The Issue Whether Respondent committed five violations of the Yacht and Ship Brokers' Act, including the following counts: 1) failing to have the license of each salesperson in his employ prominently displayed in his principal place of business; 2) failing to place deposits received from clients pursuant to transactions involving yachts into a broker's trust account; 3) allowing a person licensed only as a salesperson to act as a broker and to use the broker's name to evade the provisions of the Yacht and Ship Brokers' Act; 4) failing to deposit funds into the broker's trust account within three working days of receipt of funds pursuant to a purchase contract by a salesperson licensed under him; 5) allowing a salesperson licensed under him to carry out acts which if committed by the broker would place him in violation of the Yacht and Ship Brokers' Act and the rules thereunder, such as violating the Notary Public Law, failing to exercise due professional care in the performance of brokerage services, and making substantial and intentional misrepresentations with respect to transactions involving yachts, as alleged in the Amended Notice to Show Cause, in violation of the Yacht and Ship Brokers' Act, Chapter 326, Florida Statutes, and if so, what penalty should be assessed.
Findings Of Fact Petitioner is the agency of the State of Florida charged with the responsibility to administer and enforce the Florida Yacht and Ship Brokers' Act, Chapter 326, Florida Statutes. The purpose of the Yacht and Ship Brokers' Act is to protect the consumer. A yacht broker is an individual who, in expectation of compensation, sells used boats in excess of 32-feet in length for other persons. In order to obtain a license to act as a yacht broker, an individual must submit an application, undergo a background check for moral character, submit a surety bond, and demonstrate to the Division that he has a trust account to place funds received in pending yacht transactions. Before being able to independently perform yacht brokering services as a yacht broker, an individual must spend two consecutive years as a yacht salesperson in a mentorship working under a broker. At all times relevant to this action, Respondent held a license with Petitioner to operate as a yacht broker. Respondent continues to be licensed as a yacht broker. In late 1995 and early 1996, Respondent operated his yacht brokerage business, Greg and Associates, from two locations. His main office was located in Rockledge, Florida, and a branch office was located in Sarasota, Florida. No brokers were present at the Sarasota location. Respondent operated the Sarasota branch office from his main office in Rockledge, Florida. He never visited the Sarasota branch office. Respondent viewed his relationship to the Sarasota branch office as an "escrow agent." Bullock, a salesman, had complete autonomy to run the Sarasota branch office. Respondent met Bullock only once, and he never met any of the other salesmen who operated out of the branch office. Respondent had only a commission arrangement with Bullock. Respondent sent checks for all commissions to Bullock, who deposited them in Bullock's company, Friar Tuck, Inc's., Barnett Bank business account. Respondent allowed Bullock to hire the other salesmen, to determine a commission arrangement with the other salesmen, and to disburse commissions to the other salesmen. Respondent did not know the commission arrangement with most of the salesmen in the branch office. On April 16, 1996, Respondent was interviewed in his office about some complaints that had been received concerning the operation of his Sarasota branch office. Among the salesmen working under Respondent's broker's license in his Rockledge office at that time were Darrell Lawson and Mark Salmuller. Respondent did not have the licenses of either of these two salesmen displayed. Both men were listed as active employees by Respondent. At all times relevant to this proceeding, Respondent maintained a broker's trust account, entitled Greg and Associates, d/b/a Yacht Brokerage USA, in the Rockledge branch of the Barnett Bank. At all times relevant to this proceeding, Chester Bullock, a yacht salesperson working for Respondent in Respondent's Sarasota branch office, maintained a business checking account entitled Friar Tuck, Inc., d/b/a Yachtmasters, in a Sarasota branch of the Barnett Bank. Bullock was listed as president of the company and was identified as a signatory on the account. This was not a proper broker's trust account, as Bullock, being a yacht salesman, could not have established such an account. In July 1995, Chester Bullock and Jeff Webb, salesmen in the Sarasota branch office, took an offer and received a $1,000.00 deposit from David and Cynthia Cislo, on a 1979 34-foot Marine Trade Trawler. Respondent's salesmen did not deliver the deposit to Respondent's trust account within three days of its receipt. The funds were deposited in Bullock's business checking account at the Sarasota branch of the Barnett Bank. Sometime later, the money was redeposited in Respondent's trust account. Bullock notarized the vessel bill of sale at the time of the closing, and received a commission on the sale. In November 1995, Bullock took an offer and received a $5,350.00 deposit from a Louisiana client, Charles Cosgrove, on a 1964 38-foot Chris-Craft Commander yacht. Respondent's salesman did not deliver the deposit to Respondent's trust account within three days of its receipt. On November 27, 1995, Bullock and Jeff Webber, Respondent's salespeople, acted as listing broker and salesperson, respectively, on the lease-purchase of the 1964 38-foot Christ Craft Commander by Cosgrove. Respondent never signed the brokerage sales record, which is the closing statement given to the lease-purchaser, Cosgrove, and was never identified as broker of record on any of the sales documents. Instead, the purchase-sale agreement lists Bullock as the broker, and the closing statement lists Bullock as the broker. Bullock acted as the notary public for the lease-purchase agreement. In January 1996, Bullock and Harold Raines, yacht salesmen in the Sarasota branch office, took an offer and received a $1,700.00 deposit from a client, Michael Hill, on a 1973, 53-foot Huckins yacht. The letterhead of the draft purchase and sales agreement, which stated "Yachtmasters" and a phone number for the Sarasota area, further indicated that Hill's offer was made through yacht salesmen at the Sarasota branch office. Respondent's salesmen did not deliver the $1,700.00 deposit to Respondent's trust account within three days of its receipt. Instead of delivering the $1,700.00 deposit to Respondent for deposit in Respondent's Rockledge broker's trust account, the check was delivered to Friar Tuck, Inc's., Sarasota account. Hill's deposit, which was supposed to be held in a trust account, intermingled with the other business funds of Bullock's account. Hill requested and received an oral extension from Bullock on his closing date to purchase the yacht. About a month later, Bullock notified Hill that the yacht was sold to another party. It was only after Hill threatened to sue Respondent, the responsible broker, and after Hill filed a complaint with Petitioner that Respondent refunded Hill his deposit. The Yacht and Ship Brokers' Act does not permit licensed salespeople to perform certain acts. It requires the employing broker to do them. An employing broker, a broker who holds the license of his salesperson, must make all trust account deposits and withdrawals of monies involved in a transaction brokered by the salesman. An employing broker is required to supervise the yacht transactions brokered by his salespeople and to sign closing statements, which itemize all charges and credits of the transaction for the client. Respondent minimized his own involvement in his Sarasota branch office and permitted his salesman, Bullock, to operate it. This enabled Bullock to sign as the broker a closing statement of the sale of a yacht, which is an action that should have been performed only by a broker. During the same time period that Respondent granted Bullock autonomy to supervise the Sarasota branch office, Bullock operated another business from the same location, Sarasota Marine and Maintenance Services, which did boat surveys and cleaned boats. Bullock was the president of Sarasota Marine and Maintenance Services. In early 1996, Wittman, a Colorado resident at that time, telephoned Bullock about the 1988, 34-foot Wellcraft Grandsport in the magazine advertisement placed by Bullock. Bullock sent Wittman a videotape of the yacht. After reviewing the videotape, Wittman did not think that it was the same yacht advertised in the magazine. Bullock admitted that the yacht in the videotape was not the same yacht advertised in the magazine, but claimed that it was a sister ship. Based upon Bullock's assurances that the sister yacht was in good condition and the results of a survey done by Bullock's company stating that the yacht was in good condition, Wittman purchased the yacht. Bullock acted as both the listing broker and the selling broker in the sale of the 1988, 34-foot Wellcraft Grandsport yacht to Boyd Wittman, the purchaser. Notwithstandng the fact that he was representing the seller, Bullock did not obtain the written consent of Wittman, the purchaser. Wittman wanted a registered surveyor to do a survey of the condition of the yacht, because Wittman lived out-of-state and wanted to avoid spending money to fly to Florida to inspect it. Bullock arranged for his own company, Sarasota Marine and Maintenance Services, to perform the survey. The survey was signed by Ernest Shaffer, who was identified as a Certified Marine Surveyor and Consultant with the Society of Accredited Marine Surveyors, the National Association of Marine Surveyors, and the National Marine Investigators. Ernest Shaffer was someone that Bullock hired to wash boats. He was not a certified surveyor, as he was held to be. When the yacht was delivered to Wittman in Colorado, he was shocked by the poor condition of the yacht. The interior, the cockpit, the exterior, the bilge, and the mufflers were all in poor condition. Wittman was expecting a yacht that he could take someone out on a lake with, and it was not in good enough condition. Wittman had to pay another $15,000 to $20,000 to repair the yacht to improve it to good condition. Repairs included replacing all of the interior of the cabin, replacing the port windshield, putting new mufflers in, fixing a transmission leak, fixing the air-conditioning, rebuilding the water pumps so that the engines cooled properly, and replacing the dry-rot wood on the main deck on the cockpit. In sum, Wittman purchased the yacht for $38,000, spent another $15,000 to $20,000 in repairs, and eventually sold it for $37,000. Bullock also quoted to Wittman a fee for shipping the yacht from Florida to Colorado for $1,500. Wittman thought the price was reasonable. When the yacht was finally shipped, it cost Wittman approximately $3,800, which he paid, because he had already bought the yacht and had to finish the transaction. Bullock acted as both the listing broker and the selling broker in the sale of a 1973, 34-foot Nautiline yacht to Ernest C. Shaffer, the purchaser. Bullock arranged for his company, Sarasota Marine and Maintenance Services, to perform the survey. The survey was signed by Ted Williams, who was identified as a Certified Marine Surveyor and Consultant with the Society of Accredited Marine Surveyors (SAMS), the National Association of Marine Surveyors (NAMS), and the National Marine Investigators. Neither Bullock, Ernest Shaffer, nor Ted Williams, his employees who signed the surveys of the yachts described above, was certified with NAMS or SAMS, two marine surveys accreditation associations. In the case of a 1973, 53-foot Huckins yacht, Bullock tried to sell the boat three times and took three simultaneous contacts on the same vessel. He took a contract from Michael Hill, a prospective purchaser, extended the closing date for Hill to March 6, 1996, and simultaneously had contracts for the same boat with the prospective purchasers Sam Bankester and Steven Kenneally, with the closing dates of February 29, 1996, and March 2, 1996, respectively. Ultimately, Steven Kenneally purchased the yacht. The terms of the contracts did not provide for simultaneous contracts on the same vessel. The prospective purchaser who did not come up with the money first lost out on the opportunity to purchase the yacht. In addition, the Hills, the prospective purchasers, had a difficult time obtaining their earnest money back from Bullock. In January of 1996, Raines, Respondent's salesman, showed Chris June, a North Carolina resident, a 1970, 42-foot Trojan Sea Voyager yacht named "Fantasia." June liked the 42- foot Trojan Sea Voyager and entered into a contract to purchase it through Raines and Bullock. Bullock recommended a surveyor, John Pomeroy, in St. Petersburg, Florida, to complete the survey. Pomeroy was, in fact, not certified with NAMS or SAMS. Bullock told June that the boat was in very good condition and that it was a great value. During the survey, June noticed that wood on the yacht was separating in the bow, and asked Bullock and Pomeroy about it. They explained that this was "wet/dry expansion" which occurs in yachts that sit for a long time and can easily be fixed with some screws and caulking. "Wet/dry expansion" causes wood in wooden yachts to start separating, according to Bullock and Pomeroy, due to the wet wood below the waterline and the dry wood above the waterline. The survey disclosed no substantial problems with the yacht. Relying on the statements of Bullock and Pomeroy, June purchased the "Fantasia" for $22,000, with money loaned to him by a relative. A month after purchasing his yacht, June was informed that his boat was sinking while moored at the dock. June had to hire a marine recovery company to recover the yacht, just before it was about to go completely under water. The yacht took on water in an area near the stern that was not well checked-out, where a basketball-sized wad of putty holding the corner together came loose. As the estimate to repair the boat was more than three times what the boat was worth, June sold it to a salvage yard for $2,500. However, the salvage yard defaulted on that payment. June has been making accelerated payments on his loan, and has the loan down to approximately $19,000. He made a claim against Respondent's surety bond and settled the action for a small amount from the bonding company. Respondent attended two all-day workshops hosted by the Petitioner's Section of General Regulation, which cover in detail how to display a license, to display trust accounts, to display broker's duties and responsibilities, and to display branch offices. Respondent was exposed to the statutes and rules which were violated. Respondent took a cavalier attitude towards following the requirements of the Act. On February 15, 1996, Petitioner entered a Final Order against Respondent in Docket No. YS95397, imposing a fine of $1,500 for Respondent's violation of the Act. Respondent used the name "Yachtmasters" for his Sarasota branch office without having a license issued in that name in violation of Florida law. In the case DBPR v. Chester C. Bullock, Docket No. YS97172 (December 11, 1998), the Petitioner charged Chester Bullock, a registered salesman, with five violations: Charge 1 - The Respondent acted as a broker when he was licensed only as a salesman. Charge 2 - The Respondent made substantial and intentional misrepresentations with respect to transactions involving yachts upon which people have relied. Charge 3 - The Respondent violated other laws governing transactions involving yachts, specifically, he violated Chapter 117, Florida Statutes, by notarizing signatures on documents in which he had a financial interest. Charge 4 - The Respondent failed to immediately deliver deposits received from clients for the purchase of yachts to the broker under whom he was licensed as a salesman. Charge 5 - The Respondent failed to exercise due professional care in the performance of brokerage services, such as recommending his own company as a surveyor to a client and representing it as being an accredited surveyor company, when it was not. Bullock was found guilty on all charges and assessed a civil penalty of $45,000 in that case and had his yacht salesperson's license revoked. The Petitioner has proven each of the violations by clear and convincing evidence. Respondent's explanations for his conduct is not credible.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division of Florida Land Sales, Condominiums and Mobile Homes enter a final order which: Finds Respondent guilty of the charges set forth in Counts 1, 2, 3, 4 and 5 of the Amended Notice to Show Cause. Respondent's broker's license is hereby revoked. The Division impose a civil penalty of $40,500, which is $500 for Count 1 and $10,000 each for Count 2, 3, 4, and 5. The Respondent shall immediately cease and desist from any violations of Chapter 326, Florida Statutes, and the administrative rules promulgated thereunder. DONE AND ENTERED this 18th day of June, 1999, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of June, 1999. COPIES FURNISHED: William Oglo, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007 Gregory Linnemeyer 613 Rockledge Drive Rockledge, Florida 32955 Philip Nowick, Director Division of Florida Land Sales, Condominiums, Mobile Homes Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399 William Woodyard, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399
The Issue The issue presented for decision herein is whether or not Respondent's real estate license should be disciplined based on conduct, set forth hereinafter in detail, which is specifically alleged in an Administrative Complaint filed herein dated June 24, 1987.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I make the following relevant factual findings. At all times pertinent to the charges herein, Respondent was the holder of a Florida Real Estate license and operated as a real estate broker. (Petitioner's Composite Exhibit 1 and Stipulation of the parties). On October 17, 1985, Respondent obtained four exclusive listing agreements from John S. Blosnick (Blosnick) for warehouses he owned located in Miami, Florida. (Petitioner's Composite Exhibit 2). Respondent was unable to find a buyer for the units and instead leased them to Jim Gardner and V.I.P Car Care pursuant to a business lease entered into on July 22, 1986. During the time, Blosnick was experiencing financial difficulties and needed someone to either purchase or lease the premises. The lease specified that Mr. Gardner would use the premises for the manufacture and repair of cars and boats. (Petitioner's Exhibit 3). During the fall of 1986, a company that Respondent was affiliated with and served as President, Reaction Marine, Inc., took over the rental units and began constructing boat hulls from fiberglass resin. At this time, Reaction Marine erected a sign outside the warehouses where it remained during the time of the instant hearing. (Petitioner's Exhibit 4). On January 6, 1987, Respondent's bookkeeper, a Mrs. Bryant, issued a check for payment of rent drawn on the account of Reaction Marine, Inc. to John Blosnick for $945.00. The check was subsequently returned for insufficient funds. That check remains unpaid as of the date of hearing. After Reaction Marine began occupancy of the Blosnick warehouses, Respondent and Jim Gardner had a dispute and Gardner is no longer affiliated with Reaction Marine. Respondent who owned the molds for boat manufacturing, continued to store the molds in the leased warehouses. During the time when Respondent obtained the exclusive listing agreement to sell the warehouses for Blosnick, they were good friends and Blosnick frequented Respondent's office and home two to three times per week. Respondent is an entrepreneur of sorts and owns three bars and various and sundry other businesses in the Miami area. Respondent and Blosnick often talked about different business ventures as Blosnick was interested in pursuing business ventures with Respondent. As early as the fall of 1986, Blosnick was aware that Respondent was affiliated with Reaction Marine, Inc., and that Reaction Marine thereafter occupied the subject warehouse. Respondent has offered to make good on the check which was returned for insufficient funds against the account of Reaction Marine, Inc., however that offer is contingent upon Blosnick's tender of the check to Respondent upon payment. Blosnick has requested that payment be made to a third party and has not offered to tender the check to that third party simultaneous with Respondent's tender of payment to make good on the returned check. Respondent has attempted to clean the floors of the warehouses by removing the resins, epoxys, and gel coats caused by Reaction Marine, Inc. This was done during January and February, 1987 by Respondent using the assistance of an acquaintance, Heather Rockcastle, who was involved with the cleaning of the warehouse and restoration of the floors to their original condition. The cleanup process took more than one day. In Respondent's second attempt to gain entry to the warehouses, Blosnick had hired a locksmith to change the locks and thereby prevented Respondent from gaining entry. The lease agreement entered into by Blosnick and VIP Car Care specifies that the property was to be used and occupied as a place for car and boat manufacture/repair. (Petitioner's Composite Exhibit 3). Pursuant to the terms of that business lease, VIP Car Care was authorized to assign or sublet the premises for the usage here which was consistent with the usage for which VIP Car Care leased the premises. (Petitioner's Composite Exhibit 3, first stipulation and condition of the business lease).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Administrative Complaint filed herein be DISMISSED. RECOMMENDED this 11th day of May 1988, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of May, 1988. COPIES FURNISHED: Steven W. Johnson, Esquire Contract Attorney DPR-Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Mark Weissman, Esquire Katz and Weissman 300 Aragon Avenue Suite 330 Coral Gables, Florida 33134 William O'Neil Esquire General Counsel Department of Professional Regulation 101 East Gaines Street Tallahassee, Florida 32301
Findings Of Fact Petitioner is a Swiss national, who resides in Jamaica. His business in Jamaica involves water sports and vacation tours, primarily for European tourists. Petitioner attended a boat show in Fort Lauderdale, Florida, in order to locate a suitable boat for entertainment and tour purposes for use by his business in Jamaica. There, he saw The Lady, a vessel being brokered by Anchorline Yacht and Ship Brokerage, Inc., of St. Petersburg, Florida. On February 28, 1980, Petitioner purchased The Lady from Anchorline for $120,000. Prior to that date, a survey was conducted by Wilkinson Company, marine surveyors, and repairs indicated by that survey were completed at South Pasadena Marina, Inc. At the time that Petitioner purchased The Lady from Anchorline, he advised the broker that he was taking the vessel out of the country. Accordingly, the broker required Petitioner to sign an affidavit that Petitioner had read the provisions of Section 212.05, Florida Statutes, and no tax was collected on the sale and purchase of The Lady. As The Lady was journeying from St. Petersburg across the State of Florida to West Palm Beach in order to reach Jamaica, she started taking on water. She was taken to Lantana Boatyard, where another marine survey was conducted. That survey concluded that The Lady was not seaworthy and, therefore, could not be taken to Jamaica at that time. As one of the required repairs, her engines needed to be overhauled by Cummins in Miami. Accordingly, after the repairs to be made at the Lantana Boatyard were completed, The Lady was taken to the Keystone Point Marina in North Miami, Florida, so that the work on her Cummins engines could be undertaken. During this time, Petitioner attempted to register The Lady in Jamaica; however, the Jamaican Government refused to license or register the vessel since she was not in Jamaica but was still physically located within the State of Florida. As a result of discussion between Petitioner and a Mr. Mathews at Anchorline, on September 18, 1980, the Petitioner made application for a Florida boat Certificate of Title at a tag agency. He reported the purchase price as ten dollars and, accordingly, paid forty cents tax on the transaction. Cummins started the repair work necessary on The Lady's engines while she had been docked at the Keystone Point Marina. On occasion, Petitioner has stayed overnight on The Lady for security purposes. He has had a telephone attached to the vessel for his personal use while on board. On January 7, 1981, Respondent Department of Revenue issued a Warrant for Collection of Delinquent Sales and Use Tax against the Petitioner in the total amount of $9,967.37, representing the follows: Tax $4,799.60 Penalty 4,799.60 Interest 350.17 Filing Fee 18.00 $9,967.37 On January 19, 1981, Petitioner made payment to Respondent Department of Revenue in the amount of $5,167.77, which payment was made under protest and which payment represents the amount of tax, interest, and filing fees, but does not include the amount of penalty. Pursuant to its warrant, the Department of Revenue has chained The Lady to the dock at the Keystone Point Marina. Accordingly, the work being performed by Cummins on her engines has not been completed, and no sea trial can be conducted. As stipulated by the parties, since the Petitioner purchased The Lady, she has been under repair and has never left Florida waters.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is therefore, RECOMMENDED THAT: A final order be entered denying Petitioner's claim for a refund, finding the Petitioner liable for a sales tax equal to four percent of the purchase price, together with interest and filing fees, but finding the penalty assessed against Petitioner to be erroneous and therefore invalid. DONE AND ENTERED this 8th day of October 1981 in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October 1981. COPIES FURNISHED: Michael Lechtman, Esquire 801 N.E. 167th Street, Suite 301 North Miami Beach, Florida 33162 John Browdy, III, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301 Mr. Randy Miller Executive Director Department of Revenue 102 Carlton Building Tallahassee, Florida 32301 The Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301
The Issue Whether petitioner's application for registration as a real estate salesman, pursuant to Chapter 475, Florida Statutes, should be approved.
Findings Of Fact Petitioner field applications for registration as a real estate salesman with respondent on October 10, 1977. Question 16 of the application reads as follows: 16. Have you, in this state, operated, attempted to operate, or held yourself out as being entitled to operate, as a real estate salesman or broker, within one year next prior to the filing of this application without then being the holder of a valid current registration certificate authorizing you to do so? The petitioner answered "no" to Question 16. On December 8, 1977, respondent Florida Real Estate Commission issued an order denying the application based on its determination that the applicant had operated, attempted to operate or held himself out as a real estate broker or salesman within the one year period prior to filing his application. Petitioner thereafter requested a hearing in the matter. (Exhibit 1) Petitioner is the president of Marketing Institute Corporation of the Americas, Ltd. of San Jose, Costa Rica. (MICA) The firm operates as a real estate sales organization under the laws of Costa Rica, and is owned by Insco S.A., a Costa Rican holding company. (Testmony of McIntire, Figueredo) In 1975, petitioner became associated with William W. Landa, president of Costa del Sol, a condominium project in Miami, Florida. His function was to produce sales of condominium units as a result of sales efforts in Latin America. Part of the informal arrangement was the petitioner occupied a rental villa at the condominium project. His success in producing sales was limited and, as a result, the association was terminated sometime in 1976. In a letter to Lands, dated January 21, 1977, petitioner sought an accounting of expenses incurred in the operation and stated that he had produced three purchasers for which commissions were payable at the rate of "10% for foreign sales and 5% on domestic sales." Although no explanation of the terms "foreign sales" and "domestic sales" was presented, Landa testified at the hearing that petitioner did not sell in Florida for Costa del Sol. (Testimony of Landa, Figueredo, Exhibits 2-3) On December 1. 1976, the receiver in bankruptcy of the estates of Grandlich Development Corporation and Fisher Development Corporation, Fred Stanton Smith, president of the Keyes Company, Miami, Florida, Wrote petitioner and offered to pay his firm a 10% commission on "all sales closed by you of all Commodore Club Condominiums sold to your prospects." The commission was to be payable to MICA through its agent in the United States, Transcontinental Properties, Inc. of Miami, Florida, a corporate broker, The Commodore Club is a condominium project located at Key Biscayn, Florida. Hemisphere Equity Investors, Inc. was the registered broker for the sales of the condominiums and kept sales agents on the premises. Smith instructed Hemisphere to cooperate with foreign brokers in the sales of the properties. Petitioner proceeded under this arrangement to obtain and refer prospective foreign purchasers to Transcontinental who arranged to show the condominium units to the clients and consummate any resulting sales. Although petitioner had desk space in the Transcontinental office from September, 1976, to August, 1977, he was not supposed to show properties to clients or be involve in any real estate sales functions. In September, 1976, the president of Transcontinental placed a telephone call to respondent's legal office at Winter Park, Florida and ascertained that commissions could be paid to a foreign broker. However, he was informed by the Commission representative that it was a "gray" area and, although the foreign representative could serve as an interpreter for foreign clients during transactions in the United States, he could not perform any of the sales functions himself in Florida. Sales were made in this manner and commission checks were paid to petitioner's firm during the period January - September, 1977. (Testimony of Smith, McIntire, Figueredo, Exhibits 4, 5, 12, 13, 15) On July 1, 1976, Alexander Sandru purchased a condominium at the Commordore Club through the Keyes Company as broker. He was a friend of petitioner's from Caracas, Venezuela, and the latter had recommended his purchase of the condominium. However, petitioner was not in the United States at the time Sandru viewed the property and purchased it. Petitioner claimed a commission on the sale and it was paid to his firm through Transcontinental's predecessor company. A dispute arose over the payment of the commission because a saleswoman of Hemisphere Equity Investors, Inc. had shown the property to Sandru and assumed that she would earn the commission on any resulting sale. (Testimony of Lundberg, Nelson, Murragy, Exhibits 8-11) On several occasions in 1976 and 1977, petitioner accompanied Latin American individuals to the Commodore Club where a representative of Hemisphere showed them various condominium units. During this time, petitioner would inquire concerning maintenance charges and the like and transmit such information to the individuals in Spanish. Several of these persons were connected with petitioner's foreign firm and were not prospective purchasers. (Testimony of Lundberg, Figueredo, Exhibit 7) On January 30, 1977, Insco S.A. entered into a purchase agreement for a Commodore Club condominium unit. Petitioner signed the agreement on behalf of his firm MICA as broker for the transaction. However, the deal was never consummated. (Testimony of Figeredo, Exhibit 14)
Recommendation That Petitioner's application for registration as a real estate salesman under Chapter 475, Florida Statutes, be denied. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22nd day of March, 1978. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: John Huskins, Esquire Florida Real Estate Commission 400 West Robinson Avenue Orlando, Florida 32801 Richard J. Mandell, Esquire 748 Seybold Building Miami, Florida 33132
The Issue On February 28, 1996, the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Petitioner) issued a Notice To Show Cause to Robert O'Brien (O'Brien) alleging that O'Brien violated Section 326.006(2)(e)7, Florida Statutes. Specifically, O'Brien was charged with allowing an unlicensed person to attempt to sell a 52' Hatteras known as "Watermellon" on behalf of O'Brien Yacht Sales. The issue is whether this violation occurred and, if so, what penalty is appropriate. On May 15, 1996, the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Petitioner) issued an Amended Notice To Show Cause to David Sandmann (Sandmann) alleging that Sandmann violated Section 326.004(1), Florida Statutes. Specifically, Sandmann was charged with offering or negotiating to sell a 52' Hatteras, known as "Watermellon". The issue is whether this violation occurred and, if so, what penalty is appropriate. RULINGS ON PETITIONER'S EXCEPTIONS TO ADMINISTRATIVE LAW JUDGE'S FINDINGS OF FACT Petitioner filed an exception to the Administrative Law Judge's Finding of Fact number 15. Section 120.57(1)(j), Florida Statutes, states that: The agency may not reject or modify the findings of fact unless the agency first determines from a review of the entire record, and states with particularity in the order, that the findings of fact were not based upon competent substantial evidence. A thorough review of the record has been made. The Division adopts and incorporates by reference the first sentence of the Administrative Law Judge's Finding of Fact number 15. Petitioner's exceptions to the remainder of Finding of Fact number 15 are accepted because the remainder of the Administrative Law Judge's Finding of Fact number 15 is not supported by competent substantial evidence. The second sentence, "The conflict as to whether Respondent Sandmann's acts, considered collectively, establish that he was attempting to sell the boat is resolved by finding that he was not attempting to sell the boat." is rejected because, the Petitioner presented testimony which proved that Sandmann: offered "to help" the Division investigators when they approached the boat. (T. 20, 38-39). gave the Division investigators a business card with his name and O'Brien Yacht Sales, Inc. written on it. (T. 19, 38-19, 52)( P's Exh. 2) gave the Division investigators a spec sheet containing information about the boat. (T. 21, 32, 39, 52). (P's Exh. 3). told the Division investigators that the price of the boat was negotiable. (T 22, 29-30, 39-40, 52). told the Division investigators that the commission would be paid by the seller. (T 21, 22, 29-30, 32, 34, 40, 43) had a copy of a blank sales contract faxed to him (from O'Brien Yacht Sales, Inc.) at the boat show. (T. 22- 23, 41, 52) Also at Recommended Order, page 5, paragraphs 9, 10, 11 and 12. Additionally, there was no competent substantial evidence to support the Hearing Officer's Finding of Fact that Respondent Sandmann was not offering or negotiating to sell the boat, because these actions were uncontroverted. Respondent Sandmann never denied that he was offering or negotiating to sell the boat. Furthermore, the sentence in question is not a Finding of Fact, but rather a Conclusion of Law. The Administrative Law Judge's characterization of this as a Finding of Fact, does not make it so. In Hernicz v. State Dept. of Professional Reg., 390 So.2d 194 (Fla. 1st DCA 1980), facts were undisputed that a nurse practitioner had done certain acts, and when the Board concluded that the actions were a violation of the statute, the court held that that amounted to a Conclusion of Law and not a Finding of Fact. The "facts" were the individual actions that were taken by the Respondent, whether these acts violated the statute was a Conclusion of Law. As stated above, the acts, themselves, in this case were neither denied nor disputed. The second sentence in Finding of Fact number 15 is stricken in its entirety. The third sentence in Finding of Fact number 15 states that "[I]t is clear that Respondent Sandmann was at no time acting as an employee of Mr. Mellon or Respondent O'Brien or with the expectation of receiving compensation for his acts". The "expectation of receiving compensation" was the argument relied on by the Respondents at hearing as their defense to participating in the boat show. Because "compensation" is an integral part of Chapter 326, Florida Statutes, its interpretation should be left to the expertise of the agency. It is a well settled principle that the interpretation of a statute by the agency responsible for its enforcement is entitled to great weight, and will not be overturned unless clearly erroneous. Department of Environmental Regulation v. Goldring, 477 So.2d 532 (Fla. 1985); Shell Harbor Grou, Inc. v. Department of Business Regulation, 487 So.2d 1141 (Fla. 1st DCA 1986). The Division believes that "compensation" can be other than a monetary commission, as claimed by Respondents. "Compensation" can be "perks" such as transportation or use of a house or yacht, or something intangible, such as friendship and affection. The existence of a quid pro quo is what is looked for. Furthermore, from a thorough reading of the record, it was proven by substantial competent evidence that a commission was anticipated being paid, because Petitioner's investigators were told that "the commission would be paid by the seller". (T 21, 22, 29-30, 32, 34, 40, 43). Possibly, no monetary commission was paid to Sandmann, because the yacht did not sell. Regardless, the Division finds that the friendship between Mr. Mellon and Sandmann was adequate compensation under Chapter 326, Florida Statutes. The third sentence of Finding of Fact number 15 is stricken in its entirety. The fourth sentence, "Respondent Sandmann was at the Boat Show and on the `Watermellon' solely as a friend of Mr. Mellon, the owner", is also rejected. The Division does not dispute the long standing friendship of Respondent Sandmann and Mr. Mellon, however being someone's "friend", does not exempt them from Chapter 326, Florida Statutes. There was uncontroverted testimony that Respondent Sandmann was offering or negotiating to sell the boat. That is all that is necessary for him to be within the jurisdiction of the Division, and require him to have a license. Although his friendship could be his motivation or compensation for being on the yacht, his actions, while there, show that he was offering or negotiating to sell the "Watermellon". The fourth sentence of Finding of Fact Number 15 is stricken in its entirety. RULINGS ON PETITIONER'S EXCEPTION TO ADMINISTRATIVE LAW JUDGE'S CONCLUSIONS OF LAW Petitioner filed an Exception to Conclusion of Law number 23 contained in the Recommended Order. This conclusion stated that the Petitioner had failed to meet its burden as to Sandmann because it failed to establish that he was attempting to sell the yacht, and, if the case against Sandmann failed, then the case against O'Brien failed. The Division rejects this Conclusion of Law because it believes that Petitioner proved by substantial competent evidence that Sandmann was offering or negotiating to sell the "Watermellon", and that friendship is adequate compensation.
Findings Of Fact Petitioner is the agency of the State of Florida that administers and enforces the Florida Yacht and Ship Brokers' Act, Chapter 326, Florida Statutes. At all times pertinent to this proceeding, Respondent O'Brien has been licensed as a Yacht and Ship Broker pursuant to the provisions of Chapter 326, Florida Statutes. Respondent O'Brien owns and operates O'Brien Yacht Sales. Respondent O'Brien resides in and has his principal place of business in Palm Beach County, Florida. Mr. Sandmann is a resident of Essex, Connecticut. He has never been licensed as a yacht salesman or as a yacht broker. Mr. Sandmann makes his livelihood as the owner of a dog collar manufacturing business. Henry Mellon, the boat's owner, held a salesman's license issued by Petitioner that expired in August 1994. At the times pertinent to this proceeding, Mr. Mellon was not licensed by the Petitioner. Respondent Sandmann, Respondent O'Brien, and Mr. Mellon have been close friends for many years. Mr. Mellon formerly worked for O'Brien Yacht Sales. Mr. Mellon and Respondent Sandmann are old friends from college. The Fort Lauderdale International Boat Show permitted only new yachts or brokered yachts. Individuals were not supposed to sell boats in this show. Respondent O'Brien was aware of this restriction. In October 1995, Respondent O'Brien had the boat "Watermellon" displayed and listed for sale at the 36th Annual Fort Lauderdale International Boat Show. The asking price for the sale of the Watermellon was $425,000. Mr. Mellon is neither an officer or a director of O'Brien Yacht Sales. Mr. Mellon signed a form styled "Application and Contract for Exhibit Space" so that the Watermellon could be exhibited at the boat show and on this application represented that he was a vice president of O'Brien Yacht Sales. Neither Respondent O'Brien or his company paid to put the Watermellon in the Boat Show and neither expected to receive any commission from the sale of the Watermellon. Respondent O'Brien was acting out of friendship with Mr. Mellon. 1/ On October 27, 1995, Peter Butler and Robert Badger, in their official capacities as employees of the Petitioner, attended the Boat Show and went to the Watermellon. They observed a sign on the back of the boat that advised that the boat was being offered by O'Brien Yacht Sales and gave its telephone number. Mr. Butler and Mr. Badger approached the boat and asked a person, later identified as Respondent Sandmann, whether Respondent O'Brien was aboard. Respondent Sandmann told Mr. Butler and Mr. Badger that Respondent O'Brien was not aboard, asked if he could help them, and gave them a business card with his name and the name of O'Brien Yacht Sales on it. No licensed salesman was on board at this time, but Mr. Mellon, the owner of the boat, was aboard. 2/ Respondent Sandmann gave Mr. Butler and Mr. Badger a copy of a printed sheet containing basic information about the Watermellon. This sheet, referred to as a spec sheet, contained errors that Respondent Sandmann verbally corrected when he gave them the sheet. In response to questions, Respondent Sandmann told Mr. Butler and Mr. Badger that the price of the boat was negotiable and that the commission would be paid by the seller. Mr. Butler and Mr. Badger asked Respondent Sandmann if they could see a copy of the contract that a buyer would need to sign if he purchased the boat. In response, Respondent Sandmann contacted the O'Brien Yacht Sales office and had someone fax to him a copy of the contract used by O'Brien. Respondent Sandmann then gave the form contract to Mr. Butler and Mr. Badger. The business card given by Respondent Sandmann to Mr. Butler and Mr. Badger was printed in 1994 when Respondent Sandmann, who is fluent in French, Spanish, and Italian, accompanied Mr. Mellon to a boat show in Europe. Mr. Butler and Mr. Badger did not inquire as to the amount of the commission that would have been paid by the seller of the Watermellon because Petitioner does not regulate commissions. None of Respondent Sandmann's acts, when considered individually, required a license from the Petitioner. 3/ The conflict as to whether Respondent Sandmann's acts, considered collectively, establish that he was attempting to sell the boat is resolved by finding that he was not attempting to sell the boat. It is clear that Respondent Sandmann was at no time acting as an employee of Mr. Mellon or Respondent O'Brien or with the expectation of receiving compensation for his acts. Respondent Sandmann was at the Boat Show and on the Watermellon solely as a friend of Mr. Mellon, the owner.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner enter a final order as to these consolidated cases that dismisses the charges filed against these respondents. DONE AND ENTERED this 27th day of August, 1996, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 1996.
The Issue Whether Petitioner owes sales and use tax (plus penalties and interest) to the Department of Revenue (Department), as alleged in the Department's November 1, 1999, Notice of Decision.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the Stipulations of Fact set forth in the parties' Joint Pre-Hearing Stipulation: 1/ Mr. Wiviott is a very successful, "hands-on" entrepreneur who presently owns approximately five or six businesses. Since 1958, when he and his brother opened a carpet store in Milwaukee, Mr. Wiviott has owned approximately 30 different businesses (including nine restaurants and a yacht service business), many of which he has sold "for literally millions of dollars of profit." Approximately two-thirds of the businesses that he has owned he has "started from scratch." There have been instances where Mr. Wiviott has invested in businesses that were in industries in which, at the time of his investment, he had no prior experience. In these instances, he overcame his lack of experience by being "extremely industrious" and doing "research." When Mr. Wiviott has needed to consider a "feminine viewpoint" in making a business decision, he has used Mrs. Wiviott, his wife of 43 years, as a "sounding board." For the past 35 years, William Becker has been Mr. Wiviott's accountant. In 1991 or 1992, Mr. Wiviott purchased two "brand new" boats as business investments. The boats were sold to Mr. Wiviott together as a package. Mr. Wiviott paid a total of $1.1 million for the two boats. The larger of the boats was a 63-foot sport fisherman. Although unfinished, it was seaworthy. Mr. Wiviott named this boat the "Choice One." Mr. Wiviott named the other boat, a 56-foot sport fisherman, the "Choice Too." Mr. Wiviott accepted delivery of the Choice One and Choice Too in the Bahamas. He did not pay any sales tax on his purchase of the boats. After accepting delivery, Mr. Wiviott brought the boats to Fort Lauderdale. In 1993, Mr. Wiviott explored the possibility of entering (for the first time) the yacht charter business. He spoke to various people involved in the industry, including two charter brokers (Bob Offer and Bob Saxon) and a charter yacht owner (Bernie Little). He also had discussions with Mr. Becker. Together, he and Mr. Becker made cost and revenue projections. He ultimately made a "value judgment" to go into the business. Mr. Wiviott retained the services of Mr. Offer to help him find a suitable yacht for the business. One of the yachts that Mr. Offer showed Mr. Wiviott was the Fifty-One, a Washington State-built, Fort Lauderdale- based "mega" yacht owned by an Italian national, Dr. Moretti. The Fifty-One's interior design made it particularly well suited for chartering. It had four levels, including a sky deck/lounge equipped with a complete kitchen (to complement the galley located on the bottom level). There were five staterooms that could comfortably accommodate ten charter guests. Each of the regular staterooms had its own head. The master stateroom had "his and her" heads. There was also a stateroom for the captain, as well as quarters for six other crew members (the number needed to properly service a charter party). The Fifty-One had not been well maintained during the time it had been owned by Dr. Moretti. Although Dr. Moretti had made the Fifty-One available for charter, the yacht had a poor reputation among charter brokers and, as a result, it just "sat at the dock," unchartered, while under Dr. Moretti's ownership. In October of 1993, Mr. Wiviott offered to purchase the Fifty-One from Dr. Moretti for $5.1 million, subject to a satisfactory marine survey and sea trial. Dr. Moretti initially rejected the offer, but subsequently agreed to sell the Fifty- One at Mr. Wiviott's offering price (which was considerably less than the $9 million that Dr. Moretti had paid for the Fifty-One a year and a half earlier). Before the deal was consummated, Mr. Wiviott contracted with a marine survey company, Patton Marine, Inc. (Patton), to perform a thorough inspection of the Fifty-One. Patton performed an extensive pre-purchase survey of the Fifty-One, which included various sea trials and other tests (conducted in Fort Lauderdale and off the Fort Lauderdale coast). The survey revealed that the Fifty-One had various "deficiencies." Most of these "deficiencies" were "small items" and were remedied before the sale was finalized. The most serious of the remaining "deficiencies" was the excessive amount of interior vibration. Notwithstanding the known "deficiencies" that remained, Mr. Wiviott thought that, at $5.1 million, the Fifty- One was a good buy. At worst, he believed, he "could make a pretty good profit" by reselling the Fifty-One. Mr. Wiviott retained Robb Maass, whom Mr. Wiviott was told was the "top marine attorney in the [Fort Lauderdale] area," to assist him in forming a Florida corporation which would purchase the Fifty-One and operate a yacht charter business. With Mr. Maass' assistance, B. W. Marine, Inc. (Petitioner) was organized under the laws of the State of Florida, effective January 20, 1994, with Mr. Wiviott as its sole officer, director, and shareholder. Petitioner's principal corporate address was, at the time of incorporation, and has remained, 757 Southeast 17th Street, #389, Fort Lauderdale, Florida 33316. On January 28, 1994, shortly after Petitioner's incorporation, Petitioner closed on the purchase of the Fifty- One. No Florida or other state sales tax was paid on the purchase. The newly purchased yacht (which had been registered in the Cayman Islands by the previous owner, Dr. Moretti) was immediately registered with the United States Coast Guard, and it thereafter began to fly an American flag. Based upon on Mr. Maass’ advice, Petitioner also took steps to obtain a "certificate of documentation with appropriate endorsement for employment in the coastwise trade" for the Fifty-One. It was not until the following year, however, that the United States Congress (passing a bill introduced by Florida Congressman E. Clay Shaw, Jr.) authorized the Secretary of Transportation to issue such a "certificate of documentation." 2/ After taking delivery of the yacht in the Bahamas, Petitioner imported the Fifty-One into Florida. It did so because Mr. Wiviott wanted the Fifty-One to be marketed in the south Florida area and to have access to the exceptional yacht repair and maintenance facilities that were available there. The South Florida area is where the "mega" yacht charter brokers (who, in most instances, effectively "make[] the decision [as to] which boat a charter client is going to use") are concentrated and where the reputation (or, as Mr. Wiviott put it in his hearing testimony, the "aura" or illusion") of a "mega" yacht is established (in part, by the owner, captain, and crew "pander[ing]" to the broker community during showings of the yacht). It is therefore important for a "mega" yacht available for charter to have a presence in the south Florida area so that it can seen by, and shown to, the "mega" charter brokers who are concentrated there. Although most "mega" yachts are marketed in Florida, "the chartering experience [generally occurs] elsewhere," in such places as New England (in the summer) and the Caribbean and Mediterranean (in the winter). Aware of this, Mr. Wiviott, at the time that the Fifty-One was imported into Florida, had no expectation that that the Fifty-One would be used exclusively for charters in Florida waters. Mr. Wiviott wanted the Fifty-One to be imported into Florida without Petitioner having to pay any use tax. Mr. Maass advised Mr. Wiviott that Petitioner would not have to pay Florida use tax if it registered with the Department as a "dealer" and used the Fifty-One "only . . . for bare boat charter[s]." Mr. Maass cautioned Mr. Wiviott that "[t]here could be no personal recreational use, no personal use aboard the boat whatsoever." Before importing the Fifty-One into Florida, Petitioner registered with the Department as a "dealer" that would be engaging in "bare boat" charter operations in Florida. Mark Newcomer was the first captain of the Fifty-One under Petitioner's ownership. Mr. Wiviott considered Captain Newcomer to be, not a "charter captain," but a "yard captain," that is, a captain "who specializes in repairs, maintenance and upgrades of yachts." Captain Newcomer was hired by Petitioner "to take delivery [of the Fifty-One] and to oversee the renovation and retrofit[ting] of the yacht." He was responsible for ensuring that the Fifty-One was brought up to American Bureau of Shipping (ABS) standards. Obtaining certification that the Fifty-One met ABS standards was an "essential part" of any campaign to effectively "market[] the boat" for charter. Mr. Wiviott did not have any intention of continuing Captain Newcomer's employment with Petitioner following completion of "the renovation and retrofit[ting] of the yacht." Captain Newcomer brought the Fifty-One into Florida on or about February 1 or 2, 1994, and docked it at a Fort Lauderdale marina (either Pier 66 Marina or the Bahia Mar Marina). On February 3, 1994, Captain Newcomer moved the Fifty- One to the Bradford Marine Shipyard (Bradford Marine), a Department-registered Fort Lauderdale repair facility able to service boats up to 150 feet in length. The Fifty-One underwent repairs and improvements at Bradford Marine until February 12, 1994, by which time the work that had to be done with it out of the water had been completed. At Bradford Marine, Petitioner had to pay a 20 to 30 percent "surcharge on all outside vendors that c[a]me in." On February 13, 1994, Captain Newcomer moved the Fifty-One to the Bahia Mar Marina (Bahia Mar), a more cost- effective location, to do (with the help of others) the remaining repair and improvement work on the yacht (which could be done with the yacht in the water). Because Captain Newcomer was "very good friends" with the dockmaster at the Bahia Mar, he and those he supervised were allowed to perform work on the Fifty-One (involving the use of noise-generating power tools) that would have otherwise been prohibited. The Fifty-One remained at the Bahia Mar until March 14, 1994, undergoing repairs and improvements. On March 15, 1994, Captain Newcomer, accompanied by Mr. and Mrs. Wiviott (and with less than a full crew), took the Fifty-One on a cruise to the Jockey Club, a "private club" that was part of a "condominium complex resort" located in Miami. He did so pursuant to the instructions of Mr. Wiviott, with whom he spoke to on a daily basis regarding the repair and improvement work that was being done on the Fifty-One under his (Captain Newcomer's) supervision. Mr. Wiviott wanted "to take the boat out to stretch it out [and to] see the progress that Captain Newcomer was making." Furthermore, Mr. Wiviott thought that it was important for Petitioner's charter business for the Fifty- One "to be seen." Near the Jockey Club, the Fifty-One ran aground "in the mud," where it "sat . . . for about eight hours until the tide came back in." After the Fifty-One arrived at the Jockey Club, divers "g[o]t under the boat and clean[ed] the prop[eller]s [and] clean[ed] the drivetrain." The Fifty-One remained docked at the Jockey Club for three days. On March 17, 1994, the Fifty-One returned to the Bahia Mar to undergo further repairs and improvements. By mid-April of 1994, the work necessary to bring the Fifty-One up to ABS standards had been completed. Petitioner therefore applied for, and on April 19, 1994, was issued, an ABS "Class Certificate." The Fort Lauderdale Charter Broker's Boat Show (1994 Boat Show) was held at Pier 66 Marina (Pier 66) from April 14, 1994 to April 20, 1994. The Fifty-One was one of the boats entered in the 1994 Boat Show, and it remained at Pier 66 for the entire show. Mr. Wiviott was aboard throughout the event to show the boat to charter brokers and others. Captain Newcomer helped Mr. Wiviott show the boat. Food and drinks were served. Fresh flowers adorned the boat. The crew wore their dress uniforms. After the end of each day's session, Mr. Wiviott stayed aboard the Fifty-One overnight in lieu of spending company money to rent a hotel room. Following the 1994 Boat Show, from April 20, 1994 until April 28, 1994, the Fifty-one was taken on a "shakedown" cruise to Key West and back to Fort Lauderdale, during which it was run at various speeds and systems were "overloaded" to determine whether they worked properly. At the time of the cruise, the Fifty-One was not equipped with all of the staff and other accoutrements necessary to provide the "five star service" that those who charter "mega" yachts pay to receive. During the cruise, the boat docked at the Ocean Reef Club, an exclusive private resort community in Key Largo; the Galleon Marina, a public facility in Key West; Fisher Island; and the Jockey Club. There were a "few breakdowns" during the cruise, including a "crane breakdown" at the Ocean Reef Club. With the help of vendors, the necessary repairs were made. Aboard during the cruise, in addition to Captain Newcomer and a partial crew, was Mr. and Mrs. Wiviott; Mr. Wiviott's brother, Howard Wiviott; Howard's wife; Mr. Becker, whose firm provided Petitioner with accounting services (primarily through the efforts of Stacey Torchon, one of its accountants); and Mr. Becker's wife. There was no marine surveyor, no representative of a registered repair facility, and no "mega" yacht charter broker aboard during the cruise. 3/ Mr. Becker and his wife did not remain aboard for the entire cruise. They disembarked in Key Largo on April 23, 1994. During the time that he was aboard, Mr. Becker spoke to Captain Newcomer and the crew about the financial and accounting procedures that needed to be followed in conducting Petitioner's charter operations, information that Mr. Becker could have provided by telephone from his California office. (Stacey Torchon, who was "more involved [than Mr. Becker] in the day-to-day operations" of Petitioner, never met personally with any Fifty-One crew member; rather, she communicated with the crew by telephone.) While they were aboard, Mr. Becker and the other guests Mr. Wiviott had invited to take part in the cruise (referred to, collectively, hereinafter as the "Invited Guests") ate, relaxed, and enjoyed the hospitality and ambiance. The Invited Guests' presence on the Fifty-One during the "shakedown" cruise was not solely for the purpose of furthering Petitioner's charter business. Mr. Wiviott was motivated by personal reasons in inviting them aboard. The assertion (made by Petitioner in its Proposed Recommended Order) that one of the purposes of the "shakedown" cruise was to determine, through the feedback given by the Invited Guests, "whether the Petitioner was delivering the chartering experience in terms of comfort, ambiance and service that people willing to spen[d] $50,000 per week would expect" simply does not ring true. Mr. Wiviott knew full well that the Fifty-One, with a "yard captain" at the helm and less than a full crew, was not equipped to provide such service. He did not need to take the "Fifty-One" on a lengthy cruise with family and friends to find this out. Had Mr. Wiviott really wanted to learn if the Fifty-One offered a "chartering experience" for which someone would be willing to pay $50,000.00, he would have asked "mega" yacht charter brokers, not family and friends, to come aboard the Fifty-One for a cruise and give him their feedback. On April 28, 1994, following the "shakedown" cruise, the Fifty-One returned to the Bahia Mar, where, in the ensuing days, defects discovered during the "shakedown" cruise were remedied. By May 7, 1994, the Fifty-One was ready for charter. The Fifty-One, at that time, was not the only vessel in Petitioner's fleet. Shortly after acquiring the Fifty-One, Petitioner had purchased (in Florida) the Choice One and Choice Too 4/ from Mr. Wiviott. Petitioner paid Mr. Wiviott $1,138,804.28 for the Choice One. Inasmuch as the purchase was made under Petitioner's sales tax exemption certificate (that Petitioner had obtained from the Department based upon its representation that it intended to use the Fifty-One exclusively for "bare boat" charter operations in Florida), no Florida sales tax was paid. At the time of the purchase, Mr. Wiviott envisioned that Petitioner would use the Choice One as a "chase boat" for the Fifty-One (from which charterers and guests could fish). The Choice One, however, was never used by Petitioner for this purpose because it turned out that it was not feasible to do so. The Choice One wound up sitting at the dock in Fort Lauderdale, leaving only "to be stretched" or moved to another docking facility by its captain (initially Steven Ernst and then later Carl Roberts). Before its sale by Petitioner in 1995, the Choice One was chartered on only one occasion, during which time it remained at the dock in Fort Lauderdale (positioned so that those aboard could view a passing "boat parade"). The Fifty-One was chartered on a more frequent basis. Of the 15 charters of the Fifty-One during the Audit Period, however, only two (the Gerardo Cabrera and Jean Foss charters) were in Florida waters. The Gerardo Cabrera charter was the first charter of the Fifty-One following the completion of the "renovation and retrofit[ting] of the yacht." It started in Fort Lauderdale on May 18, 1994, and ended in Fort Lauderdale on May 21, 1994. The captain of the Fifty-One for the Gerardo Cabrera charter was Jon Cheney, who had replaced Captain Newcomer on May 7, 1994. The charter agreement between Petitioner (as the "Owner") and Mr. Cabrera (as the "Charterer") was dated May 13, 1994, and read, in pertinent part, as follows: In consideration of the covenants hereinafter contained, the Owner agrees to let and the Charter[er] agrees to hire the Yacht from noon on the 18th of May 1994 to noon on the 21st of May 1994 for the total sum of $18,000.00 + expenses + 6% FSST ($1,080 Dollars) of which amount $18,000 + $1,080 + $5,000 (ADVANCE toward expenses) for a total of $24,080 shall be paid on the signing of this Agreement . . . . The Owner agrees to deliver the Yacht at Bahia Mar Yachting Centre, Ft. Laud. on the 18th day of May 1994 in full commission and working order, outfitted as a yacht of her size, type and accommodations, with full equipment, inclusive of that required by law, and fully furnished, including galley and dining utensils and blankets; staunch, clean and in good condition throughout and ready for service; and agrees to allow demurrage pro rata to the Charterer for any delay in delivery. . . . The owner's insurance policy does not cover Charterer's protection and indemnity during the term of the Charter. . . . * * * The Charterer agrees to accept the yacht delivered as hereinbefore provided and to pay all running expenses during the term of the charter. The Charterer, his agents and employees have no right or power to permit or suffer the creation of any maritime liens against the yacht, except the crew's wages and salvage. The Charterer agrees to indemnify the Owner for any charges or losses in connection therewith, including reasonable attorney's fees. * * * The Charter[er] agrees to redeliver the yacht . . . to the Owner at Bahia Mar Yachting Centre, Ft. Lauderdale, FL . . . . The Charter[er] agrees that the yacht shall be employed exclusively as a pleasure vessel for the sole and proper use of himself, his family, guests and servants during the term of this charter and shall not transport merchandise or carry passengers for pay, or engage in any trade nor in any way violate the Revenue Laws of the United States, or any other Government within the jurisdiction of which the yacht may be at any time, and shall comply with law in all other respects. * * * 11. It is mutually agreed that full authority regarding the operation and management of the yacht is hereby transferred to the Charter[er] for the term thereof. In the event, however, that the Charterer wishes to utilize the services of a Captain and/or crew members in connection with the operation and management of the yacht, whether said Captain and/or crew members are furnished by the Owner or by the Charterer, it is agreed that said Captain and/or Crew members are agents and employees of the Charterer and not of the Owner. In the further event that local United States Coast Guard or other regulations require the Owner exclusively to provide a Captain and/or crew, or the Owner wishes to provide his own Captain and/or crew, the Owner agrees to provide a Captain who is competent not only in coastwise piloting but in deep sea navigation, and to provide a proper crew. The Captain shall in no way be the agent of the Owner, except that he shall handle clearance and the normal running of the yacht subject to the limitations of this charter party. The Captain shall receive orders from the Charterer as to ports to be called at and the general course of the voyage, but the Captain shall be responsible for the safe navigation of the yacht, and the Charterer shall abide by his judgment as to sailing, weather, anchorages, and pertinent matters. The Charterer assumes total control and liability as if the Charterer were the owner of the yacht during the term of the charter. . . . This agreement, by "industry standard," is "considered a 'bare boat' charter agreement." On May 13, 1994, Mr. Cabrera (as "Employer") also entered into a separate "Yacht Employment Agreement" with Captain Cheney (as "Yacht Captain"). It provided as follows: WHEREAS, Charterer has under charter the yacht FIFTY ONE pursuant to his bare boat charter party agreement wherein it is Employer's obligation to furnish the said yacht with a competent master and crew; and WHEREAS, Yacht Captain is a competent master, having over two years' experience in the coastal and inland waters of FLORIDA and THE BAHAMAS and is able to furnish a crew for the management and navigation of the said yacht; and WHEREAS, the parties desire to reduce their agreement to written term; NOW THEREFORE in consideration of the premises and of the agreements hereinafter contained, it is agreed as follows: Employer hereby hires yacht Captain as the Master of the said yacht to act as such Master as long as the yacht is under charter to Employer. Yacht Captain agrees to furnish 6 crew men to assist in operating and navigating the said yacht. The Captain and crew, if any, shall be properly uniformed. The crew to comprise the following: [left blank] Yacht Captain shall be paid for his services and the services of his crew a total sum of TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION and Employer shall furnish the Yacht Captain and his crew, quarters and food, during the term of this Agreement. The term of this Agreement shall commence on the 18th day of MAY 1994, or at such time that the yacht shall be ready to sail pursuant to the bare boat charter party agreement with the Owner and shall terminate on the 21st day of MAY, 1994, unless sooner terminated by the termination of the yacht party agreement for any reason whatsoever. In the event that the yacht charter party agreement is sooner terminated, the Master and crew will receive a pro-rated share of the agreed compensation for their services. After collecting from Mr. Cabrera all the monies Mr. Cabrera owed under both the charter agreement and the "Yacht Employment Agreement," Rikki Davis (the broker representing Mr. Cabrera) handed these monies over to Mr. Offer (the broker representing Petitioner). (It is commonplace in the "mega" yacht chartering industry "to have the amount paid for the use of the vessel under [a] bare boat charter agreement and amount for the captain and crew paid together by the charterer as a lump sum."). Mr. Offer, in turn, forwarded the monies he was given by Ms. Davis to Petitioner. The Gerardo Cabrera charter was the only charter that took place before the captain and crew of the Fifty-One became employees of Papa's Yacht Services, Inc. (Papa's), Petitioner's sister corporation, which, like Petitioner, was incorporated in Florida and has maintained a Florida corporate address from its inception. Papa's was formed solely for the purpose of enabling Petitioner to be in "compliance [with] the bare boat charter concept." Papa's dealings with Petitioner was Papa's sole source of revenue. Petitioner paid Papa's a "management fee" for providing a captain and crew for the Fifty-One. Although the Fifty-One's captain and crew had become Papa's employees, Petitioner continued to pay for their health insurance and provide them with free room and board on the Fifty-One at all times during the Audit Period, except when the Fifty-One was under charter and the charterers provided the captain and crew with room and board. Having a full-time captain and crew aboard a "mega" yacht available for charter, even when the yacht is not under charter, is essential to conduct successful charter operations. The captain and crew must be available, on the vessel, to host the "mega" yacht charter brokers who come aboard between charters (sometimes with little or no advance notice) and to perform those everyday tasks necessary to maintain the vessel. To attract and keep qualified onboard personnel, it is necessary to provide them with, as part of their compensation package, free room and board on the "mega" yacht. Doing so is the "standard in the industry." The Fifty-One was chartered by Jean Foss from December 27, 1995 to January 3, 1996, approximately a year and a half after Papa's had become the employer of the Fifty-One's captain and crew. Ms. Foss cruised to the Bahamas during the charter. The charter originated and concluded in Fort Lauderdale. "[T]he only reason [the Fifty-One] was in Florida [for the charter was] because [Ms. Foss] wouldn't fly to the Bahamas." The charter agreement between Petitioner (as the "Owner") and Mr. Foss (as the "Charterer") was similar to the charter agreement into which Mr. Cabrera and Petitioner had entered. It was dated August 15, 1995, and read, in pertinent part, as follows: TERM, HIRE & PAYMENTS: In consideration of the covenants hereinafter contained, the OWNER agrees to let and the CHARTERER agrees to hire the Yacht for the term from 12 noon . . . on the 27th day of December, 1995 to 12 noon . . . on the 3rd day January, 1996 for the total sum of $44,800 + All Expenses of which amount $22,400.00 shall be paid on the signing of this AGREEMENT and the balance thereof as follows: remaining 50% deposit (US$22,400.00) and Florida State Sales Tax of 6% US$2,668 for a total sum of $25,088.00 due by 24 November, 1995. DELIVERY. The OWNER agrees to deliver the yacht to CHARTERER at Fort Lauderdale, Florida at 12 noon . . . on the 27th day of December, 1995, in full commission and in proper working order, outfitted as a yacht of her size, type, and accommodations, with safety equipment required by law, and fully furnished, including gallery and dining utensils and blankets; staunch, clean and in good condition throughout and ready for service, and agrees to allow demurrage pro rata to the CHARTERER for any delay in delivery. . . . * * * 5. RUNNING EXPENSES. The Charterer agrees to accept the yacht as delivered as hereinbefore provided and to pay all shipboard expenses during the term of the charter period. * * * 8. RE-DELIVERY and INDEMNIFICATION. The CHARTERER agrees to redeliver the yacht, her equipment, and furnishings, free and clear and of any indebtedness for CHARTERER's account at the expiration of this charter, to the OWNER at Fort Lauderdale, Florida at 12:00 noon on the 3rd day of January, 1996 in as good condition as when delivery was taken, ordinary wear and tear and any loss or damage for which the OWNER is covered by his own insurance, and CHARTERER's insurance (if any) set forth in Paragraph 3 of this AGREEMENT, excepted. . . . * * * 10. RESTRICTED USE. The CHARTERER agrees that the yacht shall be employed exclusively as a pleasure vessel for the sole and proper use of himself, his family, passengers and servants, during the term of this charter, and shall not transport merchandise, or carry passengers for hire, or engage in any trade, nor any way violate the Revenue Laws of the United States, or any other Government within the jurisdiction of which the yacht may be at any time, and shall comply with the laws in all other respects. * * * 12. CHARTERER'S AUTHORITY OVER CREW. It is mutually agreed that full authority regarding the operation and management of the yacht is hereby transferred to the CHARTERER for the term thereof. In the event, however, that the CHARTERER wished to utilize the services of a captain and/or crew members in connection with the operation and management of the yacht, whether said captain and/or crew members are furnished by the OWNER or by the CHARTERER, it is agreed that said captain and/or crew members are agents and employees of the CHARTERER and not of the OWNER. In the further event that local United States Coast Guard or other regulations require the OWNER exclusively to provide a captain and/or crew, or the OWNER agrees to provide a proper captain who is competent not only to coastwise piloting, but in deep sea navigation, and to provide crew, the captain shall in no way be the agent of the OWNER, except that he shall handle clearance and the normal running of the yacht subject to ports to be called at, and the general course of the voyage. The captain shall be responsible for the safe navigation of the yacht, and the CHARTERER shall abide by his judgment as to sailing, weather, anchorages, and pertinent matters. The captain and crew shall be selected by the CHARTERER with the approval of the OWNER or the OWNER's Agent. CHARTERER is aware that he has a choice of captains. CHARTERER has full right to terminate the captain and/or crew; however, replacements shall be hired as under Paragraph 12 of this AGREEMENT. . . . Ms. Foss also entered into a "Yacht Services Agreement." The agreement, dated August 16, 1995, was with Papa's, which agreed to provide a seven person crew for the Fifty-One for the charter period (December 27, 1995, through January 3, 1996). Ms. Foss, in turn, agreed to pay Papa's $11,200.00 for such crew services and, in addition, to provide the captain (Arthur "Butch" Vogelsang) and crew with food and quarters aboard the Fifty-One during the charter period. Petitioner collected and remitted to the Department the sales tax owed by Mr. Cabrera and Ms. Foss on their rentals of the Fifty-One. No Florida sales tax was due on any of the other 13 charters of the Fifty-One during the Audit Period because they all took place outside Florida. In the case of 11 of these 13 other charters, like in the Jean Foss charter, the charterer entered into a charter agreement with Petitioner for the rental of the Fifty-One, as well as a separate agreement with Papa's for employment of a captain and crew for a fee (that "represent[ed] the actual cost [to Papa's] of the crew"). Typically, the total amount due under both agreements was sent to Petitioner, and Mr. Becker's firm (which also provided accounting services to Papa's) "moved the [portion of the] funds" due Papa's to Papa's bank account. Two charterers during the Audit Period (Mutual of Omaha Marketing Company and Prince Faisal Aziz of Saudi Arabia) refused Mr. Wiviott's request that they enter into two separate agreements, one (with Petitioner) for the rental of the Fifty- One and another (with Papa's) for employment of a captain and crew. Instead, they insisted on signing a single document, a Mediterranean Yacht Brokers Agreement (or MYBA Agreement), wherein Petitioner agreed to provide both the Fifty-One and a captain and crew. Not wanting to lose the business, Mr. Wiviott, on behalf of Petitioner, entered into these MYBA Agreements, notwithstanding that he had been instructed by Mr. Maass "not [to] take MYBA contracts." The MYBA Agreement between Petitioner (as "Owner") and Mutual of Omaha Marketing Company (as "Charterer") was dated December 16, 1995, and provided that: the "charter period" would begin 12:00 noon on March 3, 1996, and end 12:00 noon on March 17, 1996; the "cruising area" would be the Caribbean; the "port of delivery" would be Guadeloupe; the "port of re- delivery" would be Grenada; the crew would consist of a captain and six other crew members; the charter fee would be $48,000.00 per week for a total (for 2 weeks) of $96,000.00; the "Advance Provisioning Allowance" would be $48,000.00; and the "delivery/re-delivery fee" would be $6,857.00. In addition, it contained the following "clauses," among others: CLAUSE 1 AGREEMENT TO LET AND HIRE The OWNER agrees to let the Yacht to the Charterer and not to enter into any other Agreement . . . for the Charter of the Yacht for the [s]ame period. The CHARTERER agrees to hire the Yacht and shall pay the Charter Fee, the Security Deposit, the Advance Provisioning Allowance and any other agreed charges in cleared funds, on or before the dates and to the Account specified in this Agreement. * * * CLAUSE 6 CREW The OWNER shall provide a suitably qualified Captain acceptable to the insurers of the Yacht and a suitably experienced Crew, properly uniformed, fed and insured. The OWNER shall ensure that no member of the Crew shall carry or use any illegal drugs on board the Yacht or keep any firearms on board (other than those declared on the manifest) and shall ensure that the Captain and Crew comply with the laws and regulations of any country into whose waters the yacht shall enter during the course of this Agreement. The MYBA Agreement between Petitioner (as "Owner") and Prince Aziz (as "Charterer") was dated March 19, 1996, and provided that: the "charter period" would begin 12:00 noon on April 2, 1996, and end 12:00 noon on April 9, 1996; the "cruising area" would be the Caribbean; St. Maarten would be the "port of delivery" and "the port of re-delivery"; the crew would consist of a captain and six other crew members; the charter fee would be $50,000.00; and the "Advance Provisioning Allowance" would be $10,000.00. It contained the following additional provisions, among others: 30. AGREEMENT TO LET The OWNER shall let the yacht for the charter period and agrees not to enter into any other agreement for the charter of the yacht for the same period, and agrees not to sell the yacht before completion of the charter period, unless otherwise agreed by the Charterer. * * * 32. CREW The Owner shall provide a properly qualified Captain approved by the insurers of the yacht and a properly qualified crew, uniformed and insured. . . . Upon the advice of Mr. Maass, Petitioner assigned to Papa's its MYBA Agreements with Mutual of Omaha Marketing Company and Prince Aziz. It also entered into "Bareboat Charter Agreements" with Papa's for the rental of the Fifty-One for the same periods covered by the MYBA Agreements (notwithstanding that the MYBA Agreements expressly prohibited Petitioner from doing so). According to what Mr. Maass told Mr. Wiviott, by Petitioner taking such action, "the MYBA contract[s] could be accepted without violating the requirement that [Petitioner] engage only in bare boat chartering." The written assignment of the MYBA Agreement with Mutual of Omaha Marketing Company was dated December 16, 1995, the same date as the MYBA Agreement, and read, in pertinent part, as follows: BW Marine owns the vessel "Fifty-One," a 125 foot motoryacht, bearing official number 1020419 (the "Vessel"); BW Marine entered into a Yacht Charter Party Agreement dated December 16, 199[5] (the "Charter") between BW Marine and Mutual of Omaha Marketing Company (Charterer"); BW Marine desires to assign to Papa's Yacht Services, and Papa's Yacht Services agrees to accept, all BW Marine's right, title, and interest in and to the Charter; NOW THEREFORE, in consideration of the premises, the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Assignment BW Marine assigns to Papa's Yacht Services all its right, title, and interest in and to the Charter. Papa's Yacht Services accepts the assignment and assumes all obligations of BW Marine under the Charter. Payment For administrative convenience, Charterer shall pay BW Marine the charter hire under the Charter. BW Marine, in turn, shall remit the surplus of these funds over the lease amount due from Papa's Yacht Services to BW Marine under that certain Bare Boat Charter Agreement between the parties of even date herewith. . . . Mutual of Omaha Marketing Company was not a signatory to this written assignment (and no other document offered into evidence reflects that Mutual of Omaha Marketing Company consented to the assignment). 5/ The written assignment of the MYBA Agreement with Prince Aziz was dated March 19, 1996, the same date as the MYBA Agreement. It was identical to the December 16, 1995, written assignment of the MYBA Agreement with Mutual of Omaha Marketing Company (with the exception of the dates contained therein). Prince Aziz was not a signatory to this written assignment (and no other document offered into evidence reflects that Prince Aziz consented to the assignment). The first "Bareboat Charter Agreement" between Petitioner (as "Owner") and Papa's (as "Charterer") was dated December 16, 1995, and provided, in pertinent part, as follows: Owner owns the vessel "Fifty-One," a 125 foot motorcoach bearing official number 1020419 (the "Vessel"); and Charterer desires to charter the Vessel from Owner and Owner is willing to make the Vessel available to Charterer for such purpose, subject to the terms and conditions contained herein. NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Term Owner agrees to let and Charterer to hire, the Vessel for a term commencing March 3, 1996, and ending March 17, 1996. Payment Charterer shall pay Owner charter hire of One Hundred Two Thousand Eight Hundred Fifty Seven Dollars ($102,857.00), plus state sales tax, if applicable. Control The Vessel is chartered on a bare boat or demise basis. Owner hereby transfers to Charterer full authority regarding the operation and management of the Vessel for the charter term. Charterer is solely responsible for retaining a master and crew. Guest Limitation When the Vessel is underway, the number of persons on board the Vessel, other than the master and crew, shall be limited to the Charterer (or the Charterer's representative, if Charterer is a corporation) and twelve (12) guests. * * * Delivery Owner agrees to deliver the Vessel at Guadeloupe. Redelivery Charterer shall redeliver the Vessel to Owner at Granada at the end of the charter term, in as good condition as when delivery was taken, ordinary wear and tear excepted. . . . * * * 9. Expenses Charterer shall pay all running expenses during the term of the charter. Charterer shall pay for routine maintenance and repair of the Vessel during the charter term. * * * 12. Non-Assignment Charterer agrees not to assign this Agreement or subcharter the Vessel without the consent of the Owner in writing, which Owner may withhold in Owner's sole discretion. . . . The second "Bareboat Charter Agreement" between Petitioner and Papa's was dated March 19, 1996, and was identical to the first "Bareboat Charter Agreement" between them (with the exception of the charter period, charter cost, and delivery/redelivery locations). The evidence is insufficient to support a finding that Papa's ever entered into a sub-charter agreement with either Mutual of Omaha Marketing Company or Prince Aziz. Both Mutual of Omaha Marketing Company and Prince Aziz paid Petitioner the entire charter fee prescribed under their respective MYBA Agreements. They did not make any payments to Papa's. Petitioner paid Papa’s a “management fee” for providing the captain and crew during these charters. On one of the 15 charters during the Audit Period, Mr. Wiviott was aboard the Fifty-One as a guest of the charterer, the Choice Meat Co., Inc., a company that he and his son, Greg Wiviott, owned. Choice Meat Co., Inc., paid the "going charter rate" for the rental, but no broker's commission because "there was no broker to pay." There were occasions during the Audit Period, when the Fifty-One was not under charter, that Mr. Wiviott, members of his family (including his wife; children; grandchildren; his bother, Howard; and Howard's wife), and his friends used the Fifty-One outside Florida for non-business-related, personal purposes, sometimes for "one or two weeks at a time." For instance, in June of 1994 (after the Gerardo Cabrera charter and before the next charter, which began on July 21, 1994), when the Fifty-One was in New England, the Wiviott family was aboard for approximately "a couple of weeks." At the end of that summer, just before the Fifty-One returned from New England to Fort Lauderdale, the family again used the Fifty-One, this time "for a week or so." In November of 1994, around the Thanksgiving holiday, the Fifty-One traveled to the Caribbean so that the family could use it there for recreational purposes. The Fifty-One remained in the Caribbean for ten to 14 days with the family aboard. After the Wiviott children and grandchildren got off, the Fifty- One went on to the Virgin Islands, where Mr. and Mrs. Wiviott's friends came aboard and were entertained by the Wiviotts. In January of 1995, some time "shortly after the 1st," when the Fifty-One was in St. Maarten (where it was based for the winter), the Wiviott family once again spent time aboard the Fifty-One. The foregoing instances of out-of-state, non-charter, non-business-related use of the Fifty-One by the Wiviott family occurred when Captain Cheney was in command of the vessel. The Wiviott family continued to make such use of the Fifty-One during the time Captain Elario was captain. When Captain Elario took over the Fifty-One in St. Lucia (from Paul Canvaghn, who had been captain for only a day or two), Mr. and Mrs. Wiviott were aboard the vessel. They remained on board for approximately a week as the Fifty-One cruised the Caribbean. During that week, Mrs. Wiviott swam, laid in the sun, relaxed, and ate meals prepared by the Fifty- One's chef. She did not perform any tasks designed to further Petitioner's charter business. Subsequently, while Captain Elario was still captain, Mr. and Mrs. Wiviott took a non-charter, non-business-related trip on the Fifty-One to the Bahamas. Also during the time Captain Elario was captain, when the Fifty-One was in Hilton Head, South Carolina, Mr. Wiviott's brother, Howard, and Howard's wife, came aboard, and they remained on the yacht as it traveled to Norfolk, Virginia. Howard and his wife did not perform any tasks designed to further Petitioner's charter business while aboard the Fifty- One. Mr. and Mrs. Wiviott's daughter, along with her two young children, stayed overnight on the Fifty-One when, while under Captain Elario's supervision, it was docked at the Capital Marina in Washington, D.C. During the daughter's and children's stay, there was a party celebrating the youngest child's birthday. Indicative of the amount of time that Mr. and Mrs. Wiviott spent aboard the Fifty-One were the clothing and other personal items that (as a convenience) they stored (in a locker) on the Fifty-One (so that they would not have to bring these items with them each time they boarded the vessel). (These items were moved from the locker to another area on the Fifty- One, when necessary, to accommodate charterers using the stateroom in which the locker was located). Whenever the Fifty-One returned to Florida, it underwent needed repairs and maintenance. It also cruised the waters of the south Florida area, docking at various facilities. It did so not only "to be stretched," but to gain additional exposure among "mega" yacht charter brokers. In addition, while in Florida, the Fifty-One was stocked with supplies and provisions (including rack of lamb, veal, lobster tails, baked goods, gourmet foods, specialty items, wines, bath and beauty products, and party supplies) to be available for use by those on board when the Fifty-One was outside Florida, including not only charterers (such as Mutual of Omaha Marketing Company and Prince Aziz) and their guests, but also Mr. Wiviott, his family, and friends (when they were on board the Fifty-One for non-business-related, personal purposes). The Fifty-One, while in Florida, was also provided with fuel for charter, as well as non-charter, non-business related, trips outside Florida. Petitioner's charter business proved to be unprofitable. Expenses far exceeded revenues. (Petitioner, however, was able to sell the Fifty-One for more than the purchase price it had paid, receiving approximately $5.7 million, excluding commissions, for the Fifty-One in February of 2000.) By letter dated October 11, 1996, the Department informed Petitioner that it was going to audit Petitioner's "books and records" for the Audit Period. Petitioner was selected for audit because it had reported only a relatively small amount of taxable charter revenue on the Florida sales and use tax returns it filed during the Audit Period. The Department's "audit findings" were that the Fifty-One "was purchased for [a] dual purpose, for leasing and to be used by the shareholder" and therefore "the vessel and other purchases [made by Petitioner during the Audit Period under its sales tax exemption certificate, including its purchase of the Choice One] are taxable at the cost price." Based upon these audit findings, the Department issued a Notice of Intent to Make Audit Changes, in which it advised Petitioner that Petitioner owed $430,047.95 in sales and use taxes, $215,023.97 in penalties, and $169,672.70 in interest through July 18, 1997, for a total of $814,744.62, "plus additional interest of $141.39 per day . . . from 07/18/97 through the date [of] payment." By letter dated April 22, 1998, Petitioner protested the Department's proposed assessment. On November 1, 1999, the Department issued its Notice of Decision sustaining the proposed assessment and announcing that, as of October 6, 1999, Petitioner owed the Department $929,270.52, with "interest continu[ing] to accrue at $141.39 per day until the postmarked date of payment." Petitioner subsequently filed a Petition for Chapter 120 Administrative Hearing on the Department's proposed action.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order sustaining its assessment against Petitioner in its entirety. DONE AND ENTERED this 26th day of October, 2001, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 2001.
The Issue Whether Respondent committed the offenses set forth in the Notice to Show Cause and, if so, what action should be taken.
Findings Of Fact Petitioner is the state agency charged with regulating yacht and ship brokers and salespersons pursuant to Chapter 326, Florida Statutes. At all times material hereto, Respondent was a licensed yacht broker.1 She is the yacht broker for Yachting Consultants, Inc. in Fort Lauderdale, Florida. In April 1999, Respondent was the listing broker of record regarding the sale of a 43-foot Pilgrim yacht. The selling broker was Mark Lipkus, a licensed yacht broker. John Pribik, a licensed salesperson, was Respondent's representative in the sale of the Pilgrim yacht. Mr. Pribik was under the supervision and control of Respondent and Respondent was responsible for his actions. Respondent had a buyer for the Pilgrim yacht, and the closing for the sale of the yacht was scheduled for April 13, 1999. The buyer was financing the purchase of the yacht. In a sale situation, a buyer and a seller have different responsibilities. The seller is responsible for providing all of the documents needed for a sale. The buyer is responsible for providing the funds for a sale. In the sale of the Pilgrim yacht, the responsibilities of the Seller and the Buyer did not change. There is a commission from the sale of a yacht, which is paid by the seller and, in accordance with standard industry practice, paid at closing. By standard industry practice, the commission split is 70/30, but can differ upon agreement. Mr. Lipkus received a down payment of $15,000.00 from the Buyer and placed the down payment in his escrow account. Mr. Lipkus was of the mistaken belief that the commission was payable by the Buyer, not the Seller. No co-broker agreement was entered into between Respondent or Mr. Pribik and Mr. Lipkus regarding commission. There was no discussion regarding the split of the commission between them. On a prior sale involving Mr. Pribik and Mr. Lipkus, the commission split was 60/40. Mr. Pribik and Respondent assumed the commission split of the sale of the Pilgrim yacht would again be 60/40. Considering the prior sale, it was not unreasonable for Respondent and Mr. Pribik to assume a 60/40 split of the commission. Mr. Lipkus assumed the commission split would be 70/30. A power of attorney had been prepared by the Seller who was unavailable for closing due to being in a remote area in the Philippine Islands. Mr. Pribik provided the power of attorney to the documenting agent who reviewed the power of attorney and found it to be satisfactory. The mortgage broker received a copy of the power of attorney prior to closing and forward a copy to the lending institution. The lending institution notified the mortgage broker at some point before closing that the power of attorney was unacceptable. In turn, the mortgage broker contacted the documenting agent regarding the unacceptability of the power of attorney and informed the documenting agent that a new power of attorney was required before closing could take place. Mr. Pribik was notified by the mortgage broker that a new power of attorney was required. The responsibility to obtain the new power of attorney was the responsibility of the listing broker, who was Respondent via Mr. Pribik. As far as Mr. Pribik was concerned, with the time remaining before closing2 and with the Seller being in the Philippine Islands, he believed that it was virtually impossible to obtain a new power of attorney by the time of closing. The mortgage broker, taking the position that he should do whatever he could to effectuate a closing, encouraged Mr. Pribik to attempt to contact the Seller. Complying, Mr. Pribik was able to make telephonic contact with the Seller and Mr. Pribik and the mortgage broker spoke with the Seller, who agreed to provide a new power of attorney. Based on the verbal assurance by the Seller to provide the new power of attorney, the lending institution agreed to proceed with the closing, which was re- scheduled for April 14, 1999. A new power of attorney was faxed to the Seller, and the Seller executed it and faxed it back. According to industry standard, all commissions are paid at closing when a seller receives the funds. Also, according to industry standard, closing is not delayed until a commission is paid. Mr. Lipkus mistakenly believed that the commission was paid by a buyer, coming out of a buyer's deposit. As a result, he expected to take the commission out of the Buyer's down payment, which was held in Mr. Lipkus' escrow account. After obtaining his commission, Mr. Lipkus was going to forward the remaining monies. On April 13, 1999, the original date for the closing, the closing could not take place because the financing from the lending institution was not available, based upon the absence of a new power of attorney. Also, Mr. Lipkus had not made arrangements for the deposit monies to be at closing or forwarded a settlement statement to closing, which were both needed for the closing. Respondent contacted Mr. Lipkus by fax regarding the commission monies and the settlement statement, demanding both items in order for closing to take place. The evidence is not clear and convincing as to whether Respondent demanded the monies held by Mr. Lipkus prior to closing or whether Respondent was threatening to delay the closing unless she had the monies prior to closing. The evidence suggests that Respondent was demanding the monies to be in place at closing. Additionally, on the original closing date, closing was to take place at the office of the mortgage broker. Mr. Pribik, the Buyer, and the mortgage broker were present for the closing. Mr. Lipkus did not intend to attend, and did not attend, the closing. Since the commission monies were not available at closing, Mr. Pribik telephoned Mr. Lipkus and demanded that the commission monies be available and, told him that if not made available, the closing could not take place. In Mr. Pribik's opinion, the monies were needed for closing. The evidence is not clear and convincing as to whether Mr. Pribik demanded the monies held by Mr. Lipkus prior to closing or whether Mr. Pribik was threatening to delay the closing if he did not have the monies prior to closing. The evidence suggests that Mr. Pribik was demanding the monies to be in place at closing. Furthermore, for the first time, Mr. Pribik and Mr. Lipkus, during the telephone conversation, became aware of their disagreement as to the proper commission split, whether 60/40 or 70/30. Believing that Mr. Pribik would prevent a timely closing, Mr. Lipkus agreed to Mr. Pribik's split of 60/40. Closing occurred on April 14, 1999. The necessary documents and finances were present. At the final hearing, Respondent expressed with sincerity that, if she did anything wrong, she wanted to know exactly what it was, so that she would not engage in the same conduct again. Furthermore, Respondent expressed the frustration that, prior to hearing, no one had explicitly told her what she had done wrong and that, at hearing, she continued to be unsure what she had done wrong because she had not been explicitly told what she had done wrong. Respondent has no prior disciplinary action.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes, enter a final order: Finding that Giovanna Gallottini did not violate Rule 61B-60.008(3)(a), Florida Administrative Code. Not sustaining the Notice to Show Cause. DONE AND ENTERED this 6th day of February, 2001, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of February, 2001.
Findings Of Fact At all times pertinent to the allegations contained herein, Respondents were licensed real estate salesmen in the State of Florida, with Mr. Blanc's license being 0406481 and Ms. Kirkland's license being 0399466. The Division of Real Estate is a state government licensing and regulatory agency charged with the responsibility of regulating the practice of real estate in this state. In November, 1985, Mr. and Mrs. William A. McKie were owners of Week 43 in Unit 1 of a time share condominium located at the Anchorage Resort and Yacht Club in Key Largo, Florida. About that time, they received a card issued by the Florida Bay Club to visit a time share condominium there. Because they were somewhat disappointed in the condition of their Anchorage unit, they went to see the Florida Bay Club facility and met with Respondent Kirkland who took them on a tour of the facility and the model apartment. Mrs. McKie was quite impressed with it, but indicated she could not afford it, because she and her husband already owned a time share unit at the Anchorage. When told that, Ms. Kirkland introduced the McKies to Respondent Blanc, who in the course of his sales presentation, suggested that the McKies use their ownership at the Anchorage as a trade-in worth $4,000 off of the in excess of $11,000 price of the Florida Bay Club unit. The McKies agreed and signed certain documents incident to the purchase including a worksheet, purchase agreement, disclosure agreement, and settlement statement, all prepared by Respondent Blanc. The worksheet reflected that the unit being purchased by the McKies, Week 44 in Unit A-5, had a purchase price of $6,500 toward which the McKies made a down payment of $650 by three separate charges to their Master Card and Visa cards, two for $300 each and one for $50. This left a mortgage balance to be financed of $5,850 payable for 7 years at 15 1/2 percent with monthly payments of $114.54. No reference was made in the worksheet to a trade in of the Anchorage unit. The purchase agreement also signed by the McKies and by Respondent Kirkland for the Florida Bay Club reflects a purchase price of $6,500 with a down payment of $650. The truth in lending form reflects that the amount financed would be $5,850 at 15.5% resulting in a finance charge of $3,771.36 with a total monthly payment amount of $9,621.36 which, when added to the $650 deposit, showed a total sales price of $10,271.36. The settlement statement signed by the McKies reflects a sales price of $6,500 with a $650 deposit. At no place, on any of the documentation, is the $4,000 trade-in for the Anchorage unit reflected. As a part of the transaction and at the suggestion of Respondent Blanc, the McKies were to sign a quitclaim deed to him as the representative of the seller to receive credit for the $4,000 trade-in. The documents, except for the quitclaim deed, were signed by the McKies on their first visit to Florida Bay Club on November 17, 1985. Mrs. McKie does not recall either Respondent signing the documentation, but there is evidence that Ms. Kirkland signed the purchase agreement and the worksheet and Mr. Blanc approved the worksheet. Neither the disclosure statement, the settlement statement nor the quitclaim deed, which was prepared by Respondent, Blanc, and furnished to the McKies on their second visit, was signed by either Respondent. The McKies went back to Florida Bay Club approximately a week later to sign for the prize they had been notified they had won and to sign the quitclaim deed, which had not been ready for them on their first visit. Respondent Blanc explained what the quitclaim deed was for and according to both McKies, they would not have purchased the property at Florida Bay Club had they not been able to trade-in their Anchorage unit. They definitely could not afford to pay for both units, a fact which was repeatedly explained to Respondents on both visits. Mrs. McKie believed that when she signed the quitclaim deed to the Anchorage unit, she would no longer be responsible for making payments there and in fact, the McKies notified the Anchorage Resort Club that Respondent Blanc had assumed their Week at the Anchorage, a fact which was confirmed by the Anchorage to Mr. Blanc by letter dated February 13, 1986. It is further noted that on January 30, 1986, Ms. Berta, general manager of the Florida Bay Club, by letter of even date, notified Mr. Blanc who was no longer an employee of Florida Bay, that the McKies' payment book, invoices for taxes due on the Anchorage property, and the quitclaim deed were being forwarded to him as evidence of the change of ownership of the Anchorage Resort unit from the McKies to Respondent Blanc. In this letter, Blanc was requested to notify the Anchorage of the change so the McKies would not be dunned for continuing payments. At the closing of the Florida Bay unit, when Mrs. McKie and her husband signed the quitclaim deed, Respondent Blanc told her she would continue to get payment notices from the Anchorage while the transfer was being processed, but she should bring those payment notices to him at the Florida Bay Club and he would take care of them. When Mrs. McKie received the first notice, she brought it to the Florida Bay Club to give to Mr. Blanc, but he was no longer located there. On this visit, she spoke to Ms. Berta, who advised her that the Florida Bay Club did not take trades. Ms. Berta called Respondent Blanc at his new place of business by phone in Mrs. McKie's presence and Respondent indicated at that time that he would buy the Anchorage unit himself and assume the payments. As a result, Mrs. McKie sent the delinquent notices to him at his new place of business, Gulf Stream Manor. In the meantime, she continued to make her new payments at the Florida Bay Club. Notwithstanding Respondent Blanc's agreement to assume payments, Mrs. McKie continued to receive mortgage payment delinquent notices from the bank for the Anchorage unit. During later negotiations with the bank regarding this, Mrs. McKie was told that she would still be responsible for making the payments even if Respondent Blanc took over and didn't pay and as a result, in order to relieve herself from this impending burden, she made arrangements to pay off the entire amount due for the Anchorage unit. After that she made several efforts to get Respondent Blanc to pay her back for the amount paid. Respondent Blanc agreed to make the payments and said he would pay the taxes on the unit, but he never reimbursed the McKies for any of the amount they had to pay. The McKies now own the Anchorage unit and have worked out a settlement agreement with the Florida Bay Club to get out of the responsibility for the unit there. Review of the quitclaim deed in question, prepared by Respondent Blanc and signed by the McKies, reflects that the McKies are both the grantors and grantees of the property and that Respondent Blanc's name nowhere appears on the document. It is of no force and effect. Respondent contends that when the McKies indicated they were unable to purchase a new unit since they still had a prior unit to pay for, relying on his understanding that the marketing organization selling the Florida Bay Club units had in the past taken a unit in trade, he discussed the matter with his supervisor who advised that he could offer up to $4,000 in trade on the unit. In order to do this, Respondent Blanc had to price the new unit at $10,500 and credit the McKies with $4,000. However, none of the documentation shows this was ever done. At no place on any of the documentations is the $4,000 trade-in referenced. It is clear the offer of a trade-in was a sham to induce the McKies to purchase a unit at Florida Bay Club. Ms. Berta, who was manager at Florida Bay Club at the time in question, indicated that no trade-ins were ever taken by the club. The prior trade-in referenced by Mr. Blanc was a unit which was completely paid for as opposed the McKies' which still had a substantial outstanding balance on it. Respondent Kirkland who was not a party to any of the negotiations subsequent to her initial interview with the McKies indicates that she "probably" quoted the McKies a price of $10,500. When Mrs. McKie indicated that they could not afford such a high price, she turned them over to Mr. Blanc who thereafter handled the entire transaction. Respondent Blanc tells a somewhat different story about the reaction of the McKies when his failure to assume responsibility for the trade-in unit at the Anchorage Bay Club came to light. He indicates that it was never intended that he would take title to this unit at first. The trade in was to be absorbed by the marketing company, Resort Sales International, for whom he worked, and he assumed, when he left the following week to go to a different facility, the company would follow through with its agreement to assume the McKie's Week at the Anchorage. He was quite surprised, he contends, to learn that this had not been done and since he wanted a unit in the Key Largo area anyway, he agreed to then assume it personally after first offering Mrs. McKie the opportunity to back out of the purchase. When she said that she wanted to be at Florida Bay Club, he was sent the payment books and the deed. He called the bank to notify them that he was going to assume responsibility for the loan, but the bank would give him no information regarding it and the bank official, Ms. Brown, was adamant in her representation that the McKies could not quitclaim deed the property to him. No reason was given for this, however. Mr. Blanc claims he made a series of telephone calls between January 30 and March 31, 1986, in an attempt to straighten out the difficulty involved. These included sixteen calls to Ms. Berta, eight calls to his former supervisor at Resort Sales, four calls to the Anchorage, three calls to the bank and three calls to Mrs. McKie. Mrs. McKie denies receiving calls from the Respondent and contends that her numerous calls to him remained unanswered. In a call he made after she paid off the loan on the Anchorage and settled with Florida Bay Club for approximately $2,183, Mrs. McKie advised Blanc to forget about it, that they were tired of messing with him and with the property. As a result, he admittedly gave up and did and heard nothing more regarding the property until he was contacted by a DPR investigator. On January 30, 1988, Mr. Blanc offered to buy Mrs. McKie's unit at the Anchorage for $2,900 which was exactly the amount owed on the property when she paid it off. She refused to accept that offer since she had paid $6,800 for the unit initially.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Administrative Complaint against Respondent Sandra Kirkland be dismissed and that Respondent Blanc's license as a real estate salesman in Florida be suspended for six months. RECOMMENDED in Tallahassee this 19th day of April, 1988. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 1988. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Darlene F. Keller Department of Professional Acting Executive Director Regulation DPR, Division of Real Estate Division of Real Estate Post Office Box 1900 Post Office Box 1900 Orlando, Florida 32801 Orlando, Florida 32801 Sandra S. Kirkland Post Office Box 9264 Panama City, Florida 32407 John G. Blanc 17501 West Highway 98 Panama City, Florida 32407
