STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
IN RE: BERND SCHULTE, ) CASE NO. 04-2064EC
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Respondent. )
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Pursuant to notice, a public hearing was conducted in this case on October 19, 2004, by video teleconference at sites in West Palm Beach and Tallahassee, Florida, before Stuart M. Lerner, a duly-designated Administrative Law Judge of the Division of Administrative Hearings (DOAH).
For Advocate: James H. Peterson, III, Esquire
Office of the Attorney General
The Capitol, Plaza Level 01
Tallahassee, Florida 32399-1050
For Respondent: Norman Malinski, Esquire
Law Offices of Norman Malinski
2875 Northeast 191st Street, Suite 508
Aventura, Florida 33180
Whether Respondent violated Section 112.313(7)(a), Florida Statutes, "by having a contractual relationship with an individual engaged in a lawsuit involving the Town" and, if so, what is the appropriate penalty.
On June 10, 2003, the Florida Commission on Ethics (Commission) determined that there was "probable cause to believe that the Respondent violated Section 112.313(7)(a), Florida Statutes, and [it] therefore order[ed] a public hearing as to whether the Respondent, as a member of the Town Commission of the Town of Ocean Ridge, violated Section 112.313(7)(a), Florida Statutes, by having a contractual relationship with an individual engaged in a lawsuit involving the Town." Exactly a year later, on June 10, 2004, the Chairman of the Commission, referred the matter to DOAH, requesting that an administrative law judge be assigned to conduct a public hearing and prepare a recommended order for the Commission's consideration.
On October 13, 2004, the parties filed a Joint Prehearing Stipulation, which provided, among other things, the following information:
A. NATURE OF CONTROVERSY
This is an action before the Commission on Ethics which has been brought against the Respondent, Bernd Schulte, pursuant to Part III, Chapter 112, Florida Statutes. The issue is:
Whether the Respondent, as a member of the Town Commission for the Town of Ocean Ridge, violated section 112.313(7)(a), Florida Statutes, by having a contractual relationship with an individual engaged in a lawsuit involving the Town.
B. STATEMENT OF POSITIONS
1. Advocate's Position
Prior to becoming a Town Commissioner of Ocean Ridge, Respondent was involved with several other citizens in litigation brought by Betty Kelso and her husband to gain access across the other citizens' lands to a land-locked piece of property recently purchased by the Kelsos. Respondent was upset because Respondent had wanted to buy the property and keep it in its natural state, but the Kelsos had bought it and wanted to develop it. Although not a party to the litigation because access across his parcel was not sought, Respondent owned property in the area and he paid for some of the attorney fees incurred by one of the defendants in the litigation, Cheryl Olanoff. Respondent felt that development of the Kelso's property would negatively affect the value of his property and other properties in the area. The Town of Ocean Ridge was also a named defendant in the lawsuit because the Town owned easement rights in the property that the Kelsos needed to access their property. The Town named Ms. Olanoff as a defendant in the Town's cross-claim seeking a declaratory judgment on the access issue.
Upon his election to the Town Commission on February 12, 2002, Respondent informed the Town Commission that he was involved in the subject litigation and that he would recuse himself from all matters pertaining to it. On or about March 2, 2002, a written settlement agreement to the litigation was signed by Ms. Olanoff and some or all of the others involved in the litigation. The Town of Ocean Ridge was named as a party to the settlement agreement and, on March 7, 2004, the Town Council approved the settlement agreement "subject to the modifications suggested by the Town Attorney, and the new format to be approved by the Town Commission [including] the most recent reconfigured drawing. . . ." The Town Council also approved "advertisement for the hearing for the abandonment [of its easement interest called for in the settlement agreement and asked that the abandonment] be scheduled for the regular meeting to be held April 1, 2002.
On March 25, 2002, Respondent and his wife entered into a written Agreement with Ms. Olanoff whereby Respondent and his wife obtained an option to purchase Ms. Olanoff's property for, inter alia, her agreement to continue to resist efforts by the Kelsos to obtain access over Ms. Olanoff's property. That agreement contained the following provision:
" The withdrawal from the March 2, 2002, Agreement is a material and significant consideration for the payments being made by the Optionors herein, and disclosure of this Agreement may affect the Town's actions in complying with its undertakings, thereby substantially and adversely affecting the property interests which the Optionors are acquiring herein and their property interests as abutting owners and such adverse affect is not readily subject to precise damage determination. Therefore, neither Optionors nor Olanoff may disclose the substance or existence of this Agreement to anyone other than their respective counsel, except as otherwise ordered by a court of competent jurisdiction."
While Respondent abstained from Town Council votes involving the subject litigation, Respondent's compliance with the voting conflicts law (Section 112.3143, Florida Statutes) does not obviate contractual conflicts prohibited under the Code of Ethics. While arguably, Respondent's agreement to pay Ms. Olanoff's attorney fees incurred in the litigation, alone, would be sufficient to constitute a contractual conflict, it is clear that Respondent's Agreement and Option Agreement with Ms. Olanoff violated Section 112.313(7)(a), Florida Statutes, because it was a contractual relationship that impeded the full and faithful discharge of Respondent's public duties as a member of the Town Commission.
II. Respondent's Position
The Respondent denies that any conflict or statutory violation occurred and further states that his abstaining from voting on all matters concerning this issue fulfilled all of his ethical duties. The matter of the Respondent's conflict was fully discussed with the City Attorney and the abstaining from voting and leaving the dais was deemed to be the appropriate approach.
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E. FACTS WHICH ARE ADMITTED AND WILL REQUIRE NO PROOF AT HEARING
1. Respondent was elected as Town Commissioner in Ocean Ridge, Florida.
2. Respondent is subject to the requirements of Part III, Chapter 112, Florida Statutes, the Code of Ethics for public officers and employees, for his acts and omissions during his tenure as a Town Commissioner for Ocean Ridge.
3. Respondent was a party to that Agreement and Option Agreement dated March 25, 2002.
F. ISSUES OF LAW ON WHICH THERE IS AGREEMENT
1. Respondent is subject to the requirements of Part III, Chapter 112, Florida Statutes, the Code of Ethics for public officers and employees, for his acts and omissions during his tenure as a Town Commissioner for Ocean Ridge.
G. ISSUES OF FACT WHICH REMAIN TO BE LITIGATED
Whether the Respondent, as a member of the Town Commission for the Town of Ocean Ridge, violated Section 112.313(7)(a), Florida Statutes, by having a contractual relationship with an individual engaged in a lawsuit involving the Town.
H. ISSUES OF LAW WHIH REMAIN FOR ADMINISTRATIVE LAW JUDGE'S DETERMINATION
Whether the Respondent, as a member of the Town Commission for the Town of Ocean Ridge, violated Section 112.313(7)(a), Florida Statutes, by having a contractual relationship with an individual engaged in a lawsuit involving the Town.
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As noted above, the public hearing in this case was held on October 19, 2004. Five witnesses testified at hearing: Dr. Betty Kelso; Kenneth Spillias, Esquire; Respondent; Cole FitzGerald, Esquire; and Cheryl Olanoff. In addition to these five witnesses' testimony, 20 exhibits (Joint Exhibits 1 through 19, and Advocate's Exhibit 1) were offered and received into evidence.
At the close of the taking of evidence, the undersigned established a deadline (December 15, 2004) for the filing of proposed recommended orders.
The hearing Transcript (consisting of one volume) was filed with DOAH on November 12, 2004.
On December 14, 2004, Respondent filed a motion requesting an extension of the deadline for filing proposed recommended orders. By Order issued December 15, 2004, the motion was granted and the filing deadline was extended to December 27, 2004.
The Advocate filed his Proposed Recommended Order on December 27, 2004. Respondent filed his Proposed Recommended Order on December 28, 2004.
Based on the evidence adduced at the public hearing and the record as a whole, including the parties' Joint Prehearing Stipulation, the following findings of fact are made:
1. Respondent is a retired executive of W.R. Grace and Company.
2. He is now, and has been since February 2002, a member of the Ocean Ridge Town Commission (Town Commission), the "legislative and policy making body" of the Town of Ocean Ridge, Florida (Town).
3. Among the duties and responsibilities of the Town Commission is to determine, based on what is "in the best interests of the Town," whether the Town should litigate to resolve a dispute in which it is involved or whether it instead should seek a settlement and, if so, "on what terms."
4. Before making any such determination in a particular case, the Town Commissioners have the opportunity to discuss the matter with the Ocean Ridge Town Attorney, Kenneth Spillias, Esquire, of the law firm of Lewis, Longman & Walker, P.A. Mr. Spillias has been the permanent Ocean Ridge Town Attorney since October 1999. He and his firm are compensated by the Town on an hourly basis.
5. Respondent has been a resident of the Town since the early 1990's.
6. His residence, which he and his wife own, is located at 5 Osprey Court (Lot Number 0050) in Ocean Shore Estates, a residential development in the Town.
7. The northern half of Lot Number 0050 (also referred to herein as the "Schulte Property") is bordered on the east by Lot Number 0002, the "land-locked piece of property" referenced in the "Statement of Positions" portion of the parties' Joint Prehearing Stipulation.
8. Other lots abutting this "land-locked piece of property" are: to the north (from west to east)- Lot Number 0160, which has a street address of 566 David Lane and is owned by Cheryl Olanoff, a part-time school teacher; Lot Number 0140, which has a street address of 5691 David Lane and is owned by Robert Katz; and Lot Number 0120, which has a street address of 18 Adams Road and is owned by Randy Allen; to the east (from north to south)- Lot Number 0110, which has a street address of 7 Beachway North and is owned by David Pollay; Lot Number 0100, which has a street address of 5 Beachway North and is owned by Richard Lucibella; and Lot Number 0090, which has a street address of 3 Beachway North and is owned by William and Anita Finley; to the south (from east to west)- Lot Number 0120, which has a street address of 207 Beachway Drive and is owned by Frederic Rose; and Lot Number 0080, which has a street address of 205 Beachway Drive and is owned by George Elder and his wife, Jo Ann Engelhardt; and to the west, in addition to the Schulte Property- Lot Number 0040, which is located immediately to the north of the Schulte Property, has a street address of 7 Osprey Court, and is owned by Joseph Park.
9. Lot Number 0160 (owned by Ms. Olanoff) and Lot Number 0140 (owned by Mr. Katz) front on, and are separated by, the southern half of David Lane, a north-south roadway, which extends from Adams Road on the north to Lot Number 0002 (owned by the Kelsos) on the south (where it dead-ends).
10. Another north-south roadway in the Ocean Shore Estates development is Beachway North, a private roadway owned by the Beachway North Association that is paved and at least 20 feet wide. It runs parallel to, but does not "directly touch," the eastern boundary of Lot Number 0002. "There is a few feet of grass between [Lot Number 0002] and [Beachway North]." This property separating Lot Number 0002 and Beachway North is privately owned.
11. In 1991, at or around the time Respondent and his wife purchased Lot Number 0050, they inquired about the possibility of also purchasing Lot Number 0002, then-owned by the National Wildlife Federation (Federation), which was (and still is) an undeveloped, vacant lot zoned (like the other lots surrounding it in the development) for single-family residential use. During his discussions with the Federation, Respondent gave "assurances that, if [the Federation] would sell the property to [him,] [he] would restrict it from ever being developed." Respondent's interest in Lot Number 0002 stemmed from his belief that its development could, under certain circumstances, negatively impact the value of his neighboring property. The Federation declined Respondent's offer, but advised him that if the property were ever to be placed on the market, Respondent "would certainly be given a shot at it."
12. Mr. Lucibella, the owner of Lot Number 0100, was also interested in purchasing Lot Number 0002 from the Federation.
13. In December 1999, the Federation sold Lot 0002 to Town residents Betty Kelso and her husband, Scott Kelso, much to the displeasure of Respondent, who had not even been given an opportunity to bid on the property.
14. In November 1999, after the sales contract had been signed, but before the closing, Betty Kelso went around the Ocean Shore Estates development to introduce herself. Respondent was among those she met. During her conversation with Respondent, she told him that she and her husband had entered into a contract to purchase Lot 0002 and they intended to "build a single-family home for [themselves]" on the lot. Respondent, although "cordial" throughout the conversation, was "visibly upset" when Mrs. Kelso told him of her and her husband's plans for the lot.
15. The Kelsos' ability to develop the property in accordance with their plans was dependent on there being sufficient access to the property (measured against the access requirements set forth in the Town's Land Development Code).
16. The Kelsos were aware, before they purchased the property, that "there [might] be an access problem from information given to [them] at the Town Hall." They made a pre-purchase attempt to obtain from the Town Commission a variance from the Land Development Code's access requirements, but the Town Commission declined to grant their request on the ground that they did not have standing to ask for such a variance since they did not yet own the property.
17. After learning of the Kelsos' purchase of Lot 0002 and their intentions to build on it, Respondent and other property owners in the Ocean Shore Estates development "banded together" in an effort to thwart the Kelsos' plans.
18. In January 2000, Respondent, Mr. Lucibella, Mr. Katz, and Ms. Olanoff signed (as clients) a Retainer Agreement, agreeing to pay the law firm of Sweetapple, Broeker & Varkas (Sweetapple Firm) for legal services "in the matter of THE KELSO PURCHASE OF NATIONAL WILDLIFE PROPERTY." The group's objective was to prevent the Kelsos from gaining access to Lot 0002 from the north via David Lane. In the group's Retainer Agreement with the Sweetapple Firm, Respondent was designated as the "spokesman" for all of the client signatories. Because of her financial situation, Ms. Olanoff initially did not contribute at all to the payment of the bills for legal services provided under the agreement. After a period of time, however, she started paying 10 percent of each bill, with Respondent, Mr. Lucibella, and Mr. Katz paying 30 percent each.
19. On June 8, 2000, other Ocean Shore Estates property owners, Mr. Rose, Mr. Elder, and Ms. Engelhardt, also entered into a Retainer Agreement with the Sweetapple Firm to receive legal services "in the matter of THE KELSO PURCHASE OF NATIONAL WILDLIFE PROPERTY." The focus of their concern was the Kelsos' gaining access to Lot 0002 from the south. Paragraph J. of their Retainer Agreement with the Sweetapple Firm provided as follows:
The clients acknowledge that the attorneys are already representing Bernd A. Schulte and Richard Lucibella in this matter. The clients agree that Bernd A. Schulte will be their spokesman.[[1]] Further, the strategy employed by the attorneys during the course of the representation must be approved by a majority of the clients.
20. Shortly after this second Retainer Agreement was entered into, a determination was made that it would be best that the group trying to prevent the Kelsos from gaining access to Lot 0002 from the north (Northern Access Group) not be represented by the same law firm as the group attempting to stop the Kelsos from accessing Lot 0002 from the south (Southern Access Group). The Northern Access Group therefore terminated its relationship with the Sweetapple Firm and retained the services of the law firm of FitzGerald, Hawkins, Mayan & Cook, P. A. (FitzGerald Firm), with Respondent, Mr. Lucibella, and Mr. Katz each paying 30 percent of the cost of these legal services and Ms. Olanoff paying the remaining 10 percent.
21. The issue of the Kelsos' entitlement to access to Lot 0002 was raised in Palm Beach Circuit Court Case No. CL 00-3364 AN. Case No. CL 00-3364 AN began when Ms. Olanoff filed a complaint against the Kelsos, alleging that the Kelsos had trespassed on her property.[2] The Kelsos responded by filing a counterclaim against Ms. Olanoff and third party complaints against the Town, Mr. Katz, Mr. Elder, Ms. Engelhardt, Mr. Rose, Coral Gables Federal Savings and Loan Association, and Merrill Lynch Credit Corporation, claiming that they (the Kelsos) were entitled to access to Lot 0002 via David Lane or, in the alternative, from the south.
22. In response to the Kelsos' third party complaint against it, the Town, through Mr. Spillias, on or about June 23, 2000, filed an Answer, Affirmative Defenses, Counterclaim and Crossclaim in Case No. CL 00-3364 AN. The Towns' counterclaim and crossclaim read as follows:
The Town, by Counterclaim sues the KELSOS, and by Crossclaim sues CHERYL H. OLANOFF ("OLANOFF") and ROBERT KATZ ("KATZ"), and alleges:
DECLARATORY RELIEF
(All Parties)
1. This is an action for declaratory relief pursuant to Chapter 86, Florida Statutes, and is within the jurisdiction of this Court.
2. The acts and properties at issue occurred or are located in Palm Beach County, Florida.
3. The KELSOS, as set forth in their action against the Town, assert they enjoy an easement over OLANOFF'S property for road right-of-way purposes and that it is the Town's responsibility to enforce the KELSOS' right to use that easement.
4. The Town is in doubt regarding its rights and responsibilities pursuant to the deeds from which OLANOFF deraigned her title to the subject property both with respect to the existence of an easement for the general public or, more specifically, for the KELSOS and, should such an easement exist, with respect to the Town's obligation to enforce such an easement against OLANOFF.
5. Given the demands of the KELSOS with respect to the OLANOFF property, the Town is entitled to have its doubt regarding its rights and responsibilities removed by declaration of this Court.
6. As further set forth in the KELSOS' action against the Town, specifically in paragraphs 12 and 13 thereto, a quitclaim deed was executed July 21, 1966, by Edith G. Henry and James Henry, predecessors in title to KATZ, conveying to the Town the eastern half of David Lane lying adjacent to lots 13 and 14 of the non-recorded plat at Ocean Shore Estates for the specific stated purpose of creating, among other things, a road right-of-way. A copy of said deed is attached hereto as Exhibit "A."
7. There presently exist obstructions on the ten foot right-of-way deeded to the Town in the form of a patio, curbing and trees emanating from the adjoining property owned by KATZ and either placed and/or maintained thereon by KATZ.
8. Despite demand by the Town that KATZ remove the obstructions located on the right-of-way, KATZ has refused to do so asserting that he has a superior right of ownership to the ten foot right-of-way to the Town.
9. The Town is in doubt about its rights under the deed and, particularly given the KELSOS' demand for access to the right-of-way, is entitled to have such doubt removed by this Court.
WHEREFORE, the Town respectfully requests that this Court issue a declaratory judgment declaring the Town's rights and responsibilities under the deeds deraigning title of those portions of David Lane adjoining or located on the property or properties of OLANOFF, KATZ and the KELSOS, awarding the Town its costs and providing such other and further relief as this Court deems just and proper.
INDEMNIFICATION
(Olanoff and Katz)
10. The Town reasserts and readopts the allegations contained in paragraphs one (1) through nine (9) above as if fully set forth herein.
11. This is an action for additional and supplemental relief pursuant to Chapter 86, Florida Statutes.
12. In their action against the Town, the KELSOS seek damages for their fees and costs in bringing their action for declaratory relief and for requiring KATZ to remove the obstructions from the right-of-way adjoining his property.
13. Any liability for the Town for damages to the KELSOS would be derivative based on OLANOFF'S and/or KATZ'S refusal to allow access and/or remove obstacles to access over the easement and right-of-way at issue.
14. The Town is entitled to indemnification from OLANOFF and/or KATZ to the extent that it is found liable in damages due to OLANOFF'S and/or KATZ'S actions in this cause.
WHEREFORE, the Town demands judgment against OLANOFF and KATZ for damages by way of indemnification, including its reasonable attorney's fees and costs, as well as such other and further relief as this Court deems just and proper.
23. Ms. Olanoff and Mr. Katz, through the FitzGerald Firm, filed the following response to the Town's Crossclaim against them:
The Cross-Defendants, ROBERT F. KATZ ("KATZ") and CHERYL H. OLANOFF ("Olanoff"), in answer to the Cross-Claim of the TOWN OF OCEAN RIDGE ("the TOWN"), state as follows:
1. Admitted that this is an action for declaratory relief, which comes within the jurisdiction of this Court. Otherwise, denied.
2. Admitted.
3. The pleadings of KELSOS speak for themselves. To the extent that the TOWN's description is inconsistent with those pleadings, the TOWN's assertions are denied.
4. Without knowledge as to the TOWN's doubt and therefore denied. Specifically denied as to the existence of easements and the TOWN's obligations to enforce same.
5. Denied.
6. Without knowledge and therefore denied.
7. KATZ denies this paragraph; OLANOFF is without knowledge and therefore denies same.
8. KATZ admits that he possesses a superior right of ownership; otherwise, he denies this paragraph. OLANOFF is without knowledge and therefore denies same.
9. Denied.
10. The responses of KATZ and OLANOFF to Paragraphs 1-9 are hereby readopted and reaverred.
11. Admitted that the Town requests such relief; denied that such relief is appropriate.
12. The pleadings of KELSOS speak for themselves. To the extent that the TOWN's description is inconsistent with those pleadings, the TOWN's assertions are denied.
13. Denied.
14. Denied.
WHEREFORE, Cross-Defendants KATZ and OLANOFF demand that Cross-Plaintiff the TOWN go hence without day.
Cross-Defendants, KATZ and OLANOFF, move this Court to strike the TOWN's prayer for attorney's fees, and as grounds therefore states that the TOWN has failed to allege a legal basis for the recovery of fees.
15. For a first affirmative defense, KATZ and OLANOFF state that the TOWN is not entitled to indemnification because it is not without fault and its liability, if any, to KELSOS is not solely vicarious.
16. For a second affirmative defense, KATZ and OLANOFF state that the TOWN is not entitled to indemnification because KATZ and OLANOFF are not at fault.
17. For a third affirmative defense, KATZ and OLANOFF state that the TOWN is not entitled to the declaratory relief which it seeks because it has failed to include all persons who have or might claim any interest in the issues it has presented to this Court.
18. For a fourth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to an easement by right because David Lane is not a public, but a private right-of-way, and any easements are for the benefit of residents of David Lane and the non-recorded plat of Ocean Shore Estates.
19. For a fifth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to an easement by right because the "Quit-Claim Deed" was recorded in order to provide access for the residents of David Lane and/or the non-recorded plat of Ocean Shore Estates, and was not intended to create a right-of-way for the general public.
20. For a sixth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to an easement by right because no easements were ever granted to them, or their predecessors in interest.
21. For a seventh affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to an easement by right because the TOWN has never accepted any easement on David Lane.
22. For an eighth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to an easement by right because the TOWN is estopped from asserting access on David Lane by its conduct which includes, inter alia, public statements that access is limited to residents of Ocean Shore Estates, and its insistence that Olanoff pay for maintenance and repairs to David Lane.
23. For a ninth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to an easement by right because the TOWN has abandoned any right of access it may wish to assert on David Lane.
24. For a tenth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to an easement by right because any claims of access over Lot 14 are barred by the doctrine of adverse possession.
25. For an eleventh affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to an easement by right because any claims of access over David Lane are barred by the doctrine of "balancing equities."
26. For a twelfth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to a statutory easement by necessity because this property is located within a municipality.
27. For a thirteenth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to a statutory easement by necessity because David Lane is not the nearest practicable route to the nearest practicable road.
28. For a fourteenth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to a statutory easement by necessity because there is no necessity for access over David Lane, as the KELSOS have a right to access over other properties.
29. For a fifteenth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to a statutory easement by necessity because there is no necessity for access over David Lane because the KELSOS have implied (common law) easement by necessity over other properties.
30. For a sixteenth affirmative defense, KATZ and OLANOFF state that claims of access by the public and the parties to this action are barred by the Marketable Records Title Act.
31. For a seventeenth affirmative defense, KATZ and OLANOFF state that neither the public nor the parties to this action are entitled to any of the relief of which they are seeking including, but not limited to, injunctive relief, mandatory or prohibitive, because the granting of such relief would be inequitable for a variety of reasons including, but not limited to, the following:
a. KELSOS knew, before closing, that they did not have clear access to the property and, nevertheless, elected to purchase the property;
b. KELSOS recognized, before, closing, that the purchase price was substantially below its actual market value,[[3]] and knew that its fair market value would increase substantially if they could obtain access to the property;
c. The granting of an easement over David Lane would enhance the value of the KELSO property and, at the same time, impair the market value of the KATZ and OLANOFF properties, leaving KELSOS unjustly enriched; and
d. The relief requested would unfairly diminish the ability of KATZ and OLANOFF to enjoy the use of their homes.
32. For a[n] eighteenth affirmative defense, KATZ and OLANOFF state that the TOWN's requests for relief are barred by the doctrine of "balancing equities."
33. For a nineteenth affirmative defense, KATZ and OLANOFF state that the TOWN's requests for relief are barred by the doctrine that "he who seeks equity must do equity."
34. For a twentieth affirmative defense, KATZ and OLANOFF state that the TOWN's requests for relief are barred by the doctrine of "unclean hands."
35. For a twenty-first affirmative defense, KATZ and OLANOFF state that they are entitled to compensation for any servitude, easement, use or other restraint placed upon their property.
WHEREFORE, ROBERT F. KATZ and CHERYL H. OLANOFF request the dismissal of the TOWN's claims against them, attorney's fees pursuant to 57.105, Florida Statutes, costs, and such other relief as this Court deems proper.
24. Efforts to amicably resolve the dispute were made prior to Respondent's election to the Town Commission, but they were unsuccessful and the litigation therefore continued.
25. Although he was not a named party in the case, Respondent played a significant and visible role in these settlement efforts. Mr. Lucibella also participated.
26. There came a point in time when, upon learning that Ms. Olanoff and Mr. Katz were contemplating "suing the Town for flooding damage which had nothing to do with the Kelsos," Respondent and Mr. Lucibella "pulled out" of their agreement to help pay for the legal services the FitzGerald Firm was providing Ms. Olanoff and Mr. Katz in Case No. CL 00-3364 AN, leaving Ms. Olanoff and Mr. Katz to "split[] that bill 50-50."
27. The trial in Case No. CL 00-3364 AN was scheduled to commence the first week of March 2002.
28. Prior to the scheduled commencement of the trial, the parties engaged in further settlement negotiations.
29. Mr. Spillias was given "the authority to at least enter into [settlement discussions, on behalf of the Town] and submit any proposed settlement agreement to the [Town] Commission."
30. It was "very clear" to Mr. Spillias, based on what he had been told by the "the various commissioners" with whom he had discussed the matter [Respondent not being one of them], that it was "their greatest desire to have this case settled, particularly among the adversarial residents," and that "they did not want to go to trial."
31. Settlement negotiations this time produced a proposed settlement agreement.
32. On March 2, 2002, Steven Mayans, Esquire, of the FitzGerald Firm (representing Ms. Olanoff and Mr. Katz) sent the following letter by facsimile transmission to Linda Conahan, Esquire, of the law firm of Gunster, Yoakley & Stewart (representing the Kelsos) and Mr. Spillias (representing the Town):
This letter confirms the parties' settlement of the above referenced case [Olanoff v. Kelso, et al, Case No. CL 00-3364 AN] between Cheryl Olanoff ("Olanoff"), Robert Katz ("Katz"), J. A. Scott Kelso and Betty Kelso (collectively "Kelsos"), and the Town of Ocean Ridge ("Town") on the following terms and conditions:
1. Kelsos shall convey by quit claim deed to Olanoff twenty-five feet (25') of property immediately south of Olanoff's property line, but excluding from said property the westerly 10 feet (10') of David Lane as shown on the plat of Beachway North as recorded at Plat Book 45 Page 74 of the Public Records of Palm Beach County, Florida, and twenty five feet (25') immediately south therefrom.
2. Kelsos shall convey by quit claim deed to Katz twenty-five feet (25') of property immediately to the south of Katz's existing property line. Katz shall grant back to Kelsos an easement for right of way and utility purposes in perpetuity over said twenty-five feet (25'); however, the granting of such easement shall in no way inhibit Katz's ability to expand or add on to his existing structure.
2a. In addition, Kelsos shall convey by quit claim deed to Katz 25 feet (25') immediately to the south of the existing 20 foot (20') right of way designated as David Lane on the Plat of Beachway North as recorded at Plat Book 45 Page 74 of the Public Records of Palm Beach County, Florida. Katz shall simultaneously grant to Kelsos and Olanoff an easement for right of way and utility purposes in perpetuity over said twenty-five feet (25'). The Kelsos agree to maintain this 20' x 25' right of way.
3. Kelsos shall pay Olanoff $50,000, payable $25,000.00 upon final settlement (approval by all parties and the Town Commission) and $25,000.00 in installments of $2,000 each month for 11 months with a final installment of $3,000 in the 12th month.
4. Olanoff shall grant to Kelsos a ten foot (10') easement in perpetuity for right of way and utilities along the east portion of her property (west side of David Lane).
5. Katz and Town confirm Kelsos' right to access along the ten feet (10') to the west of his property (existing east side of David Lane), or, if necessary, Katz grants Kelsos a ten feet (10') easement in perpetuity for right of way and utilities to the west of his property (existing east side of David Lane).
6. By virtue of the agreements herein, the Town declares the public access along the ten feet (10') of Katz's property (existing east side of David Lane) as unneeded surplus property and agrees to abandon it as well as the ten eastern feet (10') of Olanoff's property (existing west side of David Lane). For all intents and purposes, the resulting easements will result in a private road for Katz, Olanoff, Kelsos, and their successors and assigns. Counsel for the Town agrees to expedite the abandonment process.
7. Katz guarantees that should the Town abandon the public right of way over the ten feet (10') west of his property (existing east side of David Lane) then Katz grants to Kelsos a ten foot (10') easement in perpetuity for right of way and utilities.
8. The parties agree that the existing trees upon a portion of the east side of David Lane shall be maintained.
9. Olanoff grants Kelsos an additional easement in perpetuity for right of way and utilities over an additional portion of her property, such as would allow a reconfiguration of the Kelsos' twenty-foot (20') easement around the Katz's trees and front porch.
10. Town recognizes, or if need be, approves, the reconfigured twenty foot (20') easement for right of way and utilities purposes.
11. Kelsos agree that heavy construction vehicles will not use the easement on weekends. Kelsos agree to be responsible for any damages or required improvements to the roadway or Katz and Olanoff's properties resulting from construction, improvements or construction vehicles on the Kelsos' property.
12. Kelsos agree that the development of their property shall be designed in such a way as not to worsen the drainage problem for Katz or Olanoff.
13. Town acknowledges that the twenty foot (20') easement as provided for above is sufficient and adequate access for approval by the Town for a building permit based upon the plans previously submitted to Town by Kelsos.
14. Subject to air conditioning approval and Paragraph 13 regarding access, Town acknowledges that the Kelsos' plans previously submitted to Town will be approved by Town and forwarded to the County Building Department for issuance of a building permit.
15. Town acknowledges that the road right of way across and for access through Kelsos' property will not reduce the calculation of "buildable acreage" pursuant to Town's Code of Ordinances for land development code purposes.
16. Town acknowledges that Kelsos' property is properly zoned for the potential of being subdivided into two (2) buildable lots, subject to compliance with all Town, County, and State building land development regulations.
17. If Kelsos in the future subdivide and sell a part of their property, they agree to give Olanoff and Katz a right of first refusal to purchase said property on the same terms and conditions available to a third party.
18. Kelsos agree to allow Olanoff, her successors and assigns in perpetuity, when needed, overflow parking for a maximum of five cars just south of her property. Parking for additional cars needs permission of the landowner.
19. All parties shall bear their own attorney's fees and costs of litigation.[[4]]
20. All claims raised in the pending litigation as between Kelsos, Olanoff, Katz, and Town shall be dismissed with prejudice upon final approval of this agreement.
21. Nothing contained herein shall be viewed as a waiver by the Town of any present or future building, land development or other regulations as they may apply to the properties owned by Olanoff, Katz and the Kelsos, and as may be owned by their successors and assigns, except as specifically provided for herein.
22. Notwithstanding the execution of this agreement, if the Kelsos discover that the access to their property contemplated by the parties herein is deemed insufficient by any governing agency for the issuance of building permits, the agreement and all of its provisions shall be null and void.
23. Notwithstanding the execution of this agreement by counsel for the Town, this agreement is subject to approval by Town Commission of the Town of Ocean Ridge. Should the Town Commission fail or refuse to approve this agreement, the agreement and all of its provisions shall be null and void.
24. Counsel for the Town shall endeavor to convene a special meeting of the Town Commission within one week of execution of this agreement for the purpose of obtaining final approval. However, final Town approval must be obtained within three weeks of execution of this agreement or the agreement and all of its provisions shall be null and void.
25. It is the intention of the parties hereto that all easements and rights granted appurtenant thereto shall inure to the parties successors, heirs and assigns in perpetuity.
26. The parties further agree to execute such additional document as shall be necessary to put the agreements hereto into effect and to record all conveyances and easements in the public records.
If I have accurately set forth the parties' agreement in this matter, please sign where indicated for presentation to Judge Rapp on Monday morning asking that the trial be rolled to his next calendar to allow time for the Town's approval. Thank you.
Sometime prior to the scheduled March 4, 2002, commencement of the trial in Case No. CL 00-3364 AN, Mr. Katz, Ms. Olanoff, the Kelsos, Mr. Spillias, Ms. Conahan, and E. Cole FitzGerald, III, Esquire, of the FitzGerald Firm signed "where indicated," signifying that they were of the view that, in the letter, Mr. Mayans had "accurately set forth the parties' agreement in this matter."
33. The morning of March 4, 2002, the judge in Case No. CL 00-3364 AN, upon being advised by the parties that the they "had a potential settlement agreement that had to be presented to the Town Commission for its approval," continued the trial that was set to begin that day.
34. At the regular Town Commission meeting held later that same day (March 4, 2002), the Town Commission was briefed on the developments in Case No. CL 00-3364 AN. The minutes of that meeting read, in pertinent part, as follows:
8b. Kelso litigation and Special Town Commission Meeting By: Kenneth Spillias, Town Attorney
Atty Spillias explained that the trial had been scheduled to begin earlier this day, but that through extensive negotiations in the past three weeks an agreement had been signed dependent upon Town Commission approval. He stated that the Town would be asked to abandon 10' which is currently in dispute between Robert Katz and the Town. He suggested that a Special Town Commission meeting be set up this week to answer questions and discuss the settlement. He stated that he would be suggesting a few minor revisions, but the substance of the agreement would remain the same. He stated that it would take a public hearing to approve the abandonment by the Town.
The Town Commission concurred to have the Special Meeting at 8:00 A.M. on Thursday, March 7th.
Rich Lucibella, 7 Beachway N, stated that he would like to comment on the agreement to which Atty Spillias stated that he should comment at the Special Meeting since the Town Commission has not yet had a chance to review the proposed agreement. Mr. Lucibella stated that Atty Spillias has characterized that the agreement only includes the Town giving up a 10' portion of the right-of-way, but that there are other items in the agreement which will need to be discussed. Atty Spillias stated that he did not advise that the Town's only concession would be a 10' portion of a right-of-way to Mr. Katz.
Atty Spillias advised that Comm Schulte would be declaring a conflict on this issue.
35. Mr. Spillias had spoken with Respondent some time after Respondent's election to the Town Commission (and before the March 4, 2002, Town Commission meeting) about "whether [Respondent] should vote on issues involving the Kelso property and the Kelso litigation." During their discussion, Mr. Spillias "explained to [Respondent] the conflict of interest rule." Respondent, in turn, informed Mr. Spillias that he felt he had "an interest in the outcome of the [Kelso] litigation because what did or didn't happen on that property would have an impact on [Respondent's] property" and that he therefore "would abstain from voting" given what Mr. Spillias had told him about the "conflict of interest rule."
36. The special Town Commission meeting to discuss and consider the proposed settlement agreement was held on March 7, 2002, as scheduled.
37. As the minutes of the meeting reflect, "[p]rior to any discussion, [Respondent] declared a conflict and stepped off the dais" and the Town Clerk "advised that she would have a Voter Conflict form prepared for his signature."
38. Among those who spoke at the meeting were Mr. Spillias, Mr. FitzGerald, Ms. Conahan, Ms. Olanoff, Mr. Lucibella, Mr. Finley, and Norman Malinski, Respondent's counsel of record in the instant case.
39. In his comments to the Town Commission, according to the minutes of the meeting:
Atty Spillias summarized the events leading up to this litigation and the settlement agreement distributed to the Commission on March 4, 2002 along with his proposed modifications . . . . He concluded by recommending approval of the agreement with his modifications and the reconfiguration drawing submitted by . . . Mr. and Mrs. Kelso showing the new boundaries and the 20' access. He stated that [t]his has been a long and torturous litigation. He added that he feared that if the Town continued to be caught in the middle between neighbors the case would go to trial and whoever lost would appeal and costs above the $60,000 would occur.
* * *
Atty Spillias commented that the suits involving George Elder and Ann Engelhardt would be dismissed if the agreement is executed.
* * *
. . . . Atty Spillias suggested reformatting the agreement so that it separates what the Town agrees to follow and what the parties agree to with each other. Atty FitzGerald and Atty Conahan agreed so long as the terms remain the same. . . .
40. The minutes of the meeting indicate the following regarding the action taken by the Town Commission:
Comm Aaskov moved to approve the settlement agreement subject to the modifications suggested by the Town Attorney, and the new format to be approved by the Town Commission, with the most recent reconfigured drawing, and that the advertisement for the hearing for the abandonment be scheduled for the regular meeting to be held April 1, 2002. Comm Bingham seconded the motion.
Mayor Kaleel clarified that the Kelsos would investigate the possibility of constructing some sort of turn-around for the Public Safety Dept.
Motion carried -- Yea 4 (Schulte abstain).
41. Respondent did not "want the [proposed] settlement agreement [to be approved] because it would grant access to the Kelso property." Moreover, he "also thought it would violate the Town Code." He did not publicly air these views at the meeting, however.
42. Following the meeting, Respondent signed the "Voter Conflict form" that the Town Clerk had prepared for him. Typed on the form was the following description of the "measure before [Respondent's] agency and the nature of [his] conflicting interest in the measure":
A discussion regarding the settlement of a lawsuit in which I was involved in the mediation process and of which the ultimate result may [a]ffect my property value.
43. Although she signed the proposed settlement agreement and even personally negotiated some of its terms, Ms. Olanoff was "never really ever happy with it." She "thought that [she] was getting [a] raw deal," but nonetheless agreed to the "deal" because of the "pressure" she was under (due, primarily, to her "lack of money to continue to pay" the costs of litigating). Before signing the agreement, she had contacted Respondent, telling him that she did "not want to do this" and asking him for his financial help. Respondent, however, had declined to provide her with any assistance.
44. Some time after the proposed settlement agreement had been signed, Ms. Olanoff "bumped into" Mr. Lucibella on the street and talked about the possibility of Mr. Lucibella's and Respondent's providing her with the funds she needed to continue to litigate against the Kelsos should the proposed settlement agreement expire without being finally approved by the Town Commission.
45. Mr. Malinski, on behalf of Respondent and Mr. Lucibella, drafted a proposed agreement providing for Ms. Olanoff to receive such financial assistance from Respondent and Mr. Lucibella. On or about March 18, 2002, Mr. Malinski sent, by facsimile transmission, an unsigned copy of the proposed agreement he had drafted to Ms. Olanoff's then-attorney, Mr. FitzGerald, for Mr. FitzGerald's review and consideration. The proposed agreement "contained a condition that [Mr. FitzGerald] hide this agreement" from Mr. Katz, the Town, and the Kelsos. Mr. FitzGerald thought that the proposed agreement "was illegal for many, many different reasons" and that "[i]t would be unethical for [him] to even counsel [Ms. Olanoff] about this document." He decided that, under the circumstances, he and his firm should no longer represent either Ms. Olanoff or Mr. Katz and he took action to effectuate such a withdrawal.
46. Shortly thereafter Edward Marod filed a Notice of Appearance as counsel of record for Ms. Olanoff in Case No. CL 00-3364 AN.
47. On March 25, 2002, Respondent, Mr. Lucibella, and Ms. Olanoff entered into an Agreement and Option Agreement,[5] which read, in pertinent part, as follows:
WHEREAS, there are currently pending in the Palm Beach County Circuit Court several related lawsuits (hereinafter "the Litigation") including an action captioned Cheryl H. Olanoff v. J. A. Scott Kelso, Palm Beach County Circuit Court Case No. CL 00-3363 AN, wherein J. A. Scott Kelso and Betty Kelso are seeing access to certain property they own in Palm Beach County, Florida; and
WHEREAS, Olanoff, as an abutting owner to the Kelso property[,] is a Defendant in this action, that Kelso[]s seeking to acquire their access by crossing over a portion of the property owned by Olanoff; and
WHEREAS, there are a number of property owners abutting the Kelso[]s['] property, some of whom are Defendants to the above described action and some of whom are interested parties by virtue of being abutting property owners; and
WHEREAS, Olanoff and several other parties to the above described litigation have entered into a Settlement Agreement (hereinafter the "Settlement Agreement") dated March 2, 2002 . . . ; and
WHEREAS, the Settlement Agreement specifically provides that it shall be null and void in the event final approval of it[]s elements is not obtained from the Town of Ocean Ridge within three (3) weeks) of its execution, that is, by March 23, 2002 if execution is deemed to be March 2, 2002, the date of the letter, or March 25, 2002 if execution is deemed to be March 4, 2002, the date the last party affixed his or her signature; and
WHEREAS, the Settlement Agreement, at this time, is an executory agreement with regard to Olanoff, in that she has received none of the performance promised for her participation in the Settlement Agreement as of this date; and
WHEREAS, in addition to being an executory agreement at this time, Olanoff desires to exercise her right to withdraw from the Settlement Agreement in the event final approval is not secured from the Town of Ocean Ridge by March 25, 2002; and
WHEREAS, Optionors desire to acquire property rights in the Olanoff property, including an option to purchase same and the right to both defend and, as appropriate, settle the above described litigation with respect to access sought over the Olanoff property.
NOW AND THEREFORE, in consideration of the payment of TEN DOLLARS ($10.00) and other good, valuable and sufficient consideration, which other consideration is further identified herein, the Optionors and Olanoff hereby covenant and agree as follows:
1. Incorporation by Reference: The parties agree that all of the recitations contained in the Whereas provisions are true and accurately express the intentions of the parties to this Agreement.
2. Withdrawal from March 2, 2002, Settlement Agreement: Olanoff agrees, when permitted to so under the terms of the Settlement Agreement, to furnish to all other signatories of the Settlement Agreement, written notice of her withdrawal from it. Such notice shall be in the form of a written communication by counsel for Olanoff to counsel for all parties who have executed the Settlement Agreement, such communication being made by telecopier after 5:00 P.M. on March 25, 2002 and by First Class Mail. Thereafter, Olanoff shall not enter into any further agreement with respect to her property or the settlement of litigation without the express written consent of Optionors.
3. Grant of Option: For a period of five (5) years from the date of this Agreement, or for a period ending ninety (90) days after the full execution and performance of any settlement of the Litigation, or for a period ending upon the sale of the Optioned Property pursuant to the terms of this Agreement, whichever is a shorter period of time, Olanoff grants to Optionors an option to purchase her property, located at 566 David Lane, Town of Ocean Ridge, Palm Beach County, Florida, . . . .
* * *
4. Conduct of Litigation: [T]he Optionors shall, immediately upon execution of this Agreement, assume all obligations for conduct of the litigation described as Cheryl H. Olanoff v. J.A. Scott Kelso and Betty Kelso, Palm Beach County Circuit Court Case No. CL 00-3364 AN. Such obligations shall include, without limitation,
(a) the obligation to reimburse Olanoff for all attorney's fees and costs paid in such litigation, together with the obligation of paying all attorney's fees and costs to be incurred in such litigation;
(b) the obligation of determining counsel for Olanoff in this litigation.
(c) Optionors will undertake all efforts necessary to secure an outcome to this litigation which will result in the Olanoff property not being utilized as access to the Kelso property.
(d) in the event the Kelsos either are or appear to be approaching success in securing access over the Olanoff property, the Optionors will utilize their best efforts to fashion alternatives by way of additional litigation or settlement which will result in the Olanoff property not being utilized to furnish access to the Kelso[]s['] property.
(e) Optionors will utilize best efforts to maintain the vegetation and green barrier between the Olanoff and Katz properties, such obligation including the obligation to replace any foliage and vegetation which may be removed as a result of the pending litigation.
5. Obligations of Olanoff: As additional undertakings on the part of Olanoff, Olanoff agrees to:
(a) execute all documents necessary to formalize the Option Agreement granted herein, or a memorandum thereof, in order that same may be suitable for recording in the Public Records of Palm Beach County, Florida.
(b) until such time as Optionors acquire title to the Optioned Property, or until the Optioned Property is otherwise sold as authorized by this Agreement, permit the pending litigation, and any ancillary proceedings resulting from this litigation, to be conducted in her name, the name of her estate, the name of her heirs, or in the event she is incapacitated, the name of her legal guardian, subject to the discretion and control of Optionors[.]
(c) vigorously pursue all available sources of insurance coverage and reimbursement relating to her being a defendant in this litigation, including homeowner's and title insurance. With respect to any sums recovered as defense costs from any insurance, Optionors agree to accept two-thirds (2/3) of any such payment as reimbursement for their defense costs paid on behalf of Olanoff, permitting Olanoff to retain one-third (1/3) of any such sums recovered.
(d) maintain the negotiation, execution and existence of this Agreement confidential. The withdrawal from the March 2, 2002, Agreement is a material and significant consideration for the payments being made by the Optionors herein, and disclosure of this Agreement may affect the Town's actions in complying with its undertakings, thereby substantially and adversely affecting the property interests which the Optionors are acquiring herein and their property interests as abutting owners and such adverse affect is not readily subject to precise damage determination. Therefore, neither Optionors nor Olanoff may disclose the substance or existence of this Agreement to anyone other than their respective counsel, except as otherwise ordered by a court of competent jurisdiction.
6. Obligations of Optionors: As additional obligations, the Optionors shall:
(a) advance Olanoff the sum of $10,000.00 in consideration of her entering into this Agreement. This sum of $10,000.00 is hereby allocated as a $7500.00 payment towards the obligations for defense fess and costs described above, as well as a total payment of $2500.00 for the option granted herein. However, all payments and undertakings by the Optionors herein shall be deemed as nonseverable consideration for all undertakings by Olanoff herein.
Olanoff hereby acknowledges receipt of this $10,000.00.
(b) immediately undertake to determine and satisfy the outstanding balance due to Olanoff's counsel for her defense in the pending litigation, together with arranging for counsel for continuing representation.
7. Amendments. No provisions of this Agreement may be amended or altered unless such amendment or alteration shall be in writing signed by all signatories to this Agreement.
48. The Town Commission's not having taken final action on the proposed agreement to settle Case No. CL 00-3364 AN, Ms. Olanoff's new attorney, Mr. Marod, on March 26, 2002, sent, by facsimile transmission and United States Mail, to Mr. Spillias, Ms. Conahan, and Mr. FitzGerald the following letter:
This letter is to inform you the deadline for completion of performance of the terms of the settlement agreement set forth in the correspondence from Steven Mayans dated March 2, 2002, between my client, Cheryl Olanoff, and Mr. Katz, Mr. and Mrs. Kelso and the Town of Ocean Ridge has now expired. Without limiting the generality of the foregoing, the requirements of the second sentence of paragraph 24 have not been met.
Therefore, pursuant to its terms, the March 2, 2002 settlement agreement and all of its provisions are now null and void. Ms. Olanoff no longer wishes to settle. Please let me know how you wish to proceed to having the case re-scheduled for trial.
Before sending this letter, Mr. Marod conferred with Respondent about the matter.
49. At its regular meeting on April 1, 2002, the Town Commission was scheduled to consider a resolution "[e]videncing its intent to vacate and abandon its interest in any and all public right of way lying between Lot 14 and Lot 16 of the unrecorded plat of Ocean Shore Estates," as called for in the proposed settlement agreement.
50. As the minutes of the meeting reflect, after the title of the resolution was read, "Comm Schulte declared that he had a conflict with this issue and moved down from the dais" and "Town Clerk Hancsak [then] advised that she would prepare a voter's conflict form for his signature."
51. The minutes of the meeting further reflect that, thereafter, the following occurred at the meeting:
Atty Spillias advised that the purpose of the resolution was the last step for a settlement in which the Town had agreed to abandon a 10' portion of Town right-of-way adjacent to Mr. Katz'[s] property and the public easement, if it exists, on David Lane on the land privately owned by Olanoff. He added that he had received a letter from Katz/Olanoff's attorney that he would no longer be representing them. He stated that Mr. Katz has not retained new representation as of yet, but Mrs. Olanoff had. Mrs. Olanoff's new attorney has taken the position that since the deadline for final approval of the agreement had passed, the agreement was null and void. Atty Spillias disagreed with this and sent documents to support the Town's position that it is an enforceable agreement, but it would go to trial on April 8th as previously planned. He explained that the Town could file a motion to enforce which would necessitate more litigation and suggested that the Town let the court decide and file a suit against Olanoff in the future for breach of contract, if the Town desires.
Atty Spillias suggested that the resolution be tabled in case the agreement is found to be enforceable. He added that if the resolution is tabled, the public discussion must be limited to the tabling of the resolution and not the merits of the resolution.
Atty Spillias concluded that although he does believe the agreement to be enforceable, he suggests that the Town go ahead with the court hearing on April 8th. Mayor Kaleel agreed adding that the Town would need to reserve [its] rights.
Comm Aaskov moved to table Resolution No. 2002-08, seconded by Comm Bingham.
* * *
Roll call was taken on Comm Aaskov's motion.
Motion carried-yea 3 (Schulte abstain).
52. The minutes of the meeting further indicate that, during the public discussion on the motion to table the resolution, in response to comments made by Mr. Lucibella critical of the Town Commission's actions in connection with the Kelso litigation:
Atty Spillias advised that at a mediation a year ago which involved Mr. Lucibella, Mr. Schulte and Mr. Rose, the Town put forth a significant effort to bring this issue to a resolution and even offered to put a significant amount of money into purchasing the property in a manner that would have resolved issues for everyone,[[6]] but they were not able to come to a final resolution. He added that the Town has not sued anyone except Mr. Katz to vacate the 10' of Town owned property. He stated that there is not a direct lawsuit against Mrs. Olanoff, but only a request of the court to clarify the Town's interest in her 10' easement. The Town was put in this position due a demand made upon the Town to make its right-of-way available to a property owner. He stated that although it sounds like the Town has spent a lot of money, under these circumstances the Town has been made to defend itself. He explained that this settlement agreement was intended to settle these differences between neighbors and now a Judge will be made to decide the outcome.
53. Following the meeting, Respondent signed the Memorandum of Voting Conflict form that the Town Clerk had prepared for him. Typed on the form was the following description of the "measure before [Respondent's] agency and the nature of [his] conflicting interest in the measure":
A discussion regarding the settlement of a lawsuit in which I was involved in the mediation process and of which the ultimate result may [a]ffect my property value.
54. As Mr. Spillias had indicated would be the case, a judge did "decide the outcome" of the dispute concerning access to Lot 0002 on the merits (there having been no attempt made by the Town or any other party to the litigation to argue that the matter had been resolved by settlement). On June 13, 2002, Palm Beach County Circuit Court Judge Stephen Rapp rendered a Final Judgment of Declaratory Decree in Case No. CL 00-3364 AN, which provided as follows:
THIS CAUSE came before the court for a Non-Jury Trial on June 10, 2002. Upon consideration of testimony of witnesses, evidence presented and arguments of counsel the Court makes the following findings of fact and conclusions of law:
1. The Court finds that David Lane as depicted on the January 26, 2000 survey by O'Brien, Suiter & O'Brien, Inc., a copy of which is attached hereto and incorporated herein by reference and as set forth in the non-recorded plat of Ocean Shore Estates prepared by George S. Brockway, Engineer, for John H. Adams, Trustee, under said Engineer's File No. TMA-1017 and filed in the Palm Beach County Tax Assessor's Office as Assessor's Map #71, is a full 20 foot public right of way available for ingress and egress and all other lawful uses as such by the public.
2. The Court further finds that there is a public right of way easement over the eastern 10 feet of Cheryl Olanoff's
property more particularly described as
follows . . . .
3. The Court further finds that the remainder of David Lane as described above is owned by the Town of Ocean Ridge in fee simple.
For the foregoing reasons, it is therefore
ORDERED AND ADJUDGED as follows:
A. The Kelsos are entitled to access their property pursuant to the 20 foot wide public right of way which is commonly known as David Lane and which is depicted as stated above. The Town of Ocean Ridge has a duty to clear and maintain that portion of David Lane deeded to them by Katz. Due to the configuration of the road and surrounding properties the town, as a condition of issuance of a building permit perhaps, might be authorized to require the Kelso[s] to dedicate a portion of their property for use as a public turn around to accommodate public service trucks e.g., street sweepers and the like.
B. Due to the fact that the Kelsos are entitled to legal access to their property over David Lane, the Kelsos do not have a common law way of necessity over Rose, Elder or Engelhardt's properties.
C. This Court retains jurisdiction to determine further supplemental relief to this declaratory decree, to consider an application for fees and costs and to enter such further orders and relief as may be necessary to enforce this Judgment.
55. Ms. Olanoff appealed Judge Rapp's Final Judgment of Declaratory Decree to the Fourth District Court of Appeal. The judgment was affirmed, per curiam, on March 19, 2003. The Fourth District's mandate issued on May 9, 2003.
56. The Town incurred legal expenses as a result of its participation in the litigation before Judge Rapp and the Fourth District.
57. Although he was not at any time a party to the litigation, Respondent, along with Mr. Lucibella, pursuant to the Agreement and Option Agreement, "took control of [the conduct of] litigation for Ms. Olanoff" from March 25, 2002, onward at the trial and appellate level.
58. Respondent did not "think that it was any of the Town's business to know about this option agreement" and he therefore did not "tell about the option agreement" and its contents (consistent with the last sentence of paragraph 5(d) of the agreement).
CONCLUSIONS OF LAW
59. DOAH has jurisdiction over the subject matter of this proceeding and of the parties hereto pursuant to Chapter 120, Florida Statutes.
60. The Commission was "created . . . to serve as guardian of the standards of conduct for the officers and employees of the state, and of a county, city, or other political subdivision of the state . . . and to serve as the independent commission provided for in s. (8)(f), Art. II of the State Constitution."[7] § 112.320, Fla. Stat.
61. The "Code of Ethics for Public Officers and Employees" (Code) found in Chapter 112, Part III, Florida Statutes, contains such "standards of conduct."
62. In Sections 112.311 and 112.316, Florida Statutes, which provide as follows, the Legislature explained what it intended, and what it did not intend, in enacting the Code:
112.311 Legislative intent and declaration of policy
(1)
It is essential to the proper conduct and operation of government that public
officials be independent and impartial and that public office not be used for
private gain other than the remuneration provided by law. The public interest,
therefore, requires that the law protect against any conflict of interest and
establish standards for the conduct of elected officials and government
employees in situations where conflicts may exist.
(2) It is also essential that government attract those citizens best qualified to serve. Thus, the law against conflict of interest must be so designed as not to impede unreasonably or unnecessarily the recruitment and retention by government of those best qualified to serve. Public officials should not be denied the opportunity, available to all other citizens, to acquire and retain private economic interests except when conflicts with the responsibility of such officials to the public cannot be avoided.
(3) It is likewise essential that the people be free to seek redress of their grievances and express their opinions to all government officials on current issues and past or pending legislative and executive actions at every level of government. In order to preserve and maintain the integrity of the governmental process, it is necessary that the identity, expenditures, and activities of those persons who regularly engage in efforts to persuade public officials to take specific actions, either by direct communication with such officials or by solicitation of others to engage in such efforts, be regularly disclosed to the people.
(4) It is the intent of this act to implement these objectives of protecting the integrity of government and of facilitating the recruitment and retention of qualified personnel by prescribing restrictions against conflicts of interest without creating unnecessary barriers to public service.
(5) It is hereby declared to be the policy of the state that no officer or employee of a state agency or of a county, city, or other political subdivision of the state, and no member of the Legislature or legislative employee, shall have any interest, financial or otherwise, direct or indirect; engage in any business transaction or professional activity; or incur any obligation of any nature which is in substantial conflict with the proper discharge of his or her duties in the public interest. To implement this policy and strengthen the faith and confidence of the people of the state in their government, there is enacted a code of ethics setting forth standards of conduct required of state, county, and city officers and employees, and of officers and employees of other political subdivisions of the state, in the performance of their official duties. It is the intent of the Legislature that this code shall serve not only as a guide for the official conduct of public servants in this state, but also as a basis for discipline of those who violate the provisions of this part.
(6) It is declared to be the policy of the state that public officers and employees, state and local, are agents of the people and hold their positions for the benefit of the public. They are bound to uphold the Constitution of the United States and the State Constitution and to perform efficiently and faithfully their duties under the laws of the federal, state, and local governments. Such officers and employees are bound to observe, in their official acts, the highest standards of ethics consistent with this code and the advisory opinions rendered with respect hereto regardless of personal considerations, recognizing that promoting the public interest and maintaining the respect of the people in their government must be of foremost concern.
112.316 Construction
It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his or her duties to the state or the county, city, or other political subdivision of the state involved.
63. "Conflict of interest," as used in Section 112.311, Florida Statutes, and in the rest of the Code, is defined in Section 112.312(8), Florida Statutes, which provides as follows:
"Conflict" or "conflict of interest" means a situation in which regard for a private interest tends to lead to disregard of a public duty or interest.
64. Among the "standards of conduct" established by the Code are those set forth in Section 112.313(7), Florida Statutes, which provides as follows:
Conflicting employment or contractual relationship.--
(a) No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties.
1. When the agency referred to is that certain kind of special tax district created by general or special law and is limited specifically to constructing, maintaining, managing, and financing improvements in the land area over which the agency has jurisdiction, or when the agency has been organized pursuant to chapter 298, then employment with, or entering into a contractual relationship with, such business entity by a public officer or employee of such agency shall not be prohibited by this subsection or be deemed a conflict per se. However, conduct by such officer or employee that is prohibited by, or otherwise frustrates the intent of, this section shall be deemed a conflict of interest in violation of the standards of conduct set forth by this section.
2. When the agency referred to is a legislative body and the regulatory power over the business entity resides in another agency, or when the regulatory power which the legislative body exercises over the business entity or agency is strictly through the enactment of laws or ordinances, then employment or a contractual relationship with such business entity by a public officer or employee of a legislative body shall not be prohibited by this subsection or be deemed a conflict.
(b) This subsection shall not
prohibit a public officer or employee from practicing in a particular
profession or occupation when such practice by persons holding such public office
or employment is required or permitted by law or ordinance.
65. Concerning Section 112.313(7)(a)'s prohibition against having a "contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties," the Commission, in CEO 91-31 (Florida Commission on Ethics July 19, 1991), made the following observation:
Of particular relevance here is the second part of this prohibition, which concerns contractual relationships that will create a continuing or frequently recurring conflict of interest or impede the full and faithful discharge of public duties. In the case of Zerweck v. State Commission on Ethics, 409 So.2d 57 (Fla. 4th DCA 1982), the court viewed Section 112.313(7)(a) as establishing
"an objective standard which requires an examination of the nature and extent of the public officer's duties together with a review of his private employment to determine whether the two are compatible, separate and distinct or whether they coincide to create a situation which 'tempts dishonor.'" [Id., at p. 61.][[8]]
Notably, the statute does not prohibit a public employee from having employment or a contractual relationship that would create any conflict of interest whatsoever. The term "conflict of interest" is defined in Section 112.312(6), Florida Statutes, as meaning "a situation in which regard for a private interest tends to lead to disregard of a public duty or interest." The Legislature easily could have phrased the statute as prohibiting "any employment or contractual relationship that would create a conflict of interest," but it clearly has not done so. Rather, the law prohibits only those employments and contractual relationships that will create a continuing
or frequently recurring conflict or that would impede the full and faithful discharge of public duties.
This accords with the Legislature's statement of intent underlying the Code of Ethics, expressed in Section 112.311, Florida Statutes:
"It is hereby declared to be the policy of the state that no officer or employee . . . of a county . . . shall have any interest, financial or otherwise, direct or
indirect . . . or incur any obligation of any nature which is in substantial conflict with the proper discharge of his duties in the public interest." [Section 112.311(5).]
Further,
"[i]t is also essential that government attract those citizens best qualified to serve. Thus, the law against conflict of interest must be designed as not to impede unreasonably or unnecessarily the recruitment and retention by government of those best qualified to serve. Public officials should not be denied the opportunity, available to all other citizens, to acquire and retain private economic interests except when conflicts with the responsibility of such officials to the public cannot be avoided." [Section 112.311(2).]
See also CEO 89-47 (Florida Commission on Ethics September 14, 1989)("In some cases, we have advised that where a conflict was not substantial, the employment or contractual relationship was permissible provided that the individual abstained from voting and disclosed that relationship under Section 112.3143(3), Florida Statutes."); CEO 86-32 (Florida Commission on Ethics May 15, 1986)("[W]hile it might be preferable for the Assistant Administrator not to be involved in negotiating any part of the County's contract with the Hospital, we find that his interest in the bonds is not substantial enough to conclude that it impedes the full and faithful discharge of his public role in negotiating a portion of the contract."); CEO 82-14 (Florida Commission on Ethics March 4, 1982)("No prohibited conflict of interest exists where an airport authority board member is a member of an association of tenants of the authority. Membership in a voluntary, unincorporated association is a contractual relationship within the provisions of Section 112.313(7), Florida Statutes. Although a conflict of interest would result from the board member's membership in an association of authority tenants, that conflict is not so substantial as to be prohibited under Section 112.313(7)."); CEO 82-12 (Florida Commission on Ethics March 4, 1982)("As the legislative intent [of the Code] indicates, not all private economic interests which give rise to a conflict of interest are prohibited by the Code of Ethics; rather, the Code is directed at those which present a substantial conflict with the proper discharge of public duties."); and CEO 81-45 (Florida Commission on Ethics July 16, 1981)("In our view, your joint liability with the person requesting the borrow pit permit would not interfere with the full and faithful discharge of your public duties and would not present such a substantial conflict of interest that it should be prohibited. Under the circumstances you have presented, it appears that matters related to the permit came before the County Commission at one time only. Although there would have to have been some oversight by the County to see that the conditions of the permit were complied with, it appears that the County Commission had no continuing regulatory authority over the manner or mode in which business was done under the permit. Accordingly, we find that no prohibited conflict of interest existed by virtue of your joint liability on a promissory note, the proceeds of which were to be used for the purchase of land for a borrow pit requiring a permit from the County Commission.").
66. Section 112.3143(3)(a), Florida Statutes, which is also part of the Code, requires a "county, municipal, or other local public officer" to abstain from:
vot[ing] in an official capacity upon any measure which would inure to his or her special private gain[[9]] or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(2); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer.
The Commission has opined that a public officer's abstaining from voting in compliance with Section 112.3143(3)(a) will not automatically render lawful conduct otherwise in violation of Section 112.313(7)(a), Florida Statutes. See CEO 94-42 (Florida Commission on Ethics October 13, 1994)("[A]lthough the Commissioner would be subject to the requirements of the voting conflicts law [Section 112.3143(3)(a), Florida Statutes] regarding votes concerning the acquisition of his insurance client's property, his compliance with that law, including abstention from voting, would not negate the prohibited conflict under Section 112.313(7)(a)."); CEO 94-5 (Florida Commission on Ethics March 10, 1994)("Compliance with the voting conflicts law (Section 112.3143, Florida Statutes), which would include abstention from voting or participation in matters involving clients of the member's law firm, does not obviate the conflict under Section 112.313(7)(a). Nothing in Section 112.313(7)(a) indicates that compliance with Section 112.3143 creates an exemption from its application; in contrast, other specific exemptions are provided in Section 112.313(12)."); and CEO 93-13 (Florida Commission on Ethics April 22, 1993)("This temptation would not be remedied by your abstention from voting on matters concerning or related to the FBO because the duties of an Authority member are not limited to merely voting but include whether to initiate discussion on certain matters, whether to alert staff to certain issues, etc., and because frequent abstention or lack of participation because of a private relationship, in and of itself, can constitute a violation of the second clause of Section 112.313(7)(a)."). Conversely, the fact that a public officer, as a result of an employment or contractual relationship he or she has entered into, must abstain from voting on a particular matter to comply with Section 112.3143, Florida Statutes, by itself, does not mandate the conclusion that that relationship is violative of Section 112.313(7)(a), Florida Statutes. See CEO 99-9 (Florida Commission on Ethics May 9, 2000)("[P]rovided the member continues to have no financial interest in the lawsuit and continues to have no responsibility for or involvement in the handling of the lawsuit, provided no other suits are brought by the law firm against the School Board, provided the firm does not represent any other clients before the Board, provided the member abstains from voting on any Board measures concerning the lawsuit, and provided the member only gets paid by the firm for actual work performed for the firm on an hourly basis, we find that the member's situation is distinguishable from that of CEO 96-1 and find that a prohibited conflict of interest would not be created under Section 112.313(7)(a) were the member to become of counsel to the law firm handling the existing lawsuit [against the Board]."); CEO 94-41 (Florida Commission on Ethics October 13, 1994)("In the one opinion factually on point, CEO 75-136, the issue before the Commission primarily involved voting conflicts of interest rather than conflicting employment relationships. However, there, we did not view the paralegal/city commissioner's employment relationship with a law firm representing a client in a matter that came before the city commission as creating a conflicting employment relationship. Instead, we urged that she consider abstaining from voting on matters where her employer was directly involved as an advocate. While we also have opined that recurring conflicts involving the public officer's frequent abstention can be viewed as an impediment to duty prohibited by Section 112.313(7)(a) [see Zerwick v. Commission on Ethics, 409 So.2d 57 (Fla. 4th DCA 1982)], the circumstances described here do not suggest that the law firm can be expected to regularly represent clients with matters involving the City. Therefore, based upon that factual predicate, we do not find her employment with the firm creates a conflict of interest prohibited by Section 112.313(7)(a), Florida Statutes, where the law firm employing her may represent a client occasionally or infrequently before the City Council or another City board, or in litigation involving the City."); CEO 90-20 (Florida Commission on Ethics March 8, 1990)("No prohibited conflict of interest would be created were a city council member to hold membership in a citizens' group which has a pending lawsuit against the city. Section 112.313(7)(a), Florida Statutes, would not be violated, as the group is neither doing business with nor regulated by the city, and no continuing conflict would be presented as the council member resigned as chairman of the group and removed his name as a plaintiff to the lawsuit. However, a voting conflict of interest would be created under Section 112.3143, Florida Statutes, as any vote on the lawsuit would inure to the special private gain of the council member as a property owner with a special assessment against his property."); CEO 90-15 (Florida Commission on Ethics March 8, 1990)("A city commissioner is not prohibited [by Section 112.313(7)(a), Florida Statutes] from being employed by a newspaper to write newspaper articles which concern the activities and business of the city commission. In doing so, he must avoid using information not available to the general public gained because of his public position. He would be prohibited by Section 112.3143(3), Florida Statutes, from voting on matters which would inure to the special private gain of his employer, the newspaper."); and CEO 77-10 (Florida Commission on Ethics February 1, 1977)("[W]e find no prohibited conflict to be created in the senator's privately being a limited partner in an investment group which owns property contiguous to that of a municipal airport. We would, however, call the senator's attention to s. 112.3143, relating to voting conflicts, should he ever be faced with a vote affecting the value of the property and/or the municipality's future purchase of it from the investment group.").
67. Inasmuch as wrongful intent is not an element of a violation of Section 112.313(7)(a), Florida Statutes, a public officer's reliance on the erroneous advice of counsel is not a valid defense to a charge of violating Section 112.313(7)(a). See Gordon v. Commission on Ethics, 609 So. 2d 125, 126 (Fla. 4th DCA 1992); and In re: Michael Kenton, Complaint No. 87-41 (Florida Commission on Ethics October 26, 1989). It, however, may be taken into consideration in determining what penalty should be imposed.
68. The "penalties" that public officers who violate the Code face are spelled out in Section 112.317(1)(a), Florida Statutes, which provides, in pertinent part, as follows:
(1) Violation of any provision of this part, including, but not limited to,
any . . . violation of any standard of conduct imposed by this part, . . . in addition to any criminal penalty or other civil penalty involved, shall, pursuant to applicable constitutional and statutory procedures, constitute grounds for, and may be punished by, one or more of the following:
(a) In the case of a public officer:
* * *
2. Removal from office.
3. Suspension from office.
4. Public censure and reprimand.
5. Forfeiture of no more than one-third salary per month for no more than 12 months.
6. A civil penalty not to exceed $10,000.
7. Restitution of any pecuniary
benefits received because of the violation committed.
(2) In any case in which the commission finds a violation of this part . . . and recommends a civil penalty or restitution penalty, the Attorney General shall bring a civil action to recover such penalty. No defense may be raised in the civil action to enforce the civil penalty or order of restitution that could have been raised by judicial review of the administrative findings and recommendations of the commission by certiorari to the district court of appeal.
* * *
(5) By order of the Governor, upon recommendation of the commission, any elected municipal officer who violates any provision of this part . . . may be suspended from office and the office filled by appointment for the period of suspension. The suspended officer may at any time before removal be reinstated by the Governor. The Senate may, in proceedings prescribed by law, remove from office, or reinstate, the suspended official, and for such purpose the Senate may be convened in special session by its President or by a majority of its membership.
69. Pursuant to Section 112.324(3), Florida Statutes, "only the appropriate disciplinary authority as designated in this section" may impose penalties for Code violations. In the case of an elected municipal officer, the Governor is the "appropriate disciplinary authority . . . designated in [Section 112.324]."
70. The Commission is authorized to investigate complaints of violations of the Code to determine "whether there is probable cause to believe that a violation has occurred." If, upon completion of its preliminary investigation, the Commission finds that such probable cause exists, a public (evidentiary) hearing must be held if requested by the accused public officer or employee. If it so desires, "[t]he [C]ommission may on its own motion, require a public [evidentiary] hearing." § 112.324, Fla. Stat.
71. "Public hearings may be conducted by the full Commission, by a single Commission member, or by the Division of Administrative Hearings, as directed by the Chair of the Commission after considering the Commission's workload." Fla. Admin. Code R. 34-5.010.
72. The Commission is represented at these public hearings by its Advocate, who enjoys the same opportunity as the accused to be a "full participant" in the proceedings. Fla. Admin Code R. 34-5.011; see also Fla. Admin Code R. 34-5.0045(2)("The Advocate represents the Commission in its prosecutorial function.").
73. The Advocate bears the burden of proving that the accused engaged in the conduct, and thereby committed the Code violation(s), alleged in the Commission's order finding probable cause.
74. Proof greater than a mere preponderance of the evidence must be presented by the Advocate to meet this burden of proof. Clear and convincing evidence of the accused's guilt is required. See Department of Banking and Finance, Division of Securities and Investor Protection v. Osborne Stern and Company, 670 So. 2d 932, 935 (Fla. 1996); and Latham v. Florida Commission on Ethics, 694 So. 2d 83, 87 (Fla. 1st DCA 1997).
75. Clear and convincing evidence "requires 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). It is an "intermediate standard." Id. 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). "Although this standard of proof may be met where the evidence is in conflict, . . . it seems to preclude evidence that is ambiguous." Westinghouse Electric Corporation, Inc. v. Shuler Bros., Inc., 590 So. 2d 986, 989 (Fla. 1st DCA 1991).
76. The Advocate's evidentiary presentation at the public hearing must be evaluated in light of the specific allegations of wrongdoing made in the Commission's order finding probable cause to determine whether the Advocate has met the burden of proof. Due process prohibits penal action being taken against a public officer based on matters not specifically alleged in the Commission's order finding probable cause, unless those matters have been tried by consent. See Shore Village Property Owners' Association, Inc. v. Department of Environmental Protection, 824 So. 2d 208, 210 (Fla. 4th DCA 2002); Hamilton v. Department of Business and Professional Regulation, 764 So. 2d 778 (Fla. 1st DCA 2000); Lusskin v. Agency for Health Care Administration, 731 So. 2d 67, 69 (Fla. 4th DCA 1999); Cottrill v. Department of Insurance, 685 So. 2d 1371, 1372 (Fla. 1st DCA 1996); and Delk v. Department of Professional Regulation, 595 So. 2d 966, 967 (Fla. 5th DCA 1992).
77. Where an administrative law judge has conducted the public hearing and issued a recommended order, the Commission must meet to consider the recommended order and any exceptions thereto filed by the public officer and the Advocate. Pursuant to Florida Administrative Code Rule 34-5.024, the meeting "shall not be an evidentiary 'hearing'" and"[n]o new evidence shall be taken."
78. If the Commission, at its meeting, finds that the public officer violated the Code, as alleged in the Commission's order finding probable cause, it may recommend a "civil penalty" (not to exceed $10,000.00) and/or a "restitution penalty" (in an amount equal to the any "pecuniary benefits received because of the violation committed"). Should the Commission do so, "the Attorney General [must] bring a civil action to recover such penalty." § 112.317, Fla. Stat.
79. In the instant case, the Commission's Order Finding Probable Cause frames the issue to be decided as follows:
[W]hether the Respondent, as a member of the Town Commission of the Town of Ocean Ridge, violated Section 112.313(7)(a), Florida Statutes, by having a contractual relationship with an individual engaged in a lawsuit involving the Town.
The Advocate urges that this question be answered in the affirmative, arguing that "it is clear that Respondent's Agreement and Option Agreement with Ms. Olanoff violated Section 112.313(7)(a), Florida Statutes, because it was a contractual relationship that impeded the full and faithful discharge of
Respondent's public duties as a member of the Town Commission." According to the Advocate:
There can be no question that the Option Agreement was in substantial conflict with the proper discharge of Respondent's fiduciary duties to the public. While the Town Commission did not want the litigation to continue and ultimately felt that the terms of the Settlement Agreement were in the best interests of the public and agreed with all of its terms, Respondent utilized the Option Agreement to interfere with settlement. In doing so, Respondent ignored his public responsibility to consider on behalf of the Town the prospects of success, the cost of continued litigation, the risk and consequences of losing, and the politics of how constituents or residents would be affected by the outcome.
80. As a Town Commissioner Respondent does have a responsibility to take into consideration the "best interests" of the Town, but this duty applies only when he is acting in his capacity as a Town official. He need not be guided by what is in the Town's "best interests" in his private affairs. Accordingly, to the extent he may have placed his personal interests over the interests of the Town in entering into the Agreement and Option Agreement with Ms. Olanoff and in exercising his contractual rights thereunder, Respondent did not, in so doing, run afoul of the law inasmuch as he was acting in his capacity as a private citizen, not a Town Commissioner.
81. The foregoing notwithstanding, Respondent, as a public officer, is not free to enter into any private contract he so desires, without restriction. Rather, he is constrained by the provisions of Section 112.313(7)(a), Florida Statutes, which, in pertinent part, prohibit a public officer from entering into a private contractual relationship that would create a substantial conflict with the proper discharge of the public officer's public duties.
82. Respondent's Agreement and Option Agreement with Ms. Olanoff, however, did not constitute such a prohibited contractual relationship. It did not create any impediment to Respondent's fully and faithfully discharging any Town Commissioner duties he otherwise would have been able to perform unemcumbered by conflict of interest. It is true that Respondent recused himself and did not participate in any Town Commission votes relating to the litigation (involving Ms. Olanoff, the Kelsos, the Town, and others) referenced in the agreement, but even if Respondent had not entered into the agreement, he still would have had to have refrained from performing these public duties. This is because, at the time he entered into the agreement, Respondent already had a personal interest in the outcome of the litigation by virtue of his status as an owner of property abutting the lot (Lot 0002) that the Kelsos owned and were seeking access to (through the litigation) so that they would be able to develop it. Respondent wanted a result that would effectively prevent such development from taking place, believing that a contrary outcome could adversely affect the value of his property. It was this very desire to protect the worth of this property that prompted Respondent to enter into the Agreement and Option Agreement with Ms. Olanoff. Respondent's establishing this contractual relationship therefore did not create a new conflict of interest that made it more difficult for him than it otherwise would have been to fully and faithfully perform his responsibilities as a Town Commissioner; rather, such action was merely a manifestation of a preexisting and continuing conflict of interest (that already disqualified him, and would continue to disqualify him, from voting on matters relating to the litigation) arising, not from any contractual or employment relationship he had, but from his status as the owner of property that could be impacted by the litigation. In short, Respondent's Agreement and Option Agreement with Ms. Olanoff did not create a situation where Respondent was, in any appreciable way, more tempted than he would have been in the absence of such an agreement to disregard the interests of the Town in favor of his own personal interests in discharging his public duties.
83. In view of the foregoing, it cannot be said that it has been clearly and convincingly established that Respondent violated Section 112.313(7)(a), Florida Statutes, as a result of
his Agreement and Option Agreement with Ms. Olanoff, as has been alleged.
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
RECOMMENDED that the Commission issue a public report finding the evidence presented at the public hearing in this case insufficient to clearly and convincingly establish that Respondent "violated Section 112.313(7)(a), Florida Statutes, by having a contractual relationship with an individual engaged in a lawsuit involving the Town" and dismissing the complaint filed against Respondent.
DONE AND ENTERED this 11th day of January 2005, in Tallahassee, Leon County, Florida.
___________________________________
STUART M. LERNER
Administrative Law Judge
Division of Administrative Hearings
The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675 SUNCOM 278-9675
Fax Filing (850) 921-6847
Filed with the Clerk of the
Division of Administrative Hearings
this 11th day of January, 2005.
ENDNOTES
[1] Although designated as the client "spokesman," Respondent was not a signatory to the agreement.
[2] Ms. Olanoff's complaint against the Kelsos was virtually identical to a complaint Mr. Lucibella had previously filed against the Kelsos which had been resolved by settlement only two days earlier.
[3] The Kelsos purchased the property for $290,000.00.
[4] Ms. Olanoff's attorney fees and costs were in excess of $50,000.00.
[5] The final version of this Agreement and Option Agreement was not identical to the draft that Mr. FitzGerald was sent on or about March 18, 2002.
[6] The amount of money the Town "offered to put . . . into purchasing the property" was $650,000.00.
[7] Article II, Section 8 of the Florida Constitution provides that "[t]here shall be an independent commission to conduct investigations and make public reports on all complaints concerning breach of public trust by public officers or employees not within the jurisdiction of the judicial qualifications commission."
[8] In commenting on this "objective standard," the Fourth District Court of Appeal, in Zerweck, stated the following:
Turning next to the age-old notion of conflict, Justice Terrell made this observation in City of Coral Gables v. Coral Gables, Inc., 119 Fla. 30, 160 So. 476 (1935):
"No principle of law is better settled than that the same person cannot act for himself and at the same time with respect to the same matter as the agent of another whose interests are conflicting. The two positions impose different obligations, and their union would at once raise a conflict between interest and duty and, constituted as humanity is, in the majority of cases duty would be overborne in the struggle." Id. at 479.
In the same vein, the United States Supreme Court in United Stated v. Mississippi Valley Generating Co., 364 U.S. 520, 81 S. Ct. 294, 5 L. Ed.2d 268 (1961), upheld a federal conflict of interest statute and noted:
"It is
also significant, we think, that the statute does not specify as elements of
the crime that there be actual corruption or that there be any actual loss
suffered by the Government as a result of the defendant's conflict of
interest. This omission indicates that the statute establishes an objective
standard of conduct, and that whenever a government agent fails to act in
accordance with that standard, he is guilty of violating the statute,
regardless of whether there is positive corruption. The statute is thus
directed not only at dishonor, but also at conduct that tempts dishonor. This
broad proscription embodies a recognition of the fact that an impairment of
impartial judgment can occur in even the most well-meaning men when their
personal economic interests are affected by the business they transact on
behalf of the Government. To this extent, therefore, the statute is more
concerned with what might have happened in a given situation than with what
actually happened. It attempts to prevent honest government agents from
succumbing to temptation by making it illegal for them to enter into
relationships which are fraught with temptation."
[9] It has been said that "[a] 'special private gain' described by the voting conflicts statute almost always (if not always) refers to a financial interest of the public official that is directly enhanced by the vote in question." George v. City of Cocoa, Fla., 78 F.3d 494, 496 (11th Cir. 1996). The Commission has "found gain not to be 'special' when the class of persons benefited or affected by a measure was of sufficient size." CEO 92-20 (Florida Commission on Ethics April 24, 1992).
COPIES FURNISHED:
James H. Peterson, III, Esquire
Office of the Attorney General
The Capitol, Plaza Level 01
Tallahassee, Florida 32399-1050
Norman Malinski, Esquire
Law Offices of Norman Malinski
2875 Northeast 191st Street, Suite 508
Aventura, Florida 33180
Kaye Starling, Agency Clerk
Florida Commission on Ethics
2822 Remington Green Circle, Suite 101
Post Office Drawer 15709
Tallahassee, Florida 32317-5708
Philip C. Claypool, General Counsel
Florida Commission on Ethics
2822 Remington Green Circle
Post Office Drawer 15709
Tallahassee, Florida 32317-5708
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.