time of applying for the policy at the Respondent's office in Panama City. That exhibit is a copy of what was given to Brumfield when she left Respondent's office. Anita Prevost was the employee who took care of Brumfield on the date the automobile insurance was purchased. During this purchase no discussion was made of the motor club. Brumfield did sign the Nation Motor Club application form that is depicted as Respondent's Exhibit No. 2. In addition, she signed the rejection of liability coverage provided by Friendly, to include that portion of the form related to accidental death benefits, being a separate item carrying an additional charge. As with other cases spoken to in this Recommended Order, the accidental death benefit was part of the motor club membership and not part of the automobile insurance coverage requested by Brumfield. Brumfield recalls some discussion about $8,000 related to personal injury protection but did not understand from this conversation at the time of purchase that this $8,000 amount pertained to a deductible. She did not discover this fact until a subsequent time. On that same occasion, Brumfield discovered that she had purchased a motor club membership which she did not request. The copy of the application for insurance which the Respondent's agency in Panama City submitted to the insurance company as shown through Petitioner's Exhibit No. 45, admitted into evidence, reflects the various charges set forth in the premium and demonstrates that the real cost of the automobile insurance was $128 with the other $25 being related to motor club membership. The customer did not carefully consider documents by reviewing them at the time of her purchase. COUNT IX BENNY L. COON On December 31, 1981, Benny Coon went to Friendly Auto Insurance to purchase the necessary automobile insurance to satisfy legal requirements in the State of Florida. He chose this agency because it was the nearest to his residence. A quotation was made to him of $158 and he paid $158 for what he understood to be the necessary automobile insurance coverage. This quote, unknown to Coon, contained motor club charges. A copy of the application form, for automobile insurance which contains his signature, may be found as Petitioner's Exhibit No. 49, admitted into evidence. Coon's also signed an application for Nation Motor Club as shown in Petitioner's Exhibit No. 52, admitted into evidence which is the copy kept by Friendly insurance. As reflected on that exhibit, $25 was charged for motor club membership unrelated to the automobile insurance requested by Coon. Coon had not requested to join a motor club when be went to the agency, not being interested in that plan, and there was no discussion made about joining the motor club. Eventually, Coon received a copy of the declaration statement related to the automobile policy and it reflected the true charge of $133 as opposed to the $158 which Coon paid, believing that was related to the cost of automobile insurance not automobile insurance and motor club membership. Petitioner's Exhibit No. 50 is a copy of the application submitted to the insurance company and it also shows charges in an amount of $133. The break out of the charges for the automobile insurance was not reflected on the copy of the application provided to the customer on the date he made that application. See Petitioner's Exhibit No. 49. Coon had not carefully read the documents prepared at the time of requesting insurance coverage. Again this customer completed the rejection of liability coverages form which is found as Respondent's Exhibit No. 5 admitted into evidence. He signed that aspect of the form related to accidental death, i.e. death benefit being a separate item and the additional charge related. COUNT XI DAVID B. PERMENTER David Permenter went to the Friendly Auto Insurance office in Panama City on March 15, 1982, to purchase basic automobile insurance coverage required by the State of Florida. He was quoted a price with a premium of $346 and he paid that price. This price included motor club membership without his knowledge. At the time the application was made, he signed a form related to membership in Nation Motor Club and was provided the customer's copy. This is found as Petitioner's Exhibit No. 63, admitted into evidence. It does not reflect the amount of charge for this protection. He also executed an application form related to the automobile insurance, a copy of which is found as Petitioner's Exhibit No. 60. This item does not display the break out of the cost related to the automobile insurance which ultimately was determined to be $321 with the balance of the amount he paid being $25 utilized for membership in Nation Motor Club. The declarations document related to the automobile insurance policy was received by the customer subsequent to the purchase of the insurance. That document reflects the cost of automobile insurance to be $321 and it was received as evidence, Petitioner's Exhibit No. 61. At the time the automobile insurance was purchased, no request was made to join a motor club and no inquiry was made of the customer if he desired to join a motor club. The purchaser thought that he was buying automobile insurance and did not recognize that motor club membership was envisioned in the sale. He would have joined the motor club if it was part of the policy payment and not a separate charge but did not wish to pay additional money to join the motor club. Permenter did not discover that he had joined a motor club until a date subsequent to the time of the purchase of insurance. No specific discussion was entered into about the features of coverage being purchased, the principal emphasis of the sale being related to the total price. The customer was in the insurance agency for approximately 15 minutes and he did not complete the application forms other than to sign them. This customer did not read the documents carefully at the time of the purchase. The amount of money paid for the motor club membership was refunded. This customer completed a rejection of liability coverages to include a signature on that aspect of the sheet which indicated that accidental death benefit was a separate item for which a charge would be placed. This document is found as Respondent's Exhibit No. 1, admitted into evidence.
The Issue Whether the Respondent violated Sections 112.313(6), 112.313(7)(a), and 112.313(8), Florida Statutes (Supp. 1994), and, if so, what penalty should be imposed.
Findings Of Fact Respondent, Robert Lee Thomas, served as Mayor of Glen St. Mary for approximately fourteen years prior to his resignation on June 6, 1995. In early December 1994, Ed Harvey, vice-president of the Baker County Shrine Club, telephoned Respondent regarding certain real property owned by the Shrine Club. Mr. Harvey told Respondent that the Shrine Club wanted to sell the property for $20,000. The Shrine Club had previously purchased the property from the City of Glen St. Mary. Pursuant to a provision in the deed conveying the property, the Shrine Club was obligated to give the city right of first refusal should it ever decide to sell the property. Consistent with this provision, Mr. Harvey contacted Respondent in his role as Mayor so that the matter could be presented to the Glen St. Mary City Council (Council). At the time Ed Harvey called Respondent regarding the sale of the Shrine Club property, information that the property was for sale was not available to the general public. When initially contacted by Mr. Harvey regarding the sale of the Shrine Club property, Respondent was aware that the City of Glen St. Mary had a right of first refusal on the Shrine Club property. During their telephone conversation, Respondent asked Mr. Harvey if the Shrine Club would sell the property to anyone other than the City of Glen St. Mary. Mr. Harvey told Respondent that the property was available to anyone for $20,000, subject to the City of Glen St. Mary's right of first refusal. After learning that the Shrine Club property was for sale, Respondent contacted his cousin, C. Parker Thomas, pastor of the Midnight Cry Ministry Church. Respondent informed C. Parker Thomas of the availability of the Shrine Club property because he knew that his cousin was looking for property in the Glen St. Mary area. As a result of Respondent's communication with C. Parker Thomas, the church decided to purchase the Shrine Club property and use it as an outreach center. On December 15, 1994, Respondent met with Jimmy Robbins, an elder of the Midnight Cry Ministry Church, and C. Parker Thomas at Respondent's home. At this meeting, Respondent accepted a $2,000 binder check dated, October 15, 1994, from Mr. Robbins on behalf of the Midnight Cry Ministry Church. The binder check was given to Respondent in exchange for his agreement to sell the Shrine Club property to the church for $30,000. Respondent asked Mr. Robbins to postdate the December 15, 1994, binder check to December 21, 1994. However, Mr. Robbins refused to postdate the check. Respondent brought the issue of the Shrine Club property up before the Council at its December 20, 1994, meeting. Specifically, the issue brought to the Council by Respondent was whether the City should exercise its right of first refusal and purchase the Shrine Club property. In presenting the issue to the Council for a vote, Respondent pointed out that the City of Glen St. Mary already had more land than it needed. Comments made by Respondent were intended to persuade the Council members not to purchase the Shrine Club property. After a brief discussion of the issue, the Council voted to decline to purchase the Shrine property. At no time did Respondent inform the Council that he had an agreement to sell the Shrine Club property to the Midnight Cry Ministry Church for $10,000 more than the Shrine Club was asking for the property. On December 23, 1994, three days after the Council voted to decline to exercise its right of first refusal, Respondent cashed the December 15, 1994, binder check from the Midnight Cry Ministry Church and used the money to purchase a $2,000 cashier's check as a binder on the Shrine Club property. The cashier's check was made payable to the Shrine Club with Respondent named as the remitter. On or about December 24, 1994, Respondent delivered the $2,000 binder check made payable to the Shrine Club to Ed Harvey. On February 23, 1995, Respondent purchased the Shrine Club property from the Shrine Club for $20,000. On that same date, Respondent sold the Shrine Club property to the Midnight Cry Ministry Church for $30,000. Winston Byrd was a Glen St. Mary City Commissioner on December 20, 1994, and participated in the vote regarding the City's right of first refusal on the Shrine Club property. Mr. Byrd voted not to purchase the Shrine Club property, but would have voted differently if Respondent had disclosed that the Midnight Cry Ministry Church was willing to purchase the property for $30,000.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order and Public Report be entered finding that Respondent, Robert Lee Thomas, violated Section 112.313(6), 112.313(7)(a) and 112.313(8), Florida Statutes (Supp. 1994); imposing a civil penalty of $1,000 per violation; ordering the restitution of the $10,000 profit Respondent made on the land deal to the City of Glen St. Mary; and issuing a public censure and reprimand. DONE and ENTERED this 10th day of January, 1997, in Tallahassee, Florida. COPIES FURNISHED: Eric S. Scott CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUMCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 10th day of January, 1997. Assistant Attorney General Attorney General's Office PL-01, The Capitol Tallahassee, Florida 32399-1050 Mr. Robert Lee Thomas Post Office Box 185 Glen St. Mary, Florida 32040 Bonnie Williams Executive Director Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Phil Claypool General Counsel Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Kerrie J. Stillman Complaint Coordinator Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709
The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint filed against him, and, if so, what disciplinary action should be taken against him, if any.
Findings Of Fact At all times material hereto, Respondent Elbert Cecil Wright, III, has been licensed in the state of Florida as a state certified residential appraiser. He has been appraising residential property in Central Florida since 1983. On May 31, 2005, Respondent issued an appraisal report for vacant land known as Lot 212, Bella Collina West, Montverde, Florida. SunTrust Mortgage was Respondent's client and the intended user of the report. SunTrust made no complaints to Petitioner or to Respondent regarding the appraisal Respondent prepared. Bella Collina, Bella Collina East, and Bella Collina West are subdivisions which were being developed by the same developer. They are separated from each other by roads. In preparing his appraisal report, Respondent consulted MicroBase and MLS, the multiple listing service. He researched the public records and found there were no prior closed sales in Bella Collina West, where the subject property was located. Moreover, Respondent spoke to the sales staff at Bella Collina and was advised that there were no prior closed sales in Bella Collina West. Similarly, in researching the public records, Respondent found that the plat for Bella Collina West had not yet been uploaded so that it was accessible to the public. He did obtain the first page of the 19-page plat from the sales staff at Bella Collina. Respondent obtained the dimensions of Lot 212 from the sales staff. He was told the lot was 50' by 140' as were most of the lots in Bella Collina West. Respondent used these dimensions in determining the value of the lot and in his appraisal report. Unfortunately, Lot 212 was one of the few lots in the subdivision that was only 40' by 140'. The evidence is undisputed that the difference in the size of the lot between its represented size and its actual size had no impact on its value. Since the public records reflected no prior closed sales in Bella Collina West and since the sales staff told him there had been no closings, Respondent prepared his report using four comparable properties. Comparable 4 was in Bella Collina West as was the subject property but the sale on comparable 4 was still pending. Comparables 1, 2, and 3 were located in Bella Collina, not Bella Collina West. He used those comparables because of the proximity of the two subdivisions and because they were both considered upscale and unusual for subdivisions in that county. Even though Bella Collina West did not yet have paved roads, he drove by the subject property, taking photographs, and he viewed the comparables he located. The lot sizes for comparables 1, 2, and 3 were each approximately 50,000 square feet. Lot 212, the subject property, was thought by Respondent to be only 7,000 square feet but in actuality was only 5,600 square feet. Accordingly, it was necessary for Respondent to adjust or "offset" the value of the subject property because it was a much smaller lot. On the other hand, Lot 212 was located on the golf course which, along with the clubhouse and a number of other amenities, was part of Bella Collina West and not part of Bella Collina. Lot 212's location on the golf course substantially increased its value even though it was a small lot. Respondent determined based on the closed sales on comparables 1, 2, and 3 that $40,000 was the appropriate adjustment in value to make to offset the smaller size of Lot 212. He also considered the pending sale price for comparable 4 as an indicator although it lacked the reliability of a closed sale price. In determining the value of Lot 212, Respondent, therefore, considered size, location, and view. He also used the best information available to him as provided by the sales staff at a time when that information could not be verified by public records. Because the larger lots were similar in price with the smaller golf course view lot, Respondent computed an offset between a larger lot and a lot with a golf course view. In his appraisal report, he explained the basis for his offset theory and the amount he chose for the offset. No evidence was offered that the intended user of the report did not understand Respondent's explanation or disagreed with it. Although the comparables Respondent used had much bigger lots than the subject property, the comparables sold for only a slight difference in price. Lot 212's sales price was $665,900, and Respondent's comparable 1 sold for $685,000, a $20,000 difference despite the larger lot. Respondent's comparable 2 sold for $625,000 in March 2005, $40,900 less than the subject property despite its larger lot size. Comparable 3 sold for $695,000, a $30,000 difference despite its larger lot size. The pending sale on comparable 4 was for $665,000. As to comparable 2, with its closed sales price in March 2005 of $625,000, there appeared to be a subsequent sale two months later for $850,000. However, Respondent could not determine if it had actually closed because of conflicts in dates as to when it closed, which appeared to be subsequent to recordation. If it had not closed when he prepared his report, he was not required to include it in his report. Respondent decided not to include the $850,000 sale because in his professional opinion, it was not a legitimate sale. As a vacant lot in a subdivision being developed, the subject property had no street address. In the address section of his appraisal report, Respondent made an error and failed to indicate that the property was located in Bella Collina West, stating instead that the property was in Bella Collina. However, Respondent did accurately provide the legal description which clearly indicated the subject property was located in Bella Collina West. No evidence was offered that the intended user of the appraisal report did not know the subject property was located in Bella Collina West or was confused by Respondent's error. Although Petitioner's expert would have used different comparables, no evidence was offered to show that the appraised value placed on Lot 212 was inaccurate, negligent, or misleading in any way.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding Respondent not guilty and dismissing the Administrative Complaint filed against him in this cause. DONE AND ENTERED this 1st day of April, 2009, in Tallahassee, Leon County, Florida. S LINDA M. RIGOT Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 2009. COPIES FURNISHED: Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N802 Orlando, Florida 32801-1757 Ned Luczynski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Donna Christine Lindamood, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801-1757 Daniel Villazon, Esquire Daniel Villazon, P.A. 1420 Celebration Boulevard, Suite 200 Celebration, Florida 34747
Findings Of Fact Respondent, 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.
