10-002905RX Barbara M. Blanco vs. Department Of Business And Professional Regulation, Regulatory Council Of Community Association Managers Status: Closed DOAH Final Order on Tuesday, September 21, 2010.

Summary: Sentence in Florida Administrative Code Rule 61E14-2.00(5), which provides that a licensee "shall be deemed responsible" for the misconduct of his agent, constitutes an invalid exercise of delegated legislative authority.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BARBARA M. BLANCO , )

)

Petitioner, )

)

vs. )

) Case No. 10 - 2905RX

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

REGULATORY COUNCIL OF COMMUNITY )

ASSOCIATION MANAGERS , )

)

Respondent. )

)

FINAL ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing by tele phone conference call on

August 23, 2010 .

APPEARANCES

For Petitioner: Howard J. Hochman, Esqui re

Law Offices of Howard J. Hochman

7695 Southwest 104th Street, Suite 210

Miami, Florida 33156

For Respondent: Thomas E. Dennis, Esquire

Dror Lewy, Esquire

Office of the Attorney General

PL - 01, The Capitol

Tallahassee, Florida 32399

STATEMENT OF THE ISSU E

T he issue in this case is whether a single sentence in

Florida Administrative Code Rule 61E14 - 2.001(5), which provides

that a licensee "shall be deemed responsible" for the miscondu ct

of his agent, constitutes an invalid exercise of delegated

legislative authority.

PRELIMINARY STATEMENT

On M ay 27 , 20 1 0, Petitioner Barbara M. Blanco ("Blanco")

filed with the Division of Administrative Hearings a Petition for

Administrative Determin ation of the Invalidity of Administrative

Rule. Blanco alleged that a portion of Florida Administrative

Code Rule 61E14 - 2.001 (5) (the "Control of Others Rule") is an

invalid exercise of delegated legislative authority. The

Control of Others Rule provides , in its entirety, as follows:

Control of Others. A licensee shall not

permit others under his or the management

firm ' s contr ol to commit on his or the

firm' s behalf, acts or omissions which, if

made by either licensee, would place that

licensee in violat ion of Chapter 455, 468,

Part VIII, F.S., or Chapter 61 - 20, F.A.C. or

other applicable statutes or rules. A

licensee shall be deemed responsible by the

department for the actions of all persons

who perform community association management

related function s under his or its

supervision or control.

Fla. Admin. Code R. 61E14 - 2.001(5)(emphasis added.) The

sentence at issue, which is underlined above, will be referred

to as the "Imputed Responsibility Provision."

The Control of Others Rule was adopted by the Regulatory

Council of Community Association Managers (the "Council"),

which, like a regulatory board, exists within the Department of

Business and Professional Regulation (the "Department"). See

§ 468. 43 15(1), Fla. Stat. Blanco is licensed in Florida a s a

community association manager and thus is within the regulatory

and disciplinary jurisdiction of the Council and the Department.

As of this writing, Blanco is the subject of a disciplinary

proceeding in which it is alleged that she personally, or her

employees, committed certain disciplinable offenses. See

Department of Business and Professional Regulation, Council of

Community Association Managers v. Barbara M. Blanco , DOAH Case

No. 10 - 2681PL. Blanco thus is substantially affected by the

Control of Others Rule generally, and the Imputed Responsibility

Provision in particular.

On June 2, 2010, the undersigned conducted a scheduling

conference, at which counsel for both parties appeared by

telephone. During the discussion, the parties agreed that an

evidentiary hearing would not be necessary because the grounds

upon which Blanco bases her contention that Rule 61E14 - 2.001(5)

is invalid do not raise any disputed issues of material fact,

but rather present questions of law. Concurring with this

assessme nt, the undersig ned directed that, in lieu of an

evidentiary hearing, the parties would present their respective

arguments first in writing according to a briefing schedule

prescribed by order, and later at an oral argument to be

conducted by telephone , wh ich would serve as the final hearing .

Thereafter, the parties fully briefed the issue of whether

the Imputed Responsibility Provision is an invalid exercise of

delegated legislative authority. Then, pursuant to notice, an

oral argument was held on August 23, 2010. The parties have

maintained throughout this proceeding that there are no material

facts in dispute; at no time has either party urged that an

evidentiary hearing be held. Having carefully considered all of

the parties' respective arguments, th e undersigned concludes

that it is both possible and appropriate to decide the disputed

legal issue on the existing record, without further

supplementation. Because no evidence was offered or received,

n o findings of fact are set forth in this Final Order .

Unless otherwise indicated, citations to the Florida

Statutes refer to the 20 1 0 Florida Statutes.

CO NCLUSIONS OF LAW

1 . The D ivision of Administrative Hearings has personal

and subject matter jurisdiction in this proceeding pursuant to

Sections 120.56 , 120.569, and 120.57(1), Florida Statutes, and

the parties have standing.

2 . In a challenge to an existing rule, the "petitioner has

[the] burden of proving by a preponderance of the evidence that

the existing rule is an invalid exercise of delegated

le gislative authority as to the objections raised." See

§ 120.56(3)(a), Fla. Stat.

3 . The Fundamental Rules of Decision 1

The starting point for determining whether an existing or

proposed rule is invalid is Section 120.52(8), Florida Statutes,

in which the legislature defined the term "invalid exercise of

delegated legislative authority." Pertinent to this case are

the following provisions:

A proposed or existing rule is an invalid

exercise of delegated legislative authority

if any one of the following applies:

* * *

(b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by s. 120.54(3)(a)1.; [or]

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to whic h is required

by s. 120.54(3)(a)1.

§ 120.52(8), Fla. Stat.

4. As used in Section 120.52(8), the term "rulemaking

authority" " means statutory language that explicitly authorizes

or requires an agency to adopt, develop, establish, or otherwise

create any statement coming within the definition of the term

'rule.'" § 120.52(17), Fla. Stat. The term "l aw implemented "

is defined to mean " the language of the enabling statute being

carried out or interpreted by an agency through rulemaking. " §

120.52(9), Fla. Stat.

5 . Also included in Section 120.52(8) , Florida Statutes,

is a concluding paragr aph ÏÏ commonly called the "flush - left

paragraph" ÏÏ in which the legislature expressed a clear intent to

curb agenc y rulemaking authority:

A grant of rulemaking authority is necessary

but not sufficient to allow an agency to

adopt a rule; a specific law to be

implemented is also required. An agency may

adopt only rules that implement or interpret

the specific powers and duties granted by

the enabling statute. No agency sh all have

authority to adopt a rule only because it is

reasonably related to the purpose of the

enabling legislation and is not arbitrary

and capricious or is within the agencyÓs

class of powers and duties, nor shall an

agency have the authority to implemen t

statutory provisions setting forth general

legislative intent or policy. Statutory

language granting rulemaking authority or

generally describing the powers and

functions of an agency shall be construed to

extend no further than implementing or

interpre ting the specific powers and duties

conferred by the enabling statute.

The legislature enacted the very same restrictions on rulemaking

authority in Section 120.536(1), Florida Statutes.

6 . The meaning of the flush - left paragraph was the subject

of a pa ir of influential appellate decisions, starting with

Southwest Fla. Water Mgmt. Dist. v. Save the Manatee Club, Inc. ,

773 So. 2d 594 (Fla. 1st DCA 2000). There, the First District

Court of Appeal considered a challenge to rule provision s which

granted exe mptions to certain permitting requirements based upon

prior governmental approval. By statute, the agency had been

delegated the power to establish exemptions, but the power was

qualified: only exemptions that did not "allow significant

adverse [environm ental] impacts to occur" could be granted. Id.

at 600.

7 . Examining the then - recently revised flush - left

paragraph, the court found, as an initial matter, that the

language prohibiting agencies from adopting any rules except

those "that implement or i nterpret the specific powers and

duties granted by the enabling statute" is clear and

unambiguous. Id. at 599. The court observed that, "[i]n the

context of the entire sentence, it is clear that the authority

to adopt an administrative rule must be based on an explicit

power or duty identified in the enabling statute. Otherwise,

the rule is not a valid exercise of delegated legislative

authority." Id.

8 . In the opinion's most memorable paragraph, the court

encapsulated its position as follows :

[T] he authority for an administrative rule

is not a matter of degree. The question is

whether the statute contains a specific

grant of legislative authority for the rule,

not whether the grant of authority is

specific enough. Either the enabling

statute autho rizes the rule at issue or it

does not. [T]his question is one that must

be determined on a case - by - case basis.

Id. (underlining added). In other words, according to the

court, the relevant inquiry is whether the specific law being

implemented (the enabl ing statute) evinces a legislative intent

to grant the agency the specific power or specific duty behind

the subject rule. In answering this question, the specificity

of the enabling statute's terms is not the primary

consideration. (Obviously, however, specificity is a factor to

consider , inasmuch as a relative lack of specificity tends to

obscure legislative intent, whereas relative precision in

legislative draftsmanship tends to reveal such intent.)

9 . Because, the court found, the exemptions at issue in

Manatee Club had been based "entirely on prior approval," and

because, moreover, the enabling statute did "not provide

specific authority for an exemption based on prior approval,"

the disputed rule provisions did "not implement or interpret any

specif ic power or duty granted in the applicable enabling

statute" ; hence they were invalid. Id. at 600.

10 . The first district revisited the flush - left paragraph

of Section 120.52(8), Florida Statutes, in Bd. of Trustees of

Internal Improvement Trust Fund v. Day Cruise Ass'n , 794 So. 2d

696 (Fla. 1st DCA 2001), clarified , rehr'g denied , question

certified , 798 So. 2d 847 (Fla. 1st DCA 2001) , rev. denied , 823

So. 2d 123 (Fla. 2002) . The proposed rule under attack in that

case would have forbidden the use of sovereignty submerged lands

for anchoring cruise ships engaged in carrying passengers on so -

called "cruises to nowhere" ÏÏ legal gambling excursions. Id. at

697. A divided court held the challenged rule to be invalid on

two interrelated grounds, namely, th at it (a) exceeded the

agency's rulemaking authority and (b) enlarged the specific

provisions of law purportedly implemented.

11 . To make these determinations, the court defined the

specific power that the agency had exercised as being the

authority to " prohibit[] the use of sovereignty submerged lands

on account of lawful [gambling] activities on board ships at sea

which have no physical or environmental effect on sovereignty

submerged lands or adjacent waters." 794 So. 2d at 702. To

this the court add ed:

Although framed as a regulation of anchoring

or mooring, the proposed rule does not

regulate t he mode or manner of mooring. It

does not govern the use of the bottom in any

way that protects its physical integrity or

fosters marine life. Instead it

de liberately and dramatically interferes

with certain kinds of commerce solely on

account of activities that occur many

leagues from any dock.

Id.

1 2 . Upon examining the statutory grant of rulemaking

authority applicable specifically to sovereignty submer ged

lands, the court concluded that a provision in the grant which

prohibited regulations that "interfere with commerce" qualified

the agency's power "in ways that are incompatible with the

adoption of the proposed rule." Id. at 702. Thus the proposed

ru le was outside the agency's rulemaking authority.

13 . The court next looked at the broad constitutional

grant of authority to the agency to acquire, administer, manage,

control, supervise, conserve, protect, and dispose of state

lands, including the sover eignty submerged lands. Id. at 703.

It found that "[n]one of the cited constitutional or statutory

provisions makes reference to, much less gives specific

instructions on the treatment of, the 'day cruise industry' or

contains any other specific directiv e that would provide the

support for the proposed rule that the [law] now requires." Id.

Driving this point home, the court continued that, despite the

breadth of the general language contained in the state

constitution,

[n]o provision listed as being i mplemented

in the proposed rule purports to authorize ÏÏ

much less specifically to direct ÏÏ the

[agency] to prohibit only certain vessels

from mooring on the basis of lawful

activities on board (possibly other) vessels

once they are on the high seas.

* * *

The provisions purportedly to be implemented

here are completely silent about day cruises

and about gambling and confer no authority

to bar day cruise vessels ÏÏ or any other

vessels ÏÏ from sovereignty submerged lands

based on lawful activities occur ring outside

Florida ' s territorial jurisdiction.

Id. at 703 - 04 (footnote omitted).

1 4 . The court concluded, "In the absence of a specific

power or duty" which would enable or require "the [agency] to

regulate cruises to nowhere or to regulate gambling o r to

regulate on the basis of activities occurring aboard vessels

after they leave sovereignty submerged lands and adjacent

waters, the [agency's] proposed rule exceeds the [agency's]

rulemaking authority and is an invalid exercise of delegated

legislative authority as defined in section 120.52(8)(c) . " Id.

at 704 (footnote omitted ).

15 . T he Council's Rulemaking Authority

Blanco complains that the Imputed Responsibility Provision

is not within the scope of the Department's rulemaking power.

The thre shold question for determination is whether the Council

has been delegated the power to make rules. This issue will

rarely be disputed since most agencies have been granted general

rulemaking powers. See Day Cruise , 794 So. 2d at 702 (general

power to ad opt rules "normally should be of little interest"

because almost all agencies have been given that).

16. The grant of rulemaking authority for the Control of

Others Rule is Section 468.4315(2), Florida Statutes, which

provides as follows:

The council m ay adopt rules relating to the

licensure examination, continuing education

requirements, continuing education

providers, fees, and professional practice

standards to assist the department in

carrying out the duties and authorities

conferred upon the depart ment by this part.

(Emphasis added.) The Control of Others Rule prescribes a

standard of professional conduct. Th us, Section 468.4315(2)

provides the requisite general authority for the Control of

Others Rule.

17 . Having determined that the Council has the necessary

grant of rulemaking a uthority, the next question is: What is

the specific power or specific duty that the agency has

implemented or interpreted through the Imputed Responsibility

Provision ? In answering this question, it is helpful to

iden tify and describe what it is that the challenged rule does.

In this case, t he dispute d rule provision subjects a licensee to

punishment for allowing someone under his supervision or control

(an agent) to commit a disciplinable offense , based s olely on

the fact that the agent committed the offense.

18. A law which requires the finding of an ultimate fact

( e.g. , the licensee permitted his agent's actions) based on

proof of particular predicate facts (th e agent's actions) is

called an evidentiary presumpti on. As one court explained,

[a] presumption is typically an evidentiary

tool which compels a trier of fact to find

the truth of an ultimate fact which is only

supported circumstantially by evidence of

predicate facts and which is not

satisfactorily rebu tted by the opposing

party's evidence. . . . Similar to an

inference, in terms of logical analysis, if

the predicate fact of a presumption is true,

then the ultimate fact is also presumed to

be true; if A, then B.

Tomlinson v. Department of Health & R ehabilitative Services , 558

So. 2d 62, 6 6 (Fla. 2d DCA 1990) (citations omitted) .

19. In Tomlinson , the court examined a rule pursuant to

which a state employee could be deemed to have abandoned his

position ÏÏ and hence to have resigned from the Career Service.

The rule provided in pertinent part that "'[a]n employee who is

absent without authorized leave for 3 consecutive work days

shall be deemed to have abandoned the position and to have

resigned from the C areer S ervice.'" Id. at 6 4 . The court

co ncluded that this "constructive abandonment regulation" was a

"rebuttable presumption." Id. at 63. The court expressed

reservations about whether the agency had the "authority to

promulgate this regulatory presumption," id. at 66, but declined

to resolve the issue because th e appellant had neither raised

nor preserved it for review, id. at 65.

20. The Imputed Responsibility Provision is

indistinguishable, in its operation, from the constructive

abandonment regulation discussed in Tomlinson . Under the

Im puted Responsibility Provision , a licensee whose agent commits

a disciplinable act shall be deemed to have permitted the

agent's act and to have violated the Control of Others Rule.

The refore, the challenged rule provision is an evidentiary

presumption, j ust as was the "constructive abandonment

regulation." Because the Imputed Responsibility Provision is a

presumption, the specific power that the Council exercised in

promulgating this rule is the power to adopt a legal

presumption.

2 1 . The next analytica l step, once the specific power

being implemented has been defined, is to examine the enabling

statute to determine whether the specific power or duty, as

defined, is among the specific powers or duties delegated to the

agency by the legislature. This ent ails the "difficult task" of

identifying and defining "the kind of delegation that is

sufficient to support a rule." St. Johns River Water Mgmt.

Dist. v. Consolidated - Tomoka Land Co. , 717 So. 2d 72, 79 (Fla.

1st DCA 1998) (italics in original).

22. The Co ntrol of Others Rule cites two statutes as

comprising the "law implemented": Sections 468.433 and 468.436 ,

Florida Statutes . The first of these statutes deals with

licensure by examination and plainly does not give the Council

the power to adopt the Impu ted Responsibility Provision , as the

Department itself concedes . The second relates to disciplinary

proceedings and provides in pertinent part as follows:

(2) The following acts constitute grounds

for which the disciplinary actions in

subsection (4) may be taken:

(a) Violation of any provision of s.

455.227(1).

(b)

1. Violation of any provision of this part.

2. Violation of any lawful order or rule

rendered or adopted by the department or the

council.

3. Being convicted of or pleading nolo

contendere to a felony in any court in the

United States.

4. Obtaining a license or certification or

any other order, ruling, or authorization by

means of fraud, misrepresentation, or

concealment of material facts.

5. Committing acts of gross misconduct or

gross ne gligence in connection with the

profession.

6. Contracting, on behalf of an

association, with any entity in which the

licensee has a financial interest that is

not disclosed.

(3) The council shall specify by rule the

acts or omissions that constitute a

v iolation of subsection (2).

(Emphasis added.)

23. Section 455.227(1), Florida Statutes, which is

incorporated by reference in Section 468.436(2)(a), Florida

Statutes, provides as follows:

(1) The following acts shall constitute

grounds for which the di sciplinary actions

specified in subsection (2) may be taken:

(a) Making misleading, deceptive, or

fraudulent representations in or related to

the practice of the licensee ' s profession.

(b) Intentionally violating any rule

adopted by the board or the depa rtment, as

appropriate.

(c) Being convicted or found guilty of, or

entering a plea of guilty or nolo contendere

to, regardless of adjudication, a crime in

any jurisdiction which relates to the

practice of, or the ability to practice, a

licensee ' s professi on.

(d) Using a Class III or a Class IV laser

device or product, as defined by federal

regulations, without having complied with

the rules adopted pursuant to s. 501.122(2)

governing the registration of such devices.

(e) Failing to comply with the educat ional

course requirements for human

immunodeficiency virus and acquired immune

deficiency syndrome.

(f) Having a license or the authority to

practice the regulated profession revoked,

suspended, or otherwise acted against,

including the denial of licensur e, by the

licensing authority of any jurisdiction,

including its agencies or subdivisions, for

a violation that would constitute a

violation under Florida law. The licensing

authority ' s acceptance of a relinquishment

of licensure, stipulation, consent ord er, or

other settlement, offered in response to or

in anticipation of the filing of charges

against the license, shall be construed as

action against the license.

(g) Having been found liable in a civil

proceeding for knowingly filing a false

report or co mplaint with the department

against another licensee.

(h) Attempting to obtain, obtaining, or

renewing a license to practice a profession

by bribery, by fraudulent misrepresentation,

or through an error of the department or the

board.

(i) Failing to repo rt to the department any

person who the licensee knows is in

violation of this chapter, the chapter

regulating the alleged violator, or the

rules of the department or the board.

(j) Aiding, assisting, procuring,

employing, or advising any unlicensed perso n

or entity to practice a profession contrary

to this chapter, the chapter regulating the

profession, or the rules of the department

or the board.

(k) Failing to perform any statutory or

legal obligation placed upon a licensee.

(l) Making or filing a rep ort which the

licensee knows to be false, intentionally or

negligently failing to file a report or

record required by state or federal law, or

willfully impeding or obstructing another

person to do so. Such reports or records

shall include only those that are signed in

the capacity of a licensee.

(m) Making deceptive, untrue, or fraudulent

representations in or related to the

practice of a profession or employing a

trick or scheme in or related to the

practice of a profession.

(n) Exercising influence on the patient or

client for the purpose of financial gain of

the licensee or a third party.

(o) Practicing or offering to practice

beyond the scope permitted by law or

accepting and performing professional

responsibilities the licensee knows, or has

reason to know, the licensee is not

competent to perform.

(p) Delegating or contracting for the

performance of professional responsibilities

by a person when the licensee delegating or

contracting for performance of such

responsibilities knows, or has reason to

know, such person is not qualified by

training, experience, and authorization when

required to perform them.

(q) Violating any provision of this

chapter, the applicable professional

practice act, a rule of the department or

the board, or a lawful order o f the

department or the board, or failing to

comply with a lawfully issued subpoena of

the department.

(r) Improperly interfering with an

investigation or inspection authorized by

statute, or with any disciplinary

proceeding.

(s) Failing to comply with t he educational

course requirements for domestic violence.

(t) Failing to report in writing to the

board or, if there is no board, to the

department within 30 days after the licensee

is convicted or found guilty of, or entered

a plea of nolo contendere or guilty to,

regardless of adjudication, a crime in any

jurisdiction. A licensee must report a

conviction, finding of guilt, plea, or

adjudication entered before the effective

date of this paragraph within 30 days after

the effective date of this paragraph.

(u) Termination from a treatment program

for impaired practitioners as described in

s. 456.076 for failure to comply, without

good cause, with the terms of the monitoring

or treatment contract entered into by the

licensee or failing to successfully compl ete

a drug or alcohol treatment program.

(Emphasis added.)

24. In reviewing the foregoing statutes to determine

whether they contain a specific grant of legislative authority

for the Imputed Responsibility Provision, the undersigned is

mindful that "pre sumptions arise as a matter of law, and the

power to establish them is reserved solely to the courts and the

legislature." B.R. v. Department of Health & Rehabilitative

Services , 558 So. 2d 1027, 1029 (Fla. 2d DCA 1989)(agency policy

requiring finding of child abuse if bruises remained visible for

at least 24 hours was unauthorized and unconstitutional). Thus,

"[a]n agency of the executive branch of our government has no

authority to formulate an evidentiary presumption." Id.

25. In Little v. Departmen t of Labor & Employment Sec . ,

652 So. 2d 927 , 928 (Fla. 1st DCA 1995), the First District

Court of Appeal held that the constructive abandonment

regulation, which had troubled the court in Tomlinson , could not

be applied. The court reasoned as follows. F irst, an "agency

lacks implied or inherent power to fashion, adopt, or apply a

legal presumption for application in an administrative

proceeding in the absence of specific authority in a statute or

the constitution." Id. Second, there was "no specific

st atutory or constitutional authority for the presumption" at

issue. Id. Consequently , the court found, the presumption was

ultra vires and hence "impermissible." Id. ; see also McDonald

v. Department of Professional Regulation , Bd. of Pilot Comm'rs ,

582 S o. 2d 660, 664 (Fla. 1st DCA 1991)("Under the principle of

strict construction applicable to disciplinary statutes and

[because "there is no authority under Florida law for an agency

to adopt and apply a legal presumption in the absence of

specific legisla tive authorization by the legislature " ], it

follows that without any provision for a legal presumption in

the disciplinary statutes, the agency lacks authority to adopt a

legal presumption that effectively relieves it of having to

prove specific acts of mi sconduct and shifts the burden of

proving innocence to the licensee.").

26. The undersigned finds no grant of authority in the

statutes behind the Control of Others Rule that empowers the

Council to adopt a presumption which lifts from the Department

the burden of proving that the licensee in fact permitted his

agent to commit a disciplinable offense and thereby shifts to

the licensee the burden of disproving that such permission was

given. It is concluded, therefore , that the Imputed

Responsibility Prov ision does not implement a specific power or

duty delegate d by the enabling statutes.

27. B ecause the Imputed Responsibility Provision does not

meet the criteria specified in the flush - left paragraph, the

Council has exceeded its grant of rulemaking aut hority. It

follows that the presumption at issue is an invalid exercise of

delegated legislative authority. § 120.52(8)(b), Fla. Stat.

28 . Whether the Rule Enlarges the Law Implemented

Blanco contends that the Imputed Responsibility Provision

enlarges the statutory grounds for imposing discipline by making

a licensee vicariously liable for the acts of another. The

undersigned agrees.

29. The foundational principle is that disciplinary

statutes such as those behind the Control of Others Rule are

pena l in nature and therefore must be strictly construed against

the enforcing authority. See , e.g. , McDonald , 582 So. 2d at

664. From this it follows that

without a clear, unambiguous provision in

the statute indicating legislative intent to

hold the licens ee responsible for the

negligent or wrongful acts committed by

another, the administrative agency is not

authorized to extend the effect of the

statute.

Id. at 669 (Zehmer, J., specially concurring).

30. To subject a licensee to discipline based on ano ther's

misconduct, an "unambiguous [statutory] provision" would need to

be exceptionally clear with regard to the legislative intent ;

merely authorizing the imposition of penalties for an agent's

violation of law is insufficient. For example, Section

569. 29(1)(a), Florida Statutes, explicitly provides authority to

discipline a liquor licensee upon a finding of a "[v] iolation by

the licensee or his or her or its agents, of ficers, servants, or

employees . . . of any of the laws . . . in regard to . . .

alcoh olic beverages . . . . " (Emphasis added.) Although a

"literal reading of [ the statute ] would indicate that a liquor

licensee is under the onus of suspension or revocation of his

license for any violation of law committed by his employees on

the premises, irrespective of his own personal fault in

connection therewith," Pic N' Save Central Fla., Inc. v.

De partmen t of Bus iness Regulation, Div. of Alcoholic Beverages &

Tobacco , 601 So. 2d 245, 25 1 (Fla. 1st DCA 1992) , the courts

consistently have declined to read Section 561.29(1)(a) as a

warrant for imposing discipline under the respondeat superior

doctrine. See , e.g. , i d. at 249 - 56; Brother J. Inc. v. Dep't of

Bus. and Prof. Regulation, Div. of Alcoholic Bev s. & Tobacco ,

962 So. 2d 1037 (Fla. 1st DCA 2007 ) .

31. U nder Section 569.29(1)(a) as judicially construed,

the prosecuting agency must clearly and convincingly prove

misconduct personal to the licensee to suspend or revoke his

beverage license . Pic N' Save , 601 So. 2d at 249 - 56. This

means that a l iquor licensee cannot be punished unless it is

shown that he personally committed, or is personally culpable

for, a disciplinable offense. Personal culpability attaches,

for example, when a licensee knows, or should know, about the

misconduct of his emplo yees; negligently fails to train or

supervise employees; negligently overlooks, condones, or fosters

the wrongdoing of employees; or fails to exercise due diligence

in preventing misconduct. Id. at 250.

32. The undersigned finds nothing in the applica ble

disciplinary statutes which unambiguously express es a

legislative intent to hold a community association manager

responsible, in the absence of personal culpability on the part

of the licensee, for the negligent or wrongful acts committed by

another. 2 To the contrary, in defining offenses for which a

licensee might be discipline d as a result of someone else's

misconduct, the provisions of law being implemented through the

Control of Others Rule make clear that the licensee must be

personally culpable f or responsibility to attach . See , e.g. ,

§ 455.227(1)(j), Fla. Stat. (defining the offense of "aiding,

assisting, procuring, employing, or advising any unlicensed

person" to engage in unlawful practices); § 455.227(1)(p), Fla.

Stat. (making it an offense to delegate professional

responsibilities to, or to enter into a contract with, a person

whom the licensee "kn ows, or has reason to know," is

unqualified).

33. The Imputed Responsibility Provision impermissibly

extends the effect of the relevant discipli nary statutes. It

is, therefore, an invalid exercise of delegated legislative

authority pursuant to Section 120.52(8)(c), Fla. Stat.

34 . Having determined that a portion of Florida

Administrative Code Rule 61E14 - 2.001 is invalid, the undersigned

is requ ired, p ursuant to Section 120.595( 3 ), Florid a Statutes,

to award Blanco reasonable costs and reasonable attorney's fees

(up to $50,000) , unless the Department "demonstrates that its

actions were substantially justified or special circumstances

exist which would make the award unjust." If Blanco timely

requests such relief, the undersigned will conduct further

proceedings to determine whether such an award must be made, and

if so in what amount.

ORDER

Based on the foregoing Conclusions of Law, it is ORDERE D

that the Imputed Responsibility Provision which comprises the

second sentence of Florida Administrative Code Rule 61E14 -

2.001(5) is an invalid exercise of delegated legislative

authority . It is further ORDERED that Blanco shall have 30 days

from the dat e of this Final Order within which to file a motion

for attorney's fees and costs, to which motion (if filed) Blanco

shall attach appropriate a ffidavits ( e.g. attesting to the

reasonableness of the fees) and essential documentation in

support of the claim , such as time sheets, bills , and receipts .

DONE AND ORDERED this 2 1st day of September , 20 1 0, in

Tallahassee, Leon County, Florida.

S

___________________________________

JOHN G. VAN LANINGHAM

Administrative Law Judge

Division of Administrative Hearings

Th e 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 2 1st day of September , 20 1 0.

EN DNOTES

1 / An expanded discussion of this topic appears in Home Delivery

Incontinent Supplies Co., Inc. v. Agency For Health Care

Administration , No. 07 - 4167RX, 2008 Fla. Div. Adm. Hear. LEXIS

205, *11 - *26 (Apr. 18, 2008).

2 / Indeed, the relevant statutes do not even contain a provision

analogous to that of § 569.29(1)(a), Fla . Stat . , which, despite

being seemingly unambiguous with regard to the power to impose

vicarious liability on a licensee, has been found consistently

not to have such an effect.

COPIES FURNISHED:

Howard J. Hochman, Esquire

Law Offices of Howard J. Hochman

7695 Southwest 104th Street, Suite 210

Miami, Florida 33156

Thomas E. Dennis, Esquire

Dror Lewy, Esquire

Office of the Attorney General

PL - 01, The Capitol

Tallahassee, Florida 32399

Reginald Dixon, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Anthony B. Spivey, Executive Director

Regulatory Council of Community

Associ ation of Managers

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

F. Scott Boyd, Executive Director

Joint Administrative Procedure Committee

120 Holland Building

Tallahass ee, Florida 32399 - 1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellat e Procedure. Such proceedings are commenced by

filing the original notice of appeal with the Clerk of the

Division of Administrative Hearings and a copy, accompanied by

filing fees prescribed by law, with the District Court of

Appeal, First District, or w ith the District Court of Appeal in

the Appellate District where the party resides. The notice of

appeal must be filed within 30 days of rendition of the order to

be reviewed.