18-005291 Jonathan Young And Loretta Shirley vs. Springlake-Northwood Homeowners Association, Inc., And Its Board Of Directors And Department Of Economic Opportunity Status: Closed Recommended Order on Friday, January 4, 2019.

Summary: Revitalization of declaration denied because revitalization committee failed to verify copies of written consents.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JONATHAN YOUNG AND LORETTA

SHIRLEY,

Petitioners,

vs. Case No. 18 - 5291

SPRINGLAKE - NORTHWOOD HOMEOWNERS

ASSOCIATION, INC., AND ITS BOARD

OF DIRECTORS AND DEPARTMENT OF

ECONOMIC OPPORTUNITY,

Respondents.

__ _____________________________/

RECOMMENDED ORDER

On December 7, 2018, Robert E. Meale, Administrative Law

Judge of the Division of Administrative Hearings (DOAH),

conducted the final hearing by videoconference in Lauderdale

Lakes and Tallahassee, Florida.

APPEARANCES

For Petitioner: Jonathan Paul Young, pro se

Loretta Shirley, pro se

9635 Northwest 83rd Street

Tamarac, Florida 33321

For Respondent s Springlake - Northwood Homeowne rs Association,

Inc., and its Board of Directors (HOA) :

Lauren T. Schwarzfeld, Esquire

Kaye Bender Rembaum, P.L.

1200 Park Central Boulevard South

Pompano Beach, Florida 33064

For Resp ondent Department of Economic Opportunity (DEO ) :

Rebekah Davis, Esquire

Department of Economic Opportunity

Mail Station 110

107 East Madison Street

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue is whether, pursuant to section 720.406(2),

Florida Statutes (2018) , a revitalization organization committee

of HOA (Committee) is entitled to approval from DEO of a proposed

revitalization of the declaration of rest rictive covenants.

PRELIMINARY STATEMENT

On July 3, 2018, Emily E. Gannon, an attorney, submitted a

copy of the proposed Revitalized Amended and Restated Declaration

of Restrictions for Springlake - Northwood (Revitalized

Declaration), a copy of numerous wri tten consents of lotowners,

and other documents. By letter dated August 31, 2018, DEO

advised Ms. Gannon that it had determined that the submitted

documents comply with the requirements of chapter 720, part III,

and DEO approved the proposed Revitalized D eclaration. The

August 31 letter includes a notice stating that any person whose

substantial interests are affected by this determination may

obtain an administrative hearing by filing a petition within

21 days of receipt of the determination.

On Septem ber 25, 2018, Petitioners filed a Petition for

Administrative Hearing (Petition) with a copy to HOA and

Ms. Gannon's law firm. The Petition states that Petitioners

learned of the proposed agency action on September 10, 2018,

following the receipt of infor mation from DEO pursuant to a

public records request submitted on September 4, 2018.

At the hearing, Petitioners called two witnesses and offered

into evidence four exhibits: Petitioners Exhibits B, C, H,

and I; HOA called four witnesses and offered in to evidence five

exhibits: HOA Exhibits 1 through 5 (HOA Exhibit 3 is Petitioners

Exhibit A); and DEO called no witnesses and offered into evidence

one exhibit: DEO Exhibit 1. All exhibits were admitted except

Petitioners Exhibits B, H, and I, which wer e proffered.

The parties did not order a transcript. Petitioners and an

unidentified party filed proposed recommended orders on

December 17, 2018.

FINDING S OF FACT

1. In 1978, HLR, Inc. , recorded restrictive covenants on

97 lots of a subdivision known as Northwood in Tamarac, Broward

County (as amended, Declaration). As authorized by the

Declaration, HOA has administered and maintained the common area,

including a recreation area and lake that are owned by HOA. By

operation of the Marketable Record Ti tle Act, chapter 712,

Florida Statutes (MRTA), and the failure of HOA to file timely a

notice under section 712.05(2), the Declaration was extinguished

sometime in 2008, and the lots were freed from the restrictive

covenants.

2. At some point, Susan DePot ter, Phyllis Bonfoey, and

Elaine Hidalgo, who are lotowners, formed the Committee to

revitalize the Declaration. With the assistance of Ms. Gannon,

the Committee prepared the Revitalized Declaration and supporting

documents and presented them to the other lotowners for their

approval.

3. The Declaration had been amended four times prior to its

extinguishment. On December 6, 1989, HOA recorded an unnumbered

amendment to the Declaration, which implemented an occupancy

requirement that at least 80 % of the lots be occupied by at least

one person at least 55 years old, an occupancy prohibition

against permanent residents by any person under 16 years old, and

a leasing restriction that no lot may be leased without the prior

approval of HOA. On January 6, 1990 , HOA recorded the fourth

amendment to the Declaration, which changed the frequency of

payment of lotowners' fees from quarterly to annually. On

October 24, 2000, HOA recorded an unnumbered amendment to the

Declaration, which changed the office location o f HOA. The

record does not contain other amendments to the Declaration.

4. The Revised Declaration generally tracks the

Declaration. Major changes made by the Revitalized Declaration

are the deletion of the above - described provisions of the

amendment re corded on December 6, 1989, although article III,

section 3, of the bylaws of HOA submitted to DEO continue to

prohibit leasing of a lot without the approval of the HOA board

of directors. Minor changes involve the deletion of references

to HLR, Inc., who se responsibilities as the developer of

Northwood ended many years ago. As provided in the fourth

amendment to the Declaration, the Revitalized Declaration

continues to require lotowners to pay fees annually, even though,

at times since the recording of t he fourth amendment, HOA has

allowed lotowners to pay fees quarterly.

5. By memorandum mailed to all lotowners on or about

February 20, 2018, the Committee enclosed the Revitalized

Declaration, articles of incorporation and bylaws for the HOA,

and a con sent form. The memorandum explains the revitalization

process and asks for the written approval of each lotowner to the

revitalization. Specifically, the memorandum asks each lotowner

to sign and return, starting March 7, 2018, the enclosed consent

form to one of the three Committee members, each of whose address

and telephone number is listed. Most of the executed consents

were signed by May 31, 2018, but about a dozen were signed after

May 31, 2018. Each executed consent was returned to one of the

thr ee Committee members.

6. The consent forms are straightforward and easy to

understand. They include spaces for a signature, date, and

address of the lot owned by the person signing the form, but do

not include an acknowledgement.

7. Owners of 58 lots returned signed, unacknowledged

consent forms indicating their approval of the Revitalized

Declaration. On September 19, 2018, seven owners signed

unattested " affidavits " stating that they had signed consent

forms, but felt " pressured, coerced, misled, an d/or threatened "

by other homeowners to do so, although these " affidavits " do not

attempt to rescind the previously granted consents.

8. By letter dated July 3, 2018, Ms. Gannon transmitted to

DEO a copy of the proposed Revitalized Declaration; a copy of the

Declaration; copies of 58 signed consent forms; a notarized

affidavit signed by a member of the HOA board of directors, Brian

McLaughlin; and a notarized affidavit signed by Ms. Gannon.

9. In Mr. McLaughlin's affidavit, he attests to the

following: to the best of his knowledge, the Revitalized

Declaration, articles of incorporation, and bylaws are true and

correct; to the best of his knowledge, the amendments to the

bylaws on seven occasions from 1981 through 1997 have been lost;

and, to the best of his knowledge, the submittal satisfies the

requirements of section 720.404.

10. In Ms. Gannon's affidavit, she attests:

[T] o the best of my knowledge, the proposed

Revitalized . . . Declaration . . . was

approved by at least a majority of the

affected parcel owners by Written Consent.

[T] o the best of my knowledge, the enclosed

. . . 58 Written Consent Forms are the

true and correct copies of the . . . Written

Consent Forms that were received by

the . . . Committee reflecting consent

to the proposed R evitalized . . .

Declaration . . . .

11. By letter dated August 31, 2018, DEO approved the

proposed Revitalized Declaration. The letter advises that HOA

must comply with the requirements of section 720.407(1)

through (3), including the recording of the documents described in

section 720.407(3), and states that the Revitalized Declaration

will become effective upon recording. The second page of the

letter is a " Notice of Administrative Rights, " which advises that

a person " whose substantial interests are affected by this

determination has the opportunity for an administrative proceeding

pursuant to section 120.569, Florida Statutes. " The notice

requires that such a person file a petition within 21 calendar

days of receipt of the DEO's determination.

12. On September 10, 2018, Petitioners received notice of

the proposed approval of the Revitalized Declaration. On

September 18, 2018, HOA recorded the Revitalized Declaration. On

September 25, 2018, Petitioners timely filed the Petition

challenging the pro posed approval of the Revitalized Declaration.

CONCLUSIONS OF LAW

1 3. DOAH has jurisdiction. §§ 120.569 and 120.57, Fla.

Stat. Essentially, DEO has proposed to grant an application

submitted by the HOA, and Petitioners have filed the Petition

challengin g this proposed agency action.

14. The jurisdictional determination is governed by Agrico

Chemical Co. v. Department of Environmental Regulation , 406 So.

2d 478 (Fla. 2d DCA 1981), which applies to a third - party

challenge to proposed agency action to gr ant a permit

application. Under Agrico , a permit challenger must show that it

will suffer an injury in fact of sufficient immediacy to entitle

him to a formal hearing and its substantial injury is of a type

or nature that the proceeding is designed to pro tect. Agrico ,

406 So. 2d at 482. The injury - in - fact prong is satisfied by

" actual or immediate threatened injury at the time the petition

was filed. " S. J. v. Thomas , 233 So. 3d 490, 499 (Fla. 1st DCA

2017) (citation omitted) (petitioner had already suf fered actual

injury in the form of a disciplinary school transfer prior to

filing petition).

15. Typically, DEO's proposed approval precedes the

recording of the r evitalized d eclaration because section

720.407(2) mandates the recording of the r evitalize d d eclaration,

after its approval by DEO; in such cases, the alleged injury is

immediate and threatened. Where a revitalization committee

records a revitalized declaration before the time for filing a

request for a hearing and such a request is later file d, the

alleged injury is actual, as it is here where Petitioners'

interests in their lot have been encumbered by the restrictive

covenants contained in the Revitalized Declaration. Petitioners'

interests are within the zone of interests protected by

chapt er 720, part III, which protects the interests of lotowners

like Petitioners by requiring the consent of the majority of

lotowners to the revitalization and prohibits provisions in the

r evitalized d eclaration more restrictive than the provisions in

the ext inguished d eclaration.

16. The burden of proving compliance with the statutory

requirements for revitalization is on HOA. Dep't of Transp. v.

J. W. C. , 396 So. 2d 778 (Fla. 1st DCA 1981). The standard of

proof is a preponderance of the evidence. § 120. 57(1)(j ).

17. DEO characterizes as " ministerial " its responsibilities

under chapter 720, part III, because, in their simplicity, the

applicable conditions do not invite the exercise of agency

discretion. These conditions are found in three statutes.

18. Section 720.404 conditions a revitalization of a

declaration upon the following:

(1) All parcels to be governed by the

revived declaration must have been once

governed by a previous declaration that has

ceased to govern some or all of the parcels

in the community;

(2) The revived declaration must be

approved in the manner provided in

s. 720.405(6); and

(3) The revived declaration may not contain

covenants that are more restrictive on the

parcel owners than the covenants contained

in the previous decla ration, except that the

declaration may:

(a) Have an effective term of longer

duration than the term of the previous

declaration;

(b) Omit restrictions contained in the

previous declaration;

(c) Govern fewer than all of the parcels

governed by the pr evious declaration;

(d) Provide for amendments to the

declaration and other governing documents;

and

(e) Contain provisions required by this

chapter for new declarations that were not

contained in the previous declaration.

19. Section 720.405(4) expl icitly requires the revitalized

declaration to be the same as the declaration as to voting

interests, proportional - assessment obligations, and amendment

provisions.

20. Section 720.406(1) requires the Committee to submit the

revitalization package to DEO within 60 days of receiving the

requisite number of consents. The package " must include " :

(a) The full text of the proposed revived

declaration of covenants and articles of

incorporation and bylaws of the homeownersÓ

association;

(b) A verified copy of the previous

declaration of covenants and other previous

governing documents for the commu nity,

including any amendments thereto;

(c) The legal description of each parcel to

be subject to the revived declaration and

other governing documents and a plat or

other graphic depiction of the affected

properties in the community;

(d) A verified co py of the written consents

of the requisite number of the affected

parcel owners approving the revived

declaration and other governing documents

or, if approval was obtained by a vote at a

meeting of affected parcel owners, verified

copies of the notice of the meeting,

attendance, and voting results;

(e) An affidavit by a current or former

officer of the association or by a member of

the organizing committee verifying that the

requirements for the revived declaration set

forth in s. 720.404 have been satisfied; and

(f) Such other documentation that the

organizing committee believes is supportive

of the policy of preserving the residential

community and operating, managing, and

maintaining the infrastructure, aesthetic

character, and common areas serving the

residential community.

21. Petitioners ha ve challenged generally three aspects of

the proposed revitalization: 1) the scope of the proposed

Revitalized Declaration compared to the Declaration; 2) the

consents; and 3) the role of Ms. Gannon in performing duties of

the Committee.

22. In no way is the Revitalized Declaration more

restrictive than the Declaration. Section 720.404(3) prohibits

covenants in a revitalized declaration that are more restrictive

than covenants in the declaration, not more restrictive than

practices of a homeowners' ass ociation that are more generous

than specified by the declaration. The Declaration specifies the

payment of fees annually, and so does the Revitalized

Declaration. Although the bylaws are more restrictive than the

Declaration in requiring the approval of the HOA board of

directors for any lease, chapter 720, part III, does not prohibit

a more restrictive provision in bylaws than a declaration.

23. Petitioners argued for a deadline within which consents

must be filed, but none is contained in chapter 72 0, part III.

The only deadline, which the HOA met, is that the lotowners

receive the revitalization package at least 14 days before

voting. § 720.405(5).

24. Petitioners claimed that the owners of a majority of

the lots failed to consent, evidently base d on the seven

" affidavits " that Petitioners claim rescinded seven consents.

The language of these " affidavits " does not clearly rescind the

prior consent. Even if the " affidavits " purportedly rescinded

prior consents, chapter 720, part III, fails to ind icate whether

a lotowner may rescind his or her consent and, if so, by when he

or she must do so. But the most important problem with

Petitioners' " affidavits " is that, even if construed as allowable

rescissions, the proposed Revitalized Declaration still won

consents from 51 lotowners, which is a majority of the

97 lotowners.

25. Nor is the admissibility of the written consents at

issue. Even after HOA objected to Petitioners' " affidavits " on

the ground of hearsay, which was overruled because the

" aff idavits " supplemented or explained the " affiants' " earlier

written consents, as provided by section 120.57(1)(c),

Petitioners failed to object to, or move to strike, the consents

on the basis of hearsay or authenticity. Thus, it is unnecessary

to determin e whether the written consents were admissible under

section 120.57(1)(c) ( " Hearsay evidence may be used for the

purpose of supplementing or explaining other evidence, but it

shall not be sufficient in itself to support a finding unless it

would be admissi ble over objection in civil actions . " ) or

section 120.569(2)(g) ( " evidence of a type commonly relied upon

by reasonably prudent persons in the conduct of their affairs

shall be admissible " ). Compare O'Brien v. Fla. Birth - Related

Neurological Injury Comp. Ass'n , 710 So. 2d 51 (Fla. 4th DCA

1998) (objection to lack of review by medical panel waived by

failure to raise it at the hearing) , with Harris v. Game &

Freshwater Fish Comm'n , 495 So. 2d 806 (Fla. 1st DCA 1986)

(objection to hearsay not waived by failu re to raise it at

hearing).

26. Petitioners raised a number of objections to

Ms. Gannon's performance of responsibilities imposed upon the

Committee and to the activity of HOA, which Petitioners claim was

terminated upon the extinguishment of the Declar ation in 2008.

With one exception, these contentions are based on a misreading

or misapplication of the pertinent statutes.

27. First, HOA is a Florida corporation, whose existence is

dictated by its articles of incorporation, which do not mandate

dissol ution upon the extinguishment of the Declaration, and

Florida law governing corporations, which likewise does not

mandate dissolution upon the extinguishment of the Declaration.

In fact, section 720.405(3) recognizes the possibility that an

association ma y continue to exist after the extinguishment of the

declaration that it previously administered.

28. Section 720.405(1) provides that the revitalization

committee shall " initiate " a proposed revitalization of the

Declaration. The evidence is consistent w ith the initiation of

the proposed revitalization by the Committee. The evidence does

not support Petitioners' contention that HOA initiated the

proposed revitalization. Nothing in chapter 720, part III,

requires the Committee to litigate whether the pro posed

revitalization should be approved, so the appearance in this case

of HOA, rather than the Committee, is immaterial.

29. As for duties performed by Ms. Gannon, she may serve as

an agent for the Committee and perform duties statutorily imposed

upon it . See, e.g. , Johnson v. Est. of Fraedrich , 472 So. 2d

1266 (Fla. 1st DCA 1985) (attorney for personal representative

may file objection to a claim, even though the statute extends

this right to a personal representative). Section 720.405(2)

and (3) vary in language, but do not support Petitioners'

contentions as to nondelegable duties of the Committee. Section

720.405(2) provides for the Committee " to prepare or cause to be

prepared " the Revi talized Declaration, and section 720.405(3)

provides for the Co mmittee to " prepare " the articles of

incorporation and bylaws. It is unclear why the statutory

language is different in these provisions, but, as counsel for

the Committee, Ms. Gannon may perform these duties for the

Committee under the statutory language found in both

subparagraphs of section 720.405.

30. But Petitioners' broad challenge of Ms. Gannon's

performance of duties of the Committee, as well as their

objections to the consents, bring into focus the failure of the

revitalization package to comply with one statutory requirement.

As noted above, in response to the requirement of section

720.406(1)(d) for a " verified copy of the written consents, "

Ms. Gannon's affidavit attests, to the best of her knowledge,

that the transmitted copies are true and correct copies of the

original consents. This purported verification fails due to the

qualification that it is to the best of the affiant's knowledge.

This failure is no technical shortcoming because each lotowner

sent his or her original consent to a me mber of the Committee,

who, not Ms. Gannon, was in a position to verify that a copy was

faithful to the original.

31. On its face, Ms. Gannon's verification fails to comply

with section 92.525, which provides:

(1) If authorized or required by law, by

rule of an administrative agency, or by rule

or order of court that a document be

verified by a person, the verification may

be accomplished in the following manner:

(a) Under oath or affirmation taken or

adminis tered before an officer authorized

under s. 92.50 to administer oaths;

(b) Under oath or affirmation taken or

administered by an officer authorized under

s. 117.10 to administer oaths; or

(c) By the signing of the written

declaration prescribed in subs ection (2).

(2) A written declaration means the

following statement: " Under penalties of

perjury, I declare that I have read the

foregoing [document] and that the facts

stated in it are true, " followed by the

signature of the person making the

declarati on, except when a verification on

information or belief is permitted by law,

in which case the words " to the best of my

knowledge and belief " may be added. The

written declaration shall be printed or

typed at the end of or immediately below the

document b eing verified and above the

signature of the person making the

declaration.

* * *

(4) As used in this section:

* * *

(b) The term " document " means any writing

including, without limitation, any form,

application, claim, notice, tax return,

inventory, affidavit, pleading, or paper.

(c) The requirement that a document be

ver ified means that the document must be

signed or executed by a person and that the

person must state under oath or affirm that

the facts or matters stated or recited in

the document are true, or words of that

import or effect.

Obviously, section 720.406(1) (d) does not permit a conditional

verification of the copies of the written consents, so the

condition as to knowledge stated in Ms. Gannon's affidavit fail s

to satisfy the statutory definition of a verification, regardless

of whether the document was purp ortedly verified by the

declaration under section 92.525(2) or by an oath or affirmative

administered by a duly authorized person under section 92.525(1)

and (4)(c).

32. In general, an oath conditioned by the language, " to

the best of my knowledge, " is not an adequate oath, see, e.g. ,

Gonzalez v. State , 991 So. 2d 971 (Fla. 5th DCA 2008), as HOA's

counsel would readily contend if Petitioners had been sworn in

with an oath or affirmation subject to this condition.

Reflective of the problem of the identit y of the person who is in

a position to verify a document, a verification based on

knowledge and belief from a person not shown to have personal

knowledge of the facts purportedly verified is not an adequate

verification. See, e.g. , Houk v. PennyMac Corp. , 210 So. 3d 726,

733 (Fla. 2d DCA 2017) (verification from employee of assignee of

note that law firm had lost note).

33. Petitioners also challenged the proposed revitalization

due to ongoing enforcement of the Declaration by HOA after the

extinguishm ent of the Declaration, but such action, if true, is

not prohibited by chapter 720, part III. The legislature has not

vested in DEO the authority to regulate this activity or even to

deny approval for a revitalized declaration on this ground.

34. Lastly, Petitioners objected to the premature recording

of the Revitalized Declaration. Section 720.407(1) imposes a

deadline of 30 days following receipt of approval for the

recording of a revitalized declaration, but does not address the

contingency of a reque st for a hearing of a proposed approval.

DEO's approval letter likewise fails to address the contingency

of the filing of a request for a hearing. It is unclear how the

30 - day deadline of section 720.407(1) may be applied when the

time within which a per son with a substantial interest may not

learn of DEO's approval until mo re than 30 days after its

issuance, so as still to have a right to request a hearing,

although this contingency is not at issue in the present case:

HOA recorded the Revitalized Decla ration before the time for

filing a request for a hearing would have run for a person with a

substantial interest who had learned of the proposed approval on

the day that it was issued.

35. Section 720.407(4) prohibits the retroactive

application of a r evitalized declaration, and recording the

Revitalized Declaration before the time had run for requesting a

hearing has assured its retroactive application, regardless of

whether the final orde r were to approve or not to approve the

proposed Revitalized Declaration. If DEO were to approve the

proposed Revitalized Declaration, the restrictive covenants will

have been applied from the date of recordation, so they will

have been applied retroactiv ely. If DEO were to deny the

approval of the proposed Revitalized Declaration, the restrictive

covenants will also have been applied from the date of

recordation, so they will also have been applied retroactively.

Section 720.406(2) broadly conditions th e approval or denial of

approval of a revitalized declaration on compliance " with the

act, " meaning chapter 720, part III. Although section 720.407(4)

is part of " the act, " the retroactive HOA's recording of the

Revitalized Declaration is not a ground for a denial of approval.

Sections 720.404, 720.405(4), and 720.406(1) provide the

exclusive criteria on which DEO may approve or not approve a

revitalized declaration, and the violation of the

nonretroactivity provision would normally take place only after

DEO has issued its proposed agency action on a revitalized

declaration. Again, the legislature has not vested in DEO the

authority to deny approval for a revitalized declaration on this

ground.

RECOMMENDATION

It is

RECOMMENDED that the Department of Econo mic Opportunity

enter a final order denying approval of the Revitalized

Declaration.

DONE AND ENTERED this 4th day of January , 2019 , in

Tallahassee, Leon County, Florida.

S

ROBERT E. MEALE

Administrative Law Judge

Divisio n of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 4th day of January , 2019 .

COPIES FURNISHED:

Jonathan Paul Young

Loretta Shirley

9635 Northwest 83rd Street

Tamarac, Florida 33321

(eServed)

Rebekah Davis, Esquire

Department of Economic Opportunity

Mail Station 110

107 East Madison Street

Tallahassee, Florida 32399

(eS erved)

Lauren T. Schwarzfeld, Esquire

Kaye Bender Rembaum, P . L .

1200 Park Central Boulevard South

Pompano Beach, Florida 33064

(eServed)

Peter Penrod, General Counsel

Department of Economic Opportunity

Caldwell Building, MSC 110

107 East Madison Street

Tallahassee, Florida 32399 - 4128

(eServed)

Cissy Proctor, Executive Director

Department of Economic Opportunity

Caldwell Building

107 East Madison Street

Tallahassee, Florida 32399 - 4128

(eServed)

Stephanie Webster, Agency Clerk

Department of Economic O pportunity

Caldwell Building

107 East Madison Street

Tallahassee, Florida 32399 - 4128

(eServed)

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 ex ceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.