Findings Of Fact From August 18, 1976 to December 30, 1977, the date of corporate resignation, O'Brien was President, broker and active firm member for Exclusively. O'Brien also had a separate broker operation which was, and continues to be, conducted at another location as William O'Brien Registered Real Estate Broker. During the August 1976 - December 1977 period, Cocoran was a real estate salesman for Exclusively, and continued to conduct brokerage operations as Exclusively after O'Brien's December 30, 1977 resignation. Corcoran became Exclusively's broker on January 24, 1978. Corcoran was apparently the sole owner of the corporation, although O'Brien understood he was to have been a 52 percent shareholder. On October 5, 1977, O'Brien, after being advised, instructed his staff to place all moneys received from rentals in Exclusively's escrow account. Checks on this account required the signature of both O'Brien and Corcoran; the operating account checks were signed by Corcoran. On October 10, 1977, O'Brien went into the hospital and was unable to operate Exclusively's business. After he found out that moneys were not being properly accounted for and handled in mid-December, O'Brien resigned from the corporation December 30, 1977. On February 9, 1978, in an attempt to satisfy some of the claims against Exclusively, O'Brien, on advice of his attorney, signed checks on Exclusively's escrow account. These checks were dishonored by the bank as that account had been frozen. O'Brien and/or Corcoran and Exclusively were involved in-the following 18 specific transactions: About October 4, 1977, Robert Seneca extended his lease with Edward "Whitey" Ford on a condominium unit located at Suite 274, 234 Hibiscus Avenue, Lauderdale-by-the-Sea, Florida, paying to Exclusively $275.00 for the additional one month's rent. The $275.00 was deposited into Exclusively's operating account In the Sun Bank of Wilton Manors. About November 28, 1977, a check was drawn by Corcoran on the operating account for $247.50, payable to Ford, said sum representing the rental less commission. The check was subsequently dishonored due to insufficient funds and at no time subsequent has Ford received the funds due him. About November 21, 1977, a check for $600.00 was received by Exclusively as payment for rental on Edward "Whitey" Ford's condominium unit located at Suite 274, 234 Hibiscus Avenue, Lauderdale-by-the-Sea, Florida, from Julius Zinn. This $600.00 was deposited to Exclusively's escrow account and on February 9, 1978 a check was issued on Exclusively's escrow account to Ford for $540.00. The check was subsequently dishonored and Ford has not received the funds due him. About November 12, 1977, Samuel Mathes entered into a contract to lease a home owned by Lester J. Grant. Mathes deposited with Exclusively $3,300.00, which represented the first and last month's rent, and the security deposit. About December 9, 1977, Exclusively issued an accounting to Grant showing $1,980.00 due him after deduction of the commission and a check on the operating account of Exclusively for this amount. The check was subsequently dishonored and Grant has not received the $51,988.08 due him. About December 16, 1977, Neale Murphy leased the residence located at 1533 Southeast 6th Street, Deerfield, Florida, from Sam Gillotti paying $51,188.88 to Exclusively, representing the first and last month's rent. About January 20, 1970, Exclusively issued an accounting which showed $440.00 owing to Gillotti after deduction of the real estate commission and issued a check drawn on Exclusively's operating account for that amount. That check was returned due to insufficient funds and Gillotti has not received delivery of the funds due him. About November 16, 1977, Joseph T. Scanlon entered into a lease for property owned by E. P. Goodrich located at 1000 South Ocean Boulevard, Pompano Beach, Florida, paying Exclusively $1,100.00 and about November 21, 1977, a second check was given Exclusively for $2,700.00. The checks were deposited into Exclusively's operating account. About December 14, 1977, Corcoran drew a check on Exclusively's operating account for $2,700.00, the amount due the Goodriches, less commission; that check was returned for insufficient funds. On February 9, 1978, a check was drawn in Exclusively's escrow account payable to Goodrich for $2,97O.00. The bank dishonored the check and Goodrich has not received the funds due him. A lease of property was negotiated between G. Porto and P. Franklin, and $51,980.00, representing the first and last month's rent and security deposit was paid. The lease arrangement subsequently broke down and Porto released his claim to the earnest money deposit held by Exclusively authorizing payment to Franklin. Abaut October 17, 1977, Exclusively transferred the $1,980.00 from its escrow account to its operating account and Franklin has not received the 1,980.00 due him. About December 31, 1977, Exclusively leased an apartment owned by Charles Hora to Cindy Noves and received payment for the first and last month's rent plus the security deposit for a total of $740.00. About January 12, 1978, Exclusively leased to Harry Maier another apartment owned by Charles Hora and received the first and last month's rent plus the security deposit for a total of $740.00. $640.00 was to he the total commission. To this date, Hora has received only $456.09 of the $840.00 due him. About February 9, 1978, a check drawn on Exclusively's escrow account for $202.00 to Charles Hora was subsequently dishonored and at no time subsequent has Hora received the funds due him. In October, 1977, Bernard Goldstein, lessee of an apartment owned by Basil de Verteuil, exercised an option to extend his lease. About November 16, 1977, Goldstein paid to Exclusively the sum of $500.00 by check which was deposited into Exclusively's operating account, the $500.00 representing the rental payment for the additional one month extension. About January 16, 1978, Corcoran wrote a check on the operating account of Exclusively in to amount of $450.00, said sum representing the rental payment less commission. That check was dishonored by the bank and at no time subsequent thereto has Verteuil received the funds due him. About December 9, 1977, Robert Reeder leased his rental property located at 1016 Northeast 17th Way, Apartment 4, Fort Lauderdale, Florida, to Meg Wilson. Exclusively issued an accounting about December 9, 1977, which stated that they had received $370.50 from Wilson. The accounting further stated that Exclusively owed Reeder $190.00 after the deduction of the $180.00 commission. On February 9, 1978, a check was drawn on Exclusively's escrow account in the amount of $190.00 to Reeder. That check was subsequently dishonored by the bank and at no time has Reeder received the funds due. About December 6, 1977, William McCormick entered into a lease to rent real property owned by Stephen Runkle for a period of six months. About December 12, 1978, Exclusively sent an accounting to Runkle showing that they had received $790.08 representing the first and last month's rent and security deposit. The $790.00 check from McCormick was deposited to Exclusively's operating account. The accounting showed that after deduction of commission and certain cleaning charges that $578.00 was due Runkle. About January 17, 1978, a check was drawn on exclusively's operating account in the amount of $578.00. That check was dishonored and at no time subsequent has Runkle received the funds due him. About November 15, 1977, George F. Meyer executed a check payable to Exclusively in the amount of $1,200.00, representing one month's rent plus a $600.00 security deposit on a residence located at 1824 Coral Ridge Drive, Fort Lauderdale, Florida, owned by Norf Petrucci. The security deposit was never forwarded to Petrucci. The premises were inspected by Petrucci at the termination of the lease and it was determined that Meyer was entitled to the return of his security deposit but at no time has Meyer received the funds due him. About November 20, 1977, Julius Volinsky leased his residence, known as Apartment 417, l Las Olas Circle, Fort Lauderdale, Florida, to Julius Burt for a term of 12 months, through Exclusively. Burt executed a check for $1,500.00 payable to Exclusively, said sum representing the first and last month's rent and security deposit. That check was deposited to Exclusively's operating account. An accounting prepared by Exclusively about December 12, 1977, showed $400.00 due Volinsky and a check was drawn on Exclusively's operating account to Volinsky. This check was returned due to insufficient funds and at no time has Exclusively delivered the $400.00 to Volinsky. About December 4, 1977, Exclusively leased an apartment owned by Michael Bombardier to Selma Schachter. The lease was for four months with a total rent of $3,100.00 which was paid to Exclusively. About December 19, 1977, a check was drawn on Exclusively's operating account for $2,790.00 payable to Bombardier, representing the amount due Bombardier less the real estate commission of $310.00. That check was returned due to insufficient funds. In January, 1978, Exclusively gave Bombardier $480.00 as partial payment but the remaining $2,310.00 is still due. In January, 1977, Exclusively secured Robert DiTacchio to rent a condominium unit owned by Robert Knack at 3000 Rio Marsh Street, Fort Lauderdale, Florida. Exclusively received from DiTacchio $900.00 representing the first and last month's rent and the security deposit; $300.00 was to be retained by Exclusively as the commission leaving a balance due Knack of $600.00. Knack has not received the $600.00 due him. In November, 1977, Joey Clark, salesperson for Exclusively showed an Apartment 4-G, in the Royal Park Condominium, Fort Lauderdale, Florida, to Jeannette Verboom. Verboom advanced $680.00 to Exclusively to secure a lease for Apartment 4-G. Apartment 4-H was, in fact, the apartment upon which Exclusively had its listing agreement. Upon being made aware of the mistake and viewing Apartment 4-H, Verboom requested the return of her money. On February 9, 1978, a check was issued to Verboom from Exclusively's escrow account for $680.00. That check was subsequently dishonored and Verboom has not received the funds due her. About November 4, 1977, William O'Brien, broker for Exclusively, leased an apartment at 101 Royal Park Drive, Oakland Park, Florida, belonging to Elizabeth Finn to Mr. and Mrs. Eric Whittel and issued a receipt for $600.00 received from the Whittels for the rental of the apartment. At no time has Finn received the funds due her. About November 29, 1977, Edward J. Pfleger leased his apartment located at Suite 4-H, Building 113, Royal Park Condominium, 1500 Northwest 38th Street, through Exclusively to Marie Pugliese and Barbara Foreman. Exclusively received $580.00 representing the first and last month's rent, plus $100.00 security deposit. The $680.00 was deposited to Exclusively's operating account. About January 4, 1978, a check on Exclusively's operating account was drawn for $332.00 payable to Pfleger, representing the rental monies due him less the real estate commission. The check was returned due to insufficient funds, and Exclusively has not paid Pfleger the $332.00 due him. Due to the above checks that were issued without sufficient funds, an overdraft on Exclusively's operating account at the Sun Bank of Wilton Manors in the amount of $3,367.88 was created. At no point has Exclusively paid Sun Bank for the overdraft.
Recommendation From the foregoing findings of fact and conclusions of law, it is RECOMMENDED that William O'Brien be fined the sum of $2,800.00 ($200.00 for each of 14 counts) . It is further RECOMMENDED that the licenses of Michael J. Cocoran and Exclusively Rentals and Management, Inc. be revoked. DONE AND ORDERED this 20th day of November, 1980, in Tallahassee, Florida. HAROLD E. SMITHERS Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of November, 1980. COPIES FURNISHED: John Huskins, Esquire Staff Attorney Department of Professional Regulation 2009 Apalachee Parkway Tallahassee, Florida 32301 Dewey A. F. Ries, Esquire 215 NorthEast Third Street Fort Lauderdale, Florida 33301 Michael J. Corcoran 3121 NorthEast 51st Street, Apt 106-E Fort Lauderdale, Florida 33306 William O'Brien t/a Choice Listings and Rentals 4290 Northeast 7th Avenue Fort Lauderdale, Florida 33334
Findings Of Fact Upon consideration of the evidence adduced at the hearing, the Report of the hearing officer submitted on December 6, 1979, is hereby adopted and incorporated herein. It should be noted, however, that the total time and savings deposits for commercial banks in Collier County as of June 30, 1979, was $266,668,000 rather than $226,668,000 as indicated in the hearing officer's Report. The idea of establishing another savings and loan association in Naples originated with Robert E. Talley, a banker, and Allan L. McPeak, a lawyer. The name proposed for the new association is Marine Savings and Loan Association. No financial institution operating in Collier County at the time of the hearing had the word "Marine" in its name. All of the savings and loan associations in operation in Collier County at the time of the hearing had the word "federal" in their names. Applicant proposes to establish an office in downtown Naples, within a few blocks of several other financial institutions. Applicant has entered into a lease for the proposed facility, at an annual rental of $50,000, renewable for two three-month periods, during the pendency of Applicant's application. The lease provides for a ten-year term at an annual rental of $50,000, if the application is approved, with the option to renew for two additional five-year terms. The lease also contains an option to purchase which must be exercised within thirty-six months of opening or no later than March, 1983, whichever first occurs, at a purchase price of $600,000. In support of its application, Applicant caused an MAI appraisal to be prepared. According to the appraisal, the leased premises have a fair market value, as of March 14, 1979, of $433,000. According to a second, CCIM appraisal, also prepared at Applicant's instance, the property will be worth $632,400 as of February 26, 1982. Initially, Applicant plans to occupy the northern 4,285 square feet of the 6,700 square foot, single-story building it is leasing. Subleases with two tenants who are to occupy the southern portion of the building will be structured so as to provide additional space for expansion by Applicant. The leased premises include 43 parking spaces. Additional parking is available on adjacent streets. The site is easily accessible. Traffic conditions appear to pose no problems. The proposed savings and loan association would be a full service financial institution and expects to be competitive with the existing savings and loan offices in the primary service area (hereinafter PSA) with respect to interest rates and breadth of services. Some of the services that the proposed savings and loan association plans are a drive-in teller window, a night depository, safety deposit boxes, a walk-up window, extended hours on week days (from 9:00 a.m. to 6:00 p.m.), evening hours on Fridays (from 9:00 a.m. to 7:00 pm.), Saturday hours (from 9:00 a.m. to Noon), and safekeeping facilities. Most of the existing savings and loan associations in the PSA do not offer extended hours, drive-in teller windows or safekeeping facilities. The proposed PSA includes the populated portion of the city of Naples and segments of unincorporated Collier County to the north and east of the city. It is bounded on the north by Pine Ridge Road, 4.7 miles away; on the east by County Barn Road, 4.2 miles away; on the south by Gordon Pass and Holly Avenue, 3 miles away; and on the west by the Gulf of Mexico, .7 miles away. The PSA is roughly rectangular except for an indentation in the northeastern corner. Twelve savings and loan association offices now operate within the PSA. One savings and loan association has headquarters within the PSA. Four of the eleven branch offices in the PSA are limited facilities. The Protestant's main office is located 0.2 miles southeast of the premises Applicant has leased. Protestant has filed an application to relocate its main office to a site in unincorporated Collier County, 4.8 miles north of Applicant's proposed site and to make its present main office a branch office. One branch office is now located 0.2 miles southwest of the proposed site; three are between 1.3 miles and 2.0 miles from it; and one is 8.7 miles to the north. Except for the Protestant, no savings and loan association now operating in Collier County has headquarters in Collier County. There are 14 commercial bank offices, including five main banking offices and nine branch offices in operation within the PSA. Three of the five main bank offices are located within 0.3 miles of the proposed site; one is 2.6 miles away and another is 7.5 miles away. Of the branch offices, one is located one mile southwest of the proposed site; three are 1.3 to 2.0 miles from it; four are between 2.2 and 4.0 miles from it and one is 8 miles away. In addition, there are three approved but unopened branch offices which are to be located between 3.1 and 5.3 miles-from Applicant's proposed site. The main office of Security Trust of Naples, a non-deposit trust company, is located 0.3 miles southwest of Applicant's proposed site. Applicant proposed five million dollars as the initial capitalization for the savings and loan association. The capital accounts would initially consist of $1,500,000 common stock and $3,500,000 paid-in surplus. Eighteen percent of the stock of the proposed savings and loan association has been subscribed to by nine organizers. The remaining 82 percent has been subscribed to by more-than 400 members of the general public, mostly from the Collier County area. Applicant has estimated the permanent 1979 population of the PSA at 47,000. This represents an average annual rate of growth of 11.6 percent from the PSA's 1970 population of 23,000. Applicant estimates the County's 1979 permanent population at 77,900, the seasonal population of the PSA at between 12,000 and 14,000, and the seasonal County population at between 15,000 and 20,000. The Applicant estimated the combined permanent and seasonal populations of the County at between 92,900 and 97,900 and that of the PSA at between 59,000 and 61,000. The Applicant projects for the 1982 permanent population of the PSA a figure of 53,000, representing an average annual growth rate of 4.3 percent from 1979. According to data compiled by the Bureau of Economic and Business Research, Division of Population Studies, at the University of Florida, the population of Collier County on April 1, 1970, was 38,040; on July 1, 1979, 64,761; on July 1, 1977, 68,900; on July 1, 1978, 74,572. According to the same source, the population of Naples on April 1, 1970, was 12,042; on July 1, 1976, 17,425; on July 1, 1977, 17,437; and on July 1, 1978, 17,462. The population of unincorporated areas of Collier County, including Everglade City, according to the same source, was 25,998, on April 1, 1970; 47,336, on July, 1976; 51,463 on July 1, 1977; and on July 1, 1978, The population of Collier County grew at an average annual rate of approximately 11.7 percent between 1970 and 1976. Between 1976 and 1977, the County's population grew at a slower rate, viz., approximately 6.4 percent. The rate of growth increased to approximately 8.2 percent between 1977 and 1978. Between 1970 and 1976, the population of Naples grew at an annual average rate of approximately 7.5 percent. During the years 1976, 1977 and 1978, the population of Naples did not increase significantly. The population of the unincorporated areas of Collier County grew at an average annual rate of approximately 13.7 percent between 1970 and 1976, at a rate of approximately 8.7 percent between 1976 and 1977, and at a rate of approximately 11.0 percent between 1977 and 1978. Almost all (94.14 percent) of the population growth in the County between 1970 and 1978, was the result of net migration. Between 1970 and 1978, the proportion of Collier County's population older than 65 years of age increased from 14.0 percent in 1970, to approximately 17.5 percent in 1978. Recent unemployment data for Collier County show an unemployment rate of 10.2 percent for July, 1979 (revised), and 9.8 percent for August, 1979 (preliminary), in the County as compared to the state averages of 6.6 and 6.1 percent for the same months, respectively. The per capita personal income for Collier County was $6,905 in 1976, and $7,663 in 1977. The 11.0 percent increase from 1976 to 1977, is higher than the 9.8 percent increase in the state average for the same period. Collier County's averages were above the state averages of $6,101 in 1976, and $6,697 in 1977. The proposed board of directors would be composed of nine members, at least seven of whom are full-time Florida residents and at least eight of whom are United States citizens. Robert E. Talley, the proposed president and chief executive officer, has had extensive commercial banking experience. From 1964 to 1972, he served as vice-president and loan officer for the Manatee National Bank; from 1972 through 1973, he was senior vice-president of the National Bank of St. Petersburg; from 1973 through 1977, he was president, chief executive officer, and a director of the Community Bank of Homestead; and from 1977 to 1978, he was executive vice-president and branch manager of the National Bank of Collier County. Proposed director, Roland Erickson, served as president and director of the Guaranty Bank and Trust Company, Worcester, Massachusetts, from 1947 to 1964. Proposed director, Harold S. Smith, served as a director and member of the executive committee of the Bank of Everglades from 1948 through 1951. Proposed director, Hendry P. Albrecht, is president of Gale-Realty, Inc., which is involved in investments, including rental property. Although most of the proposed board of directors appear to be successful businessmen, none of them has had direct savings and loan association experience. On June 30, 1975, commercial banks in Collier County had total deposits of $245,086,000 of which $152,499,000 were time and savings deposits. On June 30, 1976, commercial banks in Collier County had total deposits of $301,664,000, of which $193,488,000 were time and savings deposits. On June 30, 1978, commercial banks in Collier County had total deposits of $369,928,000 of which $224,982,000 were time and savings deposits. On June 30, 1979, commercial banks in Collier County had total deposits of $423,365,000 of which $266,668,000 were time and savings deposits. In March of 1979, Protestant held more than three quarters of all moneys on deposit with savings and loan associations in Collier County. At that time, $141,996,000 was on deposit at the Protestant's home office; $10,890,000 at its Tamiami North branch, even though this office first opened in September of 1977; $26,989,000 at its Lely branch; $4,728,000 at its Tamiami South satellite; and $5,537,000 at its Golden Gate facility. In March of 1979, Coast Federal's Tamiami North branch held $56,667,000. On deposit at First City Federal's Tamiami North branch was $6,855,000 in March of 1979. At the same time, Gulf Federal's Fifth Avenue branch had deposits of $7,018,000. In March of 1979, First Federal of Fort Myers had $10,256,000 on deposit at its Tamiami North branch and $235,000 at its Olde Naples facility, which opened in February of 1979. Time and savings deposits in savings and loan associations and commercial banks in Collier County amounted to $552,839,000 in 1978, up 55.62 percent from 1976. At the time of the hearing, there was commercial activity in Naples and residential development, particularly to the north of the PSA. Some thirteen financial institutions were in operation in the western part of Collier County, north of Applicant's proposed site, at the time of the hearing. Applicant has projected savings deposits at the end of the first, second and third years of operation to be $10,000,000, $15,000,000 and $20,000,000, respectively. Applicant also presented a pro forma budget which projected net profit for the first three years to be $191,700, $256,000 and $319,100, respectively. The Deputy Comptroller, Gerri Raines Dolan, and the Director of the Division of Banking, Ryland Terry Rigsby, as advisory staff members to the Comptroller, reviewed the application and the Department's entire file relating to the application. They assisted and concurred with the Comptroller in the ultimate determination of the application.
Conclusions As set forth in Rule 3C-20.45, Florida Administrative Code, when an application for authority to organize and operate a new state savings and loan association is filed pursuant to Chapter 3C-9, Florida Administrative Code, it is the applicant's responsibility to prove that the statutory criteria warranting the grant of authority are met. The Department shall conduct an investigation pursuant to Subsection 665.031(3), Florida Statutes, which was done in this case, and then approve or disapprove the application in its discretion. This discretion is neither absolute nor unqualified, but is instead conditioned by a consideration of the criteria listed in Subsection 655.031(4), Florida Statutes, wherein it is provided that: The Department shall approve the application upon such terms and conditions as it determines necessary to protect the public interest or disapprove the application at its discretion, but it shall not approve such application, unless in its opinion: Public convenience and advantage will be promoted by the establishment of the proposed thrift institution; Local conditions assure reasonable promise of successful operation of the proposed thrift institution and those thrift institutions already established in the community; The proposed officers and directors have good character, sufficient financial standing, and adequate experience and responsibility to assure reasonable promise of successful operation of the thrift institution; and The proposed savings account capital and organization expense fund or capital stock subscriptions comply with the requirements of this chapter. and Subsection 665.051(1), Florida Statutes, wherein it is provided that, The name of every association shall include either the words "savings association" or "savings and loan association." If in the opinion of the Department, any one of the above criteria has not been met and cannot be remedied by the applicant, it cannot approve the application. An applicant can, however, take corrective action in most circumstances to meet the criteria set forth in Subsections 665.031(4)(c), or (d), and 665.051(1), Florida Statutes, if any of these are found to be lacking. For example, if all other statutory criteria are met, the applicant may increase capital, or make certain changes in the board of directors, or change the name, or alter the provisions for suitable quarters, because these factors, at least to some degree, are within its control. It is the Department's policy to allow applicants to make certain changes to meet these criteria if all other criteria are met; to do otherwise would be to subject applicants to unnecessary red tape. However, it is the Department's opinion that there is little, if anything, that an applicant can do to alter its ability to meet the criteria set forth in Subsections 665.031(4)(a) and (b), Florida Statutes, since applicants CANNOT readily change the economic and demographic characteristics of an area. Therefore, if either one or both of these criteria are not met, the Department cannot approve the application. For purposes of applications for authority to organize and operate a new state savings and loan association, Rule 3C-20.45(1), Florida Administrative Code, defines PSA as the "smallest area from which the proposed association expects to draw approximately seventy-five percent of its deposits. It should be drawn around a natural customer base, should not be unrealistically delineated to exclude competing financial institutions or to include areas of concentrated population." Based upon, traffic patterns, natural and manmade geographic barriers and the location of other existing offices of financial institutions in the area, the Department concludes that the Applicant's PSA is realistically delineated. It is the opinion and conclusion of the Department that public convenience and advantage will be promoted by the establishment of the proposed savings and loan association. Therefore, the criterion in Subsection 665.031(4)(a), Florida Statutes, IS met. As set forth in Rule 3C-20.45(2)(a), Florida Administrative Code, the location and services offered by existing savings and loan association offices in a service area are indicative of the competitive climate of the market and should be considered. Other financial institutions such as banks and credit unions may be considered competing institutions to the extent their services parallel those of a new savings and loan association. Also, the traffic patterns in the area, as well as the general economic and demographic characteristics of the area, must be considered in evaluating this statutory criterion. Because it is recognized that the establishment of a new savings and loan association ANYWHERE would promote the convenience and advantage for at least a few people, SUBSTANTIAL convenience and advantage for a SIGNIFICANT number of people must be shown; otherwise, a new savings and loan association could be justified for every street corner in the state. Clearly, such a result was not the legislative intent in regulating entry into the savings and loan association industry, nor is it in the public interest. Based upon the facts set forth above, the Department has determined that the establishment of the proposed savings and loan association will substantially increase convenience to a significant number of residents of the PSA. This is particularly true in view of the significant growth of the various financial institutions in the area since 1976, as well as the past and projected population growth in the PSA. The Protestant, which is the only other savings and loan association with a main office in Collier County, held more than seventy-five percent of all savings and loan deposits in the County in March, 1979. Consequently, the proposed institution will served as a needed competitive alternative. The site is easily accessible and traffic patterns are favorable. Furthermore, the Applicant intends to offer a variety of new services not generally offered by other financial institutions within the PSA. Therefore, the criterion of public convenience and advantage is met. It is the opinion and conclusion of the Department that local conditions do assure reasonable promise of successful operation of the proposed thrift institution and those thrift institutions already established in the community. Therefore, the criterion in Subsection 665.031(4)(b), Florida Statutes, IS met. As set forth in Rule 3C-20.45(2)(b), Florida Administrative Code, current economic conditions and, to a lesser extent, the growth potential of the area in which the new savings and loan association proposes to locate are important considerations in determining the association's probable success. Essential to the concept of thrift institution opportunity is that there does and will exist a significant volume of business for which the new savings and loan association can realistically compete. The growth rate, size, financial strength and operating characteristics of savings and loan associations and other financial institutions in the service area are also important indicators of economic conditions and potential business for a new savings and loan association. It is noted that the statutory standards require that " . . . local conditions ASSURE reasonable PROMISE of successful operation of the proposed thrift institution and those thrift institutions already established in the community . . ." (E.S.), NOT merely that local conditions INDICATE a POSSIBILITY of such success. Thrift institutions involve a public trust. Unlike private enterprise establishments generally, a savings and loan association operates on the public's capital and therefore, the Legislature has vested in the Comptroller the responsibility to protect that public interest. Furthermore, the failure of a savings and loan association, as opposed to private enterprise establishments generally, may have an unsettling effect on the overall economic welfare of the community and that is why the Florida Legislature and the United States Congress have imposed stringent requirements for the industry. This Department is responsible for enforcing this legislative standard. Public interest is best served by having a thrift institution system whereby new competition is encouraged where appropriate, yet, at the same time, ensuring that the financial resources of the residents in the community are stable and safe. That was the obvious intent of the Legislature in regulating entry into the thrift institution industry. The Applicant's estimated 1979 PSA population of 47,000 and its projections for the near future seem more than reasonable in view of the latest official estimates by the University of Florida. The population base is healthy, a balanced mixture of residents, local businessmen and commuters, with a steady recent history of growth and projections for significant future growth. Although there are other savings and loan offices already existing in or near the PSA, the Department has concluded that the total savings potential within the PSA will readily support a new institution. The Department further concludes that the extensive deposit and loan growth of the existing financial institutions within the PSA justifies the establishment of another competitive alternative. The increasing population, the high per capita income, and the business and residential mix of the PSA point to an expanding and stimulated economy in the PSA for the present as well as the near future. Clearly, these factors are conducive to assuring the reasonable promise of success for the proposed savings and loan association and for those thrift institutions already established in the community. It is the opinion and conclusion of the Department that the proposed directors, as a group, have good character, sufficient financial standing and responsibility, but do not have sufficient experience in the savings and loan field to assure reasonable promise of successful operation of the proposed association. Therefore, one of the criteria of Subsection 665.031(4)(c), Florida Statutes, IS NOT met. As set forth in Rule 3C-20.45(2)(c), Florida Administrative Code, the organizers, proposed directors and officers shall have reputations evidencing honesty and integrity. They shall have employment and business histories demonstrating their responsibility in financial affairs. At least one member of a proposed board of directors, other than the chief managing officer, shall have experience in the savings and loan field or in a business directly related thereto such as mortgage banking, real estate finance and commercial banking where real property lending has constituted an integral part of such banking experience. The organizers, proposed director's and officers shall meet the requirements of Sections 665.131 and 665.703, Florida Statutes, as applicable. A majority of the organizers and directors of a proposed thrift institution shall be, whenever possible, from the local community and shall represent a diversification of occupation and experience commensurate with the position for which proposed. Members of the initial management group, which includes directors and officers, shall require prior approval of the Department. Changes of directors or chief managing officer during the first year of operation shall also require prior approval of the Department. While it is not necessary that the names of proposed officers he submitted with an application to organize a new savings and loan association, the chief managing officer and operations officer must be named and their names submitted for departmental approval at least sixty (60) days prior to the association' opening. In addition, interlocking directorships involving existing financial institutions competitively near the proposed site of a new institution are discouraged. Such interlocking directorships could possibly restrict competition and create fiduciary problems. Although the proposed directors have, as a group, good character, sufficient financial standing and responsibility, none of the proposed directors has any direct experience in the savings and loan field. Only Robert E. Talley, as a proposed director, has demonstrated that he has the requisite related business experience by virtue of his background in commercial banking, real estate, and mortgage brokerage. Because the selection of directors for a proposed new savings and loan association is generally within an applicant's control, the Department wilt, in this case, allow the Applicant to remedy the above inadequacy in the proposed board of directors by the addition of one director with sufficient experience in the savings and loan field or in a business directly related thereto or by further demonstrating that one of the proposed board members already has the requisite related business experience. While the department has noted that Robert E. Talley has been proposed as the chief managing officer, the Department does not approve or disapprove an applicant's proposed chief managing officer until the association makes an application for insurance of its accounts. It is the opinion and conclusion of the Department that the proposed savings account capital and the organization expense fund or capital stock subscriptions comply with the requirements of Chapter 665, Florida Statutes. Therefore, the criteria of Subsection 665.031(4)(d), ARE met. As set forth in Rule 3C-20.45(2)(d), Florida Administrative Code, capital should be adequate to enable the new savings and loan association to provide the necessary services of promoting thrift and home financing to meet the needs of prospective customers. Capital should be sufficient to purchase, build or lease a suitable permanent facility complete with equipment. Generally, the initial capital (withdrawable savings for a mutual association applicant and total stock and paid-in surplus for a stock association applicant) for a new savings and loan association should not be less than $1.5 million in non- metropolitan areas and $2.0 million in metropolitan areas. To encourage community support, a wide distribution of stock ownership is desirable. A majority of the stock should be issued wherever possible to local residents of the community, persons with substantial business interests in the community, or others who may reasonably be expected to utilize the services of the association. Subscribers to five (5) percent or more of the stock may not finance more than fifty (50) percent of the purchase price if the extension of credit is predicated in any manner on the stock of the new association, whether or not such stock is pledged. Generally, all proposed stock for-a stock savings and loan association shall be subscribed to at the time the application is submitted to the Department. The organizers may initially subscribe to all proposed stock, but should disclose the anticipated amount of individual stock to be retained. It is the opinion and conclusion of the Department that the name, Marine Savings and Loan Association, meets the criterion of Subsection 665.051(1), Florida Statutes, and is not so similar as to cause confusion with the name of an existing financial institution. As set forth in Rule 3C-20.45(4), Florida Administrative Code, the Department will consider the possibility that a name similar to that of another financial institution may cause confusion in the minds of the public or be misleading and may deny the use of such name, with the exception of names specifically authorized under Subsection 665.051(1), Florida Statutes. The Department concludes that the name Maring Savings and Loan Association is not so similar as to cause confusion with the name of an existing financial institution. It is the opinion and conclusion of the Department that provision has been made for suitable quarters. Therefore, the provisions of Rule 3C- 20.45(6)(d), Florida Administrative Code, ARE met. As set forth in Rule 3C-20.45(6)(d), should temporary quarters be contemplated by an applicant until a permanent facility is completed, permission to open in temporary quarters may be granted, generally not to exceed one year. The permanent structure of a new savings and loan association should generally contain a minimum of 5,000 square feet unless the applicant satisfactorily shows that smaller quarters are justified due to the performance of certain auxiliary services off-premises. It shall be of sufficient size to handle the projected business for a reasonable period of time. The facility shall be of a nature to warrant customer confidence in the association's security, stability and permanence. Other pertinent factors include availability of adequate parking, an adequate drive-in facility if such is contemplated and possibilities for expansion. The Applicant presently plans permanent quarters in a building containing 4,285 square feet, which will have adequate parking and drive-in facilities. No temporary quarters are contemplated. Since adequate provision has been made for expansion up to 6,700 square feet, the Department considers that provision has been made for suitable quarters. It is the opinion and conclusion of the Department that the proposed acquisition of the association's proposed site has been fully disclosed and does not constitute an insider transaction. Therefore, the provisions of Rule 3C- 20.45(3) ARE met. Rule 3C-20.45(3), Florida Administrative Code, provides that any financial arrangement or transaction involving the organization of a proposed association and its organizers, directors, officers and shareholders owning five (5) percent or more of the stock, or their relatives, their associates or interests should ordinarily be avoided. Should there be transactions of this nature, they must be fair and reasonable, fully disclosed and comparable to similar arrangements which could have been made with unrelated parties. It is the opinion and conclusion of the Department that the provisions of Rule 3C-20.45(6)(e), Florida Administrative Code, have NOT been met. Pursuant to Rule 3C-20.45(6)(e), Florida Administrative Code, appraisals of land and improvements thereon shall be made by an independent qualified appraiser and be dated no earlier than six months from the filing date of the application. In those instances where the application involves a lease arrangement, the appraisal should be directed to the comparability of the proposed lease with other leasing arrangements for similar business property. The application involves a lease arrangement and, although the Applicant has submitted an acceptable appraisal as to the fair market value of the leased premises, it has not submitted an appraisal directed to the comparability of the proposed lease with other leasing arrangements for similar business property. However, since this is a criterion that is within the control of the Applicant, the Department may approve the application upon the condition that this deficiency is remedied.
Findings Of Fact The parties to this proceeding have stipulated to the correctness of the following facts: Respondent filed a Consent and Joinder simultaneously with the Declaration of Tuscany Place, a condominium, which was recorded in Official Records Dock 1281, Page 1833, Public Records of Seminole County, Florida, and was filed with the Division of Florida Land Sales and Condominiums under I.D. #80 CN5742. Respondent accepted deeds in lieu of foreclosure from the Developer, Goehring Development Corp., under paragraph number 16.5 of the Declaration of Condominiums which deeds were dated May 10 and May 12, 1982, and recorded in Official Records Book of Seminole County, Florida. (Copies of the deeds are attached [to the Stipulation as to Facts] and are self-explanatory.) Respondent sold Unit 16-E to Huey M. Napier. All remaining units were sold to Larry J. Whittle on January 31, 1983. Copies of contracts for the two purchases are attached [to the Stipulation as to Facts]. The term "developer" was defined in paragraph 21.7 of the Condominium Declaration and was approved for filing by the Division including the provision that any successor or alternate developer must indicate its consent to be treated as the developer. Respondent attempted to comply with oral and written communications from the Division as to the regulation relating to "Subsequent Developer," as Respondent could not locate Statutes or Division Rules requiring Subsequent Developer filing. Copies of letters from the Division are attached [to the Stipulation as to Facts]. Respondent admits the sales described above, but denies any liability under Statutes or Rules as a matter of Law. The above-numbered paragraphs constitute the facts stipulated between the parties. Attached to the parties' stipulation are a series of documents. These documents establish that the aforementioned sale from Respondent to Huey M. Napier occurred on or about October 22, 1982. This sale involved a single condominium unit. The remaining ten units obtained by Respondent from the original developer by virtue of a deed in lieu of foreclosure were sold on or about January 4, 1983. On or about November 29, 1982, representatives of Petitioner warned Respondent's counsel that failure to file as a second developer with Petitioner in accordance with Section 718.502, Florida Statutes, would place Respondent in violation of that law. Respondent subsequently filed with Petitioner in accordance with the requirements of Section 718.502, Florida Statutes, on or about January 14, 1983.
The Issue The issue for resolution in this proceeding is whether Respondent committed the violations alleged in the Notice to Show Cause: Failure to deliver to the association a review of financial records for the required period. Section 718.301(4)(c) F.S. (1981). Failure to fund reserves. Section 718.112(2)(k) F.S. (1981). Failure to turn over converter reserves. Section 718.301(4)(d) F.S. (1981). Charging the association $10,000 for management services without documentation of the contract for the services. Section 718.115(1) F.5. (1981). If it is determined that violations occurred, the remaining issue is what corrective action and civil penalties are appropriate.
Findings Of Fact The parties have stipulated to the following facts: Batura Enterprises, Inc. (Batura) is the developer, as defined in Section 718.103(13) F.S., of a residential conversion condominium known as English Park, in Melbourne, Florida. The condominium association for English Park was incorporated on December 2, 1980. The declaration of condominium for English Park was recorded in the public records on January 22, 1981. Turnover of control of the condominium association from control by the developer to control by unit owners other than the developer pursuant to Section 718.301 F.S., occurred on May 31, 1982. (Joint exhibit #1.) A review of financial statements dated January 19, 1983, was delivered to the condominium association. The review covers a ten-month period commencing August 1, 1981, and ending May 31, 1982. (Joint Exhibit #4.) A supplemental turnover review, performed during the course of this litigation and signed on February 7, 1987, covers the period from incorporation of the condominium association on December 2, 1980, through July 31, 1981. (Joint exhibit #6.) The function of the review is to provide an accounting during the time that the developer is responsible for the association, and to insure that assessments are charged and collected. (Testimony of Eric Larsen, C.P.A., qualified without objection as an expert in condominium accounting.) The proposed operating budget included $15,248.00 for an annual reserve account ($1,270 per month). (Joint exhibit *5, p. 83.) Based on this, the reserve account from the creation of the condominium, January 22, 1981, until the date of turnover, May 31, 1982 should have been $20,688.71 (sixteen months and nine days). The "election period" provided in Section 718.116(8)(a) F.S. (1979) is addressed in the Condominium documents, p. 31: F. Common Expenses payable by the Developer. Until the sale of the first Unit in the Condominium, Developer shall be solely responsible for all expenses of the Condominium. Following the first closing, the Unit Owner in whom title shall have been vested shall be responsible for his proportionate share of Common Expenses, based upon his percentage interest in the Common Elements. The Developer shall be excused from payment of the share of the Common Expenses and Assessments relating to the unsold units after the recording of this Declaration for a period of time which shall terminate on the first day of the fourth calendar month following the month in which the closing of the sale of the first unit occurs. The Developer shall pay the portion of expenses incurred during that period which exceeds the amount assessed against other Unit Owners. (Joint Exhibit #5.) The first units were sold in April 1981. (Joint Exhibit #2, p. 2). Therefore, the "election period" ended on August 1, 1981. The turnover review does not reflect the existence of the $20,688.71 reserve fund at the time of turnover on May 31, 1982. Instead, it reflects a certificate of deposit in the amount of $18,795.00 that was created as a "reserve for transition operations". This was derived from initial payments made by the owners to the association to provide working capital for the start- up phase. (Joint Exhibit #4., testimony of Philip Batura.) These "initial assessments" are addressed in the condominium documents: G. Initial Assessments. When the initial Board, elected or designated pursuant to these By-laws, takes office, it shall determine the budget as defined in this Section for the period cornencing 30 days after their election or designation and ending on the last day of the fiscal year in which their election or designation occurs. Assessment shall be levied against the Unit Owners during said period as provided in this Article. The Board will levy an "initial assessment" against the initial purchaser at the time he settles on his purchase contract. Such initial assessment shall be in an amount equal to two months regular assessments, and shall be utilized for commencing the business of the Association and providing the necessary working fund for it. In addition, the initial purchaser shall pay the pro-rated portions of the monthly assessments for the remaining balance of the month in which closing takes place. The initial assessment and other assessments herein provided shall be paid by each subsequent purchaser of a Unit; no Unit Owner shall be entitled to reimbursement from the Association for payment of the initial assessment. Developer shall not be liable to pay any initial assessment. (Emphasis added) (Joint Exhibit #5, p. 31.) Based on the above, it is apparent that none of the $18,975.00 was contributed by the developer. Between April 1, 1981, and August 1, 1981, 60 percent of the units were sold. (Testimony of Philip Batura. Joint exhibit #4, attachment C.) Therefore at any given point in time between those dates, at least 40 percent of the units were in the hands of the developer. Between August 1, 1981 and turnover at the end of May 1982, an additional 30 percent of the units were sold, for a total of 90 percent. (Testimony of Philip Batura.) This means a minimum of 10 percent of the units were in the hands of the developer at any point between those dates. While Philip Batura claims that reserves were waived by a majority of members pursuant to Section 718.1l2(2)(k), F.S. (1981), he produced no evidence of that. He admitted that the action is not reflected in association minutes. (Joint Exhibit #1.) Reserves are included in the proposed budget filed with the condominium documents. (Joint Exhibit #5.) Reserves are noted in the supplemental financial review provided by the developer: ENGLISH PARK CONDOMINIUM ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (SEE ACCOUNTANT'S REVIEW REPORT) JULY 31, 1981. NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RESERVES - The Association's policy is to currently fund all expected replacements and major repairs of commonly owned assets. Should restricted funds available to meet future replacements and major repairs prove to be insufficient, the Association's Declaration provides that special assessments may be made against the unit owners. * * * (Joint Exhibit #6.) The purpose for a reserve account is to insure that funds are available in the future for replacements and deferred maintenance on the common elements. (Testimony of Eric Larsen) In addition to the statutorily-required reserves for exterior painting, roof replacement and repaving, the English Park proposed budget includes reserves for the swimming pool and "townhome hot water tanks". According to Philip Batura the budget was not amended prior to turnover. A separate reserve was required at the time of turnover because this was a condominium converted from apartments. (Testimony of Philip Batura) The only converter reserve applicable was a reserve for roofing in the amount of $6,114.00. (Joint exhibit #2, p. 2 of 11.) The Respondent has admitted its failure to turn over this reserve, but claims the obligation is offset by $10,000 in management fees which it asserts the association owes. (Joint Exhibit #1, p. 2 of 6.) Philip Batura is President of Batura Enterprises, Inc. He was elected or designated to the association board of directors at some point prior to turnover and remained on the board at turnover as he still owned some units. He mostly ran the association until the turnover in May 1982. (Testimony of Philip Batura.) Batura claims that there was an oral agreement for management services for $1,000.00 per month, commencing on August 1, 1981, between the association and Batura Enterprises, Inc. He said this was never paid by the association as there was not enough income to cover the costs of operation. The financial review covering the period August 1, 1981 to May 30, 1982, addresses the accrual of a management fee of $10,000, "...per the proposed operating budget which was recorded in the original declaration." (Joint Exhibit #4.) It is unclear where this figure was derived, as the budget does not reflect a $1,000.00 per month expense line item for management services. Included in the condominium documents is a proposed contract between the association and Eussel G. Hurren for management services. Both the fee and the term of the contract are left blank. The contract form that was filed is not signed, nor was a contract with this individual ever signed. (Testimony of Philip Batura.) The Declaration of Condominium permits a contract with a professional managing agent, including the developer. (Joint - Exhibit #5, p. 25.) No competent evidence was adduced by either party that this provision was ever fulfilled.
Recommendation Final hearing in the above-styled action was held on February 10, 1987, in Cocoa, Florida, before Mary Clark, Hearing Officer of the Division of Administrative Hearings. The parties were represented as follows: For Petitioner: Karl M. Scheuerman, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 For Respondent: James S. Cheney, Esquire Post Office Drawer 10959 Melbourne, Florida 32902-1959
Findings Of Fact The Respondent, M. Betty Murray, currently holds Florida Real Estate Broker's License number 62943. At all times material to this proceeding, the license was in full force and effect. The Respondent represented L. O. Huckaby and Sarah Huckaby in the sale of property located at 363 Boylston Avenue, Daytona Beach, Florida, to Elizabeth T. Stein, the complainant in this proceeding. Pursuant to her representation of the Huckaby's, the Respondent, on or about June 18, 1979, prepared a proposed contract for the sale and purchase of the subject property. Prior to signing the contract and tendering a deposit thereunder, Ms. Stein reviewed the contract with her attorney, Berrien Becks, Sr. When reviewing the contract with Mr. Becks, Ms. Stein failed to inform either Mr. Becks or his secretary, Sylvia Van De Mark, that she intended to use the property as either a duplex or a triplex. Had Ms. Stein indicated such an intent, a provision to that effect would have been included in paragraph VIII of the contract for sale and purchase. This was the normal procedure utilized in the ordinary course of business by the Becks' law firm. The contract for sale, Respondents Exhibit 1, shows no such provision or notation. The sellers, Mr. and Mrs. Huckaby, were represented by Charles E. Booth, Esquire. On behalf of Ms. Stein, Mr. Becks requested that certain repairs be made to the property. Mr. Booth rejected these demands by letter dated July 24, 1979. Although the contract does not state that the property was intended to be used as a duplex, the property is in fact recognized as a de facto duplex under the nonconforming use provisions of the city's zoning ordinance. Had Ms. Stein elected to proceed with the sale, she would have been permitted to utilize the property as a two unit property so long as she lived in one of the units which was her expressed intent. Prior to paying the balance of the deposit due on the contract, Ms. Stein and the Respondent went to Mr. Booth's office where Mr. Booth confirmed by telephone conversation with city officials and in the presence of both Ms. Stein and the Respondent, the lawful use of the property as a single family residence with attached rental unit. Following this information, Ms. Stein paid the balance into the Respondent's escrow account. On August 20, 1979, Ms. Stein demanded return of the $9,000.00 deposit from the Respondent. Upon receipt of this demand, the Respondent contacted Mr. Booth who instructed her to retain the deposit in her escrow account. Mr. Booth and Mr. Becks negotiated a release which was signed by the Sellers on August 28, 1979 and by Ms. Stein on September 11, 1979. The release authorized disbursements to be made including $500.00 to the Respondent, $150.00 to Mr. Booth, $43.00 to Lawyers Title Services, Inc. and the remaining $8,307.00 to Ms. Stein. On August 20, 1979, prior to signing the release, Ms. Stein sent a complaint to the Board concerning the return of her $9,000.00. On September 7, 1979, Ms. Stein sent another letter to the Board indicating that she had not agreed to the disbursements set forth in paragraph 8 above notwithstanding her agreement to sign the release. Ms. Stein's attorney, Mr. Becks, witnessed the release and explained the legal implications of the release in detail to her prior to her signing. Mr. Stein did not inform Mr. Becks of her correspondence with the Board which attempted to disclaim the release. At no time did the Respondent represent the property as a triplex, but only as a single family residence with a single attached rental unit, which was a permissible use under the city zoning ordinance. In fact, Ms. Stein defaulted on the contract and under its express terms could have forfeited the entire $9,000.00. The release negotiated between Mr. Becks and Mr. Booth which returned $8,307.00 to Ms. Stein was generous and demonstrated good faith efforts on the part of the Sellers to settle this matter amicably. The Respondent has maintained her registered office at 231 Gradview, Daytona Beach, Florida. The office consists of a room where she maintains her business files and which can be closed for privacy. The allegations of Ms. Stein against the Respondent were untrue and were made with knowledge that neither the Huckaby's nor the Respondent had engaged in any illegal or unethical activities regarding this transactions. The testimony of Mr. Becks, attorney for Ms. Stein and the affidavit of Mr. Booth, attorney for the Huckaby's, corroborates the Respondent's testimony and contradicts the allegations made in the complaint filed by Ms. Stein and the administrative complaint filed by the Board which was based entirely upon Ms. Stein's allegations. Ms. Stein's failure to appear at the final hearing supports the conclusion that she knew the allegations made by her could not be proved at the hearing. Any equitable or legal rights which Ms. Stein may have had to pursue this matter ended when she knowingly and voluntarily signed a release in order to secure the return of a substantial portion of her deposit monies. In effect, the only misrepresentation in this case was that made by Ms. Stein when she represented that the release would extinguish all responsibilities, obligations and rights arising from the contract in return for the $8,307.00 and then effectively requested the Board to proceed against the Respondent.
The Issue The ultimate issue is whether Emergency Rule 10 CER 80-11 is valid. Petitioner alleges that this rule is an invalid exercise of validly delegated legislative authority because it is over-broad and excludes Public Housing Authorities which have reserve funds when such reserve funds are required by rules and regulations of the federal housing authorities.
Findings Of Fact Dade County HUD is a Public Housing Authority (PHA). Dade County HUD applied for LIEAP benefits and was denied upon a determination that it was "fully compensated" pursuant to Emergency Rule 10 CER 80-11, Florida Administrative Code. Dade County HUD has standing to make this challenge on the rule. The U.S. Congress enacted as federal law 42 U.S.C. ..8607 which provides for the LIEAP program. The provisions of the federal statutes place payments to PHAs on an equal footing with those to individual households. See Section 308(b)(3)(A) and (B), 42 U.S.C. 8607. The State of Florida authorized the Department of Health and Rehabilitative Services to administer this program in Florida through Florida Statutes 409.508, which also authorizes DHRS to enact rules to implement this federal program. Pursuant to this authority, the Department prepared draft rules and regulations which were approved as required by the federal authorities and adopted in accordance with applicable state statutes as Emergency Rule 10 CER 80-11. The portion of Rule 10 CER 80-11.10, Florida Administrative Code, specifically challenged in this case, provides in pertinent part regarding PHAs: (2) The project must not be fully com- pensated. A low rent public housing authority project is not fully compensated when the sum of the project's reserve and approved subsidy does not equal or exceed the pro- ject's expenses less revenue. Other pro- jects are not fully compensated when the sum of the project's approved subsidy and revenue does not equal or exceed the pro- ject's expenses. The effect of this rule is to exclude from LIEAP benefits any PHA whose revenues and reserves exceeded its expenses. Pursuant to federal guidelines, the Department first arrived at a percentage of potentially eligible recipients in Florida residing in PHAs. It allocated to PHA this percentage of the $23 million available to Florida. This amounted to less than $700,000. Recognizing that all PHAs had been adversely affected by the increased cost of operation to include energy cost, the Department further determined that only the most vulnerable, i.e., those PHAs whose tenants might suffer the most in the absence of LIEAP payments, should be eligible. The Department adopted the objective criteria, as required by the federal authorities, set forth in Rule 10 CER 80-11.10, Florida Administrative Code. This criteria provided payments only to those PHAs who lacked money to pay heating bills. All the monies paid to PHAs were paid to paid to PHAs meeting the criteria stated in Rule 10 CER 80-11.10, supra. The rule and payments made under them were procedurally and substantively in accord with the applicable state and federal statutes.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioner is a dentist and is also engaged in the business of leasing real property in Florida for commercial purposes. A tax auditor for the respondent, Mr. Eugene A. Soinski, notified petitioner that an audit of his books and records would be conducted to determine whether petitioner was remitting the appropriate amount of rental taxes to the respondent. At the time of the initial audit, Mr. Soinski was supplied with only bank deposit receipts and certain leases. The auditor had difficulty in determining which were mortgage payments and which were rental payments. Based upon the auditor's review of petitioner's deposit slips, lease agreements, a three-year audit prepared by petitioner and discussions with some of petitioner's tenants, as assessment for delinquent taxes was made. The initial assessment was reduced and the present dispute lies with the revised assessment dated October 2, 1978, in the amount of $5,316.35. In his amended petition for a hearing and at the hearing, petitioner alleged that no rent tax was due on three specific leases. Petitioner offered no evidence to refute the respondent's assessment on any other lease. All testimony and evidence adduced at the hearing was confined to the lease agreements between petitioner and three other businesses -- Suncoast Amusement, Product Movement Systems, Inc., and Staid, Inc. One of the three disputed items in the assessment concerned an agreement between petitioner and Suncoast Amusement, also referred to as Hot Foots. The lease agreement between Suncoast and petitioner was not made available at the hearing. According to the testimony of the petitioner, the tenant removed carpeting from the premises and installed new red carpeting in its stead. Certain other improvements were also made to the property. The petitioner testified that he received no actual benefit to the property from these improvements, and that the red carpet actually decreased the value of the property. The auditor, Mr. Soinski, remembered seeing the lease agreement and matching the rental payment amounts with the deposit receipts to arrive at the assessment. A copy of the first two pages of the "business lease" between petitioner and Product Movement Systems, Inc., was received into evidence as respondent's Exhibit 3. This agreement contains the stipulation that TWENTY-SECOND: Minimum of two room office, with air, will be built at tenant's expense and remain as part of the first years rent. According to petitioner, the tenant actually built eight to ten offices and this did not improve the real estate. It was, instead, a deterrent to future tenants, according to petitioner. A copy of the "business lease" between petitioner and Staid, Inc., was received into evidence as the respondent's Exhibit 2. The consideration for the agreement was a total rental of sixty thousand dollars, payable as follows: One thousand dollars per month in advance, plus 4 percent State tax. Two thousand dollars security deposit, receipt acknowledged. Also on the first of each month an amount equal to 1/60th of the total cost of all improvements of any kind, as approved by both parties, will be paid plus the above basic rent of $1,040. - per month. Also, the twenty-fourth stipulation and condition in said lease provides as follows . . . TWENTY-FOURTH: If during the life of this lease tenant has need of more space every effort will be made to provide some adjacent. If it is desirable to both parties a new building is necessary then such buildings will be to tenants specifications, the rent will be the total cost of such land and improvements including architect fee, cost of mortgage, paving, landscaping or any expense of any nature x 15 percent net, net. According to the petitioner, he made a loan to Staid, Inc., in the amount of $48,000.00 to enable Staid to pay for certain improvements to the property. This loan was to be repaid in installments of $800.00 per month for sixty months. It was petitioner's testimony that regardless of the wording contained in the lease agreement, the improvements were not considered a part of the rent, he derived no benefits from the improvements to the property, and part of the payment made by the tenant each month was for repayments of a loan, rather than rental on the property. It was the testimony of Mr. Soinski, the auditor, that the assessment of the three disputed leases was based on the total amount of rent paid by the tenants to the petitioner, which rent included any improvements to the property. Where lease documents were available, he utilized the amount of rent due from the face of the lease document. Where possible, he compared the lease documents with the petitioner's bank deposit slips. The revised notice of proposed assessment dated October 2, 1978, was received into evidence as the respondent's Exhibit 1. This document assesses a tax on rentals of real property in the amount of $4,215.40, a delinquent penalty in the amount of $210.79 and interest through October 2, 1978, in the amount of $890.16, for a total amount of $5,316.35.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the proposed assessment dated October 2, 1978, in the amount of $5,316.35 be upheld and that the relief requested by petitioner be denied. DONE AND ENTERED this 3rd day of January 1980 in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January 1980. COPIES FURNISHED: James W. Hickman 203 River Bend Longwood, Florida Linda Procta Assistant Attorney General Department of Legal Affairs The Capitol LL04 Tallahassee, Florida 32301 =================================================================
The Issue Whether Petitioners' Petition for Relief from a Discriminatory Housing Practice (Petition for Relief) filed against Respondents should be granted by the Florida Commission on Human Relations (Commission).
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Samari Lake East (Development) is a residential condominium apartment development located on approximately 16 or 17 acres of land in the City of Hialeah Gardens, Florida. It is one of the largest such developments in Miami-Dade County. The Development is home to a racially and ethnically diverse group of persons. Because of the diversity of its residents, it has been described, appropriately, as a "rainbow community." While the majority of the residents are of Hispanic origin and speak Spanish, many different countries and cultures are represented in the community. There are some, but not a relatively large number of, black and African-American residents. The exact number is difficult to ascertain. No records are kept which keep track of such information. Persons of all ages, including approximately 500 children, reside in the Development. There are no age restrictions barring children from living in the Development. Petitioners are an African-American married couple with eight children. They have owned a two-bedroom, two-bath unit in the Development since approximately 1990. They resided in the unit from approximately 1990 until early July of 2002 when they were forced to vacate because the premises became uninhabitable as a result of an overflow of water and waste materials from within the unit's plumbing system. When they moved into the unit in 1990, Petitioners had only one child and Ms. Williams was pregnant with the couple's second child. At the time that they had to move out of the unit, Petitioners and their children had the following living arrangements: Petitioners and their two youngest children shared the master bedroom; three children (all girls) shared the second bedroom; two children (both boys) shared the living room; and the oldest child (a boy) lived on the balcony, which was enclosed. The Development is comprised of eight five-story multi-family, elevatored buildings having a total of 635 units (60 of which have three bedrooms and two baths, 510 of which have two bedrooms and two baths, and 65 of which have one bedroom and one and a half baths). First-floor units have porches. Units above the first floor have balconies. Most of the balconies, unlike the balcony in Petitioners' unit, are "open."3 Access to the units are by common exterior corridors and catwalks. Pursuant to Section 14A of the Development's Declaration of Condominium, "[e]ach Unit shall be used only as a single family residence" and "[n]o separate part of a Unit may be rented and no short term tenants (i.e., tenants for less than one month) may be accommodated in any Unit." The Development has two phases. Phase I consists of Buildings 1, 2, 3, and 4, which together contain 330 units. One of these units is Petitioners' unit, Unit 2314, which is on the third floor in Building 4. Phase II consists of Buildings 5, 6, 7, and 8, which together contain 305 units. The buildings in Phase I were constructed more than a quarter of a century ago (in or around 1976 or 1977). The buildings in Phase II were constructed sometime later, and, as a result, they are in better general, overall condition than those in Phase I. Each phase has its own swimming pool and clubhouse. Residents and their guests are free to use the swimming pool from 9:00 a.m. to 8:00 p.m. Children under 12 years of age must be accompanied by an adult when at the pool. Persons who use the pool are expected to wear appropriate attire and refrain from activities that endanger themselves or others or that otherwise unreasonably interfere with others' peaceful enjoyment of the pool. The rules and regulations regarding the use of the pool are posted. In addition, individual copies of these rules and regulations are given to the residents. The clubhouse is available for use by residents (for a fee) for parties and similar functions. Residents, if they want to rent the clubhouse, must fill out a form in the management office in the Development and put down a refundable $100.00 rental deposit at least seven days in advance of the date of the desired rental date. If the clubhouse is available on the requested date, the resident will be permitted to use it. There is a $150.00 rental charge. There are parking areas in the Development for residents and visitors. These parking areas include spaces reserved for the handicapped. The resident parking area is closer to the buildings than is the visitor parking area. Each unit is assigned one primary reserved parking space. Since there are not enough parking spaces for each unit to be assigned a second reserved parking space, secondary reserved parking spaces are assigned on a "first come, first served basis." Unit owners fortunate enough to have a secondary reserved parking space must pay $30.00 for a parking sticker (with a bar code), as well as a monthly fee of $20.00. If they do not make these payments, they forfeit the space. Unit owners desiring to obtain a secondary reserved parking space must go to the management office in the Development and make a request that their names be placed on a "waiting list." There are 50 to 60 names on the list at any one time. When a secondary reserved parking space becomes available, the unit owner at the top of the list is awarded the space, provided that the unit's account is current. If the unit owner is delinquent in paying any assessed common expenses, the unit owner will be bypassed and the space will be given to the next non-delinquent unit owner on the list. The Development has a gated, two-lane entrance, at which there is a guardhouse manned 24 hours a day, seven days a week by at least one member of the Development's in-house security staff4 (whose members also patrol the Development on foot and in golf carts). All vehicles must pass through this gated entrance to enter the Development. Hundreds of vehicles pass through each day. The lane farthest from the guardhouse is for residents with reserved parking spaces and current parking stickers (with bar codes) affixed to their vehicles. If the equipment (which includes a laser bar code reader) is working properly, the gate arm will automatically rise when a vehicle with a properly affixed parking sticker is approaching. If the equipment malfunctions, the security guard stationed at the guardhouse will let the resident in (after asking for the resident's name and apartment number and confirming, from a list of current residents, which all security guards are required to carry with them, that the resident lives in the Development). Once inside the gate, the resident must park in his or her unit's assigned space. The lane closest to the guardhouse is for visitors. Visitors must stop at the guardhouse to be cleared for entry and given a yellow visitor's pass (which expires at midnight that day and is good only for that visit) by the security guard on duty. There is a switch inside the guardhouse that the security guard moves to raise the gate arm in the visitor's lane and let properly screened and authorized visitors into the Development. The "post orders" that the security guards are given contain the following instructions regarding their dealing with visitors at the entrance to the Development: The security officer should fill in visitor's pass completely. The unit number, telephone number and the vehicle tag must be written. Do not tear identification numbers off passes. In the future, the security officer will be required to announce all visitors before allowing entry to the property. The only person that can grant a visitor entry, is the person they are visiting. Night & Day shifts should call when there is low traffic, or when suspicion exists. Security must verify the telephone number by: Using a residents telephone list. Do not ask the visitor for the telephone number. In the event that a telephone number is not [o]n the list, you may ask visitor for the number. The officer will thereafter obtain entry clearance from the resident. Place the new telephone number on the list. File an entry in the logbook for building manager. If telephone happens to be disconnected Make an entry in the log and highlight for future follow up. Entry will not be granted without authorization of resident or person being visited. NO PHONE NO ENTRY. After clearance, for the guest, has been obtained, the Security Officer is to: Give visitor a Guest Pass; the pass should be h[u]ng [on] front rear view mirror. Advise guest that pass needs to be visible at all times and th[at] he/she needs to park in visitors parking. Have guest sign the pass on the back, which authorizes us to tow after 2359. Visitors must proceed directly to the visitor parking area (which is to the left of the guardhouse as one enters the Development). The resident parking area is off limits to visitors, except when they are dropping off an infant or a handicapped or elderly person. Security guards on patrol inside the Development attempt to make sure that no persons have entered the Development who do not belong there. It is not unusual for them, particularly in the pool areas in the Development (where uninvited guests have been discovered in the past) to stop and question persons with whom they are unfamiliar to find out if they are residents or invited guests. If a security guard determines that the person is an uninvited guest, the security guard will call the police to obtain a trespass warning against the person. Respondent Samari Lake East Condominium Association, Inc. (Association), was incorporated in August of 1977. Pursuant to the Development's Declaration of Condominium, the Association is responsible for the operation of the Development and the maintenance, repair and replacement of the common elements (that is all parts of the Development except for the units themselves), and unit owners are obligated to pay assessments (regular and special) imposed by the Association for the costs and expenses incurred by the Association in the performance of its duties. The amount of a unit owner's regular assessment (or maintenance fee, as it is sometimes called) is based on the number of bedrooms in the unit and the unit's square footage. It includes charges for water and sanitary sewer services. (The Association is billed by the City of Hialeah Gardens for water and sanitary sewer services provided all of the units in the Development.5 The city does not bill individual unit owners.) According to Section 10B, C, and D of the Development's Declaration of Condominium: Assessments that are unpaid for over fifteen (15) days after the due date shall bear interest at a rate equal to the lesser of (i) eight percent (8%) per annum, or (ii) the maximum legal rate permitted under controlling law, from the due date until paid. In the sole discretion of the Board of Directors, a late charge, in an amount determined by the Board of Directors from time to time, for Assessments not paid when due may be assessed against a delinquent Unit Owner. Regular Assessments shall be due and payable monthly on the first (1st) of each month, unless the Board of Directors shall otherwise determine. The Condominium Association shall have a lien on each Unit for any unpaid Assessments, together with interest thereon, owed by the Unit Owner of such Unit. Reasonable attorney's fees (including fees in appellate proceedings) incurred by the Condominium Association incident to the collection of any Assessment or the enforcement of such lien (whether or not suit is instituted), together with sums advanced or paid by the Condominium Association in order to preserve and protect its lien, shall be payable by the Unit Owner upon demand and shall be secured by such lien. The Board of Directors may take such action as it deems necessary to collect Assessments by personal action, or by enforcing and foreclosing such lien, and may settle and compromise the same, if it shall so determine. Such lien shall be effective from and after the recording of a claim or lien as and in the manner provided by the Condominium Act. The Condominium Association shall be entitled to bid at any sale held pursuant to a suit to foreclose an Assessment lien, and to apply as a cash credit against its bid all sums due the Condominium Association covered by the lien enforced. In case of such foreclosure, the Unit Owner shall be required to pay a reasonable rental for the Unit, and the plaintiff in such foreclosure shall be entitled to the appointment of a receiver to collect such rental from the Unit Owner and/or Occupant. To assist it in discharging its responsibility to maintain the common elements in the Development, the Association employs a maintenance supervisor. Cosme Rodriguez has been employed by the Association as the Development's maintenance supervisor since 1993. He and his wife (who is black) live in the Development. Unit owners have been instructed to come to the management office if they have a maintenance-related complaint. After such a complaint is made, Mr. Rodriguez is sent out to investigate and determine what action if any, the Association should take to address the problem. On occasion, a "specialist," such as a plumber in the case of a plumbing problem, is hired to help. If it is determined that the problem is within the boundaries of the unit (which includes, among other things, according to Section 3B4(e), (f) and (l) of the Development's Declaration of Condominium, "[a]ll plumbing fixtures located within [the unit]," "[a]ll piping, ducts and wiring serving only [the] [u]nit," and "[t]he fresh water pipes, discharge pipes and all other plumbing, pipes and conduits serving only [the] [u]nit"), the Association will not take any action other than to tell the unit owner of its determination. The Development is a much more desirable place to live today than it was in the mid-1990's, when units were selling for less than a third of their present value.6 By the mid-1990's, conditions in the Development had become, in a word, "deplorable," so bad that condemnation proceedings had commenced and one of the buildings (Building 5) had been ordered to be demolished. There were a number of fire code and building code violations, some of which were "life-threatening." The fire alarm system was not operational, and replacement parts could not be found because the system was "obsolete." There were railings on the exterior corridors and catwalks above the first floor that had rusted and were loose. Some railings had already fallen off. The elevators did not work. There were cracks and spalls in the walkways, fire stairs, and building exteriors. Water was leaking into the buildings through the roofs. The swimming pools were closed because the water (which had turned green) was no longer safe to swim in, and they had become a dumping ground for used tires and other unwanted items. Crime was rampant in the Development. Two gangs considered the Development their turf. Light bulbs and fixtures in common areas in the Development were constantly being broken, largely due to gang activity. Consequently, "[t]he place was dark at night." The parking lot was littered with abandoned and stolen vehicles, as well the parts of vehicles. A "clandestine" car repair business was being operated out of the parking lot. When there was a significant rain event, the parking lot would flood because of poor drainage. Sometimes the water would be knee deep. Visitors commonly and, with impunity, parked in residents' reserved parking spaces or elsewhere where they did not belong (such as on the sprinklers). Overpopulation was a serious problem. Notwithstanding the mandate in the Development's Declaration of Condominium that "[e]ach Unit shall be used only as a single family residence," some units were shared by more than one family and had as many as 15 occupants. There were instances where a single room in a unit (either a bedroom or the living room) was rented out by the family living in the unit to another family (or families7), in violation of the prohibition in the Development's Declaration of Condominium that "[n]o separate part of a Unit may be rented " The large number of residents overwhelmed, not only the Development's facilities, but also the Association's financial resources. The cost of water and sewage usage was more than the Association was able to pay. The Association was in arrears to the City of Hialeah Gardens approximately $350,000.00 for water and sanitary sewer services. The Association also owed money for trash removal services. Making it even more difficult for the Association to meet its financial obligations was that some unit owners (particularly the younger ones) were not paying their assessments. With the Association paralyzed by debt, unable to meet its responsibilities, "chaos" reigned in the Development. Finally, in 1995, a group of unit owners, led by Maria Colson, went to court and requested that the Association be placed in receivership and that the court, through a receiver, administer the Association. The request was granted by Miami- Dade County Circuit Court Judge Rosemary Usher Jones, who, in or around September of 1995, appointed Stanley Tate to serve as receiver for the Association.8 In or around November of 1995, Mr. Tate was succeeded as receiver by a team of three persons, one of whom later became the sole receiver. The plight of the unit owners and the Association had not improved appreciably by May of 1996, when Judge Jones appointed Respondent Rafael Penalver to serve as receiver for the Association. Mr. Penalver is a Florida-licensed attorney who has been practicing law since 1976. He presently is a partner in the law firm of Penalver and Penalver, P.A. Since high school, Mr. Penalver has been actively involved in civil rights activities. Among the most notable of these activities was his service as a member of the Commission for four years. Mr. Penalver began actively serving in his capacity as receiver for the Association on July 1, 1996. A couple of months later, Mr. Penalver, on behalf of the Association, contracted with SPM Group, Inc. (SPM), an established community association management firm, to provide a site manager for the Development to oversee the Association's day-to-day operations. The site manager that SPM provided was Respondent Carlos Reyes, one of its employees. Mr. Reyes is a Florida-licensed community association manager. The Association is still in receivership today. Mr. Reyes continues to act as site manager. Mr. Penalver remains the receiver, however, he now serves at the pleasure, and under the supervision, of Miami-Dade County Circuit Court Judge Michael Chavies, who was assigned the case in 1999.9 Judge Chavies is "very involved" in administering the Association. He holds hearings once or twice a month. Unit owners are given the opportunity to address Judge Chavies at these hearings and to air their concerns. Notices of the hearings before Judge Chavies are posted at various places in the Development. These notices are in both English and Spanish, as are all other notices that are posted by Respondents in the Development.10 Unit owners also have the opportunity to attend meetings conducted from time to time by Mr. Penalver and Mr. Reyes (including the annual meeting of unit members, at which Mr. Penalver presents them with a copy of the annual report that he prepares.) Spanish is spoken at these meetings; however, both Mr. Penalver and Mr. Reyes are fluent in Spanish and English,11 and they have never refused any request to serve as interpreter for English-speaking attendees who do not understand or speak Spanish. (Ms. Williams is not someone who would need such help from Mr. Penalver or Mr. Reyes. As she testified at hearing, while she does not read or write Spanish "very well," she does "speak it and understand it."12) The Development has experienced a "turn[] around" in the time that Mr. Penalver and Mr. Reyes have been there. Many physical improvements have been made, and, as a result, the condemnation proceedings that had been initiated before their arrival have been "halted." New railings have been installed.13 There is a new sprinkler system. Fire extinguishers are now properly located (every 75 feet) in the common exterior corridors. A new fire alarm system (including mini-horns in each unit), financed by a special assessment imposed in July 1999, has been installed. The project began in or around late 1999 or early 2000. Efforts to complete the project in a timely manner were stymied by unit owners who did not allow the contractor into their units when asked to do so. In some instances, court orders were needed to gain access. (The contractor experienced some problem, initially, in gaining access to Petitioners' unit.) Four buildings, including Building 4, Petitioners' building, have new elevators, and the elevators in all of the buildings now operate reliably. New lighting has been installed. The swimming pools are open and safe to use. The parking areas have been repaved and equipped with a new storm drainage system, which has alleviated the previous flooding problems. This project (which was first approved in 1995 or 1996, before Mr. Penalver was appointed receiver) was finished in September of 2001. The project cost $377,000.00 and was paid for with federal funds obtained through the Community Development Block Grants program. The recipient of the funds was the City of Hialeah Gardens, not the Association. The funds were administered by Miami-Dade County. Acosta Constructors, which performed work on the project pursuant to a contract with the City of Hialeah Gardens, posted signs (on barricades) in the parking areas, in Spanish, advising motorists as to where there was construction work ongoing and where they therefore could not park. The Association was required by law, after the project had been completed, to increase the size and number of handicapped spaces and to locate these spaces closer to the buildings in the Development than the old handicapped spaces had been. To comply with this requirement, the parking areas had to be reconfigured. The reconfiguration has resulted in a reduction of the total number of parking spaces in the Development, making an already tight parking situation worse. Before the project, there were a total of 953 parking spaces (including resident, visitor, and handicapped spaces). There are now a total of approximately 920 parking spaces, 870 of which are for residents. Of the 870 resident parking spaces, 635 are primary reserved parking spaces (one for each unit) and the remaining spaces are secondary reserved parking spaces. Unit owners had to be assigned new primary reserved parking spaces following the reconfiguration. Mr. Penalver enlisted the assistance of a unit owners' advisory committee to help him determine how these reassignments should be made. Taking into consideration the input he received from the unit owners' advisory committee, Mr. Penalver recommended to Judge Chavies that new primary reserved parking spaces be assigned based on "proximity" (distance from the unit), with first floor unit owners given the opportunity to park directly behind their units, where possible, so as to minimize the noise and other disturbances they had to contend with due to the location of their units and for the additional purpose of enhancing the value of these first-floor units (which have a lower value than comparable units on the floors above them). Judge Chavies adopted Mr. Penalver's recommendation at a hearing held on the matter (of which unit owners were given written notification, in both English and Spanish). Thereafter, Petitioners were assigned a new primary reserved parking space (space number 503), which is farther away from their unit than was their old space (304). Others owning units above the first floor, including Petitioners' next door neighbors (whose new primary reserved parking spaces are next to Petitioners') now also have to walk a greater distance to get from their primary reserved parking space to their unit than they did prior to the reconfiguration of the parking areas. Petitioners' race and familial status played no role in the assignment of their new primary reserved parking space. While much progress has been made, there are still physical improvements that need to made by the Association. The buildings' roofs still leak and need to be repaired. Steps, however, have been taken to fix the problem. A special assessment of approximately $2,000.00 per unit (approved by Judge Chavies) has been imposed for a roof replacement project and a contractor to do the work has been hired. There are still cracks and spalls in the walkways,14 fire stairs, and building exteriors. There are such cracks and spalls in the area outside of Petitioners' unit15 and elsewhere in the Development, including, most notably, in Buildings 1 and 2, which have the greatest number, and in the fire stairs in the Phase II buildings. The next major project the Association intends to undertake (following the completion of the roof replacement project) is the replacement of these fire stairs. After all structural repairs have been made, the buildings will be painted. Petitioners' race and familial status have played no role in the Association's prioritization of physical improvements. The Association's efforts to make physical improvements have been hampered by the failure of some unit owners to pay their assessments when due. Initially, Mr. Penalver simply "begged" delinquent unit owners to pay the money they owed and took no other action. After three years of employing this strategy, he started sending cases to a collection attorney, Michael Chadrow, Esquire, of the law firm of Bakalar, Brough & Chadrow, P. A. (Bakalar law firm) to take appropriate legal action. Since March of 1999, Mr. Chadrow and others in the Bakalar law firm have filed 112 foreclosure actions on behalf of the Association. Once a matter is turned over to the collection attorney, Mr. Penalver takes a "hands off approach" and lets the attorney handle all communications with the delinquent unit owner regarding the unit owner's arrearage. Petitioners were among the unit owners who did not pay their assessments and whose cases were sent by Mr. Penalver to the collection attorney. Petitioners' case was one of the last to be sent,16 even though their outstanding unpaid balance was greater than most, if not all, other delinquent unit owners. They had made no payments from August 31, 1996, until the time Mr. Penalver turned their case over to the collection attorney. As a consequence of being behind in their payments, Petitioners were unable to obtain a secondary reserved parking space. They had requested that their names be placed on the "waiting list" for such a space and they were next on the list when a space became available, but were bypassed because they were in arrears at the time. Petitioners' race and familial status played no role in their not being able to obtain a secondary reserved parking space. Mr. Penalver delayed in turning Petitioners' case over to the collection attorney because he thought that it might be difficult for Petitioners, due to the large size of their family, to meet their financial obligations to the Association. Before sending their case to the collection attorney, Mr. Penalver made an effort to speak with Petitioners. He went to their unit several times and knocked on the door, but no one answered. Mr. Penalver was finally able to make contact with Mr. Williams, when he spotted Mr. Williams outside of Petitioners' unit. Mr. Penalver asked if Williams would be willing to work out a "payment plan." Mr. Williams responded by telling Mr. Penalver that he would be filing a harassment action against Mr. Penalver. Petitioners' race and familial status played no role in Mr. Penalver's decision to send their case to the collection attorney (although their familial status was a factor in his not sending it sooner). Mr. Penalver believed that not pursuing legal action against Petitioners after having waited as long he did for Petitioners to bring their account current would have been unfair to the ninety percent or so of the unit owners who were up-to-date in their assessment payments. On May 1, 2001, a Final Summary Judgment of Foreclosure and Order Taxing Costs and Attorney's Fees was entered against Petitioners and in favor of the Association in Miami-Dade County Circuit Court. As of June 29, 2001, Petitioners had not made any assessment payments since August 31, 1996, and their outstanding unpaid balance was $15,616.00. On that date, faced with the imminent public sale of their unit, they tendered payment to the Association, bringing their account current and satisfying the judgment that had been entered against them. By the next month, Petitioners were already in arrears again, and, in the following months, they continued to fail to make their assessment payments. A second foreclosure action was commenced by the Association against Petitioners in Miami-Dade County Circuit Court. A Final Judgment of Foreclosure was entered against Petitioners and in favor of the Association on October 18, 2002. A Clerk's Certificate of Satisfaction of Final Judgment of Foreclosure was issued on December 19, 2002. Petitioners corresponded in writing with the Bakalar law firm during the time the law firm was working on collecting the monies Petitioners owed the Association. In their correspondence to the law firm, after complaining about the conditions in the Development and the manner in which they and their family and friends had been treated by the Association and its agents, Petitioners expressed their willingness to "come to some type of agreement" with the Association. Following his routine practice, Mr. Penalver determined that the issues raised in the correspondence should be dealt with by the collection attorney handling the case. Despite not having the cooperation of all unit owners, the Association's financial situation is not nearly as bleak now as it was when Mr. Penalver became receiver. For example, the amount of the Association's indebtedness to the City of Hialeah Gardens is presently $35,000.00, a tenth of what it was at the start of Mr. Penalver's receivership. Like the Association's indebtedness, crime in the Development has also been reduced dramatically. A significant contributing factor to the reduction in crime in the community has been the Association's stepped-up efforts to prevent unauthorized persons from gaining entry to and loitering in the Development. The Association's first line of defense against intruders is the security guard stationed at the guardhouse, who is responsible for screening visitors seeking to enter the Development and instructing those permitted entry where to park. Ms. Williams' sister, Iris Thomas, was involved in an incident with security staff at the entrance to the Development on the evening of October 24, 2001. Ms. Thomas had been given a visitor's pass and allowed to enter the Development earlier in the day to pick up three of Petitioners' children. When she returned to the Development with the children,17 she got into a dispute with the security guard manning the entrance. She wanted to drive into the resident parking area closest to Petitioners' unit so she could quickly drop off the children and then leave. The security guard told her, however, that she had to park in the visitor parking area inasmuch as none of the children in the vehicle were infants. Ms. Thomas expressed her displeasure upon being told this. The security guard contacted his immediate supervisor (the shift supervisor that evening), Alexander Santiero, and asked him to come to the guardhouse to assist in dealing with Ms. Thomas. As he approached the guardhouse and started speaking with the security guard, Mr. Santiero saw one of the children in Ms. Thomas' vehicle exit the vehicle and go into the guardhouse. The child apparently touched the switch controlling the gate arm in the visitor's lane because the arm began to rise. Mr. Santiero reacted by getting a portable metal sign to drag over an "access sensor" on the pavement in front of Ms. Thomas' vehicle (on the other side of the gate) so that the arm would lower. As he moved in front of Ms. Thomas's vehicle with the sign in his hand, Ms. Thomas' vehicle lurched forward, hitting Mr. Santiero and injuring his ankle. In anger, Mr Santiero threw the sign that he was still holding onto at Ms. Thomas' vehicle. Police were called to the scene, but no arrests were made. The determination to deny Ms. Thomas access to the resident parking area was in keeping with reasonable Association policy and, like Mr. Santiero's reaction to being hit by Ms. Thomas' vehicle, was not based on racial or other impermissible considerations.18 The security guards who patrol the Development are responsible for checking to see that no unauthorized persons have been successful in gaining entry to the Development. It is also their responsibility to make sure that those who are authorized to be there (invited guests and residents) are acting in compliance with the Association's rules and regulations and, if they are not, to take appropriate action. Discharging these responsibilities frequently draw the security guards to the pool areas, which are magnets for uninvited outsiders who enter the Development by jumping over the fence that separates the Development from the property around it. Ms. Williams has had two encounters with security guards in the pool area (in Phase I) that have left her upset. The first encounter occurred in or around June of 1999. Ms. Williams was in the pool with her two-year old son, who was wearing only a diaper, when she was approached by a security guard asking that she change her son into shorts. Ms. Williams complied with the request. At no time was she told that she could not use the pool. The second encounter occurred in or around June of 2000. Ms. Williams was in the pool area with her children and other family members (her mother-in-law, her younger sister, and a nephew) when she got into a dispute with a security guard who had been dispatched to the area to investigate a complaint of excessive noise. Ms. Williams was unable to convince the security guard that she lived in the Development. Consequently, the security guard asked her and her family to leave. Ms. Williams became "outraged." The security guard contacted Mr. Reyes and asked him to come to the pool area. When he arrived on the scene, Mr. Reyes walked up to Ms. Williams, whom he recognized, and told her to calm down. He then spoke to the security guard and told him that Ms. Williams lived in the Development and that therefore she and her family were entitled to use the pool. The security guard responded by apologizing to Ms. Williams. After speaking with the security guard, Mr. Reyes turned his attention back to Ms. Williams. One of her sons, who appeared to Mr. Reyes to be between six and seven years of age, was naked. Mr. Reyes told Ms. Williams that she and her family could stay in the pool area, but that the young boy needed to have on appropriate attire. There is no indication in the evidentiary record in the instant case that the actions of the security guards and Mr. Reyes in the two pool area incidents related above involving Ms. Williams and her family were the product of any racial animus or any other illicit motivation. Petitioners and their family have not used the pool since the last of these two incidents. They have not done so, however, of their own choosing, not because they have been denied use of the pool. Another common facility that Petitioners have not used is the clubhouse. It cannot be said, though, that they have been unfairly denied use of the clubhouse inasmuch as, at no time, have they followed the established procedure to which all unit owners must adhere in order to be able to enjoy such use. The security guards are not the only ones who patrol the grounds of the Development. Mr. Penalver and Mr. Reyes do so as well. On the evening of March 22, 2001, at around 9:00 p.m., Mr. Penalver observed a young man in a ski cap pulled down to his eyes walking slowly on the "island" between two rows of parked vehicles in the resident parking area. It appeared to Mr. Penalver that the young man was looking inside the parked vehicles. This aroused Mr. Penalver's suspicion, particularly since there had been a car burglary in the Development a couple of nights before. Mr. Penalver approached the young man, whom he did not recognize, and asked him if he lived there. He asked no other questions, nor did he stop or detain the young man. The young man, it turned out, was Darrell Williams, Petitioners' teenage son. Darrell responded to Mr. Penalver's inquiry by calling Mr. Penalver a "racist." He then walked away, went up to his parents' unit, and told them about what had just happened. Mr. Williams decided to call the police "to put this on record" because he believed (erroneously) that Darrell had been unfairly harassed and discriminated against by Mr. Penalver. After contacting the police, Mr. Williams went downstairs to the resident parking area and confronted Mr. Penalver in a hostile manner. He informed Mr. Penalver that he had called the police and demanded that Mr. Penalver wait with him until the police arrived. Mr. Penalver remained with Mr. Williams, waiting for the police to respond to Mr. Williams' call. The police officer who responded to the scene spoke with Mr. Williams and Mr. Penalver, filled out paperwork, and then left. That evening, Mr. Penalver did not treat Darrell any differently than he would have treated anyone else, unfamiliar to him, doing what he observed Darrell doing. The reduction in the Association's indebtedness and in crime in the Development has coincided with a decrease in the number of persons residing in the Development. To address the overpopulation problem that plagued the Development at the time Mr. Penalver took over as receiver, the Association, in November of 1996, adopted, with court approval, the following reasonable occupancy limits, which are consistent with HUD guidelines: a maximum of two persons in a one-bedroom unit; a maximum of four persons in a two-bedroom unit; and a maximum of six persons in a three-bedroom unit. This policy was designed to reduce, not the number of families with children who lived in the Development,19 but the total number of persons of all ages who called the Development home. Notices of this policy are posted at the entrance to every building in the Development. The Association has issued anywhere from 50 to 100 notices of violation to unit owners in violation of this policy. In those instances where the unit having a greater number occupants than allowed is being used by more than one family, a fine has been imposed against the unit owner. The Association has not taken any other action to enforce its adopted occupancy limits. After receiving complaints from Petitioners' neighbors about the noise and the number of persons living in Petitioners' unit, Mr. Reyes, on March 29, 2001, sent Petitioners a notice of violation advising Petitioners that there were "too many people" in their unit. No fine was imposed, however. Although Petitioners continued to be in violation of the occupancy limit for a two-bedroom unit, no enforcement action was taken against them pursuant to Mr. Penalver's instructions. Mr. Penalver, however, did recommend to Petitioners, when there were three-bedroom units available, that they consider moving into such a unit,20 a recommendation Petitioners declined to follow. Mr. Penalver has been criticized by some unit owners for not strictly enforcing the Association's occupancy limits. He has endured this criticism since he "does not have the heart to force people out" due to the size of their families. In addition to the March 29, 2001, notice of violation for having "too many people" in their unit, Petitioners have received several other notices of violation during Mr. Penalver's receivership. Like the March 29, 2001, notice of violation, these other notices of violation were signed by Mr. Reyes (or for him, by his secretary) and contained the following advisement: If the above mentioned violation(s) is(are) true, then we respectfully request that you immediately correct them[.] [I]f you disagree [,] [p]lease notify us in writing within 7 days. If the violation(s) re- occurs, per Florida Statute 718.112[,] . . . you can be subjected to a fine of $50.00 per day up to $1,000.00. Your cooperation in observing the rules and regulations would be greatly appreciated[.] [T]his will help us in maintaining a peaceful and safe place to live. These other violations were based on reports received by Mr. Reyes of misconduct involving Petitioners' children. One notice of violation was dated January 24, 2000. It advised Petitioners that their "account ha[d] been fined $50.00." The violation alleged was "throwing a mustard bottle." Another notice of violation was dated February 7, 2000. The violation alleged was "breaking glass bottle, threatening other children." Mr. Reyes had been told about the incident by two or three young residents (approximately nine to 11 years of age). The children reported to Mr. Reyes that the incident took place on the grounds of the Development. The notice reflected that no fine was being imposed against Petitioners. A few days later, Petitioners received a notice of violation, signed by Mr. Reyes' secretary, advising them a second time of the violation that had been described in the February 7, 2000, notice of violation. This notice of violation, like the February 7, 2000, notice of violation, indicated that Petitioners were not being fined. There was a notice of violation dated February 10, 2000, advising Petitioners that their "account ha[d] been fined $100.00" for "threat[en]ing other kids, picking fights." Petitioners were fined because this was a repeat offense.21 Petitioners received another notice of violation dated February 10, 2000. The violation alleged was "jumping on vehicles." The notice reflected that Petitioners' "account ha[d] been fined $100.00." Earlier in the month, the Development's director of security, Pablo Diaz de la Rocha, had observed two of Petitioners' sons, Larry Williams, Jr., and Jordan Williams, jumping on the hoods of parked vehicles in the Development. Mr. de la Rocha took their names and wrote a report, which he subsequently sent to Mr. Reyes. He also entered into an agreement with Larry and Jordan, allowing them to perform "community service" (by taking to the bus bench, outside the Development's entrance, shopping carts that had been brought into the Development from a nearby supermarket) in lieu of their parents' having to pay a fine for their misconduct. To Mr. de la Rocha's knowledge, Larry and Jordan did not live up to their end of the bargain. It was only after being advised by Mr. de la Rocha of the brothers' noncompliance that Mr. Reyes sent Petitioners the notice of violation described above. Mr. Reyes has not issued a notice of violation every time he has received a complaint about the conduct of Petitioners' children. The notices of violation he has sent to Petitioners (which number no more than seven or eight) represent a very small percentage of the total number of notices he has issued since becoming site manager. Other families whose children have engaged in misconduct of which Mr. Reyes has been made aware have also received notices of violation. Petitioners have not been unfairly singled out. No notice of violation has been sent to Petitioners, nor has any fine been imposed upon them, based on racial considerations or on their familial status. Unfortunately, Petitioners are not able to enjoy the overall improved conditions in the Development because the conditions inside their unit are such that they can no longer live in it. The unit has been uninhabitable since on or about Saturday, July 6, 2002. On that day, Ms. Williams and her children, upon returning to their unit, discovered the unit "ankle deep" in water and waste materials. Ms. Williams telephoned the guardhouse and advised the security guard on duty of the situation. The family then left, taking with them what they could. That same day, Mr. Rodriguez was asked by Mr. Reyes to check out a "plumbing problem" in Petitioners' unit. Mr. Rodriguez went to Petitioners' unit to investigate. It was his routine practice, as maintenance supervisor, to check out all maintenance-related problems referred to him, regardless of who the unit owner was complaining about the problem. He treated Petitioners' complaints no differently than those made by other unit owners. Mr. Rodriguez knocked on the door to Petitioners' unit, but no one answered. He then went up to the roof. Using a motorized snake, he made sure that the main lines servicing Petitioners' unit and the units beneath and above Petitioners' unit (which main lines are common elements that the Association is responsible for maintaining) were unclogged. He then returned to his unit, thinking "everything was okay." The following Monday (July 8, 2002), Mr. Rodriguez was asked to look into a complaint from Petitioners' next door neighbor (in unit 2316) that water was leaking into her unit from Petitioners' unit. Mr. Rodriguez went back to Petitioners' unit. Mr. Williams was there. He let Mr. Rodriguez in and showed him the flooding in the unit. Mr. Rodriguez then returned to the roof. He put the snake down the main lines and found no obstructions. Mr. Rodriguez reported back to Mr. Reyes, telling him that the flooding in Petitioners' unit did not appear to be caused by any problem in the main lines. After obtaining Mr. Penalver's approval, Mr. Reyes hired a plumber to determine the cause of the flooding in Petitioners' unit. The plumber Mr. Reyes hired was Ricardo Frankie. Mr. Frankie has worked as a plumber for the past 23 years. Mr. Frankie came out to the Development the same day he was called (July 8, 2002). After conducting the tests he typically performs to determine the source of a overflow problem in a multi-story building, Mr. Frankie concluded that there was a blockage, not in the main lines, but in a pipe or pipes serving only Petitioners' unit. Before leaving, Mr. Frankie verbally advised Mr. Rodriguez of his conclusion. He subsequently provided a written report. Mr. Rodriquez informed Mr. Williams that, because the obstruction was within the interior boundaries of Petitioners' unit, it was Petitioners', not the Association's, responsibility to take care of the problem. On July 11, 2002, Mr. Williams contacted the Miami- Dade County Health Department complaining that there was "sewage backup throughout [his] building." A Health Department inspector, Paul Silvestri, was dispatched to the Development that same day, but Mr. Silvestri was unable to make contact with Petitioners. Another Health Department inspector, Seidel Sanchez, went to the Development the following day. Based on what he observed and the information he obtained from speaking with Mr. Rodriguez, with Mr. Williams, and with others, Mr. Sanchez decided to issue Mr. Williams an Official Notice to Abate a Sanitary Nuisance, which directed Mr. Williams to abate, within 48 hours, the "unsanitary condition existing on property under [his] control," to wit: "sewage water inside unit 2314, also [going] into unit 2316 closet and room." Petitioners had a plumber, Lee Allen, come to their unit that same day to look at the problem. The Association's failure to take any further action to address the flooding problem in Petitioners' unit was based on the reasonable belief that the Association was under no legal obligation to take such action. Petitioners' race and familial status played no role in the Association's failure to act. In summary, there has been no showing of any acts of commission or omission by Respondents the purpose or effect of which was to disadvantage Petitioners based on their race or familial status.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission issue a final order finding that Respondents are not guilty of any "discriminatory housing practice" and dismissing Petitioners' Petition for Relief based on such finding. DONE AND ENTERED this 29th day of April, 2003, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 2003.
