The Issue The issue is whether Petitioner has a disability (handicap), and, if so, was denied a reasonable accommodation for his disability by Respondents, in violation of the Florida Fair Housing Act (FFHA), as amended.
Findings Of Fact The record in this discrimination case is extremely brief and consists only of a few comments by Mr. Homer, cross- examination by Respondents' counsel, and Respondents' exhibits. Petitioner resides at Golfside Villas, a condominium complex located in Winter Park, Florida. At hearing, Petitioner asserted that he suffers from a disability, narcolepsy, but he offered no competent evidence to support this claim. Thus, he does not fall within the class of persons protected against discrimination under the FFHA. Golfside is the condominium association comprised of unit owners that is responsible for the operation of the common elements of the property. Hara is the corporate entity that administers the association, while Mr. Michaud, a Hara employee, is the community manager. In September 2016, Mr. Homer became involved in a dispute with Golfside over late fees being charged to his association account and issues concerning ongoing repairs for water damage to his unit that were caused by flooding several years earlier. Because some of his telephone calls were not answered by "Lorie" (presumably a member of management staff), on September 23, 2016, Mr. Homer sent an email to Mr. Michaud, the community manager, expressing his displeasure with how his complaints were being handled. He also pointed out that "I have a disability." The email did not identify the nature of the disability, and it did not identify or request an accommodation for his alleged disability. There is no evidence that Respondents knew or should have known that Mr. Homer had a disability or the nature of the disability. Also, there is no evidence that narcolepsy is a physical impairment "which substantially limits one or more major life activities" so as to fall within the definition of a handicap under the FFHA. See § 760.22(7)(a), Fla. Stat. Here, Petitioner only contends that at times it causes him to speak loudly or yell at other persons. As a follow-up to his email, on September 26, 2016, Mr. Homer spoke by telephone with Mr. Michaud and reminded him to look into the complaints identified in his email. If a request for an accommodation ("work with me") was ever made, it must have occurred at that time, but no proof to support this allegation was presented. Mr. Homer acknowledged that he was told by Mr. Michaud that in the future, he must communicate by email with staff and board members rather than personally confronting them in a loud and argumentative manner. On September 26, 2016, Mr. Michaud sent a follow-up email to Mr. Homer informing him that he must "work with my staff, without getting loud or upset, no matter how frustrated you may be at the time." The email also directed staff to answer Mr. Homer's questions regarding repairs for water damage to his unit, to "look into some late charges on his account," and to "work with Mr. Homer to help him get both his unit and his account in order." On November 15, 2016, Mr. Homer filed his Complaint with the FCHR alleging that on September 26, 2016, Golfside, Hara, and Mr. Michaud had violated the FFHA by "collectively" denying his reasonable accommodation request. Later, a Petition for Relief was filed, which alleges that Gulfside and Hara (but not Mr. Michaud) committed the alleged housing violation. However, the findings and conclusions in this Recommended Order apply to all Respondents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief, with prejudice. DONE AND ENTERED this 14th day of December, 2017, in Tallahassee, Leon County, Florida. S D. R. ALEXANDER 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 14th day of December, 2017. COPIES FURNISHED: Tammy S. Barton, Agency Clerk Florida Commission on Human Relations Room 110 4075 Esplanade Way Tallahassee, Florida 32399-7020 (eServed) John Homer Unit 609 1000 South Semoran Boulevard Winter Park, Florida 32792-5503 Candace W. Padgett, Esquire Vernis & Bowling of North Florida, P.A. 4309 Salisbury Road Jacksonville, Florida 32216-6123 (eServed) Cheyanne M. Costilla, General Counsel Florida Commission on Human Relations 4075 Esplanade Way, Suite 110 Tallahassee, Florida 32399-7020 (eServed)
Findings Of Fact Respondents, Max Kastner and Gitta Kastner, were at all times material hereto licensed by Petitioner, Department of Business Regulation, Division of Hotels and Restaurants, to operate the Euclid Apartments, 1211 Euclid Avenue, Miami Beach, Florida, license number 23-3431H, and the Euclid Plaza Apartments, 1227 Euclid Avenue, Miami Beach, Florida, license number 23-51O8H. The Euclid apartments On February 27, 1986, Petitioner inspected the Euclid Apartments and found that the fire extinguishers located on the premises were not attached with a State approved service tag and were in need of recharging, the premises' front doors were not equipped with automatic self-closing hardware, an extension cord was run from a hallway light fixture to apartment 14, numerous jalousies and screens were missing or broken, furniture was stored in the hallways; the wall at the entrance to the building was breached by a hole which could admit vermin onto the premises, and, refrigerators were stared outside the building. At the conclusion of the inspection, Respondents were issued a written warning which detailed the deficiencies and directed that they be corrected within 7 days. On March 6, 1986, Petitioner re-inspected the Euclid Apartments and found that while the deficiencies relating to the storage of furniture, the storage of refrigerators, and the extension cord had been corrected, Respondents had failed to correct the remaining deficiencies. Accordingly, Petitioner issued the subject notice to show cause. The Euclid Apartments were subsequently inspected on two occasions. On March 20, 1986, Petitioner's inspection of the premises found that all deficiencies bad been corrected except for the installation of automatic self- closing hardware and the replacement of missing or broken screens and jalousies. On May 13, 1986, the premises were once again inspected and found to be free of deficiencies except for the absence of the self- closing hardware for the front doors. The Euclid Plaza Apartments On February 27, 1986, Petitioner inspected the Euclid Plaza Apartments. Pertinent to this proceeding, Petitioner's inspection revealed that one Fire extinguisher was missing and that the remaining fire extinguishers required recharging; jalousies and window screens were missing; the exit doors of the building were not equipped with automatic self-closing hardware; open vent spaces were not closed, and a current State license was not displayed. At the conclusion of this inspection, Respondents were issued a written warning detailing the deficiencies and directed to correct them within 7 days. When the Euclid Plaza Apartments were reinspected on March 6, 1986, the only deficiency that had been corrected was the replacement of missing jalousies, however, the premises were reinspected on March 21, 1986, following the Petitioner's issuance of a notice to show cause, and all deficiencies were found to have been corrected. The Written Warning The warnings issued by Petitioner on February 27, 1986, granted Respondents 7 days within which to correct the deficiencies, When Petitioner reinspected the premises on the morning of March 6, 1986, 7 days had not yet elapsed. Mr. Kastner averred that all deficiencies were corrected by the end of the day of March 6, 1986. The evidence fails to establish that Respondents did not correct any deficiencies in a timely manner except for their failure to install automatic self-closing hardware on the front door of the Euclid Apartments and their failure to replace missing or broken screens and jalousies at the Euclid Apartments.
Findings Of Fact Biscayne Boulevard through the municipality of Miami, Florida, is a state highway, State Road 5 (U.S. 1,) which is operated and maintained by the State of Florida through its Department of Transportation. The state owns the right of way areas adjacent to Biscayne Boulevard. The Petitioner, Marina Park Associates ("Marina Park") is the owner of the Marina Park Hotel (the "Hotel") located at 340 Biscayne Boulevard, Miami, Florida. The Hotel is situated adjacent to the Department's right of way. Petitioner has applied to the Department of Transportation for approval to construct a canopy extending from the entrance of the Hotel over the state's right of way adjacent to Biscayne Boulevard. There is an existing canopy in front of the Hotel which was installed approximately 11 years ago. At the time the existing canopy was installed, the Hotel obtained a permit from the city. However, it does not appear that the State Department of Transportation was ever notified or considered the application for the existing canopy. Petitioner is seeking to replace the existing canopy with a new improved canopy at approximately the same location. The Hotel recently underwent renovations and the Petitioner is seeking to make the property more attractive by installing a new canopy. The plans for the proposed canopy were submitted by Petitioner to Respondent. Those plans indicate that the proposed canopy would violate at least three aspects of the Respondent's rules regarding canopies over state right of way areas. These rules were adopted to establish uniform safety standards, to limit or prevent obstruction of the sidewalks and to further emergency vehicle access. There is no provision in the rules for variances or exceptions to these requirements. While the evidence established that there are several obstructions along the right of way which contravene these rules, there is no evidence that the Department has ever approved such obstacles. The plans for the proposed canopy do not provide for a set back of at least two feet from the outside edge of the canopy to the face of the curb as required by the existing rules. This defect can be cured quite easily by adjusting the length of the canopy. However, the other problems with the canopy cannot be cured so easily. The Hotel has a recessed entrance. The proposed canopy would extend into the recessed area. As a result, there will not be a nine foot clearance between the bottom of the canopy and the sidewalk as required in the existing rules. Even more importantly, the building design provides insufficient support to cantilever the canopy out from the entraceway without columns. Therefore, the proposed canopy requires supports at the end of the canopy on the sidewalk. The existing rules prohibit any such supports and there is no provision for a variance from this requirement. Canopy supports extending below the nine foot clearance are prohibited because of the resulting obstruction of the sidewalk impairing pedestrian traffic and inhibiting access from passenger vehicles parked on the roadway. The existing canopy is apparently not in compliance with all of the provisions of the Respondent's rules. Respondent never reviewed or permitted the existing canopy nor has it cited the existing canopy for being in violation of the rules. There is no provision in the rules to grandfather in an existing canopy and/or to replace or improve an existing canopy.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Transportation enter a Final Order finding Petitioner's proposed canopy does not meet the requirements of Rule 14-43 and denying Petitioner's request for a variance by means of through application for a special permit. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 24th day of June, 1991. J. STEPHEN MENTON 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 D Division of Administrative Hearings this 24th day of June, 1991. APPENDIX The Respondent has filed a Proposed Recommended Order. The following constitutes my rulings on the proposed findings of fact submitted by the parties. The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or Reason for Rejection. Adopted in substance in Findings of Fact 1. Adopted in substance in Findings of Fact 2. Adopted in substance in Findings of Fact 3. Adopted in substance in Findings of Fact 7, 8 and 9. Adopted in substance in Findings of Fact 9. Adopted in substance in Findings of Fact 4. COPIES FURNISHED: Russell A. Waldon Assistant General Counsel Department of Transportation Haydon Burns Building 605 Suwanee Street, M.S. #58 Tallahassee, FL 32399 M. L. Dayton Marina Park Associates 340 Biscayne Boulevard Miami, FL 33132 John Reilly Miami Awning Company 282 Northwest 36th Street Miami, FL 33127 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwanee Street Tallahassee, FL 32399-0458 Thornton J. Williams, General Counsel Department of Transportation 562 Haydon Burns Building Tallahassee, FL 32399-0458
Findings Of Fact The following findings of fact are based upon the stipulation of the parties: At all times material hereto, Treco, Inc. (hereinafter Treco) was the creating developer as that term is defined in Section 721.05(9)(a), F.S., of a condominium time-share plan, as defined in Section 721.05(28), F.S., known as The Beach Club at St. Augustine Beach and Tennis Resort, a Condominium (hereinafter The Beach Club at St. Augustine), and this plan was located at St. Augustine, Florida. In 1983, pursuant to Section 721.07, F.S., Treco filed and obtained Petitioner's approval of a public offering statement for The Beach Club at St. Augustine. In 1984, Treco recorded a declaration of condominium in the public records of St. Johns County committing the property described in the declaration contained in the public offering statement for the Beach Club at St. Augustine to condominium ownership. The declaration of condominium, referenced in paragraph c) above, provided for and described, in accord with Section 718.403, F.S., three additional proposed condominium phases, identified as The Beach Club at St. Augustine Phase II, The Beach Club at St. Augustine Phase III, and The Beach Club at St. Augustine Phase IV, but did not and has not committed the properties described in the proposed phases to condominium ownership. The declaration of condominium, referenced in paragraph c) above, further provided that Phase II would contain 1248 time-share periods and that Phase III would contain 1456 time-share periods. In 1983 Treco submitted a subsequent phase filing and filing fees, as provided in Rule 7D-17.03(4) & (5), Florida Administrative Code, for The Beach Club at St. Augustine, Phase II, and The Beach Club at St. Augustine Phase III, and the Petitioner subsequently advised Respondent that the above filings were in compliance with Chapters 718 and 721, F.S. The composite exhibit attached to the stipulation as Exhibit A contains true and correct copies of the subsequent phase filings and the Petitioner's response thereto as referenced in paragraph f) above. Although the Petitioner is without actual knowledge on this issue, it is stipulated for purposes of this proceeding that Treco has not recorded a declaration of condominium committing the properties described in the proposed Phases II and III to condominium ownership, has not offered nor advertised for sale nor filed any advertisements as required by Section 721.11, F.S., nor entered into any contracts for the sale of time-share periods, nor closed on any sales at said phases, and holds no purchase or deposit monies for time-share periods at the proposed phases. For the calendar year 1984, The Beach Club at St. Augustine Beach and Tennis Resort Condominium Association, Inc. has not paid managing entity fees for The Beach Club at St. Augustine, Phase II, or for The Beach Club at St. Augustine, Phase III. At all times material hereto, Treco Inns of Orlando, Inc. (hereinafter Treco Inns) was the creating developer of the condominium time- share plan known as Magic Tree Resort II, a Condominium, and this plan was located in Kissimmee, Florida. In 1983, Respondent Treco Inns filed and obtained Petitioner's approval of a public offering statement for Magic Tree Resort II, a Condominium. In 1983, Treco recorded a declaration of condominium in the public records of Osceola County committing the property described in the declaration contained in the public offering statement for Magic Tree Resort II, Phase I to condominium ownership. The declaration of condominium, referenced in paragraph l) above, provided for and described, in accord with Section 718.403, F.S., two additional proposed condominium phases identified as Magic Tree Resort II, a Condominium, Phase II, and Magic Tree Resort II, a Condominium, Phase III, but did not and has not committed the properties described in the proposed phases to a condominium form of ownership. The declaration of condominium, referenced in paragraph l) above, further provided that the Magic Tree Resort II, Phase II, would contain 1040 time-share units and that the Magic Tree Resort II, Phase III, would contain 1508 time-share periods. In 1983, Treco Inns submitted a subsequent phase filing and filing fees as provided in Rule 7D-17.03(4) & (5), Florida Administrative Code, for Magic Tree Resort II, Phase II and Magic Tree Resort II, Phase III and the Petitioner subsequently advised Treco Inns that the above filings were in compliance with Chapters 718 and 721, F.S. The composite exhibit, attached to this stipulation as Exhibit B, contains true and correct copies of the subsequent phase filings and the Petitioner's response letters referenced in paragraph o) above. Although the Petitioner is without actual knowledge, it is agreed for purposes of this proceeding that Treco Inns has not recorded a declaration of condominium submitting the properties described in the proposed Phases II and III above to condominium ownership; has not offered nor advertised for sale, nor filed any advertisements as required by Section 721.11, F.S., nor entered into any contracts for the sale of time-share periods or deposit monies for time- share periods at the proposed phases. For the calendar year 1984, Magic Tree Resort Condominium Association, Inc. has not paid managing entity fees for either Magic Tree Resort II, Phase II or Magic Tree Resort II, Phase III. Chapter 718, F.S., prohibits a developer of a time- share condominium from closing on the sale of time-share periods in a subsequent phase until an amendment to the original declaration extending the condominium form of ownership to the subsequent phase has been recorded in the public records of the county in which the condominium is located, and Chapter 721, F.S., prohibits a developer of a time-share condominium from closing on the sale of time-share periods until construction of the improvements has been completed in accordance with the requirements of Chapter 721, F.S. The following findings of fact are based upon the testimony and evidence presented: On January 1, 1984 Treco had not commenced construction of Phases II and III of The Beach Club at St. Augustine, and Treco Inns had not commenced construction of Phases II and III of Magic Tree Resort II, a condominium. As of the date of the final hearing, construction had begun only on Phase II of Magic Tree Resort II. In accordance with Chapter 721, F.S., Treco and Treco Inns were prohibited from closing sales in the proposed phases on January 1, 1984. The estimated completion date for construction of The Beach Club at St. Augustine, Phase II was June, 1984 and February, 1985 for Phase III, and the estimated completion date for construction of Magic Tree Resort II, Phase II was March, 1984 and October, 1984 for Phase III. Respondents have designated The Beach Club at St. Augustine Beach and Tennis Resort Condominium Association, Inc., as managing entity for Phases II and III of The Beach Club at St. Augustine, and Magic Tree Resort Condominium Association, Inc., as managing entity for Phases II and III of Magic Tree Resort, Phase II. The parties have submitted post hearing proposed findings of fact pursuant to Section 120.57(1)(b)4, F.S. A ruling on each proposed finding has been made either directly or indirectly in this Recommended Order, except where such proposed findings of fact have been rejected as subordinate, cumulative, immaterial or unnecessary.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is hereby recommended that the Notices to Show Cause issued herein be DISMISSED. DONE and ENTERED this 19th day of April, 1985 at Tallahassee, Florida. DONALD D. CONN 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 th day of , 1987. COPIES FURNISHED: Robin H. Conner, Esquire John C. Courtney, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Frederick R. Brock, Esquire Bert C. Simon, Esquire 1325 San Marco Boulevard, Suite 600 Jacksonville, Florida 32247 Richard B. Burroughs, Jr., Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
Findings Of Fact Petitioners, Leon Motor Lodge, Houston Motor Lodge, and Taylor Motor Lodge, are three Georgia corporations operating motels located in Leon County, Florida, Taylor County, Florida and Escambia County, Florida, respectively. In 1982, 1983 and 1984, each hotel corporation held a franchise from Howard Johnsons. All three corporations were wholly owned by David Shapiro and Company, Inc. David Shapiro and Company, Inc., is also a Georgia corporation with its principal office in Valdosta, Georgia. David Shapiro, Victor Shapiro and Carl Shapiro are officers and directors of the parent corporation, David Shapiro and Company, Inc., and are also officers and directors of each of the three subsidiary hotel corporations. David Shapiro and Company also engages in other business activities not related to the hotel corporations. All four corporations use the accounting services of Gerald Henderson, C.P.A. Charles Hanlon, an employee of the Department, conducted an audit of David Shapiro and Company, Inc., and its wholly owned subsidiaries, Leon Motor Lodge, Houston Motor Lodge, and Taylor Motor Lodge. The audit concerned the taxable years ending September, 1982, 1983 and 1984. Mr. Hanlon's audit determinations did not treat Petitioners as a unitary business group. Paul Craft, C.P.A., was Mr. Hanlon's audit supervisor. Mr. Craft reviewed Mr. Hanlon's audit workpapers and determined that Hanlon's audit improperly disallowed Petitioners the use of a federally reported deduction and overlooked the existence of a unitary business group. After determining that Mr. Hanlon's original audit work was flawed, Mr. Craft made arrangements with the Petitioners' designated representative, Gerald Henderson, C.P.A., to personally redo Hanlon's field audit work. The field audit work was performed at Mr. Henderson's office in Valdosta, Georgia. Over a one week period, Mr. Craft reviewed the Petitioners' computer printouts of journals and ledgers as well as Petitioners' summary business records. Mr. Henderson was consulted for assistance in explaining the Petitioners' accounting controls, records organization, and in locating various records. As a result of the audit, on April 18, 1986, the Department issued revised notices of intent to make audit changes, with supporting workpapers, and delivered the same to the Petitioners' representative, Gerald Henderson. Afterwards, Gerald Henderson and Paul Craft discussed the revised audit determinations and Mr. Craft explained the audit changes to Mr. Henderson. The Department's revised notices of intent to make audit changes involved basically four audit determinations or issues. The audit determinations were: a determination that the Petitioners had not properly used three factor apportionment; a determination that David Shapiro and Company, Inc., Leon Motor Lodge, Inc., Taylor Motor Lodge, Inc. and Houston Motor Lodge, Inc. constituted a "unitary business group" for the taxable years ending 1983 and 1984; a determination that interest earned on installment sales income should be excluded from the sales factor of the apportionment formula, and; a determination that Taylor Motor Lodge could not carry-forward its net operating loss to the 1982 taxable year. 1/ The Department subsequently issued its notices of proposed assessment based upon these four revised audit changes. 2/ The Department's notices of proposed assessment were based on the revised audit work of Paul Craft and not on Ray Hanlon's original audit work. These notices of proposed assessment were timely mailed to the Petitioners. The Petitioners protested the notices of proposed assessment. Upon review of the protest, the Department issued and timely mailed a Notice of Decision to the Petitioners which sustained the Department's position on all issues. The Petitioners' petition for reconsideration resulted in the timely issuance and mailing of a Notice of Reconsideration which again sustained the Department's position and rejected the Petitioners' protest position. After the filing of the Petitioners' request for a formal administrative hearing, but prior to hearing, the Department revised the original proposed assessments. The revisions consisted of the following: the inclusion of interest on installment sales income in the apportionment fraction; and, the correction of a math error. The revisions served to reduce the total sums originally assessed by approximately $18,000.00. No new tax liability was created by these "revisions". Revised notices of proposed assessments were prepared and timely mailed to Petitioners. During taxable years ending 1982, 1983 and 1984, the Petitioners had payroll, property and sales in Florida. The payroll was attributable to employees involved in the operation of Leon Motor Lodge, Taylor Motor Lodge and Houston Motor Lodge. The sales consisted primarily of motel rents and receipts from the sale of food in the restaurants which adjoined the motels. Sales also included some installment sales income from the earlier sale of apartments and motels. The property factor consisted of the three motels and the restaurants associated with those motels. All such property was located in Florida. During the tax years in question, multi-state corporations, such as the corporations involved in this case, were subject to an income tax based on the share of that taxpayer's adjusted federal income tax which was attributable to Florida. In order to determine the amount of a taxpayer's adjusted federal income tax attributable to Florida, the legislature established a statutory three factor apportionment method whereby a taxpayers' "adjusted federal income" is apportioned among the states by reference to a weighted formula consisting of payroll, property and sales factors. The "apportioned" share of a taxpayers' "adjusted federal income" is then taxed by Florida. A taxpayer must use the statutory three factor apportionment formula unless the taxpayer can establish that the statutory three factor apportionment formula "does not fairly represent" the degree of that taxpayer's economic activity in Florida and that whatever apportionment method the taxpayer used fairly represents that taxpayers degree of economic activity in Florida. See, Sections 220.13, 214.71, Florida Statutes (1983). Petitioners used a three factor apportionment method similar to the statutory three factor apportionment method used by the Department. However, the Petitioners' method was not precisely the same method as the statutory three factor apportionment method used by the Department. The Petitioners' method, in fact, yielded a lower tax for Petitioners. No substantive evidence was submitted which demonstrated that Petitioners' departure from the statutory three-factor apportionment method was justified. Therefore, since the evidence demonstrated that Petitioners deviated from the statutory three factor apportionment method and since the evidence did not demonstrate any reason for not utilizing that statutory method, the Department's revised assessment on this issue should be sustained. For taxable years ending 1983 and 1984, Florida had enacted Section 220.03(1)(bb), Florida Statutes (1983). That section established a special type of apportionment for businesses which constituted a "unitary business group." A "unitary business group" was defined as "a group of taxpayers related through common ownership whose business activities are integrated with, are dependent upon, or contribute to a flow of value among members of the group." Factors to be looked at in determining whether a group of taxpayers constituted a unitary business group included, but were not limited to, whether there was common purchasing of equipment, common accounting facilities, common legal representation, intercompany financing, joint efforts in expanding the business, shared officers and directors, submission of monthly financial statements, a uniform management theory, or an interchange of knowledge and expertise among the companies. See Rule 12C-1.51, Florida Administrative Code, and DR-Form F- 1061, "Instructions for Filing Under the Unitary Reporting Method". When, as in this case, a parent company owns or controls 50 percent or more of the outstanding voting stock of its subsidiaries, then the taxpayers have the burden to clearly establish that they are not a unitary business. Section 220.03(1)(bb), Florida Statutes. In this case, there was common ownership among the subsidiaries in that during the pertinent taxable years ending 1983 and 1984, David Shapiro and Company, Inc., owned or controlled all of the issued and outstanding voting stock of Leon Motor Lodge, Inc., Houston Motor Lodge, Inc. and Taylor Motor Lodge, Inc. Additionally, the directors and officers of the parent corporation and the subsidiary corporations were the same individuals and these dual officers made the decisions regarding the selection of managers, and the employment and replacement of managers. The hotel corporations did not maintain offices at the motel site for any of the officers or directors of the parent corporation or any of the officers of the individual hotel corporations. When these officers visited the motels, they would use whatever office or facilities were available. Local managers were responsible for the day to day operations of that manager's hotel. The day to day operations included decisions on the hiring and firing of employees, the disciplining of employees, the salaries of employees, and the hours, duties and responsibilities of employees. The managers made all decisions with regard to the advertising and public relations for that manager's motel 3/ Each manager was authorized to write checks from the manager's account associated with that manager's hotel. Each manager wrote all checks paying for the normal operational expenses incurred by that manager's hotel. Disbursements which were typically made by the local managers included soap, toilet tissue, replacement linens, maid's uniforms, kleenex and other minor purchases such as the purchasing of one television, as well as, minor repairs to rooms if needed. Each hotel had a bookkeeper or auditor who kept the books and recorded the sales receipts and disbursements for the hotel. The evidence was not clear whether such purchases and decisions were made independently by the local manager of each hotel or whether such purchases above a certain amount of money required the local manager to confer with the officers or directors of David Shapiro and Company, Inc., in Valdosta. Additionally, there was no substantial exchange of personnel between the hotel corporations. The parent corporation did not have a training program for its managers or employees. However, Howard Johnsons' did require that the managers attend a Howard Johnsons' management school to become acquainted with the requirements of Howard Johnsons' franchise agreements. Finally, each of the hotel corporations was represented by local counsel in each of the cities where that corporation was located. However, it should be noted that the Petitioners were commonly represented at the hearing by Larry Levy. The evidence also established that the corporate minute books of Petitioners and of the parent company were commonly maintained by one law firm, Kilpatrick and Cody, in Atlanta Georgia. The cost of these common legal services was included in the management fee which David Shapiro and Company charged each of the Petitioners. Considering all of the above factors, it would appear that, at least on the surface, each hotel corporation was a separate entity from its parent corporation and from its sister corporations. However three very important pieces of evidence substantially erode the reality of this surface independence. First, all major decisions regarding the three hotel corporations were made by David Shapiro and Company, Inc. Specifically, these decisions were made by the principal officers of the Shapiro company, each of whom were members of the Shapiro family. In the words of Carl Shapiro, "all the major purchases, we did ourselves." For example, the decision to buy cash registers from NCR, rather than from another supplier, and the shopping of such a purchase was made by either Victor Shapiro or Carl Shapiro. Major purchases such as fifteen beds, television sets, air conditioners, or the decision to incur the expenses involved in refurbishing one of the hotels to conform to Howard Johnsons' standards 4/ were made by the officers of the Shapiro company and not by the local managers of the three hotel corporations. Major repairs and purchases such as was caused at the Leon Motor Lodge by severe flooding were also made by the officers of the parent corporation. 5/ One prime example of the control of the parent corporations over the hotel subsidiaries occurred when the hotel corporations purchased the restaurant associated with that hotel. Originally, the Petitioners only operated the motels. The restaurant at each motel was operated by Howard Johnsons. However, prior to the period of the audit, Howard Johnsons, for business reasons, decided it would no longer operate the restaurants associated with its hotel franchises. While the purchase of the restaurants was not required by Howard Johnson's, the franchise owner/operators were forced to purchase and take over the operation of the restaurants in order to avoid having an empty and closed restaurant in front of the motels. David Shapiro and Company, Inc., believed that such closed restaurants in front of the motels would cause the operation of the motels to suffer drastically. Therefore, the Shapiros' decided that each hotel corporation would purchase and assume operation of that motel's adjoining restaurant. After the restaurants were acquired and operation commenced the restaurants were at all times managed by a manager who was a different person from the manager of the motel. Each restaurant manager had authority and control over that restaurant's operation similar to the managers of each hotel. Likewise, separate bank accounts and separate books of receipts and expenditures were maintained for each restaurant. Second, the bank accounts of each motel in each city consisted of (1) the manager's account which was sometimes referred to as a petty cash account; (2) the main account which was the account into which receipts from sales and rental of rooms were deposited on a daily basis; and (3) the bank credit card account which received credit card deposits. As indicated earlier, the managers of each subsidiary motel only had the ability to sign checks on a separate subsidiary account which was referred to as a petty cash account or managers account. The normal operational expenses incurred by the motel were written by the managers out of these manager's accounts. Funds in the manager's accounts varied and could range from $7,500.00 to as high as $12,000.00 or $15,000.00. Importantly, the manager's account for each hotel would be reimbursed from the hotel's main account on a regular basis. The checkbook for each hotel's main account, was maintained at the offices of David Shapiro and Company, Inc. in Valdosta, Georgia. The managers lacked any authority to write checks upon these accounts. The managers would ordinarily exhaust all funds in that manager's account in one week to ten days. Therefore, replenishment of the funds in a manager's account occurred every week to ten days. The manager's accounts required replenishment because deposits from sales and rentals were made daily into the main accounts. All of the main accounts were controlled in Valdosta by David Shapiro and Company. Daily, each manager or bookkeeper submitted a list of receipts and disbursements together with statements of purchases to Jerri Tomlinson, the office manager for Shapiro and Company, Inc. Ms. Tomlinson would mathematically verify the information she received from the hotels and computer code these records. These accounting reports and ledgers were then compiled by David Shapiro and Company's C.P.A. into computer printouts. These printouts were then delivered to Shapiro and Company, in Valdosta Georgia, which retained the data compilations for its records. Gerald Henderson's firm not only compiled the data described above, but it also functioned as the auditor for the parent and its subsidiary corporations. By this uniform system of management and integrated accounting controls, David Shapiro and Company, Inc. not only had access to vital management information, but also exercised the ability to control the level or amount of cash in each manager's petty cash account. In addition to the daily data it received, David Shapiro and Company, Inc., regularly reviewed a weekly report submitted by each hotel's manager and then determined how much money to transfer into that manager's account from the main account and whether the amount requested by management was "warranted." There is no question that by maintaining main accounts at the parent level, David Shapiro and Company, Inc. was able to directly control the expenditures of each hotel. That is, the main accounts were not only used to replenish the managers' operating accounts, but also, to directly control that manager's ability to make purchases for the hotel. Third, the parent corporation and its subsidiaries engaged in financially helping each other out when one corporation's sales were not sufficient to meet its overhead. This intercompany financing took the form of loans between and among the parent corporation and the subsidiary corporations. All the loans were interest bearing loans and met Federal IRS requirements. All of these loans were made at below market rate. An example of this intercompany financing occurred during the audit period. Leon Motor Lodge was losing money, and Taylor and Houston Motor Lodges were making money. There were several loans back and forth between the subsidiary companies. In referencing these loans, Carl Shapiro stated in his deposition that "there was a lot of them, and there were some big ones. I guess ten or fifteen or twenty thousand sometimes. It could amount to that much." This intercompany financing creates a material "flow of value" between and among the parent corporation and the subsidiary companies and demonstrates the unitary nature of Petitioners' businesses. Additionally, all three of the facts mentioned above, demonstrate that Petitioners applied a routine management theory to the hotel corporations in that routine day to day decisions were delegated to subsidiary managers but ultimate control over the family business was retained at the David Shapiro and Company level. This uniform management was accomplished through family control over main accounts, control over major purchasing or expansion decisions, control over the hiring and firing of local on site managers, and the level of funds to be entrusted to any given manager. Likewise, the shared officers of the subsidiary companies resulted in an interchange of knowledge and expertise among the corporations since the experiences learned by the Shapiro family in managing one hotel could be directly applied to the operations of the other corporations. Finally because of the Shapiro's uniform management and integrated accounting controls, significant economies of scale resulted. To begin with, the companies had the ability to make intercompany loans at below market rates. In addition, by maintaining the bank accounts of each hotel at the same bank, the companies enjoyed an economy of scale which resulted in discounts on banking service charges in excess of the discounts available to any of the subsidiaries individually. Similar economies of scale resulted in discounts to Petitioners on insurance rates. These discounts create a "flow of value" resulting from the unitary operations or pooling of resources by Petitioners. Clearly when all the facts are considered, Petitioners constituted a unitary business group as defined in Section 220.03(1)(bb), Florida Statutes. Therefore, the Department's revised assessments on this issue should be sustained.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is accordingly recommended that the Department of Revenue enter a Final Order sustaining the Department's revised assessments against Leon Motor Lodge, Inc., Taylor Motor Lodge, Inc., and Houston Motor Lodge, Inc., with the exception of the corporate income tax assessment against Taylor Motor Lodge, for the taxable year ending 1982, which has already been withdrawn. RECOMMENDED this 31st day of May, 1991, in Tallahassee, Florida. DIANE CLEAVINGER 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 31st day of May, 1991.
The Issue Whether Respondents violated the Florida Fair Housing Act as alleged in the Petition for Relief filed with the Florida Commission on Human Relations.
Findings Of Fact Petitioner, a 59-year-old male, alleges that he is a disabled and non-violent person, who was "illegally" evicted from an apartment unit in the Lakeside Apartment complex. At all times relevant to this proceeding, Respondents, Stephen McCormick and Scott Leonard (Lakeside Apartment Management or Respondents) were the owner and manager, respectively, of Lakeside Apartments. On August 9, 2005, Petitioner submitted a Rental Application and Information Release Form for Lakeside Apartments located at 4715 Land O'Lakes Boulevard, Land O'Lakes, Florida. On the application, Petitioner indicated that he would be the only person living in the apartment. Petitioner also noted that his dog would also be occupying the apartment. Petitioner's application did not indicate that he had any disability. However, at the time he submitted his rental application, he told the owner or manager of Lakeside Apartments that he had a mental disability. Petitioner's application was approved, and, on March 12, 2006, he moved into a one bedroom apartment on the second floor of Lakeside Apartments. The apartment that Petitioner occupied provided him with a "lake view." On or about June 2007, Petitioner was involved in a car accident. Two or three months later, Petitioner was involved in a second accident. In or about the fall of 2007, after the car accident, Petitioner requested that the manager assign him a first-floor apartment due to the problem with his ankles, presumably sustained in the car accident. This was an oral, not written request. At the time he made the oral request, and at no time thereafter, did Petitioner provide documentation of any type of disability, including one related to problems with his ankles. Moreover, Petitioner failed to provide a medical certification from a physician verifying that Petitioner's requested accommodation (i.e., assign him to a first-floor apartment) was necessary for his disability. The management of Lakeside Apartments began eviction proceedings against Petitioner in or about the spring of 2008. An order was issued on May 28, 2008. Petitioner moved out of Lakeside Apartments on or about May 31, 2008. The eviction action against Petitioner was initiated after Petitioner repeatedly exhibited inappropriate and disruptive behavior on the Lakeside Apartment property, as well violated the terms of his lease. Petitioner's conduct included the following: (1) driving on the Lakeside Apartment property while intoxicated; (2) calling "911" 17 times for no reason between April 1 through 9, 2008, resulting in the police being dispatched to the property; and (3) being disrespectful and causing disturbances with other tenants. Numerous tenants complained to Lakeside Apartment Management about Petitioner's inappropriate conduct on the property, including his drinking and being loud and disruptive. Petitioner violated the terms of his lease by having three unauthorized people living in his apartment unit. Even after eviction proceedings were underway, Petitioner was arrested for spitting on another tenant. In another incident, Petitioner's dog bit the manager at the Lakeside Apartment complex. Both of these incidents occurred on the Lakeside Apartment complex premises. After being evicted, Petitioner requested that Lakeside Apartment Management return his $400.00 security deposit. Lakeside Apartment Management refused to return Petitioner's $400.00 due to the condition of the apartment when Petitioner moved out. Upon inspecting the apartment unit after Petitioner moved, management found that the apartment had been damaged (i.e., holes in the walls) and was not cleaned. Petitioner failed to establish that his eviction was for any reason other than his disruptive and inappropriate conduct on the Lakeside Apartment premises. Moreover, Petitioner failed to establish that the Lakeside Apartment management's refusal to return $400.00 of his security deposit was for any reason other than the condition of the apartment unit when Petitioner moved out.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing Petitioner's Complaint and Petition for Relief. DONE AND ENTERED this 5th day of March, 2009, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 5th day of March, 2009.
The Issue Whether Respondents, Park Lane Condominium Owners Association, Jim Faix, and Polaris Property Management, Inc.,1 discriminated against 1 Respondents will collectively be referred to as Respondents, but Park Lane Condominium Owners Association will be referred to as the Association, and Polaris Property Management, Inc., will be referred to as Polaris. Jim Faix will be referred to as Mr. Faix. Petitioner, Benedict Theisen (Mr. Theisen or Petitioner), on the basis of Mr. Theisen’s disability in violation of the Florida Fair Housing Act (the Act), sections 760.20 through 760.37, Florida Statutes (2019),2 and, if so, the relief to which Petitioner is entitled.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing the following Findings of Fact are made: Petitioner is a 75 year-old male who resides in a second floor condominium unit located at 2155 Wood Street, Sarasota, Florida. Mr. Theisen has lived in his condominium unit for over 29 years. Beginning at age 59, Mr. Theisen’s health started declining, and he began taking his Social Security retirement at age 62. Mr. Theisen experiences shortness of breath and considerable pain in his feet and legs when walking or climbing stairs. He uses a motorized scooter when possible. Mr. Theisen has an unrebutted diagnosis of diabetic peripheral neuropathy. Mr. Theisen has a physical handicap as defined by the Act, section 760.22(7)(a). The Association is the managing body for the Park Lane Condominium (Condo), which is a 49 unit condominium located at 2155 Wood Street, Sarasota, Florida. The Condo was originally built as an apartment complex in the late 1950s, and converted to condominium ownership in 1979. James Faix is the manager for the Association. He holds a bachelor’s degree and has multiple certifications and licensures. Polaris is a property management company that engaged Mr. Faix as the Association’s manager. Mr. Theisen, acting on his belief that his request for a chair lift6 had been approved by the Association,7 received an estimate/invoice from Florida Surgical Supply for the installation and removal of a chair lift at his Condo 6 The term chair lift and stair lift were used interchangeably throughout the hearing and the emails. 7 No evidence was introduced at hearing that the Association had “approved” the chair lift in 2018. There was testimony that in the fall of 2018, Mr. Theisen and Mr. Faix discussed what requirements the Association (or Board) “would approve” for a chair lift. Mr. Theisen testified that he did not speak directly with any Board member about the stair lift. for $1,500.00. The “Delivery Day/Date” on the estimate/invoice was handwritten: “9/13/19.” Bryan Ball, the owner of Florida Surgical Supply, testified that he has been in business for 36 years, and has installed a number of chair lifts. He is not a licensed contractor, but has a Sarasota County business license, tax identification number, and liability insurance. Mr. Ball met Mr. Theisen through the church they attend, and Mr. Ball agreed to provide Mr. Theisen with a chair lift at cost. On Friday, September 13, 2019, Mr. Theisen sent an email to Mr. Faix, which reiterated Mr. Theisen’s understanding of the Association’s requirements for his reasonable accommodation of a stair lift: Hi Jim, Recalling your explanation of the board’s requirements in regard to their reasonable accommodation of a stair lift to wit: I [Mr. Theisen] must pay for the stair lift myself and the stair lift must be removed upon my death or permanent departure from my unit. Attached is the doctor’s prescription which is also being provided to the installer. The installer company has agreed to remove the stair lift upon my death or permanent departure from my unit. .. I do not have an exact figure for the electrical usage but it isn’t much. If it can be calculated that amount could be added to my monthly condo fee. I suppose the power supply will have that information printed on it. Thanks for your tracking that all down for me. I guess it was a year ago. I hope I thanked you then as well. Regards, Pete The “doctor’s prescription” from S. Lexow, M.D., provided, in pertinent part: Theisen, Pete Date: 9-12-19 ? Stair lift. Dx- Diabetic peripheral neuropathy (E13.42) [Dr. Lexow’s signature] Mr. Faix responded to Mr. Theisen via email later that same day. Mr. Faix’s response provided: Pete, I wish I would have had this in time for the board meeting last night. I’ll send it off to the board now and maybe I can get their consent. Will let you know as soon as I can. Stay tuned. ... Jim On Tuesday, September 17, 2019, Mr. Faix emailed Mr. Theisen the following: Pete, The stair lift has been approved. OK to proceed. They are putting together an agreement for you to sign regarding paying for the installation, continued maintenance, removal once you’re no longer using it, and restoring the lobby to its original condition after removal. These are the things we talked about, but well [sic] need to put in writing for the future. I’ll let you know when I get it and we can get together to sign it. In the meantime, I would like to create a file on this. Can you have your installer send me some technical data sheets on the product, and some drawings on how this will be installed and maybe some pictures if available I’m curious to know which side of the staircase it will be installed: along the wall or along the rail? It doesn’t matter, but I’m just curious. BTW, are you getting some sort of key switch installed? Is there a way to prevent others from using or abusing it? I would be concerned with the Association’s liability if an unauthorized person used it and injured themselves. Please ask your installer about this. He’s probably addressed this issue before. I’ve never been involved with a stair lift installation and it’s rather fascinating. Best regards, Jim Faix Polaris Property Management, Inc. Mr. Theisen responded to Mr. Faix via another email that reiterated his position that he would be okay with the agreement if it complied with the HUD guidelines. Mr. Theisen included in this email that: he had forwarded Mr. Faix’s request to the installer; confirmed there was a key switch; explained that the seat could be installed on either side of the stair well, and the seat and arms folded up to take up very little room; and stated that the installer paints the ends of the rails with high visibility paint so people could see them. Lastly, Mr. Theisen suggested that once the chair lift was installed there might be other residents who would want to use the lift, and they should plan for that issue. Later on September 17, 2019, a five-page “COVENANT RUNNING WITH THE LAND AND INDEMNIFICATION AGREEMENT” (Original Covenant) was emailed to Petitioner. The Original Covenant contained a lot of “legalese” phrases8 and 14 specific clauses that both the Association and Petitioner had to agree upon. For example, one “legalese” phrase was a recitation for the consideration for the agreement clause, (“NOW, THEREFORE, IN CONSIDERATION of Ten Dollars ($10.00), the permission and approval by the Board to allow the Owner to undertake and maintain the requested Improvement, and for other good and valuable consideration.”). Even later on September 17, 2019, Mr. Theisen’s reaction was emailed to Mr. Faix: That is ridiculous. The agreement is that the installer put it in and remove it when I die or move and I pay for it. No $10, no insurance, no hairsplitting none of all the rest of it. I told you that attorney was sneaky. Mr. Theisen provided another email to Mr. Faix which provided: “No $10, no insurance, no hairsplitting,” but Mr. Theisen did not elaborate on what else was “ridiculous” about the Original Covenant. Petitioner sent Mr. Faix another email stating that he (Mr. Theisen) was turning the Original Covenant over to “HUD,” and if HUD told Petitioner to sign it, he would. In addition to seeking HUD information and guidance, Mr. Theisen also arranged to consult with a legal aid attorney. Mr. Theisen could not get an appointment until sometime in October 2019. Late on September 18, 2019, Mr. Theisen emailed Mr. Faix the following: It is killed. Because the provider had a temporary over-stock of last year’s model (functionally and cosmetically the same as the latest model) that I 8 Upon review of the Covenant, the first “WHEREAS” clause provided that Mr. Theisen had requested permission to “install a motorized chair lift on the exterior of the building containing” his unit. Based on the oral descriptions and pictures entered in evidence, this was an obvious error in drafting, as the stairwell was within the lobby of the building. would have been able to take advantage of. About half price. I could afford it at that price. By the time the lawyers get done muddying the waters that will be over for a long time, perhaps forever. During season they will sell them out and have back-orders. Killed the deal. If the government websites are to be believed, the lawyers are wrong. Not just wrong, but deliberately wrong – they have to know what the government policy is. I have had business with that firm before, on another controversy with the Wood Street board. I don’t understand why the government doesn’t crack down on them, and/or crack down on the board. Maybe they have “friends”.[sic] I don’t blame you. I know the board always has a majority despot composition. And that law firm caters to despots. Mr. Theisen and Mr. Faix exchanged a number of emails between September 17 and October 1, 2019, regarding the Original Covenant and the legal aid appointment Mr. Theisen requested. Mr. Theisen emailed Mr. Faix that his legal aid appointment was scheduled for October. Mr. Theisen subsequently told the installer that the deal was killed. When Mr. Faix offered that the deal was not killed, just postponed, Mr. Theisen responded via email that by postponing the deal, it was killed. After his October 9, 2019, appointment with a legal aid attorney, Mr. Theisen repeated to Mr. Faix that the Original Covenant was “over- lawyered,” but did not provide specifics as to his objections. Mr. Theisen then filed his complaint with HUD and FCHR. In mid-October, Mr. Faix responded to an inquiry from HUD on behalf of the Condo, Polaris, and himself regarding the chair lift issue. Mr. Faix’s HUD response and his credible testimony confirmed that at the time of the HUD response, Mr. Theisen’s requested accommodation had been approved, but that Mr. Theisen objected to the Original Covenant. The outstanding problem was that the Condo, Polaris, and Mr. Faix did not know which provisions of the Original Covenant Mr. Theisen found objectionable. In late October, Mr. Faix, as the managing agent for the Condo and on behalf of Polaris, responded to a similar inquiry from FCHR. Mr. Faix again provided that Mr. Theisen’s requested accommodation had been approved, but that Mr. Theisen objected to the Original Covenant. Mr. Faix offered that Respondents were willing to work with Mr. Theisen, but were not aware of the exact objections that he held. Further, Mr. Faix indicated Respondents would participate in a conciliation attempt. At hearing (roughly 11 months after the Original Covenant was provided), Mr. Theisen verbalized his objections with the Original Covenant as the $10.00 consideration and paragraphs 3 through 7. At some point between October and January, FCHR provided Petitioner’s objections to Respondents. As a result of being told what the objections were, the Original Covenant was reduced from a five-page document to a one-page document, known as the Covenant (Second Covenant). This Second Covenant was provided to Mr. Faix and Mr. Theisen on or about January 23, 2020. Mr. Theisen shared his objections to the Second Covenant via an email to FCHR. Mr. Theisen provided that this Second Covenant was an improvement, but he could “not agree to numbers 2, 3, and 4.” Those sections provided: The Owner will hire an installer to install a motorized chair lift on the interior of the building containing Unit B-4 who is licensed and insured for furnishing such work and only such installer may furnish such work. Prior to commencing such work, the Owner or installer shall obtain any required building permits from the City of Sarasota or Sarasota County, as applicable, to allow for such work to proceed. Upon completion of such work, the work shall be inspected and approved by the appropriate government agency having jurisdiction of the work. At least two (2) business days before commencing such work, the Owner or installer shall furnish the Association, through its management, evidence that the installer is licensed and insured for furnishing such work, a copy of any permit issued for the work, the make and model of all equipment to be installed, the mechanical mounting and electric hookup, power requirements, and the scheduled installation and repair dates and times. Mr. Theisen objected to the requirement that the installer be licensed and insured, because the chair lift was going to be installed by a mechanic, who according to Mr. Theisen did not need to be certified. Mr. Theisen repeatedly testified that no building permits were necessary, and there was no need for the completed work to be inspected or approved by an appropriate government agency. Other than his self-serving testimony, Mr. Theisen did not provide competent evidence that permits, licenses, and inspections were not necessary. Mr. Ball testified he provided the $1,500.00 installation invoice offer to Petitioner in September 2019, but “pulled out” of the invoice offer in January 2020, when the project became too costly for him. Mr. Theisen notified Mr. Faix at least two times after receiving approval that the chair lift installation was “killed.” However, both parties attempted to come to a positive resolution. The term “condominium” is a form of real property ownership created pursuant to chapter 718, Florida Statutes. A condominium is comprised entirely of a collection of units and common areas along with the land upon which it sits. Units may be owned by one or more persons and those unit owners own a pro rata share of all the common elements. Each unit owner has exclusive ownership or rights to their unit’s interior space. Each unit owner also owns an undivided interest with the other unit owners in the common elements, which interest cannot be separated from the unit. Those common elements are controlled by a condominium owners’ association. Generally, the condominium owners’ association is responsible for the condominium’s assets as well as its operation in accordance with standards established by state and federal law, local ordinances, and the governing documents upon which the entity itself was created. This includes the repair and maintenance of the common areas, including the building(s) exterior. The condominium owners’ association involves a commitment to all the owners to make decisions on behalf of all owners. One of a condominium owners’ association’s goals is to ensure that the facility’s common elements are kept in a reasonable condition for everyone’s use. It is common practice to use covenants running with the land to allow unit owners to make improvements to the common elements within reason. Although the undersigned was not provided with a copy of the Condo’s Declaration or by-laws, Mr. Faix provided the requisite insight with respect to the Association. In this instance, there are 49 units in the Condo. The Association is composed of five elected volunteer members. The Association received Mr. Theisen’s request for a reasonable accommodation, the installation of a stair lift, and approved it. The Association, via Mr. Faix, notified Mr. Theisen of the approval, and that an agreement was being prepared for the future. The Covenant was not an unreasonable request, but one for the viability of the Condo. There was an unfortunate breakdown in communication and lengthy delay between Mr. Theisen and the Association over his objections to that agreement, caused in large part by Mr. Theisen’s refusal to identify his specific objections. This does not negate the Association’s approval of the requested accommodation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief filed by Petitioner Benedict Theisen. DONE AND ENTERED this 25th day of September, 2020, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK 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 25th day of September, 2020. COPIES FURNISHED: Tammy S. Barton, Agency Clerk Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399-7020 (eServed) Benedict Peter Theisen Pete Theisen 2155 Wood Street B 4 Sarasota, Florida 34237 (eServed) Mark W. Lord, Esquire 46 North Washington Boulevard, Suite 16D Sarasota, Florida 34236 (eServed) Cheyanne Costilla, General Counsel Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399-7020 (eServed) Paul Edward Olah, Esquire Law Offices of Wells Olah, P.A. 1800 Second Street, Suite 808 Sarasota, Florida 34236 (eServed) Jim Faix Park Lane Condominium Association No. 376 8437 Tuttle Avenue Sarasota, Florida 34243
The Issue Whether an assessment should be made against Petitioner for additional sales and use tax, interest, and penalty in connection with the business operations of WHI Limited Partnership relating to Wyndham Harbour Island Hotel in Tampa, Florida, for the audit period July 31, 1990, through June 30, 1995, and, if so, in what amount.
Findings Of Fact On March 1, 1988, Lincoln Island Associates No. 1, Limited (Lincoln Island Associates) and WHI entered into a 30-year Lease and Agreement (Lease), whereby WHI leased from Lincoln Island Associates a tract of land on Harbour Island, Tampa, Florida, and the Harbour Island Hotel located on the tract of land. Section 5.5 of the Lease provides: Use of Leased Property. Lessee may use the Leased Property only for the purpose of operating the Hotel (and ancillary activities) as a hotel and will not do or permit any act or thing that is contrary to any Legal Requirement or Insurance Requirement, or that may impair the value (subject to ordinary wear and tear), useful life or usefulness of the Leased Property or any part thereof, or that constitutes a public or private nuisance or waste of the Leased Property or any part thereof provided that Lessee may use the Leased Property for purposes other than as a hotel with the prior written consent of the Lessor. The Department is authorized to administer the tax laws of Florida pursuant to Section 213.05, Florida Statutes (1990- 1994).3 The Department conducted an audit of WHI to determine its compliance with Florida sales and use tax laws. The audit covered the period from July 31, 1990, through June 30, 1995. Based on the audit, the Department determined that the hotel property was a multiple-use property and was subject to taxable allocation pursuant to Section 212.031, Florida Statutes. The Department considers to be taxable the portions of the hotel property which are used by the hotel operator for functions that do not involve guest accessibility or use, are used by the hotel operator to carry on commercial businesses serving the general public, and are not used by the hotel operator to serve guests exclusively at no charge as part of the guests' accommodations. WHI takes the position that the hotel property is not a multiple-use property; the hotel property is used exclusively as dwelling units; the lease agreement between WHI and Lincoln Island Associates is a capital lease and thus a sale; the Department is estopped from assessing a tax based on a previous audit in which the Department found that the hotel property was not subject to taxation; Lincoln Island Associates is the proper party against whom the assessment should be made; and the Department improperly determined the amount of taxable property based on an unpromulgated rule by using the square footage of the property. The Department conducted a sales and use tax audit for the audit period of December 28, 1988, through May 31, 1990 (first audit), on Wyndham Hotel Co., Ltd (Wyndham) on the same property at issue in the instant case. During the first audit, WHI and Wyndham had a principal and agency relationship. WHI leased the hotel property from Lincoln Island Associates, and Wyndham operated the hotel. WHI and Wyndham are separate entities and have separate taxpayer identification numbers. In the first audit, the Department originally determined that 15.892 percent of the hotel property was not subject to rentals to guests and was therefore taxable. Wyndham protested the assessment, and a letter of reconsideration was issued on May 14, 1992, finding that zero percentage of the property was taxable. The 1992 letter of reconsideration was drafted by Richard Parsons, who was a tax audit specialist with the Department and whose responsibilities included handling protested audit cases. He acknowledged that the reconsideration letter was in error and that the property subject to taxation should not have been reduced to zero percentage. He attributes this error to the auditor having revised the audit based on an updated floor plan submitted by Wyndham and his adoption of the auditor's revisions. When asked why he did not change the assessment when it came to him, Mr. Parsons stated: Well, because when it came back to me, the audit had been revised and at the time that this was issued, we were under a heavy backlog and it probably wasn't a material amount of money, so we issued the NOR [Notice of Reconsideration] as it came back. The Department audited WHI for the hotel property for the period July 31, 1990, through June 30, 1995 (the second audit). Araks Navasartian conducted the second audit for the Department. She personally observed the layout of the hotel and whether guests were permitted to visit or were restricted from areas of the hotel. Ms. Navasartian correctly found that the hotel property was multiple-use property based on the hotel's rental of conference rooms and banquet halls; the operation of a bar and catering services; the use of a loading dock; the use of kitchens by hotel employees; the use of laundry areas; the utilization of warehouse storage, a phone room, and maintenance area; and the operation by WHI of accounting, security, and personnel offices. Ms. Navasartian requested WHI to provide her with plans or schematic drawings of the hotel so that she could determine the areas that were being used by WHI. She was not provided with any plans or drawings of the hotel, but WHI did provide a list of areas used by WHI with a square footage measurement of each area. However, the auditor was unable to identify the areas in the hotel itself based on the list provided by WHI. Because WHI did not provide sufficient information on which Ms. Navasartian could determine the amount of square footage that was being used by WHI rather than hotel guests, she calculated the square footage of the various areas by measuring the length of her pace, pacing the areas, and calculating the square footage based on the number of paces and the length of her pace. Ms. Navasartian determined the square footage that was being used exclusively for guests and the square footage that was being used by WHI and calculated the percentage of the property which would be subject to taxation. She did not calculate the commercial rentals tax on parts of the hotel that were being used as sleeping quarters or guest rooms. Ms. Navasartian determined that approximately 25 percent of the hotel was being used by WHI for taxable purposes and applied that percentage to the total rent to determine the taxable portion of the lease payment. The use of square footage to determine the ratio for calculating the amount of rental charge that would be taxable was an appropriate method to determine the amount of tax that was due on the multiple-use property at issue. While the second audit was being conducted, WHI did not suggest or offer an alternative method for determining the taxable portion of the commercial rentals portion of the lease with Lincoln Hotel Associates. After the audit was completed, the Department issued a Notice of Proposed Assessment of Tax, Interest and Penalty to WHI for the audit period July 31, 1990, through June 30, 1995. On August 23, 1996, WHI made a payment of $108,950.61, which was applied to reduce the sales and use tax liability. On February 17, 1997, WHI filed a protest letter of the tax assessment and provided to the Department an old set of blue prints which may not have accurately reflected the current areas in the hotel. On October 15, 1997, the Department issued a Notice of Decision, which reduced the taxable percentage of lease payments and stated: The auditor also included conference and meeting rooms as taxable that WHI has since established were rerented with taxes paid on those charges. These areas have been reclassified as nontaxable for purposes of proration. The auditor requested and was not provided with a blueprint to assist her in determining how various portions of the property were used. As a result, she was forced to estimate non-exempt usage based on visual inspection. A blueprint has now been provided. It is, however, almost 14 years old and may not accurately reflect current size and usage of all areas. For purposes of this notice, the list of areas the auditor determined were taxable have been used. Certain areas that are either rerented or are used by hotel guests at no additional cost to them have been eliminated. Space used by WHI for storage, security, maintenance, laundry, management and accounting offices is treated as taxable. These areas are used by WHI for functions that do not involve guest accessibility or use. Space used for the restaurant and bars is taxable, as is the kitchen. These areas are used by WHI to carry on commercial businesses serving the general public, not to serve hotel guests exclusively at no charge as part of their accommodations. The square footage of taxable areas as estimated by the auditor have been compared to the blueprints and adjusted if more accurate measurements were available for any particular area. As a result of eliminating certain areas from the taxable category and revising the estimated measurements where the blueprints contain a clearly comparable area, the percentage of taxable rent is reduced to 13.50 percent for purposes of this Notice. WHI filed a Petition for Reconsideration dated November 13, 1997. Because the blueprints which WHI had submitted with its protest dated February 17, 1997, were old, WHI hired a contractor to determine the areas and square footages dedicated to various uses. In the petition, WHI contended that the taxable rental percentage should be five percent or less based on the new square footage dimensions provided by its contractor. WHI also raised the issue of its reliance on the Department's first audit in which the Department found that the taxable rental percentage of the hotel property was zero. Such reliance, WHI concluded, constituted grounds for finding doubt as to liability and served as a basis for the Department compromising WHI's liability pursuant to Subsection 213.21(3)(a), Florida Statutes (1997). WHI knew that the Department was in error when the Department found the taxable rental percentage for the first audit was zero. During the second audit, an employee of WHI, Tray Seamans, told Ms. Navasartian that five percent would have been agreeable in the first audit, but the Department "goofed up" and reduced it to zero. On December 23, 1997, the Department issued a Notice of Reconsideration and recalculated the percentage of taxable real property rentals as follows: Taxpayer has now provided an updated list of areas and square footages prepared by a building contractor. Based on this list, 6.90 percent of Taxpayer's space is used as offices, 4.29 percent is "support space," 65.79 percent is "guest space" and 23.102 percent is "public space." Taxpayer asserts that the taxable percentage should be approximately 5 percent or less. The guidelines for proration were discussed earlier. All of the office space (6.90 percent) is taxable. All of the support space (kitchen, laundry and storage) is taxable. The guest space (guest rooms and corridors on guest room floors) is exempt. The Taxpayer treats all "public space" as not taxable. This includes function spaces and corridors and the entire lobby (except for the kitchen and office spaces, which are specifically identified and classified as office or support space). The lobby level also includes a bar, restaurant space, front lobby area, cooler room, storage space, phone system space, registration area, and a room labeled by the auditor as "President's Club." According to Taxpayer, the President's Club is actually a meeting room that is re-rented. The registration area provides services to overnight guests exclusively. The remaining lobby areas identified by the auditor are taxable. Using the more accurate measurements of the contractor rather than the auditor's visual estimates, the additional taxable lobby space is 10,745 square feet. When this is added to the office space and support space as measured by Taxpayer's contractor, the total taxable square footage is 37,485, which is 15.684 percent of the total 238,994 square foot facility. The auditor's report and the contractor's measurements are the best information available upon which to base proration. For purposes of this Notice, it is determined that 15.684 percent of the real property rentals paid by the Taxpayer for its facility are taxable. Based on the recalculation of the percentage of taxable real property, the Department assessed the tax liability for sales and use as of December 15, 1997, at $303,865.14, which included a penalty of $83,132.69 and interest accrued December 15, 1997, less the $108,950.61 payment in August 1996. Interest continued to accrue at the rate of $36.32 per day for the sales and use tax. The tax liability for the indigent care surtax totaled $24,165.72, which included interest through December 15, 1997. Interest continued to accrue at the rate of $4.11 per day for the indigent care surtax. During the protest period and after WHI filed its petition for reconsideration, the Department made it clear to WHI that the Department would consider methodologies, other than the use of square footage, to determine the portion of the property rentals which would be taxable. WHI did not suggest another method for attributing the taxable portion of the hotel property not used exclusively as dwelling units. When conducting the second audit of WHI's hotel operations, the Department did not rely on any method found in any Department training manual to compute the amount of tax on WHI's multiple-use property. The Department's auditors are not required to follow any particular methodology in assessing the liability for multiple-use property, and have some discretion in determining the manner in which the audit is conducted. The Department uses at least three different methodologies for allocating the taxable and non-taxable portions for multiple-use properties under Section 212.031, Florida Statutes: square footage, revenue, and percentage of sales. When the square footage method is used, as it was in the instant case, the percentage of taxable property is determined by comparing the square footage of hotel property not used exclusively by the guests to the total square footage of the hotel property. If a revenue method is used, the Department would look at the revenue generated by the different areas of the property and compare that to the total revenues of the property. For example, if a department store subleases a portion of its store to a jewelry concessionaire and the jewelry concession takes up one percent of the square footage of the store, but generates ten percent of the revenues of the store, the Department could value the jewelry location as ten percent of the value of the building rather than one percent. If a percentage of sales method is used, the Department would look at the percentage of sales of the concessionaires. For example, in one case a store's prime lease was based on a percentage of sales that took place for the entire store. Parts of the store were subleased to concessionaires, and the concessionaires' rent was based on a percentage of their sales. The Department determined what portion of the total sales were attributable to individual concessionaires and gave credit to the taxpayer for that amount. A revenue method of allocation of taxes for multi-use hotel property is used for several hotels in the Orlando area. The taxpayers are leasing property from the Walt Disney Corporation and are operating hotels on the property. This method of allocation based on revenue is sometimes referred to as the Disney method. Typically the cases that involve an assessment method other than square footage are a result of an agreement between the auditor and the taxpayer that the assessment method is a fair way to determine the non-taxable portion of the commercial lease. The vast majority of the audits involving the use of square footage to determine the tax liability is a result of an agreement between the auditor and the taxpayer that square footage is appropriate. The Lease between WHI and Lincoln Island Associates identifies WHI as the Lessee and Lincoln Island Associates as the Lessor. Pursuant to the Lease, WHI is to pay Lincoln Island Associates basic rent, additional rent, and contingent rent. With certain exceptions, Lincoln Island Associates is required by Section 6 of the Lease to "keep the foundation, roof and structural portions of the Improvements in good order, condition, and repair." Section 21.9 of the Lease provides that before Lincoln Island Associates may sell the leased property, but "before any sale of the Leased Property to an Unaffiliated Assignee, the Lessor shall first offer the Leased Property to the Lessee for sale on the same terms and conditions offered to such Unaffiliated Assignee for the sale of the Leased Property." Section 39 of the Lease provides: "Lessee shall have the right to purchase the Leased Property on the last day of the Term, at a price equal to the Fair Market Sales Value of the Leased Property on the date of such purchase." Fair Market Sales Value is defined in Section 34 of the Lease as follows: the fair market sales value that would be obtained in an arms'-length transaction between an informed and willing buyer and an informed and willing seller, under no compulsion to buy or sell, and neither of which is a subsidiary, Affiliate or a Person related to the Mortgagee, the Lessor, or the Lessee, for the purchase of the Leased Property, assuming that the Leased Property is in the condition and repair required to be maintained by the terms of the Lease (including compliance with all Legal Requirements[)]. Section 35 of the Lease provides the following: End of Lease Term. Upon the expiration or other termination of this Lease, except an expiration or other termination at which Lessee purchases the Leased Property, Lessee, at its expense, shall quit and surrender to Lessor the Leased Property in good order and condition, ordinary wear and tear excepted, in compliance with all Legal Requirements, provided that the Lessor shall pay to the Lessee amounts for certain additions and improvements not removed from the Hotel as provided in Section 6. (emphasis in original) Attached to the Lease as Exhibit D is a tax indemnity agreement dated March 1, 1988, between WHI and Lincoln Island Associates. The agreement provides: SECTION 2. Tax Assumptions. Basic Rent during the Term has been calculated by the Lessor, and the Lease is being entered into by the Lessor partly on the basis of certain Federal income tax assumptions, including the following assumptions referred to herein as the "Tax Assumptions": Lessor will, as owner of the Leased Property, be required and entitled to take into account in computing its tax liability all items of income, gain, loss and deduction regarding the Leased Property allowed by law (including depreciation deductions with respect to the Improvements); The Lease will be a true lease for Federal income tax purposes, and throughout the Term of the Lease, the Lessor will be treated as the owner and the lessor of the improvements; From and after the commencement of the Term of the Lease, the Lessor, as the owner of the Improvements, will be entitled to such deductions and other benefits as are provided by the Code to the owner of Improvements, and such deductions and benefits will be allowed, including, but not limited to depreciation deductions with respect to 100 percent of the Lessor's tax basis for the Improvements at the commencement of the Term of the Lease, determined under Section 168 of the Internal Revenue Code of 1954 for 15-year real property ("Depreciation Deductions"); The Lessor will not realize any income in connection with the transaction in any taxable year of the Lessor during the Term other than Basic Rent and Contingent Rent in the amounts and at the times set forth in Sections 2 and 3 of the Lease. The Lessor will not realize any recapture of investment tax credit previously claimed with respect to the Leased Property (the "Investment Tax Credit"). SECTION 3. No Inconsistent Action. Neither the Lessee nor any Affiliate of the Lessee will claim any tax benefits, file any tax returns or take any other actions that would be inconsistent with Section 2(a), (b), and (c). Tori Lambert, a certified public accountant licensed in Texas, reviewed the lease between WHI and Lincoln Island Associates and concluded that WHI was characterizing the Lease as a capital lease for financial accounting purposes. Her determination that it was a capital lease was based on her finding that the life of the lease was equal or greater than 75 percent of the economic life of the hotel and that the net present value of the cash flows were greater or equal to 90 percent of the fair value of the asset. The expected useful life of the hotel was 40 years and the lease term was 30 years. The value of the hotel at the inception of the lease was 18.3 million dollars, and the value of the lease payments was 18 million. Ms. Lambert is not licensed in Florida. She has never conducted a Florida sales or use tax audit. From 1990 to the time of her deposition in 2002, none of Ms. Lambert's practice has related to Florida sales and use tax matters. She does not consider herself an expert in any aspect of Florida tax law. Linda Bridges, an attorney with over 20 years' experience in tax law, opined that for the purposes of Chapter 212, Florida Statutes, the Lease was a true lease and not a capital lease or sale. Ms. Bridges is currently a revenue program administrator with the Department. She has worked for the Department since 1996 and is familiar with the Florida sales and use tax laws. In determining whether the Lease is a true lease or a sale in the form of a capital lease, she considers whether there is a purchase at the end of the term of the lease and whether it is for fair market value or for a nominal amount. If the property is to be purchased at the end of the lease for the fair market value, it is not generally viewed as a capital lease. WHI did not present any evidence that it paid the taxes that are being assessed to its landlord, Lincoln Island Associates, for payment to the Department.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered: Denying WHI's request for relief. Assessing the sales and use tax, indigent care surtax, penalty, and interest as set forth in the Notice of Reconsideration dated December 23, 1997. DONE AND ENTERED this 29th day of July, 2005, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of July, 2005.
