Findings Of Fact On July 2nd, 1974, Closet Maid Corporation (CMC) acquired Beechcraft model BCO from Elliott Flying Service under an agreement which was not introduced into evidence at this hearing. Respondent contends that this is a lease agreement with option to purchase at the expiration of sixty (60) months. Exhibit 3 is a transfer of CMC's interest in this aircraft to NOS Corporation. The Notice of Proposed Assessment (Exhibit 1) claims a tax due of $9,633.70, penalties of $481.69, and interest of $1,011.54 or a total tax due of $11,126.93. The accuracy of this sum was not contested. CMC is a corporation the majority of whose stock is owned by Norman Sauer. NOS Corporation was formed to be the transferee of CMC's interest in the airplane and the stock of NOS is wholly owned by Sauer. CMC and Nodorana Farms, another corporation wholly owned by Sauer, entered into agreements with NOS to lease back the aircraft at a guaranteed minimum monthly rental in excess of $8,000.00, which will provide NOS with sufficient revenues to make the monthly payments on the aircraft of $4,214.89 plus operating expenses. Elliott Flying Service is the registered owner of the aircraft. The only documentary evidence presented regarding the agreement between CMC and Elliott Flying Service is Exhibit 3. Exhibit 3 is a Beech Acceptance Corporation, Inc. (BAC) Transfer of Interest Agreement form which states that the "note, conditional sale contract, lease, chattel mortgage, or other security agreement, herein called 'Instrument'", representing the agreement between CMC and Elliott, requires the consent of BAC for its transfer to NOS. At the date shown on Exhibit 3 of August 1st, 1976, Exhibit 3 recites the balance due on the aircraft of $240,842.39 "is payable in forty-seven (47) consecutive monthly installments of $4,214.89 each, first installment payable August 2nd, 1976, and one final installment of $42,742.56." Exhibit 3 further shows BAC to be the assignee of the "instrument" executed between CMC and Elliott. Exhibit 2C is headed NOS CORPORATION and shows monthly aircraft expenses. Included therein is depreciation of $2480.00 and interest expense of $2192.00. Accounting procedures prescribed by AICPA provide that equipment held on long term lease be capitalized. Accordingly, essentially the same accounting procedures would be used whether the aircraft was obtained on lease or conditional sales contract.
The Issue The issue is whether Respondents are guilty of dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction, in violation of Section 475.25(1)(b); failing to maintain trust accounts in an escrow account until disbursement is authorized, in violation of Section 475.25(1)(k); operating as a broker without holding a valid broker's license, in violation of Sections 475.42(1)(a) and 475.25(1)(e); failing to prepare the required written monthly escrow-statement reconciliations, as required by Rule 61J2-14.012(2) and (3), and thus Section 475.25(1)(e); failing to give written notice to a party to a transaction, before the party signs a contract, that the broker is a representative of another party, in violation of Rule 61J2-10.033 and Section 475.25(1)(q); failing to comply with Section 475.25(1)(q), and thus Section 475.25(1)(e); and, as to Respondent Dume, engaging for a second time in misconduct that warrants his suspension or engaging in conduct or practices that show he is so incompetent, negligent, dishonest, or untruthful that clients and their money cannot safely be entrusted to him, in violation of Section 475.25(1)(o). If either Respondent is guilty of any of these alleged violations, an additional issue is what penalty should be imposed.
Findings Of Fact Respondent Dume has been licensed in Florida as a real estate broker, and Respondent Southwest Florida Home Realty, Inc. has been licensed in Florida as a corporate broker. Petitioner did not file licensing documentation as an exhibit. Petitioner's witness testified that the licenses expired on September 30, 1995, for Respondent Dume and March 31, 1995, for Respondent Southwest Florida Home Realty. This testimony is hearsay and does not establish the licensing status of Respondents. In their proposed recommended order, Respondents propose a finding that they are now and have been at all material times licensed real estate brokers in Florida. The evidence does not support this assertion. However, the pleadings of the parties establish that Respondents were licensed at least up to the dates alleged by Petitioner. The Administrative Complaint alleges that Respondent Dume's license expired on September 30, 1995, and Respondent Southwest Florida Home Realty's license expired on March 31, 1995. The obvious inference from these allegations is that Respondents were licensed up to those dates. Combining these inferred allegations in the Administrative Complaint with the assertion of Respondents in their proposed recommended order that they are now and have been at all material times licensed, it is clear that the parties do not dispute that Respondents were licensed at least up to the dates set forth in the Administrative Complaint. The only real dispute as to licensing is whether Respondents were licensed after these dates, and the record supplies no answer to this question. By final order filed August 8, 1994, the Florida Real Estate Commission found both Respondents guilty of violating Sections 475.25(1)(b), (e), and (k) and Rule 61J2-14.012(2) and (3). The final order is based on an administrative complaint alleging, as of February 1 and 2, 1994, a shortage of about $6000 in one escrow account and an overage of about $400 in another escrow account. The administrative complaint alleges that Respondent Dume prepared written monthly escrow-account reconciliation statements. The final order reprimands each Respondent. As to Respondent Dume only, the final order imposes a $300 fine, suspends his license until the fine is paid, and places Respondent Dume's license on probation for one year, during which time he was required to "enroll in and satisfactorily complete a 30-hour broker management course." The final order states that a failure to complete all conditions of probation may result in the filing of a new complaint. The final order establishes that Respondents have been licensed brokers in Florida, but does not establish their licensing status as of anytime after the expiration of Respondent Dume's probation, which ended on September 8, 1995. In mid-September 1995, an investigator employed by Petitioner contacted Respondent Dume to determine whether he had complied with the final order of August 8, 1994. Respondent Dume admitted that he had not undertaken the required education. The investigator set up an office audit for November 1, 1995. On November 1, 1995, the investigator visited Respondents' office to conduct the audit. She had access to all relevant documents and found that Respondent Southwest Florida Home Realty, Inc. maintained an escrow account for real estate rental deposits. The investigator audited the period from January 31, 1995, through September 30, 1995. The investigator found that neither Respondent conducted written reconciliations of the escrow account during this period of time. The investigator found checks drawn on the escrow account improperly paid to another corporation owned by Respondent Dume and, in one case, paid to Respondent Dume personally. Two of the checks payable to the other corporation, which was not a licensed corporate broker, were dated September 30 and October 31, 1994. The investigator did not testify as to the date of the check paid personally to Respondent Dume. The investigator asked Respondent Dume about these disbursements. As to the check made to him personally, he explained that a bank would not cash his check and he needed funds. All of the checks paid to the other corporation or Respondent Dume personally were unauthorized and an improper use of escrow funds. Petitioner proved that the two checks to the corporation owned by Respondent Dume related to a time period not covered in the case resulting in the August 8 final order. When the investigator attempted to reconcile the escrow account for the period from January 31 through September 30, 1995, she found a shortage of about $31,500. Respondent Dume told her that he had repaid the escrow account about $20,000, but this was in January 1994. There is no evidence that any client has suffered any losses due to Respondents' failure to maintain the escrow account in the manner required by law. As already noted, the parties in effect agree that Respondents were licensed until certain dates in 1995, but the evidence fails to establish that Respondents' licenses expired after that time. But even if the evidence had proved the alleged expiration dates, the evidence would still be less than clear and convincing that Respondents conducted real estate business after those dates. There is even less evidence that Respondents failed to make required written disclosures in real estate transactions, as Petitioner has failed to prove any real estate transactions or the absence of any such disclosures.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the licenses of Respondent Dume and Respondent Southwest Florida Home Realty, Inc. ENTERED on December 2, 1996, in Tallahassee, Florida ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of December, 1996. COPIES FURNISHED: Steven D. Fieldman Chief Attorney Department of Business and Professional Regulation Division of Real Estate Hurston Building, North Tower 400 West Robinson Street Orlando, Florida 32801-1772 Frederick H. Wilsen Gillis and Wilsen 1415 East Robinson Street, Suite B Orlando, Florida 32801 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares Division Director Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802-1900
The Issue The issue to be determined is whether the doctrine of equitable tolling should excuse the late filing of a Petition for Administrative Hearing filed with Respondent by Petitioner Florists Mutual Insurance Company.
Findings Of Fact Respondent, the Department, is the state agency charged with resolving disputes over reimbursement for costs of medical services provided to injured workers under workers? compensation law. Petitioner Florists was in a reimbursement dispute with Kendall. The Department issued a Determination that Florists should reimburse Kendall the sum of $100,894.54. Florists received notice of the Reimbursement Dispute Determination on April 8, 2013, via United States Postal Service certified mail. The Reimbursement Dispute Determination included a Notice of Rights advising Florists that a request for an administrative hearing on the Determination had to be received by the Department within 21 days of Florists? receipt of the Determination. It noted in bold print that failure to file a petition within that time period constituted waiver of the right to a hearing. Florists? Initial Petition was sent via certified mail from the Tallahassee office of Petitioner?s counsel located at 1701 Hermitage Boulevard, Suite 103, Tallahassee, Florida, on or about Thursday, April 25, 2013. The filing deadline was the following Monday. The Initial Petition was appropriately addressed to “Julie Jones, CP, FRP, DFS Agency Clerk, Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida.” The Initial Petition was received by the Department on Wednesday, May 1, 2013, at 10:11 a.m. The Department determined that the Initial Petition was untimely, as it was received on the twenty-third day after Florists received notice, making it two days late. Petitioner is a workers? compensation insurance carrier whose substantial interests are affected by Respondent?s Reimbursement Dispute Determination that it must reimburse health care provider Kendall $100,894.54. That determination will become final if Petitioner is determined to have waived its right to a hearing. The distance between the Tallahassee office of Petitioner?s counsel and the office of the Department is approximately four miles. From review of the United States Postal Service tracking information, it appears that after the Initial Petition was mailed, it was processed in Louisville, Kentucky, before it returned to Tallahassee, Florida, for delivery, indicating a journey of some 1,050 miles over the course of six days. Late delivery of the Petition by the United States Postal Service did not prevent Florists from asserting its rights.
The Issue Is Worldwide Investment Group, Inc. (Worldwide) entitled to apply to the State of Florida, Department of Environmental Protection (the Department) for funds to reimburse Worldwide for costs associated with petroleum clean-up at 500 Wells Road, Orange Park, Florida, Facility ID#108736319? See Section 376.3071(12), Florida Statutes.
Findings Of Fact The Property Howard A. Steinberg is a Certified Public Accountant, (CPA) licensed to practice in Florida. In addition to his work as a CPA, Mr. Steinberg has other business interests. Among those interests is Worldwide, a corporation which Mr. Steinberg formed for the purpose of acquiring certain assets, or properties, from Home Savings Bank and American Homes Service Corporation (Home Savings Bank). Worldwide became a corporation in July 1996. Mr. Steinberg is the sole shareholder of that corporation and has been since the inception of the corporation. In addition to controlling all of the assets within Worldwide, Mr. Steinberg is the sole officer of the corporation. The corporation has no other employees. Worldwide has its office in Hollywood, Florida, in the same physical location as Mr. Steinberg's accounting firm of Keystone, Steinberg and Company, C.P.A. Under its arrangement with Home Savings Bank, Worldwide acquired property known as Save-A-Stop at 500 Wells Road, Orange Park, Florida. Mr. Steinberg engaged the law firm of Burnstein and Knee, to assist Worldwide in the purchase of the Save-A-Stop property. The Save-A-Stop property is a commercial parcel that has experienced environmental contamination from petroleum products. To address that problem the firm of M. P. Brown & Associates, Inc., (Brown) was paid for services in rendering environmental clean-up of that site. Substantial work had been done by Brown to remediate the contamination before Worldwide purchased the property from Home Savings Bank. Home Savings had paid Brown for part of the costs of clean-up before Worldwide acquired the Save- A-Stop property. After the purchase, Mr. Steinberg paid Brown to finish the clean-up. Application for Reimbursement Mr. Steinberg, as owner of Worldwide, understood that the possibility existed that Worldwide could be reimbursed for some of the clean-up costs by resorting to funds available from the Department. On July 29, 1997, Bonnie J. Novak, P.G., Senior Environmental Geologist for Brown, wrote to Mr. Steinberg to provide a cost estimate for preparing a reimbursement application in relation to the Save-A-Stop property. The cost to prepare the application was $1,870.00. On August 27, 1996, Mr. Steinberg accepted the offer that had been executed by Brown by Mr. Steinberg signing a contract, and by calling for Brown to prepare an application, to be presented to the Department for reimbursement of costs expended in the clean-up. In furtherance of the agreement between Worldwide and Brown, $935.00 was paid as part of the costs of preparation of the application. This payment was by a check mailed on August 27, 1996. The balance of the fee was to be paid upon the completion of the preparation of the application. In 1996, outside the experience of his businesses, Mr. Steinberg was having difficulties in his marriage. To address the situation, Mr. Steinberg filed a Petition for Dissolution of Marriage. That Petition was filed in April 1996, at which time Mr. Steinberg assumed custody of the children of that marriage, with no right for their mother to unaccompanied visits. After filing for dissolution, Mr. Steinberg relied on others to assist him in dealing with his personal and business life. From December 1996 through January 6, 1997, Mr. Steinberg was particularly influenced by the upheaval in his personal life. It caused him to request extension of deadlines from the Internal Revenue Service for the benefit of his clients whom he served as a CPA. During December, Mr. Steinberg was only in his office for approximately 10 percent of the normal time he would have spent had conditions in his personal life been more serene. On January 6, 1997, the conditions in Mr. Steinberg's personal life took a turn for the worse when his wife committed suicide. In December 1996, attorney Jerrold Knee, who had assisted Mr. Steinberg as counsel in purchasing the Save-A-Stop property, spoke to someone at Brown concerning the status of the preparation of the application for reimbursement of funds expended in the clean-up. He was told that the application was being worked on. Mr. Knee was aware that the deadline for filing the application was December 31, 1996. Mr. Steinberg was also aware of the December 31, 1996, deadline for submitting the application. In that connection, Mr. Knee was familiar with the difficulties that Mr. Steinberg was having in Mr. Steinberg's marriage in 1996. Mr. Knee knew that Mr. Steinberg was infrequently in the office attending to business. Mr. Knee surmised that Mr. Steinberg was relying upon Mr. Knee to make certain that the application was timely submitted, and Mr. Knee felt personally obligated to assist Mr. Steinberg in filing the application, given the knowledge that Mr. Steinberg was not in the office routinely during December 1996. His sense of responsibility did not rise to the level of a legal obligation between lawyer and client. Although Mr. Knee was aware of the pending deadline for submitting the application for reimbursement, and had inquired about its preparation by Brown, and had discussed it with Mr. Steinberg, Mr. Knee never specifically committed to making certain that the reimbursement application was filed on time. As it had committed to do, Brown prepared the reimbursement application for the Save-A-Stop site. The application was for the total amount of $58,632.85, not including preparation charges and CPA Fees. Written notification of the preparation of the application was provided to Mr. Steinberg on December 12, 1996. The correspondence reminded Mr. Steinberg that the application needed CPA approval, an invoice and registration, and a signed certification affidavit. Most importantly, the notification reminded Mr. Steinberg that an original and two copies of the application must be sent to a person within the Department prior to December 31, 1996. The notification specifically indicated the name of that individual within the Department and set forth that person's address. The notification arrived in Mr. Steinberg's office during the week of December 12, 1996. That notification was not opened until late January or early February 1997. Mr. Steinberg opened the letter at that time. During December 1996 Mr. Steinberg was responsible for opening the mail received in his office. No other person was expected to open that mail for the benefit of Worldwide. Untimely Application On February 6, 1997, Worldwide submitted its application for reimbursement for clean-up at the Save-A-Stop location. That application was received by the Department on February 7, 1997. The Department has consistently interpreted the statutory deadline for submitting reimbursement applications in accordance with Section 376.3071(12), Florida Statutes, (Supp. 1996) to be absolute. Consequently, on February 11, 1997, the Department denied the Worldwide application because it had been filed beyond the December 31, 1996, deadline recognized by the statute. Worldwide contested that proposed agency action by requesting a hearing to examine the issue of the timing of the application submission. Consequences of Untimely Application In Florida, petroleum taxes are deposited for the benefit of the Inland Protection Trust Fund. The Florida Legislature allows monies to be appropriated from those deposited funds. In that budgetary process, the Governor's office serves as liaison in requesting the Legislature to appropriate monies from the Inland Protection Trust Fund in relation to the costs of cleanup of sites contaminated by petroleum products. To assist the Governor's office, the Department identifies the need for covering the costs of the clean-up and makes a recommendation to the Governor to provide to the Legislature concerning the amount to be appropriated for the clean-up. In the history of the clean-up program, in 1995, problems were experienced with fraudulent and inflated claims calling for reimbursement for the cost of clean-up. This led to a debt of approximately $550,000,000.00. There was a concern that that debt could not be repaid in a reasonable time frame. In response, the Department, as authorized by the Legislature in action taken in 1996, negotiated a bond transaction through the Inland Protection Financing Corporation. With the advent of the bond issue, $343,000,000.00, not to include the cost of funding the bond, was made available to pay for petroleum clean-up. That bond issue was designed to fund the payment of reimbursement applications that had been received before the end of the life of the petroleum clean-up reimbursement program in place. During the 1996 session, in which the Legislature approved the bond issue, the Legislature also made changes to the petroleum clean-up program. The changes were fundamental in that applicants were no longer reimbursed for clean-up work that had been performed. With the advent of the legislative changes, petroleum clean-up, under a system calling for payment from the fund, could only be conducted if an applicant was pre-approved to conduct the clean- up. As part of that process of gaining funds pursuant to the bond issue, the Department performed an analysis, as authorized by the Legislature, to determine that amount necessary to pay existing obligations that had accrued under the petroleum clean-up reimbursement program that predated the Legislative change in 1996. To ascertain the existing obligation, the Department totaled the known dollar amount associated with the existing reimbursement applications and a portion of unreviewed reimbursement applications that had been received. The Department adjusted the sum to be paid in association with applications that had not been reviewed to that point, having in mind prior experience in which only 82 percent of claims had been allowed. The overriding concern by the Department was that it needed to determine whether the bond issue would be sufficient to defease the backlog of applications for reimbursement previously filed. Information concerning the reimbursement obligations was made known to the Florida Supreme Court in bond validation proceedings held before that court. The Inland Protection Finance Corporation was also made aware of the reimbursement obligations. In 1997, the Department gave further information to the Inland Protection Financing Corporation, indicating that the amount of bond was sufficient for reimbursement obligations. The Department in association with the terms of the bond transaction agreed that the bond proceeds would not be used to fund claims that were received after January 3, 1997. The deadline for submitting applications had been extended until January 3, 1997, by virtue of a statutory amendment found at Section 376.3071(12), Florida Statutes, (1997). Therefore, consistent with the statutory change, the Department had allowed applications submitted after December 31, 1996, but before January 4, 1997, to be considered on their merits. The December 31, 1996, deadline had existed under Section 376.3071(12), Florida Statutes (Supp. 1996). The statutory change occurred because a number of applications that were filed pursuant to the December 31, 1996, deadline set forth in Section 376.3071(12), Florida Statutes (Supp. 1996) did not meet that deadline. The reason for this failure was due to weather conditions that caused overnight couriers, Federal Express and United Parcel Service, to be unable to deliver parcels to the Tallahassee, Florida, airport. These applications, as other applications, were sent to the Department at a Tallahassee, Florida, address. Based on the inability of the two couriers to deliver applications under the timeline anticipated, the Department did not receive that group of applications until January 2, 1997. Subsequently, the applications were accepted as timely based upon the amendment found in Section 376.371(12), Florida Statutes (1997) which extended the filing deadline until January 3, 1997. As a policy consideration, the Department believes it must strictly enforce the deadline for submission of reimbursement applications, as extended by the Legislature, to avoid the future accrual of debt for applications submitted after January 3, 1997, which the Department cannot reasonably anticipate. Apropos of the present case, the Department does not believe that it is well-advised to allow even a single claim for reimbursement, if that claim was received after January 3, 1997. To date, 64 applications have been received by the Department subsequent to December 31, 1996. All but six of those applications were received no later than January 3, 1997. Two of that six applications for reimbursement are still pending before the Department. Historically 22,000 applications for petroleum clean-up have been received by the Department since 1986. At the time of the hearing, 9,000 applications were pending before the Department. In December 1996, 3,000 applications were received calling for reimbursement of costs. At the time of hearing, approximately $340,000,000 in reimbursement claims had not been satisfied. Petitioner makes its claim to be excepted from the deadline for submitting its application based upon the doctrine of equitable tolling.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED that a Final Order be entered denying the application of Worldwide to participate in the reimbursement program for clean-up expenses as untimely. DONE AND ENTERED this 7th day of May, 1998, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1998. COPIES FURNISHED: P. Tim Howard, Esquire P. Tim Howard and Associates, P.A. 1424 East Piedmont Drive, Suite 202 Tallahassee, Florida 32312 Jeffrey Brown, Esquire Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Kathy Carter, Agency Clerk Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 F. Perry Odom, General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Virginia B. Wetherell, Secretary Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
