The Issue The issues to be resolved in this proceeding concern whether the Petitioner should be assessed a late fee, pursuant to Section 400.111, Florida Statutes, for the late filing of the Petitioner's 2001 license renewal application and, if so, the amount of the fee.
Findings Of Fact The parties have agreed in the Pre-hearing Stipulation and revised Pre-hearing Stipulation to the following undisputed facts. These facts are quoted and numbered in the manner numbered in the stipulations. Where numbered paragraphs are omitted below the omissions are because the parties have agreed that those paragraphs of the stipulations have no relevance to the late-filing fee case which is the only remaining disputed case between the parties. The following facts are thus found in accordance with the parties' stipulations. BAKER COUNTY MEDICAL is a non-profit 501(c)3 corporation that leases the land and buildings comprising, and operates but does not own, a clinic, a hospital and a nursing home ( the latter, the W. FRANK WELLS NURSING HOME, referenced herein as the Facility), in Baker County, Florida. The lease is between BAKER COUNTY MEDICAL as the lessee and the BAKER COUNTY HOSPITAL AUTHORITY [the Authority] as the lessor. [The Authority, according to the prospectus documents, owns the clinic, hospital and nursing home buildings, the site (about 8 acres) and the equipment utilized at the clinic, hospital and nursing home. Petitioner now wishes to assert that it does own the buildings and did own the buildings at all times pertinent to this dispute.] The Authority and BAKER COUNTY MEDICAL entered into the referenced lease as a condition to the financing by and through the Authority's "Health Care Facilities Revenue Bonds" for the demolition of the old then-existing hospital building and nursing home and the construction of a new hospital and nursing home. The lease runs to 2025 and involves the payoff by Petitioner of the authorized $11,650,000 in revenue bonds by and through the operation of the hospital and nursing home by Petitioner during the period of the lease. The subject nursing home Facility is licensed under Chapter 400, Florida Statutes. The hospital is licensed under Chapter 395, Florida Statutes. AHCA is the state's licensing and regulatory agency for both of these facilities under those chapters. On its 2000 license renewal application, Petitioner indicated that the Facility was leased and thereafter filed a lease bond that met the requirements of Section 400.179(5)(d), Florida Statutes, (2000). By letter dated June 4, 2001, AHCA advised Petitioner that its license would expire on October 31, 2001, and that the license renewal application and fees are due and payable ninety (90) days before the expiration date. See AHCA's Exhibit 1. That is, the annual license renewal cycle for Petitioner's Facility commences each August 1st. On August 13, 2001, Petitioner signed its 2001 license renewal application. This was submitted to and received by AHCA on August 14, 2001. See AHCA's Exhibit 2. AHCA, by letter to Petitioner, dated August 22, 2001, informed Petitioner that the "Medicaid Lease Surety Bond submitted for the (2001) license renewal" was "insufficient in the amount" required by the lease bond statute. AHCA Exhibit 3. Petitioner's 2001 license renewal application was due on August 1, 2001, and was submitted to AHCA 13 days late. Petitioner's license certificate #6304 shows Petitioner's licensure for the period from 11/01/2000 to 10/31/2001. See AHCA Exhibit 4 (license certificate, together with AHCA's cover letter of October 3, 2000). AHCA, by NOTICE OF INTENT TO IMPOSE LATE FINE, dated August 25, 2001, informed Petitioner of its intent to impose a statutory fee of $5,000.00 for the late filing of the 2001 application, pursuant to § 400.111, Florida Statutes, AHCA Exhibit 5. By Petition for Formal Proceeding Under § 120.57, dated September 12, 2001, Petitioner sought administrative review of the 2001 notice to impose the $5,000.00 late fee. In its petition, Petitioner asserts as disputed issues of material fact that: "The Petitioner was required to file a bond with its renewal application." "The application could not be filed without the bond." "There is no provision in 400.111(1), [Florida Statutes] Florida Administrative Code or the rules, to submit the application without the bond with an explanation that the bond could not be attached to the application to avoid a penalty." In response to Petitioner's assertions above, AHCA asserts that it has and has had at all times material to this dispute, a uniformly applied policy and practice for processing annual license renewal applications, as follows: (a) that any license renewal application that is filed by its due date, which application is not complete in some way, including that the application does not include some item that is necessary to the granting of the application for renewal of the license, is deemed by AHCA as timely filed though incomplete; and (b) that the applicant is thereupon notified by AHCA as to the basis for any determination by AHCA that the application is incomplete. * * * In years prior to Petitioner's filing of its 2000 license renewal application, AHCA had accepted certain "unconditional guarantees" in lieu of lease bonds from lessees of nursing facilities, including from Petitioner, to establish facilities' compliance with Section 400.179(5)(d), Florida Statutes; however, by the due date of Petitioner's 2000 license renewal application, AHCA had ceased accepting such unconditional guarantees from nursing home applicants. AHCA so informed Petitioner and refused to accept any such unconditional guarantee from Petitioner in lieu of a lease bond to establish compliance with the law as to Petitioner's 2000 annual license renewal. Petitioner asserts, and AHCA does not dispute here, that in the summer of 2001, Petitioner had considerable difficulty in securing a lease bond as then required by law of a lessee of a facility, which lease bond Petitioner intended to file with a timely filed 2001 license renewal application. Petitioner also asserts, and AHCA does not dispute, that in the summer of 2001, Petitioner did not understand that AHCA treats a license renewal application as timely filed if it is filed within the deadline for filing, even though the application is incomplete; for example, for not attaching a lease bond. Petitioner further asserts, and AHCA does not dispute, that Petitioner's filing "only" thirteen (13) days late in 2001 was accomplished by Petitioner due to great effort on Petitioner's part to secure a lease bond from third parties over whom Petitioner asserts that it had no control. In 2002, the Florida Legislature enacted chapter 2002-223, Laws of Florida, effective May 15, 2002, which among other things (in its section 28) added the language to Section 400.179(5)(d), Florida Statutes, which today appears as the last sentence of subparagraph 6 of that section (numbered as subparagraph 5 in the 2002 amendment). The pertinent part reads: (d)6 . . . A lease agreement required as a condition of bond financing or refinancing under § 154.213 by a health facilities authority or required under § 159.30 by a county or municipality is not a leasehold for purposes of this paragraph and is not subject to the bond requirement of this paragraph. As to the 2002 lease bond matter, Petitioner represents, and AHCA does not dispute based upon documents provided to AHCA by Petitioner in May 2003: that the referenced lease between the Authority and Petitioner is identified as an "Amended and Restated Lease Agreement" dated August 1, 1998, in the documents for issuance of the related "Health Care Facilities Revenue Bonds;" that the referenced lease was required as a condition of financing through the Authority for the demolition of the old hospital and nursing home and the construction of the new hospital and nursing home operated by Petitioner; and that the lease between the Authority and the Petitioner contains the indicia of a lease by a health facilities authority under § 154.213, Florida Statutes. See letter of July 3, 2003, from counsel for Petitioner, outlining the status of the lease as a lease under the statute, attached hereto as AHCA's Exhibit 9. In light of such uncontested representations by Petitioner regarding the status of the Authority's lease to Petitioner, AHCA and Petitioner mutually submit a confession of error as to the existence of a legal requirement for Petitioner, even though Petitioner is a lessee of the Facility, to provide a lease bond with its 2002 annual license renewal application. That is, by virtue of the referenced 2002 amendment to the lease bond provisions of the statute, the lease with the Authority is accepted by AHCA as within those leases to which the statutory exemption applies, which thus relieves Petitioner from the requirement for filing a lease bond as to its 2002 renewal application. The Petitioner submits that admitted or stipulated facts 15 through 34, as quoted above, are relevant and material and should entitle the Petitioner to mitigation or reduction, if not elimination, of the late-filing fee. AHCA, by stipulating to the accuracy to those facts, does not, however, agree that those facts require mitigation as to the amount of the late- filing fee for late-filing of the 2001 renewal application. AHCA, on or about June 4, 2001, sent a letter to the Petitioner, wherein it was stated: The license to operate the above named Facility expires October 31, 2001. It is a violation of Florida Statutes to operate a nursing home facility without a valid license. In order to continue to operate the Facility, it is necessary that the enclosed application form(s) be completed and returned with the appropriate license fee. . . . The application and fee are due 90 days before the expiration date noted above. Failure to file a renewal application within this time frame will result in the imposition of a late fee as allowed by Florida Statute. Application without licensure fees will not be accepted, and the application will be returned without processing. . . (Petitioner Exhibit 2 in evidence.) The instructions under "number 12" of the instructions accompanying that letter stated: Attach a copy of the surety bond or membership in a self-insurance pool. There are no instructions in that letter to the effect that an incomplete application could be filed and would be accepted as timely-filed even if incomplete. Maria Allen is the CFO of Baker County Medical Services, Inc. (Facility). She was designated as the person responsible for filing the nursing home renewal application at issue. Ms. Allen relied upon the instructions in the above- referenced letter and on the form and understood that a completed application had to be filed with the agency. It was Ms. Allen's understanding that the application had to be submitted in complete form including both relevant surety bonds. Thus, she was under the impression that the application could only be submitted in complete form. Neither Ms. Allen nor the Facility was ever informed by any personnel of AHCA, verbally or in writing, that an incomplete application could be submitted and would be considered as timely, provided the necessary fee was submitted with an incomplete application. Ms. Allen was aware that the application should be filed by August 1, 2001. She was having difficulties with the surety company because, as shown by Exhibit 20 in evidence, the surety company had moved its offices and had misplaced the nursing home's bond application documents. She repeatedly called the surety company or its broker or agent to determine when the surety bond would be ready. The surety bond was promised by the surety company prior to the deadline. In fact, the surety bond was delayed and was submitted to Ms. Allen some 11 to 12 days later. When she received the bond, she thereupon "over-nighted" a completed application with the bond accompanying it to the Respondent, such that the application was filed 13 days late. In the fact of the surety bond company's delay, it was unreasonable and impracticable for Ms. Allen to seek an alternative surety bond company or agency because it would take considerably more time to get a new surety company to issue a surety bond, after starting that process over again. After she submitted the application 13 days late, she never had any advice from AHCA to the effect that she could have submitted an incomplete application. Mr. James Kemp is the Health Services and Facilities consultant who reviewed and received renewal applications, including that of the Petitioner. Mr. Kemp maintains that he seldom received a renewal application with the renewal bond attached. He maintains that only ten percent of applications are first submitted in complete fashion. He stated that the same instructions are sent out to all nursing facilities that are leased. Incomplete applications come in with defects such as typing errors or other errors or omissions. AHCA reviews for errors or omissions and informs the applicant as to what is needed to properly complete an application. If a nursing home does not correct the omission within 90 days, the date of license expiration, AHCA will send a notice of intent to deny. Mr. Kemp stated that there was no fine or penalty for nursing homes if omissions or errors are corrected within 90 days. The W. Frank Wells Nursing Home only filed a lease bond once before, with its 2000 application. Prior to that time it was not legally required to file a lease bond. The prior lease bond and application filed for the year 2000 was filed on time. Thus, there was no reason at that time for the Facility to have known of any policy which would allow an incomplete application to be submitted on the due date, to be completed within 90 days thereafter. Because neither Mr. Kemp nor any other agency personnel, by letter, written instructions, or verbally, ever informed the Petitioner that AHCA would accept an incomplete application as timely filed, the only way the Facility could have learned of that policy would be to inquire of the Agency by letter or by phone call. This was not done because the Facility and Ms. Allen had no information that would alert them to that possibility. Ms. Molly McKinstrey is Bureau Chief for Long Term Care Services. In her testimony she acknowledged that the statute, Section 400.111, Florida Statutes, does not use the modifier "incomplete" or "complete." She also admits that the language of the letter, Petitioner's Exhibit Two, referenced- above, as well as the application document, references the requirement that the application be completed and returned with the appropriate license fee. She also admits that the Agency has a regularly-established, unwritten policy that the Agency will accept an incomplete application, filed before the deadline, as a timely application. There is no evidence that the Respondent Agency makes a practice of giving notice of this policy in any way unless a substantially affected party makes inquiry of the Agency. If Ms. Allen and the Facility had been informed, before the August 1 deadline, of this routinely followed, unwritten policy, the Facility would have filed the application timely and then submitted the surety bond at such time thereafter as it was obtained. Further, the evidence establishes that Ms. Allen, in June 2001, soon after receiving the notice letter of June 4, 2001, began immediate steps to timely obtain the required surety bond. The bond was not obtained in time to submit the application with the bond on August 1 due to no fault of the Facility but rather due to the mistakes made by the surety bond company or its agents.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a Final Order be entered by AHCA excusing the Petitioner herein of the payment of the $5,000.00 late fee for the late filing of its 2001 application for its renewal of licensure. It is further RECOMMENDED that, as to DOAH Case No. 02-4827, in view of the withdrawal by AHCA of its denial of the 2002 application for licensure renewal and withdrawal of its intent to seek an administrative fine for failure to have professional liability insurance, that Case No. 02-4827 be dismissed. DONE AND ENTERED this 15th day of December, 2003, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 15th day of December, 2003. COPIES FURNISHED: John D. Buchanan, Jr., Esquire Henry, Buchanan, Hudson, Suber & Carter, P.A. 117 South Gadsden Street Tallahassee, Florida 32301 Tom R. Moore, Assistant General Counsel Agency for Health Care Administration Office of the Attorney General 2727 Mahan Drive, Building III Tallahassee, Florida 32308 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner is a Florida corporation. It was incorporated on September 10, 1991. On August 25, 1995, it was administratively dissolved for failure to file its annual report. It has not been reinstated. At present, Petitioner has no assets. Its liabilities exceed $250,000.00 and include a judgment against it in the amount of $11,857.00 (plus interest) and numerous unpaid bills. Before its demise as an active corporation, 3/ Petitioner was a provider of travel services. It was registered as a "seller of travel" with the Agency in 1992 (from January 1 to December 31) and in 1993 (also from January 1 to December 31), during which time it held Seller of Travel Registration Number 14223. As part of the registration process, Petitioner posted with the Agency a $10,000.00 performance bond effective for the one year period commencing November 19, 1991 (the 1991-92 Performance Bond) and another $10,000.00 performance bond effective for the one year period commencing November 19, 1992 (the 1992-93 Performance Bond). 4/ The surety on these two performance bonds (the 1991-92 Performance Bond and the 1992-93 Performance Bond) was the Hartford Fire Insurance Company (the Hartford). Edward Volz, in his capacity as Petitioner's President, signed an indemnity agreement obligating Petitioner to indemnify the Hartford for any payments made by the Hartford "by reason or in consequence of its suretyship." 5/ Consumer claims against Petitioner were received by the Agency. By letter dated February 28, 1994, the Agency advised Petitioner of these "claims on the above referenced security" and of the Agency's intention "to make a demand under its [the security's] terms." By letter to the Hartford dated February 28, 1994, the Agency made "a demand on the surety bond." 6/ The letter read as follows: This is to notify your company that the Department of Agriculture and Consumer Services is in possession of claims made by persons who purchased travel-related services from the above-mentioned seller of travel [Petitioner]. This bond was issued by your company to secure the services of the seller of travel or to provide a refund to those customers who do not receive the services purchased. Please accept this letter as a demand on the surety bond. We would appreciate your advising this office in writing within fifteen (15) days from the date of this letter as to the form and information you require in order to make payment pursuant to the bonded obligation. If you have any questions please contact me at 904-922-2972 or Mr. Wayne Searcy, 904-922-2920. In or around March of 1994, Petitioner filed an application with the Agency to renew its "seller of travel" registration. In conjunction with the filing of its application, Petitioner posted with the Agency a $25,000.00 performance bond effective for the one year period commencing November 19, 1993 (the 1993-94 Performance Bond). The surety on the bond was the Hartford. 7/ By letter dated June 22, 1994, the Agency notified Petitioner that Petitioner's application for renewal of its registration had ben denied for failure "to provide a financial statement prepared by an independent public accountant." After receiving the Agency's June 22, 1994, letter, Petitioner discontinued its business operations. Having received additional claims against Petitioner since it had sent its February 28, 1994, demand letter to the Hartford and not having received any response from the Hartford to that letter, the Agency sent a second letter, dated September 29, 1994, to the Hartford. The letter read as follows: Subject: Excell Travel Club, Inc. 1239 East Newport Ctr., [Number] 113 Deerfield Beach, Florida 33442 Surety Bonds [Number] 41770-77 ($25,000) and [Number] 41770-77 ($10,000) Effective November 19, 1993/ Effective November 19, 1992 Dear Sir: The Department of Agriculture has claims exceeding the amount of the bonds [the 1992- 93 Performance Bond and the 1993-94 Performance Bond] from persons who purchased travel-related services from the above- mentioned seller of travel [Petitioner]. Therefore, the Department of Agriculture is making a demand on the bonds. The bonds were issued by your company to secure the services of the seller of travel or to provide a refund to those customers who do not receive the services purchased. Please accept this letter as a follow up demand on the surety bonds. We would appreciate your advising this office in writing within ten (10) days from the date of this letter as to the form and infor- mation you require in order to make payment to the bonded obligation. If you have any questions please contact me at 904-922-2820. A copy of this letter was sent to Petitioner. The Hartford sent a letter, dated October 18, 1994, to the Agency acknowledging receipt of the Agency's September 29, 1994, letter. Subsequently, the Hartford sent a second letter, dated November 2, 1994, to the Agency. The letter read as follows: RE: Our file: 319 S 26747 and 319 S 26748 Principal: Excell Travel Club, Inc. Dear Mr. Cloud: Enclosed are our checks totalling $35,000.00 which are in settlement of the two surety bonds with effective periods 11/19/92 to 11/19/93 and 11/19/93 to 11/19/94. Please acknowledge receipt of these two checks and acknowledge that our bonds are exonerated. Thank you for your advices concerning these matters. Appearing on both of the two checks that were enclosed with the Hartford's November 2, 1994, letter was the notation, "full and final settlement." Each of the checks also had a "loss date" written on it. The "loss date" written on the $10,000.00 check was November 18, 1993. The "loss date" written on the $25,000.00 check was September 29, 1994. Petitioner had no advance notice that the Hartford was going to make a "settlement" with the Agency. By letter dated May 17, 1995, the Agency advised Petitioner of its intention "to make distribution of the entire bond proceeds to the claimants on a pro rata basis." Thereafter, Petitioner filed a petition requesting an administrative hearing on such proposed action. Petitioner has not repaid any of the $35,000.00 that the Hartford paid the Agency for the benefit of those who filed claims against Petitioner, nor has the Hartford instituted legal proceedings to require Petitioner to indemnify it for having made such payment to the Agency.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency enter a final order dismissing, on the ground of lack of standing, Petitioner's petition requesting an administrative hearing on the Agency's proposed action to distribute the proceeds of the 1992-93 and 1993-94 Performance Bonds to claimants on a pro rata basis. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 8th day of October, 1996. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1996.
Findings Of Fact Respondent, Larry K. Sechrest, was at all times relevant to the charges contained in the Administrative Complaint, licensed as limited surety agent in the State of Florida representing Allied Fidelity Insurance Company ("Allied"). In February, 1982, Respondent's accounts with Allied were audited by their representative at which time it was discovered that Respondent executed but did not report 202 powers of attorney. The aforementioned powers represented $11,464.51 in premiums due Allied, and an additional $5,732 due the buildup fund. On March 4, 1982, Allied demanded that the Respondent remit to them these premiums and buildup fund payments and account for and return the missing powers of attorney. Respondent had failed to comply with Allied's demands as of the date this Administrative Complaint was filed by Petitioner (July 20, 1982). Respondent subsequently offered to repay Allied at the rate of $1,000 per month, but this was refused. At the final hearing on February 16, 1983, Respondent offered to repay the total amount due within 30 days. On April 29, 1981, Respondent attempted to post a ne exeat bond in the amount of $25,000 for Douglas R. Valentine of Manatee County, Florida, based on power of attorney number FL2800913 issued by Allied. Respondent had not been given authority by Allied to post ne exeat bonds. Power of attorney number FL2800913 was by its language to be issued for appearance bonds only.
Recommendation Based on the foregoing, it is RECOMMENDED: That Petitioner enter a Final Order finding Respondent guilty of violating Subsections 648.45(1)(d), (h) and (j), Florida Statutes (1981), as charged in Count I of the Administrative Complaint, and suspending his limited surety agent's license for one year; provided, however, that such license shall not be reinstated until Respondent has made restitution to the Allied Fidelity Insurance Company. DONE and ENTERED this 20th day of May, 1983, in Tallahassee, Florida. R. T. CARPENTER 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 20th day of May, 1983. COPIES FURNISHED: Clark R. Jennings, Esquire Department of Insurance The Capitol Tallahassee, Florida 32301 Jerry Surfus, Esquire 150 East Avenue, South Sarasota, Florida 33577 The Honorable Bill Gunter Insurance Commissioner Department of Insurance The Capitol Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF INSURANCE AND TREASURER IN THE MATTER OF LARRY K. SECHREST Revocation of License and Case No. 82-L-162J Eligibility for Licensure DOAH Case No. 82-2617 Limited Surety Agent / ORDER REVOKING RESPONDENT'S LICENSES AND ELIGIBILITY TO HOLD LICENSES THIS MATTER came on to be considered upon the transcript of record of hearing held on February 16, 1983, in Sarasota, Florida, and the Report, Findings, Conclusions and Recommendations of the Hearing Examiner dated May 20, 1983. Upon consideration thereof and being otherwise fully advised in the premises, it is ORDERED: The Findings of Fact of the Hearing Examiner are adopted. The Conclusions of Law of the Hearing Examiner are adopted. The Recommendation of the Hearing Examiner is rejected for the following reasons: Section 648.49, Florida Statutes prohibits the establishment of a period of suspension in excess of one (1) year. The Department lacks the authority to condition any Order upon financial restitution by a Respondent to any aggrieved party listed in an Administrative Complaint. Revocation of license and eligibility for licensure is an appropriate remedy under the statutory authority cited in the Administrative Complaint, and the Hearing Officer's Conclusions of Law. All licenses of the Respondent, LARRY K. SECHREST, heretofore issued within the purview of the Florida Department of Insurance and eligibility to hold said licenses be, and the same are hereby revoked. DONE and ORDERED at Tallahassee, Florida, this 28th day of June , 1983. BILL GUNTER Insurance Commissioner and Treasurer WILLIAM D. RUBIN Assistant Insurance Commissioner and Treasurer COPIES FURNISHED: Jerry Surfus, Esquire 150 East Avenue, South Sarasota, Florida 33577 Clark R. Jennings, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301
The Issue Whether Respondents are indebted to Petitioner in the amount of $18,330.00 for agricultural products (bahia sod).
Findings Of Fact Petitioner, McCullough Grass Corporation, is a producer of agricultural products and is located in Balm, Florida. Respondent, Landtech Services, Inc. (Landtech), is an agricultural dealer located in Largo, Florida. Co-Respondent, Western Surety Company, is a surety which issued Respondent Landtech a surety bond during times material. On April 19, 1993 and on May 18 and 19, 1993, Petitioner sold to Respondent Landtech 217,000 square feet of bahia sod for the total price of $18,330.00. The terms of the sale between Petitioner and Respondent Landtech were for net payment for products sold within thirty days after the invoice date. Respondent, Landtech, has paid Petitioner approximately $8,000.00 toward the purchase price of the sod leaving a balance now due and owing of $10,470.70. Respondents, Landtech and Western Surety Company, did not appear at the hearing to contest or otherwise refute the charges alleged in Petitioner's complaint. Respondent, Landtech, is indebted to Petitioner in the amount of $10,470.70 for bahia sod purchased from Petitioner during April and May of 1993.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: The Department of Agricultural issue its final order requiring that Respondent, Landtech, pay to Petitioner the amount of $10,470.70 within fifteen (15) days of its final order. It is further RECOMMENDED that if Respondent, Landtech, fails to comply with the order directing payment, that the Department shall call upon the surety, Western Surety Company, to pay over to the Department from funds out of the surety certificate, the amount needed to satisfy the indebtedness. 1/ RECOMMENDED this 3rd day of March, 1995, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 3rd day of March, 1995.
The Issue Whether Petitioner's application for licensure as a life, variable annuity, and health agent should be approved.
Findings Of Fact Based upon the evidence adduced at the final hearing and the record as a whole, the following findings of fact are made: Petitioner was formerly a Florida-licensed real estate broker. On September 20, 1995, the Florida Department of Business and Professional Regulation issued an Administrative Complaint against Petitioner and others, including Ian Law and Florida Home Finders Realty, Inc. Petitioner, Mr. Law, and Florida Home Finders Realty, Inc., disputed the charges against them and requested an evidentiary hearing. The matter was referred to the Division of Administrative Hearings and assigned to Judge Michael Parrish, who, on October 22, 1996, conducted the hearing Petitioner, Mr. Law, and Florida Home Finders Realty, Inc., had requested. Prior to the hearing, the parties filed a prehearing stipulation, in which they stipulated to the following facts: Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular Section 20.165, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent Robert Ian Law is and was at all times material hereto a licensed real estate broker pursuant to Chapter 475, Florida Statutes, having been issued license number 3000835. The last license issued was as a broker in care of Law Property Services, Inc., t/a Century 21 Law Realty, 190 Malabar Road Southwest 120, Melbourne, Florida 32907. Respondent Benjamin Schiff is and was at all times material hereto a licensed real estate broker pursuant to Chapter 475, Florida Statutes, having been issued license number 0449353. The last license issued was as a broker at 9771 Northwest 41st Street, Miami, Florida 33178. Respondent Florida Home Finders Realty, Inc., is and was at all times material hereto a licensed real estate brokerage corporation pursuant to Chapter 475, Florida Statutes, having been issued license number 1003632. The last license issued was at 1648 Southeast Port St. Lucie Boulevard, Port St. Lucie, Florida 34952. At all times material hereto, Selma Del Carmen Schevers, Cheryl Ann Atwood, Lynn Marie Lake, Barbara Kay Davidson, Carol Ann Chandler, and Beverly J. Klemzak were licensed and operating as qualifying brokers and officers of Respondent Florida Home Finders Realty, Inc. On or about April 18, 1995, the real estate brokerage corporate license (former license number 0027454) of Florida Home Finders, Inc., was voluntarily dropped by Florida Home Finders, Inc. Simultaneously, Florida Home Finders Realty, Inc., submitted documents for and received a real estate brokerage corporate license effective April 18, 1995, from the Florida Division of Real Estate. Benjamin Schiff and Ian R. Law are directors of both Florida Home Finders, Inc., and Florida Home Finders Realty, Inc. Benjamin Schiff is the Chief Financial Officer for both Florida Home Finders, Inc., and Florida Home Finders Realty, Inc. Ian R. Law is the Chief Executive Officer for both Florida Home Finders, Inc., and Florida Home Finders Realty, Inc. On or about May 5, 1995, Selma Schevers and Cheryl Atwood notified various banking institutions of the authorized officers/directors and account signatories for Florida Home Finders, Inc., and Florida Home Finders Realty, Inc. On or about June 14, 1995, at the request of Benjamin Schiff, Selma Schevers and Cheryl Atwood authorized various banking institutions to transfer $2,492,000.00 in security deposits and rental trust funds to an account entitled "Florida Home Finders, Inc.," account number 3603969464 at NationsBank of Florida. At no time material did the Respondents obtain the authorization or permission of the owners of the trust funds to transfer the funds. Subsequent to the transfer referenced in paragraph 10 herein, the funds were used to purchase a certificate of deposit (No. 012897). After the purchase of the certificate of deposit, Cheryl Atwood, at the request of Ian Law, signed a document which placed the certificate of deposit as collateral for a commercial loan (No. 018002410263) from loan officer F. Larry Robinette of County National Bank of South Florida. The terms of the loan were: $2,000,000 principal; Benjamin Schiff and Ian Law as borrowers; proceeds payable to Atlantic Gulf Communities, Corp., as partial payment for the stock of Florida Home Finders, Inc., and two related companies. On or about August 21, 1995, Respondent Law instructed Barnett Bank to transfer $65,000.00 from Florida Home Finders, Inc., Rental Receipts Account No. 2274002335 to Florida Home Finders, Inc., Operating Account No. 2274027149.[1] After this transfer Respondent Law instructed the bank to transfer the $65,000.00 from the operating account to Atlantic Gulf Communities Corporation, the former owner of Florida Home Finders, Inc., a formerly licensed real estate brokerage company and predecessor to Respondent Florida Home Finders Realty, Inc. On or about June 14, 1995, the following bank funds transfers were requested to be made to Florida Home Finders, Inc., (FHFI) account No. 3603969464 at NationsBank of Florida from the following accounts: Barnett Bank Acct Name- FHFI Rental Receipts Escrow Acct; Acct No.- 1700027712; Date- 6/22; Amt.- 138,000 Barnett Bank Acct Name- Rental Security Deposit Acct; Acct No.- 1700027810; Date- 6/22; Amt.- 398,000 Barnett Bank Acct Name- FHFI Rent Receipts Acct; Acct No.- 3388072440; Date- 6/21; Amt.- 38,000 Barnett Bank Acct Name- FHFI Security Deposit Acct; Acct No.- 3388072558; Date- 6/21; Amt.- 158,000 Barnett Bank Acct Name- FHFI Rent Receipts Escrow Acct; Acct No.- 2274002335; Date- 6/15; Amt.- 179,000 Barnett Bank Acct Name- FHFI Rental Security Escrow; Acct No.- 2274002343; Date- 6/15; Amt. 609,000 SunBank Acct Name- FHFI Escrow-Rental Receipts; Acct No.- 0809000005795; Date- 6/16; Amt.- 87,000 SunBank Acct Name- FHFI Escrow-Rental Security; Acct No.- 0809000005806; Date- 6/16; Amt.- 285,000 1st Union Nat. Bank Acct Name- FHFI Rental Receipts-Escrow Acct; Acct No.- 2161006787374; Date- 6/14; Amt.- 152,000 1st Union Nat. Bank Acct Name- FHFI Rental Security Escrow Acct; Acct No.- 2161006724586; Date- 6/14; Amt.- 406,000 1st Bank Acct Name- FHFI Rental Receipts- Escrow Acct; Acct No. 20-116845-06; Date- 6/15; Amt.- 8,000 1st Bank Acct Name- FHFI Rental Security Escrow; Acct No. 20-116888-06; Date- 6/15; Amt.- 34,000 Following the hearing, on April 22, 1997, Judge Parrish issued his Recommended Order. In his Recommended Order Judge Parrish made the following findings of facts to supplement the parties' factual stipulations: Prior to April of 1995, Florida Home Finders, Inc., then a licensed real estate brokerage corporation, engaged in soliciting, obtaining, and leasing to tenants the real property of others, pursuant to contracts between Florida Home Finders, Inc., and the property owners. A substantial majority of the money, probably more than 75 percent of the money, contained in the security deposit accounts and rental receipts accounts that was transferred in mid-June of 1995 was money collected from tenants on behalf of property owners while Florida Home Finders, Inc., was a licensed real estate brokerage corporation.[2] Subsequent to the transfers of funds in mid-June of 1995, there was on at least one occasion insufficient funds in some of the security deposit and rental receipts trust accounts to meet disbursement demands. On that occasion the bank paid a number of checks for which Florida Home Finders, Inc., did not have sufficient funds on deposit and requested that Florida Home Finders, Inc., make an immediate transfer of funds to cover the insufficiencies. Shortly thereafter a transfer was made to cover the insufficiencies. Subsequent to the transfers of funds in mid-June of 1995, on some occasions funds that had been collected from new clients after those transfers took place were paid out to meet the demands of clients who were owed money that had been paid to Florida Home Finders, Inc., prior to the mid-June transfers. At the end of March of 1995, Respondents Schiff and Law purchased Florida Home Finders, Inc., a real estate brokerage corporation licensed pursuant to Chapter 475, Florida Statutes, (license number 0027464) from Atlantic Gulf Communities Corporation. The purchase price was three and a half million dollars, with the Respondents to pay $500,000.00 down and the three million dollar balance within three months. One aspect of the business plan of the Respondent's Schiff and Law was to create a separate company to conduct real estate brokerage activities and to continue to engage in property management activities with the existing corporation, Florida Home Finders, Inc. Respondents Schiff and Law met with all managers and employees of Florida Home Finders, Inc., during the first week of April of 1995 to explain the business plan to them. At that time they also explained that they intended to utilize the provisions of Section 83.49(1), Florida Statutes, to hold security deposits in a manner which would allow them to pay interest to tenants. Respondents Schiff and Law were not involved in the day to day operations of either Florida Home Finders, Inc., or Florida Home Finders Realty, Inc. At the time the Respondents Schiff and Law purchased Florida Home Finders, Inc., the corporation maintained at least three types of accounts for deposits received from its operations: sales escrow accounts, rental receipts accounts, and security deposit accounts. Each of the seven offices of Florida Home Finders, Inc., maintained its own separate set of accounts. The sales escrow accounts maintained by Florida Home Finders, Inc., contained money derived from purchasing and leasing transactions. The rental receipts accounts maintained by Florida Home Finders, Inc., contained money received from tenants for the payment of rent. The use of these funds was governed by the property management agreements with the landlords. Typically, the funds in these accounts would be used to pay for such things as maintenance and repairs to the rental properties, mortgage payments due on the rental properties, and/or property management fees, with any excess funds being periodically paid to the respective landlords. The security deposit accounts maintained by Florida Home Finders, Inc., contained money received from tenants for security deposits to be held to guarantee the tenants' performance under their respective rental agreements. Shortly after the formation of Florida Home Finders Realty, Inc., and its licensure as a real estate brokerage corporation, the sales escrow accounts of Florida Home Finders, Inc., were transferred to Florida Home Finders Realty, Inc. There were no irregularities in any of the sales escrow accounts while they were under the control of either of these two corporations. Following the creation of Florida Home Finders Realty, Inc., Florida Home Finders, Inc., did not engage in any licensed real estate brokerage activities. All such activities were conducted by Florida Home Finders Realty, Inc., after it was licensed as a brokerage corporation. On or about June 27, 1995, Florida Home Finders, Inc., posted a security deposit bond in the amount of $250,000.00 with the Florida Secretary of State in an effort to comply with Section 83.49(1)(c), Florida Statutes. None of the landlords and none of the tenants were ever provided with notice that money had been transferred from the security deposit accounts and from the rental receipts accounts. None of the landlords and none of the tenants were ever provided with notice that Florida Home Finders, Inc., had posted a bond with the Florida Secretary of State and intended to rely on the provisions of Section 83.49(1)(c), Florida Statutes. Subsequent to the transfer of the $2,492,000.00 to the NationsBank account, the funds were used to purchase three separate certificates of deposit. One certificate of deposit in the amount of $242,000.00 was purchased from NationsBank and secured a loan of the same amount. The second certificate of deposit in the amount of two million dollars was purchased from County National Bank in Miami in the name of Florida Home Finders, Inc., and was used to secure a personal loan to Respondents Schiff and Law in the amount of two million dollars. The third certificate of deposit in the amount of $250,000.00 was purchased from NationsBank in the name of Florida Home Finders, Inc., and was used as security for the bond posted with the Florida Secretary of State. The loan proceeds secured by two of the certificates of deposit described above, plus $100,000.00 from the operating account of Florida Home Finders, Inc., at Barnett Bank, were used to pay Atlantic Gulf Communities Corporation against the balance of the purchase price of Florida Home Finders, Inc. Between the time of the mid-June transfer of funds from the accounts of Florida Home Finders, Inc., and the freezing of the assets of Florida Home Finders, Inc., in September of 1995, Florida Home Finders, Inc., was able to pay all current demands for funds from tenants and landlords. As of September 21, 1995, all funds transferred from the various security deposit and rental receipt accounts of Florida Home Finders, Inc., remained in accounts and financial instruments in the name of Florida Home Finders, Inc. However, $2,242,000.00 of those financial instruments in the name of Florida Home Finders, Inc., were pledged as security for personal loans of the Respondents Schiff and Law and were not available to Florida Home Finders, Inc., while those personal debts remained unpaid. Judge Parrish's Recommended Order contained the following conclusions of law, among others: Petitioner seeks to impose discipline which includes the possibility of suspension or revocation of Respondents' licenses to practice real estate brokerage. Therefore, Petitioner must prove its allegations by clear and convincing evidence. See, Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Nair v. Department of Business and Professional Regulation, 654 So. 2d 205 (Fla. 1st DCA 1995). Recent amendments to the Administrative Procedures Act have codified the burden of proof set forth in Ferris v. Turlington and its progeny. Section 120.57(1)(h), Florida Statutes (1996 Supp.), now provides that: "Findings of fact shall be based upon a preponderance of the evidence, except in penal or licensure disciplinary proceedings or except as otherwise provided by statute, and shall be based exclusively on the evidence of record, and on matters officially recognized." [Emphasis added.] The nature of clear and convincing evidence has been described as follows in Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983): "We therefore hold that clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of facts a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." See also, Smith v. Department of Health and Rehabilitative Service, 522 So. 2d 956 (Fla. 1st DCA 1988), which, at page 958 quotes with approval the above-quoted language from Slomowitz. The Smith case also includes the following at page 958: "'Clear and convincing evidence' is an intermediate standard of proof, more than the 'preponderance of evidence' standard used in most civil cases, and less than the 'beyond a reasonable doubt' standard used in criminal cases. See State v. Graham, 240 So. 2d 486 (Fla. 2nd DCA 1970). Pursuant to Section 475.25(1), Florida Statutes (1994 Supplement), the Florida Real Estate Commission is empowered to revoke or suspend real estate brokerage licenses or otherwise discipline real estate brokerage licensees upon a determination that any of the acts set forth in that Section were committed, which include a determination that the licensees: "(b) Has been 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 this state or any other state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct and committed an overt act in furtherance of such intent, design, or scheme. It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public. * * * (k) Has failed, if a broker, to immediately place, upon receipt, any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as a broker in escrow with a title company, banking institution, credit union, or savings and loan association located and doing business in this state, or to deposit such funds in a trust or escrow account maintained by him with some bank, credit union, or savings and loan association located and doing business in this state, wherein the funds shall be kept until disbursement thereof is properly authorized; or has failed, if a salesperson, to immediately place with his registered employer any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as agent of his registered employer. The commission shall establish rules to provide for records to be maintained by the broker and the manner in which such deposits shall be made." [Emphasis added.] Section 475.01(1)(c), Florida Statutes, defines the term "broker" as follows, in pertinent part: ". . . a person who, for another, and for a compensation or valuable consideration directly or indirectly paid or promised, expressly or impliedly, or with an intent to collect or receive a compensation or valuable consideration therefor, appraises, auctions, sells, exchanges, buys, rents, or offers, attempts or agrees to appraise, auction, or negotiate the sale, exchange, purchase, or rental of business enterprises or business opportunities or any real property or any interest in or concerning the same, including mineral rights or leases, or who advertises or holds out to the public by any oral or printed solicitation or representation that he is engaged in the business of appraising, auctioning, buying, selling, exchanging, leasing, or renting business enterprises or business opportunities or real property of others or interests therein, including mineral rights, or who takes any part in the procuring of sellers, purchasers, lessors, or lessees of business enterprises or business opportunities or the real property of another, or leases, or interest therein, including mineral rights, or who directs or assists in the procuring of prospects or in the negotiation or closing of any transaction which does, or is calculated to, result in a sale, exchange, or leasing thereof, and who receives, expects, or is promised any compensation or valuable consideration, directly or indirectly therefor; and all persons who advertise rental property information or lists." Florida law imposes a high standard of ethical conduct upon real estate brokers. In Zichlin v. Dill, 25 So. 2d 4 (Fla. 1946), for example, the Florida Supreme Court stated: "The broker in Florida occupies a status under the law with recognized privileges and responsibilities. The broker in this state belongs to a privileged class and enjoys a monopoly to engage in lucrative business . . . The state, therefore, has prescribed a high standard of qualifications and by the same law granted a form of monopoly and in doing so the old rule of caveat emptor is cast aside. Those dealing with a licensed broker may naturally assume that he possesses the requisites of an honest, ethical man." In a similar vein, the Florida Supreme court, in Ahern v. Florida Real Estate Commission, 6 So. 2d 857 (Fla. 1942), stated that "the real estate broker is now the confidant of the public in much the same manner as the lawyer or the banker. His relation to the public exacts the highest degree of trust and confidence. " Any person or entity engaging in activity set out in Section 475.01(1)(c), Florida Statutes, must be licensed by the State of Florida as a real estate salesperson, broker, or brokerage corporation and must comply with Chapter 475 of the Florida Statutes and rules enacted pursuant thereto. Sections 475.15 and 475.42(1)(a), Florida Statutes. Florida Administrative Code Rule 61J2- 14.008(1)(a) defines a "deposit" as "a sum of money, or its equivalent, delivered to a real estate licensee, as . . . a payment, or a part payment, in connection with any real estate transaction . . . or such sum delivered in escrow, trust or on condition, in connection with any transaction conducted, or being conducted, by such licensee within the scope of Chapter 475, Florida Statutes." Florida Administrative Code Rule 61J2- 14.010(1) provides that "every broker who receives from . . . persons interested in any real estate transaction, any deposit . . . shall immediately place the same in a bank, savings and loan association, trust company, credit union or title company having trust powers, in an insured escrow or trust account. " Florida Administrative Code Rule 61J2- 14.011 provides that a broker who receives a deposit "shall not have any right to or lien upon said deposit, except upon the written agreement or order of the depositor so long as the depositor has sole control of said deposit, until the transaction involved has been closed. " Prior to April 1995, Florida Home Finders, Inc., was leasing property to tenants, and thereby brokering pursuant to Section 475.01(1)(c), Florida Statutes. Florida Home Finders, Inc., collected security deposits and rental payments in conjunction with that brokering activity. Therefore, Florida Home Finders, Inc., and those acting on its behalf, were required to comply with Chapter 475 of the Florida Statutes and the rules enacted pursuant thereto. Florida Home Finders, Inc., and those acting on its behalf, were required to maintain the security deposits and rental receipts collected prior to April of 1995 in an escrow or trust account until disbursement of those funds was properly authorized by the parties to the leasing transactions. Turning first to the charges against the individual Respondents, in Counts VII and VIII (7 and 8) of the Administrative Complaint, Respondents Law and Schiff are each charged with having violated Section 475.25(l)(b), Florida Statutes. Both of these individual Respondents violated Section 475.25(l)(b), Florida Statutes, by reason of the following conduct.[3] They caused the transfer of $2,492,000.00 of security deposits and rental receipts from various separate bank accounts into a single Florida Home Finders, Inc., account at NationsBank, the vast majority of which funds had been collected while Florida Home Finders, Inc., was a licensed real estate brokerage corporation engaging in brokerage activities. They then caused that money to be used to purchase certificates of deposit. Thereafter, they caused $2,242,000.00 of that money in the form of two certificates of deposit to be pledged as collateral for personal loans to the two individual Respondents. Additionally, on or about August 21, 1995, the Respondent Law caused a series of transfers to take place by means of which $65,000.00 of money from the rental receipts account of Florida Home Finders, Inc., was paid to Atlantic Gulf Communities Corporation. Neither of the individual Respondents, nor anyone else on their behalf or on behalf of Florida Home Finders, Inc., obtained authorization or permission of the tenants or the property owners to transfer the funds, purchase the certificates of deposit, pledge the funds as collateral for personal loans to Respondents Law and Schiff, or disburse some of the funds to Atlantic Gulf Communities Corporation. Respondents' pledging of the security deposits and rental receipts funds of others to secure their personal loans was inconsistent with the trust which had been placed in them,[4] particularly since the Respondents are licensed real estate brokers governed by the high ethical standards of Florida law. Such failure breached the Respondents' agreements to hold those funds in escrow and subjected the tenants and property owners involved, undoubtedly without their knowledge, to the risk that the Respondents may not have been able to timely disburse the security deposits and rental trust funds to the appropriate parties, due to some unforeseen contingency rendering the Respondents unable to fulfill their obligation to the lenders holding the trust funds as collateral.[5] In Counts XVII and XVIII (17 and 18) of the Administrative Complaint, Respondents Law and Schiff are each charged with having violated Section 475.25(l)(k), Florida Statutes. Both of these individual Respondents violated Section 475.25(l)(k), Florida Statutes, in that they caused the removal of $2,492,000.00 in security deposits and rental receipts funds from the escrow and trust accounts of Florida Home Finders, Inc., and ultimately used those funds to purchase certificates of deposit which they then caused to be pledged as collateral to secure their own personal loans. The vast majority of the $2,492,000.00 in security deposits and rental receipts were "deposits" within the meaning of Florida Administrative Code Rule 61J2- 14.008(l)(a), which had been collected by Florida Home Finders, Inc., from or on behalf of tenants and property owners while Florida Home Finders, Inc., was a licensed real estate brokerage corporation engaged in real estate brokering, as defined in Section 475.01(l)(c), Florida Statutes. Therefore, the individual Respondents and Florida Home Finders, Inc., had an obligation to maintain those funds in an escrow or trust account, unencumbered and available for immediate disbursement. In reaching the foregoing conclusions regarding the violations of Sections 475.25(l)(b) and 475.25(l)(k), Florida Statutes, I have not overlooked the Respondents' arguments to the effect that, by operation of Section 83.49, Florida Statutes, they were excused from compliance with various requirements of Chapter 475, Florida Statutes, and, therefore, were not in violation of any provision of Chapter 475, Florida Statutes. At the time of the various transfers of funds in 1995, Section 83.49, Florida Statutes, read as follows in pertinent part: "(1) Whenever money is deposited or advanced by a tenant on a rental agreement as security for performance of the rental agreement or as advance rent for other than the next immediate rental period, the landlord or the landlord's agent shall either: "(a) Hold the total amount of such money in a separate non-interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants. The landlord shall not commingle such moneys with any other funds of the landlord or hypothecate, pledge, or in any other way make use of such moneys until such moneys are actually due the landlord; Hold the total amount of such money in a separate interest-bearing account in a Florida banking institution for the benefit of the tenant or tenants, in which case the tenant shall receive and collect interest in an amount of at least 75 percent of the annualized average interest rate payable on such account or interest at the rate of 5 percent per year, simple interest, whichever the landlord elects. The landlord shall not commingle such moneys with any other funds of the landlord or hypothecate, pledge, or in any other way make use of such moneys until such moneys are actually due the landlord; or Post a surety bond, executed by the landlord as principal and a surety company authorized and licensed to do business in the state as surety, with the clerk of the circuit court in the county in which the dwelling unit is located in the total amount of the security deposits and advance rent he or she holds on behalf of the tenants or $50,000, whichever is less. The bond shall be conditioned upon the faithful compliance of the landlord with the provisions of this section and shall run to the Governor for the benefit of any tenant injured by the landlord's violation of the provisions of this section. In addition to posting the surety bond, the landlord shall pay to the tenant interest at the rate of 5 percent per year, simple interest. A landlord, or the landlord's agent, engaged in the renting of dwelling units in five or more counties, who holds deposit moneys or advance rent and who is otherwise subject to the provisions of this section, may, in lieu of posting a surety bond in each county, elect to post a surety bond in the form and manner provided in this paragraph with the office of the Secretary of State. The bond shall be in the total amount of the security deposit or advance rent held on behalf of tenants or in the amount of $250,000, whichever is less. The bond shall be conditioned upon the faithful compliance of the landlord with the provisions of this section and shall run to the Governor for the benefit of any tenant injured by the landlord's violation of this section. In addition to posting a surety bond, the landlord shall pay to the tenant interest on the security deposit or advance rent held on behalf of that tenant at the rate of 5 percent per year simple interest. The landlord shall, within 30 days of receipt of advance rent or a security deposit, notify the tenant in writing of the manner in which the landlord is holding the advance rent or security deposit and the rate of interest, if any, which the tenant is to receive and the time of interest payments to the tenant. Such written notice shall: Be given in person or by mail to the tenant. State the name and address of the depository where the advance rent or security deposit is being held, whether the advance rent or security deposit is being held in a separate account for the benefit of the tenant or is commingled with other funds of the landlord, and, if commingled, whether such funds are deposited in an interest-bearing account in a Florida banking institution. Include a copy of the provisions of subsection (3). Subsequent to providing such notice, if the landlord changes the manner or location in which he or she is holding the advance rent or security deposit, he or she shall notify the tenant within 30 days of the change according to the provisions herein set forth. This subsection does not apply to any landlord who rents fewer than five individual dwelling units. Failure to provide this notice shall not be a defense to the payment of rent when due. (3)(a) Upon the vacating of the premises for termination of the lease, the landlord shall have 15 days to return the security deposit together with interest if otherwise required, or in which to give the tenant written notice by certified mail to the tenant's last known mailing address of his or her intention to impose a claim on the deposit and the reason for imposing the claim. The notice shall contain a statement in substantially the following form: This is a notice of my intention to impose a claim for damages in the amount of upon your security deposit, due to . It is sent to you as required by s. 83.49(3), Florida Statutes. You are hereby notified that you must object in writing to this deduction from your security deposit within 15 days from the time you receive this notice or I will be authorized to deduct my claim from your security deposit. Your objection must be sent to (landlord's address)____. If the landlord fails to give the required notice within the 15-day period, he or she forfeits the right to impose a claim upon the security deposit. (b) Unless the tenant objects to the imposition of the landlord's claim or the amount thereof within 15 days after receipt of the landlord's notice of intention to impose a claim, the landlord may then deduct the amount of his or her claim and shall remit the balance of the deposit to the tenant within 30 days after the date of the notice of intention to impose a claim for damages. * * * (d) Compliance with this subsection by an individual or business entity authorized to conduct business in this state, including Florida-licensed real estate brokers and salespersons, shall constitute compliance with all other relevant Florida Statutes pertaining to security deposits held pursuant to a rental agreement or other landlord-tenant relationship. Enforcement personnel shall look solely to this section to determine compliance. This section prevails over any conflicting provisions in chapter 475 and in other sections of the Florida Statutes." [Emphasis added.] In 1996, several months after the actions which led to the charges in these consolidated cases, the Florida Legislature enacted an amendment to paragraph 3(d) of Section 83.49, Florida Statutes. As amended in 1996, paragraph 3(d) of Section 83.49, Florida Statutes, reads as follows: "(d) Compliance with this section by an individual or business entity authorized to conduct business in this state, including Florida-licensed real estate brokers and salespersons, shall constitute compliance with all other relevant Florida Statutes pertaining to security deposits held pursuant to a rental agreement or other landlord-tenant relationship. Enforcement personnel shall look solely to this section to determine compliance. This section prevails over any conflicting provisions in chapter 475 and in other sections of the Florida Statutes and shall operate to permit licensed real estate brokers to disburse security deposits and deposit money without having to comply with the notice and settlement procedures contained in s. 475.25(1)(d)." The Respondents' argument to the effect that their reliance on Section 83.49, Florida Statutes, insulates them from liability under Chapter 475, Florida Statutes, fails for several reasons. In this regard it is first noted that the language of paragraph (3)(d) of Section 83.49, Florida Statutes, as of the date of the 1995 conduct at issue in these consolidated cases referred to "compliance with this subsection," which was a reference to subsection (3) of Section 83.49, Florida Statutes. The plain and ordinary meaning of that statutory language as it existed in 1995 was that real estate brokers who made refunds of security deposits in the manner described in subsection (3) of the statute were excused from compliance with any conflicting provisions in Chapter 475 regarding the procedure for making refunds of security deposits. The terms of the statute limiting its scope to "compliance with this subsection" could not be logically read as authorizing a real estate broker to take advantage of any of the three alternatives in subsection (1) of the statute and thereby be excused from compliance with any conflicting provisions in Chapter 475 regarding the manner in which deposits received by licensed real estate brokers must be held. Under the 1996 amendments to paragraph (3)(d) of Section 83.49, Florida Statutes, (which included substituting the term "this section" in place of the earlier term "this subsection") it now seems clear that a real estate broker is authorized to take advantage of any of the three alternatives in subsection (1) of the statute and thereby achieve exemption from compliance with any conflicting provisions of Chapter 475, Florida Statutes, with respect to the manner in which security deposits and advance rental payments must be held. The Respondents argue that the 1996 amendments were intended by the Florida Legislature to be retrospective. The Legislative intent in that regard is far from clear. But even assuming that retrospective effect was intended, for the reasons set forth below, the Respondents' arguments still fail. If retrospective effect is given to the 1996 amendments to paragraph (3)(d) of Section 83.49, Florida Statutes, in order to be eligible for the benefits of paragraph (3)(d), as amended, the Respondents must be in compliance with the requirements of Section 83.49, Florida Statutes. They failed to comply in several ways; the most obvious failure being their failure to give the notice required by subsection (2) of the statute. That subsection requires the landlord to advise the tenant of various specified details regarding the manner in which any security deposit and advance rent is being held, including the name and address of the depository where the funds are being held. That subsection also states: "[I]f the landlord changes the manner or location in which he or she is holding the advance rent or security deposit, he or she shall notify the tenant within 30 days of the change according to the provisions herein set forth." No such notice was ever provided to any tenant following the transfer of the security deposit money. The Respondents also appear to have failed to comply with the requirements of Section 83.49(1)(c), by filing a bond of doubtful efficacy, inasmuch as the status of Florida Home Finders, Inc., is incorrectly described in the bond filed with the Florida Secretary of State. In the second paragraph of the bond document Florida Home Finders, Inc., described itself as a "Landlord" in several specified counties in Florida. Florida Home Finders is not a landlord in those counties, or in any other counties; it is the agent for numerous landlords in several counties. This misdescription of the status of Florida Home Finders, Inc., casts serious doubts as to the extent to which the bond could be enforced. Finally, the Respondents appear to have failed to comply with the requirements of Section 83.49(1)(c), Florida Statutes, because the statute does not appear to be susceptible to an interpretation which would allow one agent to file one bond as security for the obligations of numerous landlords. Throughout paragraph (1)(c) of the statute, as well as throughout all other paragraphs of the statute, all references to "landlord" are in the singular; the references are all in terms of "the landlord" or "a landlord." There is nothing in paragraph (1)(c) or anywhere else in Section 83.49, Florida Statutes, that purports to authorize a group of landlords, either on their own behalf or through an agent, to post a single bond covering the liabilities of numerous landlords. In sum: Inasmuch as the Respondents failed to comply with Section 83.49, Florida Statutes, when they transferred the $2,492,000.00 out of the several trust and escrow accounts, the Respondents fail to come within the scope of the provisions of paragraph (3)(d) of Section 83.49, Florida Statutes, as amended. Based upon the foregoing, Judge Parrish recommended that the Florida Real Estate Commission "[c]onclud[e] that the Respondent Schiff is guilty of violations of Sections 475.25(1)(b) and 475.25(1)(k), Florida Statutes, as charged in Counts VIII and XVIII (8 and 18)" of the Administrative Complaint and "[i]mpos[e] a penalty against the Respondent Schiff consisting of the revocation of his real estate broker license and an administrative fine in the amount of two thousand dollars." Exceptions were filed to Judge Parrish's Recommended Order. In a Final Order issued July 16, 1997, the Florida Real Estate Commission rejected these exception and adopted Judge Parrish's findings of fact, conclusions of law, and recommended penalty. As of October 23, 2001, Petitioner was a certified public accountant holding license number AC-0015803 issued by the Florida Department of Business and Professional Regulation. By letter dated November 17, 1998, the Florida Department of Business and Professional Regulation notified Petitioner's attorney of the following: The above-stated case [Benjamin Schiff, Case No. 98-06763] has been reviewed by the Probable Cause Panel of the Board of Accountancy and closed without a finding of probable cause to believe your client violated the provisions of Chapter 473, Florida Statutes, and/or Rule 61-H1, Florida Administrative Code. Accordingly, all materials will remain confidential.[6] Petitioner was admitted to The Florida Bar in 1981. On November 29, 1999, The Florida Bar sent Petitioner the following letter regarding a complaint (The Florida Bar File No. 98-51,683(17D)) that had been considered by the Seventeenth Judicial Circuit Grievance Committee "G":7 Please be advised that Seventeenth Judicial Circuit Grievance Committee "G" (which is composed of lawyer and non-lawyer members) considered the above-referenced complaint during its November 10, 1999, meeting and entered a finding of no probable cause with letter of advice. The grievance committee's finding is reflected on your copy of the enclosed notice. The original notice will be maintained in The Florida Bar's file. Predicated upon the grievance committee's no probable cause finding, The Florida Bar's file has been closed. On July 31, 2001, Petitioner filed with the Department his application for licensure as a life, variable annuity, and health agent. By letter dated August 22, 2001, the Department requested additional "information" from Petitioner. The letter read as follows: This is in reference[] to your pending application for licensure as a life, health and variable annuity agent. The following information is needed. Certified copies of the Administrative Complaint. A written statement from you indicating whether or not you have had any civil and or administrative action taken against you relative to insurance. If so, we will need certified copies of appropriate documentation. A written statement from you indicating whether or not you are the owner, partner or employee of any insurance agency. If so, we will need the name and location of the agency. You have (60) days to either furnish the information and documents or show cause in writing why the information cannot be supplied within (60) days. Please send all correspondence [to] the undersigned at the Bureau of Agent and Agency Licensing, 200 East Gaines Street, Larson Building, Tallahassee, Florida 32399-0319. Petitioner sent the requested "information" to the Department by United State Priority Mail on September 4, 2001. The Department received the requested "information" on September 6, 2001. Thereafter, Petitioner sent the following letter, dated November 19, 2001, to the Department: I have not yet received a response regarding my application for a Life Insurance License. I successfully completed the life insurance examination on July 30, 2001 (copy attached). You had requested additional information on August 22, 2001, which was forwarded to your office and received in your office on September 6, 2001. We spoke on November 7, 2001 and you advised me that my paperwork was "in review." I have heard nothing since that time. Please advise me as to the current status of my application. Thank you in advance for your assistance. Please call me if you should require any further information. Petitioner sent a second letter, dated December 14, 2001, to the Department inquiring about his application. The letter read as follows: I have not received a response to my letter of November 19, 2001 regarding the status of my license application. It has been over 90 days since your last information request. Pursuant to Regulation 4-211.0035(10),[8] I am entitled to a response within ninety days of receipt of the information which makes my application complete. Please advise as to the current status of my application. Thank you in advance for your assistance. The Department denied Petitioner's application on December 20, 2001.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department issue a final order approving Petitioner's application for licensure. DONE AND ENTERED this 25th day of June, 2002, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of June, 2002.
The Issue Whether the Petitioner should be required to provide authorization and coverage for surgery and radiation treatment for J.C.M., a person covered under the Certificate of HMO Coverage ("HMO Certificate") between the Petitioner and the Broward County School Board.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: At all times material to this dispute, J.A.M. was insured under a group health maintenance organization contract between Foundation Health and the Broward County School Board for the benefit of its employees and their eligible dependents. At all times material to this dispute, J.C.M., J.A.M.'s son, was a dependent eligible for coverage under the contract. J.C.M. is currently a 22-year-old college student. When J.C.M. was approximately 13 years old, he suffered a cut on his arm, and a keloid developed that was surgically removed. A keloid is a raised, irregular, and enlarging scar created by an excessive build-up of collagen. When the body suffers a wound such as a cut, a burn, or a surgical incision, the body heals the wound by building up tissue over the wound to close it. A keloid forms when the body does not stop the development of tissue, so that the tissue continues to accumulate and eventually forms large, unsightly scars or growths. Some people are prone to develop keloids, although keloids do not always develop in these individuals as a result of every cut or abrasion. It appears that J.C.M. is a person prone to develop keloids. When he was 16 years old, J.C.M. elected to pierce his ears so that he could wear earrings, a practice that was, according to J.C.M., "in style." Ear piercing is not a medical procedure, although a physician can perform the procedure. After his ears were pierced, J.C.M. wore earrings continually for a period of time. At some point, J.C.M. noticed that the back of both of his earlobes itched. As time passed, it became apparent that keloids were forming on the back of each earlobe at the point at which his ears were pierced. When J.C.M. first noticed them, the keloids were the size of pimples, and they formed around the hole made by the incision piercing his earlobes. The keloids have grown slowly, and they are now quite large. They cause J.C.M. considerable discomfort: They turn a dark purplish color when exposed to the sun, they itch, and they become tender if J.C.M. rubs them or sleeps on his side. The keloids on the posterior of his earlobes developed as a result of the incisions created when his earlobes were pierced. Zoila Alen, M.D., J.C.M.'s primary physician, referred him to Nestor F. De La Cruz-Munoz, M.D., a surgeon, for evaluation of the keloids for surgical removal. Dr. De La Cruz, in turn, referred J.C.M. to Jaime Zusman, M.D., for a preoperative evaluation of the need for radiation treatment to prevent new keloids from developing as a result of the surgical incisions to remove the existing keloids. The physicians concluded that J.C.M. required surgery and radiation treatment. On March 3, 2000, Dr. Alen submitted a Primary Care Physician Referral Authorization and Consultation Form to Foundation Health requesting authorization to refer J.C.M. to Abelardo Arango, M.D., for surgery to remove the keloids on his earlobes and for radiation therapy. In a letter dated March 15, 2000, Foundation Health notified J.A.M. that it was unable to authorize the requested referral. The basis for Foundation Health's decision was that the keloids were complications of a non-covered benefit and that the treatment to remove the keloids was, therefore, not covered. J.A.M. requested a re-evaluation of the request in a letter dated March 21, 2000. In a letter dated March 23, 2000, Foundation Health notified J.A.M. that it would adhere to its original decision and deny the requested authorization. Foundation Health reiterated as the basis for its decision the determination that the keloids were "complication[s] of a non-covered benefit (ear piercing)" and that the requested services were not covered by the HMO Certificate. Foundation Health enclosed with this letter a copy of page 26 of the Member Handbook explaining J.A.M.'s coverage under the HMO Certificate, which provides in pertinent part: Miscellaneous. The following services and supplies are excluded from coverage: * * * Complications of non-covered services including the diagnosis and treatment of any condition which arises as a complication of a non-covered service (e.g. services or supplies to treat a complication of cosmetic surgery, etc.) The HMO Certificate provides in pertinent part: SECTION IX EXCLUSIONS AND LIMITATIONS A. Exclusions. The following services and/or supplies are specifically excluded from Coverage and are not Covered Services under this Agreement: * * * 8. cosmetic, surgical or non-surgical procedures which are undertaken primarily to improve or otherwise modify the Member's external appearance except reconstructive surgery necessary to correct or repair a functional disorder as a result of a disease, injury or congenital defect or initial implanted prosthesis and reconstructive surgery incident to a mastectomy for cancer of the breast. Also excluded are surgical excision or reformation of any sagging skin of any part of the body, including, but not limited to the eyelids, face, neck, abdomen, arms, legs or buttocks; any services performed in connection with the enlargement, reduction, implantation or change in appearance of a portion of the body, including, but not limited to, the face, lips, jaw, chin, nose, ears, breast, or genitals; hair transplantation; chemical face peels or abrasion of the skin,; electrolysis depilation; removal of tattooing; or any other surgical or non-surgical procedures which are primarily for cosmetic purposes or to create body symmetry. Additionally, all medical complications as a result of cosmetic, surgical or non-surgical procedures are excluded; * * * 39. Complications or conditions resulting from a non-Covered Service.
