93-006214RX Michael Gertinisan, Individually As Resident/Site Owner In The Bay Hills Village Condo. vs. Florida Land Sales, Condominiums, And Mobile Homes Status: Closed DOAH Final Order on Friday, January 14, 1994.

Summary: Respent's interpret. of 718.301(1)(e) to be applied prospective rather than retroactive was corr interpretation Rule not invalid exer of del. legis auth

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MICHAEL GERTINISAN, )

individually as a resident/ )

site owner in the Bay Hills )

Village Condominium, )

)

Petitioner, )

)

vs. ) CASE NO. 93-6214RX

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF FLORIDA LAND )

SALES CONDOMINIUMS AND )

MOBILE HOMES, )

)

Respondent. )

____________________________)

FINAL ORDER

Upon due notice, the Division of Administrative Hearings by its duly

designated Hearing Officer, William R. Cave, held a formal hearing in the above-

captioned matter on November 23, 1993 in Tallahassee, Florida.

APPEARANCES

For Petitioner: Michael Gertinisan, pro se

10506 Bay Hills Circle

Thonotosassa, Florida 33592

For Respondent: Karl M. Scheuerman, Esquire

Department of Business and

Professional Regulation

Division of Florida Land Sales,

Condominiums, and Mobile Homes

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-1007

STATEMENT OF THE ISSUES

Whether Rule 61B-23.003(9), Florida Administrative Code, is an invalid

exercise of delegated legislative authority.

PRELIMINARY STATEMENT

On October 29, 1993, Petitioner, Michael Gertinisan, as President of Bay

Hills Village Ad-Hoc Committee, filed a petition challenging the validity of

Rule 61B-23.003(9), Florida Administrative Code, alleging that the rule was an

invalid exercise of delegated legislative authority in that the challenged rule

gave prospective application to Section 718.301(1)(e), Florida Statutes (1991),

rather than retroactive application. By an Order of Assignment dated November

3, 1993, the petition was accepted in that the petition appeared to comply with

the requirements of Section 120.56, Florida Statutes. The matter was scheduled

for hearing on November 23, 1993. Prior to hearing, the Respondent filed a

Motion To Redesignate Proper Petitioner And To Amend Case Style. By this

motion, the Respondent argues that the Bay Hills Village Ad-Hoc Committee has no

standing to challenge the rule but concedes that Petitioner as an individual

resident/site owner in the Bay Hills Village condominium has standing to

challenge the rule. Argument on the motion was presented at the hearing. The

motion was granted and Michael Gertinisan, as an individual resident/site owner

in Bay Hills Village Condominium, was designated as the Petitioner. An order

granting that motion and amending the case style was entered on December 7,

1993.

At the hearing, the Petitioner testified in his own behalf. Petitioner's

Exhibit 1 was received as evidence in this case. Respondent presented the

testimony of Richard Gentry and Michael Gertinisan. Respondent did not offer

any documentary evidence.

Rule 61B-23.003, Florida Administrative Code, and Chapter 91-103, Laws of

Florida, were officially recognized at the hearing. Subsequent to the hearing,

the Respondent filed a Request to Take Judicial Notice of Chapter 91-426, Laws

of Florida, which shall be treated as a request for official recognition. The

request is granted and Chapter 91-426, Laws of Florida, is officially

recognized.

There was no transcript of this proceeding filed with the Division of

Administrative Hearings. The Petitioner, by a motion that was unopposed by

Respondent, requested an extension of time for filing a proposed final order.

The motion was granted and the time for filing proposed final orders was

extended from December 3, 1993 until December 13, 1993. The Respondent timely

filed its proposed final order under the extended time frame. The Petitioner

elected not to file a proposed final order. A ruling on each proposed finding

of fact submitted by the Respondent has been made as reflected in an Appendix to

the Final Order.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the

hearing, the following relevant findings of fact are made:

1. Petitioner, Michael Gertinisan, is a unit owner and member of the Bay

Hills Village Condominium Association, Inc. (Association). The Association is

responsible for the operation of the Bay Hills Village Condominium.

2. Petitioner purchased his unit in December, 1992. Prior to December,

1992, the Petitioner had leased the unit for a number of years.

3. The Bay Hills Village Condominium is a mobile home park condominium

where each unit is comprised of a parcel of vacant land upon which is placed a

mobile home.

ansfer of control of the Association from the developer to the unit

owners, other than the developer, pursuant to Section 718.301, Florida Statutes,

has not occurred. However, unit owners, other than the developer, are entitled

to elect a representative to the board of administration of the Association in

an upcoming election.

5. The declaration of condominium for Bay Hills Village Condominium was

recorded in the public records in 1985. A number of units were sold to

purchasers in 1985.

6. At the time Bay Hill Village Condominium was created and the

declaration of condominium recorded in the public records in 1985, the

controlling statute, Chapter 718, Florida Statutes, contained no maximum period

of time during which the developer was entitled to control the operation of the

Association through its ability to elect a majority of the board of

administration.

7. The developer of a condominium is statutorily entitled to control the

affairs of the condominium association for a period set forth in the statutes.

This right to control the affairs of the condominium association for the period

set forth in the statutes is a substantive vested right. With the right to

control the condominium association, comes the attendant rights, including but

not limited to, the right to: (a) adopt a budget meeting the marketing needs of

the developer; (b) enter in to contracts with related entities providing for

maintenance and management of the condominiums; (c) control ingress and egress

on and over the condominium property to move construction equipment; (d) adopt

board policies relating to the renting of units in the condominium; (e) adopt

board policies regarding placement of "For Sale" signs on the condominium

property and to model its units; (f) maintain the property in accordance with

the developer's need to conduct an ongoing sales program; and (g) change the

size and configuration of units in the condominium to meet the needs of the

developer's marketing campaign.

8. In those situations where the developer still exercises control over

the condominium association, the aforestated rights of the developer would be

substantively impaired by a retroactive application of Section 718.301(1)(e),

Florida Statutes, as created by Chapter 91-103, Section 12, Laws of Florida, to

condominiums in existence prior to the affective date of the Chapter 91-103,

Section 12, Laws of Florida.

CONCLUSIONS OF LAW

9. The Division of Administrative Hearings has jurisdiction over the

parties to, and the subject matter of, this proceeding pursuant to Section

120.56 and 120.57, Florida Statutes.

10. The validity of rules normally will be sustained as long as they are

reasonably related to the purpose of the enabling legislation and are not

arbitrary or capricious. Florida Beverage Corporation v. Wynne, 306 So.2d 200

(1 DCA Fla. 1975) Agrico Chemical Co. v. Department of Environmental Regulation,

365 So.2d 759. As stated by the court in Department of Professional Regulation,

Board of Medical Examiners v. Durrani, 455 So.2d 515 (1 DCA Fla. 1984):

The well recognized general rule is that the

agencies are to be accorded wide discretion

in the exercise of their lawful rulemaking

authority, clearly conferred or fairly

implied and consistent with the agencies'

general statutory duties. Florida Commission

on Human Relations v. Human Development

Center, 413 So.2d 1251 (Fla. 1st DCA 1982).

An agency's construction of the statute it

administers is entitled to great weight and

is not to be overturned unless clearly

erroneous. Baker v. Board of Medical

Examiners, 428 So.2d 720 (Fla. 1st DCA 1983).

Where, as here, the agency's interpretation

of a statute has been promulgated in

rulemaking proceedings, the validity of such

rule must be upheld if it is reasonably

related to the purpose of the legislation

interpreted and it is not arbitrary and

capricious. The burden is upon the

petitioner in a rule challenge to show by a

preponderance of the evidence that the rule

or requirements are arbitrary and capricious.

Agrico Chemical Co. v. State, Department of

Environmental Regulation, 365 So.2d 759 (Fla.

1st DCA l978); Florida Beverage Corp. v.

Wynne, 306 So.2d 200 (Fla. 1 DCA 1975).

Moreover, the agency's interpretation of a

statute need not be the sole possible

interpretation or even the most desirable

one; it need only be within the range of

possible interpretations. Department of

Health and Rehabilitative Services v. Wright,

439 So.2d 937 (Fla. 1st DCA 1983) (Ervin, C.

J., dissenting); Department of Health and

Rehabilitative Services v. Framat Realty,

Inc., 407 So.2d 238 (Fla. 1st DCA 1981). . .

11. To prevail in this case, the burden is upon the Petitioner to

demonstrate that the challenged rule is an invalid exercise of delegated

legislative authority. Humana, Inc. v. Department of Health and Rehabilitative

Services, 469 So.2d 889 (1 DCA Fla. 1985); Agrico Chemical Co. v. Department of

Environmental Regulation, 365 So.2d 759 (1 DCA Fla. 1978); An invalid exercise

of delegated legislative authority is defined by Section 120.52(8), Florida

Statute, which in pertinent part provides:

(8) "Invalid exercise of delegated

legislative authority" means action which

goes beyond the powers, function, and duties

delegated by the Legislature. A proposed or

existing rule is an invalid exercise of

delegated legislative authority if any one or

more of the following apply:

. . . .

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required by

s. 120.54(7);

. . . .

(e) The rule is arbitrary or capricious.

12. Under Section 718.301, Florida Statutes, as it existed prior to the

enactment of Chapter 91-103, Section 12, Laws of Florida, which forms the basis

for the challenged rule in this case, a developer was basically entitled to

elect a majority of the members of the board of the association until a certain

number of units in the condominium were sold to purchasers. Prior to the 1991

amendment of Section 718.301, Florida Statutes, there was no maximum period of

time during which a developer could control the condominium association.

13. Chapter 91-103, Section 12, Laws of Florida, created Section

718.301(1)(e), Florida Statutes, which substantively changed the statutory

provision regarding the turnover of control of the condominium association and

in pertinent part provides:

ansfer of association control.

(1) . . . Unit owners other than the

developer are entitled to elect not less than

a majority of the members of the board of

administration of an association:

. . . .

(e) Seven years after the recordation of

the declaration of condominium, or in the

case of an association which may ultimately

operate more than one condominium, 7 years

after recordation of the declaration for the

first condominium it operates, or in the case

of an association operating a phase

condominium created pursuant to s. 718.403, 7

years after recordation of the declaration

creating the initial phase,

Pursuant to Chapter 91-103, Section 28, Laws of Florida, this amendment was to

become effective on January 1, 1992. However, in special session, the

Legislature enacted Chapter 91-426, Section 5, Laws of Florida, which amended

Chapter 91-103, Section 28, Laws of Florida, providing for an effective date of

April 1, 1992, for Chapter 91-103, Section 12, Laws of Florida.

14. Acting on the authority granted the Respondent by the Legislature in

Section 718.501(1)(f), Florida Statutes, "to promulgate rules . . . necessary to

implement . . . and interpret this chapter", the Respondent promulgated Rule

61B-23.003(9), Florida Administrative Code, the challenged rule, which

implements Section 718.301(1)(e), Florida Statutes (1991), as created by Chapter

91-103, Section 12, Laws of Florida, and provides as follows:

(9) In condominiums created on or after

January 1, 1992, unit owners other than the

developer are entitled to elect not less than

a majority of the members of the board of

administration not later than 7 years after

the recordation of the declaration. In the

case of an association which may ultimately

operate more than one condominium, where the

initial condominium operated by the

association is created on or after January 1,

1992, unit owners other than the developer

are entitled to elect not less than a

majority of the members of the board not

later than 7 years after recordation of the

initial condominium. In the case of a phase

condominium created pursuant to section

718.403, Florida Statutes, where the

declaration submitting the initial phase or

phases is recorded on or after January 1,

1992, unit owners other than the developer

are entitled to elect not less than a

majority of the members of the board not

later than 7 years after the recordation of

the declaration submitting the initial phase

or phases.

It should be noted that even though the above rule establishes January 1, 1992,

as the date which triggers the running of the seven years after recordation of

the declaration for transfer of control of the association, the effective date

of that provision of Chapter 91-103, Section 12, Laws of Florida, was amended to

be April 1, 1992, by Chapter 91-426, Laws of Florida.

15. It is clear from the language of the above rule that the Respondent

has determined that Section 718.301(1)(e), Florida Statutes (1991), as created

by Chapter 91-103, Section 12, Laws of Florida, should be applied prospectively.

The Petitioner, on the other hand, takes the position that the statutory

amendment should be applied retroactively and that the prospective application

by the Respondent is an invalid exercise of delegated legislative authority.

16. Statutes are presumed to be prospective in application and will be

given retroactive application only when the act clearly and explicitly provides

for such application. Fleeman v. Case, 342 So.2d 815 (Fla. 1976); Century

Village, Inc. v. Wellington E, F, K, L. H, J. M. and G Condominium Association,

361 So.2d 128 (Fla. 1978), and the cases cited therein; Van Bibber v. Hartford

Accident & Indemnity Ins. Co., 439 So.2d 524 (Fla. 1983). This rule applies

with particular force where the effect of giving a statute a retroactive

operation would be to interfere with an existing contract, destroy a vested

right, or create a new liability in connection with a past transaction. See:

Florida Jur.2d, Statutes, Section 107. In this case, there is nothing in the

language of Section 718.301(1)(e), Florida Statutes (1991), to indicate that the

Legislature intended a retroactive application. Likewise, neither the enacting

clause of Chapter 91-103, Laws of Florida, nor the effective date contained in

Section 28 of that law, reveal any expression that the Legislature intended

Section 718.301(1)(e), Florida Statutes, to operate retroactively. For an

example of legislative expression of retroactive application, see Chapter 92-49,

Section 41, Laws of Florida, wherein it expressly provides for the retroactive

application of certain amendments to Chapter 718, Florida Statutes.

17. The evidence shows that the Respondent's decision to apply Section

718.301(1)(e), Florida Statutes (1991), as created by Chapter 91-103, Section

12, Laws of Florida, was a rational decision taken after thought and reason, is

supported by facts and logic and is neither arbitrary nor capricious. Agrico

Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759 (1 DCA

Fla. 1979).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is,

accordingly,

ORDERED that the Petitioner failed to establish that Rule 61B-23.003(9),

Florida Administrative Code, is an invalid exercise of delegated legislative

authority and the relief sought by the Petitioner is DENIED.

DONE AND ORDERED this 14th day of January, 1994, in Tallahassee, Florida.

___________________________________

WILLIAM R. CAVE

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 14th day of January, 1994.

APPENDIX TO FINAL ORDER, CASE NO. 93-6214RX

The following constitutes my specific rulings, pursuant to Section

120.59(2), Florida Statutes, on all the proposed findings of fact submitted by

the parties in this case.

Petitioner's Proposed Findings of Fact:

The Petitioner elected to not file any proposed findings of fact.

Respondent's Proposed Findings of Fact:

1. Proposed findings of fact 1, 2, 3, 4, 5, 6, 8 and 9 are adopted in

substance as modified in Findings of Fact 1, 2, 3, 4, 5, 6, 7 and 8,

respectively.

2. Proposed finding of fact is unnecessary.

COPIES FURNISHED:

Michael Gertinisan

10506 Bay Hills Circle

Thonotosassa, Florida 33592

Karl M. Scheuerman, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Henry M. Solares, Director

Division of Florida Land Sales

Condominiums and Mobile Homes

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Jack McRay, Acting General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

A party who is adversely affected by this final order is entitled to judicial

review pursuant to Section 120.68, Florida Statutes. Review proceedings are

governed by the Florida Rule of Appellate Procedure. Such proceedings are

commenced by filing one copy of a notice of appeal with the agency clerk of the

Division of Administrative Hearings and a second copy, accompanied by filing

fees prescribed by law, with the District Court of Appeal, First District, or

with the District Court of Appeal in the appellate district where the party

resides. The notice of appeal must be filed within 30 days of rendition of the

order to be reviewed.