15-000223 Kevin And Catherine Hannon vs. Horse Creek Estates Homeowners Association, Inc.; The Compass Management Group, Llc; And Dale Mullin Status: Closed Recommended Order on Friday, May 8, 2015.

Summary: Petitioners failed to prove discrimination; recommend FCHR dismiss the petition. The Respondents' motion for attorney's fees is denied.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KEVIN AND CATHERINE HANNON,

Petitioners,

vs. Case No. 15 - 0223

HORSE CREEK ESTATES HOMEOWNERS

ASSOCIATION, INC.; THE COMPASS

MANAGEMENT GROUP, LLC ; AND DALE

MULLIN,

Respondents.

__________________________ _____/

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case on

March 11, 2015, in Naples, Florida, before Administrative Law

Judge Lynne A. Quimby - Pennock of the Division of Administrative

Hearings (Division ).

APPEARANCES

For Petitioner s : Catherine Hannon , pro se

Kevin Hannon , pro se

3452 Atlantic Circle

Naples, Florida 34119

For Respondent s : Michael E. Riley, Esquire

GrayRobinson, P.A.

Post Office Box 11189

Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

Whether Respondents , Horse Creek Estates Homeowners

Association, Inc. (HCE) ; The Compass Management Group , LLC ; a nd

Dale Mullin, H CE p resident , discriminated against Petitioners,

Kevin and Catherine Hannon, in violation of the Florida Fair

Housing Act.

PRELIMINARY STATEMENT

In September 2014, Mr. and Mrs. Hannon filed a housing

discrimination complaint with the Flor ida Commission on Human

Relations (Commission). The Commission investigated, and on

December 5, 2014, entered a Notice of Determination of No Cause

(Notice). The Notice was sent to Petitioners via certified

mail. 1/ On January 6, 2015, Petitioners filed a Petition for

Relief with the Commission, and on January 14, the Commission

referred the case to the Division.

On March 3, RespondentsÓ Motion in Limine was filed

(Motion). This Motion set forth multiple areas of concerns that

Respondents did not want Pe titioners to explore during the

hearing. On March 4 , Petitioners filed a Motion to Report

Harassment and Objecting to Motion in Limine (Objection). The

Motion and Objection were taken under advisement at the hearing.

The Motion and Objection are denied. 2 /

At the final hearing, Petitioners called M r s. Hannon to

testify. PetitionersÓ Composite Exhibits 1 and 2 were admitted

into evidence. Respondents called Mr. Mullin, Daniel Sussman,

and Aubrey Nolen to testify on their behalf. RespondentsÓ

Exhibits 1 t hrough 9, 11, 13, 14, 3 / and 16 through 18 4 / were

admitted into evidence.

At the end of the hearing, RespondentsÓ counsel advised that

a transcript of the final hearing would be ordered. The parties

were advised that any post - hearing submissions would be d ue on

the tenth day following the filing of the transcript.

Petitioners requested seven additional days in which to submit

their proposed recommended orders (PROs). The request was

granted and the PROs were due 17 days after the filing of the

transcript.

The Transcript was filed on April 7, 2015 . On April 7, a

Notice of Filing was issued informing the parties that the

Ðproposed orders . . . must be filed with the Division on or

before the close of business on April 24.Ñ

The parties timely submitted the ir PROs, which have been

considered in the preparation of this Recommended Order .

To the extent that PetitionersÓ PRO contained new testimony

or evidence, not subject to cross - examination, that information

has not been considered.

On May 4, 2015, Petitione rs filed an ÐEx ception Request for

Award of Attorney Fee and Dismissal.Ñ PetitionersÓ pleading

contained testimony or evidence that was not subjected to cross -

examination. That pleading has not been considered.

On May 6, 2015, RespondentsÓ Motion to Stri ke as Impertinent

and Scandalous PetitionersÓ ÐException Request for Attorney Fee

Award and DismissalÑ was filed with the Division. In light of

the ruling that PetitionersÓ ÐExceptionÑ pleading has not been

considered, so to o this particular pleading has not been

considered in the rendering of this Recommended Order.

Unless otherwise stated, all statutory references are to the

2014 codification of the Florida Statutes.

FINDING S OF FACT

PARTIES

1. Petitioners are a married couple with children , living

in N aples, Florida. During the applicable period, Petitioners

own ed a home located at 442 Saddlebrook Lane (Saddlebrook home) .

They currently reside in their new home at 3452 Atlantic Circle.

2. Petitioners did not allege they are members of a

protected cla ss and they were subjected to discrimination based

on that protected classification. Petitioners alleged that

Respondents violated the Florida Fair Housing A ct, as amended in

the manner specifically described:

- Respondents creates [sic] different terms

an d standards for different tenants and do

not have a fair screening process;

- Respondents continue to discriminate against

proteted [sic] classes in order to ÐcreateÑ

their desired All White Neighborhood;

- Respondents failed to provide a Ðwritten

adverse ac tion notice as required by the

Federal Trade Commission (FTC)

3. Further, Petitioners alleged as the Ðultimate factsÑ and

Ðentitlement to reliefÑ as:

Respondents did discriminate when they

unfairly denied the tenants based o n highly

inaccurate informatio n. They failed to use a

fair screening process and intentionaly [sic]

delayed the approval process. This action

caused and created unnecessary stress and a

considerable amount of time, effort and

financial burden & expenses to prove tenant

was not a conv icted felon. Respondents have

never taken any responsibility for their

actions, apologized or expressed remorse.

They have manipulated the facts and benefit

by having unlimited [illegible] I am

seeking justice. 5 /

4. Petitioners claimed their tenants were subjected to

discrimination based on their protected class: race and familial

status. As set forth below, such discrimination was not

established.

5 . Respondent HCE is a Florida not - for - profit corporation.

According to Mr. Mullin, HCE represents 109 lots , including 103

homes, four empty lots and one lot being developed. 6 / Since its

inception , HCE has , through its members, approved its articles of

incorporation and bylaws, and amended its declaration of

condominium in accordance with Florida law.

6 . Respondent Mr. Mullin is currently president of HCE Ó s

Board of Directors (Board). Mr. Mullin has been on the Board

since 2010 and has served as its president for the last two

years. Mr. Mullin resides in the community. The undersigned

finds that Mr. Mullin was listed as a Respondent in his official

capacity as the BoardÓs president, and not in his individual

capacity.

7 . Respondent Compass Management Group , LLC (Compass) , is a

property management company which supervises approximately 130

different properties in Naples and the surrounding area,

including HCE. Compass is responsible for the accounting,

repair ing property, and processing sales and leases for the

various properties it manages. Compass processes the various

lease applications, but does not make any decisions on which

tenants are approved or denied; those decisions are made by the

individual property associations.

SCENARIO

8 . In 2014, Petitioners were in the process of building a

new home in another Naples neighborhood. Petitioners det ermined

that if they could not sell the Saddlebrook home in order to

obtain the necessary financing for their new home, they would

list the Saddlebrook home as rental property.

9 . Petitioners engaged Chris Lecca as their real estate

rental agent for the S addlebrook home. Mr. Lecca listed the

Saddlebrook home on the MLS (multiple listing services).

10 . Nhuchau Hong Presti, who is also a real estate agent ,

saw the MLS rental listing for the Saddlebrook home. She, along

with her husband Scott Presti, compl eted and executed the Compass

application checklist (2 pages), and the Ð Estates at Horse Creek Ñ

lease application 7 / (21 pages, which included a copy of the

Florida Residential Landlord and Tenant Act) on June 27, 2014.

This lease application included a no tice that Ð [a n ] interview

with the Board is required prior to approval.Ñ 8 /

11 . The Saddlebrook home lease term was August 1, 2014 ,

through March 31, 2015. The Prestis submitted their completed

lease application to Mr. Lecca. Prior to submitting the leas e

application to Compass, Mr. Lecca performed a background check on

Mr. and Mrs. Presti. Mr. Lecca found the Prestis to have Ðdecent

or good credit.Ñ The background check also provided information

about an old arrest of Mr. Presti. The arrest was over t en years

old and was not a felony. Mr. Lecca could not envision any

reason for the Prestis Ó application to be denied.

12 . Mr. Lecca submitted the Prestis Ó lease application to

Compass on Tuesday, July 1, 2014, 30 days before the lease was to

begin. Com pass forwarded the lease application to the HCE Board

for its review and determination.

1 3 . According to HCE bylaws, a decision on the lease

application had to be announced within 15 days of the

application. 9 / On Wednesday, July 9 , Compass sent a letter to

Petitioners notifying them that the Prestis Ó lease application

was denied. The stated reason was:

( 1 ) This application is being denied do

[sic] to results that were returned on the

background/credit check for the applicants.

Attached is a copy of the Horse Creek Estates

ÐRegulatory Criteria for Disapproving a

Rental LeaseÑ. . [sic]

1 4 . The Board initially based its decision on information

found in the ÐREAL - ID IncorporatedÑ documentation, which

reflected Mr. PrestiÓs arrest and Mrs. PrestiÓs financi al

foreclosure actions. Once the Board was advised of the

circumstances, the Board exercised its right to interview the

Prestis. As a result of that personal interview, the lease

application was approved, and the Prestis moved into the

Saddlebrook home.

1 5 . CompassÓ client services manager, Ms. Nolen , advised

Mr. Lecca that the BoardÓs basis for the denial was Mr. PrestiÓs

felony conviction and M r s. PrestiÓs financial foreclosure

actions.

1 6 . Shortly thereafter , Petitioners engaged an attorney who

requ ested the Board to reconsider the denial decision. On

Monday, July 14, Mr. and Mrs. Presti were asked to attend an

in - person interview with the Board or members of the Board.

Although the Board (through Compass) offered to meet with the

Prestis on Thurs day, July 17, a conflict arose and the interview

was re - scheduled to Friday, July 18.

1 7 . On July 18, Mr. and Mrs. Presti , accompanied by

Mr. Lecca , arrived at the interview location, Mr. MullinÓs

residence. Mr. Mullin declined to allow Mr. Lecca to att end the

meeting, stating that Mr. LeccaÓs presence wasnÓt necessary.

1 8 . Board members , Mr. Mullin and Mr. Sussman , interviewed

the Prestis. Following this 30 to 45 minute interview, the Board

reversed its denial and approved the Prestis Ó lease applicati on.

Mr. Mullin telephoned Mr. Lecca and told him that the lease

application was approved. The Compass approval letter was issued

on Tuesday, July 22.

1 9 . The Prestis moved into the Saddlebrook home on or about

August 1, the date the lease began. They h ave paid their monthly

rental fee timely and there have been no complaints.

20 . No testimony or evidence was presented that

demonstrated any type of discrimination was the motivation for

the initial denial of the lease application.

CONCLUSIONS OF LAW

21 . The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

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

Statutes.

22 . Florida's Fair Housing Act (the "Act") is codified in

s ections 760.2 0 through 760.37, Florida Statutes. Section

760.23 provides in relevant part:

Discrimination in the sale or rental of

housing and other prohibited practices. Ï

* * *

(2) It is unlawful to discriminate against

any person in the terms, conditions, or

privileges of sale or rental of a dwelling,

or in the provision of services or facilities

in connection therewith, because of race,

color, national origin, sex, handicap,

familial status, or religion.

2 3 . In evaluating housing discrimination claims , courts

have applied the burden shifting analysis developed in McDonnell

Douglas Corp. v. Green , 411 U.S. 792, 802 - 804 (1973), as later

refined in Texas Dep artment of Comm unity Aff air s v. Burdine , 450

U.S. 248, 252 - 253 (1981). Under this approach, Petitio ners must

first make a prima facie case for discrimination.

2 4 . A prima facie showing of housing discrimination simply

requires the Petitioners to show that they were ready, able, and

willing to rent the property, that they were a member of a

protect ed class; that their application for renting the house was

denied; and that the house remained available for lease. See

Soules v. U.S. Dep't of Housing and Urban Dev. , 967 F.2d 817, 822

(2d Cir. 1992).

2 5 . Petitioners are not within a protected class as

con templated by the Act.

2 6 . Petitioners have the burden of proving by a

preponderance of the evidence that Respondents violated the Act

by discriminating against Petitioners based on the tenants Ó race.

§ § 120.57(1)(j) and 760.34(5), Fla. Stat. Petition ers failed to

meet their burden in this case.

27. On March 24, 2015 , Respondents filed a Motion for

AttorneyÓs Fees Pursuant to Section 57.105, Florida Statutes

against Petitioners. Therein Respondents contend that

Petitioners Ðknew or should have known that a claim or defense

was not supported by the material facts necessary to establish

the claim or would not be supported by the application of the

then - existing law.Ñ Further, Respondents rely on sections

760.23(1) and (2). The undersigned finds that P etitioners

believed they had a discriminatory claim of action.

28. Further, section 760.35 provides in pertinent part:

[I]f the administrative law judge finds that

a discriminatory housing practice has

occurred . . . she shall issue a recommended

order to the commission prohibiting the

practice and recommending affirmative relief

from the effects of the practice, including

quantifiable damages and reasonable

attorneyÓs fees and costs. The commission

may adopt, reject, or modify a recommended

order only as provided under s. 120.57(1).

(emphasis added.)

29. In the instant case, the undersigned did not

find that a discriminatory housing practice occurred.

30 . It should be noted that M r s. Hannon was very credible.

However, she did not carry the burden of proof to establish that

discrimination actually occurred . The initial denial was made in

a timely fashion. The reconsideration and ultimate lease

approval enabled the Prestis to move into the Saddlebrook home on

the original rental date.

RECOMMENDATI ON

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered by the

Florida Commission on Human Relations , dismissing the Petition

for Relief filed by Petitioners in its entirety , and d enying

Respo ndentÓs request for attorneyÓs fees.

DONE AND ENTERED this 8th day of May , 2015 , in Tallahassee,

Leon County, Florida.

S

LYNNE A. QUIMBY - PENNOCK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Buil ding

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 8th day of May , 2015 .

ENDNOTE S

1/ The date of PetitionerÓs receipt of the Notice was never

established.

2 / It is noted that the undersigned does not have jurisdiction

over the practice of law .

3 / RespondentsÓ Exhibit 14 is M r s. HannonÓs February 11

deposition. Therein, at page 132, RespondentsÓ counsel direc ted

the court reporter Ðto mark all these exhibits and attach the m to

the deposition transcript.Ñ None of the deposition exhibits were

contained in Exhibit 14.

4 / In lieu of live testimony, the depositions of Christopher

Lecca, Scott Presti and Nhuchau Hong Presti were admitted into

evidence as Exhibits 16, 17, and 18 respectively. Each

deposition transcript reflected that exhibits with various

numbers for identification were provided to the deponents.

However, only Mr. LeccaÓs deposition (Exhibit 16) contained one

attached exhibit number 14, which was admitted separately at

hearing as RespondentsÓ Exhibit 8.

In Exhibit 18, the parties agreed that several references to

ÐMr. HannonÑ should be to ÐMr. Mullin . Ñ

5/ Please see the Notice of Hearing issue d January 29, 2015.

6 / It i s noted that the number of homes and lots does not equal

the number of units Mr. Mullin described.

7 / The lease application reflects that the starting point of the

lease is Ð8/1/14Ñ and the ending point is Ð 3/31/15.Ñ Howeve r , in

the ÐNOTEÑ section, the lease term is a Ðminimum of seven (7)

months, 1 time per year.Ñ The term of the lease is for eight

months.

8 / Section 3.23 .1 of the Declaration of Covenants, R estrictions

and Easements for Horse Creek Estates provides the f ollowing:

LEASES. All leases of Lots must be in

writing, and a copy of any Lease shall be

delivered to the Board of Directors prior to

the commencement of the Lease. The provisions

of this Declaration shall be deemed expressly

incorporated into the Leas e of any Lot. An

Owner may lease a Lot only in accordance with

the following provisions:

3.23.1 An Owner intending to lease his Lot

must give the Board, or its designee, written

notice of such intention and a copy of the

proposed Lease at least thirty ( 30) days prior

to the proposed transaction, together with the

name and address of the proposed tenant, and

such other information as the Board may

reasonably require. The Board, or its

designee, may require the personal appearance

of any tenant, their spo use, and any other

potential occupant, as a condition of

approval. (emphasis added).

9 / Section 3.23. 3 of the Declaration of Covenants, restrictions

and Easements for Horse Creek Estates provides the following:

After the required notice, application fe e and

all information or appearances requested have

been provided, the Board, or its designee,

shall approve or disapprove the proposed Lease

within fifteen (15) days. If the Board, or

its designee, neither approves nor disapproves

within the time state a bove, such failure to

act shall be deemed the equivalent of

disapproval. In the event the Board fails to

approve the Lease, the Lease may not be

entered into, and shall not be effective. The

Board may consider the status of paid or

unpaid assessments in determining whether a

lease should be approved.

COPIES FURNISHED:

Catherine Hannon

Kevin Hannon

3452 Atlantic Circle

Naples, Florida 34119

(eServed)

Michael E. Riley, Esquire

GrayRobinson, P.A.

Post Office Box 11189

Tallahassee, Florida 32302

(eS erved)

Amy Garrard

The Compass Management Group, LLC

Suite 200

3200 Tamiami Trail, North

Naples, Florida 34103

Dale Mullin

Horse Creek Estates

411 Saddlebrook Lane

Naples, Florida 34110

Tammy Scott Barton, Agency Clerk

Florida Commission on Human Rela tions

4075 Esplanade Way , Room 110

Tallahassee, Florida 32399

Cheyanne Costillo, General Counsel

Florida Commission on Human Relations

4075 Esplanade Way , Room 110

Tallahassee, Florida 32399

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.