In the Matter of a Mail Dispute Between:

 DAVID RAKES, CONNIE RAKES

 and

 JAMES MERRIMAN

 P.S. Docket No. MD-15

 10/25/88

 Mason, Randolph D.; Administrative Law Judge

 APPEARANCE FOR DISPUTANTS RAKES:
 Eric S. Mashburn, Esq.,
 P.O. Box 1277,
 Winter Garden, FL 32787-1277 

 APPEARANCE FOR DISPUTANT MERRIMAN:
 James Merriman, pro se,
 P.O.  Box 831,
 Goldenrod, FL 32733-0831

By Order dated July 15, 1988, the Associate Judicial Officer remanded the instant case to the Administrative Law Judge for the purpose of taking further evidence on the issue of whether the Rakes were fraudulently induced into entering into a contract with James Merriman. The instant decision supersedes the previous rulings of the Administrative Law Judge on this issue.

Although both parties were given an opportunity to file an additional submission in the form of a sworn statement of facts with exhibits on the fraud issue, only the Rakes chose to do so. In this regard, Merriman refused the communications by certified mail from this office, but all documents have been resent to him by regular mail.

Based on all of the submittals, comments, and exhibits submitted during this proceeding, I make the following findings of fact and conclusions of law:

1. Prior to November, 1987, the Rakes operated a sole proprietorship known as Rakes Floor Store at 739 S. Dillard Street, Winter Garden, Florida 32787.

2. In November, 1987, the Rakes were contacted by James Merriman and Larry Bangert in regard to purchasing their business.

3. The Rakes informed Merriman and Bangert that they owed Florida State Sales Tax for the business and Federal Income Tax on income from the business. The Rakes told Merriman and Bangert that they would sell their interest in the business if Merriman and Bangert would take over such obligations and either pay them in full or make appropriate arrangements for their payment.

4. Merriman and Bangert made oral and written promises on November 26, 1987 (Bahama Trust Agreement) that they would pay the above tax obligations.

5. In reliance on the promise to pay the tax liabilities, the Rakes agreed to transfer Rakes Floor Store to them.

6. Bangert and Merriman had prepared the Bahama Trust Agreement and presented it to the Rakes for the first time on November 26, 1987, which was Thanksgiving Day.

7. Merriman and Bangert informed the Rakes that they wanted to take title to the business in the form of a trust to protect the assets from their creditors. The Rakes did not understand the trust agreement or the reasons for its use. They were unable to contact their attorney. They were primarily concerned that the tax liabilities would be paid.

8. Therefore, based on the promises to pay the liabilities, the Rakes signed the agreement on November 26, 1987. Other than the promise to pay the taxes, the Rakes received nothing of value for their interest in the store (a few subsequent payments were for rent or labor performed).

9. After signing the agreement, Merriman and Bangert began operating the business.

10. They employed David Rakes as an independent contractor to install carpet and agreed to pay him a draw of $500.00 per week against work to be done.

11. After taking over the business, Merriman and Bangert made no effort to pay the delinquent tax liabilities even though the Rakes repeatedly requested them to do so.

12. During the time that Merriman and Bangert were refusing to satisfy the obligations, they were deriving profits from the business for themselves.

13. Further, during the first two months, Merriman and Bangert did not change any of the trade accounts, bank accounts, utility accounts, post office box, sales tax number, checking account, Master and VISA card account, or any other account of Rakes Floor Store into the name of the Bahama Trust or their individual names.

14. When the Rakes learned that Merriman and Bangert were still operating under their sales tax number, the Rakes cancelled the number.

15. In February of 1988, the Rakes' attorney told Merriman to pay the delinquent taxes or the Rakes would consider the trust agreement null and void. The Rakes also told the utility companies to cancel the accounts which remained in their individual names since they were concerned Merriman would not pay the bills. At that time, Merriman attempted to transfer some of the utility accounts to his name. Shortly thereafter, he abandoned the business, leaving rent owed on the lease which was still in the Rakes' name.

16. At the time Merriman abandoned the business, money was owed to the business which Merriman refused to allow to be applied against the tax liabilities of the Rakes.

17. At the time of the contract with the Rakes on November 26, 1987, Merriman and Bangert had no intention of fulfilling their promise to pay the tax liabilities. The Rakes relied on this promise to their detriment. Accordingly, the contract is void and the Rakes' interest in the Rakes Floor Store was never transferred to Merriman and Bangert.

This case involves a dispute between David and Connie Rakes and James Merriman over the delivery of mail addressed to Rakes Floor Store at 739 S. Dillard St., Winter Garden, FL 32787. Both parties claim to own the business.

The Rakes contend that Merriman and Bangert fraudulently induced them into the contract of sale by falsely promising to pay off their tax liabilities and that the Rakes relied upon this promise to their detriment. If this is so, the contract was void from the beginning and ownership of the business never passed to Merriman and Bangert.

Under all of the circumstances herein, it is reasonable to infer that Merriman and Bangert never intended to pay the tax liabilities in question. The Rakes clearly relied upon their promise to pay when they executed the contract of sale. Accordingly, the contract was void and the business is still owned by David and Connie Rakes.

The attached mail delivery instruction should be issued.