STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SHURLY CONTRACTING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 83-3936

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard on March 23, 1984, by R. L. Caleen, Jr., hearing officer with the Division of Administrative Hearings, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Diann Criss Atkinson, Qualified

Representative

Shurly Contracting, Inc. Post Office Box 15267

West Palm Beach, Florida 33406

For Respondent: Vernon L. Whittier, Jr., Esquire

Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32301 ISSUES

Whether petitioner's application for certification as a Women Business Enterprise, under Rule 14-78.05, Florida Administrative Code, should be granted, or denied on grounds that the company is not an independent business entity; that the woman owner does not possess the power to direct nor does she control the day-to-day management and other related functions or individually make major business decisions; and that she did not make real and substantial contributions of capital or expertise to acquire her interest in the company.

BACKGROUND

By letter dated November 28, 1983, respondent Department of Transportation ("Department") denied Shurly Contracting, Inc.'s ("petitioner") application for certification as a Women Business Enterprise. As grounds, the Department asserted that petitioner failed to meet the requirements of Rule 14-78.05, Florida Administrative Code, because it was not an independent business entity; the woman owner did not possess the power to direct nor did she control the day- to-day management and other related functions or individually make major business decisions; and she did not make real and substantial contributions of capital or expertise to acquire her interest in the firm.

After petitioner timely requested a hearing to challenge the Department's denial, this case was forwarded to the Division of Administrative Hearings for assignment of a hearing officer.

At hearing on March 23, 1984, petitioner presented the testimony of Kay Gill and Diann Criss Atkinson; the Department presented the testimony of Thadeus Fortune and Harley Andrews. Petitioner's Exhibit Nos. 1 through 46 were received into evidence, as were Department Exhibit Nos. 1 and 2.

The transcript of hearing was filed on April 5, 1984. Proposed findings of fact were filed by April 16, 1984. Those proposed findings incorporated in this recommended order are adopted; otherwise they are specifically rejected as unsupported by the evidence or as irrelevant or unnecessary to resolution of the issues presented.

Based on the evidence presented, the following facts are determined: FINDINGS OF FACT

1. Petitioner, Shurly Contracting, Inc., was incorporated on July 22, 1977. Shurly Atkinson, a male, has been president of this company, which is seeking certification as a Women Business Enterprise in the areas of fencing, guardrail, riprap, signs, roadway lighting and signalization. Diann Criss Atkinson is Shurly Atkinson's wife. She now owns 51 percent of the company and is a vice-president. During the course of the company's operations, Mr. and Mrs. Atkinson have signed business documents individually and jointly. Mrs. Atkinson signs many financial documents on behalf of the company. Loans are signed by both Mr. and Mrs. Atkinson, and some documents, such as contracts, are signed solely by Mr. Atkinson as president of the corporation.

   
   

2. Mrs. Atkinson's work experience before coming to Shurly Contracting, Inc. included contract administration with Palm Beach County, real estate and nursing. She worked approximately six years for Palm Beach County.

   
   

3. Mrs. Atkinson and her husband jointly determine what contracts the company will bid. Further, her husband receives a salary of $2,000 a week, while Mrs. Atkinson receives a salary of $400 a week. Mrs. Atkinson is not actively involved in the company's field operations. Previously, when she was first learning about the company's work, she visited jobs in the field--but her husband normally accompanied her.

   
   

4. Mrs. Atkinson acquired her 51 percent ownership interest in the company when her husband assigned the stock to her after buying out other shareholders using money from their personal account. The stock was transferred on April 20, 1982. Although she didn't pay for her stock with her personal funds, over the years, she has returned her bonuses and some income to the company. The amount of these contributions has not been shown.

   
   

5. Technical questions that arise on company job sites are handled by the foremen or superintendents, and contacts with the prime contractors are handled by Mr. Atkinson. Major company policy decisions are jointly made by Mr. and Mrs. Atkinson, including those involving finances, job estimates, bidding and major equipment acquisitions.

   
   

6. Mrs. Atkinson works in the company s headquarters and is in charge of office operations. She handles correspondence and paperwork, and attests to signatures on contracts. She also prepares the payroll. Mr. Atkinson signs the payroll checks and she signs accounts payable and expense checks. She is an energetic, capable and dedicated office manager who, without doubt, makes a valuable contribution to the company. She has organized and improved many

   phases of office operations and record keeping. She instituted a new bookkeeping system and revamped the company s personnel policies, which included preparation of a new employment application and company policy booklet. She is responsible for and involved in every phase of the company's central office operations. Her responsibilities, involve central office operations. Her husband, is responsible for the major day-to-day management decisions, and he remains, for the most part, in overall control of the company. While Mrs.

   Atkinson has eagerly learned about the company's field work, Mr. Atkinson has superior knowledge and expertise, and is actively involved in managing all aspects of field operations.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this proceeding. 120.57(1), Fla. Stat. (1983).

   
   

8. In licensing proceedings such as this, the applicant has the burden of demonstrating entitlement to the requested license. See J.W.C. Company, Inc.,

   v. Florida Department of Transportation, 396 So. 2d 778 (Fla. 1st DCA 1981).

   
   

9. Rule 14-78.05(3), Florida Administrative Code, contains standards for granting or denying certification as a Women Business Enterprise:

   
   

   (3) In certifying a firm as an MBE, the Department shall consider but shall not be limited to the following standards:

   * * *

   An eligible minority business enterprise under this rule shall be an independent business entity, . . . In assessing business independence the Department shall consider all relevant factors, including but not limited to the date the MBE applicant was established, the adequacy of its resources, and the degree to which financial relationships, equipment leasing, and other

   business relationships with non-minority firms vary from industry practice.

   * * *

   1. An eligible minority business enterprise under this rule shall be one in which the minority or women owners shall also possess the power to direct or cause the direction of the management and policies of the MBE and to make day-to-day as well as major business decisions concerning the MBE's management, policy, and operation. . . .

      * * *

   2. An eligible minority business enterprise under this rule shall be one in which the contributions of capital or expertise invested by the minority or women owners in order to acquire their interest(s) in the enterprise are real and substantial. . . .

   
   

10. Mrs. Atkinson, the female owner of 51 percent of petitioner's stock, did not acquire her ownership interest by contributing her individual capital or expertise. Petitioner is an independent business entity, but the power to direct its day-to-day management is possessed by Mr. Atkinson, or jointly possessed by he and Mrs. Atkinson. Mr. Atkinson is primarily responsible for,

and in charge of, field operations. Major business decisions for the company are made by Mr. and Mrs. Atkinson, jointly. As Mrs. Atkinson indicated at hearing, she and her husband are inseparable: in their business, they are "one." Power which the rule requires the female owner to possess or exercise, individually, is, here either shared with her husband--or possessed or exercised by him, alone.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That petitioner's application for certification as a Women Business Enterprise be denied.

DONE and ORDERED this 29th day of June, 1984, in Tallahassee, Florida.

R. L. CALEEN, JR. Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1984.

COPIES FURNISHED:

Diann Criss Atkinson, Qualified Representative

Shurly Contracting, Inc.

P. O. Box 15267

West Palm Beach, Florida 33406

Vernon L. Whittier, Jr., Esquire Department of Transportation

605 Suwannee Street

Tallahassee, Florida 32301

Paul A Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301

Docket for Case No: 83-003936

Orders for Case No: 83-003936