11-001340PL Department Of Business And Professional Regulation, Community Association Management vs. Ferdinand Laracuente Status: Closed Recommended Order on Monday, September 26, 2011.

Summary: Department failed to present clear and convincing evidence that licensed CAM committed violations of section 468.436 alleged in the Amended Administrative Complaint; dismissal of charges recommended.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

)

Petitioner, )

)

vs. ) Case No. 11-1340PL

)

FERNANDO LARACUENTE, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case

pursuant to sections 120.569 and 120.57(1), Florida Statutes, 1

before Stuart M. Lerner, a duly-designated administrative law

judge of the Division of Administrative Hearings (DOAH), on

August 3, 2011, by video teleconference at sites in Miami and

Tallahassee, Florida.

APPEARANCES

For Petitioner: C. Erica White, Esquire

Kathleen Brown-Blake, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2202

For Respondent: Christopher L. Hixson, Esquire

Lynch & Robbins, P.A.

2639 Dr. Martin Luther King, Jr.

Boulevard North

St. Petersburg, Florida 32804

STATEMENT OF THE ISSUE

Whether Respondent committed the violations alleged in the

Amended Administrative Complaint and, if so, what disciplinary

action should be taken against him.

PRELIMINARY STATEMENT

On or about August 16, 2010, Petitioner issued a three-

count Administrative Complaint against Respondent, a Florida-

licensed community association manager, alleging that he

"violated [s]ection 468.436(2)(b)5, Florida Statutes, when he

improperly conducted elections of the [North Bay Villas

Condominium] Association Board of Directors and released

documents [specifically, minutes of a July 1, 2009, Board of

Directors meeting] without Board approval" (Count I); "violated

[s]ection 468.436(2)(b)2, Florida Statutes, through a violation

of Rule 61E14-2.001(2), Florida Administrative Code, when he

falsely stated [during a telephone interview with one of

Petitioner's investigators] that he was one of three owners of

North Bay Property Management, Inc." (Count II); and "violated

[s]ection 468.436(2)(b)2, Florida Statutes, through a violation

of Rule 61E14-2.001(2), Florida Administrative Code, when [in

response to a February 16, 2010, records request made by a unit

owner, Adriana Vasquez Caraballo, through her attorney] he

refused access to [A]ssociation records [for photocopying]"

(Count III). 2 Respondent "dispute[d] the allegations of fact

contained in the Administrative Complaint" and requested a

hearing before a DOAH administrative law judge. The matter was

referred to DOAH on March 16, 2011, for the assignment of an

administrative law judge to conduct the hearing Respondent had

requested.

As noted above, the final hearing in this case was held

before the undersigned on August 3, 2011. 3 Six witnesses

testified at the hearing: Beatriz Caldera, Adriana Vasquez

Caraballo, Abraham Bravo, Cheryl Montgomery Barker, Maria

Guzman, and Respondent. In addition to the testimony of these

six witnesses, the following exhibits were offered and received

into evidence: Petitioner's Exhibits 1A, 8, 9, 11, 12, L1, and

L9, and Respondent's Exhibits 2 and 3.

In an ore tenus motion made at the final hearing, and in a

follow-up post-hearing written motion filed on August 8, 2011,

Petitioner requested permission to amend Count III of the

Administrative Complaint, which then read as follows:

19. Section 468.436(2)(b)2, Florida

Statutes, states "violation of any lawful

order or rule rendered or adopted by the

department or the council constitutes

grounds for which disciplinary action may be

taken."

20. Rule 61E14-2.001(2), Florida

Administrative Code, states "a licensee or

registrant shall exercise due professional

care in the performance of community

association management services."[

4 ]

21. Based on the facts set forth above,[ 5 ]

Respondent violated Section 468.436(2)(b)2,

Florida Statutes, through a violation of

Rule 6lEl4-2.00l(2), Florida Administrative

Code, in one or more of the following ways:

a) By making records inaccessible for

photocopying to association unit owners.

* * *

21. [sic] Based on the foregoing,

Respondent violated Section 468.436(2)(b)2,

Florida Statutes, through a violation of

Rule 61E14-2.001(2), Florida Administrative

Code, when he refused access to association

records . . . .

More specifically, Petitioner sought permission to amend the

last three paragraphs of Count III to read as follows:

20. Rule 61E14-2.001(6)(b), Florida

Administrative Code, states "[a] licensee

shall not deny access to association

records, for the purpose of inspecting or

photocopying the same, to a person entitled

to such by law, to the extent and under the

procedures set forth in the applicable law."

21. Based on the facts set forth above,

Respondent violated Section 468.436(2)(b)2,

Florida Statutes, through a violation of

Rule 6lEl4-2.00l(6)(b), Florida

Administrative Code, in one or more of the

following ways:

a) By making records inaccessible for

photocopying to association unit owners.

22. Based on the foregoing, Respondent

violated Section 468.436(2)(b)2, Florida

Statutes, through a violation of Rule 61E14-

2.001(6)(b), Florida Administrative Code,

when he refused access to association

records.

On August 9, 2011, Respondent filed an Objection to Motion to

Amend, arguing that the motion should be denied. On August 10,

2011, the undersigned issued an Order Granting Motion to Amend

Administrative Complaint, in which he gave the following

explanation for his ruling:

Allowing Petitioner, even at this late date,

to amend the Administrative Complaint to

allege that, "[b]y making records

inaccessible for photocopying to association

unit owners," Respondent violated subsection

(6)(b) of Florida Administrative Code Rule

61E14-2.001, not subsection ( 2 ) (or ( 4 )) of

that rule, would in no way prejudice

Respondent. Accordingly, Petitioner is

granted the leave it has requested to amend

the Administrative Complaint to make that

correction. See El Toro Exterminator of

Fla., Inc. v. Cernada , 953 So. 2d 616, 618

(Fla. 3d DCA 2007)("There is no question

that the conduct and occurrences complained

of in the case remained unchanged post-

amendment. Additionally, the causes of

action that were the gravamen of the

complaint were not altered. Although El

Toro asserts various technical deficiencies

with the original pleadings, none of these

are sufficient to defeat the court's proper

granting of leave to amend. Despite these

technicalities, El Toro was aware of the

conduct over which the suit was brought, and

the events leading to the litigation.

Hence, there is no basis for El Toro to

assert that it was in any way prejudiced by

the court's allowance of the amendment.");

Fla. Bd. of Med. v. Fla. Acad. of Cosmetic

Surgery, Inc. , 808 So. 2d 243, 256 (Fla. 1st

DCA 2002)("A party is not precluded from

amending its petition during the hearing if

there is no showing of prejudice to the

opposing party."); Optiplan, Inc. v. Sch.

Bd. of Broward Cnty. , 710 So. 2d 569, 572

(Fla. 4th DCA 1998)("The hearing officer's

denial of the motion to amend, in the

absence of any alleged prejudice to the

appellees, was an abuse of discretion.");

Florida E. Coast R. R. Co. v. Shulman , 481

So. 2d 965, 967 (Fla. 3d DCA 1986)("Leave to

amend shall be freely given, particularly

where the amendment is based upon the same

conduct, transaction and occurrence which is

the basis of the plaintiff's original

pleading."); Key Biscayne Council v. Dep't

of Nat. Res. , 579 So. 2d 293, 295 (Fla. 3d

DCA 1991)("Because the proposed amendment

raised a critical issue and because the

Hotel had not demonstrated how it would have

been prejudiced by the amendment or a

continuance, we conclude that denial of the

motion to amend constituted an abuse of

discretion."); and Wackenhut Protective

Sys., Inc. v. Key Biscayne Commodore Club

Condo. I, Inc. , 350 So. 2d 1150, 1151 (Fla.

3d DCA 1977)("Florida case law applies a

test of prejudice to the defendant as the

primary consideration in determining whether

the plaintiff's motion to amend should be

granted or denied.").

The Transcript of the final hearing (consisting of two

volumes) was filed with DOAH on August 23, 2011. Accordingly,

in accordance with the deadline established and announced by the

undersigned at the final hearing, proposed recommended orders

were due to be filed on September 22, 2011.

Petitioner and Respondent filed their Proposed Recommended

Orders (at 4:48 p.m.) on September 22, 2011, and (at 8:00 a.m.)

on September 23, 2011, respectively.

FINDINGS OF FACT

Based on the evidence adduced at hearing, and the record as

a whole, the following findings of fact are made:

1. Respondent is now, and has been since 2007, a Florida-

licensed community association manager. At the time of his

initial licensure, Respondent's legal name was Ferdinand A.

Resto, Jr. In or some time before July 2009, he legally changed

his name to Fernando A. Laracuente. 6

2. Respondent is the owner of a residential unit at the

North Bay Villas Condominium complex (Condominium).

3. The governing body of the Condominium is the North Bay

Villas Condominium Association. On and off since 2007,

Respondent has held various offices on the Association's Board

of Directors (Board), including that of secretary.

4. At all times material to the instant case, Respondent

was the sole owner and officer of North Bay Property Management,

Inc. (Management), a duly registered Florida corporation. 7

Management is a Florida-licensed community association

management firm. Respondent is its "qualifier."

5. At all times material to the instant case, Management

provided community association management services to the

Association. It did so through hired licensed community

association managers, other than Respondent , who were present on

the premises of the Condominium (working out of the property

management office 8 ) 40 hours a week. These licensed community

association managers employed by Management were hand-picked by,

and responsible for acting in accordance with the directions of,

the Board.

6. The property management office out of which these

licensed community association managers worked had a computer

the managers were to use in carrying out their duties. The

computer was set up so that e-mail correspondence sent from the

office (using the e-mail application installed on the computer)

would reflect that it was from "Fernando Resto (northbayproperty

@gmail.com)."

7. On July 1, 2009, there was a meeting of the Board.

Respondent was not, at the time, a member of the Board.

8. It was the responsibility of the secretary of the Board

to prepare the minutes of Board meetings. Management, through

the licensed community association managers it hired, assisted

the secretary in fulfilling this responsibility.

9. On Friday, July 10, 2009, at around 11:30 a.m., during

the workday of the licensed community association manager then

employed by Management, an e-mail was sent to unit owners from

the computer in the Condominium's property management office.

This e-mail read as follows:

Dear Home Owners,

Attached are the minutes of the previous

board meeting held on 6/1/2009 [sic], per

the request of many of you.

If you have any questions, please do not

hesitate to contact the office.

Management

Visit North Bay Villas Condo Association

online at:

http://www.northbaypropertymanagement.com/

northbayvillas

Attached to the e-mail were what purported to be "minutes" of

the July 1, 2009, Board meeting, written on Management

letterhead. These "minutes" had not been approved by the Board

for dissemination to unit owners.

10. The record evidence does not clearly and convincingly

establish that this July 10, 2009, e-mail was personally sent by

Respondent, or at his direction.

11. Respondent was the secretary of the Board for the

first eight months of 2010. (A new secretary took office on or

about August 28, 2010, following Board elections.)

12. By letter dated February 16, 2010, addressed to

Respondent at the Condominium property management office

address, Adam Steinberg, Esquire, an attorney acting on behalf

of Adriana Vasquez Caraballo, a Condominium unit owner, made a

"[r]equest for Condominium [r]ecords." The body of the letter

read as follows:

Pursuant to Florida Statute 718.111(12)(c),

this correspondence is an official request

to review and obtain copies of the records

of North Bay Villas Condominium Association,

Inc. Pursuant to the foregoing section,

please find below Adriana M. Vazquez's (Unit

221) signature with a properly executed

notary page indicating that Ms. Vazquez has

appointed Richard C. Muller, CAM, and me as

her duly authorized representatives to

secure copies of North Bay Villas

Condominium Association, Inc.'s records.

Florida Statute 718.111(12)(a) designates

the following as official records of the

condominium and I hereby request a time,

date (within 10 days of receipt of this

request), and place to review and copy these

records:

1. Minutes of board meetings for 2008,

2009, and 2010;

2. A current roster;

3. A copy of the current management

agreement;

4. Accounting records for fiscal years

2008, 2009 and 2010 year to date;

a. Annual audits;

b. General ledger;

c. Bank statements;

d. Accounts receivable;

e. "A current account and a monthly,

bimonthly, or quarterly statement of

the account for each unit designating

the name of the unit owner, the due

date and amount of each assessment, the

amount paid upon the account, and the

balance due." Florida Statute

718.111(12)(a)11.b;

5. If a general ledger is not available,

"accurate, itemized, and detailed records of

all receipts and expenditures," in

accordance with Florida Statute

718.111(12)(a)11.a., will suffice; and

6. All voting records from the last annual

election.

At your earliest convenience, please contact

me or Richard C. Muller.

13. Mr. Steinberg's February 16, 2010, letter was received

in the property management office. The Management-hired

licensed community association manager servicing the Association

at the time was Cheryl Montgomery Barker. Ms. Barker contacted

Respondent, who, as the secretary of the Board, was the

custodian of the Association's records, and notified him of the

contents of Mr. Steinberg's letter. Respondent, together with

other members of the Board, sought and obtained the advice of

counsel as to how to respond to the letter. Consistent with

that advice, the following letter, on Management letterhead, was

sent to Mr. Steinberg on February 23, 2010, on behalf of the

Board:

We are in receipt of your public records

request dated February 16, 2010 and received

by our offices on February 19, 2010 .

Pursuant to Florida Statute

718.111(12)(c),[

9 ] we hereby notify you that

an appointment has been set for Ms. Adirana

[sic] M. Vazquez to inspect Association

records for: Date: March 08th, 2010

Place: Management Office, 1801 Seasure

Drive, N Bay Village, Fl 33141

Time: 4:00 p.m.

Please also note that pursuant to [sic]

Florida Statute 718.111(12), also stipulates

that the disclosures and copies are governed

according to the Rules and Policies adopted

by an Association.

It is the policy of the Association that

your client or representatives adheres to

the following when inspecting Association

public records:

1. Your office staff will be granted access

to available records. However, not all

records may be immediately available. The

Association will notify Ms. Caraballo, you

or any other authorized representatives when

the rest of the records would be available

for inspection (if the records exist) and a

new appointment for these records would be

given.

2. Your client will not be allowed to make

any copies on the spot

, as some information

may have to be redacted that may identify a

homeowner or provide privileged information.

However, your client may request to have

certain copies made at the rate of $0.25 per

page, after inspecting the records. It is

highly suggested that your client brings

[sic] post-it notes, so that she may mark

those pages she wishes to have copies of.

The Association will notify your client when

such copies are available to pick up and the

price per copy incurred. A cashier's check

or money order must be given to the

Association ( North Bay Villas Condominium

Association ) for the first total number of

copies and check must clear, prior to

disbursement of any copies of the

Association records.

3. The Association, its agent or authorized

representatives will not engage in any

discussion of such records and neither your

client nor her authorized representatives

should disrupt the normal day-to-day

operations of the Association to carry out

its duties to manage said property during

the inspection period. Nor would the

Association will [sic] provide the files in

any particular order.

4. Any violation of these rules, disorderly

conduct or disruption to the normal day-to-

day operation of the Association will be

caused [sic] to have the inspection session

terminated.

If there are any questions regarding this

issue or anything further to that this

Association must address, please direct all

questions to:

Ms. Cheryl Montgomery, LCAM

Property Manager

Agent for North Bay Villas Condominium

Association, Inc.

1801 Seasure Drive, Management Office

N Bay Village FL 33141

Tel [phone]

Fax [phone]

Email: montgomery@northbayproperty

management.com

In and For the Board of Directors,

Cheryl Montgomery-Barker

Cheryl Montgomery-Barker, LCAM

Property Manager

Agent for North Bay Villas Condominium

Association

14. Neither Ms. Caraballo, nor Mr. Steinberg, appeared at

the property management office at the appointed date and time

(March 8, 2010, at 4:00 p.m.) to inspect the Association's

records.

10

15. In April 2010, Ms. Caraballo renewed the records

request her attorney had made a couple of months earlier, and

was given a May 10, 2010, appointment by Ms. Barker to inspect

the Association's records. Ms. Caraballo met with Ms. Barker on

May 10, 2010, as scheduled, and viewed the Association's

records. On May 14, 2010, Ms. Caraballo signed a Receipt for

Condominium Documents, which read, in pertinent part, as

follows:

This public records requested [sic] dated on

April 26th, 2010 and received by North Bay

Villas Condominium Association on May 5th,

2010, has been completed [sic] provided by

F.S. 718.111(12)(c).

Homeowner acknowledges receipt of all files

in accordance with the statutory [sic] and

by receiving such documents holds harmless,

North Bay Villas Condominium Association,

Inc. and its duly appointed representatives

of the Board of Directors. This request is

deemed complete.

Ms. Barker's employment with Management was terminated 11 days

later, on May 25, 2011.

16. As secretary of the Board, Respondent was involved in

the running of the 2010 Board elections. Ms. Caraballo, in or

around April 2010, filed a complaint concerning this election

with the Department of Business and Professional Regulation,

Division of Florida Condominiums, Timeshares, and Mobile Homes

(FCTMH). William Smith, an FCTMH investigator, was assigned to

investigate the complaint. On May 18, 2010, Mr. Smith wrote the

following letter to the Board:

Re: North Bay Villas Condominium

Association

Case No. 2010021485

Dear Mr. Laracuente as Secretary, and other

Members of the Board:

As discussed with Mr. Laracuente during our

May 17, 2010, telephone conversation, the

Division of Florida Condominiums,

Timeshares, and Mobile Homes has completed

its investigation, and is addressing the

allegations below by providing educational

information pursuant to rule 61B-21.002,

Florida Administrative Code.

The Association failed to include all timely

submitted names of eligible candidates on

the ballot for the election scheduled

June 4, 2010.

Specifically, candidates were instructed to

send notice of intent to:

Fernando A. Laracuente-Secretary

North Bay Villas Condominium Association,

Inc.

15551 SW 14th St.

Miami, FL 33194

Three Candidates sent certified letters of

intent in a timely manner (Andrea Gomez,

Roxana Fracchi, and Natalia Guida-Pometti)

to the [a]fore-mentioned address. The three

certified letters sent by these individuals

(as evidenced by USPS Track and Confirm

documentation) were delivered and "REFUSED"

on April 19, 2010. The letters were

subsequently re-delivered and accepted on

April 21, 2010, one day after the cut off

date for timely notice.

During the course of the investigation a

number of pertinent facts came to the

forefront:

1. The Management office for North Bay

Villas Condominium Association, Inc. is

located at 1801 South Treasure Drive,

North Bay Village, FL 33141.

2. The hours for the North Bay Village

[sic] Management Office are 09:00 to

13:00 and 14:00 to 17:00 Monday through

Friday.

3. The written request[s] to be a

Candidate for the Board of Directors were

dated April 14, 2010 for Roxanne

Fracchia, April 15, 2010 for Natalie

Guida-Pometti, and April 16, 2010 for

Andrea Gomez.

4. Notice[s] from Fracchia, Guida-

Pometti, and Gomez were received on

April 19, 2010, at the address indicated

in instructions. That address was

Fernando A. Laracuente, Secretary, North

Bay Villas Condominium, Association,

Inc., 15551 SW 14th Street, Miami, FL

33194. However, Track & Confirm

certification from the United States

Postal Service indicates that although

received 11:10 a.m. on April 19, 2010

mail items numbered 7009 3410 0002 1310

0881, 7009 3410 0002 1310 9211, and 7009

3410 0002 1310 9228 were refused to be

accepted.

5. The cut off date for notice of intent

to run as a candidate was April 20, 2010.

6. The aforementioned certified letters

were delivered and accepted on April 21,

2010.

7. Fracchia, Guida-Pometti, and Gomez

were denied the opportunity to be

candidates for the Board.

8. The Association has an obligation to

accept certified mail at the address it

indicates in the first mailing.

Whereas the Association instructed unit

holders to send their intent of Candidacy to

a specific address, and given that the

Association has an obligation to accept said

notice during normal business hours a

violation has occurred which requires

corrective action. The candidates are

eligible.

61B-23.0021(9) of the Florida

[A]dministrative Code states:

"The failure of the written ballot to

indicate the name of each eligible person

shall require the association to mail,

transmit, or deliver an amended second

notice, which shall explain the need for the

amended notice and include a revised ballot

with the names of all eligible persons

within the time required by this rule. If

an amended second notice cannot be timely

mailed, transmitted or delivered, then the

association must re-notice and reschedule

the election. If the election has already

been held, under these circumstances the

association shall conduct a new election."

There is corrective action required which is

to redo the election process from the

fourteen day notice forward with the three

candidates in question on the ballot. This

entire process must be completed by June 15,

2010.

By June 1, 2010 the following evidence is to

be sent to the Division:

- Second notice of the new election;

- Affidavit of mailing the second notice

of the new election;

- Candidate information sheets for the

new election;

- Ballot for the new election;

- Outer envelope sample for the new

election;

- Inner envelope sample for the new

election.

Upon completion of the election by June 15,

2010 the following is to be sent to the

Division:

- List of eligible voters for the new

election;

- Tally sheets for the new election;

- Minutes of the annual meeting and

election.

As discussed, rule 61B-21.002(4), Florida

Administrative Code, provides that

associations must provide a written response

to a Warning Letter. Mr. Laracuente on

behalf of the Board agreed to submit a

response to this letter by May 28, 2010.

The response must include confirmation of

the violation, and the Association[']s

agreement to comply in the future.

Additionally, the Association must implement

corrective action, which is a redo of the

election from the fourteen day notice.

However, should the Association disagree

with or want to challenge the Division's

findings, the Association may request the

Division enter a Notice to Show Cause. If

such request is received or if the

Association disputes the Division's

findings, the Division may conduct further

investigation into the Association's

response, which may require the production

of further documentation, and issue a Notice

to Show Cause that will provide the

Association an opportunity to dispute the

Division's findings and ask for a hearing.

Failure to reply, take corrective action as

requested herein, or repeated violations of

a similar nature within two years from the

date the violation is resolved, may result

in an enforcement action by the Division as

well as civil penalties of up to $5,000 per

violation.

Your attention is directed to rule 61B-

23.002(7)(b)1., Florida Administrative Code,

which requires retention of this letter or a

copy thereof among the official records of

your Condominium Association for future

reference.

Please address your response to me at the

address listed on our letterhead. If you

have any questions about this matter, please

contact me at 954.202.3983, extension 111,

[e-mail].

17. The Board decided not to challenge the findings made

by Mr. Smith in his May 18, 2010, letter. Instead, it sent out

an amended notice of election to unit owners which listed

Ms. Fracchia, Ms. Guida-Pometti, and Ms. Gomez as eligible

candidates who would be on the ballot for the June 2010

election. This amended notice of election, however, did not

"explain the need for the amended notice," as required by

Florida Administrative Code Rule 61B-23.0021(9). Mr. Smith

telephoned Respondent to notify him, as the contact person for

the Board, of this deficiency in the Board's response to the

May 18, 2010, letter. Respondent took the matter to the other

members of the Board. The Board made the decision to cancel the

June 2010 election. The election was rescheduled for, and

ultimately held, in August 2010.

18. Around the time that Mr. Smith was conducting his

investigation, Respondent had a conversation with one of

Petitioner's investigators, Beatriz Caldera, who was

investigating a complaint that had been filed with Petitioner

against Respondent. During this conversation, Ms. Caldera

questioned whether it was a conflict of interest for Respondent

to serve on the Board and also be the owner of the community

association management firm (Management) providing community

association management services to the Association. In his

response, Respondent told Ms. Caldera, among other things, that

there were three owners of Management, which was not true

inasmuch as he was Management's sole owner at the time.

CONCLUSIONS OF LAW

19. DOAH has jurisdiction over the subject matter of the

instant proceeding and of the parties hereto pursuant to chapter

120.

20. Part VIII of chapter 468, Florida Statutes (Part VIII)

establishes a statutory scheme regulating the activities of

individuals and entities engaged in "community association

management," which is defined therein as follows:

"Community association management" means any

of the following practices requiring

substantial specialized knowledge, judgment,

and managerial skill when done for

remuneration and when the association or

associations served contain more than 10

units or have an annual budget or budgets in

excess of $100,000: controlling or

disbursing funds of a community association,

preparing budgets or other financial

documents for a community association,

assisting in the noticing or conduct of

community association meetings, and

coordinating maintenance for the residential

development and other day-to-day services

involved with the operation of a community

association.

§ 468.431(2). Among other things, Part VIII provides for the

licensure, by Petitioner, of these individuals ("community

association managers"

11 ) and entities ("community association

management firms" 12 ). § 468.432. Licensed "community

association management firms" may furnish "community association

management" services only through licensed "community

association managers." § 468.432(2)(g). An entity seeking a

"community association management firm" license must "designate

on its application a licensed community association manager who

shall be required to respond to all inquiries from and

investigations by [Petitioner]." § 468.432(2)(b). It may

replace this designee with another licensed "community

association manager," but it must notify Petitioner "within 30

days after [the] change." § 468.432(2)(c). "If the license of

at least one individual active community association manager

member is not in force, the license of the community association

management firm . . . is canceled automatically during that

time." § 468.432(2)(f).

21. Part VIII delegates to Petitioner the authority not

only to license, but also to discipline, "community association

managers" and "community association management firms." See

Gerecitano v. Barrwood Homeowners Ass'n , 882 So. 2d 424, 426

(Fla. 4th DCA 2004)("Pursuant to [section] 468.436, the

Department may undertake disciplinary proceedings against those

in violation of the statute."). The following are the acts for

which, pursuant to section 468.436(2), "community association

managers" and "community association management firms" may be

disciplined by Petitioner:

(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.[ 13 ]

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 negligence 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.

22. Subsection (3) of section 468.436 mandates that the

Regulatory Council of Community Association Managers (Council),

a body created by section 468.4315, "specify by rule the acts or

omissions that constitute a violation of subsection (2)" of the

statute. In an attempt to comply with this mandate, the Council

has adopted Florida Administrative Code Rule 61E14-2.001, which

prescribes "[s]tandards of [p]rofessional [c]onduct" and

provides, in pertinent part, as follows:

Licensees shall adhere to the following

provisions, standards of professional

conduct, and such provisions and standards

shall be deemed automatically incorporated,

as duties of all licensees, into any written

or oral agreement for the rendition of

community association management services,

the violation of which shall constitute

gross misconduct or gross negligence:

(2) Honesty. During the performance of

management services, a licensee shall not

knowingly make an untrue statement of a

material fact or knowingly fail to state a

material fact.

* * *

(4) Due Professional Care.

(a) A licensee shall exercise due

professional care in the performance of

community association management services.

(b) A licensee shall not knowingly fail to

comply with the requirements of the

documents by which the association is

created or operated so long as such

documents comply with the requirements of

law.

(5) Control of Others.[ 14 ] A licensee shall

not permit others under his or the

management firm's control to commit on his

or the firm's behalf, acts or omissions

which, if made by either licensee, would

place that licensee in violation 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 functions

under his or its supervision or control.[ 15 ]

(6) Records.

* * *

(b) A licensee shall not deny access to

association records, for the purpose of

inspecting or photocopying the same, to a

person entitled to such by law, to the

extent and under the procedures set forth in

the applicable law.

(c) A licensee shall not create false

records or alter records of a community

association or of the licensee except in

such cases where an alteration is permitted

by law (e.g., the correction of minutes per

direction given at a meeting at which the

minutes are submitted for approval).

23. Petitioner may impose one or more of the following

penalties on licensed "community association managers" and

"community association management firms" found "guilty of any of

the grounds set forth in subsection (2) [of section 468.436]":

(a) Denial of an application for licensure.

(b) Revocation or suspension of a license.

(c) Imposition of an administrative fine

not to exceed $5,000 for each count or

separate offense.

(d) Issuance of a reprimand.

(e) Placement of the community association

manager on probation for a period of time

and subject to such conditions as the

department specifies.

(f) Restriction of the authorized scope of

practice by the community association

manager.

§ 468.436(4).

24. Petitioner may take such action only after the

licensee has been given reasonable written notice of the charges

and an adequate opportunity to request a proceeding pursuant to

sections 120.569 and 120.57. See

§ 120.60(5).

25. An evidentiary hearing must be held if requested by

the licensee when there are disputed issues of material fact.

See Hollis v. Dep't of Bus. & Prof'l Reg. , 982 So. 2d 1237, 1239

(Fla. 5th DCA 2008); and §§ 120.569(1) and 120.57(1).

26. At the hearing, Petitioner bears the burden of proving

that the licensee engaged in the conduct alleged in the charging

instrument. Proof greater than a mere preponderance of the

evidence must be presented. Clear and convincing evidence is

required. See Dep't of Banking & Fin,, Div. of Sec. & Investor

Prot. v. Osborne Stern & Co. , 670 So. 2d 932, 935 (Fla. 1996);

Ferris v. Turlington , 510 So. 2d 292, 294 (Fla. 1987); and §

120.57(1)(j) ("Findings of fact shall be based upon a

preponderance of the evidence, except in penal or licensure

disciplinary proceedings or except as otherwise provided by

statute . . . .").

27. Clear and convincing evidence is an "intermediate

standard," "requir[ing] more proof than a 'preponderance of the

evidence' but less than 'beyond and to the exclusion of a

reasonable doubt.'" In re Graziano , 696 So. 2d 744, 753 (Fla.

1997). For proof to be considered "'clear and convincing' . . .

the evidence must be found to be credible; the facts to which

the witnesses testify must be distinctly remembered; the

testimony must be precise and explicit and the witnesses must be

lacking in confusion as to the facts in issue. The evidence

must be of such weight that it produces in the mind of the trier

of fact a firm belief or conviction, without hesitancy, as to

the truth of the allegations sought to be established." In re

Davey , 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval,

from Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA

1983); see also In re Adoption of Baby E. A. W. , 658 So. 2d 961,

967 (Fla. 1995)("The evidence [in order to be clear and

convincing] must be sufficient to convince the trier of fact

without hesitancy."). "Although this standard of proof may be

met where the evidence is in conflict, . . . it seems to

preclude evidence that is ambiguous." Westinghouse Electric

Corp., Inc. v. Shuler Bros., Inc. , 590 So. 2d 986, 989 (Fla. 1st

DCA 1991).

28. In determining whether Petitioner has met its burden

of proof, it is necessary to evaluate its evidentiary

presentation in light of the specific allegations of wrongdoing

made in the charging instrument. Due process prohibits an

agency from taking penal action against a licensee based on

matters not specifically alleged in the charging instrument,

unless those matters have been tried by consent. See Trevisani

v. Dep't of Health , 908 So. 2d 1108, 1109 (Fla. 1st DCA 2005)("A

physician may not be disciplined for an offense not charged in

the complaint."); Marcelin v. Dep't of Bus. & Prof'l Reg. , 753

So. 2d 745, 746-747 (Fla. 3d DCA 2000)("Marcelin first contends

that the administrative law judge found that he had committed

three violations which were not alleged in the administrative

complaint. This point is well taken. . . . We strike these

violations because they are outside the administrative

complaint."); and Dep't of Rev. v. Vanjaria Enters. , 675 So. 2d

252, 254 (Fla. 5th DCA 1996)("[T]the issue must be treated as

though it had been raised in the pleadings because the parties

tried the issue by consent.").

29. Furthermore, "the conduct proved must legally fall

within the statute or rule claimed [in the charging instrument]

to have been violated." Delk v. Dep't of Prof'l Reg. , 595 So.

2d 966, 967 (Fla. 5th DCA 1992). In deciding whether the

statute or rule claimed [in the charging instrument] to have

been violated was in fact violated, as alleged by Petitioner, if

there is any reasonable doubt, that doubt must be resolved in

favor of the licensee. See Djokic v. Dep't of Bus. & Prof'l

Reg., Div. of Real Estate , 875 So. 2d 693, 695 (Fla. 4th DCA

2004); Elmariah v. Dep't of Prof'l Reg., Bd. of Med. , 574 So. 2d

164, 165 (Fla. 1st DCA 1990); and Lester v. Dep't of Prof'l &

Occupational Regs. , 348 So. 2d 923, 925 (Fla. 1st DCA 1977).

30. The charging instrument in the instant case (the

Amended Administrative Complaint) contains three counts.

31. Count I of the Amended Administrative Complaint

alleges that Respondent "violated [s]ection 468.436(2)(b)5,

Florida Statutes [that is, "[c]ommitt[ed] acts of gross

misconduct or gross negligence in connection with the

profession"], when he improperly conducted elections of the

[North Bay Villas Condominium] Association Board of Directors

and released documents [specifically, minutes of a July 1, 2009,

Board meeting] without Board approval." While Respondent was

involved in the 2010 Board elections, it was not as a community

association manager. Rather, he was acting in his capacity as

secretary of the Board. Moreover, the record evidence is

insufficient to establish that Respondent did anything regarding

the election that, even if it had been done "in connection with

the [community association management] profession," would amount

to "gross misconduct or gross negligence" within the meaning of

section 468.436(2)(b)5 (which requires a showing of an

applicable standard of conduct or care and a "gross" departure

or deviation therefrom). Cf . K. M. T. v. Dep't of HRS , 608 So.

2d 865, 873 (Fla. 1st DCA 1992)("The purely subjective standard

the hearing officer created and applied in this case does not

constitute a sufficient standard for determining whether an

individual's acts or omissions constitute neglect within the

meaning of the Act. Rather, the acts or omissions must be

judged against an objective standard, which may be defined by

rule or by proof of general acceptance within the nursing home

industry. Of course, HRS has the burden of proving that the

alleged perpetrator's conduct fell below that standard.");

McDonald v. Dep't of Prof'l Reg. , 582 So. 2d 660, 670 (Fla. 1st

DCA 1991)(Zehmer, J., specially concurring)("[W]here the agency

charges negligent violation of general standards of professional

conduct, i.e., the negligent failure to exercise the degree of

care reasonably expected of a professional, the agency must

present expert testimony that proves the required professional

conduct as well as the deviation therefrom."); and Purvis v.

Dep't of Prof'l Reg. , 461 So. 2d 134, 136 (Fla. 1st DCA

1984)("Section 474.214(1)(q), Florida Statutes, sets forth

'negligence, incompetency or misconduct, in the practice of

veterinary medicine' as a ground for disciplinary action. The

parties to this appeal have treated 'negligence' and

'incompetency' as meaning a failure to comply with the minimum

standard of care or treatment required of a veterinarian under

the circumstances. We accept that construction of this penal

statute. Unlike a charge of violating a statute or rule under

section 474.214(1)(g), which requires no proof of a standard of

care, the charge against Dr. Purvis necessarily required

evidentiary proof of some standard of professional conduct as

well as deviation therefrom. . . . [T]he Board never introduced

any evidence at the administrative hearing to show the

appropriate standard of care which it contends Dr. Purvis failed

to meet. The Board introduced no expert testimony, no statute,

no rule, nor any other type of evidence to establish the

appropriate standard of care or that Dr. Purvis fell below that

standard."). With respect to the allegation concerning the

"release[] [of] documents without Board approval," Petitioner

failed to present clear and convincing evidence that it was

Respondent who was the one responsible for the "release[] [of

these] documents." For these reasons, Count I of the Amended

Administrative Complaint must be dismissed in its entirety.

32. Count II of the Amended Administrative Complaint

alleges that Respondent "violated [s]ection 468.436(2)(b)2,

Florida Statutes, through a violation of Rule 61E14-2.001(2),

Florida Administrative Code, when he falsely stated that he was

one of three owners of North Bay Property Management, Inc." The

record evidence does clearly and convincingly establish that

Respondent made this false statement; however, the statement was

made during a telephone conversation Respondent had with one of

Petitioner's investigators and not "[d]uring the performance of

management services." The making of this statement therefore

did not constitute a violation of Florida Administrative Code

Rule 61E14-2.001(2). Accordingly, Count II of the Amended

Administrative Complaint must be dismissed.

33. Count III of the Amended Administrative Complaint

alleges that Respondent "violated Section 468.436(2)(b)2,

Florida Statutes, through a violation of Rule 6lEl4-2.00l(6)(b),

Florida Administrative Code, . . . [b]y making records

inaccessible for photocopying to association unit owners,"

specifically, Ms. Caraballo, in response to her attorney's

February 16, 2010, records request. The record evidence fails

to clearly and convincingly establish that any Association

records to which Ms. Caraballo was entitled were made

"inaccessible [to her] for photocopying" or that Respondent

participated in the Association's response to her attorney's

letter in any role other than as the secretary of the Board.

Count III of the Amended Administrative Complaint therefore must

be dismissed.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Department of Business and

Professional Regulation issue a Final Order dismissing the

Amended Administrative Complaint in its entirety.

DONE AND ENTERED this 26th day of September, 2011, in

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 26th day of September, 2011.

ENDNOTES

1 Unless otherwise noted, all references in this Recommended

Order to Florida Statutes are to Florida Statutes (2010).

2 Petitioner had further alleged in this final count of the

original Administrative Complaint that Respondent "violated

Section 468.436(2)(b)2, Florida Statutes, through a violation of

Rule 61E14-2.001(2), Florida Administrative Code, when he . . .

[through a July 21, 2010, letter from his attorney] threatened

unit owners with unlawful litigation"; however, at the final

hearing, Petitioner withdrew this allegation.

3 The hearing was originally scheduled for May 20, 2011, but was

continued twice at Respondent's request.

4 Florida Administrative Code Rule 61E14-2.001(2) actually

provides as follows:

Honesty. During the performance of

management services, a licensee shall not

knowingly make an untrue statement of a

material fact or knowingly fail to state a

material fact.

It is Florida Administrative Code Rule 61E14-2.001( 4

) that

"states 'a licensee . . . shall exercise due professional care

in the performance of community association management

services.'"

5 These facts included the following:

5. At all times material to this complaint,

Respondent was the sole owner, and officer

for North Bay Property Management, Inc.

(Management).

* * *

9. On February 16, 2010, Complainant

Adriana Maria Caraballo, a resident of

Association, submitted a public records

request to Respondent through her attorney.

10. Management did not make all of the

requested records available to Complainant.

11. Management refused to provide for

copies to the Complainant.

6 The case style of the instant case has been amended to reflect

that Respondent's legal first name is now "Fernando," not

"Ferdinand."

7 The parties so stipulated in paragraph (7)(b) of their Pre-

Hearing Stipulation.

8 Respondent had access to, but hardly spent any time in, the

Condominium's property management office.

9 Section 718.111(12)(c) provides as follows:

The official records of the association are

open to inspection by any association member

or the authorized representative of such

member at all reasonable times. The right

to inspect the records includes the right to

make or obtain copies, at the reasonable

expense, if any, of the member. The

association may adopt reasonable rules

regarding the frequency, time, location,

notice, and manner of record inspections and

copying. The failure of an association to

provide the records within 10 working days

after receipt of a written request creates a

rebuttable presumption that the association

willfully failed to comply with this

paragraph. A unit owner who is denied

access to official records is entitled to

the actual damages or minimum damages for

the association's willful failure to comply.

Minimum damages are $50 per calendar day for

up to 10 days, beginning on the 11th working

day after receipt of the written request.

The failure to permit inspection entitles

any person prevailing in an enforcement

action to recover reasonable attorney's fees

from the person in control of the records

who, directly or indirectly, knowingly

denied access to the records. Any person

who knowingly or intentionally defaces or

destroys accounting records that are

required by this chapter to be maintained

during the period for which such records are

required to be maintained, or who knowingly

or intentionally fails to create or maintain

accounting records that are required to be

created or maintained, with the intent of

causing harm to the association or one or

more of its members, is personally subject

to a civil penalty pursuant to s.

718.501(1)(d). The association shall

maintain an adequate number of copies of the

declaration, articles of incorporation,

bylaws, and rules, and all amendments to

each of the foregoing, as well as the

question and answer sheet as described in s.

718.504 and year-end financial information

required under this section, on the

condominium property to ensure their

availability to unit owners and prospective

purchasers, and may charge its actual costs

for preparing and furnishing these documents

to those requesting the documents.

Notwithstanding this paragraph, the

following records are not accessible to unit

owners:

1. Any record protected by the lawyer-

client privilege as described in s. 90.502

and any record protected by the work-product

privilege, including a record prepared by an

association attorney or prepared at the

attorney's express direction, which reflects

a mental impression, conclusion, litigation

strategy, or legal theory of the attorney or

the association, and which was prepared

exclusively for civil or criminal litigation

or for adversarial administrative

proceedings, or which was prepared in

anticipation of such litigation or

proceedings until the conclusion of the

litigation or proceedings.

2. Information obtained by an association

in connection with the approval of the

lease, sale, or other transfer of a unit.

3. Personnel records of association or

management company employees, including, but

not limited to, disciplinary, payroll,

health, and insurance records. For purposes

of this subparagraph, the term "personnel

records" does not include written employment

agreements with an association employee or

management company, or budgetary or

financial records that indicate the

compensation paid to an association

employee.

4. Medical records of unit owners.

5. Social security numbers, driver's

license numbers, credit card numbers, e-mail

addresses, telephone numbers, facsimile

numbers, emergency contact information,

addresses of a unit owner other than as

provided to fulfill the association's notice

requirements, and other personal identifying

information of any person, excluding the

person's name, unit designation, mailing

address, property address, and any address,

e-mail address, or facsimile number provided

to the association to fulfill the

association's notice requirements. However,

an owner may consent in writing to the

disclosure of protected information

described in this subparagraph. The

association is not liable for the

inadvertent disclosure of information that

is protected under this subparagraph if the

information is included in an official

record of the association and is voluntarily

provided by an owner and not requested by

the association.

6. Electronic security measures that are

used by the association to safeguard data,

including passwords.

7. The software and operating system used

by the association which allow the

manipulation of data, even if the owner owns

a copy of the same software used by the

association. The data is part of the

official records of the association.

(d) The association shall prepare a

question and answer sheet as described in s.

718.504, and shall update it annually.

(e)1. The association or its authorized

agent is not required to provide a

prospective purchaser or lienholder with

information about the condominium or the

association other than information or

documents required by this chapter to be

made available or disclosed. The

association or its authorized agent may

charge a reasonable fee to the prospective

purchaser, lienholder, or the current unit

owner for providing good faith responses to

requests for information by or on behalf of

a prospective purchaser or lienholder, other

than that required by law, if the fee does

not exceed $150 plus the reasonable cost of

photocopying and any attorney's fees

incurred by the association in connection

with the response.

2. An association and its authorized agent

are not liable for providing such

information in good faith pursuant to a

written request if the person providing the

information includes a written statement in

substantially the following form: "The

responses herein are made in good faith and

to the best of my ability as to their

accuracy."

10 Ms. Caraballo was out of the country on March 8, 2010.

11 A "community association manager" is defined in section

468.431(4) as "a natural person who is licensed pursuant to this

part to perform community association management services."

12 A "community association management firm" is defined in

section 468.431(3) as "a corporation, limited liability company,

partnership, trust, association, sole proprietorship, or other

similar organization engaging in the business of community

association management for the purpose of providing any of the

services described in subsection (2) [of section 468.431]."

13 The "council" referred to in this statutory provision is the

"Regulatory Council of Community Association Managers." §

468.431(5).

14 At the final hearing, Petitioner advised, through counsel,

that it was "not at all" relying on this "Control of Others"

provision of the rule, but rather was basing its prosecution "on

actions that Respondent took in his capacity as a licensed CAM."

15 This second sentence of subsection (5), which makes licensees

vicariously liable for the acts of others even in the absence of

personal culpability, was declared an invalid exercise of

delegated legislative authority in Blanco v. Dep't of Bus. &

Prof'l Reg. , Case No. 10-2905RX, 2010 Fla. Div. Adm. Hear. LEXIS

110 (Fla. DOAH Sept. 21, 2010), and it therefore became void and

ineffective "when the time for filing an appeal [of the Final

Order in that case] expire[d]." § 120.56(3).

COPIES FURNISHED :

C. Erica White, Esquire

Kathleen Brown-Blake, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2202

Christopher L. Hixson, Esquire

Lynch & Robbins, P.A.

2639 Dr. Martin Luther King, Jr. Street North

St. Petersburg, Florida 33704

Anthony B. Spivey, Executive Director

Regulatory Council of Community Association Managers

1940 North Monroe Street

Tallahassee, Florida 32399

Layne Smith, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.