CENTRAL FLORIDA METAL FABRICATION, ) INC., through LINDA W. WICKER, )
vs. ) DOAH CASE NO. 88-3138
Respondent. )
Notice was provided and on September 16, 1988, a formal hearing was held in this case pursuant to the authority of Section 120.57(1), Florida Statutes.
Location of the hearing was Gainesville, Florida, Room 209, County Administration Building, 21 East University Avenue. Charles C. Adams was the Hearing Officer. This Recommended Order is being entered following the receipt and review of the transcript of proceedings as filed with The Division of Administrative Hearings on October 4, 1988, and in consideration of the Respondent's Composite Exhibit A. The Proposed Recommended Order offered by the Respondent has also been examined. The fact finding set forth in that Proposed Recommended Order has been utilized to some extent. A discussion of the fact finding may be found in an Appendix to the Recommended Order.
For Petitioner: Linda W. Wicker, pro se
Central Florida Metal Fabrication, Inc. 2700 NW 74th Place
For Respondent: Sandra E. Allen, Esquire
Office of General Counsel Department of General Services Room 452, Larson Building
The issues in this case concern the question of whether the Petitioner is entitled to certification as a minority business enterprise as contemplated under Chapter 288, Florida Statutes, and Rule 13-8.055, Florida Administrative Code. In this connection there remains for consideration the question of whether Linda W. Wicker, who is the minority person in that corporation, who owns fifty-one (51) percent of the stock is the control of the management and daily operation of the petitioner corporation.
Petitioner, Central Florida Metal Fabrication, Inc., is a Florida corporation. It was incorporated on May 4, 1981. Its principal place of business is 2700 Northwest 74th Place, Gainesville, Florida. As a business, it engages in commercial sheet metal fabrication and installation. It has less than twenty-five (25) permanent full-time employees.
The corporation has two (2) stockholders, Linda W. Wicker and James E. Wicker, her husband. Linda W. Wicker is a minority business person and owns fifty-one (51) percent of the stock of the corporation. The balance of the stock is owned by the husband, James E. Wicker, a non-minority business person. At the inception of the corporation, Mr. Wicker, who began with the corporation as President and continues in that capacity, issued himself sixty (60) shares of stock and issued forty (40) shares of stock to his wife, Linda W. Wicker. In June 1986, twenty-one (21) more shares of stock were issued to Mrs. Wicker and then in June 1988, an additional share was issued. These arrangements for additional shares of stock for the benefit of the wife were in recognition of her contribution to the company and also in an attempt to have her gain control of fifty-one (51) percent of the stock, which was accomplished by the provision of the last share in June, 1988. The present stock arrangement assists in gaining certification by Respondent in the category of minority business enterprise.
In addition to James E. Wicker's position as President of the corporation, Linda W. Wicker is the other officer in the corporation serving in the capacity of Secretary. That was her position at the commencement of the corporation and has continued to be her role as an Officer. Those two individuals were on the initial Board of Directors of the corporation and continue in that capacity. They were and are the only Directors in the corporation.
Before 1981, the two owners had engaged in the business as a sole proprietorship. James E. Wicker had started the business in 1974 and has worked in the business from that point forward. Linda W. Wicker began her work with the corporation on a full-time basis following her employment with Southern Bell which ended in 1980. During the years 1974 through 1980, while still with Southern Bell, she had worked as a part-time employee of Central Florida Metal Fabrication concerning bookkeeping and assistance in bid preparations for the benefit of the proprietorship.
James E. Wicker is licensed by the State of Florida, Department of Professional Regulation, as a certified metal contractor within the meaning of Section 489.115, Florida Statutes. As such, he serves as the corporation's "qualifying agent" as that term is defined in Section 489.119, Florida Statutes. Businesses such as this corporation which wish to engage in sheet metal contracting must do so through a qualifying agent, who is either certified or registered. In the Petitioner's corporation, James E. Wicker is the only individual who is licensed to act as a "qualifying agent."
James R. Wicker and some other employees with the corporation have the necessary technical understanding of the sheet metal work to carry forward construction techniques contemplated in that business. Linda W. Wicker does not. On the other hand, she is intimately familiar with the contracting activities of the corporation, to include bid proposals and the financial aspects of the corporation, among those making arrangements for loans and maintaining the business accounts. She is also involved with personnel matters,
to include hiring and dismissal of employees. Nonetheless, Mrs. Wicker, through her testimony, indicated that in the matter of hiring and firing of employees of the company the superintendent, a separate employee, has been delegated that authority as well. In a related personnel matter, both the husband and wife made the joint decision to promote an employee in the company to the position of shop foreman. On the whole, it does not appear that Linda W. Wicker has exclusive responsibility for hiring and firing of employees in the corporation.
In bid preparation, both the husband and wife are involved in the process together with another employee of the company who is referred to as an estimator.
Loans or other forms of financial documents that are concluded by the Petitioner corporation involve both the husband and wife in a substantial number of instances. Again, the role which Linda W. Wicker plays in this circumstance is one of negotiations for loans and purchases which are made by the company.
The bank account of the corporation allows the husband and wife to sign checks and for other employees of the corporation over time to sign checks.
Only one signature is required in the checks which are written. As a consequence, Linda W. Wicker does not have the independent control of the financial affairs of the company.
When the company was started, James E. Wicker signed the Lease Agreement in the capacity of President of the company related to the offices and shop.
In the application offered for minority business enterprise certification through the Respondent, State of Florida, Department of General Services, under authority of Section 288.703, Florida Statutes, it was reported in the resumes that Linda W. Wicker was responsible for the office management, procurement of equipment and supplies, estimating and collections on accounts for the Petitioner corporation. James E. Wicker was shown as being responsible for coordination of work activities of the Petitioner corporation. In the course of the hearing, James Wicker indicated that a significant number of those responsibilities had been conferred upon the superintendent of the company over the last few months prior to the hearing date.
In 1987, the company purchased a plasma cutting computer operated machine. This was the most significant piece of equipment purchased by the company in its history. The decision to make the purchase was made by the husband and wife in which the negotiations of the purchase was through the wife.
Referring again to the job-related activities of the company, Linda W. Wicker is not involved with the supervision of the sheet metal fabrication.
This is left to a field supervisor and shop foreman.
Paragraph 27 to the By Laws of the corporation provides that the President, "shall be the Chief Executive Officer of the corporation; he shall preside at all meetings of the stockholders and directors; he shall have general and active management of the business of the corporation; and shall see that all Orders and Resolutions of the Board are carried into effect."
Paragraph 10 to the By Laws provides that, "the property and business of the corporation shall be managed by its Board of Directors, not less than one or no more than ten in number."
Paragraph 21 of those By Laws provides that, "at all meetings of the Board, the majority of the Directors will be necessary and sufficient to constitute a quorum for the transaction of business and the act of the majority of the Directors present at any meeting at which there is a quorum, shall be the act of the Board of Directors. . ."
The references to the By Laws, taken in the context that the husband is the President and that there are only two Directors on the Board, clearly describes a circumstance in which the minority member of the corporation, Linda
W. Wicker, is not in control of the management and daily operations of that firm. This observation is further supported by those other instances described in the course of the fact bindings in which the minority member's involvement in management and daily operations could not be seen as controlling.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this cause pursuant to Section 120.57(1), Florida Statutes.
The Petitioner has asked that it be certified as a minority business enterprise and bears the burden of proving its entitlement to that recognition. The requirements for this proof are contemplated in Rule 28-6.08, Florida Administrative Code, and the case of Florida Transportation vs. J. W. C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981).
The definition of "minority business enterprise" is set forth in Section 288.703(2), Florida Statutes, as the following:
"Minority business enterprise" means any small business concern as defined in subsection (1) which is organized to engage in commercial transactions, which is domiciled in Florida, and which is at least
51 percent owned by minority persons and whose management and daily operations are controlled by such persons. A minority business enterprise may primarily involve the practice of a profession.
In satisfying the terms of that definition, Linda W. Wicker is the "minority person" as defined by Section 288.703(3), Florida Statutes, and she owns fifty- one (51) percent of the stock. There remains a consideration of the question of whether Linda W. Wicker is in control of the management and daily operations of the corporation.
Section 288.703(4), Florida Statutes, contemplates that the Respondent shall be responsible for considering the question of certification of minority business enterprises. To this end, it has promulgated Rule 13-8.005(3), Florida Administrative Code, which establishes various criteria for considering the question of whether the minority person is in control of the management and daily operations. The pertinent provisions within that Rule which have application to this dispute are as follows:
An applicant must establish that the minority owners possess control over the management
and daily operations of the business. The
Department will consider the following factors:
Whether the minority owners have control over the purchase of goods, equipment, business inventory and services needed in the day-to-day operation of the business.
Whether the minority owners have the authority to hire and fire employees.
Whether the minority owners have a knowledge of the financial structure of the business and control over all financial affairs.
Whether the minority owners control business accounts - checking, savings, and other financial affairs.
Whether the minority owners have the capability, knowledge, and experience required to make decisions regarding that particular type of work.
Whether the minority owners have displayed independence and initiative in seeking and negotiating contracts, accepting and rejecting bids and in conducting all major aspects of the business.
Given that this is a corporation, the requirements of the Florida laws concerning corporate entities are also helpful in examining this question, in particular, Section 607.111(1), Florida Statutes, which states:
(1) All corporate powers shall be exercised by or under the authority of, and the business and affairs of a corporation shall be managed under the direction of, a board of directors, except as may be otherwise provided in this chapter or in the articles of incorporation. If any such provision is made in the articles of incorporation, the powers and duties conferred or imposed upon the board of directors by this chapter shall be exercised or performed to such extent and by such person or persons as shall be provided in the articles of incorporation.
and, also, Section 607.121, Florida Statutes, which states:
A majority of the number of directors fixed by, or in the manner provided in, the bylaws or, in the absence of a bylaw fixing or providing for the number of directors, then of the number stated in the articles of incorporation shall constitute a quorum for the transaction of business, unless a greater number is required by the articles of incorporation or the bylaws. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the
act of a greater number is required by the articles of incorporation or the bylaws.
As the facts have indicated, Linda W. Wicker and James E. Wicker are the only Directors in the Petitioner corporation. The By Laws indicate that the property and business of that corporation are managed by its Board. Given that there are only two Directors, they must necessarily agree on the exercise of those powers. Consequently, neither of those individuals has the power or authority to exercise corporate control in a fashion that could not be opposed by the other Board member. As a result, even should the husband, James E. Wicker, acquiesce in choices of the exercise of power by his wife, Linda W. Wicker, in law the exercise of those powers would not be entitled to force and effect. In addition, the other facts of this case did not demonstrate a circumstance in which Linda W. Wicker as minority person is in control of the corporation. Its President has always been James E. Wicker and as such he is the Chief Executive Officer of the corporation under the terms of the By Laws. In his capacity as Chief Executive Officer, he signed the lease with the company, has issued stock and has entered into various contracts. Notwithstanding the substantial involvement of Linda W. Wicker in corporate matters, the legal significance of the By Laws of the corporation and the actions taken by the husband demonstrate that Linda W. Wicker is not in control. Linda W. Wicker is involved with purchases and responsibility for the financial welfare of the corporation through activities with the accounts and has a well- grounded knowledge of the basic purpose of this business. She understands how to bid jobs. She is involved with hiring and firing. She has participated in significant decisions about the direction this corporation would take in its attempt to be economically successful. She does not control the corporation however. She shares the opportunity to write checks, to hire and fire, to bid jobs, to enter into contracts and she is without technical skills concerning production and installation capabilities within this company.
Moreover, for the corporation to engage in contracting in the sheet metal contracting business in Florida, it must do so through a "qualifying agent" as contemplated by Section 49.119, Florida Statutes. Linda W. Wicker is not the "qualifying agent," her husband is as a result of his license through certification under Section 489.115 Florida Statutes. "Qualifying agent" is defined in Section 489.105(4), Florida Statutes, where it states:
"Qualifying agent" means a person who possesses the requisite skill, knowledge, and experience, and has the responsibility, to supervise, direct, manage, and control the contracting activities of the business entity with which he is connected; who has the responsibility to supervise, direct, manage, and control construction activities on a job for which he has obtained the building permit; and whose technical and personal qualifications have been determined by investigation and examination as provided in this act, as attested by the department.
It can be seen in that definition that those persons are perceived as being the individuals with the requisite skill, knowledge and experience and the responsibility to supervise and to direct and to manage and to control those contracting activities. In this sense, James E. Wicker or someone in a similar capacity who is licensed by certification or registration must be available as
"qualifying agent" for the company to engage in the business of sheet metal contracting. In summary, without a "qualifying agent" the business could not be conducted.
On the whole, although Linda W. Wicker's position in the company is one of great influence and she is a vital part of the company's success, she cannot be seen as controlling the management and daily operations of the corporation such as would allow the corporation to be certified as a minority business enterprise.
Based upon consideration of the facts found and the conclusions of law reached, it is,
RECOMMENDED: That a Final Order be entered which denies the request for certification as a minority business enterprise.
DONE AND ENTERED this 21st day of November, 1988, in Tallahassee, Florida.
CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The Oakland Building
Filed with the Clerk of the Division of Administrative Hearings this 21st day of November, 1988.
In consideration of Respondent's Proposed Fact Finding, those facts are subordinate to the facts found in the Recommended Order with the exception of the last sentence in Paragraph No. 13 which is not necessary to the resolution of that dispute.
Mrs. Linda W. Wicker Central Florida Metal
Fabrication, Inc.
Sandra E. Allen, Esquire Office of the General Counsel Department of General Services Room 452, Larson Building
Ronald W. Thomas Executive Director
Department of General Services Room 133, Larson Building Tallahassee, Florida 32399-0951
