The Issue The Respondents have all been charged with multiple violations of Chapter 48, Florida Statutes. The specific violations charged raise the following issues: Whether the Respondents violated Section 489.023(1), Florida Statutes, by offering, disposing, or participating in the offer or disposition of subdivided lands located in Dade and Osceola Counties, Florida, without a valid order of registration from the Division of Florida Land Sales, Condominiums and Mobile Homes. Whether the Respondents violated Section 498.023(2), Florida Statutes, by disposing or participating in the disposition of subdivided lands located in Dade and Osceola Counties, Florida, without furnishing each purchaser with a public offering statement, approved by the Division of Florida Land Sales, Condominiums and Mobile Homes, prior to the purchase. Whether the Respondents violated Section 498.023(3), Florida Statutes, by disposing or participating in the disposition of subdivided lands principally offered by long distance telephone solicitation without furnishing the prospective purchaser with a copy of a synopsis or summary of the sales script, approved by the Division of Florida Land Sales, Condominiums and Mobile Homes prior to the execution of the sales agreement Whether Melvin Lewis, Larry Burton Lewis, Virginia G. Young, or Julio Bercowicz are jointly and severally liable with one or more of the other Respondents for the foregoing violations because of materially participating in the offer or disposition of subdivided lands located in Florida, which offers or dispositions were made in violation of Chapter 498, Florida Statutes, and involved fraud, deception, false pretenses, misrepresentation, or false advertising. Underlying all of the foregoing issues is the issue of whether the activities of the Respondents alleged in the several Notices To Show Cause constitute a "common promotional plan" within the meaning of Rule 7D-1.003(3), Florida Administrative Code.
Findings Of Fact At all times material to these cases, Melvin Lewis and Fay Lewis were and are husband and wife. Larry Burton Lewis ("Larry Lewis") and Cindy Morales are their son and daughter. During the period June 11, 1984, through March 16, 1987 (and perhaps later), Helen Lewis was married to Larry Lewis. Julio Bercowicz is the brother of Helen Lewis. From 1980 through 1987, Virginia Young was employed by Melvin Lewis as a secretary. South Florida Properties, Inc., was a Florida corporation created on April 26, 1977, for purposes which included selling real property located in section 21, township 54 south, range 37 east, Dade County, Florida, comprising 48 lots known as South Florida Properties. West Miami Estates, Inc., is an active Florida corporation created on July 20, 1978, for purposes which included selling the following real property: approximately 40 acres in the southeast 1/4 of the northwest 1/4 of section 19, approximately 10 acres in the northeast 1/4 of the southeast 1/4 of the southeast 1/4 of section 33, and approximately 21.25 acres in the northwest 1/4 of the northeast 1/4 of section 34, all in township 55 south, range 37 east, Dade County, Florida, comprising 48 lots known as West Miami Estates. Miami Kendall Estates, Inc., is an active Florida corporation created on October 12, 1979, for purposes which included selling approximately 60 acres in both the southwest 1/4 and the southern 1/2 of the northwest 1/4, of the southwest 1/4 of section 17, township 54 south, range 38 east, and approximately 10 acres in the east 1/2 of the east 1/2 of the southeast 1/4 of the southeast 1/4 of section 35, township 55 south, range 37 east, Dade County, Florida, comprising 48 lots known as Miami Kendall Estates. Randy Landes was the original incorporator, director, and president of Miami Kendall Estates, Inc. Miami Kendall West Inc., was a Florida corporation created on April 15, 1980, for purposes which included selling approximately 10 acres in the south 1/2 of the south 1/2 of the southwest 1/4 of section 32, township 54 south, range 38 east, and approximately 40 acres in the northeast 1/4 and approximately 20 acres in the west 1/2 of the southwest 1/4, both in the southwest 1/4 of section 34, township 55 south, range 37 east, section 34, Dade County, Florida, comprising 46 lots known as Miami Kendall West. Gateway Acres, Inc., is an active Florida corporation created on February 9, 1984, for purposes which included selling approximately 60 acres located in the western 1/2 of the southeast 1/4 of section 16, township 25 south, range 27 east, Osceola County, Florida, comprising 48 lots, numbered 27 through 39 and 42 through 76, known as Gateway Acres. Maingate Acres, Inc., is an active Florida corporation created on June 11, 1984, for purposes which included selling approximately 35 acres located in the western 1/2 of the southeast 1/4 and in the northeastern 1/4 of the southwest 1/4 of section 16, township 25 south, range 27 east, Osceola County, Florida, comprising 28 lots, numbered 1 through 26, 40, and 41, known as Maingate Acres. Central Florida Estates, Inc., is an active Florida corporation created on November 4, 1985, for purposes which included selling approximately 60 acres located in the southern 3/4 of the south 1/2 of the northeast 1/4 of section 19, township 25 south, range 27 east, Osceola County, Florida, comprising 48 lots known as Central Florida Estates. Mid-Florida Acres, Inc., is an active Florida corporation created on December 18, 1985, for purposes which included selling approximately 60 acres located in the north 1/2 of the northeast 1/4 of section 19, township 25 south, range 27 east, Osceola County, Florida, comprising 48 lots known as Mid-Florida Acres. Melvin Lewis controlled or participated in the formation, operation, or business of South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., M and L Management, Inc., and Central Florida Estates, Inc., as follows: Melvin Lewis was a subscriber to the formation of South Florida Properties, Inc., Gateway Acres, Inc., and M and L Management, Inc., and participated in the formation of Central Florida Estates, Inc. Melvin Lewis is and has been the sole shareholder of Gateway Acres, Inc., since 1984, of Maingate Acres, Inc., since 1986, and of Miami Kendall Estates, Inc., and Central Florida Estates, Inc., since 1988. Melvin Lewis was the president of South Florida Properties, Inc., from 1977 through 1983; the president and a director of Miami Kendall Estates, Inc., from 1988 to the present; the president of Gateway Acres, Inc., from 1984 to present; the president of M and L Management, Inc., from 1985 to the present; the president and a director of Maingate Acres, Inc., from 1987 to the present; and the president and a director of Central Florida Estates Inc., from 1988 to the present. Melvin Lewis has been the registered agent for Gateway Acres, Inc., from 1984; for Maingate Acres, Inc., from 1986; for M and L Management, Inc., from 1985; and for Central Florida Estates, Inc., from 1988. Melvin Lewis executed the following checks, drawn on the indicated bank accounts, to pay the necessary filing fees to the Florida Secretary of State for the incorporation of the indicated corporations: Gateway Acres, Inc., paid by check number 161, and Maingate Acres, Inc., paid by check number 186, both drawn on the account of Melvin Lewis Licensed Real Estate Broker, account number 0104101960, with the Executive National Bank. M and L Management, Inc., paid by check number 50 drawn on the account of Gateway Acres, Inc., account number 0104105354, Executive National Bank. Central Florida Estates, Inc., paid by check number 2333 drawn on the account of Melvin Lewis and Fay Lewis, account number 0107205147, Executive National Bank. Melvin Lewis participated in dividing into lots for resale those parcels known as Miami Kendall Estates, Gateway Acres, Maingate Acres, and Central Florida Estates. Melvin Lewis directed and controlled the sale of lots in Miami Kendall Estates, Gateway Acres, and Maingate Acres. He further directed and controlled the sale of lots in Central Florida Estates as the real estate broker for Central Florida Estates, Inc. Melvin Lewis was authorized to execute agreements for deed as an agent for west Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., and Maingate Acres, Inc. As an authorized agent for each corporation, he executed at least two agreements for deed for west Miami Estates, Inc. (November 6, 1978 and August 15, 1979), one each for Miami Kendall Estates, Inc. (January 12, 1980), and Miami Kendall West, Inc. (January 28, 1981), four for Gateway Acres, Inc. (September 12, 26, 30 and October 5, 1984), and three for Maingate Acres, Inc. (September 7, 10, 14, 1984). As a notary public commissioned by the State of Florida, Melvin Lewis notarized the signature of Cindy Morales on six agreements for deed for Miami Kendall west, Inc. (dated from March 22 through September 21, 1982), and on one agreement for deed for Central Florida Estates, Inc. (January 28, 1986). He also notarized the signature of Fay Lewis on forty agreements for deed for Gateway Acres, Inc. (dated from April 23, 1984, through August 8, 1985), and on twenty agreements for deed for Maingate Acres, Inc. (dated from July 8 through October 31, 1984). He also notarized the agreement for deed, dated November 11, 1984, between Maingate Acres Inc., and Irma Jean DeWitt and/or Jean M. Hutchens for Maingate Acres lot 11. Melvin Lewis also notarized the corporate execution for deeds conveying lots to purchasers from West Miami Estates, Inc., Miami Kendall Estates, Inc., and Miami Kendall West, Inc. Larry Lewis controlled or participated in the formation, operation, or business of South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., Central Florida Estates, Inc., and Mid-Florida Acres, Inc. as follows: Larry Lewis was a subscriber in the formation of West Miami Estates, Inc., and South Florida Properties, Inc., and participated in the formation of Central Florida Estates, Inc. Larry Lewis was president and a director of West Miami Estates, Inc., from 1979 through 1984, and from 1987 to the present; an officer of South Florida Properties, Inc., from 1977 to 1979; and the president of Mid-Florida Acres; Inc., from 1987 to the present. Larry Lewis has been the sole shareholder of West Miami Estates, Inc., since 1978 and the sole shareholder of Mid-Florida Acres, Inc., since 1986. Larry Lewis participated in dividing into lots for resale those parcels known as West Miami Estates and Mid-Florida Acres. From the inception of West Miami Estates, Inc., and of Mid-Florida Acres, Inc., Larry Lewis has controlled the daily operations and sale of lots by each corporation. Purchasers for lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid- Florida Acres were solicited by Larry Lewis using long distance telephone calls. Fay Lewis controlled or participated in the formation, operation or business of South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., and Maingate Acres, Inc., as follows: Fay Lewis was a subscriber to the formation of South Florida Properties, Inc., and Miami Kendall West, Inc. Fay Lewis was the president and a director of Miami Kendall West, Inc., from its inception in 1980 until its dissolution in 1988. As president of West Miami Estates, Inc., Fay Lewis executed the warranty deed conveying lot 35A of West Miami Estates to Troy Johnson. From April 30, 1984, to August 12, 1985, Fay Lewis executed at least forty agreements for deed on behalf of Gateway Acres, Inc.; thirty-eight as corporate secretary and two as an agent for the corporation. From July 17 to November 19, 1984, Fay Lewis executed at least twenty agreements for deed on behalf of Maingate Acres, Inc.; eighteen as corporate secretary and two as an agent for the corporation. Fay Lewis executed two separate warranty deeds conveying lots in Miami Kendall Estates as a witness to the execution by the president of Miami Kendall Estates, Inc. Cindy Morales participated in the operation or business of Miami Kendall Estates, Inc., Miami Kendall West, Inc., and Central Florida Estates, Inc., as follows: From April 29 to September 28, 1982, Cindy Morales executed six agreements for deed as an authorized agent for Miami Kendall West, Inc. From January 21 to February 27, 1986, Cindy Morales executed fifteen agreements for deed as an authorized agent for Central Florida Estates, Inc. Cindy Morales also executed two separate warranty deeds conveying lots in Miami Kendall Estates as a witness to the execution by the president of Miami Kendall Estates, Inc. In 1985, Virginia Young participated in the formation of Central Florida Estates, Inc., and was listed as the sole subscriber, president, and registered agent. She participated in the daily operations of the corporation, including the filing of annual reports with the Florida Secretary of State. In 1987, she resigned her positions with Central Florida Estates, Inc., and transferred the corporation to Melvin Lewis. Saundra Bonduel ("Bonduel"), who was Melvin Lewis' accountant, was an officer in South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., M and L Management, Inc., and Central Florida Estates, Inc., as follows: Bonduel was a vice president of South Florida Properties, Inc., from 1978 to 1983; of West Miami Estates, Inc., from 1979 to the present; of Miami Kendall West, Inc., from 1981 to 1987; of Gateway Acres, Inc., and Maingate Acres, Inc., from 1985 to the present; of M and L Management, Inc., from 1987 to the present, and of Miami Kendall Estates, Inc.; and Central Florida Estates, Inc., from 1988 to the present. Bonduel was a director and the corporate secretary of Miami Kendall Estates, Inc., from 1980 to 1988. In the foregoing capacities, Bonduel executed the annual reports filed with the Florida Secretary of State for each corporation as follows: South Florida Properties, Inc. (1978-1983); West Miami Estates, Inc. (1979-1989); Miami Kendall Estates, Inc. (1980, 1982-1989); Miami Kendall West, Inc. (1982- 1987); Gateway Acres, Inc., and Maingate Acres, Inc. (1985-1989); M and L Management, Inc. (1987-1988); and Central Florida Estates, Inc. (1988-1989). South Florida Properties, Inc., West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., M and L Management, Inc., Central Florida Estates, Inc., and Mid- Florida Acres, Inc. have shared common offices and telephones, as follows: All of the corporations are or have been located at 633 N.E. 167th Street, North Miami Beach, Florida 33162, as follows: South Florida Properties, Inc.: Suite 519 (1978); Suite 1020 (1979); Suite 810 (1980-1983) West Miami Estates, Inc.: Suite 1020 (1979); Suite 810 (1980 to the present) Miami Kendall Estates, Inc., and Miami Kendall West, Inc.: Suite 810 (1981 to the present). Gateway Acres, Inc., and Maingate Acres, Inc.: Suite 810 (1985 to the present) M and L Management, Inc.: Suite 810 (1987 to the present). Mid-Florida Acres, Inc.: Suite 810 (1986 to the present). Central Florida Estates, Inc.: Suite 810 (1988 to the present). 2114 N.E. 182nd Street, North Miami Beach, Florida, was the personal address for Larry Lewis from 1979 through 1984; the personal address of Randy L. Landes, incorporator of Miami Kendall Estates, Inc., from 1979 through 1984; the personal address of Helen Lewis from 1984 through 1986; the corporate address of Miami Kendall Estates, Inc., in 1979 and 1980; and the corporate address of Maingate Acres, Inc., in 1984. 4927 S.W. 139th Court, Miami, Florida 33175 was the corporate address for Gateway Acres, Inc., in 1984 and for M and L Management, Inc., in 1985 and 1986. (305) 652-8523 was the telephone number given for the officer executing each of the annual reports listed below for the following corporations: West Miami Estates, Inc., and Miami (Kendall Estates, Inc. (1980-present); South Florida Properties, Inc. (1980-1983); Miami Kendall West, Inc. (1981-1987); Gateway Acres, Inc., and Maingate Acres, Inc. (1985-present); M and L Management, Inc. (1986-present); Central Florida Estates, Inc. (1988-present); Mid-Florida Acres, Inc. (1986). Mel Lewis, Larry Lewis, and Fay Lewis are authorized signers for the following corporate bank accounts with Executive National Bank, Miami, Dade County, Florida; each account opened on the indicated date: Miami Kendall West, Inc., Account Number 010-410-176-6-06, opened on October 12, 1982; Miami Kendall Estates, Inc., Account Number 010-410-179-0-06, opened on October 12, 1982; West Miami Estates, Inc., Account Number 010-410-177-4-06, opened on October 12, 1982. West Dade Acres, Inc., Account Number 010- 410-178-2-06, opened on October 12, 1982, with Cindy Morales listed as an additional signer; Gateway Acres, Inc., Account Number 101- 010-410-5354-06, opened on July 12, 1984; Maingate Acres, Inc., Account Number 010- 410-6350-06, opened on June 25, 1984. Mel Lewis, Larry Lewis, and Fay Lewis were the authorized signers for Skylake State Bank, Account Number 102-007-6, opened July 28, 1978, for West Miami Estates, Inc. Mel Lewis and Larry Lewis were the authorized signers for the bank account of South Florida Properties, Inc., at Skylake State Bank, Account Number 101-526-9. Julio Bercowicz executed agreements for deed as an authorized agent of Mid-Florida Acres, Inc. Julio Bercowicz was the original incorporator of Mid- Florida Acres, Inc., and was, at one time, the sole stockholder. He was president of Mid-Florida Acres, Inc., until at least March 17, 1986. The properties offered as West Miami Estates, Miami Kendall Estates, and Miami Kendall West share certain characteristics. All are located in the portion of the Everglades lying east of the Everglades National park. The parcels are typical Everglades wetland: primarily sawgrass prairie with occasional hardwood hammocks on slightly elevated areas and subject to seasonal flooding. Several of the small parcels comprising West Miami Estates, Miami Kendall Estates, and Miami Kendall West are located close together. One of the parcels sold as West Miami Estates and two of those sold as Miami Kendall West; are located within the one square mile of section 34, township 55 south, range 37 east, Dade County, Florida. A second parcel of West Miami Estates and the smaller parcel of Miami Kendall Estates are located in sections 33 and 35, respectively, township 55 south, range 37 east, on either side of the foregoing section 34. The parcels sold as Gateway Acres and Maingate Acres are contiguous and were formed from the single large parcel conveyed by Sand Hills Corporation to Melvin M. Lewis Licensed Real Estate Broker, Inc., on March 30, 1984. The single parcel was divided into a total of seventy-six consecutively-numbered lots; lots 1-26, 40, and 41 were then apportioned to Maingate Acres and lots 27- 39 and 42-76 to Gateway Acres. On more than one occasion, when a lot in Gateway Acres or Maingate Acres was deeded, Melvin Lewis, individually, would convey the lot by warranty deed to the applicable corporation for nominal consideration (as shown by the documentary stamps affixed to each document). If the lot was in those apportioned to Gateway Acres, Inc., he would then execute a second warranty deed as corporate president, on the same date and before the same witnesses and notary, conveying the lot to the purchaser for substantial consideration. If the lot was in Maingate Acres, the warranty deed conveying the lot to the purchaser would be executed on the same day. Fay Lewis witnessed, and Mel Lewis witnessed and notarized, the execution of at least one warranty deed by Helen Lewis as president of Maingate Acres, Inc. Those parcels sold as Central Florida Estates and Mid-Florida Acres were created from a single 140-acre parcel, acquired by M and L Management, Inc., on January 6, 1986, from David Alan Siegel and Betti L. Siegel, comprising almost the entire northeast 1/4 of section 19, township 25 south, range 27 east, Osceola County, Florida. On the same date, Melvin Lewis, as president of M and L Management, Inc., executed a warranty deed conveying to Kissimmee Hills, Inc., a 20-acre strip 2,640 feet long and 330 feet wide. This conveyance divided the single parcel conveyed by the Siegels into northern and southern portions. On January 7, 1986, Melvin Lewis, as president of M and L Management, Inc., executed a warranty deed conveying to Central Florida Estates, Inc., the remaining portion of the original parcel to the immediate south of the strip of property conveyed to Kissimmee Hills, Inc. Cindy Morales and Fay Lewis executed the deed as witnesses to the signature of Melvin Lewis. Mid-Florida Acres is comprised of the northern 60 acres remaining after 60 acres were conveyed to Central Florida Estates, Inc., and 20 acres to Kissimmee Hills, Inc. Identical or substantially identical form contracts were used to sell lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, and Central Florida Estates. The form of the contracts was also similar to the types of contracts used by many other people in the business of selling undeveloped real estate in Florida. Each sale was made by executing an unrecorded agreement for deed which reserved to the seller both the title and possession of the property until payment under the contract was complete. The use of agreements for deed is not an unusual practice in the business of selling undeveloped real estate in Florida. Purchasers of lots in South Florida Properties exchanged their lots for lots in Miami Kendall Estates, Miami Kendall West, West Dade Acres, or West Miami Estates. Melvin Lewis solicited people who had purchased lots from South Florida Properties, Inc., to exchange their lots for ones in West Miami Estates, Miami Kendall Estates, Miami Kendall West, or West Dade Acres. He subsequently sent letters to each of such purchasers verifying their discussions and providing the documents necessary for the exchange of lots. Casimir T. Brudzinski purchased lot 94-B in South Florida Properties by an agreement for deed executed by Melvin Lewis as president of South Florida Properties, Inc. After being solicited by Melvin Lewis to exchange his lot, Mr. Brudzinski agreed to exchange his lot for lot 7WD in West Dade Acres. Delbert D. Oldenburg purchased lot 126-D, South Florida Properties, by an agreement for deed executed by Melvin Lewis as president of South Florida Properties, Inc. After being solicited by Melvin Lewis to exchange his lot, Mr. Oldenburg agreed to exchange his lot for lot 43WDA in West Dade Acres, which exchange agreement was countersigned by Melvin Lewis. Ralph J. and Beryl G. Hanchin purchased lots 100A and 100B in South Florida Properties, making monthly payments to South Florida Properties, Inc. The Hanchins continued to make payments after October 1982, which payments were credited toward the purchase of lots 55A and 55B in Miami Kendall Estates. The following sales were made in each indicated parcel: at least 19 in West Miami Estates, 22 in Miami Kendall Estates, 19 in Miami Kendall West, 44 in Gateway Acres, (lots 38, 53, 67, 71 appear to have been resold due to purchaser default or refund), 24 in Maingate Acres, at least 15 in Central Florida Estates, and at least 43 in Mid-Florida Acres. None of the lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid- Florida Acres were sold as part of a reservation program approved by the Division pursuant to Section 498.024, Florida Statutes. West Miami Estates, Inc., Miami Kendall Estates, Inc., Miami Kendall West, Inc., Gateway Acres, Inc., Maingate Acres, Inc., Central Florida Estates, Inc., and Mid-Florida Acres, Inc., are neither governments nor governmental agencies. The lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres, were not offered as cemetery lots or interests in cemetery lots. The offer or disposition of lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres was not registered with either the Florida Department of Banking and Finance or the United States Securities and Exchange Commission. Each offer or disposition of a lot in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres was for the actual sale of real property and not for the sale of a debt secured by a mortgage on real property. The sale price for each separate lot sold in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres did not exceed 50,000.00. The lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres were each offered or sold without any residential or commercial buildings. The lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres were each offered or sold without any obligation of the seller to construct a residential or commercial building thereof for the purchaser. No plat or series of plats describing each lot in South Florida Properties, West Dade Acres, West Miami Estates, Miami Kendall Estates, or Miami Kendall West, was recorded or accepted for recordation in the official records of Dade County, Florida, prior to any lot sales. No plat or series of plats describing each lot in Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres, was recorded or accepted for recordation in the official records of Osceola County, Florida, prior to any lot sales. The Division did not issue any order exempting West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres from the registration requirements of Chapter 498, Florida Statutes, prior to any lot sale or other disposition being made. The Division has not issued a valid order of registration for lots in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres pursuant to Chapter 498, Florida Statutes. No purchaser of a lot in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres received a current public offering statement which had been approved by the Division. No purchaser of a lot in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres received a synopsis or summary, approved by the Division, of the sales script used in conjunction with the long distance telephone solicitation of the lot purchaser. The Division has not approved a public offering statement for West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres. The Division has not approved a synopsis or summary of any long distance telephone solicitation sales script for West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres. Both Melvin Lewis and Larry Lewis were familiar with the subdivided land registration requirements of Chapter 493, Florida Statutes. West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres were each created to hold less than 50 lots in an attempt to avoid the registration requirements of Chapter 498. The physical characteristics of the parcels of land offered and sold by the Respondents made those parcels unacceptable for registration under Chapter 498. Rodney A. Lein purchased lot 73 in Miami Kendall West on July 13, 1980, after a telephone call from Larry Lewis in which Larry Lewis offered Mr. Lein "income property" on land slated for development. In the conversation, Larry Lewis guaranteed he could resell the land at a profit within 3 to 4years. After the call, but before the purchase, Mr. Lein traveled to Miami to inspect the property. Larry Lewis took him to the end of west Kendall Drive in Dade County, Florida. Larry Lewis said the property offered was some 2 1/2 to 3 miles to the west of the pavement's end, but that Kendall Drive would be extended out past the property. Larry Lewis further said that as the urban area developed, the city would pay for extending such services as roads and water utilities to the property. Thomas Bezelik purchased lot 54 D, Miami Kendall Estates in January 1980 after a telephone solicitation in which the caller said the property would be a good investment and possibly purchased for industrial use. Bezelik was told an aerospace business was located close to the property he was being offered and was a potential purchaser of the site. Bezelik is still paying for the property. Robert Welch was solicited by telephone to purchase a lot in Central Florida Estates and was told the subdivision had been improved with paved streets and all utilities such as electricity, gas, telephone service, water, and sidewalks. He was further told the property would definitely appreciate in value. On the basis of this and other telephone conversations with the solicitor, Mr. Welch purchased lot 28 in Central Florida Estates. He subsequently spoke with Virginia Young by telephone, who identified herself as the president of Central Florida Estates, Inc., and affirmed the statements that had been made in soliciting him to purchase the property. She also stated Welch could redivide his 1 1/4-acre parcel into 4 lots. Eileen O. Gometz, together with her husband, since deceased, purchased a lot in West Miami Estates as a result of a telephone conversation with Larry Lewis. Larry Lewis said the property was suitable for building and would be developed within 3 to 4 years from purchase. Larry Lewis told her the property was close to a large commercial company but that the actual property itself would be home sites. At no time was she advised of the actual zoning or any rezoning of the property. Paul J. Matrullo purchased a lot in Gateway Acres after a telephone call from Larry Lewis in which Lewis assured him the property was good quality, "buildable land." Prior to his purchase, Mr. Matrullo visited the general area of the property with Larry Lewis. During the physical inspection, Lewis stated the land would be developed for residential housing or the State of Florida would purchase the property to develop a highway. Lewis further stated the property had been purchased by himself and his father, and the land was of such quality that it would double or triple in value within 12 months to 2 years. Larry Lewis gave no information specifically describing the zoning of the property. Primarily based on Lewis' representation that the property would double or triple in value within a 2-year period, Mr. Matrullo purchased lot 56 in Gateway Acres. He is currently paying for the property. William Somerset purchased lot 17 in Maingate Acres after receiving a telephone solicitation. He was told the intent of the offering was not to develop the land but to hold it as an investment for approximately 1 1/2 years and then sell it to developers. He purchased lot 17 because he was told the property would be quickly resold at a profit within "...perhaps a year and a half." He is still paying for the property. Similar sales methods were utilized in the marketing of the lots in all of the subject subdivisions. For example, solicitations for sales were made by telephone and prospective purchasers were told that they should purchase for investment purposes. Much of the land offered for sale by the Respondents was a poor investment at any price. The uses to which the property in sections 16 and 19, township 25 south, range 27 east in Osceola County, Florida, may be put are primarily agricultural. The minimum lot area is five acres and the density for residential development is one residence per five-acre lot. The purchasers of lots in Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres would not be permitted to build a separate structure on their individual lots; a minimum of four contiguous lots would have to be merged in order to create a parcel on which one residence could be built. The property purchased from Sand Hills Corporation and resold as Gateway Acres and Maingate Acres is entirely contained within the "Davenport Creek Swamp." The property is low, poorly drained, wet Florida swampland subject to periodic flooding. The single parcel sold as Central Florida Estates and Mid-Florida Acres, and in part conveyed to Kissimmee Hills, Inc., contains three distinct types of property. Roughly 45 percent of the tract is a "typical central Florida grass pond." During periods of dry weather portions of the pond dry up, but the property is subject to periodic flooding during the year. The second portion of the property is a "transitional zone" between the actual grass pond and potentially more usable land. The transitional property is low and poorly drained, again subject to occasional flooding. The smallest portion of the property, primarily found in the northern portion sold as Mid-Florida Acres, is sufficiently elevated and dry. No clear public access exists to either Gateway Acres or Maingate Acres. Access is obtained either by four-wheel drive vehicle or by foot. In soliciting purchasers for either Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres, Larry Lewis stated the offered real property was located in an area undergoing rapid growth and development. In fact, none of the parcels sold as West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, or Mid-Florida Acres have been developed. Nor has West Kendall Drive in Miami, Florida, been extended westward to Lot 73, Miami Kendall West. Neither South Florida Properties, Inc., nor Melvin Lewis explained to the previous purchasers of South Florida Properties that the reason that they were being offered an exchange of their property was because South Florida Properties had been deeded back to the original mortgage holder in lieu of foreclosure. The lots offered for sale by the Respondents in West Miami Estates, Miami Kendall Estates, Miami Kendall West, Gateway Acres, Maingate Acres, Central Florida Estates, and Mid-Florida Acres were all offered as part of a common promotional plan by Melvin Lewis and Larry Lewis, with the assistance of a few of their relatives, friends, and employees. In his various capacities described in paragraph 11 of these Findings of Fact, Melvin Lewis participated in the disposition of 143 lots of subdivided lands in Florida. In his various capacities described in paragraph 12 of these Findings of Fact, Larry Lewis participated in the disposition of 186 lots of subdivided lands in Florida. In her capacities described in paragraph 15 of these Findings of Fact, Virginia Young participated in the disposition of 15 lots of subdivided lands in Florida. In his capacities described in paragraph 19 of these Findings of Fact, Julio Bercowicz participate in the disposition of at least 2 lots of subdivided lands in Florida.
Recommendation Based on all of the foregoing, it is RECOMMENDED that the Division of Florida "Land Sales, Condominiums and Mobile Homes enter a final order in this case to the following effect: Finding each Respondent in these consolidated cases guilty of the violations charged in the respective Notices to Show Cause and Amended Notices to Show Cause. Melvin Lewis shall be ordered to pay to the Division civil penalties totaling One Million Four Hundred Forty Thousand Dollars ($1,440,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 143 dispositions of lots in which he participated. Larry Lewis shall be ordered to pay to the Division civil penalties totaling One Million Eight Hundred Seventy Thousand Dollars ($1,870,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 186 dispositions of lots in which he participated. Virginia Young shall be ordered to pay to the Division civil penalties totaling One Hundred Sixty Thousand 43 Dollars ($160,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 15 dispositions of lots in which she participated. Julio Bercowicz shall be ordered to pay to the Division civil penalties totaling Thirty Thousand Dollars ($30,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 2 dispositions of lots in which he participated. West Miami Estates, Inc., shall be ordered to pay to the Division civil penalties totaling Two Hundred Thousand Dollars ($200,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 19 dispositions of lots in which it participated. Miami Kendall Estates, Inc., shall be ordered to pay to the Division civil penalties totaling Two Hundred Thirty Thousand Dollars ($230,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 22 dispositions of lots in which it participated. Gateway Acres, Inc., shall be ordered to pay to the Division civil penalties totaling Four Hundred Fifty Thousand Dollars ($450,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 44 dispositions of lots in which it participated. Maingate Acres, Inc., shall be ordered to pay to the Division civil penalties totaling Two Hundred Fifty Thousand Dollars ($250,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 24 dispositions of lots in which it participated. Central Florida Estates, Inc., shall be ordered to pay to the Division civil penalties totaling One Hundred Sixty Thousand Dollars ($160,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 15 dispositions of lots in which it participated. Mid-Florida Acres, Inc., shall be ordered to pay to the Division civil penalties totaling Four Hundred Forty Thousand Dollars ($440,000.00) comprised of one $10,000.00 penalty for participating in the offering of unregistered lots and one $10,000.00 penalty for each of the 43 dispositions of lots in which it participated. In addition to the civil penalties recited above, West Miami Estates, Inc., Miami Kendall Estates, Inc., Gateway Acres, Inc., Maingate Acres, Inc., Central Florida Estates, Inc., and Mid-Florida Acres, Inc., each shall be ordered to, under the supervision and approval of the Division, offer each purchaser of a lot from each respective corporation, the opportunity to rescind the purchase contact and receive a refund of all principal and interest paid in purchasing the lot. The offers of rescission and refund should be made to each purchaser. The offer to rescind shall be made within 60 days from the rendition of the final order by the Director of the Division. Those purchasers who elect to rescind their contract and receive a refund shall receive their payments no later than 90 days from the date they request their refund. The Division should impose such terms of compensation and require such security as will assure the maximum recovery by those purchasers selecting a refund, including, but not limited to requiring full disclosure of all facts material to the actual lot acquired by each respective purchaser, escrowing funds or posting bonds, or the appointment of a trustee or receiver to supervise the programs of rescission and refund whose fees are to be paid by the Respondents. Melvin Lewis and Larry Lewis shall also be ordered to be jointly and severally liable for the civil penalties and other remedies ordered against West Miami Estates Inc., Miami Kendall Estates, Inc., Gateway Acres, Inc., and Maingate Acres, Inc. Melvin Lewis, Larry Lewis, and Virginia Young shall also be ordered to be jointly and severally liable for the civil penalties and other remedies ordered against Central Florida Estates, Inc. Julio Bercowicz and Larry Lewis shall also be ordered to be jointly and severally liable for the civil penalties and other remedies ordered against Mid-Florida Acres, Inc. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 3rd day of November 1989. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 1989.
Findings Of Fact The Respondent Habitat Corporation is a corporate real estate broker holding license number 0217261, with a registered business address of 3835 North Andrews Avenue, Fort Lauderdale, Florida 33309. The Respondent James S. Shenkenberger is the qualifying broker for the corporate licensee, and holds license number 0079972. Prior to January 2, 1981, Shenkenberger was qualifying broker for American Overseas Investment Corporation, then a licensed Florida corporate real estate broker operating in Fort Lauderdale, Florida. On January 2, 1981, Shenkenberger placed the real estate license of American Overseas Investment Corporation on inactive status, and obtained an active license for the Habitat Corporation. From July of 1977, Shenkenberger had an oral agreement with Florida Hendry Land, Inc., to act as a broker in selling property belonging to Florida Hendry Land, Inc. The terms of this agreement were that Shenkenberger was to be paid on a commission basis, and that he would present sales agreements for the approval of Joe Hendry, the owner of the corporation. When a sales contract was complete, then Florida Hendry would issue the Warranty Deed and order the title insurance. In early 1980, Irvin Adams, pursuant to a newspaper advertisement advertising land for $800 an acre, contacted Jim Shenkenberger and arranged to meet with him. On February 9, 1980, Adams flew to Florida from Pennsylvania and was shown Florida Hendry land by Shenkenberger. On this date, Adams decided to purchase lots four and five for a total purchase price of $64,000. Shenkenberger told Adams that if he made all the payments within one year, the purchase price would be reduced by 10 percent. As a down payment, Adams gave Shenkenberger a check for $14,000, payable to the order of American Overseas Investment Corp., and $2,000 in cash. At no time was Adams presented with a sales contract for Lots four and five. Adams returned to Pennsylvania, and contacted Shenkenberger several times during 1980 when he became worried that he had not received any requests for further payments. Shenkenberger informed Adams that the land was tied up, that Mr. Hendry had an obligation to the State of Florida, and that the land had been put up as a bond. In December of 1980, Shenkenberger contacted Adams and told him that the property was clear. On January 10, 1981, Adams flew to Florida a second time. He met with Shenkenberger, and again viewed the Hendry property. Adams decided to change the property he was purchasing to tract 18. Adams gave Shenkenberger a check payable to the order of American Overseas Investment Corp. in the amount of $12,800, and Shenkenberger gave him a receipt reflecting that Adams had paid in full for tract 18. At no time was Adams presented with a sales contract for tract 18. On this same date, Shenkenberger showed Adams three more Hendry tracts, and Adams gave Shenkenberger a down payment for Lots six, seven and ten in the amount of $11,900. Shenkenberger made out and signed the offers to purchase the three lots in the presence of Adams, but did not give them to Adams to sign. Adams never received a receipt for deposit or a sales contract on any of the three lots. Polly Hodge, who operated Florida Hendry Land, Inc. on a day-to-day basis, was first informed in March of 1980 that Irvin Adams might be interested in purchasing certain of their properties. The first money received by Florida Hendry Land, Inc., relating to sale of property to Irvin Adams, was by a $300 check from Shenkenberger dated January 15, 1981. Shenkenberger represented that the funds were a binder for the purchase by Adams of tracts six, seven and ten. Florida Hendry Land, Inc., never received a written offer to purchase the properties. After Florida Hendry received the binder, Polly Hodge asked Shenkenberger on several occasions about the status of the sale to Adams. Shenkenberger repeatedly advised her only that Adams would be coming to Florida in the near future. After Adams returned to Pennsylvania from his trip to Florida in January of 1981, he contacted Shenkenberger and advised him that he wished to purchase one lot in full rather than Lots six, seven, and ten. On January 26, 1981, he sent Shenkenberger a check in the amount of $14,650 for payment in full of tract ten of the Hendry property. At no time did Adams receive a deposit receipt for this payment, nor did he receive a sales contract. When Adams became concerned because he had not received deeds to the two properties, he contacted Shenkenberger, and was told that the Hendry Land Office was slow in preparing the deeds. On February 26, 1981, Adams visited the offices of Florida Hendry Land, Inc., and spoke briefly with Polly Hodge. Adams informed her that he wished to purchase tract ten only, and was not pursuing the purchase of tracts six and seven. Later, Adams met with Shenkenberger, and again inquired about the deeds. Shenkenberger assured him that he would have the deeds shortly. On February 27, 1981, Shenkenberger wrote a check to Florida Hendry Land in the amount of $23,895 which, together with the binder of $300, was the full purchase price of tract ten less Shenkenberger's 10 percent commission, and the deed was sent for recordation. Polly Hodge also gave Shenkenberger the Warranty Deed to tract 18 after Shenkenberger represented to her that he would be closing the property on the weekend, and would then deliver the purchase money to her. After the Warranty Deed was given to Shenkenberger, Polly Hodge inquired several times as to the progress of the transaction, but Shenkenberger repeatedly told her that Adams had not arrived to close. After returning to Pennsylvania, Adams was contacted by Shenkenberger on or about March 12, 1981. Shenkenberger told Adams that he had talked to J.B. Hendry and that Hendry did not feel that he had gotten enough money from Adams for tract 18. Shenkenberger told Adams that he would give Adams his money back for tract 18 or that Adams would have to pay him an additional $3,600. In response, Adams sent Shenkenberger a check payable to the order of American Overseas Investment Corporation in the amount of $3,600. Adams received the recorded deed for tract 10 on March 14, 1981, and received the recorded deed for tract 18 on April 11, 1981. In total, Adams paid American Overseas Investment Corporation $32,400 for tract 18 and $26,500 for tract 10. Florida Hendry Land, Inc., received no monies from either Irvin Adams or James Shenkenberger for the purchase by Adams of tract 18. At the time tract 18, consisting of 40 acres, was conveyed to Adams, the purchase price was $72,000 less 10 per cent because it was a cash purchase. Florida Hendry Land, Inc., was entitled to $64,800 less 10 per cent for Shenkenberger's real estate commission, for a total amount due to Florida Hendry Land of $58,320. Shenkenberger was aware of the purchase price for tract 18 from his long business relationship with Florida Hendry Land, Inc., and from plat maps given to him by Hodge that showed lot prices. In 1980 and 1981, Florida Hendry Land processed sales on a "walk-in" basis, processing and completing a conveyance while the purchasers waited in the office. Florida Hendry had no problems with any governmental agencies, nor was there any other impediment, which prohibited them from conveying their properties. The checks on the account of Irvin Adams were made payable to the order of American Overseas Investment Corporation at the specific instruction of Shenkenberger. On February 11, 1980, Shenkenberger opened a bank account for American Overseas Investment Corporation in what was then the First Bank of Oakland Park, Oakland Park, Florida. This account was not an escrow account or trust account. On January 12, 1981, after American Overseas Investment Corporation had been placed on inactive status, Shenkenberger deposited two checks in the amounts of $12,800 and $11,900 in this account. On February 2, 1981, Shenkenberger deposited the check for $14,650 drawn by Adams into this account. On March 12, 1981, Shenkenberger deposited the check for $3,600 given by Adams into this account. Although Shenkenberger received payment in full for tract 10 shortly after January 26, 1981, he did not deliver the payment to Florida Hendry Land until February 27, 1981. The payments made by Adams to American Overseas Investment Corporation for the purchase of tract 18 were converted to Shenkenberger's own use. In August, 1981, when Florida Hendry Land, Inc., became aware that Shenkenberger had recorded the deed for tract 18, and that the property had in fact been conveyed to Irvin Adams, they attempted to get payment for this tract from Shenkenberger, but were unsuccessful. Thereafter, Florida Hendry filed suit against Shenkenberger and Irvin Adams. Irvin Adams employed the services of an attorney to defend him in the action which was still pending on the date of the final hearing in this case. During the course of the investigation of this matter by the Department of Professional Regulation, a Subpoena Duces Tecum was served on Shenkenberger, as President of American Overseas Investment Corporation, on January 25, 1982. This subpoena requested Shenkenberger to produce all listings, contracts to purchase, binder deposits, deposits of checks and/or monies into bank accounts, receipts, closing statements, and correspondence involving all real estate transactions between Florida Hendry Land, Inc., and Irvin Adams. The Respondent failed to honor the Department's subpoena, and never delivered the requested documents for examination.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the licenses of the Respondents, James S. Shenkenberger, and the Habitat Corporation, be revoked. THIS RECOMMENDED ORDER ENTERED this 2nd day of May, 1983, in Tallahassee, Florida. WILLIAM B. THOMAS Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of May, 1983. COPIES FURNISHED: Tina Hipple, Esquire Post Office Box 1900 Orlando, Florida 32802 Owen L. Luckey, Jr., Esquire Post Office Box 865 La Belle, Florida 33935 William M. Furlow, Esquire Post Office Box 1900 Orlando, Florida 32802 Harold Huff, Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether Respondent Garrison's license as a real estate broker and Respondent Arbree's license as a broker-salesman should be suspended or revoked, or the licensees otherwise disciplined for alleged violations of Chapter 475, F.S., as set forth in the Administrative Complaint, dated December 22, 1980. This proceeding commenced with the filing of an Administrative Complaint by the Department of Professional Regulation on December 22, 1980 alleging that Respondents Gary D. Garrison and Joseph M. Arbree had violated Subsection 475.25(1)(a), Florida Statutes in connection with a 1977 real estate transaction wherein Respondents allegedly failed to disclose to the seller that purchaser Respondent Arbree was a licensed broker-salesman and that Respondent Garrison had, or would have a financial interest in the property upon its purchase. The Respondents requested an administrative hearing on the charge and filed a Motion to Dismiss claiming that Petitioner lacked jurisdiction to proceed in the cause in that there had been no lawful compliance with the provisions of Section establishment of any fiduciary relationship between the Respondents and the seller of the property in question, and that Petitioner had not complied with the motion was reserved until argument was presented at the final hearing. At that time, the motion was denied for reasons which will be set forth in the Petitioner forwarded the Request for Hearings to this Division on July 1, 1981 and hearing was set for September 17, 1981. On August 27, 1981, Petitioner Oklahoma on September 9, 1981. Respondent filed objections to the said notice, together with a Motion For Protective Order, claiming that the notice period was depositions outside the State for use at trial. Respondent sought either to have the notice "stricken" or that a protective order be entered to require deposition or, alternatively, that the deposition testimony not be allowed in evidence at final hearing. The motion was denied by the Hearing Officer on At final hearing on September 17, 1981, Petitioner announced that the deposition of McNickle, an indispensable witness, had not yet been received. deposition as a late-filed exhibit, a continuance was granted until November 23, 1981, to permit receipt of the deposition and to afford Respondents an its taking in Oklahoma. Although the parties were afforded the opportunity to file Proposed herein, no post-hearing submissions have been filed.
Findings Of Fact times material to the complaint was registered as a real estate salesman with Investment Equity Corporation, Palm Beach Gardens, Florida. Respondent Joseph he was associated with Investment Equity Corporation during the times material to the allegations in the Complaint. (Testimony of Respondents) acre unimproved lots in a development called Palm Beach Country Estates located in Palm Beach County, Florida. The purchase price of each lot was telephoned Respondent Garrison and they thereafter had several telephone conversations which led to the sale of the three lots to Respondent Arbree. The found that Respondent Garrison's version is more credible. In the initial conversation, McNickle advised Garrison of his ownership of the three lots and to inspect the lots and advise him as to the distance to electrical power, the type of roads adjacent to the lots, and whether the lots were corner lots. and that he was interested in trying to get his money back from the company. There was no mention of the value of the lots or of listing the property for sale. Garrison inspected the lots and, in a subsequent telephone conversation with McNickle, informed him that the nearest electrical power was approximately 1-3/4 miles from the lot locations, that they were on a dirt road, and that none were corner lots. He also informed him that the lots were approximately fifty percent under water during the rainy season. During this conversation, Garrison told McNickle that he had an "associate" with Investment Equity who sometimes purchased such lots. McNickle asked him to see if he could obtain an offer on the lots. Garrison then asked Respondent Arbree if he desired to purchase the lots, and the latter agreed if he could obtain financing for the purchase. Arbree asked Garrison if there was a listing on the property and Garrison told him that there was not. The reason for this inquiry was that Arbree had in the past frequently made personal purchases of real estate and had disclosed his status as a real estate salesman on such contracts when the property was listed with a broker. A question had arisen in his office as to when licensed real estate personnel should disclose their status to sellers when buying on their own account. Arbree had resolved this question in his mind some time previously by telephoning the legal office of the Florida Real Estate Commission and receiving information from someone there that it was not necessary to make such disclosure if the property was not listed with a real estate office. (Testimony of Respondents, McNickle (Deposition-Petitioner's Exhibit 3), Petitioner's Exhibit 4-1, Respondents' Exhibits 1-4) On February 28, 1977, Respondent Arbree executed a deposit receipt contract whereby he agreed to pay McNickle $15,000.00 for the three lots. The contract originally provided for a $500.00 deposit evidenced by Arbree's promissory note to be held in trust by the Investment Equity Corporation, but this was later deleted by the parties at the request of McNickle, and a $500.00 check as deposit was placed in the Investment Equity Corporation Trust Account on March 10, 1977. The check was drawn on the account of J. V. Company and signed by both Respondents. J. V. Company was simply a bank account established by Arbree and Garrison sometime prior to the McNickle transaction to serve as a depository for funds which were generated through sales for their private account. Both signatures were required for issuance of checks. Originally, the funds in the account were exclusively those of Arbree and these were the funds used for the deposit and subsequent mortgage payments to McNickle. (Testimony of Respondents, Petitioner's Exhibits 1, 4-5, 4-9, 5) The deposit receipt contract was executed by Melvin F. McNickle and his wife on March 10, 1977. The contract provided that "The buyer hereby recognizes Investment Equity Corporation by separate agreement as the broker in this transaction". This provision made reference to the fact that in cases where associates of Investment Equity Corporation purchased property in their own name which was not listed with the firm, the firm broker did not require payment of any commission. On the other hand, if an associate sold his own property, whether or not listed with Investment Equity Corporation, office policy required that he pay the firm a three percent commission for overhead, escrow maintenance, and the like. The commission was payable directly to the company and not shared with any of the associates. McNickle did not enter into a listing contract with the firm nor did he pay a real estate commission on the sale. The real estate transaction closed on August 1, 1977. Warranty deeds, dated July 26, 1977, for each of the three lots were issued by McNickle to Arbree. (Testimony of Respondents, Brown, Petitioner's Exhibits 1, 4-3, 4-4, 4- 5) Garden lots and is familiar with the selling price places the top value on choice lots of $8,000.00 in 1977, and $4,000.00 to $5,000.00 if fill was Shortly after Arbree had contracted with McNickle for the sale of the lots, Arbree told Garrison that if the lots could be resold at a profit, he McNickle contract had been entered into, another associate at Investment Equity Corporation told Garrison that he had a prospect looking for vacant land, and prospect, Carl Doty, was contacted by Garrison and, on March 17, 1977, a contract for sale and purchase was entered into between Arbree and Doty for the Investment Equity Corporation as the broker and agreed to pay a commission of three percent of the gross sales price to the firm. This was in accordance with minimum commission for processing a sale of property owned by the associate. Garrison did not receive a commission on the sale, but did receive one half of Arbree. Warranty deeds were issued to Doty by Arbree on August 24, 1977. The proceeds of the sale were placed in the J. V. Company bank account. (Testimony This case was originally docketed in the Florida Real Estate Commission in September, 1978, but was not investigated until December, 1979. A prior to comply with the notice provisions of Chapter 120, Florida Statutes. (Testimony of Stephens) Petitioner's proposed disciplinary action against both Respondents is predicated upon their alleged failure to disclose to the seller of the lots in Petitioner, and that Respondent Garrison had or would have a financial interest in the said property upon its purchase. The said nondisclosure is alleged to trick or device, breach of trust", and that thereby each Respondent "has aided, assisted or conspired with another in furtherance thereof, all in violation of subsequently reenacted and renumbered (Subsection 475.25(1)(b), F.S. (1981)), the provisions of the cited ground for disciplinary action have remained the penalties. The evidence in this case falls short of the standard required under (Fla. 1st DCA 1981), i.e., that in a proceeding which "may result in the loss of a valuable business or professional license, the critical matters at issue must Here, the fact that the real property in question was not the subject of a listing contract with Respondents' firm, Investment Equity Corporation, raises commission was paid to Respondent Garrison or to the firm by the seller, nor was any expected. Respondents and their broker treated the transaction as a private Respondents misled McNickle in any respect. Garrison made it clear at the outset that Arbree was his associate in the firm and was acting in his own behalf. The circumstances demonstrate that Garrison was acting as a gratuitous "middle man" for the benefit of both parties. The offer of Arbree, which was accepted by McNickle, was not unreasonable in the light of the location of the lots and other relevant considerations bearing on market value. The evidence shows that the McNickle lots were purchased solely with Arbree's funds, even though the checks issued for the deposit and several mortgage payments were drawn on the "J. V. Company" account which had been used in a limited fashion in the past by both Respondents in real estate ventures. No competent evidence was presented to show that Respondent Garrison had acquired a financial interest in the Arbree-McNickle transaction. On the contrary, the evidence establishes that subsequent purchaser Doty was made known to Garrison as a prospective purchaser of the lots only after the purchase contract between Arbree and McNickle had been executed, and that Respondents had not agreed to split any profits in a resale until that time. It is undoubtedly true that if Investment Equity Corporation had had a broker-principal fiduciary relationship with McNickle, the duties resulting therefrom would have also been imposed upon Garrison as a salesman, and he would have been obliged to disclose to McNickle the circumstances concerning his subsequent interest in the resale to Doty. This was not the case, however, and no such duty can be found in the light of the existing circumstances. Although it is recognized that a registrant can violate Subsection 475.25(1)(a), F.S. (1977) for dishonest conduct in a business transaction for his own account, as well as for such conduct in which his only interest is as a broker (or salesman) Sellars v. Florida Real Estate Commission, 380 So.2d, 1052 (Fla. 1st DCA 1979), the evidence here is insufficient to so characterize Respondents' conduct. It is therefore concluded that Petitioner has failed to establish that Respondents violated Section 475.25(1)(a), F.S. as alleged. Although the foregoing conclusion renders it unnecessary to deal with Respondents' various claims concerning Petitioner's failure to accord them procedural rights in the prehearing process, it is considered that the amendment to Section 120.60(6), F.S. by Chapter 81-180, Laws of Florida, effective July 1, 1981, renders any defense based on the prior Section 120.60(6)(1979) no longer available. Additionally, Respondents' contentions that this proceeding is barred by the statute of limitations applicable to criminal prosecutions or by statutory laches are not well founded. Finally, Respondents did not establish any failure of Petitioner to comply with the applicable provisions of Chapter 455, Florida Statutes, in processing this case.
Recommendation It is recommended that the Board of Real Estate dismiss the allegations against Respondents Gary D. Garrison and Joseph M. Arbree. DONE and ENTERED this 6th day of January, 1982, in Tallahassee, Florida. Division of Administrative Hearings The Oakland Building Tallahassee, Florida 32301 (904) 488-9675 Division of Administrative Hearings this 6th day of January, 1982. Harold M. Braxton, Esquire 45 Southwest 36th Court Salvatore A. Carpino, Esquire Department of Professional 130 North Monroe Street Tallahassee, Florida 32301 611 North Pine Hills Road Orlando, Florida 32808 Assistant General Counsel Department of Professional 130 North Monroe Street Tallahassee, Florida 32301 Executive Director Florida Board of Real Estate Orlando, Florida 32802
Findings Of Fact Talbott and Drake, Inc. is and was at all times alleged herein a registered real estate broker corporation. William F. Talbott is now and was at all times alleged herein a registered real estate broker and active firm member of Talbott and Drake, Inc. Paul P. Drake is now and was at all times alleged herein a registered real estate broker and active firm member of Talbott and Drake, Inc. Helen C. Drake is now and was at all times alleged herein a registered real estate broker and active firm member of Talbott and Drake, Inc. On or about January 18, 1977, William F. Talbott, on behalf of Talbott and Drake, Inc., negotiated a contract for sale and purchase between the High Ridge Water Company -- John H. McGeary, Jr., sellers, and William Montaltos and Genevieve L. Montaltos, his wife, buyers, for the purchase of lot in a new housing area known as River Forest in the Boca Raton area, Palm Beach County. A copy of said contract, Petitioner's Exhibit 1, is received into the record pursuant to the Stipulation of the parties. Said contract, Petitioner's Exhibit 1, was subject to the declarations of restrictions filed by High Ridge Water Company as seller on June 28, 1976, wherein, in Paragraph 7, the developer retained the right to approve or disapprove the plans and specifications for the construction of any structure, building, fence, wall or sign in the River Forest area. A copy of said declarations of restrictions is received into the record as Petitioner's Exhibit 2, pursuant to the Stipulation of the parties. As a part of the restrictions and provisions of the contract, the purchasers, Mr. and Mrs. Montaltos, were required to use a builder selected from a list of designated builders, approved and designated by Talbott and Drake, Inc. and the High Ridge Water Company. Mr. and Mrs. Montaltos decided to build on the subject property and contacted numerous builders designated by Talbott and Drake, Inc. to submit the bids for the construction of a home on the property. On or about June 9, 1976, the McGeary partnership, as developer of the River Forest area, entered into a joint venture agreement with Group Six Developers Collaborative, Inc., whereby Group Six Developers Collaborative, Inc. purchased lots in the River Forest area and agreed to pay Talbott and Drake, Inc. a five-percent commission on all homes constructed on said lots by Group Six Developers Collaborative, Inc. in the River Forest area. A copy of said joint venture agreement is received into the record as Petitioner's Exhibit 3 pursuant to the Stipulation of the parties. Petitioner's Exhibit 3 recites on the first page of said agreement as follows: WITNESSETH: WHEREAS, by that certain Purchase Agreement intended to be executed this date, BUILDER (Group Six Collaborative, Inc.) is agreeing to purchase certain real property as set forth herein, a copy of which Purchase Agreement is attached hereto as Exhibit 1; . . . (emphasis added) WHEREAS, the parties hereto are desirous of forming a joint venture for the purpose of finan- cing, constructing and selling single family residences upon the property described in Exhibit 1; NOW THEREFORE, in consideration of the pro- mises and of the mutual covenants of the parties hereto, and for other good and valuable considera- tion, the parties agree as follows: 9. BROKER. The parties agree that TALBOTT AND DRAKE, INC., a Florida real estate brokerage corporation, shall have an exclusive listing agree- ment with BUILDER, as owner and joint venturer, for the sale of residences to be constructed pursuant to this Agreement, a copy of which Agreement is attached hereto as Exhibit 2. As a commission for their services, which shall include but not be limited to, advertising, manning model houses, showing receiving of deposits, qualifying prospects, assisting in obtaining financing for purchasers, they shall receive five percent (5 percent) of the pur- chase price, according to the provisions contained in Exhibit 2. The joint venture agreement, Petitioner's Exhibit 3, is clearly limited to houses to be constructed on the lots purchased from the McGeary partnership. The agreement does not constitute an agreement to pay Talbott and Drake, Inc. a fee of five percent of the construction cost of any custom home built by one of the designated builders on a lot purchased by an individual. When Mr. and Mrs. Montaltos received the bid statement from Group Six Developers Collaborative, Inc. there was noted thereon: "Add Real Estate Commission as per Talbott and Drake contract." A copy of said bid statement is received into the record as Petitioner's Exhibit 4 pursuant to the Stipulation of the parties. Although Mr. and Mrs. Montaltos were informed that Talbott and Drake, Inc. was to be paid a ten-percent commission by the seller on the sale of the property to Mr. and Mrs. Montaltos, they were at no time informed directly by the Respondents that the builders on the "approved list" were required to pay a five-percent commission to Talbott and Drake, Inc., nor that the said five- percent commission would be passed on to Mr. and Mrs. Montaltos when they contracted with an "approved" builder to construct a home on the subject property. On or about February 4, 1977, William F. Talbott, on behalf of Talbott and Drake, Inc., negotiated the contract for sale and purchase between High Ridge Water Company, as seller, and Donald James Kostuch and Mary Louise Kostuch, his wife, buyers, for purchase of a lot in the River Forest area of Palm Beach County. A copy of said contract is received into the record as Petitioner's Exhibit 5 pursuant to the Stipulation of the parties. Mr. and Mrs. Kostuch were required by the contract to select a builder from an approved list of designated builders approved and supplied by Talbott and Drake, Inc. and seller, High Ridge Water Company. Mr. and Mrs. Kostuch selected Snow Realty and Construction, Inc. from the list supplied by Talbott and Drake, Inc. Snow Realty and Construction, Inc. had an agreement with the McGeary partnership and Talbott and Drake, Inc. similar to that outlined in the joint venture agreement between the McGeary partnership in Group Six Developers Collaborative, Inc., Petitioner's Exhibit 3, whereby Snow Realty and Construction, Inc. agreed to pay Talbott and Drake, Inc. a five-percent commission on any residence that Snow Realty and Construction, Inc. built in the River Forest area. The bid supplied by Snow Realty and Construction, Inc. on March 7, 1977, to Talbott and Drake, Inc. contained a listing of real estate commission to Talbott and Drake, Inc. in the amount of $3,652. A copy of said bid statement is received into the record as Petitioner's Exhibit 6 pursuant to the Stipulation of the parties. The Kostuchs were advised of a five-percent fee to be paid by the builder by a salesman working for another broker who first introduced the Kostuchs to the real property in River Forest. The salesman advised the Kostuchs prior to their entry into the contract for the purchase of the lot in River Forest in which they agreed to limit their choice of builder to one approved by the McGeary partnership and Talbott and Drake, Inc. This disclosure would be sufficient to comply with the provisions of Rule 21V-10.13, Florida Administrative Code, because the fee was revealed by a salesperson involved in the transaction prior to the execution of the contract under which the favor, if any, was granted. Talbott and Drake, Inc., in addition to performing services as listing agent for the sale of homes in River Forest, also functioned as the prime developer in this project pursuant to an agreement with High Ridge Water Company and the McGeary partnership. Regarding the Montaltos' transaction, the limitation of the owners to the use of one of the approved builders constitutes the granting or placement of favor, because it narrows the competition to one of five builders out of all the builders available in the Fort Lauderdale area. The affidavits introduced indicate that, notwithstanding the absence of a written agreement, the designated builders had agreed to pay to Talbott and Drake, Inc. a fee of five percent of the cost of construction of any custom home as compensation for the efforts of Talbott and Drake, Inc. in developing the property. While compensation for these services is reasonable, it still constitutes a fee to be paid Talbott and Drake, Inc. from one of the five designated builders who would benefit from the contract. The potential adverse effect of this arrangement was to transfer a cost generally allocated to the cost of the lot to the cost of the house. Therefore, people shopping for a lot could be misled in the comparison of similar lots in different subdivisions in the absence of being advised of the fee to be paid by the builders to Talbott and Drake, Inc. However, the evidence shows no attempt to keep this fee a secret and thereby mislead buyers. The existence of such a fee is referred to in sales literature prepared by Talbott and Drake, Inc. The Kostuchs were advised of the fee by a participating salesman for another real estate company. The builders set out the fee as a separate cost item as opposed to absorbing it in general costs within their bids. While the Respondents could not produce evidence that the Montaltos' had been advised of the existence of the fee, and the Montaltos' testified that they had not been advised, this appears to be an isolated incident as opposed to a course of conduct. Notwithstanding proof of the above, no evidence is presented that the Montaltos' contracted with a designated builder to build their house, and that a designated builder paid a fee to Talbott and Drake, Inc. To the contrary, the testimony of William Talbott was that the Montaltos' had breached the terms of their contract regarding the use of a designated builder.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that the Florida Real Estate Commission issue a letter of reprimand to Talbott and Drake, Inc. which, in fairness to the Respondents, should set out the specifics of the violation and to further apprise other registrants of the potential dangers of such fee arrangement. DONE and ORDERED this 4th day of June, 1979, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Frederick H. Wilsen, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Charles M. Holcomb, Esquire 653 Brevard Avenue Post Office Box 1657 Cocoa, Florida 32922
Conclusions An Administrative Law Judge of the Division of Administrative Hearings has entered an Order Closing File in this proceeding. A copy of the Order is attached to this Final Order as Exhibit A.
Other Judicial Opinions REVIEW OF THIS FINAL ORDER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND FLORIDA RULES OF APPELLATE PROCEDURE 9.030 (b) (1) (C) AND 9.110. TO INITIATE AN APPEAL OF THIS ORDER, A NOTICE OF APPEAL MUST BE FILED WITH THE DEPARTMENT’S AGENCY CLERK, 2555 SHUMARD OAK BOULEVARD, TALLAHASSEE, FLORIDA 32399-2100, WITHIN 30 DAYS OF THE DAY THIS ORDER IS FILED WITH THE AGENCY CLERK. THE NOTICE OF APPEAL MUST BE SUBSTANTIALLY IN THE FORM PRESCRIBED BY FLORIDA RULE OF APPELLATE PROCEDURE 9.900(a). A COPY OF THE NOTICE OF APPEAL MUST BE FILED WITH THE APPROPRIATE DISTRICT COURT OF APPEAL AND MUST BE ACCOMPANIED BY THE FILING FEE SPECIFIED IN SECTION 35.22(3), FLORIDA STATUTES. YOU WAIVE YOUR RIGHT TO JUDICIAL REVIEW IF THE NOTICE OF APPEAL IS NOT TIMELY FILED WITH THE AGENCY CLERK AND THE APPROPRIATE DISTRICT COURT OF APPEAL. MEDIATION UNDER SECTION 120.573, FLA. STAT., IS NOT AVAILABLE WITH RESPECT TO THE ISSUES RESOLVED BY THIS ORDER. FINAL ORDER NO. DCA10-GM-115 CERTIFICATE OF FILING AND SERVICE I HEREBY CERTIFY that the original of the foregoing has been filed with the undersigned Agency Clerk of the Department of Community Affairs, and that true and correct copies have been furnished as indicated to each of the persons listed below on this DW say of , 2010. aula Ford Agency Clerk By U.S. Mail Amy Taylor Petrick, Assistant County Attorney Palm Beach County 300 North Dixie Highway, Suite 359 West Palm Beach, FL 33401 Tel.: (561) 355-2529 Fax.: (561) 255-4324 Email: apetrick@co.palm-beach.fl.us William L. Hyde, Esquire Gunster, Yoakley & Stewart, P.A. 215 S. Monroe Street, Suite 618 Tallahassee, FL 32301 Phone: (850) 521-1980 Facsimile: (850) 576-0902 Email: whyde@gunster.com James M. Crowley, Esquire Gunster, Yoakley & Stewart, P.A. 450 E. Las Olas Blvd., Suite 1400 Fort Lauderdale, FL 33301 Phone: (954) 713-6416 Facsimile: (954) 523-1722 Email: jcrowley@gunster.com FINAL ORDER NO. DCA10-GM-115 Claudia McKenna, City Attorney City of West Palm Beach 401 Clematis Street West Palm Beach, FL 33401 Phone: (561) 882-1350 Facsimile: (561) 822-1373 Email: cmckenna@wpb.org Keith W. Davis, Esquire Trela White, Esquire Attorney for Village of Royal Palm Beach Corbett & White, P.A. 1111 Hypoluxo Road, Suite 207 Lantana, FL 33462 Phone: (561) 586-7116 Facsimile: (561) 586-9611 Email: keith@corbettandwhite.com; trela@corbettandwhite.com By Hand Delivery Richard E. Shine Assistant General Counsel Department of Community Affairs By Interoffice Mail The Honorable Donald R. Alexander Administrative Law Judge Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675
Findings Of Fact At all times pertinent to this proceeding, Martin S. Steinhardt was president of FGCRE and was a qualifying real estate broker for this corporation. Steinhardt was also the president and operator of Gold Coast School of Real Estate III, Inc. (GCSRE), which is not a party to this proceeding, during the pertinent period. On May 8, 1979, Steinhardt, on behalf of GCSRE, entered into a lease with Robin Cook pertaining to two units of a condominium office building in West Palm Beach. Numerous problems arose thereafter culminating in the eviction of GCSRE by Court Order issued on September 30, 1981. Petitioner established that the lease was in violation of the condominium association by-laws. This was, however, the responsibility of the lessor who was a member of the association and bound by its rules. The disputes which arose over parking, noise, damage to property, etc. were landlord-tenant matters and are not relevant to the statutes under which Respondents are charged here. Steinhardt and GCSRE violated local ordinances by failing to obtain an occupation license, a building permit, and a certificate of occupancy. However, these violations were resolved when the necessary documents were secured, and no formal legal action was taken. Vannoy Banks was associated with Steinhardt in the operation of FGCRE. He obtained a listing on a house which was subsequently purchased by an employee of FGCRE. Banks believed he was entitled to 50 percent of the $1,300 sales commission, which had been reduced and deferred to accommodate the buyer. Following this sale, Banks and Steinhardt dissolved their relationship and have subsequently been involved in disputes and litigation over other matters. Banks has not been paid a share of this commission nor has he received an accounting on the transaction. The testimony of the buyer and seller established that a commission of $1,300 was paid on the transaction. Steinhardt concedes that he did not deliver any of these funds to Banks nor did he furnish a formal accounting. However, he contends that Banks was not due a separate commission since he shared in the corporate profits and that Banks never demanded a commission share or an accounting.
Recommendation From the foregoing findings, it is RECOMMENDED: The Petitioner enter a Final Order dismissing the Administrative Complaint. DONE and ENTERED this 6th day of October, 1982, in Tallahassee, Florida. R. T. CARPENTER, 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 6th day of October, 1982. COPIES FURNISHED: Cynthia G. T. Allen, Esquire Gerald S. Lesher, Esquire 189 Bradley Place Palm Beach, Florida 33480 Rod Tennyson, Esquire 325-C Clematis Street West Palm Beach, Florida 33401 Vernon J. Quigley 8920 North Military Trail Palm Beach Gardens, Florida 33410 Frederick H. Wilsen, Esquire Department of Professional Regulation P.O. Box 1900 Orlando, Florida 32802 C. B. Stafford, Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Samuel R. Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether recording a claim of lien by a registered real estate broker for the purpose of collecting a commission pursuant to an exclusive listing contract violated the provision of Section 475.42(1)(j)?
Findings Of Fact Robert F. Tully is a registered real estate broker holding Certificate #0090289 issued by the Florida Real Estate Commission. Robert F. Tully, on April 24, 1975, entered into a 30 day exclusive listing contract with James and Joyce Deede to find a purchaser for their residence located at 4150 Rector Road, Cocoa Beach, Florida. This contract was to continue in effect after the end of the 30 day period but could then be terminated on 10 day written notice. The Deedes were unable to produce any evidence of having given 10 day written notice and the Respondent and his agents denied having received written notice of cancellation of the contract. On August 21, 1975, Mr. DeVaughn Bird, a registered real estate broker, personally contacted the Deedes to inquire about selling their house for them. At that time the property had a Tully "FOR SALE" located on it, but Bird did not contact Tully or his associate sales personnel. The Deedes advised Bird that the exclusive sales contract with Tully was no longer valid and gave Bird an open listing. On August 23 and 24, 1975, Bird showed the subject property to Richard and Diane McClure at which time the Tully sign was still located on the property. A contract for sale and purchase was negotiated by Bird between the Deedes and McClures, and a closing date set. Because of difficulties, the closing was delayed and a new contract executed on October 15, 1975 for a November 7, 1975 closing. Following the execution of the initial contract, Bird put his own "SOLD" on the property. Tully became aware of the sale by Bird, and contacted Bird advising him of the existence of his exclusive listing contract, and his expectation to participate in the commission. Bird informed Tully that he would not share a commission and that Tully would have to look to the Deedes for any commission due him. The Deedes refused to acknowledge Tully's claim for any commission or share thereof. At this point, Tully sought the advice of his attorney. Tully's attorney advised him that Tully's contract was in full force and on the basis of the attorney's opinion law applicable to the situation, Tully was entitled to file an equitable lien against the property. Tully, based on his attorney's advice, authorized his attorney to negotiate a settlement if possible; and, if that failed, to file an equitable lien on the property. Negotiations were unsuccessful and on October 30, 1975, just prior to closing, Tully's attorney filed a claim of lien for real estate commission in the amount of $3,314.50 with the Clerk of the Circuit Court of Brevard County, Florida, and this was recorded in OR Book 1570 at Page 349 of the official records of that county. Copies of, the claim of lien were also served on the closing agent for the sale of the property. The Deedes, as a result of the claim of lien, directed the closing agent to pay Tully one half the amount claimed, or $1,175.00, when Bird agreed to drop his commission from 7 percent to 5 percent of the selling price of $47,000. Having received payment of $1,175.00, Tully had the claim of lien immediately satisfied, which satisfaction may be found in OR Book 1572 at Page 115 of the Public Records of Brevard County.
Recommendation Based on the foregoing findings of fact and conclusions of law, the Hearing Officer would recommend that the Florida Real Estate Commission direct Robert F. Tully to repay the $1,175.00 to the Deedes within 30 days, said period to be extended if the Deedes cannot be located, or face immediate suspension for 30 days; further, said repayment shall not act as a bar to any action by Robert F. Tully against the Deedes based on his contract with them. DONE and ORDERED this 10th day of March, 1977, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Edward L. Stahley, Esquire Goshorn, Stahley & Miller Post Office Box 1446 Cocoa, Florida 32922 Manuel E. Oliver, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789
Findings Of Fact On or about March 3, 1976, the Board served its Administrative Complaint upon the Licensee. On May 18, 1976 the Licensee filed its Answer to the Administrative Complaint. The final hearing in this case was scheduled by Notice dated April 13, 1976, and was rescheduled by Notice dated May 27, 1976. John C. Ledbetter holds Certified General Contractor's License No. CG C5281 issued by the Florida Construction Industry Licensing Board. The Licensee Ledbetter has been a certified contractor at all times relevant to this proceeding. The Licensee was the co-developer of a condominium project known as Ocean Palm Villas South or Ocean Palms Riverfront Condominium. Gerald M. Hadley, Sr., a certified contractor was initially listed as the general contractor for the project. Later Neil Wayne Smith was designated the general contractor. Smith was discharged as the general contractor, and by letter dated June 11, 1973 the Licensee notified the North Peninsular Zoning Commission that he would be substituted as the general contractor. Shortly thereafter Gerald M. Hadley was again designated the general contractor, and the change was acknowledged by the forth Peninsular Zoning Commission by letter dated August 28, 1973. Construction on Ocean Palm Villas South did not commence until after August 28, 1973. No construction was undertaken during the time that Ledbetter was designated as the general contractor. The general contractor was responsible for installation of the walls in Ocean Palm Villas South. A subcontractor was utilized to install the dry wall, but the wall construction was supervised by the general contractor. The original plans called for use of 5/8" thick gypsum wallboard. The wall units were to be installed in the manner depicted in Board Exhibit 5. The gypsum was to be nailed on either side of 4" studs, with insulating material laid between the studs. 5/8" gypsum was not available to the general contractor. 1/2" gypsum wallboard was utilized. A new wall assembly was planned. With this assembly gypsum wallboard was nailed to studs, but the wallboard on the other side of the wall was nailed to alternately interspaced studs. Insulating material was woven between the interspaced studs. (See: Board Exhibit 3). The decision to use this assembly was made by Gerald A. Hadley, a labor foreman. Hadley's father was the general contractor, and was consulted in making the decision. A Mr. Rasmussen, the building inspector, was consulted about the wall assembly, and he gave his approval. At the time that construction was under way on the Ocean Palm Villas South project, the 1965 Edition with Revisions of the Southern Standard Building Code was in effect in the North Peninsular Zoning District of Volusia County. The Ocean Palm Villas South project lied within that district. The wall assembly utilized by the general contractor does not precisely follow any of the assemblies set out as appropriate in the code. The wall assembly utilized does, however, meet the one hour fire resistance standard required by the code. There was no evidence presented at the hearing from which it could be concluded that the Licensee Ledbetter had any knowledge of the wall assembly utilized in this project other than what was set out in the original plans. Ledbetter was not the contractor for the project when the assembly was constructed.
Findings Of Fact The Department is the state agency charged with the responsibility of enforcing Chapter 253, Florida Statutes on behalf of the Board of Trustees of the Internal Improvement Trust Fund (Board). The Board holds title to submerged sovereign lands pursuant to Sections 253.03 and 253.12, Florida Statutes, and Article X, Section 11, Florida Constitution. Fraraccio, together with his wife, owns a parcel of real property located in section 13, township 38 south, range 41 east which is commonly known as 26 High Point Road and which is located in Martin County, Florida. The southern boundary of the Fraraccio's property (subject property) borders the St. Lucie and Indian Rivers. In June, 1987, Fraraccio filed an application for permission to alter mangroves which grow along the shoreline of the subject property. It was Fraraccio's intention to cut the tops of the trees in order to promote horizontal growth. This application was filed with and processed by the Department of Environmental Regulation (DER). On September 1, 1987, DER issued a permit for the mangrove alteration. Pertinent to this proceeding is the following specific condition of the Fraraccio permit: 4. "No person shall commence mangrove alteration or other activity involving the use of sovereign or other lands of the state, title to which is vested in the Board of Trustees of the Internal Improvement Trust Fund or the Department of Natural Resources under Chapter 253, until such person has received from the Board of Trustees of the Internal Improvement Trust Fund the required lease, license, easement, or other form of consent authorizing the proposed use. Pursuant to Florida Administrative Code Rule 16Q-14, if such work is done without consent, or if a person otherwise damages state land or products of state land, the Board of Trustees may levy administrative fines of up to $10,000 per offense. In October, 1987, the Department's Bureau of Survey and Mapping was asked to survey the west line of the Jensen Beach to Jupiter Inlet Aquatic Preserve (Preserve) at the confluence of the St. Lucie River. Terry Wilkinson, chief surveyor for the bureau, conducted the field survey on October 14-16, 1987. Mr. Wilkinson placed a metal rebar with a cap designating "D.N.R." at a point on the mean high water (MHW) line at the Fraraccio's property. Mr. Wilkinson also staked three points with lathe markers on a line northerly along the MHW line from the rebar monument. It was Mr. Wilkinson's opinion that the Preserve abutted the Fraraccio property from the point marked by the rebar monument northward along the coast. That portion of the Fraraccio property which was south and west of the rebar did not abut the Preserve. Fraraccio disputed the findings regarding the Preserve boundary reached by Wilkinson and did not concede that his property abuts the Preserve. On December 15, 1987, the issue of the Preserve boundary was taken before the Governor and Cabinet sitting as the Board at the request of the Department, Division of State Lands. Fraraccio was represented before the Board by counsel who argued against the staff recommendation. Mr. Wilkinson's interpretation of the boundary line for the Preserve was approved. That area waterward of the MHW line from the rebar monument northerly along the Fraraccio shoreline was, therefore, deemed to be part of the Preserve and sovereign submerged land. Prior to cutting any mangrove trees, Fraraccio telephoned Casey Fitzgerald, chief of the Department's Bureau of State Lands Management, to inquire as to whether Department permission was required to trim mangroves located above the MHW line. Fitzgerald's letter advised Fraraccio "that trimming mangroves located above the MHW line would not be within the purview of this department." Fitzgerald further recommended that Fraraccio "employ the services of a registered land surveyor to specifically identify the individual trees which are so located." Fraraccio did not obtain an independent survey. Instead, he relied upon the rebar monument and the lathe markers placed by Wilkinson, and contracted to have the mangroves landward of that line trimmed. One of difficulties encountered in determining the location of a mangrove in relation to the MHW line is the fact that one tree may have several trunks and prop roots which emanate from the center of the tree. Consequently, there is some uncertainty regarding how to locate the tree. One method used locates the centermost trunk and considers that point the tree location. Another method calculates the greatest percentage of tree mass and considers that point the center of the tree. This calculated center is then matched against the MHW line. Either method results in a judgment based upon visual inspection. This judgment may differ among reasonable men. In January, 1988, Fraraccio supervised the cutting of mangroves based upon the MHW line as established by the Wilkinson survey. Fraraccio did not intend to cut trees waterward of the MHW line. No trees were cut waterward of the Wilkinson line. A number of trees were trimmed landward of the Wilkinson line. There is no evidence that either the rebar monument or the lathe markers placed by Wilkinson were moved either prior to or after the mangrove alteration. Fraraccio was responsible for the direct supervision of the workmen who completed the mangrove trim. No work was done without Fraraccio's authorization. On March 22, 1988, Kalani Cairns, inspected the Fraraccio property. Cairns took field notes of the inspection. One of comments made at that time was that it was "difficult to determine if MHWL stakes have been moved." Based upon his review of the area, Cairns determined approximately 20 mangrove trees below the MHW line had been topped. Subsequently, the Department issued the Notice of Violation and Order for corrective action. Since Fraraccio did not believe he had cut waterward of the MHW line, no corrective measures were taken. Subsequent to the Notice, additional mangroves were not cut. Fraraccio timely sought review of the notice. In preparation for the formal hearing in this cause, the Department contracted with Greg Fleming to prepare a survey of a portion of the Fraraccio property. The purpose of this second survey was to locate the MHW line along the Fraraccio shoreline and to plot mangrove trees which had been trimmed and which were waterward of the line. Approximately 24 trimmed mangrove trees were located waterward of the MHW line as determined by the Fleming survey. The Fleming survey resulted in a MHW line which was upland of the line established by the Wilkinson survey. The trimmed trees in dispute are located between the two lines, as marked on the ground, by the lathes placed by the two surveyors. Mr. Wilkinson did not testify and no credible explanation was given for why the lines, as marked in the field, differ. At the time of the cutting, however Fraraccio believed the Wilkinson lathes marked the MHW line. This belief was based upon the representations that the Department had made regarding the rebar monument marked "D.N.R." and the fact that the placement of the lathe stakes had coincided with placement of the rebar.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Trustees of the Internal Improvement Trust Fund enter a final order dismissing the Notice of Violation against Charles A. Fraraccio. DONE and ENTERED this 23rd day of June, 1989, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of June, 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-4309 Rulings on the proposed findings of fact submitted by Petitioner: Paragraphs 1 through 5 are accepted. With regard to paragraph 6, it is accepted Wilkinson put down three lathes and that there is no evidence that those lathes were moved. Otherwise, the paragraph is rejected. Mr. Wilkinson did not testify and, therefore, no evidence was presented on the issue of the lathes. It is clear Fraraccio believed the lathes to be the MHW line. Paragraph 7 is accepted. Paragraph 8 is rejected as contrary to the weight of the evidence. The MHW line was correctly depicted on the ground and on paper by the Fleming survey which was done after-the-fact. Pertinent to this case is the fact that Fraraccio and DNR treated the Wilkinson survey on the ground (as shown by-the rebar and the three lathes) as the MHW line prior to the cutting. Paragraph 9 is accepted. With regard to paragraph 10, the record shows Fleming was contacted to perform the second survey in December, 1988, and that it was dated February, 1989. With that modification and clarification, paragraph 10, in substance, is accepted. Paragraph 11 is accepted to the extent that the two surveys differed on the ground (as opposed to on paper). Paragraphs 12, 13, and 14 accepted but are irrelevant. With regard to paragraph 15, it is accepted that the workmen were instructed not to cut waterward of the MHW line. The remainder is irrelevant to this proceeding. Paragraphs 16 through 18 are accepted. With regard to paragraph 10, it is accepted Fraraccio cut or trimmed the trees based upon the Wilkinson survey as depicted by the rebar and 3 lathe markers. Otherwise, paragraph 19, is rejected as irrelevant. Paragraph 20 is accepted. Paragraph 21 is rejected as irrelevant to this proceeding. Rulings on the proposed findings of fact submitted by the Department. Paragraphs 1 through 16 are accepted. The first sentence of paragraph 17 is accepted since both surveys coincided at the point of the rebar marked "D.N.R.;" otherwise, the paragraph is rejected as contrary to the weight of evidence since the surveys differed as plotted on the ground. Paragraphs 18 and 19 are accepted. Paragraph 20 is rejected as irrelevant. Paragraph 21 is accepted. Paragraph 22 is rejected as contrary to the weight of the credible evidence. Paragraph 23 is rejected as irrelevant. The number of trees cut waterward of the MHW line as established by the Fleming survey was approximately The size of the trees is irrelevant. Paragraph 24 is rejected as irrelevant. Paragraphs 25 and 26 are accepted. Paragraph 27 is rejected as irrelevant to this proceeding. COPIES FURNISHED: William L. Contole McManus, Wiitala & Contole, P.A. O. Box 14125 North Palm Beach, Florida 33408 Ross S. Burnaman Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Tom Gardner, Executive Director Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, FL 32399-3000
