The Issue Whether Respondent, John B. Riley ("Respondent"), willfully violated sections 106.11(4) and 106.19(1)(d), Florida Statutes (2016), with regard to a check drawn on his campaign account in the amount of $316.00, made payable to the City of Opa-Locka, without sufficient funds on deposit to pay the $316.00 fee to run in a special election for a seat on the City of Opa-Locka City Commission; or willfully violated section 106.07(5) and willfully and knowingly violated section 106.19(1)(c), with regard to accurately reporting information on his September 12, 2016, M8 Campaign Treasurer's Report ("M8 Report"); and, if so, what civil penalties are appropriate.
Findings Of Fact Respondent is a retired, disabled veteran and currently serves part time as an elected city commissioner for the City of Opa-Locka, Florida. Respondent previously ran for public office on multiple occasions beginning in 1976. He was elected and served as a city commissioner for the City of Opa-Locka in 1982 and as mayor in 1984. This case concerns Respondent's candidacy in 2016 for Opa-Locka city commissioner. On August 11, 2016, Respondent became a candidate in a special election scheduled for November 8, 2016, to fill the un- expired term of former City Commissioner Terence Pinder, who died on May 24, 2016. The qualifying period for the November 8, 2016, special election began on August 1, 2016, and ended on Friday, August 12, 2016, at 12:00 p.m. Respondent appointed himself as treasurer of his campaign and accepted his appointment as campaign treasurer on August 10, 2016. On August 10, 2016, Respondent opened his campaign account with Wells Fargo bank. On that same date, Respondent made an initial cash contribution (loan) deposit into his campaign account in the amount of $250.00. According to the City of Opa-Locka charter, the qualifying fee for the Opa-Locka City Commission seat was $250.00. A separate state assessment fee in the amount of $66.00 was also required to be paid, for a total fee of $316.00. Respondent signed and issued Check No. 100 (dated August 9, 2016) from his Wells Fargo campaign account to the City of Opa-Locka in the total amount of $316.00, for the qualifying fee of $250.00 and state assessment fee of $66.00. At the time he wrote the check, Respondent did not know how much money was in his campaign account. Respondent had a finance committee of five volunteers collecting campaign contributions. Respondent gave the committee members deposit slips, and he instructed them to directly deposit the campaign contributions they received into the Wells Fargo bank campaign account. However, members of the committee bundled and held onto contributions, failing to deposit the contributions into the bank account. The $316.00 check was tendered by Respondent to the City of Opa-Locka on August 11, 2016. The $316.00 check was not paid from the campaign account and was returned unpaid due to insufficient funds. On August 19, 2016, Respondent made an expenditure to Wells Fargo bank in the amount of $35.00, which represented a returned check fee. As indicated in the Commission's Exhibit 18, the returned $316.00 check and $35.00 returned check fee are reflected in a Wells Fargo Bank Statement covering the period of August 10, 2016, through August 22, 2016. However, when the statement was sent by the bank to Respondent, and when Respondent received the statement, is unclear based on the evidence adduced at hearing. On Tuesday, September 6, 2016, Joanna Flores, CMC, city clerk, and supervisor of elections for the City of Opa-Locka (Respondent's filing officer), was informed by the City of Opa- Locka Finance Department that Respondent's $316.00 check was returned because of insufficient funds. On September 7, 2016, Ms. Flores sent Respondent a letter via certified mail and electronic mail informing him that he was disqualified as a candidate for city commissioner on the November 8, 2016, ballot pursuant to section 99.061(7)(a)1., Florida Statutes, because of the returned check and Respondent's failure to pay the $316.00 fee by the end of the qualifying period. After Respondent was disqualified, he had the committee members who had been holding the contribution checks return the checks to the donors. Prior to his disqualification, Respondent never made any additional deposits into his campaign account, and he never had a balance of at least $316.00. Between the submission of his $316.00 check to Ms. Flores and his disqualification, Respondent never checked his campaign account balance to determine the amount of funds available. On September 12, 2016, after he had already been disqualified, Respondent filed his M8 Report for the period of August 1, 2016, to August 31, 2016. Respondent signed the report certifying that he examined the report and that it was true, correct, and complete. On the first page of the September 12, 2016, M8 Report, included within the Commission's Exhibit 5, Respondent indicated a monetary expenditure in the amount of $316.00, the same amount as the required fee. However, Respondent did not identify the $316.00 fee on the third page of the report, which requested a list of "itemized" expenditures. Respondent testified he did not identify the $316.00 check on the list of itemized expenditures because the check had not cleared the bank. Respondent also reported that on August 10, 2016, he made a contribution (loan) to his campaign in the amount of $325.00. Respondent also reported as an itemized expenditure, that on August 20, 2016, he made an expenditure to Wells Fargo bank in the amount of $35.00 for a bank fee. On September 15, 2016, the Florida Supreme Court issued its opinion in Wright v. City of Miami Gardens, 200 So. 3d 765 (Fla. 2016). In Wright, the Supreme Court held section 99.061(7)(a)1., as amended by the Florida Legislature in 2011, facially unconstitutional. The 2011 version of section 99.061(7)(a)1., in effect at the time of Ms. Flores' decision to disqualify Respondent, provided in pertinent part: (7)(a) In order for a candidate to be qualified, the following items must be received by the filing officer by the end of the qualifying period: A properly executed check drawn upon the candidate's campaign account payable to the person or entity as prescribed by the filing officer in an amount not less than the fee required by s. 99.092, unless the candidate obtained the required number of signatures on petitions pursuant to s. 99.095. The filing fee for a special district candidate is not required to be drawn upon the candidate's campaign account. If a candidate's check is returned by the bank for any reason, the filing officer shall immediately notify the candidate and the candidate shall have until the end of qualifying to pay the fee with a cashier's check purchased from funds of the campaign account. Failure to pay the fee as provided in this subparagraph shall disqualify the candidate. § 99.061(7)(a)1., Fla. Stat. (2011) (emphasis added). Respondent was disqualified by the City of Opa-Locka based on the 2011 version of section 99.061(7)(a)1., because the $316.00 check was returned, and Respondent failed to pay the required fee before the end of the qualifying period. After striking down the aforementioned version of the statute as unconstitutional, however, the Supreme Court, in Wright, went on to revive the prior version of section 99.061(7)(a)1., in existence before the 2011 amendments. Wright, 200 So. 3d at 779. The prior version provided, in pertinent part, that if a candidate's qualifying check was returned, the candidate was allowed 48 hours after being notified of that fact by the filing officer to pay the fee by cashier's check, "the end of the qualifying period notwithstanding." § 99.061(7)(a)1., Fla. Stat. (2010); Wright, 200 So. 3d at 768. Based on the Supreme Court's decision in Wright and upon advice from the City of Opa-Locka city attorney, on September 15, 2016, Ms. Flores informed Respondent that he could resubmit a check and be allowed to qualify for the special election. On September 16, 2016, Respondent tendered to the City of Opa-Locka two personal money orders issued by Wells Fargo bank in the amount of $316.00 and $20.00, respectively. Accordingly, Ms. Flores, once again, qualified Respondent as a candidate.1/ Against this backdrop, on September 23, 2016, Anna M. Alvarado, an opponent of Respondent in the special election for the City Commissioner seat, filed a sworn complaint with the Commission, alleging that Respondent committed certain campaign finance law violations. On September 28, 2016, the City of Opa-Locka adopted Resolution 16-9249, resetting the special election that had been set for November 8, 2016, and calling for a special election to be held on November 29, 2016, to fill the unexpired term of Commissioner Pinder. Respondent filed another Campaign Treasurer's Report on October 11, 2016, for the period of September 1, 2016, through September 30, 2016. In this report, Respondent reported as an itemized expenditure the $316.00 qualifying fee. Respondent filed an amended M8 Report on October 17, 2016, for the period of August 1, 2016, through August 30, 2016. In the itemized contributions section of the amended report, Respondent deleted the August 10, 2016, $325.00 loan and added the August 10, 2016, $250.00 loan. In the itemized expenditures section of the amended report, Respondent deleted the August 20, 2016, $35.00 bank fee and added the August 19, 2016, $35.00 bank fee. Respondent knew that he was required to report all contributions received and all expenditures made by the campaign on his Campaign Treasurer's Report. Respondent's filing officer notified Respondent that he was required to certify to the correctness of each Campaign Treasurer's Report and that he bears the responsibility for the accuracy and veracity of each report. Respondent's filing officer provided him with a copy of chapter 106 and The Candidate and Campaign Treasurer's Handbook. Respondent read chapter 106. In sum, the Commission failed to demonstrate, by clear and convincing evidence, that Respondent willfully violated sections 106.11(4) and 106.19(1)(d), when he signed the $316.00 check drawn on his campaign account without sufficient funds on deposit to pay the amount of the fee. Respondent did not voluntarily and intentionally bounce the $316.00 filing fee check to the City of Opa-Locka with specific intent and bad purpose to violate or disregard the requirements of the law. Respondent credibly and persuasively testified that he had a committee of volunteers collect campaign contributions; he instructed the committee members to directly deposit the contributions into the Wells Fargo bank account; the committee members failed to deposit contributions into the account; and he was unaware of the account balance when he tendered the fee to Ms. Flores on August 11, 2016. Respondent's testimony was unrefuted. Moreover, it makes no sense that Respondent would intentionally bounce his filing fee check he tendered to Ms. Flores on the last day of the qualifying period, knowing that the consequence of such action would disqualify him from the race under the law existing at that time. The Commission also failed to demonstrate, by clear and convincing evidence, that Respondent willfully and knowingly omitted information from his September 12, 2016, M8 Campaign Treasurer's Report. The Commission contends Respondent failed to disclose the $316.00 filing fee on the report. As detailed above, that check bounced. Nevertheless, Respondent, in fact, reported the $316.00 filing fee check as an expenditure on the first page of the report, although Respondent did not identify the check on the third page of the report as an "itemized" expenditure. Respondent also filed another Campaign Treasurer's Report on October 11, 2016, for the period of September 1, 2016, through September 30, 2016. In this report, Respondent reported as an itemized expenditure the $316.00 qualifying fee. The Commission also contends that although Respondent made a contribution (loan) to his campaign account in the amount of $250.00 on August 10, 2016, he willfully and knowingly reported the amount as $325.00. The Commission further contends that although Respondent made an expenditure to Wells Fargo bank on August 19, 2016, in the amount of $35.00, he willfully and knowingly reported that the expenditure had been made on August 20, 2016. As detailed above, Respondent corrected these errors in an amended report. The Commission also failed to demonstrate, by clear and convincing evidence, that Respondent willfully certified that the campaign's September 12, 2016, M8 Report was true, correct, and complete, when it was not.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint issued against him and, if so, what disciplinary action should be taken against him.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Respondent is now, and has been at all times material to the instant matter, registered as a septic tank contractor with the Department. In July 2002, Respondent entered into a contract with Pro Gold Investments Corp. (Pro Gold), whose president and sole owner is Emerico Kemeny Fuller. The contract provided that Respondent would install a "new septic system" for Pro Gold at 453 Blue Road in Coral Gables, Florida (Blue Road Property) for $4,600.00, a job that should have taken only a "few days" to complete. Pro Gold gave Respondent a "job deposit" of $2,300.00. In July 2003, Pro Gold, by Warranty Deed, conveyed title to the Blue Road Property to Maurits de Blank's company, Mortgage Lending Company LLC (MLC), and it also executed a Bill of Sale, Absolute and Assignments of Contracts, which read as follows: PRO GOLD INVESTMENTS CORP, as Seller, in consideration of Ten Dollars ($10.00) and other valuable consideration paid to it by MORTGAGE LENDING COMPANY, LLC, as Buyer, the receipt of which is acknowledged hereby sells, assigns, grants, transfers, and conveys to Buyer all of Seller's right, title, and interest in the following described goods, contracts and personal property: SEE ATTACHED EXHIBIT "A- PROPERTY" AND EXHIBIT "B- CONTRACTS ASSIGNED" Seller covenants and agrees that it is the lawful owner of goods, contracts, rights or interests transferred hereby; that they are free from all encumbrances, except for outstanding amounts due, if any, to those parties set forth on Exhibit "B," and that it has the right to sell, transfer and assign the goods, properties and rights set forth in the attached Exhibit "A," and the right to transfer and assign the contracts, rights or interests shown on Exhibit "B," and will warrant and defend same against the lawful claims and demands or all persons. The "attached Exhibit 'A- Property'" read, in pertinent part, as follows: (Regarding transfer of 453 Blue Road, Coral Gables, Florida, "the Real Property") (Mortgage currently in favor of Mortgage Lending Company, LLC "the Mortgage") All property rights of any kind whatsoever, whether in property that is real, fixed, personal, mixed or otherwise and whether in property that is tangible or intangible, including, without limitation, all property rights in all property of any kind whatsoever that is owned or hereafter acquired by the Company and that is associated with, appurtenant to or used in the operation of the Real Property or is located on, at or upon the Real Property and is associated with or used in connection with or in operation of any business activity conducted on, at or upon the Real Property, and including, without limitation, the following: * * * All right, title, and interest in those certain contracts and agreements [set] forth in the attached Exhibit "B," which are hereby transferred and assigned to Mortgage Lending Company LLC. Among the "contracts and agreements [set] forth in the attached Exhibit 'B,'" was the aforementioned July 2002, contract wherein Respondent agreed to install a "new septic system" for Pro Gold on the Blue Road Property (Septic System Contract). This contract was still executory. Respondent had not done any work on the site in the year that had passed since the contract had been signed. In the beginning of August 2003, Mr. de Blank met with Respondent and advised him that MLC was the new owner of the Blue Road Property and that MLC had also received an assignment of the Septic System Contract from Pro Gold. In response to this advisement, Respondent stated "he did not do assignments." Following this meeting, Mr. de Blank sent Respondent documentation supporting the assertions he had made regarding MLC's ownership of the Blue Road Property and its having been assigned the Septic System Contract. Mr. de Blank then attempted, unsuccessfully, to make contact with Respondent by telephone. He "left messages," but his telephone calls were not returned. These efforts to telephonically communicate with Respondent having failed, Mr. de Blank "decided that it may make some sense to start a letter writing program." As part of that "program," on September 8, 2003, Mr. de Blank sent Respondent the following letter: Re: 453 Blue Road, Coral Gables As background, and in chronological order: Pro Gold Investments purchased the above cited property and obtained a construction loan from our firm. One of the conditions was that all construction contracts would be assignable to our firm in the event of default. Pro Gold Investments entered into contract with your firm to install a new septic tank and drainfield at 453 Blue Road. Pro Gold Investments defaults and forfeits title in lieu of foreclosure. The deed was recorded on August 4, 2003, at Bk/Pg: 21484/4283. Not recorded but attached for your reference is an assignment of contracts to include the contract Pro Gold Investments entered into with your firm. See further attachment. The original can be inspected in my office. At this point, I request you proceed with the work as soon as practical and under identical conditions as originally agreed with Pro Gold Investments. Please call me at . . . to confirm a start date. Mr. de Blank did not receive any response to his letter. He finally was able, however, to reach Respondent on the telephone. During this telephone conversation, Mr. de Blank made arrangements to meet Respondent at the Blue Road Property to discuss Respondent's doing the work Respondent had agreed to do in the Septic System Contract. This meeting between Mr. de Blank and Respondent took place on September 11, 2003. During the meeting, Mr. de Blank went over with Respondent "what the job [was] going to be." Although Respondent indicated that he was "going to put in th[e] septic tank" per the Septic System Contract, Mr. de Blank had his doubts that Respondent would be true to his word. Following the meeting, Mr. de Blank sent Respondent the following letter: Re: 453 Blue Road, Coral Gables We met today to discuss the above referenced job. My understanding is: You will start the job no later than the first week of October and will complete the job no later th[a]n the last week of October. I will obtain a copy of the approved permit. You indicated you will not need a survey.[1] Should you change you[r] mind, you can always refer to a survey I keep on site. You will have your insurance agent mail to my address a certificate of insurance. Though not discussed: I would like a partial release of payments made to date for the job. See further the attachment. Assuming you concur, then please send a signed and notarized copy to Maurits de Blank, Mortgage Lending Company, Post Office Box 430336, Miami, Florida 33143. Note that I prefer for various legal reasons that you use the release form as provided. Once the job has been started, I would like a list of firms supplying materials to the job. Notwithstanding that he had promised Mr. de Blank that he would "start the job no later than the first week of October," by the middle of October Respondent had yet to even "pull a septic tank construction permit from the City of Coral Gables" (that was needed before any on-site work could begin).2 In an attempt to find out from Respondent what was the cause of the delay, Mr. de Blank started a "calling campaign," but Respondent neither answered the telephone when Mr. de Blank called nor returned Mr. de Blank's calls. On October 19, 2003, Mr. de Blank sent the following letter to Respondent (by certified United States Mail, return receipt requested): Re: 453 Blue Road, Coral Gables I need a firm commitment when you will start and finish septic tank at above address. If you cannot perform the work, then I will need a refund of the deposit given to your firm. Please call to discuss. The end of the month was fast approaching, and Respondent had neither contacted Mr. de Blank nor begun the Septic System Contract on-site work. After paying a visit to Coral Gables City Hall and learning that Respondent had still not even "pull[ed] a septic tank construction permit from the City of Coral Gables," Mr. De Blank found another septic tank contractor, Westland Septic Tank Corp., to do the installation work for MLC that Respondent was contractually obligated to perform. MLC paid Westland $4,400.00 to do the work. Westland completed the job some time prior to November 4, 2003. The work passed all of the necessary inspections. Upon learning that MLC had contracted with Westland, Respondent sent Mr. de Blank a letter complaining that Mr. de Blank had not given Respondent an adequate opportunity to meet his obligations under the Septic System Contract. In the letter, Respondent offered to return only $500.00 of the $2,300 down payment he had received from Pro Gold. Mr. de Blank subsequently informed Respondent that this was not satisfactory and that he wanted the "full deposit back." He added that if he did not get it, he would "go to court." Not having received any portion of the "deposit back," Mr. de Blank, acting on behalf of MLC, in mid-November 2003, filed suit against Respondent in Miami-Dade County Court. On May 14, 2004, a Final Judgment was entered in Miami-Dade County Court Case No. 0313813 in favor of MLC and against Respondent "in the amount of $1,675.00 plus court costs in the amount of $121.00." As of the date of the final hearing in this case, Respondent had not made any payments to MLC. In view of the foregoing, it is found that Respondent abandoned for 30 consecutive days, without any apparent good cause, a project in which he was under contractual obligation to complete; and his failure to go forward with the project, combined with his failure to return any of the deposit he had received, caused monetary harm to a party to whom he was contractually obligated.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that the Department issue a final order finding Respondent guilty of the misconduct alleged in the Administrative Complaint and disciplining him therefor by fining him $500.00 and suspending his registration for 90 days. DONE AND ENTERED this 4th day of February, 2005, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of February, 2005.
