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CEB Minutes 12/15/1995 1995 Code Enforcement Board December 15, 1995 December 15, 1995 TRANSCRIPT OF THE MEETING OF THE CODE ENFORCEMENT BOARD Naples, Florida, December 15, 1995 Met on this date at 9:04 a.m. in SPECIAL SESSION in Building "F" of the Government Complex, East Naples, Florida, with the following members present: CHAIRMAN: Jim Allen Charles Andrew Mireya Louviere Celia Deifik Jean Rawson Louis Laforet ABSENT: Richard McCormick ALSO PRESENT: Ramiro Manalich, Assistant County Attorney Heidi Ashton, Assistant County Attorney Maria E. Cruz, Code Enforcement Linda Sullivan, Code Enforcement Director Page 1 SPECIAL MEETING CODE ENFORCEMENT BOARD OF COLLIER COUNTY. FLORIDA AUENDA Date: December 15, 1995 at 9:00 o'clock A.M. Location: Collier County Government Center, Admn. Bldg, 3rd Floor NOTE: ANY PERSON WHO DECIDES TO APPEAL A DECISION OF THIS BOARD WILL NEED A RECORD OF THE PROCEEDINGS PERTAINING THERETO, AND THEREFORE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDINGS IS MADE, WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED. NEITHER COLLIER COUNTY NOR THE CODE ENFORCEMENT BOARD SHALL BE RESPONSIBLE FOR PROVIDING THIS RECORD. 1 . ROLL CALL 2. APPROVAL OF AGENDA 3 . APPROVAL OF MINUTES N/A 4. PUBLIC HEARINGS N/A 5. NEW BUSINESS N/A 6. OLD BUSINESS A. BCC vs. Deauville Lake Club Dev. Corp. - Affidavit of Non-Compliance and Request for Imposition of Fines B. BCC vs. Deauville Lake Club Dev. Corp. - Affidavit of Compliance 7 . REPORTS N/A 8. NEXT MEETING DATE January 25, 1996 9. ADJOURN December 15, 1995 CHAIRMAN ALLEN: Good morning. I'd like to call to Jrder the Code Enforcement Board meeting for December 15, 1995. Any person who decides to appeal a decision of this board will need a record of the proceedings pertaining thereto and, therefore, may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the' appeal is to be based. Neither Collier County nor the Code Enforcement Board shall be responsible for providing this record. We'll start our roll call to the left. We would like to for the record Mr. McCormick has asked to be excused this morning. MR. LAFORET: Lou Laforet. MS. RAWSON: Jean Rawson. CHAIRMAN ALLEN: Jim Allen. MS. DEIFIK: Celia Deifik. MS. LOUVIERE: Mireya Louviere. MR. ANDREWS: Charlie Andrews. CHAIRMAN ALLEN: With that in place we'll move for approval of the agenda. MR. LAFORET: So moved. MS. RAWSON: Second. CHAIRMAN ALLEN: Moved and seconded. All those in favor, signify by saying aye. It carries unanimously. The minutes this morning are -- we'll go right now to our public hearings. MR. MANALICH: Mr. Chairman, good morning. Good morning, members of the board. For the record, Ramiro Manalich, chief assistant county attorney. This matter is here today at the request of Deauville Lake Club Development Corporation, which you heard on, I believe it was November 30th in regard to whether there could be any proposal submitted to you for resolution of the outstanding fines which are pending in this case. Pursuant to your direction at the last meeting, staff as well as myself as your counsel met with Mr. Reina and Mr. Meadvin, the representatives of the corporation. And at that time we met to see if there was any proposal that they were going to submit to resolve these outstanding fines. And I have distributed to you a December 8, 1995, letter from Mr. Reina on behalf of the corporation/respondent in which he affirms that there was no progress made, and there was no acceptable proposal which was advanced at the time of the meeting with their representatives and the county. So in accordance with his letter, I'm also here to report and confirm that that is the result of the negotiation. Consequently', as we had indicated to Mr. Reina at the time of the last hearing, I believe this matter here today is before you on staff's request to impose the remaining fines in this case. I would also for the record clarify that it is my recollection that at the last meeting Mr. Reina waived any objection with regard to Mr. Allen participating in the deliberations and decisions in this case. So I believe, Mr. Allen, even though you had disclosed that you were involved as a contractor on this property, Mr. Reina indicated he had no objection to you participating and voting in these matters. Is that your recollection? Page 2 December 15, 1995 CHAIRMAN ALLEN: That's correct. MR. MANALICH: Okay. So I just wanted to state that for the record. I would also like to point out that today we have a related item that you also asked for a report about. Mr. Kirby is here from code enforcement staff with regard to the related case of Embassy Woods because, if you recall, there was a settlement agreement in that matter which was brought up in the context of this case. He has an update for you on the landscaping. And finally I wanted to mention that Attorney Henry Johnson is here today on behalf of the association of homeowners at Deauville Lake Club. And he is here to give you a report with regard to his perspective on where this matter now lies. With that in mind, perhaps I can just summarize my position on this at this point. We did have the meeting with Mr. Reina, as I indicated earlier, and as well as in Mr. Reina's letter. We believe that essentially no substantive proposal was advanced. Consequently, nothing was accepted. The matter is here for you to, at staff's request, impose fines. We have done in the county attorney's office an assets -- real property assets check with regard to this corporation. At this point the only thing that I have located is a couple of units at the development which were still titled to the developer. But, of course, as you know, these units have been the very subject of our partial releases in the past to assist the homeowner association. I have also asked real property attorney in my office Heidi Ashton, and she gave me a report that indicated that there were two parcels which are designated Band C on the property which at one time were owned by the developer. I am not clear as to whether there is still ownership by the developer or not on that. What I would recommend today, if you choose to impose fines, is that you authorize the county attorney's office to impose those fines on any developer-owned property that is available through our search. And I'll have to confirm in my office through further research whether any of that is still remaining with the exception of the units. We also can check periodically, because as of this morning I did a corporate check on the status of Deauville Lake Club Corporation. They appear to be still active. The registered agent is a Mr. Mimon Baron, and they are still an active corporation. We can periodically do checks, real property checks, to see if within the county they own any property as the corporation, which could then be, of course, subject to lien. At this point I believe it's staff's position that compliance has been achieved in accordance with the order, is that correct, Miss Cruz? MS. CRUZ: That's correct. MR. MANALICH: Okay. Well, that from my perspective, I think, is my update to you. And do you have any questions for me at this point? MS. DEIFIK: I do. MR. MANALICH: Yes. MS. DEIFIK: I didn't said you had identified as having been owned by owned by the developer. understand what you said. You Heidi Ashton had identified parcel the developer, but you're not sure if Do you want to restate that? If you Band C it's did a Page 3 December 15, 1995 title search, you would know one way or the other. MR. MANALICH: Well, what I have at this point -- the title search that I did recently prior -- after Miss Ashton's memo indicated that the only thing we could locate was units -- condominium units. Prior to that in June Ms. Ashton had done some type of title search for me that she gave me a memo on indicating that parcel A was owned by the condominium association. Parcels Band C were still at that time owned by the developer. And she was not available here this week for me to talk with her to have her follow up on this. What I'm saying is there still is a possibility that beyond the units there might be something out there. I discussed that briefly this morning with Mr. Johnson, and he indicated he would have to check into that also himself. MS. DEIFIK: So you didn't do a -- what kind of -- did you do a name search, and those parcels did not show up? MR. MANALICH: Correct. MS. DEIFIK: Okay. MR. MANALICH: So I feel like at this point we still need to further look into it, because in June they apparently owned that according to Heidi. But our latest title search under the name of Deauville Lake Club Development Corp. did not disclose that. So I don't know if they've disposed of it or what. I mean, we'll have to check that out. MR. ANDREWS: Refresh my memory. We've had so many of these. Was it some time ago on a title check -- wasn't there a piece of property in -- in Naples that -- that we could get a lien on, but there were a zillion liens on it previously, or am I talking about another -- MR. MANALICH: Well, I think you're talking about the Embassy Woods case where Elba Development Corporation had a condominium unit on Gulf Shore Boulevard, I believe, and that was liened and continues to be liened in that case. MR. ANDREWS: Okay, thank you. MR. MANALICH: I guess what I'm saying is if you choose to impose these fines and have them act as a lien, what I would recommend is that you allow me the authority to further investigate their property situation, and if they have anything that is in the name of the corporation as opposed to the association, to then lien those property descriptions. Now, Mr. Kirby is here, and I believe he has a report on the related matter of the landscaping under the settlement agreement in Embassy Woods. Mr. Kirby. MR. KIRBY: My name is Mike Kirby for the record. I'm the environmental investigator for code enforcement. I was asked to help out with this landscape plan to get the plan going to get the landscaping, the $10,000 commitment for landscaping, going. So in September I initiated contact with Mr. Meadvin, and to make a long story short, after letters and telephone calls, we received a -- a plan middle of November, a little after -- 11-22, and we wrote comments back to get some items corrected, specified, you know, some locations in more appropriate areas, and I haven't had a response to that. I haven't -- we haven't had a revised plan. So we still do not have a current up-to-date landscape plan committing what details __ what will be planted. Page 4 December 15, 1995 MS. LOUVIERE: Can I ask you a question? So basically JOU don't have any details of what's to be planted, and you have -- no planting has been done up to date; is this right? MR. KIRBY: I have an initial plan, but it is not satisfactory. MS. LOUVIERE: Oh, I see. So they agreed to do something, and then now they're stuck in whatever -- in giving you these plans to see what it is that's going to be planted there. MR. KIRBY: Correct. MS. LOUVIERE: No one agreed to that. MR. KIRBY: Correct. They didn't agree with our comments so -- MS. DEIFIK: Is there any money escrowed to actually do the planting? MR. KIRBY: I'm not aware of any. I'm newer to the scene, so -- MR. MANALICH: I have been told at the last meeting that they have submitted at least two checks in approximately a thousand fifteen hundred dollar amounts toward the, I believe, ten thousand dollars fines that they owe that must be paid with interest during the period of a year. MS. DEIFIK: Right. That was the money they were to pay to the county. I'm wondering whether or not anybody has identified I don't think it was a part -- I don't think it was required by the plan, but I'm just wondering; has anyone identified where funds are that will actually pay for this landscaping, or it's still just MS. LOUVIERE: I think the funds were -- I thought the funds were to pay for the landscaping. I thought he had some sort of agreement with the landscaper. MR. MANALICH: His agreement was to pay the fines. MS. LOUVIERE: It was a double thing. MR. MANALICH: And then the other five or ten thousand was going to be in the form of landscaping which he was required to provide by -- MS. DEIFIK: I understand. I understand. MR. MANALICH: Okay. Now I believe, Mr. Kirby, am I not correct that there has actually been planting that has occurred at the site; is that correct? MR. KIRBY: There have been plantings at the site. They were not done according to this initial plan. So whether or not, you know, they put them on this plan and we accept them, that just really hasn't came about yet. MR. ANDREWS: Gees-- MR. MANALICH: For the record I'd also like to point out at this point that Mr. Reina, as you know, was advised at the last meeting that at their request this matter was being continued to today's date at this time. And I met with him obviously pursuant to your direction, our meeting, and I also spoke with him subsequent to that by telephone. And I've -- you know, in all aspects he was very well aware that this meeting was being held today. I believe he chose to present the letter. Obviously he's not here, but my point being that for notice purposes it's my strong opinion that they have been fully notified and simply have chosen not to appear. Now, Mr. Johnson is also here. He is the attorney for Page 5 December 15, 1995 the homeowner association, and I would welcome, if you would like, Mr. ~hairman, his input -- CHAIRMAN ALLEN: Please. MR. MANALICH: -- to give you his perspective. CHAIRMAN ALLEN: Please, Mr. Johnson. MR. JOHNSON: Is this on? CHAIRMAN ALLEN: Yes. MR. JOHNSON: Good morning, ladies and gentlemen. Just for the record my name is Henry Johnson, and I represent the Deauville of Naples Condominium Association. It's actually Deauville of Naples Condominium Association, Incorporated. It's a Florida not-for-profit corporation. Its responsibilities include the -- the maintenance and care and overseeing and review of all the common areas at the Deauville of Naples Condominium. Let me provide the board some -- some litigation historical perspective that may provide some assistance to you as you deliberate in -- in the imposition of fines. At present there are three significant pieces of litigation that you should be familiar with. One piece of litigation has ended. That piece of litigation involved the transfer of title of what was the recreation parcel, that's to say the parcel of land upon which effectively sits the swimming pool, the clubhouse, and the like, from Deauville of Naples Development Corporation to my client's association. That lawsuit is over. Title has transferred in that parcel. That was effectively known as parcel A. That is no longer in invested in any other party other than my association. MR. MANALICH: Mr. Johnson. MR. JOHNSON: Yes. MR. MANALICH: Excuse me for interrupting. I just want to make it clear to the board; I spoke with Mr. Johnson, also Mr. Direktor, who is an attorney also representing the association previous to Mr. Johnson. MR. JOHNSON: Correct. MR. MANALICH: And we confirmed as part of the history of this case that as part of this item -- this litigation Mr. Johnson just mentioned -- I was not present at that hearing, but Mr. Bryant from my office was, our litigation attorney. And at that hearing consistent with the board's direction, the board's lien as to the entire area which included this recreation parcel was released by the county consistent with your direction with regard to like, for instance, the releases on the partial -- on the units and on the recreation parcel that also occurred. So that is no longer subject to the county's lien. MR. JOHNSON: That's correct. The second piece of litigation is a piece of litigation, which is ongoing, which is a complaint for condominium lien foreclosure, which originally started off as a complaint for condominium lien foreclosure against approximately 7 to 8 individual condominium units owned by Deauville Lake Club Development Corporation. There have been several closings during the course of this year. With the cooperation of -- of the county and several other parties as well, the association has been able to realize some monies, approximately $10,000 per closing, to attempt to reimburse the association for whatever essentially unpaid assessments in just condominium association maintenance fees from Deauville Lake Club Page 6 December 15, 1995 Development Corporation dating back to as early as 1991. And we have Jeen reimbursed for those. There continued to be two units which are unsold, and those are the two units which Attorney Manalich referred to earlier. Those two are still the subject of our lien and lis pendens and the like. The legal status of the case is that the case is both set for mediation and for -- for a trial, I think, in March or April of this year. MR. MANALICH: Mr. Johnson. MR. JOHNSON: Yes. MR. MANALICH: Excuse me again for interrupting. Just for clarification, is it not the position of the association that as to those units that the county partially released that in any event the interest which you asserted there were superior in time and priority to those of the county in the first place? MR. JOHNSON: Yes. It's our position that's not a close call, that our -- that our association liens were imposed prior to any county lien, and there was an argument to be made that they even relate back to the date of the recording of the declaration of condominium, which was certainly back in 1989. So our -- our liens are -- on those units are prior in interest. Now, before I talk about the third piece of pending litigation, a small amount of background is -- is necessary. The reason why -- one of the reasons why this board is contemplating fines against Deauville Lake Club Development Corporation is its failure to complete certain specific facilities which are -- which have turned out to be common-area facilities of my client association. Most specifically the developer in this case did not complete, among other things, the clubhouse, the swimming pool area, the deck area, and other recreational facilities. My client association I can represent to this board found itself in a -- in a position where it had to expend in excess of $400,000, in excess. I mean, this is -- for those of you who sit on this board who have certainly had the occasion to sit with and counsel condominium associations, I think you'll find that to be an extraordinary number. In this particular case our association found it necessary to spend in excess of $400,000. And to put it closer to home, on a per-unit basis everyone at the association was assessed in the vicinity of about eighteen hundred dollars per unit for the purposes of completing the common areas. This association is an association which I think is very strong in its -- in its -- in its ability to stay with it. I'm pleased to report that the facilities are built now. But, quite candidly, I'm -- I'm -- you know, I have a little bit of problem when I listen to statements like we're pleased to report that the -- that the facilities are now in compliance. They're in compliance, we believe, because we dipped into our pocket and spent about four hundred grand to get the darned things built. With that in mind, please -- please note that there is also a third piece of litigation pending before Judge Ted Brousseau here in Collier County which -- which is effectively a claim against Deauville of -- Deauville Lake Club Development Corporation for damages for the costs incurred by my client association in completing construction of these facilities. The procedural stance of the case right now is that Judge Brousseau has granted a summary judgment as to Page 7 December 15, 1995 liability suggesting that certainly Deauville of -- of Naples )eauviile Lake Club Development Corporation is responsible to the association for certain events. It's pending since now August of 1995. Literally on Judge Brousseau's desk or in his office is a proposed order and a memorandum as to what we claim are the amount of damages that should be assessed. We are hopeful that the judge will enter an order consistent with the actual amount of money which we've expended, you know, in the -- in the $400,000 range. Certainly that is within the judge's discretion. Our concern is this, is that if -- if your -- if the board leans towards imposing an -- an appropriate fine, that it contemplate working out some mechanism, either with your attorney and my office or -- or in some other way so as to insure that any interest that my client association might have to any parcel or ownership interest which might exist at this time or might be found in the future. to be owned by Deauville Lake Club Development Corporation, that the county's interest be subordinated to what would be our claim for -- for money damages. It -- it sounds a little bit peculiar because you say, well, we have a -- you know, you as a board have a very strong interest to protect the public from what goes on with these kind of activities. I would respectfully suggest that the real public interest that needs to be protected here is the immediate public interest, that's to say the interest of this association who dipped into their pocket to, you know, spend the kind of dollars which they have. Quite candidly, I would -- I would have been very hopeful to be able to come to the board today and say, look, folks, I've got a judgment. I have it recorded. I have it docketed for execution. It's been through no tardiness of the association nor any parties involved, just the -- what goes on in the court system, that it sometimes takes time to get a -- to get a judgment. But our -- you know, I think we say two things; one, certainly my client association is behind the board conceptually in having a fine be enforced. It expresses some -- it requests and expresses some caution that in imposing a fine you don't knock out our client's -- my client's ability to recoup the sums which it's really spent if -- if that chance exists. Thanks a lot. I'm here to answer any further questions. MR. LAFORET: Counsel, I'd like to ask you when you constructed these common element buildings, structures -- MR. JOHNSON: Yes. MR. LAFORET: -- did you follow the basic developer's plans, or did you expand on his plans? MR. JOHNSON: To the best of my knowledge, the developer's plans were followed. MR. LAFORET: All right. Thank you very much. MR. JOHNSON: Yes, Miss Deifik. MS. DEIFIK: Do you know the title status of parcels B and C that Mr. Manalich was referencing earlier? MR. JOHNSON: To the best of my knowledge, at the -- they do exist in the name of Deauville Lake Club Development Corporation, and that's why I -- that's why I bring it to the attention of -- of this board. But, again, they are subject to Page 8 December 15, 1995 further review. I think that one thing you have to keep in mind, ~elia, 'is that the various searches that we've done relating to Deauville Lake Club Development Corporation seem to be fairly -- fairly convoluted. And -- and I think that there certainly are those independent parcels. There are certainly two little strips which are marked B -- Band C on -- on, I believe, the plat, so I think those -- those are probably unencumbered. The query at this point in time is what are they worth and who are they really intended for. And there's probably a strong argument to be made they were intended to be deeded over to the association. MS. DEIFIK: Are they ingress and egress? MR. JOHNSON: One is, and the other one is a small strip on the side of the buildings, so there's not much -- you know, I don't want to overstate anything. I want to say that, you know, we're coming in today saying if there exists any value to any asset that might exist with -- with -- with Deauville Lake Club Development Corporation, we would like the opportunity, you know, to have, you know, a priority interest. MS. DEIFIK: What -- what legal descriptions did your lis pendens cover? MR. JOHNSON: On the -- on the lien foreclosure? MS. DEIFIK: On any of your suits, the one that's pending before Judge Brousseau. MR. JOHNSON: The -- the legal description for the suit on the recreation parcel specifically listed parcel -- parcel A, called it recreation parcel, had a metes and bounds description. For the lien foreclosure action it listed individual condominium units. MS. DEIFIK: Okay. How about for the one that's now pending? MR. JOHNSON: It has no legal description. It is simply an action for damages, and we don't have -- that's what I'm saying to you. We don't have the flexibility to say that at this point in time that judgement attaches to any particular property. I don't have that luxury to be able to say that to you. MS. LOUVIERE: This is an interesting question. I hope you can answer it. What kind of monetary value would you think that he owes you as far as damages and as far as the fact that you guys had to finish the work that he didn't do? How much money? MR. JOHNSON: Certainly in excess of $450,000, and that's conservative. I don't want to overstate or understate. I think that's certainly in excess of $450,000, and that's based on you know, certainly on -- on the -- on the cost of completion of the -- of the units and certainly would be in excess of that based upon actual -- what we claim to be actual unpaid assessments for monthly __ monthly or quarterly maintenance on the units as well. MS. LOUVIERE: And this does not include the damages that you are -- you are asking for? MR. JOHNSON: That includes the damages that we are requesting. I stated conservatively, again, because I'm -- I don't want to overstep or understep my bounds as an attorney in trying to determine what a -- what Judge Brousseau might award in a particular judgment. That would be improper for me to do so. MS. RAWSON: I have one question. The order that's on Judge Brousseau's desk waiting for his signature, does it have an Page 9 December 15, 1995 ~ount in it? MR. JOHNSON: Yes, it has -- actually there are two -- to the best of my knowledge, we submitted, Miss Rawson, two proposed judgments, one of which has a blank and one of which has a sum in the -- in the vicinity of about four hundred and twenty something thousand dollars. Again, we get to the four hundred twenty by taking the construction costs and adding various other supervisory costs and, you know, real consequential damages to the actual construction cost. MS. RAWSON: And to the best of your knowledge and belief, you're not going to have another hearing; he's just going to act on your order? MR. JOHNSON: Yeah, we had -- we did have after the original hearing on our -- on our motion for summary judgment damages, we did have a subsequent hearing, and I forget what the title of it was. I don't know if it was a motion for rehearing or a motion for modification. I forget which. And at that point in time I think he asked the attorneys to submit any further orders or the like and, you know, put it on his desk. The original hearing, to the best of my knowledge, was in the summer. It was either late July or early August, I think. And then the second hearing was in October. We also -- I should note just for the record today, we have numerous representatives that if -- that have been good enough to come before your board this morning from the condominium association, which certainly includes but clearly is not limited to Miss Helen Philbin, who is the association president, who certainly could provide any further factual background as well. Thank you. MR. ANDREWS: Mr. Chairman, I think a few -- I've met these people before. CHAIRMAN ALLEN: Staff, what are the total fines to date that we're talking about? MS. CRUZ: The total amount -- for the record my name is Maria Cruz. Total amount that we're requesting to be imposed today is $244,500. That's for a total of 489 days at $500 per day. CHAIRMAN ALLEN: What is staff's recommendation? MS. SULLIVAN: Staff recommends that the fines be imposed and that should any assets turn up later, that we pursue them to the legal extent possible. We -- I would add on the record -- my name is Linda Sullivan -- that we at the negotiation session asked the representatives for the development corporation for a financial statement. They told us they didn't have any problem with providing us with that, but it hasn't happened. MR. MANALICH: Mr. Chairman, I think it's important for you also to realize that the position -- at least one position has been advanced in this case by the respondent, is that as a result of -- by the way, before I even state that position, I want to point out that both staff and myself disagree with this interpretation or position. But what has been advanced is the argument that by engaging in the partial releases and the release of the recreation parcel that I mentioned, that somehow this board waived any of its rights to in the future lien any of their property, which is a novel argument, but I think it's just that and nothing more. We don't believe it has any substance and disagree strongly with that, but I just wanted you to be aware of that position that has been asserted. MS. DEIFIK: Mr. Manalich, one question that I have. I Page 10 December 15, 1995 understand that -- that last year the -- the board subordinated or artially released certain things in order to benefit the homeowners' association. Are you aware of any case law or -- or can you give us an idea of what the status of the law is with regard to a county board weighing the interests of the general public versus the interests of the homeowners? MR. MANALICH: I have not specifically researched that. I can tell you that it was always my opinion in this matter that issuing the partial releases was consistent with the public interest, that is it was addressing the -- and I think the immediate public interest, as Mr. Johnson pointed out, of those that were most and directly affected by this. MS. DEIFIK: I'm not -- I'm not arguing with that. I'm asking is there any case law that gives us any direction here. MR. MANALICH: I have not specifically located any. MS. LOUVIERE: So I just want to go back and say in addition to the amount of the two hundred and forty-four thousand five -- two four four five hundred that they owe us, I believe Ramiro said that maybe the board can authorize you to do further research and see if this corporation has any other assets MR. MANALICH: Right. MS. LOUVIERE: -- besides just this MR. MANALICH: Well, I think that needs to be done MS. LOUVIERE: Exactly. MR. MANALICH: -- because I'm lacking myself some clarity. And I apologize, but Miss,Ashton was not available this week hat I could talk with her about those two parcels, Band C. But from what Mr. Johnson said, they may just be easements of a minor nature. MS. LOUVIERE: I have a feeling that those are easements of a minor nature; I agree with you. MR. MANALICH: However, this corporation is active. MS. LOUVIERE: Exactly. MR. MANALICH: The point being that we can periodically check to see if there is any other acquired property. MS. LOUVIERE: Other acquired property or pieces of land that they still have. MR. MANALICH: Now, my very recent as of last week title search indicated that they did not have any other real property in the county other than those units. But what I'm saying is, you know, we're certainly willing to periodically check and see if anything changes. That corporation as of today is still active. MS. RAWSON: What -- what's the value of those units? MR. MANALICH: Mr. Johnson, can you help me on that? MR. JOHNSON: The fair -- the fair market -- the units excuse me. I think the last units had sold, Miss Rawson, for between fifty-five and sixty-five thousand dollars. I should tell you that -- that the -- that the -- that the value -- there's a complicating factor. The complicating factor is that it appears -- and I say appears, because there's even some confusion over the way the mortgages were granted relating to this property. But there appears to be a mortgage interest of Capital Bank in these units. ~here is one argument that has been suggested to me by representatives Jf Capital Bank that they should be entitled on every closing to the net proceeds in front of any other interest on these, in other words, Page 11 December 15, 1995 the theory being that there is no equity in these properties. As a practical matter, what has been happening relating to these closings is that Capital Bank has agreed by consent of -- of -- of the condominium association; consent of Moon-Owens Carpets, who has a construction -- still pending construction lien on these properties; Sunrise Pools, who still has a pending construction lien on these properties; and I think perhaps Charleston Company, but I'm not certain at this point in time as to their status. But certainly as to those other parties, each party has consented to a specific amount so as to ensure that each party recognizes what seems to be the reasonable maximum amount possible while at the same time the developer interest recognizes no money. I should represent also to you that I think that on those units the -- the -- the legal interests of all the parties that I mentioned have a very strong, if not absolute, argument that they take priority over any -- any -- any county lien. Certainly I've given you argument why we do, and I think that the construction lienholders make a similar claim, because they claim that their claim of lien relates back to the date of the recording of the original notices of commencement on this property. The mortgage holder suggested they had a first mortgage which was recorded prior in time to any -- any -- any judgment or lien interest of the county as well. MS. RAWSON: So we're all fighting over these two units that have no equity. MR. JOHNSON: That's one argument. CHAIRMAN ALLEN: That was a good analogy. Would any of .he members of the Deauville Lake Association like to speak this morning? MS. PHILBIN: Good morning. For the record my name is Helen Philbin. I'm a unit owner and also the president of the condominium association. I can only support what Mr. Johnson has said to you and to ask you in your consideration of the levying of fines not to forget about us. We have been through a very stressful period. It has been difficult for the unit owners and the association, and it is only during the past year that we seem to be putting our troubles behind us and moving along as best we can, and I would not like to see any of that change. So I would ask you to please not let us be victims again but to consider us and the real public interest in this matter. Thank you. CHAIRMAN ALLEN: Anybody else from Deauville Lakes? Do we have any other comments from staff? MS. SULLIVAN: No. CHAIRMAN ALLEN: Any comments from the board? Mr. Andrews? MR. ANDREWS: No. This -- this is too complicated for me. I know the -- I know these people like they're almost relatives and -- and they've all tried to -- tried to help them out, and I still feel that way. And whatever process that our staff advised us so that th~y can come out with at least their 400,000, I'd be willing to go along with it, but we got enough legal minds here that can figure that out here I think. MS. RAWSON: Well, I'll make a we have an order imposing fines and protect the county in the amount of of motion. I'll move that that those fines be liened to $244,500 and that those -- we give Page 12 December 15, 1995 our county attorney the authority to impose those fines on any leveloper-owned property found in any search, developer-owned property, not the association-owned property. It's further part of my motion that those liens be subordinate to the association lien if they can perfect one. And I do that because I think that that's in the public's best interest, that if there's any money there at all, that they should recover before the county does. That's my motion. MR. ANDREWS: I'll second that motion. CHAIRMAN ALLEN: We have a motion and a second. All those in favor, signify by saying aye. It carries unanimously. (Applause) 'MR. MANALICH: Mr. Chairman, just to add one last complication which had been raised by the board at the last meeting, you have asked in the past about possibly piercing the corporate veil type of approach to this situation. Now, I briefly talked to Mr. Johnson about that. He obviously is well aware of that as an alternative for his clients down the road depending on the outcome of all his litigation. I can tell you that from my perspective that is something that I think -- I'm not saying it should be abandoned. It should be kept as a possibility, but I do foresee it being somewhat problematic. And then you have the second aspect to that, which is I am informed -- I don't know if reliably or not -- that at least the registered agent for this corporation may not even be within the country, or at least his offices or assets may not be here. And the question becomes even if we were to go through the what I would assume ,0 be expensive, time consuming, and rather difficult process of piercing the corporate veil, will there be assets at the end of the rainbow to -- MS. DEIFIK: Mr. Reina told us when he was here some months ago that they were developing considerable other properties here in the county. MR. MANALICH: That this corporation was? CHAIRMAN ALLEN: No, the individual. MS. DEIFIK: Relative -- relative entities were. MR. MANALICH: I see. MS. LOUVIERE: So wouldn't that still make them liable? MS. DEIFIK: Well, that's arguable. MR. MANALICH: Right. MS. DEIFIK: But I think there's clearly other assets owned by other related entities. The issue is -- and Mr. Allen advised us of the outcome the last time, were the legal expense and aggravation to get there. MR. MANALICH: I do see it being problematic. What I would suggest on that front is that perhaps we await the outcome of some of this other litigation that's going on and then at that point determine whether we should make any attempt here in this direction. I don't know. I'd like to hear the board's comments on that. I -- I do see it being difficult but -- CHAIRMAN ALLEN: Knowing Mr. Johnson personally, there is no one more tenacious in this town than Mr. Johnson. If Mr. ~ohnson can get to him, we need to follow his coattails, to be ~lonest. I'm sure when these people hired Mr. Johnson, they couldn't have found someone better to go after the Barons. Page 13 December 15, 1995 MR. JOHNSON: I thank you. But the only comment I'd lake is that if we ever get to that point and my association has any interest in wanting to attempt to pierce any corporate veils, I'd like the -- I'd like the board to be open-minded, and I'd certainly like the county attorney's office to be open-minded for us to certainly you know, if we wish to have the possibility of coming to you, discussing, if we wish, what we might want to do and seeing if you want to work with us in order to diffuse what would be one-sided costs. But that would be a decision at that time. I think it's perhaps a little bit early to make that determination. MS. DEIFIK: One question that I think Mr. Andrews raised last time, and I don't -- I, frankly, don't know the answer. If these related entities are going to be applying for permits to build additional development communities, what action, if any, can __ can the county take with regard to those new communities, new development permits? MR. MANALICH: That's an interesting question you raised. I mean, I don't have an answer for you right now on that point. I had not thought about that. I'd certainly be happy to __ CHAIRMAN ALLEN: I can answer that. MS. DEIFIK: Mr. Allen. CHAIRMAN ALLEN: The problem we've got, okay, is we have a developer, and somehow within Collier County statutes a developer doesn't have to have a license. They have to have an occupational license, and that's basically it. So it's a function of a statute or an order or an ordinance coming up. The way -- what happens is that a leveloper goes in and hires a general contractor. The general contractor becomes the ultimate person that's responsible for the project. Well, for lack of terminology, Mr. Baron goes out and buys somebody, gives them a thousand a week and buys them a pickup truck, and they qualify his company, and they do the work. And the fella that started the clubhouse, I'm sure Mr. Baron didn't pay him. So you've got a contractor who's broke, okay, so the state and the county can go after the general contractor because the general contractor pulled the permit, and he took the ultimate responsibility, and the developer skates one more time. And that's what we're seeing with Embassy Woods and Deauville Lakes is the developer forms a shell corporation, strictly only a shell which has no assets and moves from point to point to point who hires another general contractor to build a condominium or a clubhouse or whatever. And when Mr. Baron and his affiliated family members get tired of that contractor, they find another contractor. MS. DEIFIK: But what I'm saying and I think what Mr. Andrews was saying some time ago is we've got a lot of good legal minds in this room right now. There must -- maybe there isn't, but MS. LOUVIERE: I have a suggestion. MS. DEIFIK: This is the point in time in which to think this through for the future. MS. LOUVIERE: I have a suggestion. Always when a corporation goes to form a subdivision of this nature, they go ahead and they have to register who all the owners are. So in this case ~ouldn't we -- wouldn't that trigger the people at developmental services, and couldn't we ask these people to come in with higher bonding and then that way make it impossible or very difficult for Page 14 December 15, 1995 them to continue to make developments in Collier County? C~IRMAN ALLEN: Good point. MS. LOUVIERE: Yeah. MR. MANALICH: I would be happy to look at those two options -- MS. LOUVIERE: What we would do, we would form -- we would change the development code to read to actually research who are the people that are forming the corporation. MS. DEIFIK: Mr. Johnson, do you have any input? MR. JOHNSON: I think the only -- the only comment that I have is really a practical caution, that is that when someone when persons or entities form development corporations, it is very difficult to -- to in any way attribute the negative activities of, you know, corporation X to the new one which is coming down the pike. And I think that -- MS. LOUVIERE: If you look at the principal owners and you see that the principal owners of corporations notoriously have a way of -- of running these subdivisions in a negative fashion and not completing what they're saying they're going to do, you can say to them, well, sir, we know in the past you developed Embassy Woods or Deauville Lakes, and the same people are coming to form new corporations, and we know that your past history shows that you did not complete these -- the things that you are proposing on this site on time and in an effective manner. Therefore, in order to __ normally we make other people bond 80 percent. In your case, sir, we would not allow any kind of bonding. You have to show us that you Lctually have the funds to be able to build each phase. And in this way they cannot continue to -- to build phases and try to sell, continue to wheel and deal and hide. MR. JOHNSON: What -- what your board certainly might consider under the -- under the good advisement of Mr. Manalich or any of your other county -- county staff or personnel or the like is the possibility of -- of holding or sharing workshops where -- where you invite parties who would be affected by any change in the code like this, and I can think offhand of several -- several large groups of very interested -- of groups in Collier County that would be very interested in any action that would take to assist in the -- in the smooth -- in aiding insurance that when a permit's pulled that it will be completed. I mean, that's what we're talking about; and, two, also the related issue which certainly was conjectural through all of the activities here, but certainly the association was mindful of it, that is the payment of parties that were supposed to be paid, subcontractors, material suppliers, and the like. And you might want to think of certainly having workshops where you invite, you know, representatives from, you know, the condominium setting, people like, you know, Community Association Institute folks who are representatives from presidents of various condominium associations, certainly also representing activities of your -- MS. DEIFIK: Construction industry. MR. JOHNSON: -- CBIA, American Subcontractor's Association, other related -- other related -- plumbing, mechanical, )ther associations that will all be affected by something like that. It would be something that I think that's going to have a lot of constitutional issues. And that's where certainly the workshop would Page 15 December 15, 1995 lean on folks who's got strong governmental backgrounds and understand ,onstitutional issues. But you're really putting your finger on the pulse of what makes Collier County happen and operate right now. And you're looking at -- my client association is kind of just a small little speck on what really -- really is, you know, the heart of our industry. People who develop, as Mr. Allen, I think -- I think, very fairly stated, you have a developer interest that certainly builds, and then we have -- we have problems right now within our own corporate laws as to how far we can go to piercing corporate veils and the like. And I think that Miss Louviere, you know, properly stated if we look maybe at the ordinance level, we might be able to do something. So my recommendation would be -- I'm sorry if I rambled a little bit -- would be to perhaps have some kind of a workshop where related parties were invited to attempt to suggest revisions to the code and then to test them to see if -- see if they pass -- pass constitutional as well as practical muster. MS. LOUVIERE: So we can enforce it. MR. BRETT: Could I just add something to this? Ray Brett, I am the past president of the association. I was very much involved with the development. I would just like to say that I do feel that if the RHS had been very much involved, because they were really causing us a lot of problem because the actual -- as the building progressed, so they should have stepped in and said you're not going to have any more permits to develop. But they didn't work ,and in glove with the -- with the county. And I think that was a major fault. I mean, we wouldn't have had the problem that we've experienced. And I would have thought there could have been a closer tie here somewhere which could have stopped the actual project going to the extent that it did. Thank you. MR. MANALICH: I think with regard to the piercing the corporate veil issue, I think my recommendation to you at this time is to keep that as a possibility in the future. But I think first we need to see how this litigation with the association shakes out. Any thoughts on that? I know we've got two new attorneys on the board. I don't know if you have any thoughts. MS. RAWSON: I agree with you. I think it's premature to go after that right now. MR. MANALICH: I mean, I also from a cost benefit analysis it's going to be difficult and expensive but __ MS. RAWSON: Well, at this point -- MR. BRETT: -- I don't want to give it up, but I'm saying you may want to wait. MS. RAWSON: At this point you need to do further searches to see if there's any other developer-owned property. We need to see what happens with their suit, what order Judge Brousseau signs, and then if all we are fighting over is two units with no equity, that's a very viable possibility to try and pierce the corporate veil. MS. DEIFIK: Well, Mr. Allen, didn't you tell us that ~here's other litigation that has recently been concluded where they spent a fortune attempting to do that and came up against a blank wall? Page 16 December 15, 1995 CHAIRMAN ALLEN: Well, I believe that was basically my .nderstanding prior to Mr. Johnson being involved, that they had pursued the Barons at length. MR. JOHNSON: Just one thing, address it to the board but also -- did we send in our case yet? MS. SULLIVAN: (Shook head.) MR. JOHNSON: Okay. We have -- one little end note to this is that the law may be getting to be going through some evolutionary changes in the area of piercing the corporate veil relating to developer concerns. I don't have the cite. I promised to provide it to Mr. Manalich and to representatives of your staff. It was a case that was decided literally several months ago out of Sarasota. It's ironically a circuit court case. It's called something like Village of Long Boat Key. Circuit Court Judge Dubinski (phonetic) ruled for the first time that I've ever seen in a condominium case -- in this case it was a condominium construction defect case -- that it was appropriate for the condominium association to pierce the corporate veil to go after the individual representatives of the development entity. The theory there that was given was -- was, among other things, that the developers had knowledge prior to turnover that they had substantial construction defects. In that case they had a problem relating to the way the windows were designed and installed. There was -- they were placed on notice of this numerous times prior to turnover. The developers elected to do nothing about it. There was evidence that the developers had obtained substantial monies from the association and lespite that knew all about this. And Judge Dubinski did allow a piercing of the corporate veil. I only bring that to the attention of the board because most of the time when attorneys talk about piercing of the corporate veil, we're very, very cautious. And we say, look, there's really no case law right on point, and it won't get us too far. It is interesting to note that we do have a reported circuit court case that will not be appealed because the case settled. I've spoken to the counsel for both parties in this case. The case settled after the circuit court case was reported. So unless we get something new out of one of our district courts that somehow changed that rule, there's at least a window of -- I don't want to call it opportunity; that's a little too strong -- hope that piercing of the corporate veil can exist in a condominium setting. CHAIRMAN ALLEN: Thank you, sir. Do we have any other comments from anybody? MS. LOUVIERE: I just have one last comment. I just noticed that we do have the press in-house, and I would like for him to list all the owners or all of the representatives of this corporation, everyone's name in his report in the newspaper. CHAIRMAN ALLEN: Thank you, Miss Louviere. MS. CRUZ: Mr. Chairman. CHAIRMAN ALLEN: Yes. MS. CRUZ: I have an addition for the record. Since they are in compliance at this time, there is an affidavit of ~ompliance that needs to be recorded. CHAIRMAN ALLEN: That's fine. We'll so note that. We are going to record the affidavit of compliance. Miss Sullivan. Page 17 December 15, 1995 MS. SULLIVAN: I just wanted to add that since their ,egotiation session I believe the representatives for the development staff has been working with our licensing contractors trying to see if there is anything we can do about maybe holding permits for these people, and so far we can't find anything. There's a lot of constitutional problems. What we are doing is we are making note of the people who have been repeatedly involved in these kind of ventures, and any new construction that they begin, you can rest assured that my licensing contractor investigators will watch them very carefully from the beginning. MR. JOHNSON: One -- one -- one final question that I have, if you don't mind, is there's going to be evidently some kind of an affidavit of compliance. Are there any conditions that could be put on that as to how the compliance came about, I mean, that this wasn't the voluntarily compliance of necessary -- was this the voluntarily compliance of the developer, or was this the compliance that came about as a consequence, which I think it is, of the sums of money which the association spent to get this -- get this project completed? And is there any way of putting that in the -- in the affidavit or -- or -- or something? MS. DEIFIK: Mr. Manalich? MR. MANALICH: Well, the only thing on that, of course, is that we don't have the benefit of the other party being here to respond to that as to what position they take as to whether they contributed to the compliance or not. Typically I think these orders as simply stated, that the property is in compliance. They have not aken a position as to who and for what reason it came into compliance. I don't know if the board feels strongly about identifying that in the order or not. My only concern in doing so is that you're making based on the representations of one side and, you know, typically -- MS. DEIFIK: Their litigation is public record. MR. MANALICH: That's correct. MR. LAFORET: Is it possible to issue a certificate of compliance directed to the homeowners' association? Would that serve any purpose, because it wouldn't be directed to the builder, so it wouldn't get him off the hook? MR. JOHNSON: I just wanted I just have several concerns. One, I have a concern, I think, in terms of my own litigation that I don't -- I don't have a certificate of compliance that gets waved in front of me on a motion for rehearing saying, look, there was a deemed compliance by this board. How can you say, Mr. Johnson, that you were entitled to money damages? That's one practical concern that I would have from a good litigator on the other side. That's number one. Then number two is really the more practical one, that is that I've got -- I've got -- I want the record to reflect reality. And even if you need more affidavits or more testimony or whatever, I would rather have that in order to accomplish -- accomplish that __ that issue so that the record is very clean on really what happened ou there. ' . CHAIRMAN ALLEN: Mr. Manalich, okay, as far as staff's -- your side of it, I can assure you because we were the general contractor, we were paid from the homeowners' association. We Page 18 December 15, 1995 ~eceived no funds, no aid, no help whatsoever. MR. MANALICH: I think maybe what we can do so we don't get bogged down on this is simply to honor their request, and a sentence in the affidavit of compliance would state that based on the evidence of record presented, the board finds that said compliance was achieved as a result of the efforts of the homeowner association. MS. DEIFIK: Deauville Lakes knew about this. They had notice of this hearing. MR. MANALICH: That's correct. I mean, I mentioned for the record earlier in the hearing that they had the opportunity to be here. And, frankly, I think this is fair game, because this all goes into the order and, you know, and how -- and the compliance affidavit which was subject to the November 30th hearing.' So I think we could insert that sentence. They can -- if they receive that order and object to it, they can ask for a rehearing on that aspect of it. You can decide whether you'd grant it or not. I think at this point you can basically, on the evidence of record presented so far, make that finding. MS. RAWSON: Is this the affidavit of compliance dated the 5th day of June 1995, signed by you MS. CRUZ: Yes. MS. RAWSON: -- that you wanted to record? MS. CRUZ: Yes, ma'am. MS. RAWSON: Well, actually, we'd have to redo the affidavit. So it probably would require a motion from this board, and I'd so move that we do that, to insert the language that the 'einspection revealed that the corrective action ordered by the board has been taken by Deauville Lakes Homeowners' Association. MS. DEIFIK: I second the motion. CHAIRMAN ALLEN: We have a motion and a second. MR. JOHNSON: Just one thing. Our correct name is Deauville of Naples Condominium Association, Incorporated. I'm sorry. MS. RAWSON: Thank you. MR. JOHNSON: I'm sorry, Miss Rawson. I just want to make sure our record is real clear. MS. RAWSON: Well, I'll amend my motion to correct the name. CHAIRMAN ALLEN: Would you like to amend your second? MS. DEIFIK: I'd like to amend my second. CHAIRMAN ALLEN: Shall we vote? All those in favor, signify by saying aye. That carries unanimously. MS. DEIFIK: Can we also make a motion to direct Mr. Manalich to work with not only staff but coordinate with the other county agencies and boards to see what, if anything, can be done to address development of properties by related entities and to address this problem in the future to make sure it doesn't occur again, not only with regard to this developer, but other developers operating similarly? Was that too broad, Mr. Manalich? MR. MANALICH: It may have to be broad insofar as the :ask. MS. RAWSON: Do we need a motion? I think I understood Miss Sullivan to say she's already looking into that. Page 19 December 15, 1995 MS. SULLIVAN: Well, I'm doing what I can from the ~icensing contractor area, but the next Land Development Code revision is scheduled for November. We just had the last session of workshops. Everything has to be in by January for this section. So, you know, that gives a little bit of time for the next -- for the next revision in -- in November. MS. LOUVIERE: I think there's a group that works with developmental services, and they look at revisions to the LDC. It is -- the people that participate in it are the people in the construction industry. And most of them, I'm sure, would not have a problem with amending the LDC to find a way of maybe dealing with this in the future. MS. DEIFIK: I have a question as to whether or not that's the -- the appropriate level or the only level that should be looked at. It may be that -- it may be it cannot be done because of constitutional considerations, and I understand that. But it may be something that we want to involve our legislators in perhaps if some statutory revisions were considered in -- hand in hand with some revisions of ordinances. It might benefit people around the state, and that may be pie in the sky. MR. MANALICH: Well, we have some time to work on it. We've mentioned that November is the next cycle, but we certainly can explore all avenues and report back to you and see if there's anything we can do as part of that cycle, both on the local level or on the state. CHAIRMAN ALLEN: Any other comments? Questions? We'll adjourn. ***** There being no further business for the good of the County, the meeting was adjourned by order of the Chair at 10 a.m. ENFORCEMENT BOARD TRANSCRIPT PREPARED ON BEHALF OF DONOVAN COURT REPORTING BY: Barbara A. Donovan Page 20 November 30, 1995 TRANSCRIPT OF THE MEETING OF THE CODE ENFORCEMENT BOARD Naples, Florida, November 30, 1995 LET IT BE REMEMBERED, that the Code Enforcement Board in and for the County of Collier met on this date at 8:34 a.m. in REGULAR SESSION in Building "F" of the Government Complex, East Naples, Florida, with the following memb~rs present: CHAIRPERSON: Jim Allen Charles Andrews Mireya Louviere Celia Deifik Louis Laforet Richard McCormick ALSO PRESENT: Ramiro Manalich, Assistant County Attorney Richard D. Yovanovich, Esq., representing the Code Enforcement Board on 6(C) Maria Cruz, Code Enforcement Linda Sullivan, Code Enforcement Page 1