Burroughs v. Communities Financial Corp., PP-198
| Decision Date | 28 November 1979 |
| Docket Number | No. PP-198,PP-198 |
| Citation | 378 So.2d 790 |
| Parties | R. B. BURROUGHS, Jr., as Secretary of the Department of Business Regulation, James S. Roth, as Director of the Division of Florida Land Sales and Condominiums of the Department of Business Regulation and Successor in office to Gordon Pfersich, and the Division of Florida Land Sales and Condominiums of the Department of Business Regulation, Appellants, v. COMMUNITIES FINANCIAL CORPORATION, a Florida corporation, Appellee. |
| Court | Florida District Court of Appeals |
Harold F. X. Purnell, Tallahassee, for appellants.
Wade L. Hopping, Gary P. Sams and William D. Preston of Hopping, Boyd, Green & Sams, Tallahassee, Dana G. Bradford of Mahoney, Hadlow & Adams, Jacksonville, for appellee.
Randall E. Denker, William P. White, Tallahassee, amicus curiae.
The Division of Florida Land Sales of the Department of Business Regulation (the Division) appeals a circuit court order temporarily enjoining it from withholding funds allegedly due Communities Financial Corporation (CFC) from the Division's improvement trust fund. The trust fund was created in improvement trust agreements which the parties entered into pursuant to what is currently Section 478.052, Florida Statutes (1977), after the Division had approved CFC's proposal and offering statement to sell 22 square miles of land in Okeechobee County as a subdivision of one and one-quarter acre lots. In its registration under Chapter 478, CFC had informed the Division in 1971, that both the Department of Pollution Control and the Department of Natural Resources had stated they had no regulatory responsibilities over the proposed project. Under Section 478.052, the trust agreements were to be an assurance to lot purchasers that improvements promised in the offering statement drainage and all-weather stabilized roads would in fact be completed. CFC's contracts with lot purchasers promised completed improvements by December 31, 1979.
The trust agreements provided uniformly that a percentage of CFC's gross receipts from lot sales would be deposited into the improvement trust fund "for the purpose of protecting the purchasers" and that CFC could withdraw funds
only in accordance with the written approval and instructions of the Division, provided, however, that if said improvements are completed . . . and upon evidencing to the Division that (they) are paid for in full (CFC) shall have the immediate right to withdraw all of said funds and said Division may not withhold approval.
Fla.Admin.Code R. 7D-6.02 governs improvement trust agreements generally and provides that when money in the trust account equals 100% of the cost of completing improvements, the subdivider may stop making deposits and withdrawals will be allowed to the extent that not "less than 110% of the projected cost of uncompleted promised improvements" remains in the account. The rule further provides that the Division may require "additional or substitute assurances if, in (its) judgment, there has been a material change in the subdivider's commitment to complete promised improvements."
Presently, 80% of the lots have been sold and nearly half of those have been fully paid. CFC began construction of the improvements in 1972, financing by corporate funds until 1977, when it began financing the improvements through periodic releases from the trust fund.
Notwithstanding the position its predecessor, Department of Pollution Control, had taken in 1971 regarding regulatory jurisdiction over the project, the Department of Environmental Regulation began communication with CFC in June, 1977, informing the latter that the project might fall within its permit jurisdiction. Three months later DER stated permits would be required, and within 45 days, CFC received DER's Letter of Notice that the project violated Chapter 403 and requesting CFC to cease construction. After 18 months, on June 1, 1979, DER sent its Notice of Violation to CFC. The Division requested "additional assurances" from CFC that DER's assertion of permit jurisdiction was not a "material change" in CFC's commitment to complete the improvements. When CFC could not assure that either the projected cost of the improvements or their completion date was unaffected by DER's action, the Division refused to allow further withdrawals from the fund.
CFC sought temporary and permanent injunctions against DER and the Division, and the trial judge temporarily enjoined the Division from withholding the funds, finding that CFC's "rights to withdraw the escrow funds are defined in the escrow agreements . . . and are unrelated to environmental considerations," and that the Division's decision to stop releases from the trust because of DER's unrelated action, was unlawful. 1
The Division argues that CFC was not entitled to a temporary mandatory injunction because the improvement trust agreements grant CFC an absolute right to the trust funds only after the improvements are completed and fully paid for. We agree...
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Communities Financial Corp. v. Florida Dept. of Environmental Regulation
...doubt. In particular, this Court noted DER's continued assertion of jurisdiction over certain activities on the site. Burroughs v. CFC, 378 So.2d 790 (Fla. 1st DCA 1979). Meanwhile, in response to conflicting evidence adduced at a hearing regarding violations of Chapter 403, Florida Statute......