Findings Of Fact Based on the testimony of the witnesses and the exhibits received in evidence at the hearing, I make the following findings of fact: On January 9, 1980, Richard Morgentaler, Trustee, obtained title to 574 lots in Pinecrest Estates, a subdivision located in St. Johns County, Florida. Pinecrest Estates is registered with the Division. (Pet. Ex. 1) Richard Morgentaler paid 22,960.00 for the 574 lots, or approximately $40 per lot. (Pet. Ex. 23) On July 21, 1980, Richard Morgentaler conveyed 44 lots to Florida Crown Corporation. (Pet. Ex. 15) The deed reflects a documentary stamp tax of 8.80. Murray Fields was the president and sole stockholder of Florida Crown Corporation. (Pet. Ex. 20) The Corporation was formed on July 17, 1980, only 4 days before the corporation obtained title to the 44 lots from Richard Morgentaler. On August 29, 1980, Richard Morgentaler also conveyed 10 lots in Pinecrest Estates to Murray Fields. (Pet. Ex. 18) Neither Florida Crown Corporation nor Murray Fields has ever been registered with the Division to offer or sell subdivided lands. (Pet. Ex. 2) On August 29, 1980, Shirley Arthur purchased 9 lots in Pinecrest Estates from Richard Morgentaler, Trustee, for $21,860.00. (Pet. Ex. 16 & 22) Present at the closing in Morgentaler's office were Shirley Arthur, Murray Fields, Barry Shelomith and Richard Morgentaler. Shirley Arthur had previously met Murray Fields when Murray Fields became her driving instructor. As a friendship developed between Shirley Arthur and Murray Fields, Shirley Arthur placed a great deal of trust and confidence in Murray Fields. Murray Fields told Shirley Arthur about some allegedly great investments in land through Barry Shelomith, who was described by Fields as "liquidator of estates." Fields and Shelomith presented brochures about Pinecrest Estates and the surrounding area and made many representations to Shirley Arthur about the value of the land as well as potential development in the area. (Pet. Ex. 21) Murray Fields also told Shirley Arthur that he was buying 10 lots in Pinecrest Estates at the same time. Shirley Arthur's belief that Murray Fields was buying lots at the same time was a major factor in her decision to purchase, because of the trust she placed in Murray Fields. Shirley Arthur was not given a public offering statement prior to or at the closing. At no time did Murray Fields disclose to Shirley Arthur the adverse features of the land, the absence of roads to the subdivision, the absence of roads in the subdivision, or the amount of water continually covering the subdivided land. (Testimony of Shirley Arthur; Pet. Ex 4) As president of Florida Crown Corporation, Murray Fields sold subdivision lots to many individuals from July 1980 to July 1981. (Pet. Ex. 5 through 14) Most of these deeds reflect documentary stamp taxes in the amount of $5.20 to $13.60). 1/
Recommendation On the basis of all of the foregoing it is recommended that the Department of Business Regulation, Division of Florida Land Sales and Condominiums, issue a Final Order as follows: Ordering Murray Fields to cease and desist from offering or disposing and from partici pating in the offer or disposition of interests in Pinecrest Estates or any other subdivided lands until he has a valid order or registration, delivers a current public offering statement, and otherwise complies with Chapter 498, Florida Statutes: and Ordering Murray Fields to pay to the Division, within 30 days from the entry of the Final Order, a civil penalty in the amount of $5,000 for violation of Section 498.023(1) and Section 498.023(2), Florida Statutes. DONE and ORDERED this 28th day of September, 1984, at Tallahassee, Florida. MICHAEL M. PARRISH 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 28th day of September, 1984.
Findings Of Fact In Spring, 1976 Menkes was employed by FAR to secure property listings for resale. At that time, FAR was engaged in an enterprise whereby advanced fee listings were obtained from Florida property owners. Salesmen known as "fronters" or "qualifiers" were employed to place calls to Florida property owners whose names and phone numbers had been provided to the salesmen by FAR. The prospects were asked if they cared to list their real estate with FAR in anticipation of resale. It was explained that there would be a refundable fee to be paid by the property owner for the listing. The refund was to occur upon sale of the property. If the prospect was interested, then certain literature was mailed out to them. Other salesmen were employed as "drivers" who would make the second contact of the prospect who indicated an interest in listing his property. The driver would secure a signed listing agreement along with a check for $375.00 which constituted the refundable listing fee. There was no evidence that any of the listings obtained by FAR were ever resold. There were, however, three parcels of land in negotiation for sale when the operations of FAR were terminated in June, 1976. There was to be a division separate and apart from the "fronters" and "drivers" to do the actual selling of the property. The listings were advertised in the Fort Lauderdale area but there was no evidence to establish whether or not other advertising occurred. There was a total absence of evidence and, hence, a failure of proof as to the allegations of misrepresentations by Menkes. FREC introduced no evidence to show that Menkes represented that the property could be sold for several times the purchase price, that it would be advertised nationwide and in foreign countries or that the company had foreign buyers wanting to purchase United States property listed with the company. There was no evidence introduced to show that Menkes either made the representations or knew them to be false. There was no evidence introduced to show that Menkes knew that no bona fide effort would be made to sell the property listed. There was no evidence of any nature introduced by FREC to show that Menkes was dishonest or untruthful.
Findings Of Fact At all times pertinent to the Administrative Complaint, the Respondent Kenneth Kasha was licensed by the Petitioner as a registered real estate broker. During that time period he was licensed to trade as Florida Landowners Service Bureau. At present he is the holder of certificate number 0046189, in the position of registered real estate broker. The particulars of his license may be found in Petitioner's Exhibit 4, admitted into evidence. In the years 1975 and 1976, one of the enterprises that Kenneth Kasha was involved in was the solicitation of real estate listings from out-of-state land owners who owned land in the State of Florida. This solicitation led to an agreement with some of those owners to list their property through various publications which Kasha contracted for, with the expectation that his company would make a bona fide effort to sell the property. The general description of the arrangement between Kasha, operating as Florida Landowners Services Bureau, and his owner/clients, was to have the owner pay a fee of $250 to $300 to have their property listed by Kenneth Kasha, trading as Florida Landowners Services Bureau. Kenneth Kasha solicited the owners by phone personally and through real estate salesmen who were involved in the solicitation. Kenneth Kasha's statement of his participation may be found in the deposition which is part of Petitioner's Composite Exhibit 8, the deposition being admitted into evidence. This deposition is a part of the record of the proceedings of the State of Florida, Department of Business Regulation, Division of Florida Land Sales and Condominiums v. Kenneth Kasha d/b/a Florida Landowners Service Bureau. The deposition was taken on March 26, 1976. In that deposition Kasha was asked if he solicited for the type of listing which is the subject of this case and if he made this solicitation via the telephone. At page 39 of that deposition he states that he did and indicates that the principal place of business of Florida Landowners Service Bureau at the time of the deposition was at 561 NE 79th Street and was the place solicitations were made from. A more complete description of the techniques involved in a solicitation is given by the witness, Alfred Landin. Alfred Landin testified in the proceedings by the Petitioner against Kenneth Kasha t/a Florida Landowners Service Bureau. Mr. Landin correctly stated that he worked for the General American Realty Corporation as a real estate salesman from January, 1975 through February, 1976. His testimony established that he began to make the form of solicitation in behalf of the Florida Landowners Service Bureau in August, 1975. His participation was by agreement between the General American Realty Corporation and the Florida Landowners Service Bureau to have certain salesmen employed by General American Realty Corporation make phone solicitations for Florida Landowners Service Bureau. Those employees of General American Realty Corporation were then paid by their corporation, who had been paid by Florida Landowners Service Bureau under an agreement between that business and the General American Realty Corporation. Alfred Landin took approximately 75 to 100 listings for the Florida Landowners Service Bureau for which he charged the owner $250 to $300 for each listing. He in turn received 30 percent to 40 percent of the listing amount as his payment. He did not receive real estate commissions following any sale of the property which was listed with Florida Landowners Service Bureau. In fact, no commissions have been received, because no property has been sold under the listing agreements, at least as of the date of the Kasha deposition of March 26, 1976. In that deposition he states that none of the property listed by Florida Landowners Service Bureau had been sold. Moreover, Alfred Landin's testimony established that the salesmen who were the contact people for the solicitation for the listings were paid on the basis of obtaining the listings, in opposition to being paid commissions for selling' the property. When Landin would call a prospective owner to solicit the listing, which will now be referred to as "advance fee" listings, he did it based upon a list of prospective clients made available in the office of General American Realty Corporation. He would tell the potential "advance fee" client that the property that they listed with the Florida Landowners Service Bureau would be advertised within and without the United States. He did not indicate which form of media advertising would be utilized. Landin was unaware of the steps which Florida Landowners Service Bureau would specifically take to bring about the sale of the listed properties, because the arrangement with General American Realty Corporation was not to consummate the sale of the property through General American Realty Corporation's salesman. Landin did tell the owners that Florida Landowners Service Bureau would be responsible for advertising the properties for the purpose of sale. Furthermore, the indication was that a bona fide effort would be made to sell the property. The contact which Landin had with the out-of-state owners, in terms of the dialogue, was not by any particular script. It would be designed according to the nature of the property of the person being solicited. In the course of the conversation the property owner would submit his price and that information and other information would be forwarded to Florida Landowners Service Bureau. At all times when a prospective customer was called Landin introduced himself by name and his connection with Florida Landowners Service Bureau. The usual technique was to make an original contact call and then a follow-up call. Although a second individual working for Florida Landowners Service Bureau normally made the follow-up, call, Landin at times would make those calls. On those occasions, between the time of the initial call and the follow-up call, certain materials would be mailed to the prospective purchaser of a listing agreement. Landin identified three forms which are numbered 1, 2, and 3 and are part of the Respondent's Exhibit No. 11 admitted into evidence. They are the mailouts. (The Respondent's Exhibit No. 11 admitted into evidence is constituted of certain information pertaining to the listing of the Florida Landowners Service Bureau's "advance fee" property through the media National Multiple Listing, Inc.) In a follow-up call there would be discussion about the meaning of the listing and brokerage agreement which is number 3 in the group of documents. Landin established that in these follow-up conversations the purpose of the listing fee was brought out and the owner was told that the listing fee would be used to compensate for the costs involved of the listing; for example advertising. The three documents in Respondent's Exhibit No. 11 are the crux of the contractual agreement between Florida Landowners Service Bureau, the company of Kenneth Kasha, and his "advance fee" listing clients. The three documents in Respondent's Exhibit No. 11 are the same in their form as those documents appended to the Kenneth Kasha deposition of March 26, 1976, which has been mentioned before. In that deposition Kasha admits that those three documents were mailed out to the "advance fee" listing clients. The three documents are available for review either in Respondent's Exhibit No. 11 or the attachments to the admitted portion of Petitioner's Exhibit No. 8, which is the Kasha deposition. The significant portions of those exhibits, in terms of the factual allegations against the Respondent, begin with Paragraph 3 of the document number 1 which states, "your property legals are checked thoroughly." In his deposition of March 26, 1976 Kasha indicated that what actually occurred was that Florida Landowners Service Bureau would receive a copy of the client's deed or agreement for deed and verify this with the developer to see if it indicates on the developer's books or records that the individual actually owned a specific piece of property in question. Kasha stated that his company did not check with the title company, but did check the tax records of various counties to see whether or not the individuals owned the particular piece of property set forth in their deeds. Continuing the examination of document 1, the next sentence in Paragraph 3 states, "an ad is constructed for your property(s) and published in our brochures and catalog which is distributed to several thousand brokers and investors NATIONALLY AND INTERNATIONALLY." The advertising that was done by Kenneth Kasha t/a Florida Landowners Service Bureau, which was established in the course of the hearing is constituted of several media approaches. One of those approaches was found in Respondent's Exhibit No. 2 admitted into evidence which is a copy of a magazine February, 1976, the magazine being a publication of the International Federation of Real Estate Brokers which has membership in 39 countries. It can be seen, the advertisement is an ad which allows the purchase of a catalog for the price of $4.00 or free to the members of the International Real Estate Federation. A copy of this form of catalog is the Petitioner's Exhibit No. 12 admitted into evidence. This catalog lists multiple properties by the owner's name, the owner's asking price, and a rough description of the location in terms of the municipality if any, county, and state, subdivision or development if applicable and a rough description of the size of the parcel. The catalog would not allow the prospective purchaser to specifically locate the property. At best it would allow the location of the development or sub-division. A second form of advertising which the Respondent utilized in the time period in question was listing with the National Multiple Listing, Inc. Those listings were also multiple listings on a single page of the type previously discussed in describing the catalog. Access to those listings was based upon Kasha's purchase of circulation and it reached as many as 2,500 plus distributees in various areas of the United States. (The number assigned to the individual properties advertised by National Multiple Listing, Inc. corresponds to some of the invoices found in the Petitioner's Composite Exhibit No. 11, which invoices were paid by Kenneth Kasha to have the listings published. There is a further correlation between those numbers and the numbers affixed to the certificates issued by National Multiple Listing, Inc. to the Respondent verifying the circulation of the listings. Those certificates are found as Respondent's Exhibit No. 12 admitted into evidence.) A compilation of those payments from Kenneth Kasha, as the owner of Florida Landowners Service Bureau, to the National Multiple Listing, Inc. for the period of June, 1975 through June, 1976 may be found as Respondent's Exhibit No. 7 admitted into evidence. The total cost for advertising in that time period was $3,583.82. Kasha also advertised his catalog in the Miami Herald, the Chicago Tribune and one German paper, entitled, Blick. This advertising was in the period of late 1975 and early 1976. The advertising is established through the Respondent's Exhibit No. 12A and a portion of Petitioner's Exhibit No. 8 which is the deposition and attachments of Kenneth Kasha taken March 26, 1976. 14 The fourth paragraph of document 1 states in its initial sentence. "In order for us to successfully merchandize and receive the highest offer for your property(s) considerable expense is involved because a great deal of time is put forth on your behalf and many of the property(s) are being offered for sale sight unseen. Therefore, we must constantly furnish prospective purchasers with factual updated information re: your listing(s). Your fee helps to defray expenses of estimating value, merchandizing, advertising, brochuring and cataloging this information here and abroad." The extent of advertising and brochuring has previously been discussed. The estimate of value is based upon the individual's price and the Florida Landowners Service Bureau does not concern itself with zoning and development in trying to get the price established. This conclusion is premised on Mr. Kasha's testimony of March 26, 1976 before the Division of Florida Land Sales and Condominiums. Therefore, by Mr. Kasha's opinion there was no expense to be defrayed in estimating value. The only other merchandizing that was done other than that discussed in the advertising techniques may be found in the description by Robert Wandler who worked for Kenneth Kasha and was involved with Florida Landowners Service Bureau as a real estate salesman. The period of his employment is not established through Mr. Wandler's testimony, but it appears to be within the time frame of the Administrative Complaint and the other testimony given. Mr. Wandler stated that he tried to sell the property listed through the "advance fee" process by contacting hotels and hotel clerks who had connection with Columbian businessmen. This area of contact was in South Florida. His reasons for contacting the Columbians was due to the fact that he speaks Spanish fluently. He occasionally showed the brochures to the persons contacted, but none of those persons were interested in purchasing the property. He specifically made reference to Petitioner's Exhibit No. 12 as being the type of brochure or catalog that he showed. He also testified that on several occasions Arabian and Lebanese people in the South Florida area were contacted and seminars were held to discuss the catalog. The Arabian and Lebanese business persons did not purchase any property and did not negotiate with any of the owners for the right to purchase the property. Document No. 2, which is a document entitled, Important Facts, is found in Respondent's Exhibit No. 11. In that document is a question which asks "(Q) Will you help me establish a correct selling price for my property? (A) Yes. While we do not appraise property, Florida Landowners Service Bureau will analyze your property comparing your property to adjacent property, to arrive at a price based on recent sales of neighboring property. The price must meet with your approval. From the testimony in Kenneth Kasha's appearance before the Division of Florida Land Sales and Condominiums it is clear that Florida Landowners Service Bureau did not analyze the property by comparing the property to adjacent property to arrive at a price. They merely relied on the owner's price. One of the other questions in Document No. 2 asks the following: "(Q) How will Florida Landowners Service Bureau sell my property? (A) Review status of development and zoning in the immediate area of your property to recommend the correct selling price for you. List your property in our directory, which is distributed by mail to real estate brokers throughout the world." Kenneth Kasha in the aforementioned deposition stated that 95 percent of the time they did not document the development and zoning to set a price as the ad indicated they would do. In Document No. 3, which is a copy of the listing and brokerage agreement, one of the statements of consideration between the parties is that Florida Landowners Service Bureau as the part of their consideration will: "(b) Contemporaneously with appearance of said listing in the directory, you agree to direct the efforts of your organization to bring about the sale of my property". This should be read in pari materia with the following provision in that Document No. 3 which states: "(c) To advertise said property as you deem advisable in newspapers, magazines, or other mediums of merit". A view of the facts that were established on the question of promoting the sale of the property through advertising or other methods, demonstrates that the Florida Landowners Service Bureau in the person of Kenneth Kasha was not living up to this agreement to bring about a sale in a bone fide fashion. This leads to a consideration of the question of whether the efforts which were taken by Kenneth Kasha t/a Florida Landowners Service Bureau were so fraudulent or deficient that they constitute violations of the provisions of Chapter 475, F.S. that are alleged in the Administrative Complaint. The general contention of the Administrative Complaint in Count I is that the solicitation of the property owners was a scheme to fraudulently secure money through the "advance fee" for reason that no bone fide effort was made to sell the property listed with Kenneth Kasha, t/a Florida Landowners Service Bureau. As indicated before there was no bone fide effort made to sell the property. More particularly, in terms of stating grounds for action against the Respondent's license, the course of conduct by the Respondent personally and through his company, Florida Landowners Service Bureau, demonstrates that he is guilty of fraud, misrepresentation, false promises, false pretenses, dishonest dealing, trick, scheme or device and breach of trust in a business transaction in this state and has violated the duty imposed upon him by law or the terms of listing contract in a real estate transaction; and has formed an intent, design, or scheme to engage in said misconduct and has committed overt acts in furtherance of such intent, design or scheme, all in violation of 475.25(1)(a) F.S. The course of conduct by Kenneth Kasha personally and trading as Florida Landowners Service Bureau shows him to be guilty of conduct or practices which show that he is dishonest and untruthful to the extent that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not be safely entrusted to him, as set forth in 475.25(3) F.S.
Recommendation Upon consideration of the facts in this cause, it is recommended that the Petitioner, Florida Real Estate Commission, revoke the real estate broker's license, certificate number 0046189, held by the Respondent. DONE and ENTERED this 17th day of February, 1978, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Kenneth Kasha P.O. Box 611238 North Miami, Florida 33161 Richard J.R. Parkinson, Esquire and Louis Guttmann, Esquire Florida Real Estate Commission 400 West Robinson Street Orlando, Florida 32801 ================================================================= AGENCY MEMORANDUM ================================================================= Orlando, Florida June 15, 1979 MEMORANDUM TO: Renata Hendrick, Registration Supervisor FROM: Fred Langford, Staff Attorney RE: Revocation of Kenneth Kasha - PD No. 3014 004618904 DOAH Case No. 77-1299 Attached please find a copy of the Final Order, Mandate and Order from the Third DCA concerning Kenneth Kasha. The effective date of revocation is December 21, 1978. /FL:bam Attachments* Fred Langford Staff Attorney * NOTE: Attachments noted are unavailable at the division and therefore not a part of this ACCESS document.
The Issue Whether Petitioner should be granted an exemption under Section 478.221(3), Florida Statutes, from the provisions of the Florida Uniform Land Sales Practices Law, Chapter 478, Florida Statutes. By stipulation dated February 14, 1978, the parties agreed that the Division of Administrative Hearings take jurisdiction in the matter under Section 120.57(1), in the absence of disputed issues of material fact. The parties also agreed to waive the notice requirements under Chapter 120. The parties stipulated to the facts of the case (Exhibit 4), and to the admission in evidence of Petitioner's application and supporting documents (Composite Exhibit 1), a letter of Respondent acknowledging receipt of the Claim of Exemption dated July 15, 1977, (Exhibit 2), and Respondent's notice to Petitioner, dated September 19, 1977, that the Claim of Exemption was rejected (Exhibit 3). Petitioner submitted an answer filed by the Respondent as Defendant in civil judicial proceedings based on its denial of the exemption claim in the Circuit Court of Leon County, Case No. 77-220, which was rejected by the Hearing Officer as irrelevant to the proceedings in view of the accepted Stipulation of Facts. (Appellate Exhibit 1)
Findings Of Fact The Stipulation of Facts is as follows: On July 14, 1977, Petitioner submitted to the Respondent and the Director thereto, a claim of exemption as required by Florida Statute 478.221(3); and claiming compliance with the provisions thereunder. Pursuant to the discretionary authority as provided for in Section 478.221(3), Florida Statutes, the Director of the Division of Florida Land Sales and Condominiums, by letter dated September 19, 1977, informed Petitioner that its claim for exemption was denied. Said letter is attached hereto and incorporated herein by reference as exhibit 1. The substance of said letter indicated that the Director, pursuant to his discretionary authority, provided for in Section 478.221(3), Florida Statutes, was not satisfied "that all necessary conditions of the exemption are present, i.e., in particular that the property is usable for the purpose for which it is offered." Said denial was based upon a letter received from the Chairman of the Board of County Commissioners of the County of Martin, State of Florida, dated August 8, 1977, and objecting to any exemption on the grounds that: "Gold Coast Ranches has not applied to Martin County for plat approval as required in our subdivision regulations," and; "Gold Coast Ranches, Inc., has not applied for road opening permits as required by Martin County ordinances." Said letter from the County of Martin, also indicated that since the parcels created by Gold Coast Ranches, Inc., were smaller than 20 acres, they were subject to the subdivision regulations of the County. A copy of said August 8, 1977, letter from the Chairman of the Board of County Commissioners, for the County of Martin, State of Florida, is attached hereto and incorporated herein by reference as Exhibit 2. The roads proposed by Gold Coast Ranches, Inc., are to be of a private nature. The subdivision in question is not to be platted, but lots are to be sold pursuant to a metes and bounds description in excess of 5 acres.
Recommendation That Respondent deny Petitioner's request for exemption pursuant to Section 478.221(3), Florida Statutes. Done and Entered this 16th day of March, 1978, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Lawrence D. Winson, Esquire 725 South Bronough 210 Johns Building Tallahassee, Florida 32304 L. M. Taylor, Esquire Post Office Box 14577 North Palm Beach, Florida 33408
Findings Of Fact Roy Ahringer, hereinafter referred to as "Respondent" has held real estate broker-salesman license number 0158288 at all times material hereto. From approximately August 15, 1983 to November 20, 1983, and from approximately March 1, 1984 to April 30, 1984, Respondent was licensed and operated as a real estate salesman in the employ of Highlands Holiday Realty, Inc., a licensed brokerage Corporation. On or about August 11, 1983, Highlands Holiday Realty, Inc., obtained from Mildred M. Haydon, as owner, a six month listing to sell certain property designated as Lot 9, Block 353, Section 26 Lake Placid, at a price of "any reasonable cash offer". By the terms of this listing agreement, the listing would continue beyond the six month period "until this agreement is revoked by a ten day's written notice" delivered by the owner to Highlands Holiday Realty, Inc. There is no evidence that this listing agreement was ever revoked and it remained in effect during the time Respondent was employed at Highlands Holiday Realty, Inc. Respondent was therefore an agent for Mildred M. Haydon. While this listing agreement was in effect, Respondent obtained a sales contract on March 29, 1984, executed by Robert J. and Marjorie P. Mitchell, as purchasers, for the purchase of Mildred M. Haydon's Lot 9 at a total purchase price of $5000. On April 30, 1984, the Mitchells executed two checks totaling $5000 to Highlands Holiday Realty which were to be placed in a trust account for this transaction. The contract was initially prepared omitting the name and address of the seller but was later completed by Respondent by having a secretary at Highlands Holiday Realty Inc. type in the names of Roy Ahringer and May Ahringer as sellers. On March 31, 1984 Respondent and his wife, May Ahringer, executed a contract for sale and purchase of Mildred M. Haydon's Lot 9 for the purchase price of $2220. Mildred M. Haydon executed this contract for sale and purchase on April 4, 1984. Subsequently this transaction closed and Respondent, with his wife, purchased the subject property for $2220 on or about May 23 or 24, 1984. The evidence presented establishes that Respondent did not explain to the Mitchells or to Mildred M. Haydon that he would be purchasing the property for $2220 from Mildred M. Haydon and then reselling the property to the Mitchells for $5000. Mildred M. Hayden was not informed of the Mitchell's offer of $5000 for her lot prior to her sale of the lot to Respondent. It is Respondent's contention that he told the Mitchells he was having a problem with the lot owner and that he might have to buy it from her in order to be able to resell it to the Mitchells. However, no evidence supporting this assertion was presented by Respondent, and in any event there is no evidence that the Mitchells or Mildred M. Haydon knew about the difference in the purchase and resale prices which would have resulted from this transaction. When the circumstances surrounding this transaction became apparent to Ronald N. Weisser, broker and owner of Highlands Holiday Realty, Inc., he stopped the Ahringer-Mitchell transaction, and the $5000 paid by the Mitchells for this lot has been returned to them. Respondent still owns the subject property. Mildred M. Hayden was damaged in an amount of approximately $2780 due to Respondent's failure to present the Mitchells' offer to her. The Mitchells were damaged in an amount equal to the interest they were required to pay on money borrowed for the purchase price during the period when the funds were retained in a non-interest bearing escrow account. The parties were allowed to submit post-hearing proposed findings of fact pursuant to Section 120.57(1)(b)4, F.S. A ruling on each proposed finding has been made either directly or indirectly in this Recommended Order except where such proposed findings of fact have been rejected as subordinate, cumulative immaterial or unnecessary.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is recommended that a Final Order be issued suspending Respondent's license for a period of two (2) years and imposing an administrative fine in the amount of one thousand dollars ($1000). DONE and ENTERED this 10th day of June, 1985 at Tallahassee Florida. Hearings Hearings DONALD D. CONN, Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 10th day of June, 1985. COPIES FURNISHED: James Gillis, Esquire Post Office Box 1900 Orlando, Florida 32802 Roy Ahringer 232 Harmony Avenue Lake Placid Florida 33852 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue posed for decision herein is whether or not the Respondent properly denied Petitioner's refund request for that portion of his Foresters licensing fee for the period July 1, 1979, through December 31, 1981.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, and the entire record compiled herein, the following relevant facts are found. John T. Clark, Petitioner, is a licensed Florida Forester and, as such, received during December of 1978 a notice mailed by the Board of Registration for Foresters a license fee request for the period of January 1, 1979, through December 31, 1981. Petitioner timely submitted his license fee for the registration period in question. The Forestry Practice Act expired on June 30, 1979, based upon a veto by the Governor. (Chapter 76-168 as amended by Chapter 77-457, Chapter 6, Florida Statutes, the "Sunset Act".) Petitioner, by letter dated July 2, 1979, requested a refund of the license fee paid for the eighteen-month period of July, 1979, through December, 1981. On October 22, 1979, Gerald A. Lewis, Comptroller, advised Petitioner of the Respondent's notice of intent to deny his refund. That notice alleged in pertinent part that "pursuant to an Attorney General Opinion dated January 27, 197P) (AGO No. 078-14), Section 215.26, Florida Statutes, as construed by Florida Courts, provides that refunds may only be made from the funds benefited and if such fund does not have sufficient monies. . . to make the requested refunds, then the refunds cannot be made absent a specific legislative appropriation or claims bill." Petitioner was then advised that the fund benefited by the license payment did not have sufficient monies to pay the requested refund and, therefore, the request would be denied. Florida Statutes 215.26(1)(a) provides in pertinent part that the Comptroller of the State may refund to the person who paid same . . . any monies paid to the State Treasury which constitute: An overpayment of any tax, license or account due. Petitioner introduced into evidence the financial statement for the Board of Registration for Foresters for the quarter ending October 31, 1979, which indicates that as of October 31, 1979, the Board of Foresters had total net resources available of $17,767.91. (Petitioner's Composite Exhibit 1.) At the time Petitioner remitted his payment, the amount remitted was correct under the laws and applicable rules of the Board of Registration for Foresters then in effect. Rule 211-2.06, Rules of the Board of Registration for Foresters, Florida Administrative Code. However, the parties also further agree that the payment tendered was a regulatory fee (as contrasted to a tax) and was used to defray the cost of regulation, and not as a general revenue producing measure. As such, the monies were deposited in a regulatory trust fund which of course reflects the fact that monies are available in said fund and which, in this instance, can be used as a refund for any overpayments. It is further undisputed that the period of regulation was for a two-year period while the regulation only lasted six months. In view of these factors, Section 215.26(1))a), Florida Statutes, authorizes a refund of an overpayment such as was paid by the Petitioner in this case. I shall so recommend.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby, RECOMMENDED: That the Petitioner's refund request of July 2, 1979, be GRANTED. RECOMMENDED this 3rd day of March, 1980, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675
Findings Of Fact The land encompassed within the mobile home park known as Mohawk Village was purchased by Winter Springs Mobile Home Corporation, a corporation owned and controlled by the Tanner family. The majority of the stock in Respondent is owned by the oldest son; another son is president of Respondent; and the father, L. William Tanner, served as "consultant" to the corporation. This tract was initially divided into some 700-odd lots which were being sold to the public in 1980 as mobile home sites. The land was purchased from North Orlando Sewer and Water Company, which agreed to provide sewer and water services to the subdivision and to have these facilities in place by January 1, 1981. Respondent never registered with the Petitioner in accordance with Chapter 498, Florida Statutes. North Orlando Sewer and Water Company failed to provide sewer service to this development and none of the home sites were available for occupancy January 1, 1981, as promised to buyers by Respondent. Without sewer service it became necessary to go to septic tanks and this required larger lots per mobile home site. The tract was replatted to provide 300-odd lots despite the previous sale of smaller lots to buyers. These buyers were advised their lots would have to be swapped and when some objected and demanded their money back, without success, Petitioner was made aware of the development and investigated. The investigation led to the entering of a Cease and Desist and Consent Order (Exhibit 1). Therein Petitioner essentially agreed to forego action against Respondent for prior violations of Chapter 498, which Respondent contended it was subject to; and Respondent agreed to cease all leasing until the site was ready for occupancy, to provide Petitioner with copies of all leases in effect, as well as copies of all future leases executed, to deposit funds received from buyers in escrow until after receipt of a certificate of occupancy, and to take necessary steps to ensure all future leases fall within the statutory exemptions set forth in Section 498.025(1)(g), Florida Statutes. L. William Tanner was paid a consulting fee by Respondent "in the ballpark of $100,000." In addition, he was to own the companies that provided utilities to the park (after default by North Orlando Sewer and Water Company), and furnished porches, decks, built walkways, roads, etc. Following the Consent Order funds were received payable to Tanner-controlled companies that were not deposited in the escrow account. These funds were not lease payments but came from the lessees for sewer and water hookups, porches, decks, etc. Mohawk Village received its first certificate of occupancy on 14 January 1982. Between 17 April 1981, when the Consent Order was entered, and 14 January 1982, lot leases were sold to Gould on 30 November 1981; to Herring on 12 September 1981; and to Roberts on 14 January 1982 (Exhibit 6). The sales to Gould and Herring were clearly during the period Respondent had consented not to sell leases. Exhibit 1 authorized Respondent to renegotiate and relocate current lessees to new mobile home sites under a plan to use alternate utility services from those initially to be provided by North Orlando Sewer and Water Company "if such plan is implemented at no additional cost to the individual lessees." Those who had bought leases under the original scheme agreed to pay $29 per month to lessor. Leases sold after the decision to use septic tanks where the number of lots was reduced from 700-odd to 300-odd, provided the lessees would pay the lessor $59 per month. Respondent advised the earlier lessees that they would have to pay $59 per month in lieu of $29. When they objected and demanded refunds of what they had paid, some of them were promised refunds but to date very few have received any refunds. Changing their rental fee from $29 to $59 violated the Consent Order. The only change in the lease before and after the execution of the Consent Order was the change of this monthly rental payment. Since the original lease did not qualify for exemption under Section 498.025(1)(g), Florida Statutes, the amended lease, which merely changed the monthly rental fee, did not qualify for exemption. Leases on these lots were sold at prices ranging from $1,000 to $7,000. At no time relevant hereto did Respondent hold a dealer's license to deal in or sell mobile homes (Exhibit 3) There was no valid reservation program established by Respondent pursuant to Section 498.024, Florida Statutes, nor did Respondent apply for or receive approval of a public offering statement for Mohawk Village (Exhibit 2). All leases sold provided, in addition to a habitable lot, that the seller would provide recreational facilities. Those leases sold in 1980 promised a lot on which the buyer could move his mobile-home by January 1, 1981. Not only was the deadline missed but also Respondent has provided no recreational facilities. One witness who sold her home and bought a mobile home could not move it to the site in accordance with the contract because of lack of utilities and was forced to acquire another residence. Although proper demand was made she has been refunded none of her purchase money. According to his testimony, L. William Tanner has developed about one hundred subdivisions throughout the United States since 1946. Some 20 such subdivisions have been developed by him in Florida. He is aware of the Florida statutes regulating the subdivision and sale of lands, and contends that the Mohawk Village subdivision is exempt because Petitioner does not have jurisdiction over 99-year leases. He further contends that the monthly rental payments of $29 or $59 for 99 years brings the price paid for the lots to more than $50,000, thereby exempting them from the provisions of Chapter 498. Prior to the commencement of this hearing, Mohawk Village was transferred to Gould, who had been involved in supplying mobile homes to lot purchasers in the park. According to Tanner's testimony "it was not much of a sale" with him insisting Gould and Mohician Valley (apparently the new name for the mobile home subdivision) acknowledging existing mortgage, the Consent Agreement with Petitioner, and the obligation to refund the monies. No documentary evidence was presented to show that Tanner or his immediate family does not continue to own controlling interest in this mobile home park.
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.
