STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MILL-IT CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 84-0279

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

A public hearing was held in this case on April 16, 1984, in Orlando, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.

APPEARANCES

For Petitioner: Russell H. Cullen, Jr., Esquire

Post Office Box 1114

Altamonte Springs, Florida 32701

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

Department of Transportation

Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32301

The issue is whether the Petitioner, Mill-It Corporation, is entitled to certification as a minority business enterprise or whether it fails to meet the minimum requirements of Rule 14-78.05(3), Florida Administrative Code, because the minority owners lack required minimum control and day-to-day policy decision-making.

The Petitioner presented three witnesses, Edward T. Quinn, Jr., Fatius Alvin Fortune, and Ben E. Guzman. The Petitioner also introduced five exhibits. The Respondent presented the testimony of Fatius Alvin Fortune, together with four exhibits. The parties were provided an opportunity to file proposed findings of fact and conclusions of law as permitted by the statutes.

Respondent failed to file same within the time permitted. The proposed findings of fact and conclusions of law submitted by Petitioner have been considered. To the extent that the proposed findings and conclusions submitted are in accordance with the Findings of Fact, Conclusions of Law, and views submitted herein, they have been accepted and adopted in substance. Those findings not adopted are considered to be subordinate, cumulative, immaterial, unnecessary, or not supported by the evidence.

FINDINGS OF FACT

1. Mill-It Corporation is a Florida Corporation licensed to do business in the State of Florida. Ben Guzman, a stipulated member of a recognized minority

   group, is the President of the Petitioner Corporation. Additionally, Mr. Guzman owns 26 percent of the stock. The other stockholders are James E. Quinn (24 percent), Myrna Bortell (26 percent), and Edward T. Quinn, Jr., (24 percent).

   Ms. Bortell is also a member of a qualified minority.

   
   

2. The Petitioner Corporation was formed in August, 1983. The first three months of its existence was spent obtaining the necessary licenses, permits, loans, and equipment. Mr. Guzman was primarily responsible for these activities.

   
   

3. During this time period, Mr. Guzman was required to return to Chicago, his former home, to undergo surgery on his arm. During his absence, he delegated minimal authority to Edward T. Quinn, Jr., in order that the Corporation could continue to operate. During Mr. Guzman's absence, he maintained control of the Corporation through frequent telephonic communications with Mr. Quinn.

   
   

4. Just before Mr. Guzman was required to go to Chicago for the surgery, Mill-It Corporation had taken delivery of its milling machine. The machine had been in the possession of Mill-It Corporation for only one week and Mr. Guzman had not had an opportunity to run the machine prior to his departure.

   
   

5. Mr. Guzman relied on Mr. Quinn because they had known each other for approximately 25 years and Mr. Guzman was aware of Mr. Quinn's knowledge of the road building business and the necessary steps to establish Mill-It Corporation as a viable business in Florida.

   
   

6. Mr. Guzman returned to Florida for the onsite inspection by an agent of the Respondent, but he was still under a doctor's care and was on various types of medication for pain. Mr. Guzman returned to Chicago for additional medical treatment following the onsite inspection, and he did not return to Florida until January, 1984.

   
   

7. In January, 1984, Mr. Guzman began to completely learn the operation and mechanics of running and maintaining the milling machine and he assumed the complete responsibility for overseeing all the projects of the milling operation.

   
   

8. Mr. Guzman originally relied upon the expertise of Edward T. Quinn, Jr. in the field of bidding, but Mr. Guzman always supplied the necessary figures and data for the bid.

   
   

9. Mr. Guzman hired Edward T. Quinn, Jr., as his sales representative and estimator. After the brief learning period, however, Mr. Guzman began to totally supervise the bidding procedures and began directing Mr. Quinn to attend various bid lettings with the figures supplied by Mr. Guzman.

   
   

10. At the time of the onsite inspection, Mill-It Corporation had completed only its organizational phase of becoming a business entity. In fact the milling machine was such a recent acquisition that during the onsite inspection Mr. Guzman had not had time to learn the technical aspects of the operation and mechanics of the machine.

    
    

11. After the onsite inspection, Mr. Guzman assumed responsibility for operation of the milling machine and supervising the overall performance of the job. Additionally, James Quinn also operated the machine.

12. Mr. Guzman has the authority to hire and fire employees, sign checks, correspond on behalf of the corporation, enter into contracts, and purchase equipment on behalf of the corporation. Cancelled payroll and vendor's checks, correspondence to and from the company, bonding contracts, insurance contracts, and corporate documents were all signed by Mr. Guzman.

    
    

13. All major business decisions are made by Mr. Guzman after considering the advise of the other officers and stockholders. All day-to-day decisions are made by Mr. Guzman.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1983).

    
    

15. Rule 14-78.05(3), Florida Administrative Code contain standards for granting or denying certification as a Minority Business Enterprise. As pertinent to this case, that rule states:

    
    

    (3) In certifying a firm as an MBE [Minority Business Enterprise], the department shall consider but shall not be limited to the following standards:

    (d) 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. The discretion of the minority or women owners shall not be subject to any formal or informal restrictions (including, but not limited to, bylaw

    provisions, partnership agreements, or charter require- ments for cumulative voting rights or otherwise) which would vary managerial discretion customary in the industry.

    
    

    In determining whether the minority or women owners also possess the power to direct or cause the direction of management and policies of the MBE and have the requisite decision-

    making authority, the department may look to the control lodged in the owners who are not minorities or women. If the owners who are not minorities or women are disproportionately responsible for the operation of the enterprise or if there exists

    any requirement which prevents the minority or women owners from making business decisions with- out concurrence of any owner or employee who is not a minority or woman, then the enterprise

    is not controlled by minorities or women and shall not be considered an MBE within the meaning of this

    rule. Where the actual management of the enterprise is contracted out to individuals other than the owner(s), those person who have the ultimate power to hire and fire the managers can, for the purposes of

    this rule, be considered as controlling the enterprise.

16. Under these standards, Mill-It Corporation has proven that it is entitled to certification as a Minority Business Enterprise. The sole reason the department denied the corporation's application was that the minority owners lacked the required minimum control and day-to-day policy decision-making as further defined in the above-mentioned rule. The evidence was clear, convincing, and essentially undisputed that the minority owner, Mr. Guzman, possesses the power to direct the management and policies of the enterprise and to make day-to-day as well as major business decisions concerning the management, policy, and operation of Mill-It Corporation. No restrictions on this authority exist. Not only does Mr. Guzman have the authority to make these decisions, he is the only person who has consistently made the day-to-day-as well as major business decisions concerning Mill-It-Corporation. Other than during the initial start-up, when Mr. Guzman was suffering physical problems, he has not delegated his management power to anyone else.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

That Mill-It Corporation's application for certification as a Minority Business Enterprise be GRANTED.

DONE and ENTERED this 7th day of June, 1984, in Tallahassee, Florida.

DIANE K. KIESLING

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 7th day of June, 1984.

COPIES FURNISHED:

RUSSELL H. CULLEN, JR., ESQUIRE

P. O. BOX 1114

ALTAMONTE SPRINGS, FLORIDA 32701

VERNON L. WHITTIER, JR., ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301

PAUL A. PAPPAS, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301

Docket for Case No: 84-000279

Orders for Case No: 84-000279