The Issue There are several issues that were under consideration in these cases. The first issue concerns the taxability of sales of used rental cars by Chestnut Fleet Rentals, Inc., referred to subsequently as Chestnut (DOAH Case No. 81- 1227); second, the taxability of short-term sub-leasing of rental cars by American International Rent-A-Car of Florida, Inc., subsequently referred to as American, to individual sub-leases (DOAH Case No. 81-1228); and finally, the taxability of car rentals (sub-leasing) from American to employees of the federal government when those employees used their personal credit cards or paid cash for the car rental. (DOAH Case No. 81-1228).
Findings Of Fact Petitioner Chestnut is a foreign corporation with authorization to do business in the state of Florida. Petitioner American is a Florida corporation doing business at various places in Florida. The corporate address of both Petitioners is 3000 Admiral Wilson Boulevard, Pennsauken, New Jersey. On October 25, 1976, Patrick Treacy, an auditor with the State of Florida, Department of Revenue, made a tax audit of the books and records of the two petitioning corporations. This audit was made in the offices of the two corporations. The audit was concluded on December 24, 1976, and was followed by an initial Notice of Proposed Assessment of Tax, Penalties and Interest pursuant to Chapter 212, Florida Statutes. Each company was notified of an intention to assess tax. A copy of the initial Notices of Proposed Assessment may be found as Respondent's Exhibits A and B which date from February 17, 1977. Exhibit A is American and Exhibit B is Chestnut. In arriving at these statements of proposed assessments, against American, Treacy had examined, among other things, the sales tax returns, general ledgers, rental agreements, daily branch reports, purchase invoices, and source journals. Reference American, it had been discovered that automobiles which had been rented in accordance with a contract between American and the United States General Services Administration, rentals pertaining to government employees, in Florida, under special rates, were transactions in which no tax was being collected for the benefit of the State of Florida. On occasions where the federal government was billed directly, for the rental, no tax was sought; however, the Notice of Proposed Assessment called for the remittance of tax on those rentals in which the employee paid cash or used a personal credit card in the transaction. Moreover, the initial assessment related to American called for collection of tax on transactions not involving federal employees or the General Services Administration contract in which tax was not collected on certain rentals in Florida. The cars which were the subject of both the General Services Administration rentals and non-government rentals, and for which Florida sought the collection of tax, had initially been leased to American International of Florida, Inc., from Chestnut Fleet Rentals and American International of Atlanta, Georgia, through a primary lease agreement, with the cars to be sublet to the general public. That lease agreement was one in which tax was paid to the State of Florida and credit afforded for that agreement. It is the further sub-lease from American International of Florida to the ultimate consumer that is the subject of the two categories of tax collection for the rental. The period involved is from February 1, 1973 through October 31, 1976. In the Chestnut Fleet Rentals circumstance of the February 17, 1977 assessment, tax collection was sought on the sale of long-term fleet rental cars, in Florida, to the lessees or other consumers, in which the State of Florida believed that sales tax was not collected. On this occasion, a pro-rata assessment was made in view of the fact that Chestnut did not have source documents representing the sales prior to November, 1974. Consequently, the pro-rata estimate was made of the pre- November 1974 sales based upon subsequent sales where records had been kept. At the final hearing Chestnut did not refute the prorata adjustment by contrary proof. The overall circumstance with Chestnut Fleet related to the audit period of February 1, 1973 through October 31, 1976. In all instances related to American and Chestnut, the State of Florida sought and continues to seek a delinquent penalty and interest. In those several categories American and Chestnut were responsible for the collection and remission of any tax which the State of Florida was certified to collect and to keen any needed records to aid in that endeavor. In the American circumstances at issue the incidence of tax fell upon the lessees. In the Chestnut sales the incidence of tax fell upon the purchasers. By correspondence of February 11, 1980 from counsel for the Petitioners, the proposed assessments were challenged. A copy of that correspondence may be found as Respondent's Exhibit C. In referring to the sale of used cars by Chestnut, its counsel did not state opposition as such, it was merely indicated that counsel wished to check with its client to be sure that the client agreed with the figures set forth in the proposed assessment. This was also the circumstance in the situation related to leases to customers other than federal government employees. In effect, counsel for the Petitioner American was asking for the opportunity to verify the tax owed based upon the circumstance that existed after credit was given for taxes that had already been paid. The General Services Administration rentals from American to federal employees were protested in their totality. On June 11, 1980, the protest was responded to by the State of Florida in its Notice of Decision. On that occasion, it was indicated that the position of the State related to the lease of American cars to non-federal employees would remain the same. The lease of American cars to federal employees was upheld in the area of rentals where federal employees paid in cash or through the use of their own credit cards. On that occasion of the notice, reference was made to Rule 12A-1.01(4)(e), Florida Administrative Code, as a basis for sustaining the State's position. That provision states, "When hotel accommodations are paid for directly by church officials from church funds, an exemption certificate may be used to exempt such transactions from tax. If hotel bills are paid by guests and reimbursement is made from church funds as expense accounts of individuals, the tax shall be paid by such individuals. This provision was offered by way of analogy, in the mind of the State of Florida. In the decision, no mention was made of the sale of rental cars by Chestnut. There followed an informal conference between the taxpayers' former attorney who had authored Respondent's Exhibit C, and officials within the Department. At that time, American, through its former counsel, sought to have the State of Florida abandon its request for penalty in the rental circumstance involving non-federal renters, and to have the State possibly consider a stipulated payment schedule for the tax due. It continued to oppose the idea of the assessment of tax on the American rentals through the General Services Administration contract. In the Chestnut Fleet sales of lease cars to consumers, counsel sought the State's acquiescence in the removal of penalties on that tax claim. This informal conference was memorialized in correspondence of former counsel for the Petitioners, a copy of which may be found as Respondent's Exhibit On February 26, 1981, the State of Florida issued its Notice of Reconsideration. A copy of this is found as Respondent's Exhibit F. In this notice, the State continues to assert its right to collect the tax in the several categories that are at issue, denies the opportunity for stipulated payments pending proof of qualification for that payment plan and refuses to consider the question of penalty reduction until the matters have been settled. At that point in time, the agency was proceeding under what, in effect, was a fourth revised notice of assessment as to American and a third revision as to Chestnut. These notices of assessment date from June 25, 1980. The assessment pertaining to the American International rentals per agreement with the General Services Administration are found as Exhibit G by the Respondent, a copy. The assessments pertaining to American International's rentals to persons other than through the General Services Administration contract are found as Respondent's Exhibit H, a copy. Finally, the assessments pertaining to the Chestnut Fleet rental sales to consumers of their off-lease automobiles may be found as Respondent's Exhibit I, a copy. In each circumstance, the state of Florida continues to request the imposition of a delinquent penalty and accrued interest. Following the receipt of the February 26, 1981 Notice of Reconsideration, the Petitioners filed a Request for Relief pursuant to Section 120.57(1), Florida Statutes, related to the issues as set forth in the Recommended Order. Those petitions as amended have been considered through the hearing process.
The Issue The issue is whether Respondent operated two contiguous four-unit buildings as an unlicensed public lodging establishment in violation of Subsection 509.241(1), Florida Statutes (2003).
Findings Of Fact The parties stipulated to most of the facts in this case. The disputed issues of fact involve issues of whether the two four-unit buildings comprise a single complex of buildings that Respondent operates as a single entity. With this exception, the parties submitted the case to the ALJ as an issue of law. Petitioner is the state agency responsible for regulating public lodging establishments defined in Subsection 509.013(4), Florida Statutes (2003). Respondent owns and operates two four-unit buildings located, respectively, at 11220 and 11240 Third Street East, Treasure Island, Florida 33706. Petitioner inspected each building on July 2 and October 16, 2003, and found that Respondent had not licensed either building as a public lodging establishment. Respondent has never licensed either building as a public lodging establishment. The two four-unit buildings are located on contiguous lots that are not separated by a highway. However, the evidence is less than clear and convincing that the two buildings comprise a single complex of buildings within the meaning of Subsection 509.013(7), Florida Statutes (2003). The buildings are not situated on the same tract or plot of land. Each parcel of land on which a building is located is a separate lot bearing a separate street address, a separate legal description, and a separate survey. Each lot is separately titled to Respondent and his wife under a separate warranty deed acquired in separate transactions. Respondent is legally entitled to transfer each lot independently without first severing or subdividing one lot from the other. Each lot secures a separate mortgage for which the lender, in the event of default, may foreclose without foreclosing against the other lot otherwise encumbering the other lot. Respondent does not operate the two buildings under one business name within the meaning of Subsection 509.013(7), Florida Statutes (2003). Respondent does not operate the two buildings under any business name. Neither building bears a name, and Respondent does not manage the two buildings from a single rental management office. Respondent operates each building pursuant to a separate occupational license for each building. The two buildings do not comprise a public lodging establishment within the meaning of Subsection 509.013(4)(a), Florida Statutes (2003). For reasons previously stated, the evidence is less than clear and convincing that the two buildings comprise a single complex of buildings. In addition, Petitioner failed to submit any evidence that Respondent either rents to any guest for a period that is less than 30 days or advertises to the public that the eight units are regularly rented to guests. Rather, the only relevant evidence shows that Respondent rents to guests for one year or more and does not advertise the rental units in any manner. The two four-unit buildings satisfy the requirements of an express exclusion in Subsection 509.013(4)(b)3., Florida Statutes (2003). Each building is an establishment that rents four units or less. Petitioner submitted no evidence that Respondent either advertises the units for rent to guests or that Respondent regularly rents the units to transients defined in Subsections 509.013(10) and (11), Florida Statutes (2003). The only relevant evidence shows that Respondent does not advertise the units and does not rent to transients.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding that the two four-unit buildings do not comprise a public lodging establishment and dismissing the Administrative Complaint for lack of jurisdiction. DONE AND ENTERED this 22nd day of December, 2004, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 22nd day of December, 2004. COPIES FURNISHED: Charles F. Tunnicliff, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202 Ted J. Starr, Esquire 8181 U.S. 19 North Pinellas Park, Florida 33781 Leon Biegalski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202 Geoff Luebkemann, Director Division of Hotels and Restaurants Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issues to be resolved in this proceeding are whether Respondent committed the violations alleged in the Amended Administrative Complaint dated February 29, 2013, and, if so, what disciplinary action should be taken against Respondent.
Findings Of Fact Petitioner is the state agency charged with the regulation of real estate licensees pursuant to chapter 475, Florida Statutes. At all times material to this case, Mardy was licensed as a Florida Real Estate Broker. Her license number is 3048239. No prior disciplinary action has been brought against Respondent. Mardy has been actively licensed as a broker in Florida since April 6, 2010. From April 8, 2010, to present, Mardy also served as the registered broker with Mardy’s Premier Properties, Inc., license number CQ1036525. The brokerage company was located at 12180 Southshore Boulevard Suite 101A, Wellington, Florida 33414. Approximately seven years ago, Mardy assisted Alix and Patricia Pasquet (“Pasquets”) with a rental transaction. In 2011, when the Pasquets decided that they wanted to lease a rental residence near their sons’ school, they decided to contact Mardy to assist them in obtaining the rental residence since they had been satisfied with her previous service. The Pasquets decided to lease the rental residence at 11188 Millpond Greens Drive, Boynton Beach, Florida 33473, (“Millpond”). The Pasquets made an offer to pay the rent a year in advance to benefit from the reduced rental amount with a full year’s payment. Mardy informed the Pasquets that the rental money needed to be in the U.S. instead of Haiti in order to execute the leasing agreement and then the Millpond owner would accept their offer to lease the property if they showed proof of funds in the U.S. prior to April 6, 2012. On or about April 5, 2012, the Pasquets wired Mardy the total rent for the year in the amount of $33,365.00 to Mardy’s Premier Properties, Inc.’s bank, PNC Bank, at Mardy’s request. Mardy received the monies in the corporation’s operating account ending in 6863. Mardy accepted the Pasquets’ rental funds with the direction to use the monies to secure Millpond as a rental residence for the Pasquets. On or about April 9, 2011, the Pasquets signed a lease addendum, which was predated to April 5, 2011. The addendum indicated the rent payment would be wired to the Millpond owner upon commencement of the lease or prior thereto. After the addendum was signed, Mrs. Pasquet tried to follow-up with Mardy to schedule the Millpond walk through that had been discussed at the previous meeting. She attempted to contact Respondent to no avail for about a week to schedule the Millpond walk through. When Mrs. Pasquet finally reached Mardy, Respondent informed her that her unavailability was because of a death in the family since her grandmother had passed. Around April 25, 2011, Mardy informed Mrs. Pasquet that she no longer had the Pasquets’ $33,365.00. Respondent provided several different reasons for use of the Pasquets’ monies. All explanations given were for both a personal and improper use, and without the Pasquets’ permission. Hence, the undersigned rejects any of Mardy’s excuses as valid or credible. Respondent never delivered the Pasquets’ rental monies to the Millpond owner nor closed the rental deal with the Millpond owner or his agent for the lease of Millpond. At hearing, Respondent admitted that she used the Pasquets’ $33,365.00 without their permission. On or about April 26, 2011, the Pasquets negotiated a lease directly with Millpond owner and leased Millpond for six months. They did the walk through on or about April 29, 2013, and moved into the Millpond property on or about May 8, 2013. After the Pasquets discovered that Mardy had taken their $33,365.00, they contacted an attorney to assist them with the matter to try to get the rental monies back. The police also became involved in the attempt of the Pasquets to get their rental monies back. When the police became involved, Respondent agreed to pay the money back to the Pasquets. On or about July 7, 2011, Respondent paid the Pasquets $10,000.00 with check number 75053315-2. On or about July 8, 2011, Respondent paid the Pasquets $3,365.00 with check number 75115202. On or about October 27, 2011, Respondent paid the Pasquets $5,000.00 with check number 0734873625. At the hearing, Mardy had not made a payment since October 2011. The Pasquets have spent thousands of dollars on legal fees trying to get their rental monies back from Respondent. Respondent owes them approximately $15,000.00. The Pasquets were forced to withdraw unbudgeted funds from their business in order to pay for the six-month lease for Millpond, which has been a financial hardship for the Pasquets. Jonathan Platt ("Investigator Platt") is employed by the Division as a Lead Investigator. Investigator Platt has worked for the Division for approximately 22 years. Investigator Platt was assigned the complaint regarding the Pasquets' missing rental funds. He interviewed Respondent and requested Respondent's corporation bank records as part of his investigation. Mardy failed to deliver the bank records to Investigator Platt. Respondent also failed to maintain an escrow account or accounting of rent deposited into the corporation’s bank account ending in 6863 with PNC Bank. Investigator Platt completed his investigation by obtaining Mardy's requested records directly from PNC Bank with an investigative subpoena duces tecum. Afterwards, the Division issued an Administrative Complaint against Mardy in which it charged violations of sections 475.25(1)(b), 475.42(1)(i), 475.25(1)(d)1, 475.25(1)(e), Florida Statutes (2010); and Florida Administrative Code Rules 61J2-14.012(1) and 61J2- 14.010(1). Respondent challenged the Administrative Complaint and requested a hearing. No dispute exists that the request for hearing was timely filed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order: Finding Guirlande Mardy violated Counts 1, 3, 4, and 5 of the Amended Administrative Complaint; and Imposing revocation of Guirlande Mardy's license identified herein. DONE AND ENTERED this 30th day of April 2013, in Tallahassee, Leon County, Florida. S JUNE C. McKINNEY 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 30th day of April, 2013. COPIES FURNISHED: Christina Ann Arzillo, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399 Guirlande Mardy 14541 Draft Horse Lane Wellington, Florida 33414 Juana Watkins, Director Division of Real Estate 400 W Robinson Street, N801 Orlando, Florida 32801 Darla Furst, Chair Real Estate Commission Department of Business and Professional Regulation 400 W Robinson Street, N801 Orlando, Florida 32801 J. Layne Smith, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issue is whether Petitioner is liable for tax, interest, and penalty, as claimed in the proposed assessment.
Findings Of Fact Gary J. Bell (Mr. Bell) and his father Sidney Bell formed Petitioner in 1992. Until Mr. Sidney Bell left the company in his son's sole control in 2001, they were the sole shareholders and officers of the company, which had two other employees. Mr. Bell and his father estimated and checked jobs. Not fabricating fences itself, Petitioner obtained finished fences from suppliers and installed them, primarily at private residences. The audit period in this case extends from May 1, 1995, through November 30, 1999 (Audit Period). By 1995, Petitioner had four employees: one in the office and three laborers. The nature of Petitioner's business had changed from entirely residential to about half commercial, mostly consisting of sales to the State of Florida. The size and nature of Petitioner's business did not change significantly during the remainder of the audit period, although the percentage of sales to the State of Florida increased somewhat. Without referring to any records, Mr. Bell estimates that Petitioner's gross sales during the 55-month audit period totaled $1.2 to $1.4 million. Jose Rouco, a tax auditor of Respondent, sent a notice in May 2000 to Mr. Bell informing him of Respondent's intention to examine Petitioner's records. Due to a change of address, Mr. Rouco sent the form a second time. When he received no response to the form, in September 2000, Mr. Rouco visited the address that he had found for the company. Speaking to someone at a nearby business, Mr. Rouco learned that the fencing business had recently moved from the second address. On November 22, 2000, Mr. Rouco spoke to Mr. Bell on the telephone and learned that the records required for the audit were at Petitioner's present business address. Mr. Rouco directed Mr. Bell to send him copies of these records. When Mr. Bell failed to do so, Mr. Rouco sent a demand letter on December 12, 2000, warning that the failure to provide the requested records by December 27 would result in the issuance of a Formal Notice of Demand to Produce Certain Records. On December 28, 2000, after Mr. Bell had failed to respond by the deadline stated in the December 12 letter, Mr. Rouco issued a Formal Notice of Demand to Produce Certain Records for the Audit Period by 10:00 a.m. on January 9, 2001. The form warns: "Failure to produce [the records] may result in the immediate issuance of a distress warrant or a jeopardy assessment in the amount of an estimated assessment of all taxes, interest, and penalties due and payable to the State of Florida." When Mr. Bell failed to produce the records by January 9, 2001, Mr. Rouco proceeded to estimate taxes that Petitioner owed. A couple of weeks later, he received as unclaimed the December 12 letter and December 28 notice, which he had sent certified mail, return receipt requested, to Petitioner's correct address. The record does not disclose why Mr. Bell never took delivery of this mail. Based on Mr. Rouco's work, Respondent issued on April 30, 2001, a Notice of Proposed Assessment, which claimed, for the Audit Period, taxes of $227,610, a penalty of $113,805, and interest of $98,583.19 through April 30, 2001, and $74.83 daily after April 30, for a total of $439,998.19. The notice warns that the proposed assessment would become a final assessment if Petitioner did not file an informal protest by June 29, 2001, and that Petitioner must commence a judicial action or administrative proceeding by August 28, 2001. By letter dated August 10, 2001, Willie Barnett, a certified public accountant, informed Respondent that he was Petitioner's accountant, and he was responding to Respondent's tax notice dated July 25, 2001. The record does not contain any documents from Respondent dated July 25, 2001. However, Mr. Barnett's letter states that Petitioner "is in the business of installing fences, not retail sale. In those instances where the company purchases the fencing materials, the sales taxes are paid at the point of purchase." The letter concludes that Petitioner is therefore not liable for sales taxes. Mr. Bell asserts that Petitioner has paid all taxes lawfully due, but that Petitioner is not required to collect any tax on its sales to consumers because these are sales pursuant to real property contracts. Respondent's file already contained the information that Mr. Barnett supplied. By Audit Assignment Request received January 11, 1999, by Respondent's Case Selection Division, L. David Mills, evidently an employee of Respondent, wrote: "Taxpayer sells and installs real property. Potential for recovery on purchases and fabrication labor and overhead. Taxpayer does not appear to be registered." By a file memorandum dated October 25, 2000, Joan C. Rietze, also evidently an employee of Respondent, wrote: "Talked to Gary Bell. . . . He also stated that he pays tax on all of the purchases he makes. He requested that his tax number be cancelled in December of last year. The sales tax number was cancelled in October, 2000." In estimating Petitioner's tax liability in January 2001, Mr. Rouco identified four areas: taxable sales, taxable purchases, taxable acquisition of fixed assets, and taxable rent. Mr. Rouco's estimates were $207,900 for uncollected taxes on sales, $6270 for unpaid taxes on purchases of items other than fixed assets, $6840 for unpaid taxes on fixed assets, and $6600 for unpaid taxes on warehouse rent. Without much explanation, Mr. Rouco selected a "small construction company" as the source of gross monthly sales of $63,000, as well as other relevant business activity. However, this choice produces $3.465 million of gross sales during the Audit Period, which is almost three times Mr. Bell's estimate. Factually, the record offers scant support for Mr. Rouco's selection of the "small construction company" as a comparable to Petitioner's business. Petitioner's business was not construction; it purchased already-fabricated fences and installed them. Coupled with the problem with the comparable, the record does not support Mr. Rouco's estimate of Petitioner's tax due on purchase amounts of fixed assets, and Petitioner has proved that it does not owe additional taxes on such purchases. Petitioner's labor-intensive services, coupled with its itinerant nature during the Audit Period, suggest strongly few, if any, such purchases. Coupled with the problem with the comparable, the record does not support Mr. Rouco's estimate of Petitioner's tax due on warehouse rent, and Petitioner has proved that it does not owe additional taxes on such rent payments. The estimate concerning unpaid warehouse rent sales tax requires the presumption that Petitioner's several lessor's found some reason not to collect and remit sales tax based on the lease payments. Any dealer-like activities by Petitioner involving sales for resales would not impact its liability to pay this tax, so misuse of a dealer registration is unlikely here. Nor has Respondent suggested such widespread noncompliance with this component of the sales tax as to justify a presumption of noncompliance among Petitioner's lessors, even assuming that Mr. Rouco generated a gross rent that is factually supported by the record. Notwithstanding the problem with the comparable, the factual record supports Mr. Rouco's estimate of Petitioner's tax due on purchases of items other than fixed assets, and Petitioner has failed to prove that it does not owe additional taxes on such purchases. For much, if not all, of the Audit Period, Petitioner appears to have been a registered dealer. Mr. Bell's unprofessional handling of this matter while Mr. Rouco attempted to perform a routine audit inspires little confidence that Mr. Bell would not misuse a dealer registration and resale certificate. Thus, although the use of the "small construction company" as a comparable is questionable, there is factual support for the assessment of $6270 in unpaid taxes on these purchases over the Audit Period. As noted below, the main problem with Mr. Rouco's estimate of Petitioner's tax due on sales to consumers is legal, not factual. As for the main factual aspect of this issue, the record offers no support that Petitioner sold to consumers using a retail sale plus installation contract, as opposed to a simple lump sum contract. Nothing in Petitioner's operation, as reflected on this record, suggests that it would be more inclined to use the more sophisticated contract.
Recommendation It is RECOMMENDED that Department enter a final order adjusting the assessment against Petitioner to reflect unpaid sales tax of $6270, a penalty of $3135, and interest at the lawful rate. DONE AND ENTERED this 26th day of February, 2002, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 26th day of February, 2002. COPIES FURNISHED: James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Bruce Hoffman, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Gary J. Bell, Qualified Representative Bell & Son Fence Company, Inc. 6600 Northwest 27th Avenue Miami, Florida 33147 John Mica, Assistant Attorney General Office of the Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050
The Issue The issue is whether Islamorada Ordinance 01-05, which amended Policy 1-2.4.7 of Islamorada's comprehensive plan, is in compliance, as provided by Chapter 163, Part II, Florida Statutes.
Findings Of Fact Respondent Islamorada, Village of Islands (Islamorada), was incorporated on December 31, 1997. At the time of its incorporation, the Monroe County comprehensive plan applied to requests for development orders in the jurisdiction of Islamorada. After conducting a number of public hearings and workshops, Islamorada adopted its initial comprehensive plan by Ordinance 00-09 on January 24, 2001 (Plan). On March 15, 2001, Respondent Department of Community Affairs (DCA) published its Notice of Intent to Find the Islamorada Comprehensive Plan not in compliance with Chapter 163, Part II, Florida Statutes, which is the Local Government Comprehensive Planning Act (Act). DCA commenced Department of Community Affairs v. Islamorada, Village of Islands, DOAH Case No. 01-1216GM, to challenge the Plan. As the only parties to DOAH Case No. 01-1216GM, DCA and Islamorada entered into a Stipulated Settlement Agreement, under which Islamorada agreed to adopt certain remedial amendments. Consequently, on April 26, 2001, Islamorada adopted Ordinance 01-05, which contained the remedial amendments. On May 24, 2001, DCA published its Notice of Intent to Find the Comprehensive Plans and Remedial Comprehensive Plan Amendments in compliance with the Act. Consequently, on June 6, 2001, the Administrative Law Judge issued an Order Closing File in DOAH Case No. 01-1216GM. On the same day, Petitioner filed his Petition, which alleges that Policies 1-2.4.7 and 1-2.1.0 are not supported by data and analysis. Ordinance 01-05 did not change Policy 1-2.1.0. For the reasons noted in the Conclusions of Law, Petitioner therefore is unable to challenge Policy 1-2.1.0. With deletions stricken through and additions underlined, Ordinance 01-05 revised Policy 1-2.4.7 as follows: Policy 1-2.4.7: Limit Transient Rental Use of Residential Properties. Islamorada, Village of Islands shall continue to prohibit the transient rental use of 28 days or less, of residential properties within the Village, including properties located within the Residential Conservation (RC), Residential Low (RL), Residential Medium (RM), and Mixed Use (MU) Future Land Use categories, except in tourist commercial Zoning Districts as provided for under Policy 1-2.10 of this Plan. Transient rental use may be allowed continue in multi- family developments with 24-hour on-site security, excluding mobile home parks, in the Residential High (RH) FLUM categories based on an existing use as of May 1, 1999, upon a majority approval of all property owners within a mandatory owner association organized under Florida law, pursuant to the association requirements, and compliance with all applicable State regulations and Village codes. Property owners located in the RL, RM, RC and MU future land use categories with valid transient rental licenses as of May 1, 1999 will have until May 1, 2003 to cease rentals of 28 days or less. Owners of such properties shall register with the Village and shall demonstrate to the Village that: The transient use of 28 days or less of the property in question was existing as of May 1, 1999, and continues to exist; All State and local licenses necessary for the conduct of transient rental use of the property have been secured; and All impact fees have been paid. Property owners permitted transient rental use pursuant to this Policy shall lose their privileges and retire their licenses prior to May 2, 2003 upon: Transfer of ownership of the property at which the transient rental activity takes place; or A combination of two of the any of the following being recorded: Code Violations as determined by the Hearing Officer and/9or Sheriffs Field Contacts and/or substantiated written letters of complaint from neighbors submitted and on record with the Village. the property being determined by nonappealable Final Order on more than two (2) occasions to have violated the Village Code. After Islamorada adopted Ordinance 01-05, Petitioner filed his petition challenging Policy 1-2.4.7. After Petitioner filed his petition, Islamorada adopted Ordinance 01-11, which repealed the amendments contained in Ordinance 01-05 and restored Policy 1-2.4.7 to its original form. However, Islamorada adopted Ordinance 01-11 on July 24, 2001--three weeks prior to the start of the hearing in this case. DCA had not yet issued a notice of intent, and the amended plan language was therefore largely irrelevant in this case. For the same reasons, as explained in the Conclusions of Law, that Petitioner may not challenge Policy 1-2.1.10, he may not challenge Policy 1-2.4.7; Petitioner's challenge is limited to the revisions contained in Ordinance 01-05. The revisions contained in Ordinance 01-05 relax the restrictions governing transient rentals, as contained in the original Plan. In its original form, Policy 1-2.4.7 required the cessation of transient rentals not in compliance with the policy by the earliest of: a) May 1, 2003, b) the conveyance of the rental property, or c) a combination of two Code violations or verified neighborhood complaints. The revisions eliminate the conveyance as an event terminating the right to enter into transient rentals, so, after the adoption of Ordinance 01-05, affected property owners could convey residences without depriving their grantees of the right to make transient rentals prior to May 1, 2003. The revisions also eliminate verified neighborhood complaints as a basis for the loss, prior to May 1, 2003, of the right of affected property owners to make transient rentals prior to May 1, 2003. The ruling that Petitioner may not challenge Policy 1-2.4.7 in its original form moots Petitioner's case. It is evident that Petitioner does not oppose the relaxation of restrictions on transient rentals, as achieved by Ordinance 01-05. In any event, data and analysis amply support the decision of Islamorada to relax the restrictions that it had imposed upon transient rentals. Neighborhood complaints supply a nebulous standard, and substantiation of such complaints, without defining the extent of verification, provides little more guidance. Legal counsel supported the elimination of the restriction on conveyances. Given the close proximity of the ultimate compliance deadline, the restriction on conveyances probably did not substantially affect the market value of affected properties, so Islamorada could find data and analysis supporting the inclusion or exclusion of this condition shortening the timeframe for compliance upon the sale of an affected residence. Even if Petitioner had timely challenged Policy 1-2.4.7, in its original form, data and analysis support the planning decision of Islamorada to restrict transient rentals. Transient rentals in residential neighborhoods facilitate a constant churning of home occupants. To the extent that this process displaces longer-term occupancy, transient rentals impede the process by which neighborhoods and communities form and residents in these neighborhoods and communities connect with each other. The commodification of neighborhoods in the service of tourism provides positive economic development to those property owners seeking to make transient rentals. However, to some extent, these economic gains are offset by those residents who wish to sustain less economically intense lifestyles. The desires of such residents may be ill-served by local merchants who price their goods to the more economically intense lifestyle of the tourist or by the replacement of more prosaic retailers, such as hardware stores, with the more ephemeral retailers, such as t-shirt stores. To find support in data and analysis, the community envisioned by Islamorada in its Plan is not required to achieve the highest and best use for the greatest number of owners of property or the owners of the greatest area of property within the village's planning jurisdiction. On this record, data and analysis clearly support the planning decision initially made by Islamorada in adopting Policy 1-2.4.7, as well as the planning decision later made by Islamorada in relaxing the restrictions contained in this policy.
Recommendation It is RECOMMENDED that the Department of Community Affairs enter a final order dismissing Petitioner's challenge to Ordinance 01-05 and finding the amendments contained in the ordinance to be in compliance with Chapter 163, Part II, Florida Statutes. DONE AND ENTERED this 16th day of November, 2001, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 16th day of November, 2001. COPIES FURNISHED: Steven M. Seibert Secretary Department of Community Affairs 2555 Shumard Oak Boulevard, Suite 100 Tallahassee, Florida 32399-2100 Cari L. Roth General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard, Suite 325 Tallahassee, Florida 32399-2100 Charles Rossignol 253 Tollgate Boulevard Islamorada, Florida 33036 Nancy Stroud Weiss Serota Helfman Pastoriza & Guedes, P.A. 3107 Stirling Road, Suite 300 Fort Lauderdale, Florida 33312 David L. Jordan Deputy General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 John R. Herin, Jr. Weiss, Serota, Helfman, Pastoriza & Guedes 2665 South Bayshore Drive Suite 420 Miami, Florida 33133
The Issue Whether Respondent Homes-R-Us, Inc.'s license as a corporate real estate broker, Respondent Vera McWeeney's license as a real estate broker, and Respondent Anthony Cutrona's license as a real estate salesman should be suspended or revoked, or the licensees otherwise disciplined for alleged violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint dated September 3, 1981. The Administrative Complaint herein alleges that the Respondents utilized a contract form in their business of negotiating rentals and furnishing information to prospective tenants which did not conform to Rule 2IV-10.30, Florida Administrative Code, therefore being in violation of various provisions of Chapter 475, Florida Statutes. The Complaint also alleges that Respondents employed various persons to conduct the business who were not licensed by Petitioner, and who were paid compensation, in violation of various provisions of Chapter 475, Florida Statutes. At the commencement of the hearing, the parties stipulated to the facts set forth in Paragraphs 2-4 of the Administrative Complaint, and that Respondents, in their business of furnishing rental information to prospective tenants for a fee, utilized a contract form which did not conform to Rule 2IV-10.30, Florida Administrative Code. As to Count II, the parties stipulated that during the times alleged in the Administrative Complaint, the corporate Respondent employed unlicensed personnel who performed certain activities, to include (1) acceptance of a rental fee provided in the contract, (2) receipting of the rental contract, delivery to the prospective customer of the "vacancy book" containing available rental properties, and (4) verifying the availability of various rental properties after selection by the customer by telephoning the prospective lessor of the property. Respondents Anthony R. Cutrona and Vera McWeeney testified at the hearing, and Petitioner called its investigator, Francis A. Maye, and a former investigator, Debbie J. Minutoli, as witnesses. Petitioner submitted eight exhibits in evidence and Respondent submitted one exhibit.
Findings Of Fact Respondent Homes-R-Us, Inc. is now, and was at all times relevant to the matters alleged in the Administrative Complaint, licensed as a corporate real estate broker, License No. 0212520, at 9000A North Florida Avenue, Tampa, Florida. (Stipulation) Respondent Vera McWeeney is now, and was at all times alleged in the Administrative Complaint, licensed as a real estate broker, License Nos. MI4 0058950 and MI4 021252, and the active firm member and officer of Homes-R-Us, Inc. (Stipulation) Respondent Anthony R. Cutrona is now, and was at all times alleged in the Administrative Complaint, licensed as a real estate salesman for Homes-R-Us, Inc., with License No. MI4 0328427. (Stipulation) Homes-R-Us, Inc. is a firm that solicits or otherwise receives from prospective lessors of residential property, information about such rentals which is then placed in a book and provided to prospective tenants who pay a fee to the firm in order to locate appropriate rental property. The firm advertises such available rentals in newspapers and secures customers in this manner. No fee is charged to the owner or prospective lessor of the property. The normal procedure employed by the firm is to receive payment of the fee from a customer, permit the customer to select any suitable properties from the descriptive information, and then seek telephonic confirmation of the continuing availability of the selected properties. The customer then proceeds to visit the property or otherwise contact the owner and negotiate a rental, if desired. If unsuccessful or unsatisfied with the properties, the customer can continue to avail himself of the "listings" maintained by Homes-R-Us, Inc. for a period of three months on a daily basis. (Testimony of Cutrona, Stipulation, Petitioner's Exhibits 2-3, 8) Respondent Cutrona has been the general manager of Homes-R-Us, Inc. since it was established in November, 1979. Respondent McWeeney was obtained as the firm broker on a gratuitous basis to supervise the activities of the firm. A form contract is used between Homes-R-Us, Inc. and the customer at the time the fee is paid by the customer to obtain rental information. The form was designed by Cutrona when the firm commenced business and was approved by McWeeney. The contract contained a provision that purportedly was included pursuant to law that read in part "If you do not obtain a rental, you are entitled to receive a return of 26 percent of the fee paid, if you make demand within 30 days of this contract date". Respondents used the figure of 26 percent for refund purposes based upon their interpretations of the requirements of Subsection 475.453(1), Florida Statutes. They were not aware of the fact that Petitioner's Rule 21V-10.30, Florida Administrative Code, (formerly Rule 21V-10.15) provided that such contracts should provide for a refund of 75 percent of the fee. Accordingly, the contract form was in violation of the applicable rule. (Testimony of Cutrona, McWeeney, Petitioner's Exhibits 2-3, Respondents' Exhibit 1) At the time Homes-R-Us, Inc. commenced business, in November, 1979, Respondent McWeeney was the only licensed employee in the firm. Cutrona received his license as a salesman in January, 1980. During the period February to August, 1980, the firm employed another licensed real estate salesman, but during the period from August to November 21, 1980, Respondents were the only licensed personnel. On the latter date, an employee, Brenda Serino, received her license as a real estate salesman. A branch office in Tampa had been opened in the spring of 1980, and Cutrona spent one day a week in that office. He was at the original Largo office during the other six days of the week. Respondent McWeeney periodically visited the office and kept in touch with activities by telephone communications. (Testimony of Cutrona) On November 10, 1980, Deborah Minutoli, an investigator for Petitioner, visited Respondents' office in an "undercover" capacity. Her investigation was prompted by several complaints that had been filed against the firm. She posed as a customer, signed the contract and paid a $45 fee to look through their listing book. She dealt with Brenda Serino, who was at that time an unlicensed employee of Homes-R-Us, Inc. Ms. Serino signed the contract on behalf of the Respondent firm. Ms. Minutoli told the employee that she was looking for a one- bedroom or efficiency-type, apartment and could pay about $180 rent per month. Ms. Serino explained a sample listing in the book and the type of information included in the listings. Ms. Minutoli then looked through the book and found five listings which she wrote on a piece of paper and gave to Ms. Serino. Several persons in the office, including Respondent Cutrona, made telephone calls to verify the listings, but only one person was able to be contacted at that time. An employee, Jackie Mourey, then presented Ms. Minutoli with a form showing the five rentals with addresses, telephone numbers, and rental prices, which both signed. The form also included a sixth rental which Ms. Mourey said was a new listing that had just come in and had not been placed in the book as yet, but since it was within the requested price range and location, it was placed on the form. Ms. Minutoli departed from the office and several days later examined one of the rental properties, drove past the other ones and returned to Respondents' office the following day. At this time, she requested that her fee be returned because the properties were unsatisfactory. Respondent Cutrona urged her to continue using the service, but gave her an "adjustment form" to fill out and told her that they would decide whether or not a refund was in order. She subsequently attempted to reach Cutrona by telephone, but was unsuccessful on several occasions. On November 21st, she spoke to him over the phone and he suggested that she fill out the "adjustment form". On November 24th, she, together with investigator Greg Clift, went to Respondents' office and gave the "adjustment form" to Cutrona, but he declined to make the refund. Subsequently, during the same month, Ms. Minutoli, together with another of Petitioner's investigators, Francis Maye, went back to Respondents' office. Maye posed as her uncle and again they sought a refund of the fee which had previously been paid, but again were unsuccessful. (Testimony of Minutoli, Maye, Petitioner's Exhibits 2-7) Investigator Maye had previously talked to Respondent Cutrona's wife at one of the offices concerning a refund complaint from another customer. At that time a refund was made in full. Maye had a conversation with Respondent Cutrona on November 25, 1980 concerning the percentage of fees payable to a customer on a refund. According to Cutrona, Maye questioned the use of a 26 percent refund amount, and told Cutrona he would get back to him later and verify the correct percentage of any refund, but never did so. Cutrona's testimony in this respect is considered credible. During the conversation, Maye did not advise Cutrona to cease using the 26 percent figure or to revise the contract form. Cutrona later talked to another employee of Petitioner who convinced him that Petitioner's regulations required a 75 percent refund and the firm thereupon revised its form to reflect the correct percentage. Investigator Maye also spoke to Respondent McWeeney in November, 1980 concerning the "seven services of real estate" and what services could be performed by unlicensed personnel in the rental office, but did not inform her concerning any suspected irregularities in the operation of Homes-R-Us, Inc. (Testimony of Maye, Cutrona, McWeeney) Respondents' employees were mostly part-time help who were compensated on an hourly basis, and it was therefore difficult to obtain licensed personnel who would remain with the firm. The clerical personnel do not provide any information to customers regarding leasing arrangements, but do receive listings called in to the office by landlords. Only licensed personnel solicit listings from prospective lessors, or owners of property. Additionally, unlicensed clerical personnel accept rental fees, prepare rental contracts, deliver the "vacancy book" to customers, and verify rental availabilities by telephone to the prospective lessors. (Testimony of Cutrona, Stipulation)
Recommendation That an administrative fine of $250.00 be imposed against Respondent Homes- R-Us, Inc., and that a public reprimand be issued to Respondent Vera McWeeney and Anthony Cutrona for violation of Subsection 475.25(1)(e), Florida Statutes. DONE and ENTERED this 25th day of February, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1982. COPIES FURNISHED: Salvatore A. Carpino, Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Joseph R. Park, Esquire 33 North Ft. Harrison Avenue Clearwater, Florida 33515 Mr. C. B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801 Frederick H. Wilsen Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issues in this matter are whether the Department of Business and Professional Regulation, Division of Real Estate (Petitioner) proved that Derek Welling (Respondent) is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes; and whether Petitioner proved that Respondent is guilty of failing to account and deliver funds in violation of Subsection 475.25(1)(d)1, Florida Statutes; and if so, what is the appropriate discipline?
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.165 and Chapters 120, 455, and 475, Florida Statutes. Respondent is a licensed realtor and has been at all times material hereto, having been issued license number 0582890 under Chapter 475, Florida Statutes. In 1989, Respondent founded UK Realty, a real estate brokerage firm, with his son-in-law, Russell Christner. From 1989 thru the summer of 1996, Respondent primarily served as UK Realty's international sales representative while Mr. Christner served as its qualified broker. Respondent traveled to various trade shows primarily in Europe and encouraged customers to purchase rental properties in the central Florida area. In 1991, Respondent and Mr. Christner formed a short- term rental property management company known as Connoisseur Homes, Inc. (Connoisseur) to manage the rental properties of UK Realty's domestic and international clients. In 1993, Respondent and Christner sold a one-third interest in Connoisseur to Mr. Graham Greene, who immediately became president of Connoisseur and served as its day-to-day operations manager. Although Respondent maintained a one-third ownership in Connoisseur, he remained the company's international sales associate. Respondent was generally not involved in the day-to-day management and operations of Connoisseur and had little personal knowledge of the factual circumstances surrounding the client complaints that form the basis of Petitioner's allegations. Each of the allegations levied against Respondent in Petitioner's Amended Administrative Complaint involves complaints filed by property owners relating to contract services with Connoisseur. There is no evidence in the record that any of the property owners was dissatisfied with the services of Respondent or Connoisseur prior to the summer/fall of 1996. Hart Property In 1994, Michael Hart, a resident of England, engaged the services of UK Realty and purchased a rental home property in Davenport, Florida. Mr. Hart was referred to Mr. Richard Wilkes, a representative of Connoisseur, to manage his property. On May 17, 1995, Mr. Hart contracted with Connoisseur to provide rental management services. Mr. Hart placed an initial deposit with Connoisseur to purchase various items and maintained a $1000 balance in an escrow account to pay the annual taxes and monthly expenses associated with the management of the property. Pursuant to his contract with Connoisseur, Mr. Hart received periodic statements from Connoisseur detailing all moneys collected from tenants, escrow balances, and any other activity in his account. According to the statements Mr. Hart received, Connoisseur booked nine persons to stay in his property between October of 1996 and January of 1997. While Connoisseur received approximately $9,844.60 for these rentals, Mr. Hart received none of the rental proceeds. On or about January 3, 1997, Mr. Hart received notice from the Polk County tax collector indicating that the "tourist development tax" associated with his property was delinquent for the months of September, October, and November of 1996. In addition, the letter indicated that Connoisseur made a payment to Polk County for September 1996 that was returned for insufficient funds. Shortly thereafter, Mr. Hart was advised that the cable and electricity to the property had been disconnected for non-payment. Glass Property In May 1993, Mr. Colin Glass purchased a rental home in Davenport, Florida, and contracted with Connoisseur to manage the property. Pursuant to the contract, Connoisseur agreed to advertise and list the property, manage the reservations and timely pay the rental property's expenses. Mr. Glass agreed to receive $500.00 for each week that the property was rented minus a cleaning fee. Pursuant to the contract, Mr. Glass placed a $1000 deposit with Connoisseur to pay the initial maintenance costs associated with the property. Thereafter, Mr. Glass received periodic statements from Connoisseur detailing the funds received, occupancy, and expenses paid to manage his property. The statement for the month ending November 30, 1996, indicates that Connoisseur collected $5,290.00 in rental proceeds from tenants who rented the property between August of 1996 and January of 1997 and paid $110 for cleaning services on November 8 and 21, 1996. In November, 1996, Mr. Glass requested a detailed accounting from Connoisseur regarding his property. On December 6, 1996, Mr. Glass received a written letter on Connoisseur stationary, signed by Kelleen Newman, a Connoisseur employee responsible for preparing accounting statements during the relevant period. The letter advised Mr. Glass that Connoisseur owed Mr. Glass approximately $1,750.00 for payments received pursuant to bookings under the names Beaumont and Tullet. To date, Mr. Glass has not received the rental proceeds. In addition, Connoisseur failed to pay the property tax bill associated with the Glass property as required by the management contract, and it became delinquent. Hamlyn Property On September 22, 1993, John Hamlyn purchased a home in Davenport, Florida. Five months later, on February 22, 1994, Mr. Hamlyn hired Connoisseur to manage his rental property. Pursuant to the contract, Connoisseur agreed to advertise and rent the property, manage the collections, and pay the operational expenses. Mr. Hamlyn placed a $500.00 deposit with Connoisseur to perform the contract and was required to maintain that balance in the account. In November of 1995, Respondent and Connoisseur increased the required escrow balance to $1000.00. In January of 1997, immediately following the demise of Connoisseur, Mr. Hamlyn maintained an escrow account with Connoisseur. Mr. Hamlyn did not receive an accounting of the escrowed funds or a refund of the balance. The evidence is undisputed that Mr. Hart, Mr. Glass, and Mr. Hamlyn each delivered funds in trust to Connoisseur which were not accounted for or returned. The evidence is undisputed that Connoisseur, in 1996, received rental proceeds as agents on behalf of Mr. Hart and Mr. Glass, which were not remitted to the owners. The evidence is undisputed that Connoisseur, in 1996, failed to pay certain utility bills and tax bills as required in its contracts with Mr. Hart and Mr. Glass. Connoisseur's Collapse Connoisseur's operational and financial failure surfaced on September 13, 1996, when Mr. Green, the company's co-owner and day-to-day operations manager, without notice, resigned as President of Connoisseur and formed a competing property management company. To make matters worse, within days, Mr. Green hired key staff away from Connoisseur including Richard Stanton, Connoisseur's office manager, accountant and licensed real estate broker, as well as Dyer Scott, the company's book-keeper. Shortly thereafter, Mr. Green's new company was operational and selectively securing new management agreements with Connoisseur's client list. In response, Respondent immediately evaluated Connoisseur's financial and operational status and attempted to manage its problems. Respondent advised all of Connoisseur's homeowners of the company's status, including the departure of the key operational owner and employees, but tried to assure them that the company was headed in the right direction. In fact, in a news update dated October 15, 1996, Respondent advised all of the clients, including Mr. Hart, Mr. Glass, and Mr. Hamlyn of the following: Upon investigation we were appalled to find that most of our homeowners are waiting on payments and upon further investigation we found that in many cases payment had never been collected from the tour operator. This situation is being corrected immediately and manual invoices are being prepared for collection . . . I'm happy to say that approximately $200,000 in back bookings will be properly allocated to our homeowners this month. Connoisseur did not recover. Within two months, 150 of Connoisseur's 270 homeowners cancelled their management contract with Connoisseur and on January 1, 1997, Respondent sold his interest in Connoisseur to Richard Wilkes and received a total of $15,000.00. Respondent experienced complete financial loss as a result of the demise of Connoisseur. His home was foreclosed and his vehicle was repossessed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Amended Administrative Complaint filed against Respondent in this matter be dismissed. DONE AND ORDERED this 3rd day of July, 2003, in Tallahassee, Leon County, Florida. S WILLIAM R. PFEIFFER 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 3rd day of July, 2003. COPIES FURNISHED: Victor L. Chapman, Esquire Barrett, Chapman & Ruta, P.A. 18 Wall Street Post Office Box 3826 Orlando, Florida 32802-3826 Christopher J. DeCosta, Esquire Department of Business and Professional Regulation Hurston Building, North Tower 400 West Robinson Street, Suite N809 Orlando, Florida 32801 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Nancy P. Campiglia, Acting Director Department of Business and Professional Regulation 400 West Robinson Street Suite 802, North Orlando, Florida 32801
Findings Of Fact Respondent Shirley Holland was registered with Petitioner as a real estate salesman in January, 1976, associated with Vern Duncklee Real Estate and Insurance, Inc., Naples, Florida. He is presently registered as a real estate broker. (Stipulation) On January 5, 1976, W. H. Ragan gave the Duncklee firm a listing to sell real property consisting of approximately one and one-quarter acres located in Collier County, Florida, for a selling price of $7,500. Respondent was the listing salesman. (Testimony of Respondent, Ragan, Duncklee, Petitioner's Exhibit 6). Respondent also was a builder who operated as Holland Investment Company. It was his practice to purchase various properties, remodel existing structures on the same, and thereafter sell them at a profit. There was a two- room shed located on the Ragan property that had no inside finishing work, electricity, or septic tank. Respondent decided to take an option on the property in order to remodel it by adding a room and to place it in a habitable condition. He broached the subject to Ragan on January 6, 1976, and Ragan told him on January 7, that he was agreeable to such a contract. On January 8, Respondent and Ragan and his wife entered into a Sales Contract and Option to Buy for $7,500. The contract provided that closing would take place within twelve months and that the seller would give possession of the property to the purchaser on January 8, 1976. This was pursuant to an accompanying rental agreement dated January 8, 1976, between the parties for a period of twelve months which provided that Respondent could exercise his option at any time within the stated twelve-month period whereby all rents paid would be applied toward the down payment on the property of $1,900 which was to be made at closing of the sale. The rental agreement further provided that if Respondent did not exercise his option within the required time, any improvements made by him on the property during that period would be considered liquidated damages of the owner. Pursuant to these agreements, Respondent made a payment of $100 at the time they were executed, which represented an initial deposit on the contracts and as rent for first month of the term. The Option Agreement also gave Respondent authority to remodel the building on the property and it further reflected that Respondent was a registered real estate salesman and would be selling the property for profit. (Testimony of Respondent, Duncklee, Petitioner's Exhibits 5, 7) On January 5, 1976, Respondent showed Harold and Ruby Stacy several houses in the area that were for sale. On January 9, Respondent went by the Stacy residence to see if they were interested in any of the houses he had shown them. They were not interested in those houses and Respondent told them of property that he had recently acquired which was the Ragan property. He showed it to Mr. Stacy that night and the next day Mrs. Stacy went with him to look at the premises. During the course of their conversations, Respondent offered to rent the property to them for $100 for the period January 10 to February 1, 1976. It was his intention to rent it to them for $125 per month commencing in February on the condition that they clean and fix up the property. They also discussed the possibility of purchase at a later date. Respondent told them that he would sell to them for $13,000 if Harold Stacy would do the remodeling work on the shed with Respondent supplying the materials. Respondent quoted a possible sales price of $14,500 if he was obliged to provide both labor and materials for renovating the shed and providing for utility services. Respondent and the Stacys entered into a rental agreement on that day for the initial period of some three weeks and Ruby Stacy gave him a check dated January 10 for $100 with a notation thereon that it was a deposit on land. Respondent explained to Mrs. Stacy that he was merely renting the property at that time and added the word "rent" at the bottom of the check. (Testimony of Respondent, Petitioner's Exhibit 1, 2) Thereafter, the Stacys proceeded to clean the premises and commence installing a ceiling in the building located on the property. They also installed a septic tank. At some undisclosed date, Ragan came to the property to obtain some of his belongings and found the Stacys there. He learned that they supposedly had purchased the property from Respondent, Ragan was of the opinion that Respondent had purported to sell the property before he had obtained the option thereon and that he had therefore defrauded the Stacys. Ragan thereupon filed a complaint against Respondent with the local Board of Realtors in latter January, 1976. About the same time, Respondent had been in the process of obtaining local permits to install the septic tank and do the other work. He discovered that the Stacys had installed a septic tank without his authorization and without obtaining a permit. He thereupon, by letter of January 21, 1976, informed the Stacys that they had done work on the property without a building permit or approval of the County Health Department and therefore was refunding the rental payment of $100. He enclosed his check in that amount, dated January 21, 1976. Although Respondent later attempted to exercise his option to purchase the property, Ragan refused to fulfill the agreement and later sold the property to the Stacys himself for $7,500. (Testimony of Respondent, R. Stacy, Ragan, Petitioner's Exhibits 3,4) Mrs. Stacy testified at the hearing that she was under the impression that she and her husband had purchased the property in question on January 10, 1976, and that the $100 payment had been a deposit for such purchase. She was under the further impression that they were to make a $2,500 down payment in February to consummate the deal. She further testified that they made the improvements on the land because of their understanding that they were going to purchase it. Mrs. Stacy had never been involved in a prior purchase of real property and is unfamiliar with contract documents and terminology. It is found that Mrs. Stacy honestly believed that she and her husband had a valid agreement to purchase the property. Her testimony that she and her husband entered into the rental arrangement in January to enable them to work on the property until they could make the down payment in February is deemed credible. (Testimony of R. Stacy) Ragan and Respondent had been involved in a prior real estate transaction and Respondent testified that Ragan had not been satisfied with that transaction, but Ragan testified to the contrary. However, Ragan talked to Respondent's broker in January, 1976, about the Stacy situation, at which time Ragan stated that he had a chance to get even with Respondent for the prior transaction and that he was going to do so. (Testimony of Respondent, Ragan, Duncklee, D. Holland)
Recommendation That the Administrative complaint be dismissed. DONE and ENTERED this 8th day of March, 1979, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph A. Doherty, Esquire Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Ed R. Miller, Esquire Suite 212 - 1400 Gulf Shore Boulevard Naples, Florida 33940
