The Issue Whether Respondent is guilty of failure to account for and deliver funds to the person entitled thereto and/or guilty of fraud, misrepresentation, breach of trust, or dishonest dealing in a business transaction.
Findings Of Fact At all times relevant hereto, Irving Halsey Brain, Jr., was licensed as a real estate broker, and, with his wife, owned the stock of Jay Hearin, Inc. On October 10, 1983, Respondent negotiated a lease of property between Emily R. Hammer, lessor, and Suncoast Heat Treatment, Inc., lessee, (Exhibit 1) for a period of three years, beginning November 1, 1983, at an initial rental of $2,225 per month plus sales tax with annual adjustments for changes in the consumer price index, and the option to renew the lease for an additional three years at the expiration of the initial lease period upon the same terms and conditions. This lease was renewed November 1, 1986, to expire October 31, 1989. On May 22, 1986, Respondent negotiated the lease agreement between Emily R. Hammer, lessor, and Whitaker Roofing, Inc., lessee, for a building for a period of one year from June 1, 1986 to May 31, 1987, at a monthly rental of $1,250 per month plus sales tax, with options to renew the lease in 1987 and 1988 on similar terms and conditions with adjustment to the rent based upon the consumer price index. Both of these leases provided in clause 21 that the lease was procured through the efforts of Jay Hearin, Inc., who was to collect all rentals coming due from which, as compensation for procuring the lease, the lessor authorized Jay Hearin, Inc., to deduct 8 percent on the Suncoast Lease and 7 percent on the Whitaker lease and remit balance to lessor. Jay Hearin, Inc., was also authorized to pay any invoices applicable to the leased premises which had been approved by the lessor and to deduct the amount so paid. In February and March, 1987, Whitaker roofing did not remit rent payments to Hearin Realty, and the monthly computer printout Owner's Statements to Mrs. Hammer show only rental payments from Suncoast. However, the monthly statement for April 1987 shows Whitaker made the February, March and April payments, and these payments were remitted to Mrs. Hammer. The May and June statements do not show payments from Whitaker and, due to an office error, the June payment from Suncoast was not remitted to Mrs. Hammer. The July statement shows receipt of rent from Whitaker for May and June and for Suncoast for July. No rental payments were received from either tenant in August, and the September statement reflects payments from Suncoast for August and September. During this period of sporadic collections, Mrs. Hammer became upset at not getting her full rental payments, and attempted several times to contact Respondent Brain without success. Brain testified he also tried to contact Mrs. Hammer without success. Mrs. Hammer telephoned the tenants about their rental payments, and they told her they had paid Respondent. In August 1987, Mrs. Hammer engaged another real estate agency to manage the property for her and unilaterally terminated her contract with Respondent contained in Exhibit 1. The new agent advised the tenants to submit rentals to him. On the September 1987 Owner's Statement, Respondent listed the Suncoast rental payments for August and September, deducted his commission, added the June payment which had not been remitted, deducted the rental commission for the balance of the lease for both Suncoast and Whitaker and submitted to Mrs. Hammer a check for the balance of $463.63. This was not accepted by Mrs. Hammer, and she engaged the services of an attorney who filed suit against respondent and Jay Hearin, Inc. The suit alleged failure to remit rents for the months of June, August and September 1987, from Suncoast in the total amount of $6,955.14 and converting these payments to his own use; and for converting rental payments from Whitaker Roofing for the months of July and August 1987, in the total amount of $2,486.06 to his own use. This complaint alleged these conversions of funds constituted civil theft and demanded triple damages (Exhibit 3). Instead of filing an answer to the complaint, Respondent submitted a letter (Exhibit 5) to Mrs. Hammer's attorney, Stephen Evans, on February 18, 1988, contending Mrs. Hammer had failed to comply with the terms of the lease agreement. The attorney for Mrs. Hammer obtained a default judgment against Respondent for triple the sums alleged to have been converted in the total amount of $28,353.60 plus costs of $105.00 and attorney's fee of $680.00 (Exhibit 2). Respondent then obtained the services of an attorney but was unable to get the judgment set aside (Exhibit 7). In 1989 Respondent submitted, through his attorney, $7,200.00 to Mrs. Hammer which apparently represents the figures shown on the September 1987 Owner's Statement without a deduction for future commissions plus interest and attorney's fees. Prior to the filing of this administrative complaint Jay Hearin, Inc., filed for bankruptcy and has been declared bankrupt. In his proposed recommended order, Respondent indicated he has also filed personal bankruptcy, but no evidence in this regard was presented at the hearing.
Recommendation It is recommended that the charges contained in the administrative complaint filed April 26, 1990 against Irving Halsey Brain, Jr. be dismissed. DONE and ENTERED this 17th day of December, 1990, in Tallahassee, Florida. K. N. AYERS 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 17th day of December, 1990. Appendix Accepted Rejected. Respondent was licensed as a broker Accepted Accepted, however, the provision quoted from the lease is Rejected as not being an accurate quote. Rejected. See Exhibit 4. Accepted only insofar as included in HO's #6,7, and 8 Accepted Accepted Treatment accorded Respondent's proposed findings: 1, 2, 3, and 4 Rejected as unsupported by evidence presented at this hearing. Accepted Accepted but for last sentence which is a legal conclusion, not as a fact. Accepted Accepted Accepted only insofar as included in HO's #6,7, and 8 (?) Accepted Accepted Accepted to the extent Respondent submitted $7,200 to Mrs. Hammer. Rejected. Evidence was presented that Jay Hearin, Inc. filed for bankruptcy, but the record does not indicate Respondent filed personal bankruptcy. Rejected as legal argument. COPIES FURNISHED: Steven W. Johnson, Esquire Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, FL 32802 Irving Halsey Brain, Jr. 334 State Street Commerce, GA 30529 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Kenneth Easley General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0792
The Issue Appellants raised two issues for resolution in this appeal. First, Appellants seek reversal of the LOU and Resolution No. 06-20, and recognition of a lawful non-conforming vacation rental use of the Property. Second, Appellants seek clarification that they are not subject to any provisions of section 134-1, Monroe County LDC, regarding the Property.
Findings Of Fact At all times material, Respondent, Gary Dean Upton, was a licensed real estate broker having been issued license number 0090905. Respondent was the broker for the other Respondent herein, Dean Upton Realty, Inc., which has its offices situated at 7045 W. Broward Blvd., Ft. Lauderdale, Florida. At times material herein, Respondent, Dean Upton Realty, Inc., was a corporation licensed as a real estate broker having been issued license number 0213092. On March 11, 1983, a hearing was held before an arbitration panel of the Ft. Lauderdale Area Board of Realtors in response to a complaint filed by Respondent herein, Upton, claiming a commission from another realtor based upon an exclusive rental agreement for property owned by Rex and Martha Anderson. (Tr pages 23, 28) Subsequently, the Ft. Lauderdale Area Board of Realtors filed a complaint with the Department of Professional Regulation alleging possible perjury in connection with Upton's testimony at the hearing or forgery in connection with the exclusive listing agreement with the Andersons. Unrefuted testimony shows that during a meeting at Anderson's home in October, 1982, Rex Anderson initialed a listing brochure for the Anderson property. (Tr page 111-112; Respondents' Exhibit 3; Anderson deposition at page 9; referring to the March 22, 1983 letter at Petitioner's Exhibit 3, page 60, paragraph 3) Anderson claimed he did not intend to give Upton an exclusive listing. However, because of the strain he was under at the time the agreement was purportly executed, he could not swear that he did not initial the document. Anderson's testimony about being under a "severe strain" and unable to remember what occurred in connection with the exclusive listing agreement is not inconsistent with that of the only other eye witness who has testified regarding the transaction, Kevin Scott, a former associate of Upton who is presently involved in hotel management at the Royal Orleans Hotel in New Orleans, Louisiana. (Tr page 108) The day Upton visited the Anderson residence to obtain the listing, Rex Anderson, who had been laid off from his job as an airline pilot, appeared "very upset," and appeared to be drinking. (Tr page 110) Thereafter, Upton and Scott left the Anderson residence for a brief period. When they returned, Anderson was a "very flustered, very nervous and an agitated individual." (Tr page 114) The credible testimony of persons familiar with Upton's reputation for honesty in the community evidenced that he was not reputed to be a person who would forge someone's name on a listing agreement. (Testimony of Clemente, Apuna and Marion Upton at Tr pages 126, 143 and 145, respectively) Based on Respondent's testimony that Anderson initialed the exclusive listing agreement, Kevin Scott's testimony which was corroborative of Respondent Upton's testimony and Anderson's inability to state, without evasiveness, what occurred in connection with the exclusive listing agreement respecting the subject property, there is no competent and substantial evidence herein to establish that Respondent Upton either forged Rex Anderson's initials to the exclusive listing agreement or that he gave perjured testimony before the Fort Lauderdale Area Board of Realtors. On October 17, 1984, Respondent Upton pleaded nolo contendere to the felony offense of possession of an unlawfully issued driver's license. (Petitioner's Exhibit 5) The plea resulted in a withheld adjudication and a sentence of 18 months probation plus the payment of fines and court costs. In making the nolo contendere plea, Respondent Upton considered that such was in his best-interests; however, he felt that he was not guilty and has been a model probationer since October, 1984. (Testimony of Susan Jean Davis, Respondent Upton's correctional officer) Respondent has completed a 30-day residential treatment program for alcoholism at the Beachcomber in Delray Beach, Florida. Since that time, he has also participated successfully in the Broward County Commission of Alcoholism, Inc. DWI program. (Respondents' Exhibits 4, 5 and 8) Those persons who have had the opportunity to observe Respondent since his bout with alcoholism consider him a reformed alcoholic. (Testimony of former judge, Lawrence C. Roberts; Marion Upton and former Broward sheriff and judge, George Brescher) Kendall D. DeVeaux, Broward County's chief evaluator for the substance abuse program had the opportunity to evaluate and supervise Respondent Upton since his DWI and drug abuse offenses. DeVeaux's testimony corroborates that of Roberts and Marion Upton respecting Upton's reformation. Based on the foregoing factual findings and conclusions, and the mitigating factors introduced herein, I hereby make the following:
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Respondent Gary Dean Upton's real estate broker's license number 0090905 be suspended for a period of six (6) months. In all other respects, it is RECOMMENDED that the complaints in Case Numbers 84-0138 be DISMISSED. RECOMMENDED this 8th day of October, 1985, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1985.
Findings Of Fact Roy Ahringer, hereinafter referred to as "Respondent" has held real estate broker-salesman license number 0158288 at all times material hereto. From approximately August 15, 1983 to November 20, 1983, and from approximately March 1, 1984 to April 30, 1984, Respondent was licensed and operated as a real estate salesman in the employ of Highlands Holiday Realty, Inc., a licensed brokerage Corporation. On or about August 11, 1983, Highlands Holiday Realty, Inc., obtained from Mildred M. Haydon, as owner, a six month listing to sell certain property designated as Lot 9, Block 353, Section 26 Lake Placid, at a price of "any reasonable cash offer". By the terms of this listing agreement, the listing would continue beyond the six month period "until this agreement is revoked by a ten day's written notice" delivered by the owner to Highlands Holiday Realty, Inc. There is no evidence that this listing agreement was ever revoked and it remained in effect during the time Respondent was employed at Highlands Holiday Realty, Inc. Respondent was therefore an agent for Mildred M. Haydon. While this listing agreement was in effect, Respondent obtained a sales contract on March 29, 1984, executed by Robert J. and Marjorie P. Mitchell, as purchasers, for the purchase of Mildred M. Haydon's Lot 9 at a total purchase price of $5000. On April 30, 1984, the Mitchells executed two checks totaling $5000 to Highlands Holiday Realty which were to be placed in a trust account for this transaction. The contract was initially prepared omitting the name and address of the seller but was later completed by Respondent by having a secretary at Highlands Holiday Realty Inc. type in the names of Roy Ahringer and May Ahringer as sellers. On March 31, 1984 Respondent and his wife, May Ahringer, executed a contract for sale and purchase of Mildred M. Haydon's Lot 9 for the purchase price of $2220. Mildred M. Haydon executed this contract for sale and purchase on April 4, 1984. Subsequently this transaction closed and Respondent, with his wife, purchased the subject property for $2220 on or about May 23 or 24, 1984. The evidence presented establishes that Respondent did not explain to the Mitchells or to Mildred M. Haydon that he would be purchasing the property for $2220 from Mildred M. Haydon and then reselling the property to the Mitchells for $5000. Mildred M. Hayden was not informed of the Mitchell's offer of $5000 for her lot prior to her sale of the lot to Respondent. It is Respondent's contention that he told the Mitchells he was having a problem with the lot owner and that he might have to buy it from her in order to be able to resell it to the Mitchells. However, no evidence supporting this assertion was presented by Respondent, and in any event there is no evidence that the Mitchells or Mildred M. Haydon knew about the difference in the purchase and resale prices which would have resulted from this transaction. When the circumstances surrounding this transaction became apparent to Ronald N. Weisser, broker and owner of Highlands Holiday Realty, Inc., he stopped the Ahringer-Mitchell transaction, and the $5000 paid by the Mitchells for this lot has been returned to them. Respondent still owns the subject property. Mildred M. Hayden was damaged in an amount of approximately $2780 due to Respondent's failure to present the Mitchells' offer to her. The Mitchells were damaged in an amount equal to the interest they were required to pay on money borrowed for the purchase price during the period when the funds were retained in a non-interest bearing escrow account. The parties were allowed to submit 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 recommended that a Final Order be issued suspending Respondent's license for a period of two (2) years and imposing an administrative fine in the amount of one thousand dollars ($1000). DONE and ENTERED this 10th day of June, 1985 at Tallahassee Florida. Hearings Hearings DONALD D. CONN, Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 10th day of June, 1985. COPIES FURNISHED: James Gillis, Esquire Post Office Box 1900 Orlando, Florida 32802 Roy Ahringer 232 Harmony Avenue Lake Placid Florida 33852 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Whether Respondent, a “seller of travel,” owes Petitioners a refund for misrepresentation of travel services offered pursuant to an agreement between the parties.
Findings Of Fact Axis is a “seller of travel” and at all times material to this matter, was located in St. Augustine, Florida. On or about October 8, 2017, Petitioners attended a presentation that was conducted by Axis. Petitioners were enthusiastic about the travel service and were impressed by the presentation. Petitioners frequently traveled to trade shows and believed the services would help reduce travel costs. They were particularly interested in vacation packages because they intended to travel to Cancun, Mexico. During the presentation, they were told of the bonus week fee of $97.00. Ms. Page asked specific questions about the costs for a vacation package for Cancun and whether there would be any hidden or additional fees. The presenter assured Petitioners there would be no hidden or additional fees. After the presentation, Petitioners jointly executed a Reservation Services Agreement (Agreement) for a non-exclusive license to access the travel network for a fee of $4,394.00. The fee was paid in two installments of $2,000.00 and one installment of $394.00. The agreement provides, in pertinent part, as follows: Customer desires to enter into this Agreement reservation services applicable to vacation packages, nightly stays, bonus weeks, fantasy getaways, activities and excursions, cruises, car rentals, golf discounts, dining discounts, hotels and luxury condominium and villa rentals (“Network Benefits”). The Customer acknowledges that the Network Benefits may be changed from time to time. * * * 8. Discount Variation All benefits and discounts conferred through this Agreement vary greatly based on the characteristics of the vacation unit or type, the time of year, space availability, and/or the rates charged by those parties listing the accommodations for rent through the Network. Customer acknowledges that he/she has been advised that while some discounts may be significant, these same accommodations may not enjoy deep discounts at other times and that deep discounts are not available for some vacation units or types at any time. Customer acknowledges that the value in this License is expected to be realized over time contingent on the frequency of the use and that the Purchase Price is not guaranteed to be recovered on a single vacation, the first year, if Customer does not take vacations, or if the vacation choices are not tailored offerings. * * * 17. Member Best Price Guarantee Customer shall receive the Best Price Guarantee if Customer finds lower prices on Equal Arrangements through a competing vendor. To access the guarantee, Customer must secure a confirmed reservation through the Network that displays the Member Price Guarantee checkmark, pay for the reservation in full and receive a valid confirmation number. The sections on the website included in the Best Price Guarantee are vacations (i.e. Accommodations, Cruises, Vacation Packages, and Worldwide Tours) and vacation add-ons (i.e. Car Rentals, Activities and Golf). Airfare not included. Eligible claims must be submitted within 24 hours from the time the original fully paid reservation is made and meet all the Terms and conditions listed in full on the Website, must be in US dollars, must be an identical comparison to what was purchased and must be publicly viewable via the internet (i.e. the general public must be able to view the rate on a website, as it does not apply to consolidator fares, fares that have been acquired through auction or bid, or any Internet fares that cannot be independently verified as to the price and exact itinerary) and available and bookable (i.e. the rate is currently available and can be reserved online). Equal Travel Arrangements shall be defined as the exact same arrival and departure dates, the exact same property, the exact same room or cabin classification, the exact same room or cabin size, the exact same cruise line, and the exact same itinerary. Reservations excluded from the Best Price Guarantee include Non- Refundable reservations, Airfare and reservations made or purchased with Reward Credits in full or in part. If the claim is found to be valid, Customer will be credited with 110% of the difference to (sic) in the form of Reward Credits. * * * 25. Entire Agreement This instrument contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect to such subject matter. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. * * * By signing below, the parties to hereby execute this Agreement on the Execution Date of this Agreement as identified herein. The Licensee acknowledges and agrees that this Agreement is subject to all terms and conditions set forth herein. The Licensee further acknowledges having read the entire Agreement and agreed to each of its provisions prior to signing below. * * * YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD (3) CALENDAR DAY AFTER THE DATE OF THIS CONTRACT. UPON CANCELLATION, YOU WILL RECEIVE A FULL REFUND, WITHOUT ANY CHARGES OR PENALTY, WITHIN TEN (10) DAYS UNLES SOONER REQUIRED BY APPLICABLE LAW. THIS RIGHT IS NONWAIVABLE. TO EXERCISE YOUR RIGHT TO CANCEL, YOU MUST SEND A WRITTEN NOTICE STATING THAT YOU DO NOT WISH TO BE BOUND BY THIS CONTRACT. THE NOTICE MAY BE SENT BY EMAIL, FACSIMILE: 713-535-9239, OR BY DEPOSIT FIRST-CLASS POSTAGE PREPAID, INTO THE UNITED STATES MAIL: 13416 SOUTHSHORE DR. CONROE, TX 77304. In November 2017, Petitioners used the network software for the first time. Petitioners searched for accommodations in Cancun, Mexico at an all-inclusive resort. The resort had a price of $129.00 instead of $97.00 and a mandatory resort fee in the amount of $135.00 to $185 per person per day. Petitioners found accommodations at three different all-inclusive resorts, which also required an additional mandatory resort fee. While rooms were available for the price offered by using the software, Petitioners were dissatisfied because the resorts required a resort fee. At an unknown time after using the software, Petitioners called Respondent but did not receive a return call. On December 14, 2017, Petitioners sent text messages to Jonicar Cruz seeking a refund because the service was not what was represented to them at the presentation. Ms. Cruz offered to assist Petitioners with the software program. Ms. Cruz also directed Petitioners to contact another staff member, as she was no longer an employee of the company at that time. Petitioners’ calls and emails to the other Axis staff member were left unanswered. On February 7, 2018, Petitioners filed a complaint with the Better Business Bureau, and on February 13, 2018, Petitioners filed a complaint with the Office of Citizen Services, Florida Attorney General’s Office, and the Better Business Bureau. In April 2018, Petitioners filed a complaint with the Department. Petitioners admitted that they did not submit a written letter of cancellation of the agreement during the three-day cancellation period. Ms. Cruz testified that she did not receive any written request to cancel the agreement during the cancellation period. Ms. Cruz also testified that while she could not affirm certain representations made by the presenter, she explained to Petitioners the process for the price match guarantee, and that a resort fee may be associated with all-inclusive resorts.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioners, John Elkins and Mary Page’s, claim against Axis and the surety bond be DENIED. DONE AND ENTERED this 4th day of September, 2018, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN 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 4th day of September, 2018. COPIES FURNISHED: W. Alan Parkinson, Bureau Chief Department of Agriculture and Consumer Services Rhodes Building, R-3 2005 Apalachee Parkway Tallahassee, Florida 32399-6500 (eServed) John E. Elkins Mary Page Apartment 1605 7507 Beach Boulevard Jacksonville, Florida 32216-3053 (eServed) Michael Borish Axis Getaways Systems, LLC 965 North Griffin Shores Drive St. Augustine, Florida 32080-7726 Axis Getaways Systems, LLC Suite B 108 Seagrove Main Street St. Augustine, Florida 32080 Travelers Casualty Surety Company of America One Tower Square Hartford, Connecticut 06183 Bryan Greiner Axis Getaway Systems, LLC 912 Ocean Palm Way St. Augustine, Florida 32020 Tom A. Steckler, Director Division of Consumer Services Department of Agriculture and Consumer Services Mayo Building, Room 520 407 South Calhoun Street Tallahassee, Florida 32399-0800 Stephen Donelan, Agency Clerk Division of Administration Department of Agriculture and Consumer Services 407 South Calhoun Street, Room 509 Tallahassee, Florida 32399-0800 (eServed)
The Issue The issue for determination is whether Petitioner is liable for the Local Option Tourist Development Tax assessment as set forth by Respondent's Notice of Reconsideration and Notice of Final Assessment, dated March 10, 2005, for the audit period October 1, 2000 through September 30, 2003.
Findings Of Fact At all times material hereto, the Resort operated as a hotel licensed under the provisions of Chapter 509, Florida Statutes, and was located at 501 East Camino Real, Boca Raton, Palm Beach County, Florida 33432. At all times material hereto, the Resort’s taxpayer identification number was 65-0762249 and Florida tax registration number was 60-03-1871843-99. No dispute exists that Palm Beach County enacted the TDT, authorized by Section 125.0204, Florida Statutes. No dispute exists that TDT is levied on room rental revenues in Palm Beach County pursuant to Section 125.0104, Florida Statutes. The Resort is subject to and is a dealer under the TDT. Pursuant to an ordinance enacted by Palm Beach County, the Resort is obligated to collect and remit to Palm Beach County the TDT due on taxable transactions. A TDT audit of the Resort’s business was performed by the Tax Collector covering the period from October 1, 2000 through September 30, 2003. The Tax Collector relied upon the information and documents provided by the Resort in performing the audit. During the audit period, guests desiring to reserve and book a room at the Resort were required to pay a deposit, which guaranteed the reservation, of one night’s room within 10 days of making the reservation. No matter what the length of stay, the deposit did not vary. The Resort did not collect any sales tax or TDT on the deposits. A deposit confirmation form (Confirmation Form) always confirmed the deposit. The front of the Confirmation Form contained the abbreviation “Guar” for guaranteed and, among other things, referred the guest to the reverse side of the Confirmation Form for important information (“PLEASE SEE REVERSE SIDE FOR IMPORTANT ADDITIONAL INFORMATION”). The guarantee, as indicated on the back of the Confirmation Form, was that the accommodations were guaranteed to the confirming-guest from the scheduled date of arrival through 2:00 a.m. of the next day. The back of the Confirmation Form provided in pertinent part: DEPOSITS – A deposit of one night’s room revenue is required within 10 days of making a reservation. Advance deposits made via credit card will be billed at the time of booking. Your deposit will hold a room until 2 A.M. of the day following your scheduled arrival date. Upon arrival, the deposit is applied to your last confirmed night of the reservation. In the event of an early departure, the deposit is non- refundable unless the Resort is notified prior to or at check-in. CANCELLATIONS – Deposits are refundable in the event of cancellation, providing notice is received at least 14 days prior to scheduled arrival date between January 4th to April 30th, 7 days between May 1st to May 27th and October 1st to December 19th, and 72 hours between May 28th to September 30th. Cancellations, without penalty, for the Holiday/Christmas period (December 19th through January 3, 2004), must be received prior to November 30, 2003 or deposit will be subject to full forfeiture, in accordance with established resort policies. Please be sure to record your cancellation number to insure proper return. ACCOMMODATIONS – We will make every effort to meet requests for specific room types, views, and bedding preferences, however, on occasion, we cannot always accomplish such requests, and reserve the right to provide alternate accommodations. For the majority of the audit period, forfeited deposits were identified as “no-show” revenue. A block of rooms may be held available and reserved for a group. Fees are charged for unused rooms within a reserved room block. These fees are “attrition fees.” The Resort was unable to separately identify no-show revenue attributable to reservations for which persons failed to check-in by the cutoff day and time, as opposed to reservations for which persons canceled but failed to cancel within the required time-period. Furthermore, the Resort was unable to separately identify the general category of no-show revenue attributable to unused rooms within a reserved room block. For the first four months of the audit period, the Resort asserted that it mistakenly included attrition fees in the no-show revenue. For the remainder of the audit period, the Resort asserts that attrition fees were not included in the no- show revenue. The Resort was unable to separately identify attrition fees in the no-show revenue. Therefore, the attrition fees could not be separately factored out of the no-show revenue. Consequently, an inference is drawn and a finding of fact is made that, as to the first four months of the audit period, all revenue shown as no-show revenue is considered as no-show revenue. During the audit period, the Resort identified no-show revenue in its monthly financial reports totaling $2,139,252.00. No TDT was collected by the Resort on the no-show revenue of $2,139,252.00 collected during the audit period. No dispute exists that, during the audit period, the TDT was due on the rental of the Resort’s rooms and that the TDT was collected and remitted to the Tax Collector by the Resort. Having conducted the audit, on March 1, 2004, the Tax Collector issued a “DRAFT” Notice of Intent to Make Audit Changes (Draft Notice). The Draft Notice indicated, among other things, that $88,775.28 in TDT was due, which included TDT in the amount of $85,570.08 on the no-show revenue of $2,139,252.00 and included denied exempt rental in the amount of $3,205.20; and that a credit in the amount of $19,583.64 was due, as an overpayment of tax, discovered by the auditor. Furthermore, the Draft Notice indicated that, as a result, a proposed total tax assessment was due in the amount of $149,252.07, which included penalties in the amount of $44,387.64 and interest in the amount of $35,672.79 as of March 31, 2004, with additional interest of $57.74 per day through the date of the Resort’s payment. After the issuance of the Draft Notice, the Tax Collector’s auditor met with a representative of the Resort. Of particular interest to the Resort was to return to its monthly financial reports and to separately indicate in the monthly financial reports the categories of no-show revenue representing failure to check-in, failure to timely cancel, and failure to use rooms in block (attrition revenue). However, the Resort was unable to identify and separately indicate these categories of revenue. Subsequently, the Resort was to provide the Tax Collector’s auditor with an eight-month sample of financial records “to address the issue of no show revenues versus cancellation fees.” The eight-month sample would “represent the transactions for the entire audit period.” However, the Resort was unable to provide data that would allow for the separation of the categories. The sample was not provided. After the sample was not provided by the Resort, the Resort took the position that none of its no-show revenue was subject to the TDT. On June 7, 2004, after the Resort changed its position, the Tax Collector issued a Notice of Intent to Make Audit Changes (Notice). The Notice indicated, among other things, that, as of June 21, 2004, the tax assessment for the audit period was in the amount of $153,986.75, which represented TDT on no-show rentals in the amount of $85,570.08, a denial of exempt rentals in the amount of $3,205.20, a credit for overpayment of TDT in the amount of $19,583.64, penalties in the amount of $44,387.64, and interest in the amount of $40,407.47, plus additional interest of $57.74 per day through the date of payment. As to no-show revenues, the Notice indicated that such revenues were taxable and also cited, as supporting authority, Florida Administrative Code Rules 12A-1.061(5)(b) and 12A- 1.061(5)(b)2. Citing Florida Administrative Code Rule 12A- 1.061(5)(b), the Notice provided the following: “Rental charges or room rates include deposits or prepayments that guarantee the guest or tenant the use or possession, or the right to the use or possession, of transient accommodations during a specified rental period under the provisions of an agreement with the owner or owner’s representatives of transient accommodations. The owner or owner’s representative is required to provide transient accommodations to any guest or tenant that enters into such an agreement and pays the required prepayment or deposit, even when the guest or tenant does not occupy the accommodation.” Citing Florida Administrative Code Rule 12A-1.061(5)(b), the Notice provided the following: “Example: A hotel guarantees that it will provide room accommodations on a designated date to potential guests that make reservations and pay a required room deposit. To receive a refund of the required room deposit, the potential guest must cancel his or her reservation by 4:00pm of the designated date. A potential guest that has made reservations and has paid the required room deposit fails to arrive at the hotel on the designated date to use the reserved room accommodations. Because the potential guest fails to cancel the reservations, the guest forfeits the room deposit. Even though the guest did not occupy a room at the hotel, the forfeited room deposit is subject to tax.” Further, the Tax Collector indicated in the Notice that the “stated policy of [the Resort] that a guest’s deposit will hold a room (which is a guarantee to the guest that they will have a room available) until the day following their scheduled arrival date. . . whether or not the guest shows up. It is irrelevant whether the guest shows up or not on the scheduled date of arrival, their deposit has paid for a room and this is a taxable transaction.” As to attrition and cancellation fees, the Notice indicated that such fees were considered "penalties" and were, therefore, "not taxable" revenue “because if a guest cancels their reservation too late, their deposit is not refunded even though a room is not held for them.” The Resort requested an audit conference. On August 6, 2004, an audit conference was held at which the parties were unable to reach an agreement. On August 9, 2004, the Tax Collector issued a Notice of Proposed Assessment (Proposed Assessment). The Proposed Assessment indicated that the total assessment, including tax, penalty and interest accrued through August 20, 2004, was in the amount of $157,451.15. Additionally, the Proposed Assessment contained, among other things, a re-citation of Florida Administrative Code Rules 12A-1.061(5)(b) and 12A-1.061(5)(b)2. The Resort protested the Proposed Assessment. By letter dated August 8, 2004, the Resort requested from the Department of Revenue (DOR) a Letter of Technical Advice (LTA) regarding the taxation of cancellations and no- shows.2 By letter dated October 27, 2004, a representative of DOR issued a LTA on the facts and circumstances presented to DOR by the Resort, providing that the LTA was “not an official statement or opinion of this Department [DOR] but, instead, represents the opinion of the writer” and that if the Resort wished “an official binding statement on the issues, you may file a written request for a Technical Assistance Advisement . . . .”3 A finding of fact is made that the LTA was not binding on the parties. The LTA was not an opinion of DOR or a statement of policy by DOR on the taxation of cancellations and no-shows. The Resort did not request a Technical Assistance Advisement from DOR. On January 4, 2005, the Tax Collector issued a Notice of Decision (Decision) denying the Resort’s protest and a Notice of Final Assessment (Final Assessment). The Decision contained, among other things, a part of the provision of Florida Administrative Code Rule 12A- 1.061(3)(a)—“Rental charges or room rates for the use or possession, or the right to the use or possession, of transient accommodations are subject to tax. . .”—and the provisions of Florida Administrative Code Rule 12A-1.061(5)(b). The Final Assessment indicated that the total assessment was in the amount of $141,515.48, plus additional interest of $19.40 per day, as of January 1, 2005, through the date of payment. The total assessment was reduced due to the Tax Collector discovering an error in the calculation of the interest. The Resort requested a reconsideration of the Final Assessment. The Tax Collector denied the request for reconsideration. The Resort requested a hearing pursuant to Chapter 120, Florida Statutes (2005).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Palm Beach County Tax Collector enter a final order affirming the final assessment of Local Option Tourist Development Tax against Boca Raton Resort and Club, for the audit period October 1, 2000 through September 30, 2003, in the total amount of $141,515.48 (which includes tax, penalties, and interest), plus additional interest of $19.40 per day, as of January 1, 2005, through the day of payment. DONE AND ENTERED this 1st day of June, 2006, in Tallahassee, Leon County, Florida. S ERROL H. POWELL 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 1st day of June, 2006.
The Issue The issue presented is whether Respondents Great American Financial Network, Inc., and Edward Bates are guilty of the allegations in the Administrative Complaint filed against them, and, if so, what disciplinary action should be taken, if any.
Findings Of Fact From November 1, 1983, through December 31, 1998, Respondent Great American Financial Network, Inc. (hereinafter "Great American"), was registered with the Department as a licensed securities broker/dealer. Between May 24, 1994, and June 18, 1999, Respondent Edward Bates was registered with the Department as an associated person of Great American. Between May 1994 and December 31, 1998, Bates was a control person, president, treasurer, and secretary of Great American. Between May 1997 and December 31, 1998, Bates was the owner of at least 75 percent of Great American. At all times material hereto, Bates was also president and control person of Great American Resorts of Florida (hereinafter "Resorts"). Resorts and Great American were owned by Great American Resorts and Hotels (hereinafter "Resorts and Hotels"). Bates was also president and chief executive officer of Resorts and Hotels. Great American, Resorts, and Resorts and Hotels were affiliated at the time the promissory notes in question were offered and sold to investors. Resorts issued unsecured promissory notes that were sold to investors by Great American and by Bates personally. The unsecured notes were not registered with the Department and were not exempt from registration. The Department received consumer complaints from investors that there had been a default in payment of interest and principal on the unsecured promissory notes sold by Great American and Bates. The Department initiated an investigation and obtained a search warrant in April 1998. The records gathered revealed that there were at least 58 non-accredited investors who had invested in the unsecured promissory notes sold by Great American and Bates. The Department interviewed 25 of them. The age of the investors ranged from 50 to 80, with the majority of them in their 60s and 70s. The investors were induced to participate in the unsecured note program by representations that the notes were a sound investment. Great American and Bates specifically told the investors that the notes were as safe as annuities or certificates of deposit. Great American and Bates specifically told the investors that the notes were guaranteed. The investors believed they were investing in notes backed by a company that owned properties, specifically hotels. However, the company had no assets and no revenue except from the sale of the unsecured promissory notes. Further, the money invested by new investors was used to make some payments to complaining investors and to pay the company's bills. A private placement memorandum is the equivalent of a prospectus. The investors were not provided with any disclosure documents. Specifically, they were not provided with a private placement memorandum, even though one was available. Bates instructed other employees of Great American not to provide any investor with the private placement memorandum because it contained disclosures which reflected that the investment was "highly speculative" and that investors should not purchase the notes unless they could "afford to lose all the money invested." Bates personally prepared a packet that was given to investors. It only contained the first page of the private placement memorandum and the signature page. The investors were not told of any risks from investing in the notes. Had they been told, they would not have invested because safety of principal was their primary concern. The investors were not suitable for Great American's note program because the risk of loss was too great. The majority of the investors were retirees, and they had used their retirement savings to purchase the notes from Great American and Bates. The unsecured notes sold by Great American and Bates were a very risky investment and were not, therefore, suitable for retirees wanting to preserve their capital. Bates pressured the other brokers at Great American to place their investors into the notes. He told them they would not receive a paycheck unless they did. As a result, investors were switched from other extremely safe, secure investments with guaranteed returns into the risky unsecured notes. Great American and Bates conducted seminars that were advertised in the newspaper to find new investors and induce them to purchase the unsecured notes. The advertisements misrepresented that the investment carried a high interest rate and was guaranteed and insured. Bates personally made the presentation and personally sold the unsecured notes to attendees from the seminars.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered: Finding Respondents Great American and Bates guilty of the allegations contained in the Administrative Complaint filed against them; Revoking all registrations held by Respondents Great American and Bates; Ordering Respondents Great American and Bates to cease and desist from their violations of Chapter 517, Florida Statutes, and the rules promulgated pursuant to that chapter; Ordering Respondents Great American and Bates jointly and severally to pay to the Department an administrative fine in the amount of $290,000; and Ordering Respondents Great American and Bates jointly and severally to pay to the Department the additional amount of $500 as attorney's fees attendant to the Department's motions for sanction. DONE AND ENTERED this 10th day of December, 1999, in Tallahassee, Leon County, Florida. LINDA M. RIGOT 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 10th day of December, 1999. COPIES FURNISHED: Honorable Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Harry Hooper, General Counsel Department of Banking and Finance Fletcher Building, Suite 526 101 East Gaines Street Tallahassee, Florida 32399-0350 Diane E. Leeds, Esquire Office of the Comptroller 111 South Sapodilla Avenue, Suite 211 West Palm Beach, Florida 33401 Great American Financial Network, Inc. c/o Great American Casino, Inc. 5805 State Bridge Road, Suite G-286 Duluth, Georgia 30097 Edward Bates c/o Great American Casino, Inc. 5805 State Bridge Road, Suite G-286 Duluth, Georgia 30097
The Issue Whether Respondent acted as a broker or sales associate without being the holder of a valid and current broker or sales associate license, in violation of Subsection 475.42(1)(a), Florida Statutes (2004),1 and, therefore, in violation of Subsection 475.25(1)(e), Florida Statutes; and Whether Respondent published or caused to be published an advertisement for the sale of real properties, advertising himself to be a broker, at the time Respondent's license was in inactive status for failure to renew, in violation of Subsection 475.25(1)(c), Florida Statutes, and Florida Administrative Code Rule 61J2-10.025.
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.165 and Chapters 120, 455, and 475, Florida Statutes. Petitioner has jurisdiction over disciplinary proceedings for the Commission. Petitioner is authorized to prosecute administrative complaints against licensees within the Commission's jurisdiction. From April 18, 2002, through September 30, 2003, Respondent was an active sales associate in association with Caldwell Banker Residential Real Estate, Inc., a brokerage corporation located at 5981 Catheridge Avenue, Sarasota, Florida 34232. Respondent's Florida real estate sales associate license, number 95480, was involuntarily placed on inactive status due to non-renewal during the period October 1, 2003, through August 15, 2004. On or about February 22, 2004, Respondent published or caused to be published an advertisement for the sale of real properties with the South Florida Sun Sentinel, and in that advertisement, Respondent held himself out to be a realtor in the State of Florida, associated with Caldwell Banker. From August 16, 2004, through the present, upon the late renewal of his license, Respondent is listed as an inactive sales associate.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order finding Respondent guilty of violating Subsections 475.42(1)(a), 475.25(1)(a), and 475.25(1)(c), Florida Statutes, and Florida Administrative Code Rule 61J2-10.025 and, therefore, Subsection 475.25(1)(c), Florida Statutes, as charged in the Administrative Complaint; suspending Respondent's license for a period of one year; fining Respondent the sum of $1,000; and requiring that Respondent pay fees pursuant to Subsection 455.227(3), Florida Statutes, for investigative costs, in the amount of $841.50. DONE AND ENTERED this 4th day of December, 2006, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE 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 4th of December, 2006.
