The Issue Each of the Respondents have been charged with violations of the Florida Securities and investor Protection Act, Chapter 517, Florida Statutes. The following violations were described in the Administrative Complaint dated August 30, 1990: Whether Respondent Baum, in his capacity as a Branch Manager for the Boca Raton branch office of First Eagle, Inc., offered for sale and sold securities from an unregistered branch office. Complaint, Paragraph 20A Whether Respondent Baum, in his capacity as a Branch Manager for the Boca Raton branch office, offered for sale and sold from the branch securities which were neither exempt from registration nor registered with the State of Florida. Complaint, Paragraph 20B Whether, while serving as branch manager, Respondents Baum, Canouse and Bergelt failed to have a registered options principal in the Boca Raton branch office for First Eagle, Inc., but permitted options trades, which the Department alleges is a violation of Rule 6E- 600.013(1)(p), Florida Administrative Code, and Article III, Section 33, Appendix E, Section 20(c), of the National Association of Securities Dealers Rules of Fair Practice. Complaint, Pagagraphs 20F, 21F Whether Respondent Baum, in his capacity as Branch Manager of the Boca Raton branch office of First Eagle, Inc., failed to maintain statements for the customers' accounts which involved option transactions in violation of Rule 6E-600.013(1)(p), Florida Administrative Code, and Section 33, Appendix E, Section 17(b), of the National Association of Securities Dealers Rules of Fair Practice. Complaint, Pagagraph 20G. Whether all Respondents functioned as the Branch Manager and in that capacity permitted the sale of securities by unregistered persons and concealed trading by unregistered persons in violation of Section 517.301, Florida Statutes. Complaint, Paragraph 21A Whether the Respondents failed to conduct their business so as to provide an audit trail for all of their transactions, in violation of Rule 6E-600.014(7), Florida Administrative Code. Complaint, Paragraph 21C Whether the Respondents engaged in and concealed the activity of splitting commissions between registered and unregistered sales persons in violation of Section 517.301(1)(c), Florida Statutes, and Rule 3E-600.13(2)(f), Florida Administrative Code. Complaint, Paragraph 21D Whether the Respondents failed to observe just and equitable principles of trade in violation of Rule 6E-600.013(1)(p), Florida Administrative Code, and Article III, Section I, of the National Association of Securities Dealers Rules of Fair Practice. Complaint, Paragraph 21E.
Findings Of Fact Exception No. 1: The Department's first exception is to footnote No. 1 in Finding of Fact No. 2 of the Recommended Order wherein the Hearing Officer stated: Current Rule 3E-600.004(3)(a), Florida Administrative Code (1991), gives the impression that a branch office registration filed on Department forms and accompanied by the fee prescribed would be effective on filing, not at some later date. Whether that was true in October 1987 cannot be determined from the current codification of the rules. The Department contends that this statement is an erroneous interpretation of an agency rule which completely ignores the Department's authority to review applications for licensure pursuant to Section 517.12, Florida Statutes, and would, if allowed to stand, render the Department's regulatory function "nugatory." Pursuant to Section 120.57(1)(b)10., Florida Statutes, the Department has the authori y to reject a Hearing Officer's conclusions of law and interpretation of administrative rules. Since the Hearing Officer has incorrectly interpreted Rule 3E-600.004(3), Florida Administrative Code, the Department's exception to above quoted statement is hereby accepted and footnote No. 1 in Finding of Fact No. 2 of the Recommended Order is accordingly rejected. Exception No. 2 and No. 3: The Department's second and third exception is to Finding of Fact No. 4 wherein the Hearing Officer found that "[t]he Boca Raton branch conducted no trades, but sent order tickets to Denver for review, approval and execution. New stock or options accounts were not opened directly in Boca Raton. The forms were filled out and Baum or another supervisor signed them after checking them for completeness and sent them to Denver for acceptance." The Department contends that acceptance of the Hearing Officer's conclusion would result in unregistered persons and branch offices conducting business in every state under the pretense that their main office is licensed. Section 517.12, Florida Statutes, provides in part: No dealer, associated person, or issuer of securities shall sell or offer for sale any securities in or from offices in this state, or sell securities to persons in this state from offices outside this state, by mail or otherwise, unless the person has been registered with the department pursuant to the provisions of this section. (5) No dealer or investment adviser shall conduct business from a branch office within this state unless the branch office is registered with the department pursuant to the provisions of this section. Section 517.021, Florida Statutes, defines the terms "offer to sell" and "sale" as follows: (12) "Offer to sell," "offer for sale," or "offer" means any attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security, or an investment or interest in an investment, for value. (16) "Sale" or "sell" means any contract of sale or disposition of any investment, security, or interest in a security, for value.... Finding of Fact No. 4 involves both factual findings and conclusions of law. Section 517.12(1), Florida Statutes, proscribes the "sale" or "offer for sale" of any securities unless the dealer, associated person, or issuer is registered with the Department Section 517.12(1), Florida Statutes, does not use the terms "conduct," "execute," or "trade." While it may be true that the Boca Rattan office did not actually "conduct" or "execute" securities trades, that office did engage in the offering and selling of securities as defined by Sections 517.021(12) and (16), Florida Statutes. The Boca Raton office solicited customers, filled out new account forms, and wrote up order tickets for the purchase or sale of securities. To the extent that the Hearing Officer's conclusion in Finding of Fact No. 4 implies that the Boca Raton office was not in violation of Sections 517.12, Florida Statutes, that conclusion is rejected as clearly erroneous and not Supported by competent, Substantial evidence. Exception No. 4: The Department'5 fourth exception is to Finding of Fact No. 5 wherein the Hearing Officer found that the Department's evidence that Joseph Canouse was a branch manager of the Boca Raton branch office was unpersuasive. The Department contends that competent, substantial evidence was presented at hearing to support findings that Mr. Canouse was a branch manager. In Heifetz v. Department of Business Regulation, 475 So.2d 1277 (Fla. 1st DCA 1985), the district court of appeal explained the respective roles of hearing officers and state agencies in deciding factual issues as follows: Factual issues susceptible of ordinary methods of proof that are not infused with policy considerations are the prerogative of the hearing officer as the finder of fact. McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977). It is the hearing officer's function to consider all the evidence presented, resolve conflicts, judge credibility of witnesses, draw Permissible infer- ences from the evidence, and reach ultimate findings of fact based on competent, substantial evidence. State Beverage Department v. Ernal, Inc., 115 So.2d 566 (Fla. 3rd DCA 1959). If, as is often the case, the evidence presented supports two inconsistent findings, it is the hearing officer's role to decide the issue one way or the other. The agency may not reject the hearing officer's finding unless there is no competent, substantial evidence from which the finding could reasonably be inferred. The agency is not authorized to weigh the evidence pre- sented, judge credibility of witnesses, or otherwise interpret the evidence to fit its desired ultimate conclusion. Id. at 1281 Having reviewed the transcript of hearing, the exhibits and pleadings in this matter, it cannot be determined that there is no competent, substantial evidence to support the Hearing Officer's finding. Although evidence was presented at the hearing to show that Mr. Canouse did act as branch manager, the Hearing Officer weighed that evidence and determined that it was unpersuasive. Since there is some competent, Substantial evidence in the record to support the Hearing Officer's finding, this finding cannot be rejected by the undersigned, and the Department's fourth exception is accordingly rejected. Heifetz, supra. Exception No. 5: The Department's fifth exception is to Finding of Fact No. 7 wherein the Hearing Officer found that William Baum could not be held liable for violations of Section 517.12(5), Florida Statutes, because he did not "know" that the branch office's registration was not effective when he became branch manager on October 24, 1987, that he had "no responsibi1ity at First Eagle to register offices at any time before he was appointed branch manager, and that registration were handled by the compliance officer at the First Eagle office in Denver, Colorado. Finding of Fact No. 7 involves both factual findings and conclusions of law. While it may be true that Mr. Baum did not "know" that the branch office was not registered with the Department on the day he was hired to be the branch manager, this does not exonerate him from violating Section 517.12, Florida Statutes. Section 517.12(8), Florida Statues, makes "any principal, manager, supervisor, or person exercising similar functions responsible for the acts of the associated persons affiliated with a dealer or investment adviser." There was no dispute that Mr. Baum was the branch manager of the Boca Raton office as of October 24, 1987. By agreeing to accept the position of branch manager of the Boca Raton office, Mr. Baum also accepted the responsibility to ensure that the branch office was operating in accordance with the provisions of Chapter 517, Florida Statutes, and the rules promulgated thereunder. The Hearing Officer's finding that Mr. Baum could not be held liable for the operation of the branch office prior to the effective date of registration with the Department is hereby rejected as an erroneous conclusion of law. Scienter, or knowledge, is not required to make out a violation of Section 517.12, Florida Statutes. State v. Houghtaling, 181 So.2d 636 (Fla. 1965). The Hearing Officer also found that the branch office application was received by the Department on October 2, 1987, and that the record did not explain what caused the delay in the effective date of registration which was based on that application. This finding is also rejected based upon the Hearing Officer's erroneous interpretation of Rule 3E-600.004(3), Florida Administrative Code, as previously discussed in the ruling on the Department's first exception. Exception No. 6: The Department's sixth exception is to Finding of Fact Nos. 10 and 13. 1/ The Department contends that the Hearing Officer erred in finding that Mr. Baum "was not responsible for determining whether stock in the inventory of First Eagle, Inc. was exempt from the registration provisions of Florida law. The compliance officer at the home office of First Eagle had that responsibility. " The Department contends that the Hearing Officer also erred in concluding that the Department failed to show a duty on the part of branch managers to ensure an exemption from registration exists prior to the offer or sale of an unregistered security and that the liability for this type of violation is attributable to the compliance officer in the Denver office. Although labelled a "finding of fact," the Hearing Officer's determination that liability for the sale of unregistered securities lies with the compliance department of First Eagle in Denver is, in reality, a "conclusion of law." The Hearing Officer's conclusion that the Department failed to show a duty on the part of a branch manager to ensure that an exemption from the registration requirements exists is contrary to the law and is hereby rejected. Section 517.171, Florida Statutes, provides: It shall not be necessary to negate any of the exemptions provided in this chapter in any complaint, information, indictment, or other writ or proceeding brought under this chapter; and the burden of establishing the right to any exemption shall be upon the party claiming the benefit of such exemption. [e.s.] The Department was not required to prove that there is an affirmative duty on associated persons to independently verify the exemption status of securities that they are offering for sale or selling. Section 517.171, Florida Statutes, places the burden of proof on the person claiming the benefit of any such exemption. The Respondents failed to provide any competent, substantial evidence that the Shogun Oil, Ltd. securities were entitled to an exemption, and the Hearing Officer found that those securities did not qualify for exemption in Finding of Fact No. 12. The Department rejects the conclusions in Finding of Fact No. 10 as a clearly erroneous interpretation of the provisions of Section 517.221, Florida Statutes. Moreover, the Department rejects the Hearing Officer's conclusions in Finding of Fact No. 13 that the sale of unregistered Securities by the Boca Raton office was "more properly attributable to the compliance division of First Eagle than to Baum personally" and that "Baum's reliance on the compliance division of the Denver home office was reasonable." As stated earlier, there was no dispute that Mr. Baum was the branch manager of the Boca Raton office. As the branch manager, he was responsible for the operation and supervision of the activities of that office which would include verifying the exemption status of securities that were being offered and sold by that office. Exception No. 7 and 8: The Department's seventh and eighth exceptions are also to Finding of Fact No 13 wherein the Hearing Officer stated that there was no evidence of any consumer complaints or consumer losses arising out of the sale of unregistered securities and that such violations Section 517.07, Florida Statutes, are "fairly characterized as technical violations." The Department asserts that evidence of consumer complaints or consumer losses is not a prerequisite to finding a violation of Section 517.07, Florida Statutes, and that the sale of an unregistered security is not a technical violation. Section 517.07, Florida Statutes, states in part: No securities except of a class exempt under any of the provisions of s. 517.051 or unless sold in any transaction exempt under any of the provisions of s. 517.061 shall be sold or offered for sale within - this state unless such securities have been registered, as hereinafter defined, and unless prior to each sale the purchaser is furnished with a prospectus meeting the requirements of rules adopted by the department. The department shall issue a permit when such registration has been granted by the department. [e.s.] Section 517.171, Florida Statutes, provides: It shall not be necessary to negate any of the exemptions provided in this chapter in any complaint, information, indictment, or other writ or proceedings brought under this chapter; and the burden of establishing the right to any exemption shall be upon the party claiming the benefit of such exemption. [e.s.] Section 517.211, Florida Statutes, provides in part: (1) Every sale made in violation of either s. 517.07 or s.517.12 may be rescinded at the election of the purchaser; and the person making the sale and every director, officer, partner, or agent of or for the seller, if the director, officer, partner, or agent has personally participated or aided in making the sale, is iointly and severally liable to the purchaser in an action for rescission, if the purchaser still owns the security, or for damages, if the purchaser has sold the security.... Section 517.302, Florida Statutes, provides in part: (1) Whoever violates any of the provisions of this chapter is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. The Department accepts the seventh and eighth exceptions filed by the Department and rejects the Hearing Officer's findings in Paragraph 13 of the Recommended Order as clearly erroneous interpretations of the above cited provisions of Chapter 517, Florida Statutes. Section 517.07, Florida Statutes, clearly proscribes the sale or offer of securities in this state unless such securities have been registered with the Department or unless such securities are exempt pursuant to Section 517.051 or Section 517.061, Florida Statutes. Section 517.171, Florida Statutes, clearly and unequivocably places the burden of establishing an exemption from the provisions of Section 517.07, Florida Statutes, on the person claiming the benefit of such exemption. Section 517.211, Florida Statutes, provides for rescission and an action for damages for purchasers of securities that have been offered or sold in violation of the registration provisions of Sections 517.07 and 517.12, Florida Statutes. Moreover, Section 517.302, Florida Statutes, makes any violation of the provisions of Chapter 517, Florida Statutes, a felony of the third degree. In Skurnick v. Alnsworth, 591 So.2d 904 (Fla. 1991), the Florida Supreme Court stated that "[t]he intent of section 517.12 is to protect purchasers and, if that section has been violated, damages are automatic in accordance with the provisions of section 517.211". It seems ludicrous that the Legislature would provide civil remedies and criminal sanctions for a "technical" violation of law. The Hearing Officer's conclusions in Finding of Fact No. 13 that the sale of unregistered securities is a "technical" violation is clearly erroneous and is hereby rejected. Likewise, the Hearing Officer's finding that there was no evidence of any consumer complaints or consumer losses arising from the sale of unregistered securities is also rejected as irrelevant to the determination whether unregistered securities were sold. Exception No. 9: The Department's ninth exception is to Finding of Fact No. 19 of the Recommended Order. The Department takes exception to the Hearing Officer's finding that "in a transaction for customer John George, who resided in Maryland and who called the Boca Raton office, registered representative JoAnne Blain had Mr. Baum place the order for the trade," The Department contends that the Hearing Officer's finding that Mr. George telephoned First Eagle is clearly erroneous. Having reviewed the transcript of hearing, the exhibits and pleadings in this matter, it cannot be determined that there is no competent, substantial evidence to support the Hearing Officer's finding. There is conflicting evidence in the record as to whether Mr. George telephoned the Boca Raton office or was solicited by that office. Accordingly, under Heifetz, this finding cannot be rejected by the undersigned and this portion of the Department's exception is rejected. The Department's ninth exception also contends that the Hearing Officer's finding that Ms. Blain was registered in the State of Maryland at the time Mr. Baum paid her the commission for the George transaction (which commission was originally credited to Mr. Baum) is irrelevant and that the effect of this finding would Sanction the dividing or otherwise splitting of commissions between associated persons. The Department agrees and accepts the Department's exception to that extent. This violation will be considered in increasing the penalty as more particularly set forth hereinafter. To the extent that the Hearing Officer's finding would authorize the splitting of commissions between associated persons, this finding is rejected as a clearly erroneous interpretation of the provisions of Rule 3E-600.013(2)(f), Florida Administrative Code. This matter is further addressed in the rejection of Paragraph 7 of the Hearing Officer's Conclusions of Law, infra. Exception No. 10: The Department's tenth exception is to Finding of Fact No. 20 of the Recommended Order. The Department contends that even if the Department failed to prove that Mr. Braum spoke to customer, Mr. Rahamie, the Hearing Officer's finding that Mr. Baum reduced his commission on the Rahamie trade by $250.00 and paid it to Kevin Hale would constitute a violation of Rule 3E-600.013(2)(f), Florida Administrative Code. The Department agrees and the Department's exception is accepted. This violation will be considered in increasing the penalty as more specifically stated hereafter. To the extent that the Hearing Officer's finding would sanction the splitting of commissions between associated persons, this finding is rejected as a clearly erroneous interpretation of the provisions of Rule 3E-600.013(2)(f), Florida Administrative Code. Exception No. 11 and 12: The Department's eleventh and twelfth exceptions are to Finding of Fact No. 21 of the Recommended Order wherein the Hearing Officer found that the Department's proof in attempting to show similar practices in splitting commissions on the Deeter, Narkiewicz and Shannon accounts was unpersuasive, The Department contends that it presented evidence to support findings that commissions were paid to unregistered persons and that Mr. Baum tried to conceal such payments. Having reviewed the transcript of hearing, the exhibits and pleadings in this matter, it cannot be determined that there is no competent, substantial evidence to Support the Hearing Officer's finding. Although the Department presented the testimony of JoAnn Blain as well as other documentary evidence on these issues, the Hearing Officer weighed that evidence and determined that it was unpersuasive. Accordingly, this finding cannot be rejected by the undersigned and the Department's exception is rejected. Heifetz, Supra. RULINGS ON EXCEPTIONS TO CONCLUSIONS OF LAW Exception No. 13: The Department's thirteenth exception is to Conclusion of Law No. 10 of the Recommended Order where the Hearing Officer concluded that no violations by Mr. Canouse or Mr. Bergelt were proven and recommended that no penalty be imposed. The Department's exception is that the finding that Canouse was not a branch manager goes against the weight of the evidence. For the reasons stated in the ruling on Exception No. 4, the Department's exception is rejected. Exception No. 14: The Department's fourteenth exception is to Conclusion of Law No. 11 of the Recommended Order wherein the Hearing Officer recommended that no penalty be imposed against Mr. Baum for the sale of securities from the Boca Raton branch office before its registration became effective. The Hearing Officer's recommendation is apparently based upon his mistaken impression that the offer or sale of unregistered securities is considered a "technical" violation of Section 517.07, Florida Statutes. For the reasons stated in the ruling on the Department's seventh and eighth exceptions, this exception is accepted and the Hearing Officer's recommendation that no penalty be imposed against Mr. Baum for the sale of securities from the Boca Raton branch office of First Eagle prior to the effective date of its registration is rejected. Exception No. 15: The Department's fifteenth exception is to Conclusion of Law No. 12 of the Recommended Order wherein the Hearing Officer concluded that no serious penalty should be imposed for the seven sales of Shogun Oil, Ltd. securities and recommended the imposition of a fine of $50.00 per sale. This exception is addressed in the "Penalty" section of this Final Order, infra. RULINGS ON OTHER ISSUES With respect to the Hearing Officer's findings in Paragraphs 16 and 22 of the Findings of Fact that the Department failed to offer into evidence the text of Rule 3E-600.013 and 3E-600.014 or sought official recognition of those rules, it is interesting to note that none of the Respondents ever objected to or questioned the text of the rule with which they were charged with violating. It is equally interesting to note that the Hearing Officer had no problem in finding the text of those rules since he accurately quoted the relevant text in Finding of Fact Nos. 15, 22 and 26. Likewise, the Hearing Officer had no problem in finding and quoting the provisions of Article III, Section 1, and Article III, Section 33, Appendix E, Section 20(c) of the Rules of Fair Practice of the National Association of Securities Dealers, Inc. With regard to the Hearing Officer's finding in Paragraph 17 of the Findings of Fact that there is no definition of the term "dealer" in Rule Chapters 3E-600 or 3E-200, 2/ this finding is rejected since the term dealer is specifically defined in Rule 3E-200.001(11), Florida Administrative Code. In Paragraph 3 of the Conclusions of Law, the Hearing Officer concluded that "Baum had no reason to know that the registration had not become effective when he became branch manager on October 24, 1987. If anyone should be disciplined for this failure, it is First Eagle, or its senior officers in Denver, not Baum." This Conclusion of Law is rejected for the same reasons stated in the ruling on Exception No. 5 herein. In Paragraph 4 of the Conclusions of Law, the Hearing Officer concluded that: "No client was shown to have suffered any loss, or even to have complained about the purchase of those shares. A technical violation may have been established, but it is not one for which any significant discipline should be imposed upon Baum. There was no evidence that Baum had an independent duty to verify whether the shares sold at the Boca Raton office were actually entitled to an exemption from the registration requirements of the Securities Code." This Conclusion of Law is rejected for the same reasons stated in the rulings on Exceptions Nos. 6, 7 and 8 herein. The Hearing Officer's conclusion that the sale of unregistered securities is a "technical" violation of the provisions of Section 517.07, Florida Statutes, is rejected as clearly erroneous in light of the civil remedies and criminal sanctions created by the Legislature in Sections 517.221 and 517.302, Florida Statutes. In Paragraph 7 of the Conclusions of Law, the Hearing Officer, after quoting the text of Rule 3E-600.013(2)(f), Florida Administrative Code, concluded that: "The persons to whom Baum paid the commissions, Ms. Blain and Mr. Hale, were persons also registered as agents for the same dealer, First Eagle. The text of the rule does not prohibit splitting commissions per se. It appears that Baum paid the entire commission to these salespersons, not that he split commissions. The rule does not make it improper for Mr. Baum to pay or split a commission with another salesperson in the office when both Baum and that other sales person spoke to a client, but only Baum was registered to sell securities in the state where the client resides. If the Department wishes to forbid such arrangements, it may by adopting a rule which says so. But such a disciplinary standard would only have prospective effect." The foregoing Conclusion of Law is hereby rejected as an erroneous interpretation of Rule 3E- 600.013(2) (f), Florida Administrative Code. Rule 3E-600.013(2) (f), Florida Administrative Code, defines "dividing or otherwise splitting commissions" to be a demonstration of unworthiness by an agent for purposes of Section 5l7.161(1)(h), Florida Statutes. To adopt the Hearing Officer's interpretation would authorize a person who is not registered in a particular state to engage in the offer or sale of securities by utilizing another registered person's number on the order ticket and having the commission held by the firm until the unregistered person becomes registered in that state. This would have the effect of allowing unregistered persons to circumvent the registration provisions of this state as well as other states. PENALTY The correct penalty in this case to be imposed against Mr. Baum is twofold: Entry of a cease and desist order for violations of Section 517.12, Florida Statutes, for operating an unregistered branch office; and (2) a fine in the amount of $5,000.00 for the sale of unregistered securities. In light of the foregoing rulings and modifications to the Hearing Officer's Recommended Order, the Department is inclined to increase the recommended penalties against Mr. Baum (See Criminal Justice Standards and Training Commission v. Bradley, 17 F.L.W. 5193 (Fla. 1992) for the following reasons: The repeated violations of Section 517.07, Florida Statutes, for the sales of unregistered securities are not "technical" violations but of a serious nature; There were at least seven sales of unregistered securities as found by the Hearing Officer, each constituting a serious violation, by itself, by Mr. Baum; Mr. Baum, under a correct interpretation of the law, allowed the branch office of which he was the manager to operate from October 24, 1987 until November 4, 1987 without being registered with the Department in violation of Section 517.12, Florida Statutes; The Findings of Fact as found by the Hearing Officer in Paragraphs 19 and 20 of the Recommended Order and applied to a correct interpretation of Rule 3E-600.013(2)(f), Florida Administrative Code, regarding splitting commissions established that the rule was violated by Mr. Baum; The Department, at the hearing, in its proposed recommended order, and in its exceptions to the Recommended Order proposed that a $5,000.00 fine be imposed, as well as the entry of a cease and desist order. Such a penalty is well within the ranges afforded by Section 517.221, Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that all charges against Respondents Canouse and Bergelt be dismissed, and that Baum be found guilty of the sale of securities not registered or entitled to exemption from registration, and that a fine of $350 be imposed. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 20th day of March 1992. WILLIAM R. D0RSEY, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of March 1992.
The Issue Petitioner has challenged a series of emergency rules promulgated by the Respondent to address the discovery of Mediterranean fruit flies (medflies) in parts of central Florida. Specifically, Petitioner contends that 5BER 97-3, 5BER 97-4, 5BER 97-6, and 5BER 97-7 are invalid to the extent that they make any geographical area subject to emergency rule for more than 90 days. The issue for determination, therefore, is whether the emergency rules are invalid as claimed.
Findings Of Fact Petitioner Rick Martinez resides and operates an organic farming business in Tampa, Hillsborough County, Florida. As stipulated, Mr. Martinez is substantially affected by the emergency rules at issue. The Mediterranean fruit fly (medfly) is considered one of the world's most serious pests affecting fruits and vegetables. It has a host range of over 260 different fruits and vegetables, 80 of which are grown in the state of Florida. It is an exotic pest of grave concern to commercial agricultural interests as well as to home gardeners. In the adult stage, the female medfly deposits or lays eggs in ripe fruit. The eggs develop into larva or maggots that feed on pulp of the interior portion of fruit, causing damage and secondary pathogens to enter the fruit and causing the fruit to rot and fall from the tree. The medfly reproduces very rapidly. It can complete a life-cycle in as little as 18 days under optimum conditions; in Florida and in recent months, it completed its life-cycle in approximately 23-25 days. As a winged insect the medfly can move several miles from its point of introduction in search of a host to deposit eggs or in search of a food source. Over a lifetime, the female can lay hundreds or thousands of eggs. The medfly enters an area via the traveling public or on commercial fruits and vegetables. Host plants or fruits can include plants or fruits that are not grown in Florida. The Florida Department of Agriculture and Consumer Services (FDACS) maintains a detection program, including 13,000 traps to detect the presence of the medfly. Under certain circumstances for every medfly detected, there can be hundreds of others in the area. Because of the biology of the medfly, mere control is difficult to achieve. Eradication, or complete elimination of the pest from a particular area, is the goal when the medfly is detected. To further this goal, Florida cooperates with the U.S. Department of Agriculture and other states. On or about May 28 or 29, 1997, a medfly was discovered in the Seminole Heights area of Hillsborough County. Very quickly other medflies were discovered in Hillsborough County, with the epicenter determined to be in the Brandon area. Soon other detections occurred in Manatee, Sarasota, Orange, and Polk Counties. This was determined to be the most severe infestation of medflies in Florida in several decades. On May 30, 1997, Commissioner of Agriculture, Bob Crawford, issued a proclamation announcing an immediate danger to the public health, safety, or welfare in the state of Florida on account of the infestation by the Mediterranean fruit fly. The proclamation cited authority and powers conferred by Article IV, Section 4, Florida Constitution and Sections 120.54(4) and 570.07(21), Florida Statutes. The proclamation called for immediate eradication procedures including aerial and ground pesticide applications in infested areas. FDACS also promulgated and filed an emergency rule, 5BER 97-2, Florida Administrative Code, "Mediterranean Fruit Fly Rule and Quarantine." The rule provided definitions, designated a quarantine area and treatment area, identified regulated articles and host plants, and provided for entry of authorized representatives to inspect, confiscate suspect fruit, or apply treatment on property on which the medfly is known or suspected to exist. The rule also declared the medfly a pest and nuisance pursuant to Section 581.031(6), Florida Statutes, and described the rule's purpose: . . . to provide detailed direction for conducting a regulatory and eradication program to prevent spread of the Mediterranean fruit fly, Ceratitis capitata, within the State. This rule is promulgated to provide a quarantine on areas regulated due to the presence of the Mediterranean fruit fly, and to specify conditions under which regulated articles may be certified as free of Mediterranean fruit fly when moved from the quarantined area. This rule also provides for the treatment and eradication of the Mediterranean fruit fly within the State of Florida. (5BER 97-2(2), Florida Administrative Code) The quarantine area within 5BER 97-2 is an area of Hillsborough County described with specificity with references to road boundaries. The treatment area was defined as "[a]ny location including urban and residential areas within a nine- square-mile area around an [sic] Mediterranean fruit fly detection. " Quarantine areas are generally 81 square miles; treatment areas are 9 square miles and may be wholly outside of a quarantine area. In the words of FDACS Director of the Division of Plant Industry, Richard Gaskalla, "[t]his was a very active infestation. For the first 90 days of the program, it was a very fluid and dynamic situation. Each day brought a new challenge, a new area to place traps in or regulate fruit in. So it was giving us quite a challenge." (transcript, 48-49) As new medflies were discovered subsequent to the end of May 1997, FDACS expanded the treatment and quarantine areas. Additional emergency rules on the infestation were filed: 5BER 97-3, on June 20, 1997; 5BER 97-4, on July 3, 1997; 5BER 97-6, on July 28, 1997; and 5BER 97-7, on August 11, 1997. With the exception of the specifically described quarantine area in section (4), each emergency rule is substantially the same. 5BER 97-3 repeats the quarantine area described in 5BER 97-2 and adds a specific portion of Polk County. 5BER 97-4 repeats the quarantine area described in 5BER 97-3 and adds a specific portion of Manatee County. 5BER 97-6 and 5BER 97-7 include a much larger quarantine area to include portions of Hillsborough, Polk, Manatee, Orange, and Sarasota Counties. There are portions of Hillsborough County which are found in the quarantine area described in all five emergency rules. Other geographical areas overlap in two or more of the five rules. The "treatment area" remains described in each of the five emergency rules as the nine-square-mile area around a medfly detection. As more medflies were found, this area obviously expanded. Eventually the treatment area became almost as large as the quarantine area in Hillsborough County. FDACS developed its series of emergency rules to address the medfly eradication program as it evolved. The agency consulted a science advisory panel that was put together to review the eradication program, and the agency received public comment and suggestions from public meetings. As new detections were made, the emergency rules were promulgated to cover the areas which the agency considered important for its regulation and control (quarantine). Richard Gaskalla did not consider each new emergency rule to be a renewal but rather a response to the unpredictable expansion of the medfly within existing areas. As soon as FDACS adopted the first emergency rule, it began work on a permanent rule and scheduled a rule development workshop in June to receive public comment. Citizens in Hillsborough County requested another workshop which was held approximately two weeks prior to the hearing in this case. A permanent rule has not been adopted, but the pre-adoption process continued as of the hearing in this case. As of the time of hearing, the last medfly detected in Hillsborough County was mid-July. Medflies were discovered after this in other counties covered by the emergency rules. Eradication is generally not considered complete until traps have been empty for two life cycles after the last treatment. Depending on the length of the life cycle, eradication could be complete from 60 to 100 days after the last fly find.
The Issue The issue to be determined is whether Petitioners, William Guererro and Christina Bang, a/k/a Christina Guerrero, are entitled to attorney’s fees pursuant to section 57.105, Florida Statutes, from Respondents, Bernard Spinrad and Marien Spinrad, related to litigation between the parties in DOAH Case No. 13- 2254.
Findings Of Fact The Recommended Order in DOAH Case No. 13-2254, including the Preliminary Statement, the Findings of Fact, and the Conclusions of Law contained therein, and the Department of Environmental Protection’s Consolidated Final Order in OGC Case No. 13-0858 are incorporated herein by reference as the facts underlying this Final Order.
Conclusions An Administrative Law Judge of the Division of Administrative Hearings has entered an Order Closing File in this proceeding. A copy of the Order is attached to this Final Order as Exhibit A.
Other Judicial Opinions THIS FINAL ORDER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND FLORIDA RULES OF APPELLATE PROCEDURE 9.030(b)(1)(C) AND 9.110. TO INITIATE AN APPEAL OF THIS ORDER, A NOTICE OF APPEAL MUST BE FILED WITH THE DEPARTMENT’S AGENCY CLERK, 2555 SHUMARD OAK BOULEVARD, TALLAHASSEE, FLORIDA 32399 2100, WITHIN 30 DAYS OF THE DAY THIS ORDER IS FILED WITH THE AGENCY CLERK. THE NOTICE OF APPEAL MUST BE SUBSTANTIALLY IN THE FORM PRESCRIBED BY FLORIDA RULE OF APPELLATE PROCEDURE 9.900(a). A COPY OF THE NOTICE OF APPEAL MUST BE FILED WITH THE APPROPRIATE DISTRICT COURT OF APPEAL AND MUST BE ACCOMPANIED BY THE FILING FEE SPECIFIED IN SECTION 35.22(3), FLORIDA STATUTES. YOU WAIVE YOUR RIGHT TO JUDICIAL REVIEW IF THE NOTICE OF APPEAL IS NOT TIMELY FILED WITH THE AGENCY CLERK AND THE APPROPRIATE DISTRICT COURT OF APPEAL. Final Order No. DCA10-GM-110 MEDIATION UNDER SECTION 120.573, FLA. STAT., IS NOT AVAILABLE WITH RESPECT TO THE ISSUES RESOLVED BY THIS ORDER. CERTIFICATE OF FILING AND SERVICE I HEREBY CERTIFY that the original of the foregoing has been filed with the undersigned Agency Clerk of the Department of Community Affairs, and that true and correct copies en furnished in the manner shown below to each of the persons listed below on this day of fii “4 , 2010. aula Ford, Agency Clerk Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 By U.S. Mail and electronic mail: Jerri A. Blair, Esq. City Attorney City of Wildwood Post Office Box 130 Tavares, FL 32778-3809 jblair710@aol.com Cecelia Bonifay, Esq. Akerman Senterfitt 420 S. Orange Avenue, Suite 1200 Orlando, FL 32801 cecelia.bonifay@akerman.com By Hand Delivery and electronic mail: David L. Jordan, Assistant General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399 david.jordan@dca.state.fl.us Linda Loomis Shelley, Esq. Fowler White Boggs Banker Post Office Box 11240 Tallahassee, FL 32302-3240 Ishelley@fowlerwhite.com By Filing with DOAH: The Honorable J. Lawrence Johnston Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-3060
The Issue The issues to be determined in this consolidated proceeding are (1) whether the Petitioners have demonstrated standing under section 163.3184, Florida Statutes (2018), and (2) whether the Okeechobee Business District Comprehensive Plan Amendment (OBD Amendment) adopted on August 13, 2018, by the Respondent by Ordinance No. 4783-18 (Ordinance) is "in compliance" under section 163.3184(1)(b).
Findings Of Fact The Parties and Standing Lakeview is a Delaware limited liability company, registered with the State of Florida. Lakeview owns Esperanté, a 20-story office tower at 222 Lakeview Avenue within the boundaries of the OBD. Lakeview submitted oral and written objections to the City during the process leading to adoption of the OBD Amendment. Lakeview's concerns included impact to views of the Intracoastal Waterway by potential development of a 25-story office tower to the east of Esperanté at the location referred to as the "church site," as well as increased traffic congestion on Lakeview Avenue. Lakeview is an affected person under section 163.3184(1)(a). The Town is a Florida municipal corporation and a home rule charter municipality. The Town owns property within the City, including its public works facility in close proximity to the OBD. The Town submitted oral and written comments, recommendations, and objections to the City during the adoption process for the OBD Amendment. The Town is an adjoining local government to the City. The Town was concerned that the OBD Amendment would produce substantial impacts on the increased need for publicly funded infrastructure by increasing the cost of traffic signalization on Okeechobee Boulevard and Lakeview Avenue in the OBD. The Town is an affected person under section 163.3184(1)(a). The County is a political subdivision of the State of Florida and a home rule charter county. The County owns property within the jurisdiction of the City, including its convention center and parking garage, which are located on Okeechobee Boulevard in close proximity to the OBD. The County was concerned that the OBD Amendment would produce substantial impacts on the increased need for publicly funded infrastructure in the form of increased cost for traffic signalization and other active traffic management measures on Okeechobee Boulevard and on increased cost of providing bus services. The County submitted oral and written comments, recommendations, and objections to the City during the adoption process for the OBD Amendment. The County is an affected person under section 163.3184(1)(a). The City is a Florida municipal corporation located in the County and is responsible for adopting a comprehensive plan and plan amendments. The City adopted the OBD Amendment under the state expedited review process in section 163.3184(3). The City also owns a parcel within the OBD referred to throughout this proceeding as the "tent site." Background The OBD includes all the properties located between Okeechobee Boulevard, Lakeview Avenue, Rosemary Avenue, and Flagler Drive in the City's downtown. It is a five-block area with the church site as its easternmost parcel. The OBD is a new district within the area defined in the Downtown Master Plan (DMP) Element of the City's Comprehensive Plan (City Comp Plan). The DMP Element is an optional element of the City Comp Plan that was adopted in 1995. The DMP's vision includes promoting a place of sustainable and efficient transportation systems that promote greater connectivity for pedestrians, cyclist, and transit riders. The OBD Amendment is a small component of the City's large and comprehensive strategy to encourage mode shift within the DMP area. The DMP currently sets forth 13 districts that are described in Policy 1.1.1 and whose boundaries are depicted on the Downtown District Map in the City Comp Plan. DMP Policy 3.1.1 directs the City to maintain the DMP Zoning Atlas showing the districts from DMP Policy 1.1.1, the planning areas and the subdistricts. The OBD is also located within the Downtown Transportation Concurrency Exception Area (TCEA) established in Objective 2.3.5 of the Transportation Element in the City Comp Plan. The Downtown TCEA is also adopted in the County's Comprehensive Plan (County Comp Plan), and the TCEA boundaries are coterminous with the DMP area. The City entered into an agreement with the County and FDOT in 1998 regarding the TCEA. Adoption of the TCEA meant that the City, the County, and FDOT acknowledged that in order for desired development and redevelopment to occur in the City's downtown area, it would be difficult for certain roadways to continue to meet the adopted level of service standards. Thus, the City was exempted from meeting transportation concurrency requirements and traffic performance standards in the TCEA. A Florida Standard Urban Transportation Modeling System (FSUTMS) traffic analysis of the area that was done prior to adoption of the TCEA ultimately established the required residential and nonresidential development ratios described in Transportation Element Policy 2.3.5(h). The development ratios required the City to have both residential and nonresidential space in the downtown area. The City achieved the projection for residential units set forth in Transportation Element Policy 2.3.5(g), but has approximately five million square feet more of nonresidential space available to reach the stated projection for nonresidential space. The OBD Amendment On April 30, 2018, Gabe Klein, a consultant for the City, presented the Downtown Mobility Plan to the mayor and city commission. The workshop was open to the public and televised on the City's website. At this workshop, the Mayor initiated the process for pursuing the OBD Amendment. The City then timely sent its executive summary of the proposed OBD Amendment to the Interlocal Plan Amendment Review Committee (IPARC) Clearinghouse on May 3, 2018. On May 7, 2018, the Clearinghouse provided notice (IPARC Notice) of the OBD Amendment to the Town and the County under the terms of the Interlocal Agreement that established the IPARC. On May 21, 2018, by Resolution No. 134-18, the City Commission adopted the Downtown Mobility Plan, along with the Okeechobee Corridor Study, Downtown Parking and Transportation Demand Management Study, and the Citywide Bicycle Master Plan. In addition to the IPARC Notice, the City provided notice to both the County and Lakeview by mail and published required notices in the newspaper. Counsel for Lakeview presented oral comments regarding the OBD Amendment at the City's Planning Board meeting on May 15, 2018; at the Downtown Action Committee (DAC) meeting on June 13, 2018; at the transmittal hearing on June 18, 2018; and at the adoption hearing on August 13, 2018. County representatives made oral comments at the transmittal hearing on June 18, 2018, and the adoption hearing on August 13, 2018. A Town representative made oral comments at the adoption hearing on August 13, 2018. The Ordinance reflected the City's continuing policy of seeking to attract high-intensity office uses to consolidate the area as an economic center of downtown, with innovative high-rise buildings and an active pedestrian environment. The Ordinance further allowed for the creation of incentives to permit building heights to increase from five stories to 25 stories in the OBD 5 subdistrict without increasing the permitted floor area ratio (FAR) of 2.75. The Ordinance amended the City Comp Plan's DMP Element to identify the location, development capacity, and height allowed within the OBD. DMP Policy 1.1.1 was amended to create the OBD. DMP Policy 3.1.3 was amended to show maximum development capacity, subdistrict boundaries and incentive areas for the OBD. The text added to DMP Policy 1.1.1 stated: N. Okeechobee Business District: The Okeechobee corridor is the traditional business district of downtown, around which office buildings have historically located. The focus of the Okeechobee business district should be towards attracting high intensity office uses to consolidate the area as an economic center of downtown, with innovative high-rise buildings and an active pedestrian environment. The district shall function as a connection between the north and south portions of the City, with enhanced pedestrian crossings and a large percentage of public open spaces. Intensity and Density The OBD Amendment did not increase development intensity or density. In fact, the OBD Amendment reduced the allowable development within the Okeechobee Corridor. The evidence established that the FAR of 2.75 on the church site remained the same with the OBD Amendment. Ms. Aponte is in charge of overseeing the development and implementation of the DMP. She testified that prior to adoption of the OBD Amendment, the FAR on the church site was 2.75 and that the church site property could have been developed to accommodate approximately 300,000 square feet of usable office space and provide parking on site. With the same FAR of 2.75 after adoption of the OBD Amendment, the church site's development capacity remained the same. Ms. Aponte also concluded that from a planning perspective, since the development capacity at the church site remained the same before and after the OBD Amendment, and the use did not change, there would not be additional traffic impacts. Mr. Greene explained that the OBD Amendment would actually reduce the development capacity on the tent site and that all other blocks in the OBD would retain the same development capacity as before the OBD Amendment. Since there was a reduction in the actual development capacity within the OBD, there was not an increase in intensity. Mr. Greene and/or his staff explained the reduction in development capacity in the OBD at all four public hearings and in many telephone conversations with staff from the County and the Town. The tent site is located within the City Place Development of Regional Impact (DRI) that holds certain development rights. Sites located within the DRI may use the DRI's development rights on a "first come, first serve" basis until they are exhausted. Reducing capacity on the tent site would allow another site within the DRI to use those development rights. This would shift development away from the Okeechobee Corridor in the OBD to another site within the DRI. The City proved that the OBD Amendment did not increase development intensity or density. The City credibly established that the OBD Amendment reduced the allowable development within the OBD. Petitioners' Objections The Petitioners jointly presented their cases during the hearing. They argued that the OBD Amendment was not "in compliance" because it created internal inconsistencies within the City Comp Plan, it was not supported by relevant and appropriate data and analysis, it was not properly coordinated with the neighboring local governments, it was not coordinated with the comprehensive plans of the Town and the County, and it was a de facto future land use plan amendment. Each argument is generally addressed below. However, the major underlying premise of the Petitioners' challenge was that the OBD Amendment would allow more intense development and that the City had not evaluated potential impacts to traffic and parking. As found above, the City proved that the OBD Amendment did not increase development intensity or density. Thus, the City did not need to evaluate the traffic impacts of the OBD. In addition, the City was exempted from meeting transportation concurrency requirements and traffic performance standards in the TCEA. Internal Consistency The Town and County identified elements in the City Comp Plan in order to argue internal inconsistency. Those were the Coastal Management Element, Intergovernmental Coordination Element, and Transportation Element. The Town and County also claimed the OBD Amendment was inconsistent with the Strategic Regional Policy Plan. Lakeview claimed the OBD Amendment was inconsistent with the entire City Comp Plan generally, and specifically inconsistent with the vision of the DMP Element, DMP Policies 3.1.3, 1.1.1.H, and 1.1.1.M; Future Land Use Policy 1.1.7; Transportation Element Policy 2.3.1(a), Objective 2.3.4, Policies 2.3.5(a) and 2.3.5(h); and Intergovernmental Coordination Element Objectives 1.1, 1.2, 1.3, and 1.4, Policies 1.3.1, 1.3.3, 1.3.4, and 1.5.3. The Petitioners argued that "high-rise Class A" buildings must be built in the Quadrille Business District (QBD) described in DMP Policy 1.1.1.H. However, the DMP Element does not limit tall buildings to the QBD. For example, a maximum height of 30 stories is allowed in the Quadrille Garden District, 25 stories in the QBD, and 15 stories in the Transit Oriented District and Flagler Waterfront District. During the hearing, Mr. Greene narrated drone footage that showed high-rise buildings are located throughout the downtown area, including in and near the OBD in the Okeechobee Corridor. Two residential towers that are 32 stories in height are also located along the waterfront in the Flagler Waterfront District. The evidence supported the description in the OBD that "[t]he Okeechobee corridor is the traditional business district of downtown, around which office buildings have historically located." The evidence also established that the tallest buildings in the downtown are not located in the QBD. The City Comp Plan does not prohibit high-rise buildings in districts other than the QBD. Lakeview's witness, Ms. Ward, opined that creation of the OBD conflicted with the intention of the Flagler Waterfront District to preserve waterfront views and its function as a transition from more intense development in the urban core of downtown. The evidence showed that these intentions can be realized with creation of the OBD. The OBD's implementing regulations adopted at the same time as the OBD Amendment as changes to the DMP Urban Regulations required that any development be set back 400 feet from the Intracoastal Waterway and that open space be increased. This would maintain an open space promenade along Flagler Drive. The County argued that the OBD Amendment conflicted with Policy 1.2-m of its Transportation Element, which provides in part: "Based on the results of the traffic monitoring report, the City will pursue strategies including, but not limited to . . . develop a centrally-managed system of strategically located parking facilities." The same language is found in the Transportation Element of the City Comp Plan in Policy 2.3.5(a). Contrary to the County's argument, the OBD Amendment in no way prohibited or directed the location of centrally-managed parking garages. The OBD Amendment complemented the many strategies referenced in Policy 1.2-m and Policy 2.3.5(a) by promoting public transit services, encouraging transportation mode options, and implementing employer-based Transportation Demand Management (TDM) activities. The evidence established that parking requirements for any developments within the DMP, including the new OBD, complied with the provisions of DMP Element Objective 4.3 and the implementing DMP Urban Regulations. DMP Objective 4.3 states that "[t]he City shall develop strategies to manage the downtown parking supply and demand." Lakeview argued that Exhibit 3 to the Ordinance showed two Okeechobee Business subdistricts but did not list the other subdistricts that were created under the OBD, specifically OBD-12CP. Mr. Hansen explained that OBD-12CP is contained within the City Place DRI, which was amended by the adoption of a separate Ordinance No. 4782-18 and is not subject to review in a comprehensive plan challenge. At the hearing, the County and Town withdrew their claim relating to conflict with the Coastal Management Element. In an abundance of caution, the City presented evidence and established that the OBD is not in a coastal high hazard area. The Treasure Coast Regional Planning Council (Treasure Coast) is the regional planning council that reviewed the City's OBD Amendment. Treasure Coast's review and comments were limited to any adverse effects on regional resources or facilities identified in the Strategic Regional Policy Plan, and any extra- jurisdictional impacts that would be inconsistent with the comprehensive plan of any affected local government within the region. Based on the City's staff report for the OBD Amendment, Treasure Coast found that the maximum development potential of property, as expressed by FAR, did not increase as a result of the creation of the OBD. Treasure Coast found no adverse effects on regional resources or facilities and no extra-jurisdictional impacts resulting from creation of the OBD. The Petitioners did not present any evidence that would establish the OBD Amendment was not consistent with the requirements of the Strategic Regional Policy Plan. The Petitioners did not prove beyond fair debate that the OBD Amendment conflicted with the policies, goals, and objectives of the City Comp Plan or the County Comp Plan. Data and Analysis The City Commission adopted the Downtown Mobility Plan (Mobility Plan), along with the Okeechobee Corridor Study, Downtown Parking and Transportation Demand Management Study and the Citywide Bicycle Master Plan. The various studies that make up the Mobility Plan included data relating to mode shift, walkability, mobility, circulation on Okeechobee Boulevard, economic growth in the downtown, and TDM initiatives. The Mobility Plan created a vision of desired outcomes, goals, a mode hierarchy, a mode-shift goal, and a series of proposed projects and strategies to improve mobility, not only along the Okeechobee Corridor, but also the entire downtown. The plan estimated needs in 2040 based on jobs and population rates and provided specific proposed projects that could be implemented to manage future growth in the entire downtown. The study specifically included streets within the OBD and was, therefore, relevant data and analysis that supported the OBD Amendment. The Okeechobee Corridor Study looked at the needs, capacity, and characteristics along Okeechobee Boulevard, all of which are related to the OBD. The Downtown Parking and Transportation Demand Management Study provided an audit of the parking in the downtown area. The study supported adoption of the OBD Amendment since the OBD is an area included within the overall parking demand study. The Citywide Bicycle Master Plan included an analysis of bike facilities and bike lanes along and accessing the OBD. It discussed the existing transit network in the Okeechobee corridor, obstacles, and the need for modification to some of the street systems to achieve the Bicycle Master Plan's long-term goals of producing a connected series of trails. The City also relied upon traffic count data for Okeechobee Boulevard produced by the County. In addition to the County's traffic count data, the City relied on an FDOT analysis dated June 7, 2018, which showed existing conditions before and after the Brightline train service began and which revealed that there were no intersections on the relevant portions of Okeechobee Boulevard that were failing. The City Commission also reviewed data concerning trolley ridership and skybike ridership. There were numerous other data and analyses that existed at the time of adoption of the OBD Amendment that supported the City's action in adopting the amendment including: The Economic Impact Analysis of the OBD by Fishkind & Associates, which found that the City's Class-A office market is underserved, that the City's market has a vacancy rate far below average for business districts in Florida or the United States, that a new Class-A office building in the OBD is likely to have a beneficial impact on the City's office market, that the OBD could create 1,000 new high-wage jobs and create additional demand for residential housing, that a new Class-A office building would likely generate $1 million in tax revenue for the City, and that approval of the OBD would not have a detrimental impact on surrounding Class-A offices. The West Palm Beach Downtown Walkability Analysis specifically stated that certain streets, most notably the state- owned Okeechobee Boulevard and Quadrille Avenue, are considered "downright hazardous" to pedestrians. Dr. Depew explained that the study was relevant to the OBD Amendment because it explained how the City could get people out of their personal automobiles and move them into an urban environment in different modes of transportation, which is consistent with the TCEA's aim to have more people living and working downtown. The City has adopted the walkability study in the Transportation Element Policy 2.4.4(a) of the City Comp Plan. The FDOT District 4 Road Safety Audit Report was intended to look at the performance of existing or future road intersections, including the intersection of Okeechobee Boulevard and Florida Avenue and Rosemary Avenue, to determine how the area itself could be made safer for pedestrians, provide alternative means of transportation, and reduce conflicts between pedestrians, bicycles, and vehicles in the area. The Transit Choices Report + Sketch Alternatives contained data related to population and employment trends in the downtown area and alternatives for transit in the downtown area. It provided options, alternatives, and recommendations that included a portion of the OBD area. The report contained a map related to the mobility plan and shifting transit services to a new downtown site as a potential for future consideration within the OBD. It also referenced the Okeechobee Boulevard Corridor Study. The West Palm Beach Economic Development Study by Avalanche evaluated economic and demographic data, assessed the City's business climate, analyzed visitor trends, analyzed real estate trends, and reviewed economic development assets and programs in the City. With regard to infrastructure and real estate, the study found that Class A office space was in high demand, that office vacancy rates have been falling since 2011, and that the potential OBD would allow the City to increase in-demand Class A office product in a prime downtown location. The appraiser report by Aucamp, Dellenback and Whitney concluded that the proposed OBD would not have an adverse effect on property values for the downtown-at-large, no adverse effect on property values for nearby residential buildings, and no adverse effect on property values for nearby office buildings. The Palm Beach Metropolitan Planning Organization (MPO) 2040 Long Range Transportation Plan included growth forecasts regarding population and employment (population growth at 35 percent and employment growth at 56 percent by 2040), which Dr. Depew looked at to confirm that the materials in other reports he reviewed were accurate. The City did not perform a site-specific traffic impact study because it was exempt under the TCEA, and there was a reduction of development intensity within the Okeechobee Corridor. Dr. Depew opined that the proposed OBD Amendment did not require a traffic impact study. The Petitioners argued that the various surveys, studies, and reports did not expressly refer to the OBD and the OBD Amendment. However, section 163.3177(1)(f) does not require creation of a plan amendment prior to conducting studies and gathering data to support it. In fact, a plan amendment is usually the reaction to surveys, studies, community goals and vision, and other data. The data and analyses relied on by the City were prepared by recognized professionals using professionally accepted methodologies and sources. The City's reaction to the data and analyses was appropriate. The Petitioners did not prove beyond fair debate that the OBD Amendment was not supported by relevant data and analysis or that the City did not react appropriately to the data and analysis. Intergovernmental Coordination The County, Town, and City entered into the Comprehensive Plan Amendment Coordinated Review Interlocal Agreement, dated October 1, 1993 (Interlocal Agreement), to comply with the intergovernmental coordination requirements of chapter 163. The Interlocal Agreement established a countywide coordinated review process designed to provide cooperation between affected local governments and opportunities to resolve potential disputes within the plan amendment process with the least amount of infringement upon existing processes. The Interlocal Agreement established the IPARC Clearinghouse. Local governments are obligated to provide the Clearinghouse with an executive summary and hearing information. The City timely sent its executive summary to the Clearinghouse, and the Clearinghouse provided notice of the OBD Amendment to the Town and the County. The Interlocal Agreement provided that a written notice of intent to object may be filed by a participating local government and must be filed no later than 15 days before the transmittal hearing. Once filed, a meeting is required between the jurisdictions, a fact-finding panel is established, an opinion letter is issued, and conflict resolution is available as provided under Article X. The Town signed the Interlocal Agreement. It also adopted Policy 1.1.3 in the Intergovernmental Coordination Element (ICE) of its Comprehensive Plan requiring it to cooperate with all other local governments in a voluntary dispute resolution process for the purpose of facilitating intergovernmental coordination. The County also signed the Interlocal Agreement. In the County's ICE, it too recognized the intergovernmental review process established under the Interlocal Agreement. The County and Town did not present any evidence that they filed notices of intent to object to the OBD Amendment 15 days prior to the transmittal hearing as required by the Interlocal Agreement. In addition to the IPARC Notice, the City provided notice to both the County and Lakeview by mail and published required notices in the newspaper. Mr. Greene and Ms. Aponte spoke with John Lingren from the Town about the OBD Amendment. During that conversation, the purpose of the amendment was clarified, development capacity was discussed, and it was explained that the amendment did not increase development capacity on the corridors and did not change the uses. Ms. Aponte and Mr. Hansen also spoke with Mr. Mohyuddin, a principal planner from the County, and clarified that the City was not modifying development capacity and that there was no effect on traffic in the corridor. Mr. Hansen also spoke to Jorge Perez, a senior urban designer with the County, regarding the plan amendments. The FDOT sent a findings letter to the City after reviewing the OBD Amendment. Following receipt of the letter, Mr. Greene communicated with Larry Hymowitz, the FDOT transportation planner who prepared the letter. After reviewing information provided by Mr. Greene, Mr. Hymowitz testified that he no longer believed that there were adverse impacts to transportation facilities and no longer had concerns about the data and analysis used to support the OBD Amendment. Mr. Hymowitz stated that he considered this type of communication to be intergovernmental coordination. The City also received letters from the Petitioners and heard public comment made by the Petitioners' representatives at the public hearings before making its final decision to adopt the OBD Amendment. The Petitioners did not prove beyond fair debate that the City did not comply with the intergovernmental coordination requirements of the Comp Plans of the County, Town, or City, or of chapter 163. De Facto Future Land Use Plan Amendment The Petitioners argued that the OBD Amendment conflicts with the Future Land Use (FLU) Element and is a de facto future land use plan amendment. On its face, the Ordinance amended the City's DMP Element, not the City's Future Land Use Map (FLUM). The only FLU designation for the entire DMP area is the Urban Central Business District. The OBD Amendment did not change the FLUM since the designation remains Urban Central Business District. DMP Element Policy 3.1.3 stated that the City would establish zoning designations, and specifically indicated that Table DMP-1 identified the maximum FAR and maximum height allowed within each zoning subdistrict by right and with incentives. The City's illustrative zoning maps included in the DMP Element were reviewed in the past by the state land planning agency and were accepted as part of the DMP Element, not as a part of the FLU Element or FLUM. The Petitioners' argument is an attempt to challenge the status quo by claiming that the OBD Amendment is part of a change to or in conflict with the FLU Element when no change to the FLUM has occurred. The City's interpretation of its Comp Plan is reasonable. Ultimate Findings The Petitioners did not prove beyond fair debate that the Ordinance is not in compliance. All other contentions not specifically discussed have been considered and rejected. The City's determination that the Ordinance is in compliance is fairly debatable.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Economic Opportunity enter a final order finding the OBD Amendment adopted by the City by Ordinance No. 4783-18 "in compliance," as defined by section 163.3184(1)(b), Florida Statutes (2018). DONE AND ENTERED this 26th day of December, 2019, in Tallahassee, Leon County, Florida. S FRANCINE M. FFOLKES Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of December, 2018. COPIES FURNISHED: Nathan E. Nason, Esquire Nason, Yeager, Gerson, White & Lioce, P.A. 3001 PGA Boulevard Palm Beach Gardens, Florida 33410 (eServed) John Kenneth Rice, Esquire Nason, Yeager, Gerson, White & Lioce, P.A. 750 Park of Commerce Boulevard Boca Raton, Florida 33487 (eServed) Terrell K. Arline, Esquire Terrell K. Arline, Attorney at Law, Company 1819 Tamiami Drive Tallahassee, Florida 32301 (eServed) Kimberly L. Rothenburg, Esquire K. Denise Haire, Esquire City of West Palm Beach 401 Clematis Street, 5th Floor West Palm Beach, Florida 33401 (eServed) Peter Penrod, General Counsel Department of Economic Opportunity Caldwell Building, MSC 110 107 East Madison Street Tallahassee, Florida 32399-4128 (eServed) Cissy Proctor, Executive Director Department of Economic Opportunity Caldwell Building 107 East Madison Street Tallahassee, Florida 32399-4128 (eServed) Stephanie Webster, Agency Clerk Department of Economic Opportunity Caldwell Building 107 East Madison Street Tallahassee, Florida 32399-4128 (eServed)
The Issue Whether a sign which has been standing without a current permit as required by Section 479.07(4), Florida Statutes, is eligible for a current permit upon payment of the delinquent fees.
Findings Of Fact The following described signs owned by Respondent have no currant permit tags: Highway - U.S. 1 Location: 7.1 miles north of State Road 100 Copy - "Shrine" Highway - A1A Location - 6.2 miles north of Florida 100 Copy - "Old Jail" Highway - A1A Location - 6.3 miles north of Florida 100 Copy - "Eddie's" or "Eddy's" Highway - A1A Location - 13.3 miles north of Florida 100 Copy - "Ocean Groves" Highway - A1A Location - 13.7 miles north of Florida 100 Copy - "Old Jail" Highway - A1A Location - 13.8 miles north of Florida 100 Copy - "Alligator Farm" Highway - U.S. 1 Location - 22.20 miles north of State Road 100 Copy - "Casa Marina" The subject signs are owned and were erected by the Respondent and there were no fees paid under the requirements of Chapter 479, Florida Statutes, insofar as paying fees and obtaining current permits.
Findings Of Fact The Office of the Comptroller, Department of Banking and Finance, Division of Securities and Investor Protection (Petitioner) is authorized and charged with the responsibility to administer and enforce the provisions of Chapter 517, Florida Statutes, and the administrative rules promulgated thereunder. At all times pertinent hereto, First Eagle, Inc. was a foreign corporation with its principal place of business located in Englewood, Colorado, and was registered with Petitioner as a securities broker/dealer in the State of Florida. First Eagle had two branch offices in Florida, one at Boca Raton and the other at Longwood. These two branch offices were supervised by the First Eagle home office. Each branch office had a branch manager. At all times pertinent hereto, Respondent Baum was the branch manager of First Eagle's Boca Raton branch office and Respondent Canouse was the branch manager of its Longwood office. Respondent Baum was registered with Petitioner as an agent with First Eagle between August 13, 1989, and September 4, 1990. At the time of the formal hearing, Respondent Baum was not registered with Petitioner. Respondent Canouse was registered with Petitioner as an agent with First Eagle between March 21, 1989, and May 31, 1990. At the time of the formal hearing, Respondent Canouse was not registered with Petitioner. On January 1, 1990, Rule 3E-600.012, Florida Administrative Code, referred to as Florida's Cold Call Rule, and its federal counterpart went into effect. Both rules pertain to the sale of designated securities (generally referred to as "penny stocks") and both require that certain information be taken from certain customers and that certain disclosures be made to those customers. Both rules require that a determination be made as to the customer's suitability to trade in designated securities, and that a written agreement evidencing the terms and conditions of the trade be received before the transaction is consummated. Florida's Cold Call Rule does not specify what person or officer within the selling organization is to make the suitability determination, nor does it set forth the criteria by which the determination is to be made. The following is required by the Rule 3E-600.012(5), Florida Administrative Code, before any dealer or associated person may sell or effect the purchase of the type transactions pertinent to this proceeding: (5) It shall be unlawful and a violation of Section 517.301(1), F.S. for any dealer or associated person to sell any equity security or to effect the purchase of such security unless ... prior to the transaction the seller has approved the customer's account for such transaction in accordance with the procedures set forth in subparagraph (5)(b) and has received from the customer a written agreement to the transaction setting forth the identity and quantity of the securities covered by this paragraph. * * * (b) In order to approve a customer's account for any transaction covered by this section, the seller shall: Obtain information from the customer concerning the customer's financial situation, investment experience, and investment objectives; Reasonably determine, based upon the information required in subparagraph (5)(b), and upon any other information known by the seller that the transaction in the security covered by paragraph (5) is suitable for the customer and that the customer (or the customer's independent adviser in the transaction) has sufficient knowledge and experience in financial matters that the customer (or the customer's independent adviser in the transaction) may reasonably be expected to be capable of evaluating the risks of the transaction covered by this section. Deliver to the customer a written statement setting forth: the basis on which the seller made the determination required by subparagraph (5)(b)2.; stating in highlighted format that it is unlawful for the seller to effect a transaction in such security unless the seller has received, prior to the transaction, a written agreement to the transaction from the customer; stating in highlighted format immediately preceding the customer signature line that the seller is required by law to provide the customer with the written statement and that the customer should not sign and return the written statement to the seller if it does not accurately reflect the customer's financial situation, investment experience, and investment objectives; and Obtain from the customer a manually signed and dated copy of the written statement required by subparagraph (5)(b)3. Failure to comply with Florida's Cold Call Rule is, pursuant to Rule 3E-600.012(5), Florida Administrative Code, a violation of Section 517.301(1), Florida Statutes. 3/ The suitability form and the procedures to be followed by First Eagle offices in attempting to comply with the Florida and federal Cold Call Rules were prepared at the corporate level. Respondent Baum was not an officer of First Eagle, and he had no control or authority over policies or procedures adopted at the corporate level. Respondent Canouse was not an officer of First Eagle, and he had no control or authority over policies or procedures adopted at the corporate level. Neither Respondent Baum or Respondent Canouse participated in developing the forms and the procedures used by First Eagle to comply with Florida's Cold Call Rule. Robert Valerius was the corporate officer at the home office of First Eagle who had the responsibility for ensuring that the Boca Raton and the Longwood branch offices complied with Florida's Cold Call Rule. The suitability form used by First Eagle and its branch offices requested that the customer give information by checking the appropriate response and provided, in pertinent part, as follows: If the information below is true and correct, First Eagle, Inc. deems you suitable to purchase designated securities. INVESTMENT OBJECTIVES: Income Growth Safety of Principal Speculation Tax exempt income Other PREVIOUS FINANCIAL EXPERIENCE: Yes No Name of broker/dealer Type of experience FINANCIAL SITUATION: Estimated annual income Estimated net worth I have sufficient knowledge and experience to evaluate the risk in purchasing designated securities. I am purchasing approximately shares of stock, ( ) Common, ( ) Units, ( ) Warrants. Both the Florida Cold Call Rule and its federal counterpart were enacted to protect investors and to prevent fraud that could be occasioned because of the high risks associated with dealing in these type transactions and because of the limited information about these type securities available to investors. The testimony of William F. Reilly, Jr., clearly establishes that the Petitioner considers a branch manager responsible for ensuring that transactions occurring under his supervision in the branch office comply with Florida's Cold Call Rule, as well as all other Florida laws and rules pertaining to the buying and selling of securities. Mr. Reilly testified that Petitioner relies on Article III, Section 27 of the Rules of Fair Practice adopted by the National Association of Securities Dealers (NASD) that regulate the conduct of its members, 4/ as its authority for imposing this responsibility on branch managers. Petitioner has pointed to no rule or statute that impose this duty on a branch manager. The duties and responsibilities separately imposed by First Eagle on Respondent Baum and Respondent Canouse as to the Florida Cold Call Rule were not established. 5/ The documentation required by Florida's Cold Call Rule must be obtained prior to the sale. Similarly, the suitability determination required by Florida's Cold Call Rule must be made prior to the sale. The form adopted by First Eagle and used by the Boca Raton branch office and the Longwood branch office did not provide for an independent suitability determination that the individual customer could appropriately deal in designated securities. Instead, the form permitted the customer to make his or her own determination. On March 19, 1990, a surprise examination was made by Petitioner at First Eagle's Boca Raton office. This examination was conducted by Jerome Jordan, an experienced investigator employed by Petitioner. On March 22, 1990, an unannounced examination was made by Petitioner at First Eagle's Longwood office. This examination was conducted by Michael Blaker, an experienced investigator employed by Petitioner. Both examinations were conducted in cooperation with other regulatory agencies as part of a nationwide investigation to determine the level of compliance with the SEC Cold Call Rule and Florida's counterpart. Between January 1, 1990, and March 19, 1990, persons working in the Boca Raton office under Respondent Baum's supervision offered for sale, sold, and effected the purchase of designated securities to individual customers in 18 transactions prior to obtaining the documentation required by the Cold Call Rule and without making a proper suitability determination. Respondent Baum caused order tickets to be forwarded to First Eagle headquarters, which was a necessary step in the completion of the purchase of these designated securities. There was no evidence that a suitability determination was made for these transactions as required by Florida's Cold Call Rule by Mr. Baum, by Mr. Valerius, or by any other person associated with First Eagle. Between January 1, 1990, and March 22, 1990, persons working in the Longwood office under Respondent Canouse's supervision offered for sale, sold, and effected the purchase of designated securities to individual customers in 26 transactions prior to obtaining the documentation required by the Cold Call Rule and without making a proper suitability determination. Respondent Canouse caused order tickets to be forwarded to First Eagle headquarters, which was a necessary step in the completion of the purchase of these designated securities. There was no evidence that a suitability determination was made for these transactions as required by Florida's Cold Call Rule by Mr. Canouse, by Mr. Valerius, or by any other person associated with First Eagle.
Conclusions Having ruled on all the exceptions filed by the parties, and having reviewed the complete record of this proceeding and all Exhibits thereto, it is accordingly ORDERED: The Hearing Officer's Findings of Fact and Conclusions of Law are adopted except as modified or rejected herein; The Respondents William J. Baum and Joseph C. Canouse are hereby ordered to cease and desist from violating the provisions of Rule 3E-600.012(5), Florida Administrative Code; That Respondents William J. Baum and Joseph C. Canouse are herein REPRIMANDED for their violations of Rule 3E-600.12(5), Florida Administrative Code; DONE and ORDERED this 24th day of June, 1992. GERALD LEWIS, as Comptroller and Head of the Department of Banking and Finance, Division of Securities COPIES FURNISHED: Don Saxon, Director Division Securities and Investor Protection R. Beth Atchision Assistant General Counsel
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which finds that Respondent Baum and Respondent Canouse violated the provisions of Rule 3E-600.012(5)(b), Florida Administrative Code, and which issues a letter of reprimand to each of them for such violation. DONE AND ORDERED this 26th day of March, 1992, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of March, 1992.
