The Issue Whether Respondent Banta is guilty of dishonest dealing, culpable negligence, or breach of trust in a business transaction, in violation of Section 475.25(1)(b), Florida Statutes, (1993). Whether Respondent is guilty of operating as a real estate broker without a valid and current license, in violation of Section 475.25(1)(e), Florida Statutes (1993). Whether Respondent is guilty of failing to provide written agency disclosure to a party in a real property transaction, in violation of Section 475.25(1)(q) and (1)(e), Florida Statutes (1993) and Rule 61J2-10.033, Florida Administrative Code.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida. Respondent is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0165881. As of March 31, 1992, the Respondent failed to renew his real estate broker’s license, for the 2-year period of April 1, 1992 to March 31, 1994. Renewal would have consisted of completing the required continuing education, paying the required fee, and sending the required form to the Department of Business and Professional Regulation. The Respondent’s license was delinquent after March 31, 1992. As of March 31, 1994, the Respondent had not renewed his broker’s license and his license remained delinquent. On May 9, 1994, the Respondent renewed his license, in order to make a claim for a commission. As of March 31, 1996, the Respondent failed to renew his license again. His license was delinquent after March 31, 1996, and was delinquent as of the hearing date. The Respondent operated as a real estate broker during the period of approximately February 1993 through May 1994, specifically including a period when his license was delinquent as “involuntary inactive.” Sam Morrow is a licensed real estate broker and is a real estate developer and home builder. Effective February 10, 1993, Respondent entered into an Independent Contractor Agreement with Florida’s Preferred Homes, Inc. (FPH), a company in which Morrow is a principal. Respondent was originally retained on a fixed salary basis for an indefinite term to assist in finishing a number of low-income housing tax credit apartment applications for tax credits. At the request of Morrow, Respondent assumed other duties. Respondent represented FPH, and other business entities of which Morrow was the principal, in other business dealing from February 10, 1993 through May 24, 1994, when Respondent was terminated. The Respondent received a fixed salary throughout the period of his association with Morrow with the promise of additional undefined compensation in the future. For the purposes of this matter, Respondent was an employee of FPH and was supervised by Morrow. Respondent’s association with Morrow was not an exclusive employment agreement. During this same period in February 1993, Morrow became engaged in a transaction involving affordable housing. The transaction involved the purchase of land, by a purchasing entity, the Community Housing Trust, Inc., a 501(c)(3) non-profit corporation, from the seller, Rouse Road Corporation. After this purchase the property was to be transferred to another corporation, of which Morrow was to be the principal along with another business partner, and affordable housing units would be constructed upon the land and then sold to the public. The structure of the purchasing and developing entities was complex, involving various public and private entities, including Orange County. Morrow was a principal and the overall coordinator of the entire project which came to be known as the Oak Grove Circle project. There was no specific agreement for the Respondent to receive any particular additional compensation for the Respondent’s services in the affordable housing project. Respondent was familiar with the property that the Rouse Road Corporation had for sale and brought it to the attention of Community Housing Trust, as a prospective purchaser. This particular property was suitable for purchase and development as an affordable housing project. Respondent facilitated the purchase and prepared the contract for sale and purchase which was executed by the parties: Community Housing Trust, as purchaser, and Rouse Road Corporation, as seller. The contract was executed on March 5, 1993 for the property later known as the Oak Grove Circle property. Respondent represented neither the purchaser nor the seller in the transaction. He considered himself a transactional broker. The contract indicates on its face that Respondent, J. Scott Banta, is the real estate broker in the transaction. The contract called for the payment of a 10% commission to the Respondent. Respondent was not at any time prior to or during the purchase and sale transaction, either an agent, employee, independent contractor or representative of the seller, Rouse Road Corporation. Respondent was not at any time prior to or during the purchase and sale transaction, either an agent, employee, independent contractor or representative of the purchaser, Community Housing Trust, Inc. In September 1993, Morrow formed a Florida corporation known as FPH Venture 2, Inc. He was the sole incorporator. During this period in the fall of 1993, certain negotiations took place regarding the structure and goals of FPH Venture 2, Inc. The principals of the firm were to be Sam Morrow and Long Farms North. All of the prospective partners agreed that because of the need for cash equity, the real estate commission on the Oak Grove Circle property would remain in the FPH Venture 2 proposed project. For this consideration Respondent expected to be a principal also. The goals for the FPH Venture 2 project were set out in some detail in a memorandum developed by the prospective venturers and typed by Respondent. Respondent was included as one of the principals. The goals memorandum provides that the 10% commission payable to Respondent on the Oak Grove Circle purchase and sale would be assigned by Respondent to FPH Venture 2 “for cash flow and total profit benefits.” Respondent’s understanding of the proposed FPH Venture 2 project was that he was to receive a one-third ownership participation in FPH Venture 2, Inc., which was to have included the proposed Oak Grove Circle project and another proposed project in Lakeland, Florida, in exchange for the prospective commission. The terms of Respondent’s proposed participation in FPH Venture 2 were never reduced to any form of written agreement. Nor was Respondent ever made a principal in the company or issued any stock, or otherwise given anything to evidence his interest in the proposed venture. The closing of the purchase and sale of the property, later known as the Oak Grove Circle property, as anticipated by the contract for sale and purchase, was consummated on May 19, 1994. James L. Bishop, vice-president of Community Housing Trust, Inc., executed the settlement statement which provided for payment of $28,000 real estate commission to J. Scott Banta from the seller’s proceeds of closing. The commission check was delivered to Respondent at the closing without objection. On the day after closing of the Oak Grove Circle purchase and sale, May 20, 1994, Respondent gave Morrow a memorandum suggesting a procedure for payment of the $28,000 commission into FPH Venture 2, Inc. On May 24, 1994, the matter culminated in a conversation between Respondent Banta and Morrow. Respondent requested Morrow reduce their agreement regarding his proposed participation in FPH Venture 2, Inc., to writing. Morrow refused to do so, and at 4:45 p.m. on the same day, terminated Respondent’s employment, stopped payment on Respondent’s consulting fee check for the prior week and changed the locks on his office with Respondent’s personal property still inside. Respondent has retained the commission from the sale of the Oak Grove Circle property. Morrow’s account of this business relationship with Respondent and the agreed disposition of the proceeds of the commission is not credible.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Respondent be found guilty of violating Sections 475.25(1)(e) and (1)(q) and be found not guilty of violating Section 475.25(1)(b), Florida Statutes (1993). It is further recommended that Respondent be fined the sum of $1,000 and that his license be suspended for a period of three months, subject to reinstatement upon such reasonable conditions as the Florida Real Estate Commission shall require. RECOMMENDED this 8th day of January, 1997, at Tallahassee, Florida. DANIEL M. KILBRIDE 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 January, 1997. COPIES FURNISHED: Steven D. Fieldman, Esquire Department of Business and Professional Regulation 400 West Robinson Street Hurston Building - North Tower, Suite N308 Orlando, Florida 32801 Allen C.D. Scott, II, Esquire Scott & Scott, P.A. 99 Orange Street St. Augustine, Florida 32084 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares Division Director Department of Business and Professional Regulation 400 West Robinson Street Hurston Building - North Tower, Suite N308 Orlando, Florida 32801
The Issue Whether Grandview Landscaping Services, Inc., is liable to Petitioner for the purchase of landscaping trees; and, if so, in what amount.
Findings Of Fact Petitioner, Southeastern Trees, LLC (Petitioner or Southeastern Trees), is a Florida Limited Liability Corporation located in Gainesville, Florida, engaged in the business of commercial tree farming. Keith Lerner is the President of Southeastern, and David Lerner is the Vice President. Respondent, Grandview Landscaping Services, Inc. (Respondent or Grandview), is a Florida corporation headquartered in Ocala, Florida, engaged in commercial landscaping. Grandview is licensed by the Department as a dealer in nursery products, flowers, and sod. In August 2015, John Sapp, Grandview’s owner, visited Petitioner’s tree farm and selected 27 live oak trees to purchase. On December 11, 2014, Mr. Sapp returned to Southeastern Trees and took possession of the 27 live oak trees. Mr. Sapp used his own equipment to haul the trees. Petitioner sent an invoice to Respondent on December 11, 2014, in the amount of $5,724.00 for the 27 live oak trees. The invoice term was “net 30,” allowing 30 days for Respondent to pay in full. After 30 days had elapsed without payment, David Lerner contacted Mr. Sapp to request payment. Mr. Lerner also requested the location of the trees in order to place a lien thereon. According to Mr. Lerner, Mr. Sapp refused to divulge the location of the trees. After 60 days had elapsed without payment, Keith Lerner contacted Mr. Sapp via telephone. According to Keith Lerner, he spoke with Mr. Sapp on March 1, 2015, who informed him the trees were beautiful and Mr. Sapp would “get him a check.” Keith Lerner attempted to reach Mr. Sapp via telephone again on March 10, 2015, and left messages with Grandview’s office and on Mr. Sapp’s personal mobile phone. Mr. Lerner did not receive a return call. On March 25, 2015, Petitioner sent Respondent, via certified mail, a letter requesting payment of $5,724.00 for the 27 live oak trees and “any interest available to us beyond the 30 days of credit that were extended to you.” The letter was delivered to both Grandview’s business address and Mr. Sapp’s home address. The certified mail receipts were returned to Southeastern Trees, signed and dated March 26, 2015. Petitioner filed a complaint with the Department on March 31, 2015, against Southeastern Trees. Petitioner paid a filing fee of $50.00 As of the date of the hearing, Southeastern Trees had not responded to Petitioner’s request for payment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order approving the claim of Southeastern Trees, LLC, against Grandview Landscaping Services, Inc., in the amount of $5,774.00. DONE AND ENTERED this 8th day of October, 2015, in Tallahassee, Leon County, Florida. S Suzanne Van Wyk 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 8th day of October, 2015.
The Issue Whether or not Petitioner's lease acquisition costs should be included in its asset cost basis for establishment of a Fair Rental Value reimbursement rate in accordance with the Florida Title XIX Long Term Care Reimbursement Plan (the Medicaid Plan).
Findings Of Fact Respondent Agency for Health Care Administration (AHCA) is the state agency responsible for implementation and administration of the Florida Medicaid Program. Its predecessor agency was the Department of Health and Rehabilitative Services (HRS), and HRS' acts with regard to Petitioner and Medicaid reimbursement may be attributed to AHCA for purposes of this proceeding. Cedar Hills Nursing Center, owned by Americare Corporation, is a licensed 180-bed nursing home located in Jacksonville, Florida. Cedar Hills participates in the Florida Medicaid Program and provides inpatient nursing home services to Medicaid eligible persons. Cedar Hills is entitled to reimbursement for certain approved property related costs in accordance with the Florida Title XIX Long Term Care Reimbursement Plan (Medicaid Plan), which was adopted and incorporated by reference in Rule 10C-7.0482 F.A.C. One of the methods of property cost reimbursement under the Medicaid Plan is the Fair Rental Value System (FRVS). FRVS reimbursement requires the establishment of a basis for computation and indexing of the FRV rate. Cedar Hills, as an existing facility at October 1, 1985, is entitled to have an FRVS rate established for capitalized tangible assets based upon the assets' acquisition costs at the last dates of acquisition prior to July 18, 1984. (See Conclusions of Law 36, 39) Essentially, FRVS determines the historic allowable costs for assets related to a facility (nursing home) as of the last acquisition cost prior to July 18, 1984, and establishes a base cost or value. This base cost, or value, is indexed (inflated) forward and becomes the basis for computing FRVS reimbursement. The computation is "facility-specific," since a particular provider- chain may own multiple facilities. Thus, no rate is assigned a chain (Americare herein), but rather, the rate is assigned to the facility, in this instance, Cedar Hills Nursing Center. AHCA refused to include in Cedar Hills' asset cost for FRVS the lease and option acquisition costs relating to Cedar Hills which were paid by Americare Corporation in 1980 as a part of a purchase of a group of Florida nursing homes, including Cedar Hills. Effective March 1, 1980, Americare Corporation purchased from Chelsea Park Corporation and Hyde Park Nursing Home Partnership (HPNH, Inc.), a subsidiary of Chelsea Park Corporation, all business assets of the sellers relating to six Florida nursing homes. Cedar Hills was one of the six nursing homes. The total purchase price was $5.7 million. This asset acquisition included the sellers' interest in a lease of the Cedar Hills facility. Americare did not purchase the Cedar Hills facility outright, and title did not pass to Americare d/b/a Cedar Hills in 1980. At the time of the 1980 asset acquisition, title to the land and building at Cedar Hills was held by HPNH, Inc.. Prior to March 1, 1980, HPNH, Inc. was the licensed operator and Medicaid provider at Cedar Hills pursuant to an assignment of lease rights from its parent, Chelsea Park Corporation. After March 1, 1980, Americare Corporation became the licensed operator and Medicaid provider at Cedar Hills. The license issued by the Department of Health and Rehabilitative Services, Office of Licensure and Certification, to HPNH, Inc., prior to March 1, 1980, shows "HPNH, Inc., owner", as the licensed operator. The official license issued by the Department of Health and Rehabilitative Services, Office of Licensure and Certification, effective March 1, 1980, shows "Americare Corporation, Owner" as the licensed operator. The 1980 asset acquisition included the acquisition by Americare of tangible assets at Cedar Hills. The Chelsea Park Corporation accounting records prior to the Americare asset acquisition reveal tangible assets relating to Cedar Hills which were being depreciated. Americare's Medicaid Cost Reports for Cedar Hills for the period immediately following the 1980 transaction show tangible assets relating to Cedar Hills which were being depreciated by Americare. The transaction Agreement between Americare and Chelsea Park expressly provided for Americare to acquire "business assets" of Chelsea Park, which assets included not only the lease agreement for Cedar Hills but also operating assets specified as "all fixtures attached to either real estate or leasehold property, all machinery, linen, personal property, equipment, handling equipment, furniture, furnishings and accessories thereto, . . ." These "operating assets" are listed on Exhibit 4 to the Agreement (Petitioner's Exhibit 3) and clearly include tangible assets relating to Cedar Hills. The expert witness testimony is consistent that the lease-option (Lease is Respondent's Exhibit R-1) constituted "the moral equivalent of a virtual purchase" of the facility. Acquisition costs are determined from the most current depreciation schedules for the facility. In this case, the facility is Cedar Hills. Cedar Hills properly capitalized the aforesaid lease and option acquisition costs and reflected them on its depreciation tables. The parties' dispute herein hinges upon interpretation of Section V. E. (1) (a) of the Medicaid Plan, and whether or not the lease rights purchased in 1980 by Americare constituted a tangible or an intangible asset, and whether or not the lease and option constituted an "acquisition," as Petitioner contends, or whether, as Respondent contends, only passage of title by purchase can constitute an "acquisition," as that term is contemplated by that section of the Medicaid Plan. That section of the Medicaid Plan incorporates by reference HCFA-PUB.15-1 (the Medicaid Provider Reimbursement Manual), and all testifying experts agreed that if there is a conflict, the Medicaid Provider Reimbursement Manual takes precedence over generally accepted accounting principles and standards (GAAP and GAAS) for purposes of Medicaid accounting. The parties stipulated that, "The costs of land, buildings, equipment, and other capital items allowable for Medicaid reimbursement by HCFA-PUB.15-1 such as construction loan interest expense capitalized, financing points paid, attorneys fees, and other amortized "soft" costs associated with financing or acquisition are included in determining allowable acquisition costs in establishing the FRVS rate. (See, Conclusions of Law 39, 46-47) Cedar Hills contended that lease and option acquisition costs are "soft costs." AHCA's expert agreed that lease and option acquisition costs may be considered "soft" costs in certain instances and that financing and refinancing costs are "soft costs". Respondent AHCA contended that the lease rights purchased by Americare constituted an intangible asset and could not be included as part of the FRVS base unless those rights related to the acquisition of a capitalized tangible asset. The Medicaid reimbursement for Cedar Hills will be lower if the lease acquisition costs are not included in the asset cost basis. As a part of a Medicaid audit report in 1981 after the 1980 asset acquisition, HRS allocated $619,224.88 to that portion of the transaction relating to Cedar Hills. The cost allocated by HRS to Cedar Hills included an allocation for tangible assets and soft costs. The soft costs allocated to Cedar Hills are $448,659.00, which are the costs allocated to the acquisition of the lease and option rights relating to Cedar Hills. Over the 1980-1993 period, Cedar Hills amortized the $448,659.00 of lease rights costs on its books and on its cost reports. (See J-3 of Petitioner's Exhibit 7). This treatment was permissible under pre-FRVS cost reimbursement principles which allowed costs of a lease to be covered in property costs. HRS (Medicaid) reimbursed Cedar Hills for its amortization of lease rights costs and, in addition, reimbursed a return on equity payment on the unamortized portion of these costs. HRS never indicated any disagreement with Americare's treatment of the lease acquisition costs as capital items. Americare possessed only a lease with an option to purchase from 1980 to 1993. Legal title to the Cedar Hills facility was not conveyed by its owner, HPNC, Inc., to Americare Corporation until April, 1993. After amortizing the lease costs of $448,659.00 over the 13-year period that Cedar Hills leased the Cedar Hills facility, Cedar Hills requested that such costs be included in its FRVS basis. Cedar Hills is not seeking any costs in excess of the actual costs it paid to acquire the lease and option. It is seeking to include those costs as part of its base upon which future Medicaid reimbursement calculations for the Cedar Hills facility shall be made. At the time Cedar Hills was first leased in 1980, there was no requirement that Americare exercise its option to purchase the facility. The lease of Cedar Hills by Americare was not a condition precedent to the purchase of the group of other facilities which were purchased by Americare simultaneously with the leasing of Cedar Hills. However, it would not have been possible for Americare to become the operator of Cedar Hills Nursing Center without acquiring both the tangible assets and the lease agreement relating to Cedar Hills' physical plant. Acquisition by Americare of the lease rights was necessary in order for Americare to be able to use the Cedar Hills assets for nursing home purposes. The lease acquisition costs relating to Cedar Hills were associated with the acquisition of approximately $90,000 worth of capital assets, some of which, such as furniture, were clearly personalty, but some of which were "fixtures," specifically, kitchen dietary equipment, laundry machines, and plumbing which had been integrated into the leased building. FRVS determines the basis for allowable capitalized tangible assets and for certain intangible costs which in and of themselves are not tangible assets but which are allowed in the FRVS basis so long as they pertain to the acquisition of tangible assets. Examples are attorneys' fees and accountants' work associated with purchase of a facility which are normally capitalized along with the facility when purchased. Soft costs are intangible costs, in that they are capital costs for something that cannot be physically touched. Basically, they are costs associated with an acquisition which are paid in the normal course of an acquisition. Stated differently, soft costs are intangible type costs that are related to tangible assets. GAAP and GAAS would characterize Petitioner's lease in this situation as a "capitalized lease" and permit all its "soft costs" to be handled as they have been. AHCA's audit to determine a FRVS base used documentation submitted by Petitioner, including depreciation schedules. AHCA considered the lease- purchase to be an "intangible." AHCA agrees that lease and option acquisition costs may be considered "soft" costs in certain instances, but not this one. Petitioner contended that lease and option acquisition costs are "soft" costs and should be included in this instance. All costs incurred by the legal owner in acquiring tangible fixed assets, including related soft costs, have been included in the FRVS base established by AHCA. The FRVS audit report allowed only $1,138.00 as acceptable additions to the FRVS base in the rate semester that the lease was acquired by Americare based on costs incurred by the legal title holder or by Americare in purchasing tangible fixed assets, including soft costs, but Americare's soft costs associated with the lease acquisition were not included.
Recommendation Upon the foregoing findings of fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration include the lease acquisition costs of $448,659.00 in Petitioner's asset cost basis for establishment of its Fair Rental Value System reimbursement rate. RECOMMENDED this 3rd day of April, 1994, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The De Soto 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 April, 1994. APPENDIX TO RECOMMENDED ORDER 93-4262 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: 1-6 Accepted, but often rephrased 7 Rejected as legal argument or a conclusion of law. Covered under Conclusions of Law 8-20 Accepted, but often rephrased 21 Accepted as modified in Findings of Fact 31-32. Otherwise rejected as a conclusion of law. See Conclusions of Law. 22-28 Accepted except often rephrased. Also cumulative material was eliminated. Rejected as legal argument or as a conclusion of law. See Conclusions of Law Accepted 31-32 Rejected as legal argument or as a conclusion of law. See Conclusions of Law Respondent's PFOF: 1-7 Accepted, but often rephrased. Also, cumulative material was eliminated. 8 Rejected as legal argument or as a conclusion of law. See Conclusions of Law. 9-15 Accepted, but often rephrased. Also cumulative material was eliminated. Rejected as inaccurate or as a mischaracterization of the record evidence as a whole. Accepted, but rephrased. Accepted that only one audit was done for FRVS purposes, however prior yearly cost report approvals were, in essence, HRS mini-audits of the provider's claimed reimbursements. Therefore, the proposal as worded is rejected as a whole. 19-21 Accepted, but rephrased. Rejected as not supported by the greater weight of the credible evidence. Rejected as cumulative COPIES FURNISHED: Harold Knowles, Esquire Knowles & Randolph 528 E. Park Avenue Tallahassee, FL 32301 Alfred W. Clark, Esquire Post Office Box 623 Tallahassee, FL 32302 Sam Power, Agency Clerk Agency for Health Care Administration The Atrium, Ste. 301 325 John Knox Road Tallahassee, FL 32303 Douglas M. Cook, Director Agency for Health Care Administration 2727 Mahan Drive Tallahassee, FL 32308
The Issue The issues presented concern the attempt on the part of the State of Florida, Department of Natural Resources (DNR) to impose a fine against Ron Harrod (Respondent) for willfully or knowingly damaging or removing products from sovereign lands without the consent of DNR or the State of Florida, Board of Trustees of Internal Improvement Trust Fund. The products spoken to is timber allegedly cut and removed from state-owned lands on November 20, 1985, and April 1, 1986. This purported conduct on the part of the Respondent is said to have violated Section 253.04(2), Florida Statutes (1985), and Rule 16Q- 14.03(2) and (6), Florida Administrative Code.
Findings Of Fact On September 1, 1985, Blanche Farrow made an agreement with the Respondent which allowed the Respondent as the owner of "Rons Cypress" to cut all the timber on her property. Rons Cypress is a business for cutting cypress slabs. This property is described in the agreement as being located on Highway 48 approximately 1 mile east of Floral City, on both the north and south sides of the road. Further it was stated that the timber contemplated in this arrangement could be found along Daniels Drive. A copy of the statement of agreement between Farrow and the Respondent may be found as Respondent's Exhibit 1 admitted into evidence. The exact nature of the Farrow property which is the subject of the agreement with the Respondent may be found in a copy of the Warranty Deed pertaining to this property, which has been admitted as DNR Exhibit 4. This property is located in Citrus County, Florida. The extent of the property over which Blanche Farrow and her husband, Chester B. Farrow, hold ownership does not extend into Lake Tsala Apopka, Lake Bradley and Little Lake, lakes adjacent to their property. These lakes constitute part of an historically meandered lake system and are subject to the sovereign rights of the State of Florida. In effect, the State of Florida owns those water bodies. The limitations of the boundaries of the Farrow property are made clear in the Warranty Deed in which certain language describes the boundaries of the property owned by the Farrows as being ". . . to the waters of Lake Tsala Apopka; thence Southerly along the water's edge of said Lake Tsala Apopka . . ." and ". . . to the water's edge of Lake Bradley . . ." Therefore, notwithstanding Respondent's protestations to the contrary and any statement made by Chester B. or Blanche Farrow, the legal description of the property does not convey title to those individuals for the several lakes described, nor create any leasehold interest on the part of the Farrows to the lakes. In pursuit of the agreement with the Farrows, Respondent made arrangements with Jerry Lovett, who is in the lumber business, to cut trees, principally cypress trees. Through this agreement, Lovett would write checks to Blanche Farrow which would be given to her by the Respondent. The Respondent in turn would be able to take the stumps left over from the cutting of cypress trees and use them for slabs in his business of selling cypress tree products. Respondent was to pay Ms. Farrow for the stumps from which he cut slabs. Respondent also took cypress knees in this area for use in his business. Respondent's Composite Exhibit 3 describes payment made by Jerry Lovett to Blanche Farrow for trees removed. On October 14, 1985, $600.00 was paid for cypress trees. On October 28, 1985, $1,275.72 was paid, of which 52.31 tons of cypress at $6.00 a ton was included in that purchase. On November 4, 1985, $551.28 was paid for cypress trees. On November 15, 1985, he paid $131.92 for removal of cypress trees. In this endeavor, Lovett in the person of his work crew had cut and removed cypress trees which belonged to the State of Florida. Respondent cut and removed slabs from the stumps left following Lovett's lumbering operation and took cypress knees as well belonging to the state. Respondent's involvement with the stumps and knees was through activities of a crew working for the Respondent. Neither the Farrows, Lovett nor Respondent had permission to take cypress products from this land belonging to the State of Florida. Lovett, in his activities, had operated under the misapprehension that the Farrows owned the disputed cypress trees that were cut from lands of the sovereign. He was led to believe in his discussions with Blanche Farrow that Respondent would point out the places where the cut could be made. Lovett also understood from his conversation with Ms. Farrow that certain monuments identifying the extent of her ownership could be found on the side of the road near Lakes Tsala Apopka and Bradley, described as cement corners. Lovett never located those monuments in that as he understood the outer bounds of the Farrow ownership, as Ms. Farrow described them, he would not approach those outer limits in his activities. Respondent likewise believed that the Farrows owned the property where the cypress cutting was being done. Nevertheless, Lovett cut and removed cypress trees in Lake Tsala Apopka, Lake Bradley and Little Lake and Respondent took stumps and knees from those lakes owned by the sovereign. Lovett sold the cypress logs which he removed from the area in dispute, to include cypress logs belonging to the State of Florida. Lovett removed less than 300 trees from the site and left some cypress logs at the site. Lovett through his crew was operating at the site of the dispute sometime approximately a week before October 14, 1985, through November 15, 1985. Lovett ceased his activities in the cutting of cypress when instructed to do so by the Respondent who mentioned something to the effect that the local zoning board said that this cutting had to cease. In the course of his operations in the three lakes, Respondent took 693 knees and between 800 and 1,200 cypress slabs. DNR became aware of the activities of Lovett and the Respondent based upon an investigation that was prompted by observations which Linda Sanford made. Linda Sanford is a zoning inspector for Citrus County. She also lives adjacent to Lake Bradley. As she describes it in her testimony, she observed work crews in the water cutting cypress "off and on." Among the people that she identified as being a member of the work crew was a James Gunn, who is an employee of the Respondent. The first time she saw the Respondent's crew was on November 13, 1985, around Daniels Road and Highway 48. Three persons were in the water and a chain saw was being operated. On November 16, 1985, while at home, Ms. Sanford received complaints from some neighbors about saws being operated and observed Respondent's crew again. One other time on a date that Ms. Sanford does not remember, which would have been following the first two occasions of her observations, Ms. Sanford asked the work crew if they had permits for the activities. Ms. Sanford never saw the Respondent's work crew remove any of the cypress materials. On November 20, 1985, Lieutenant Louis Feulner, then a Sergeant for the Florida Marine Patrol, went to the area where cypress trees had been cut by Lovett and cuttings from stumps and cypress knees were being taken by Respondent's work crew. This area was described by Feulner as the Lake Tsala Apopka chain. A copy of his report of the incident may be found as DNR Exhibit 7 admitted into evidence. Feulner was sent to investigate by his superior, Major Brown of the Florida Marine Patrol. Feulner arrived at the scene of the cutting activity around 3:30 in the afternoon and saw three subjects in the water. Those persons were James Gunn and Respondent's two sons. Feulner saw that cypress trees had been cut down on the site and some were located in the water. He observed stumps in the water as well. These observations were made of cypress products in knee- deep water. Feulner saw a chain saw being operated by the crew. The cutting that was being done was a slab from a stump. He did not see trees being removed from the site of the cutting. Upon inquiry, Gunn told Feulner that he worked for the Respondent and that the Respondent had gotten permission to cut the cypress trees from Ms. Farrow. Feulner advised Gunn that the activities involved in the cutting violated state law. In fact those activities did involve cutting of property belonging to the State. Major Brown had dispatched Lieutenant Fuelner to the questioned site on November 20, 1985, based upon a request of Gordon Roberts, Assistant Chief of Aquatic Lands for NR. At that time, Roberts was employed in a Division of State Lands, as an administrative assistant involved with investigations and enforcement. He held that position until May 1, 1987. On December 4, 1985, Roberts went to the site and observed that cypress harvesting had taken place in wetlands, in a submerged area. The area he observed was one involving buttress cypress trees. Roberts observed that harvesting was being done in an area below a line which represents the minimum flood plan line, a control line for what is described as the water management division. In conversation which Roberts had with the Respondent following the Feulner visit to the site, Roberts explained to the Respondent that there was some question about whether the cutting was on privately owned land or submerged land belonging to the State. He further advised the Respondent not to cut anymore in that area until a determination could be made about ownership of the property. Roberts wrote to the Respondent on December 13, 1985. A copy of this correspondence may be found as DNR Exhibit 1 admitted into evidence. Respondent says he did not receive this correspondence Nonetheless it was sent to the address utilized in noticing of the Respondent of the final hearing in this cause, as attended by the Respondent. The letter mentions concerns of the State on the subject of the belief held by the State that cutting was being done on its property. It went on to say that a survey was going to be conducted to decide where the line of demarcation between the upland owners property and that of the State would occur. The letter states that DNR preferred to have the matter settled amicably but indicated that trees should not be cut where buttressed cypress were found nor any other trees below the ordinary high water line of the lakes in question. It warned Respondent that a fine of $10,000 could be imposed under the provisions of Rule 16Q-14, Florida Administrative Code, for unauthorized removal of the trees and that the fine could be mitigated. Further it was stated voluntary cessation of the tree cutting would be a consideration on the amount of the fine. Finally, the letter stated that the Respondent could contact the State concerning these issues. By activities of Louis Neuman, Senior Forester for DNR, an attempt was made to ascertain the value of cypress trees which were cut in the areas in dispute. Mr. Neuman is qualified to assess the value of the trees cut. A description of his evaluation may be found in DNR Exhibits 12A-C representing the assessment made in Little Lake, Lake Bradley, and Lake Tsala Apopka. This involves a survey of December 18-20, 1985, as made by Mr. Neuman. He found that value involved in the cutting to be $440, $1,364 and $2,948, respectively, for Little Lake, Lake Bradley and Lake Tsala Apopka. These findings were related to Gordon Roberts in a memorandum of February 25, 1986, a copy of which may be found as DNR Exhibit 2 admitted into evidence. His assumption was that 78 trees, 306 trees and 815 trees had been cut within Little Lake, Lake Bradley and Lake Tsala Apopka, respectively. The total amount for cut cypress trees in all three lakes was $4,752, per Mr. Neuman's observations. Comparing his observations to those of the Respondent and Lovett, there is a disparity in valuation; however, it suffices to say that a substantial dollar amount of product was destroyed and removed from sovereign waters. This was an arrangement in which the Respondent was a knowing participant, who profited from the endeavor. In spite of the conciliatory tone of the letter of December 13, 1985, from Roberts to the Respondent, on March 26, 1986, a notice of violation or administrative complaint was brought against the Respondent concerning the observations made on December 4, 1985 and in view of the $4,752 statement of damages on the part of Mr. Neuman. The State sought to collect that amount of money and $2,000 punitive damages. A copy of the March 26, 1986 complaint letter may be found as DNR Exhibit 3 admitted into evidence. That complaint or notice of violation was subsumed in action of July 2, 1986, which forms the basis of the present dispute and for which the Respondent sought timely hearing. In the present complaint, allegations are made concerning observations of November 20, 1985, and the assessment of an administrative fine of $6,752 for what is described as a first offense. There is set forth in the notice of violation a second count or claim of violation pertaining to events of April 1, 1986, in which Respondent is stated to have willfully and knowingly removed products from the same area in which sovereign lands are said to have been involved. For this alleged second offense, DNR sought the imposition of an additional $10,000 fine. The accusations concerning a second offense arise from an investigation performed by Robert Verlato, an officer with the Florida Marine Control, which was conducted on April 1, 1986. He went to the Bradley Lake site where the cutting had been done in the past and observed three individuals at work. These were members of the Respondent's crew, including James Gunn and Respondent's two sons. He saw them operating a chain saw cutting the base of the stump which was approximately two feet in length. Gunn was operating the saw. Verlato told the individuals to stop work and they did. He arrested them for trespassing and removing state property. Respondent then arrived at the scene and indicated that he should be charged if there were any violations, and that the three men were members of his crew under his supervision and control. Verlato also observed other freshly cut stumps than the one which he had seen crew members working on, which stumps were in the same general area. He collected ten of the these fresh-cut stumps and took them as evidence for the criminal court case. Respondent indicates that the activities of April 1, 1986, had to do with the cleanup of this site requested by Ms. Farrow and not for purpose of further removal of cypress products for Respondent's benefit. The facts lead to the conclusion that while the Respondent may have had in mind accommodating Ms. Farrow, he also was accommodating his financial interests as well. This conclusion is supported by Respondent's Exhibit 2 admitted into evidence which was a letter from Ms. Farrow to Respondent on May 19, 1986, after the April 1, 1986, incident in which she asked the Respondent to observe the state's suggestions that no further cutting and hauling be done related to the cypress trees in question. Composite Exhibit 5A-D constitutes photographs of the site related to Lake Tsala Apopka showing where trees have been removed. DNR Common Exhibits 6 and 14 is an aerial photograph which marks the places where the subject cypress trees have been cut in the three lakes. They are shown in red marking. The findings about cutting that was done in Tsala Apopka Lake are not conclusive because the ordinary high water line for Lake Tsala Apopka was not established. This circumstance is discussed in the following paragraph. DNR commissioned an ordinary high water line study to be performed by Douglas A. Thompson, Professional Land Surveyor, registered in the State of Florida, and other states. He is the Assistant Chief of the Bureau of Survey and Mapping for DNR. Other members of his team included Kenneth M. Campbell, Bureau of Geology, and geologist for DNR; Catherine M. Gilbert, Bureau of Aquatic Plants, and botanist for DNR; and Louis A. Neuman of the Bureau of Mine Reclamation, forester. The details of this study are set forth in DNR Exhibit 11 admitted into evidence which is a copy of the ordinary high water lines survey of Bradley Lake and Little Lake. This study established the ordinary high water line elevation for Bradley Lake at 42.75 feet and for Little Lake at 41.75 feet. Areas where cypress trees were observed to have been cut in the operations of Lovett and the Respondent showed that in Little Lake the maximum elevation for those cuttings was 40.3 feet and at Lake Bradley the maximum elevation was at 41.4 feet. Both of these measurements are below the ordinary high water line elevation for those two water bodies. This confirms that Lovett and the Respondent were destroying and taking products belonging to the State which were below the ordinary high water line and within the boundaries of the sovereign's ownership. Due to the special nature of Lake Tsala Apopka, DNR was unable to establish with exactitude the high ordinary high water line for Lake Tsala Apopka. They were able to approximate that line at 42.75 feet in a setting where the maximum elevation of cuttings of cypress within that lake were found at 41.2 feet.
Findings Of Fact The Department is the state agency charged with the responsibility of enforcing Chapter 253, Florida Statutes on behalf of the Board of Trustees of the Internal Improvement Trust Fund (Board). The Board holds title to submerged sovereign lands pursuant to Sections 253.03 and 253.12, Florida Statutes, and Article X, Section 11, Florida Constitution. Fraraccio, together with his wife, owns a parcel of real property located in section 13, township 38 south, range 41 east which is commonly known as 26 High Point Road and which is located in Martin County, Florida. The southern boundary of the Fraraccio's property (subject property) borders the St. Lucie and Indian Rivers. In June, 1987, Fraraccio filed an application for permission to alter mangroves which grow along the shoreline of the subject property. It was Fraraccio's intention to cut the tops of the trees in order to promote horizontal growth. This application was filed with and processed by the Department of Environmental Regulation (DER). On September 1, 1987, DER issued a permit for the mangrove alteration. Pertinent to this proceeding is the following specific condition of the Fraraccio permit: 4. "No person shall commence mangrove alteration or other activity involving the use of sovereign or other lands of the state, title to which is vested in the Board of Trustees of the Internal Improvement Trust Fund or the Department of Natural Resources under Chapter 253, until such person has received from the Board of Trustees of the Internal Improvement Trust Fund the required lease, license, easement, or other form of consent authorizing the proposed use. Pursuant to Florida Administrative Code Rule 16Q-14, if such work is done without consent, or if a person otherwise damages state land or products of state land, the Board of Trustees may levy administrative fines of up to $10,000 per offense. In October, 1987, the Department's Bureau of Survey and Mapping was asked to survey the west line of the Jensen Beach to Jupiter Inlet Aquatic Preserve (Preserve) at the confluence of the St. Lucie River. Terry Wilkinson, chief surveyor for the bureau, conducted the field survey on October 14-16, 1987. Mr. Wilkinson placed a metal rebar with a cap designating "D.N.R." at a point on the mean high water (MHW) line at the Fraraccio's property. Mr. Wilkinson also staked three points with lathe markers on a line northerly along the MHW line from the rebar monument. It was Mr. Wilkinson's opinion that the Preserve abutted the Fraraccio property from the point marked by the rebar monument northward along the coast. That portion of the Fraraccio property which was south and west of the rebar did not abut the Preserve. Fraraccio disputed the findings regarding the Preserve boundary reached by Wilkinson and did not concede that his property abuts the Preserve. On December 15, 1987, the issue of the Preserve boundary was taken before the Governor and Cabinet sitting as the Board at the request of the Department, Division of State Lands. Fraraccio was represented before the Board by counsel who argued against the staff recommendation. Mr. Wilkinson's interpretation of the boundary line for the Preserve was approved. That area waterward of the MHW line from the rebar monument northerly along the Fraraccio shoreline was, therefore, deemed to be part of the Preserve and sovereign submerged land. Prior to cutting any mangrove trees, Fraraccio telephoned Casey Fitzgerald, chief of the Department's Bureau of State Lands Management, to inquire as to whether Department permission was required to trim mangroves located above the MHW line. Fitzgerald's letter advised Fraraccio "that trimming mangroves located above the MHW line would not be within the purview of this department." Fitzgerald further recommended that Fraraccio "employ the services of a registered land surveyor to specifically identify the individual trees which are so located." Fraraccio did not obtain an independent survey. Instead, he relied upon the rebar monument and the lathe markers placed by Wilkinson, and contracted to have the mangroves landward of that line trimmed. One of difficulties encountered in determining the location of a mangrove in relation to the MHW line is the fact that one tree may have several trunks and prop roots which emanate from the center of the tree. Consequently, there is some uncertainty regarding how to locate the tree. One method used locates the centermost trunk and considers that point the tree location. Another method calculates the greatest percentage of tree mass and considers that point the center of the tree. This calculated center is then matched against the MHW line. Either method results in a judgment based upon visual inspection. This judgment may differ among reasonable men. In January, 1988, Fraraccio supervised the cutting of mangroves based upon the MHW line as established by the Wilkinson survey. Fraraccio did not intend to cut trees waterward of the MHW line. No trees were cut waterward of the Wilkinson line. A number of trees were trimmed landward of the Wilkinson line. There is no evidence that either the rebar monument or the lathe markers placed by Wilkinson were moved either prior to or after the mangrove alteration. Fraraccio was responsible for the direct supervision of the workmen who completed the mangrove trim. No work was done without Fraraccio's authorization. On March 22, 1988, Kalani Cairns, inspected the Fraraccio property. Cairns took field notes of the inspection. One of comments made at that time was that it was "difficult to determine if MHWL stakes have been moved." Based upon his review of the area, Cairns determined approximately 20 mangrove trees below the MHW line had been topped. Subsequently, the Department issued the Notice of Violation and Order for corrective action. Since Fraraccio did not believe he had cut waterward of the MHW line, no corrective measures were taken. Subsequent to the Notice, additional mangroves were not cut. Fraraccio timely sought review of the notice. In preparation for the formal hearing in this cause, the Department contracted with Greg Fleming to prepare a survey of a portion of the Fraraccio property. The purpose of this second survey was to locate the MHW line along the Fraraccio shoreline and to plot mangrove trees which had been trimmed and which were waterward of the line. Approximately 24 trimmed mangrove trees were located waterward of the MHW line as determined by the Fleming survey. The Fleming survey resulted in a MHW line which was upland of the line established by the Wilkinson survey. The trimmed trees in dispute are located between the two lines, as marked on the ground, by the lathes placed by the two surveyors. Mr. Wilkinson did not testify and no credible explanation was given for why the lines, as marked in the field, differ. At the time of the cutting, however Fraraccio believed the Wilkinson lathes marked the MHW line. This belief was based upon the representations that the Department had made regarding the rebar monument marked "D.N.R." and the fact that the placement of the lathe stakes had coincided with placement of the rebar.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Trustees of the Internal Improvement Trust Fund enter a final order dismissing the Notice of Violation against Charles A. Fraraccio. DONE and ENTERED this 23rd day of June, 1989, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of June, 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-4309 Rulings on the proposed findings of fact submitted by Petitioner: Paragraphs 1 through 5 are accepted. With regard to paragraph 6, it is accepted Wilkinson put down three lathes and that there is no evidence that those lathes were moved. Otherwise, the paragraph is rejected. Mr. Wilkinson did not testify and, therefore, no evidence was presented on the issue of the lathes. It is clear Fraraccio believed the lathes to be the MHW line. Paragraph 7 is accepted. Paragraph 8 is rejected as contrary to the weight of the evidence. The MHW line was correctly depicted on the ground and on paper by the Fleming survey which was done after-the-fact. Pertinent to this case is the fact that Fraraccio and DNR treated the Wilkinson survey on the ground (as shown by-the rebar and the three lathes) as the MHW line prior to the cutting. Paragraph 9 is accepted. With regard to paragraph 10, the record shows Fleming was contacted to perform the second survey in December, 1988, and that it was dated February, 1989. With that modification and clarification, paragraph 10, in substance, is accepted. Paragraph 11 is accepted to the extent that the two surveys differed on the ground (as opposed to on paper). Paragraphs 12, 13, and 14 accepted but are irrelevant. With regard to paragraph 15, it is accepted that the workmen were instructed not to cut waterward of the MHW line. The remainder is irrelevant to this proceeding. Paragraphs 16 through 18 are accepted. With regard to paragraph 10, it is accepted Fraraccio cut or trimmed the trees based upon the Wilkinson survey as depicted by the rebar and 3 lathe markers. Otherwise, paragraph 19, is rejected as irrelevant. Paragraph 20 is accepted. Paragraph 21 is rejected as irrelevant to this proceeding. Rulings on the proposed findings of fact submitted by the Department. Paragraphs 1 through 16 are accepted. The first sentence of paragraph 17 is accepted since both surveys coincided at the point of the rebar marked "D.N.R.;" otherwise, the paragraph is rejected as contrary to the weight of evidence since the surveys differed as plotted on the ground. Paragraphs 18 and 19 are accepted. Paragraph 20 is rejected as irrelevant. Paragraph 21 is accepted. Paragraph 22 is rejected as contrary to the weight of the credible evidence. Paragraph 23 is rejected as irrelevant. The number of trees cut waterward of the MHW line as established by the Fleming survey was approximately The size of the trees is irrelevant. Paragraph 24 is rejected as irrelevant. Paragraphs 25 and 26 are accepted. Paragraph 27 is rejected as irrelevant to this proceeding. COPIES FURNISHED: William L. Contole McManus, Wiitala & Contole, P.A. O. Box 14125 North Palm Beach, Florida 33408 Ross S. Burnaman Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Tom Gardner, Executive Director Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, FL 32399-3000
Findings Of Fact Based upon the evidence and testimony adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Proposed District will be located in an unincorporated area of central Palm Beach County within the boundaries set forth in the Amended Petition. It will encompass approximately 9,450 acres of land, including the 2,300 acre impoundment area that the State of Florida has an option to purchase. Irving Cowan, individually and as Trustee, Adrian R. Chapman, as Trustee of the A.R. Chapman Palm Beach Groves Trust, Marvin S. Savin and Elaine S. Savin, as general partners of Savin Groves, a Florida general partnership, and Petitioner, a Florida limited partnership, presently own 100 percent of the land to be included within the Proposed District. The property within the District is designated in the Palm Beach County Comprehensive Plan Land Use Element as either Agricultural Production or Rural Residential The land within the Proposed District is located entirely within the boundaries of an inactive unit of development of the ITWCD. Consequently, the owners of the land neither pay taxes to, nor receive benefits from, the ITWCD. Most of the land is currently used for growing citrus fruit. Those areas which do not have citrus groves are used to support grove operations. It is the present intent of the landowners to continue to use the land for such agricultural purposes. The purposes and functions of the ITWCD and the Proposed District will be significantly different. The ITWCD is primarily concerned with providing drainage to an urbanizing, residential area with a "one By contrast, the Proposed District will operate a "two-way" drainage and irrigation system designed for the benefit of active agricultural production. The ITWCD and the Proposed District will be able to operate independently within their respective areas of responsibility. The creation of the Proposed District will have no adverse impact upon the ITWCD. On July 27, 1992, the Board of Supervisors of the ITWCD unanimously adopted a Resolution in support of the establishment of the Proposed District. The existing infrastructure within the Proposed District consists of roadways, drainage and irrigation facilities, pumping stations, and culverts connecting with the L District. There are no existing water mains or existing sewer facilities. Among the potential improvements to the existing infrastructure which could be undertaken by the Proposed District are the construction of central pumping stations to replace the many individual pumps operated by the several property owners within the Proposed District, and the replacement of the outfall structures into the L-8 canal. In addition, the Proposed District could engage in roadway construction and surfacing of the main fruit hauling routes within the District. 4/ The Proposed District provides the best possible mechanism for financing and implementing these improvements. Of the various alternatives in providing infrastructure services for the community, a community development district is superior to any other alternative, including a municipal service taxing unit, the County or a homeowners' association. This is because neither the County nor a municipal service taxing unit would be as responsive to the Proposed District's landowners as would be the Proposed District and because a homeowners' association would be hindered by reason of its inability to issue bonds or effectively collect property assessments. Centralized ownership, management and control of the Proposed District's infrastructure is more efficient and less costly than the current arrangement. Consequently, the establishment of the Proposed District will increase the likelihood that the land within its boundaries will continue to be used for agricultural purposes. The District will be empowered to issue bonds, levy ad valorem taxes and special assessments, and impose user fees and charges. To defray the costs of operation and maintenance of the infrastructure, the District will utilize a variety of taxes, assessments and user charges tailored to the service involved so as to minimize costs while insuring that only those who receive the benefits from a facility pay the costs involved. Ultimate Findings All statements contained in the Amended Petition, including those contained in the economic impact statement, are true and correct. The creation of the District is not inconsistent with any applicable element or portion of the State Comprehensive Plan or of the Palm Beach County Comprehensive Plan. The land within the Proposed District is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as a functional interrelated community. The Proposed District is the best alternative for delivering community development services and facilities to the area that will be served by the District. The community development services and facilities of the Proposed District will not be incompatible with the capacity and uses of existing local and regional community development services and facilities. The area that will be served by the Proposed District is amenable to separate special-district government.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that FLWAC enter a final order granting Petitioner's Amended Petition to establish the Cypress Grove Community Development District by rulemaking pursuant to Chapter 190, Florida Statutes. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of June, 1993. STUART M. LERNER 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 16th day of June, 1993.
Findings Of Fact On September 24, 1982, Respondents, James A. Joss, Steven M. Mishkin and Norma Trento, together with Thomas Moskowitz, formed Highland Ranch Acres, Inc. (Highland Ranch), a Florida corporation, for the purpose of acquiring, subdividing and selling certain land in Section 35, Township 24 South, Range 25 East Lake County, Florida. These individuals were the sole principals and stockholders of Highland Ranch, and held, respectively, one-sixth, one-sixth, one-third and one-third of Highland Ranch's capital stock. All of the above- referenced individuals made an initial capital contribution to Highland Ranch, except Joss, who donated his time, knowledge and expertise in land sales. The land in question, acquired from W. D. Land Company consisted of approximately 50 acres, which Highland Ranch "subdivided" into 40 parcels of 1- 1/4 acres each, and consecutively numbered 65 through 104. Highland Ranch marketed the parcels to residents and nonresidents of the State of Florida by telephone solicitation, and a follow-up brochure. On March 3, 1983, the same principals formed Citrus Grove Acres, Inc. (Citrus Grove), a Florida corporation, for the same purposes they had formed Highland Ranch. Their respective ownership of the capital stock of Citrus Grove was the same as it had been in Highland Ranch. Citrus Grove acquired approximately 53 acres of land from W. D. Land Company in the same section, township and range of Lake County, Florida, as those lands acquired by Highland Ranch. Citrus Grove "subdivided" these lands into 42 parcels of 1-1/4 acres each, and consecutively numbered them 105 through 146, and marketed them in the same manner the lands owned by Highland Ranch had been sold. On June 13, 1983, the same principals formed Central Florida Highlands, Inc. (Central Florida), a Florida corporation, for the same purposes they had formed Highland Ranch and Citrus Grove. Their respective ownership of the capital stock of Central Florida was the same as it had been in Highland Ranch and Citrus Grove. Central Florida acquired approximately 15 acres of land from W. D. Land Company in the same section, township and range of Lake County, Florida, as those lands acquired by Highland Ranch and Citrus Grove. Central Florida subdivided these lands into 12 parcels of 1-1/4 acres each, and consecutively numbered them 147 through 158, and marketed them in the same manner the lands owned by Highland Ranch and Citrus Grove had been sold. Highland Ranch, Citrus Grove and Central Florida had the same principals, who performed the same basic duties. Joss, assisted by Mishkin, was responsible for the conception and operation of the business of the three corporations. Joss, as president, executed the purchase and sale agreements on behalf of Highland Ranch; Mishkin, as president, executed the purchase and sales agreements on behalf of Central Florida; and Trento, as president, executed the purchase and sales agreements on behalf of Citrus Grove. The purchase and sale agreements, and the brochures mailed to the telephone prospects, except for the corporate name, were identical in each instance. The photographs in the brochures which purported to depict the lands being offered, were identical. None of the photographs depicted the subject lands but rather were of lands Respondent Joss had marketed 15 years previously through Groveland Ranch Acres, Inc. All of the lands in question were purchased from the same seller, were located in the same section, township and range of Lake County, Florida, were subdivided into 1-1/4 acre lots which were consecutively numbered 65 through 158. The lands were located in the Green Swamp Area of Critical State Concern, were zoned agricultural and required a minimum of five acres to be eligible for a building permit, were not platted with the county, and contained no avenues of ingress and egress. Respondents were advised by their attorney, Michael J. Moskowitz, that Chapter 498, Fla. Stat., required registration if they proposed to offer more than 50 parcels to more than 45 persons. He further advised them that if the subsequent corporation(s) had the same principals and other indicia of a common promotional plan that their activities might be deemed a common promotional plan, subjecting them to potential liabilities. Respondent Joss concedes that the sole reason for forming Citrus Grove and Central Florida, and taking title in their names, instead of simply purchasing the additional lands in the name of Highland Ranch, the existing corporation, was to avoid the registration requirements of Chapter 498, Fla. Stat. Highland Ranch, Citrus Grove, and Centra1 Florida did not individually convey more than 50 parcels to more than 45 purchasers. Collectively however, they did convey more than 50 parcels to more than 45 purchasers.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Department), enter a Final Order finding Respondents, James A. Joss, Norma Trento, Steve Mishkin, Citrus Grove Acres, Inc., and Highland Ranch Acres, Inc., guilty of violating the provisions of Sections 498.023(1) and (2), Fla. Stat., and ordering that Respondents shall not offer or dispose of, or participate in the offer or disposition of any interest in "subdivided lands," as defined by Section 498.005(17), Fla. Stat., unless the subdivided lands are registered with the Department. Within thirty (30) days of the date of the Final Order, Respondents shall offer all purchasers of land from Highland Ranch Acres, Inc., Citrus Grove Acres, Inc., and Central Florida Highlands, Inc., an opportunity to rescind their agreement, and to receive a refund of all principal and interest paid. The term "purchaser" as used herein shall mean any person who made any payment to Respondents for lands offered by Highland Ranch Acres, Inc., Citrus Grove Acres, Inc., and Central Florida Highlands, Inc., whether or not such person is currently making payments. The refund offer shall be in writing, and in a form approved by the Department. After notifying purchasers of the refund offer, Respondents shall determine the total amount of refund liability, based upon purchaser(s) who elect to rescind their agreement, and notify the Department within sixty (60) days of the date of the Final Order of the name(s) of the purchaser(s) electing to rescind their agreement and the amount of refund liability for each such purchaser. Respondents shall establish a trust or escrow account in a financial institution located within the State of Florida to assure the payment of refunds to those purchasers who elect to rescind, and to assure the conveyance of clear and marketable title to those purchasers who do not elect to rescind, transactions. Respondents shall appoint a trustee or escrow agent acceptable to the Department, who shall have such powers as are necessary to fulfill the purpose of his trust. Respondents shall collect and deposit any and all monies paid by all purchasers of lands from Highland Ranch Acres, Inc., Citrus Grove Acres, Inc., and Central Florida Highland, Inc., into the trust or escrow account established pursuant to paragraph (4). Respondents shall have no right, title or interest in or to the aforesaid monies until such time as those purchasers who have elected to rescind have been paid in full, clear and marketable title has been conveyed to those purchasers who have elected not to rescind, the trustee's or escrow agent's fees, if any, have been paid, and the civil penalties hereinafter imposed have been paid. Respondents shall pay the following civil penalties to the Department, within thirty (30) days from the date of the Final Order: Norma Trento $10,000.00 Steve Mishkin $20,000.00 James Joss $20,000.00 Highland Ranch Acres, Inc. $20,000.00 Citrus Grove Acres, Inc. $20,000 00 DONE and ENTERED this 30th day of May, 1985, at Tallahassee, Florida. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 30th day of May, 1985. COPIES FURNISHED: Thomas A. Klein, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Scott T. Eber, Esquire 3550 Biscayne Boulevard Suite 504 Miami, Florida 33137 E. James Kearney, Director Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Richard B. Burroughs, Jr., Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
