STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PRO GRADING, )

)

Petitioner, )

)

vs. ) CASE NO. 89-1495

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for formal hearing on June 5, 1989, in Ocala, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Jean A. Bice, Esquire

Patillo & McKeever Post Office Box 1450 Ocala, Florida 32678

For Respondent: Ruth Dillard, Esquire

Department of Transportation Haydon Burns Building MS 58 Tallahassee, Florida 32399-0458

STATEMENT OF THE ISSUE

Whether or not Pro Grading, Inc., may be certified by the Department of Transportation as a Disadvantaged Business Enterprise, pursuant to Chapter 14-78 F.A.C.

PRELIMINARY STATEMENT

At formal hearing, Petitioner presented the oral testimony of Ronnie James Stephens, Joseph Ronk, and Bonnie Stephens. By stipulation of the parties, affidavits of Doug Perryman, Rick Scott, Glen Benson, and Vivian Swanson were admitted as Petitioner's Exhibits 1-4, respectively, in lieu of live testimony. Inherent in the stipulation was Respondent's waiver of the right of cross- examination of the affiants. Also, with regard to two of these affidavits, there was waiver of a potential challenge to their notarization by an interested party, the Petitioner's President and principal. Petitioner also had admitted Petitioner's Exhibits 5 and 6.

Respondent presented the oral testimony of Pete Davis, and had one exhibit admitted in evidence.

No transcript of proceedings was provided, but all timely-filed proposed findings of fact have been ruled on, pursuant to Section 120.59(2), F.S., in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. On August 18, 1988, Bonnie Stephens (female), as principal and 100% stockholder of Petitioner Pro Grading, Inc., a grading and grassing corporation, applied to Respondent Department of Transportation (DOT) for certification as a disadvantaged business enterprise (DBE).

   
   

2. The agency's grounds for the denial of that certification application are based upon Rules 14-78.005(7)(c) and (e), F.A.C., and were set forth as follows in its February 22, 1989, denial letter:

   
   

   (c) The ownership and control exercised by socially and economically disadvantaged individuals shall be real, substantial, and continuing, and shall go beyond mere pro forma ownership of the firm, as reflected in its ownership documents. The socially and economically disadvantaged owners shall enjoy the customary incidence of ownership and shall share in the risks and profits commensurate with their ownership interests, as demonstrated by an examination of the substance rather than form of financial and managerial arrangements

   
   

   (e) The DBE shall be one in which the socially and economically disadvantaged owner shall also possess the power to direct or cause the direction of the management, policies, and operations of the firm and to make day-to-day as well as major business decisions concerning the firm's management, policy, and operation.

   
   

3. By stipulation, the parties agreed that the basis for the denial specified by letter is sufficiently broad so as to include evaluation of the contribution of capital by Bonnie Stephen to Pro Grading, Inc., at the time of the application and investigation. In addition to this consideration, the undersigned has considered contributions through the date of formal hearing for the reasons set out infra.

   
   

4. Except for the foregoing, it was stipulated that the Petitioner/applicant currently meets all other requirements established by statute or rule for DBE certification by DOT.

   
   

5. Upon the testimony of Pete Davis, DBE Certification Coordinator, DOT Minority Programs Office, and Chairman of the DOT DBE Certification Committee which initially reviewed the application and recommended its denial, a factor given significant weight against certification by the committee was the members' belief that Pro Grading, Inc., was listed with the federal Internal Revenue Service and with the Securities and Exchange Commission as a "Subsection S" corporation and that such an organizational framework would permit all corporate

   income to pass through the corporation to its principal, Bonnie Stephens, and thus, to her husband, Ronnie Stephens (male). However, this corporate status was categorically denied by Bonnie Stephens at formal hearing, and no documentary evidence was admitted which would tend to establish "Subsection S" status of the corporation/applicant.

   
   

6. Ronnie Stephens had done grading and sodding since 1976, however, he never incorporated a business. He had operated under the name, "Pro Grading" for two years before July 1, 1987. On that date, the business was incorporated, and all interest in the business was transferred to Bonnie Stephens. When Ronnie Stephens ran the business, it was basically a two-man operation, with Mr. Stephens managing, directing his single employee, Edgar Freytes, and actually doing much of the field work himself. At the time he met Bonnie, Ronnie Stephens had a substantial tax lien against himself, personally, due to another business he had owned previously. This lien inhibited his being able to meet "Pro Grading's" cash flow needs, inhibited his securing loans, and inhibited "Pro Grading" from securing certain types of contracts which are let at bid. During its last year of business under Mr. Stephens' control, "Pro Grading" grossed approximately $87,000.

   
   

7. Bonnie Stephens' employment background prior to meeting Ronnie Stephens in May 1986 was as a dental assistant and dental office manager. After meeting and beginning to date Ronnie, the future Mrs. Stephens assisted Mr. Stephens informally on nights and weekends with bookkeeping for his unincorporated business, "Pro Grading." Somewhat later, she began doing part-time work for the company in an administrative capacity, and in January 1987, she quit her full- time job with a local dental professional association and began working full- time (40 hours per week) in all aspects of Mr. Stephens' business, including field work. By this method, she gained experience in the work done by the grading, sodding, grassing, and seeding trades.

   
   

8. On or about July 1, 1987, the transfer of the business from Ronnie to Bonnie took place. The liabilities of Pro Grading, Inc., under Ronnie were offset by approximately the same amount of receivables, leaving net assets of approximately $27,000 which were acquired by Bonnie as part of the business without Bonnie having to make an outlay of that amount of cash to Ronnie or to the corporation account. At the time of the transfer, there was no other recorded arm's length payoff by mortgage, promissory note, or other payment from Bonnie to Ronnie, then her husband, for this $27,000 difference.

   
   

9. Both Mr. and Mrs. Stephens testified that the corporate transfer occurred after their marriage, was not in contemplation thereof, and neither of them thought it necessary for Mrs. Stephens to pay the $27,000 since they were married and since they jointly and severally considered the "trade-off" of the debts for the receivables to be fair, even with the $27,000 net (profit) to Mrs. Stephens.

   
   

10. Mr. and Mrs. Stephens' joint and mutual expressed purpose for the incorporation and transfer of ownership via stock was that the tax lien against Mr. Stephens impaired his being able to run the business successfully, while Mrs. Stephens had clearly demonstrated the business sense to run the corporation, was willing to take on the responsibility and stress of running the business herself, and had established the credit rating necessary to keep the corporation afloat. At formal hearing, Mrs. Stephens also indicated that she had felt that since she had invested so much of herself in the business and intended to invest more time and money in it, she had wanted "everything on

    paper" to protect her investment if the marriage failed. Her viewpoint evidences independence and control.

    
    

11. At the time that Mrs. Stephens made the August 18, 1988, application to DOT for DBE status on behalf of Pro Grading, Inc., she had been sole owner (100% stockholder) of the corporation, Pro Grading, Inc., for a little over one year. In that period, the gross receipts of the corporation had increased to

    $230,000 from the last full year that Mr. Stephens had run the predecessor business through the first full year of Mrs. Stephens' administration. The number of employees had increased from two to six, at least two of whom are close relatives of Mrs. Stephens. The assets had reached a value of $135,000 above those transferred in 1987.

    
    

12. Although no documentary evidence was presented to show any contribution of capital by Mrs. Stephens at the date of transfer of the stock or thereafter, Bonnie Stephens' testimony is unrefuted that she has, since acquiring the corporation in her own name, invested approximately $29,000 of her own money in the corporation. Although Mr. Davis conjectured, on the basis of a corporate income tax return he had reviewed, that the $29,000 had been loaned to the corporation by Bonnie Stephens and may have been subsequently repaid by corporate assets prior to the 1987 tax return, the scenario painted by this testimony also was not corroborated by the introduction of the corporate tax return. Contrariwise, Bonnie Stephens testified that her $29,000 investment in the corporation after her July 1, 1987, acquisition of all the stock/business assets was assembled by her personally from an $8,000 profit-sharing distribution from her prior job with the dental professional association; $1,000 from her personal checking account; and $20,000 from a local bank credit line obtained in the name of Pro Grading, Inc., by her putting a $10,000 second mortgage on a home owned solely by herself in her own name. Mrs. Stephens candidly acknowledged that her former accountant may have listed these foregoing items as loans from her personally to the corporation on the corporate tax return and further acknowledged that if he had, then she had indeed ratified the corporate return when she signed it. However, she maintained she had fired the former accountant over this and other matters and that these amounts had never been intended by her as loans but as investments in the company that was now solely hers. Also, according to the affidavit of Doug Perryman, Ford tractor salesman in Ocala, Florida, payment for all equipment sold to Pro Grading, Inc., is guaranteed by Bonnie Stephens only. Testimony reflects several substantial purchases of machinery have been made and guaranteed by her. See, infra.

    
    

13. Mr. Davis enunciated a Department of Transportation policy of viewing all "loans" made by a minority applicant principal as other than investment and of considering any "loans" between a minority owner and her corporate entity as a liability of the corporation and not as equity that may be considered as demonstrating "contribution of capital" by the minority owner/stockholder. This policy has never been formally promulgated by the agency as a rule, and is, therefore, subject to being proved up in each formal hearing. At formal hearing, DOT demonstrated no basis in general accounting practices, by statute, or by rule for this non-rule policy, and in this situation, where the credit line is in the name of the Petitioner corporation backed by the 100% minority stockholder's personal residence, the policy is capricious and unfair in its application. Regardless of whether Mrs. Stephens' $29,000 represents a "loan" or an "investment," it is a "risk" of personal money or credit by the minority principal. The promulgated rules contemplate consideration of "risks." (See Conclusions of Law).

14. Mr. Davis also expressed the DOT policy that only capitalization as of the date of purchase/acquisition of the corporate stock should be considered. That policy is also subject to being proved-up on a case-by-case basis. In this instance, such a policy was not demonstrated to be equally applied in every case. However, it was demonstrated that the policy is without a clear rule or statutory basis. The agency's expressed purpose for such a policy is so that, since certified DBEs will bid on DOT contracts, the agency may be certain that there is adequate initial corporate capitalization to ensure that the minority business will succeed financially and will complete all contracts it undertakes. It is appropriate for the agency to be concerned with such matters, but in Mrs. Stephens' situation, the agency appears to have applied capitalization as of the date of purchase/acquisition of the corporate stock as a false indicator of potential success. Clearly, the difference in gross yearly income of the corporation under Mr. Stephens' management ($87,000) and under Mrs. Stephens' management ($230,000), the tripling of the employee roster, and the increase by

    $135,000 in assets above those held by Ronnie Stephens on July 1, 1987, demonstrate considerable success and expertise of the new minority principal, Mrs. Stephens, regardless of her initial minimal capitalization. Without something more from the agency, it is appropriate to consider the capital risked by the minority principal subsequent to incorporation but prior to application for DBE status and/or prior to formal hearing.

    
    

15. DOT's committee analysis also placed great emphasis on the expertise of the applicant at the time of the application. Although the agency reviewed a variety of documents, most of which are not in evidence here, there was no suggestion that the agency had made an on-site inspection of Pro Grading, Inc.'s operation which disclosed some tangible lack of expertise or control in Mrs. Stephens. No case law, other reasoning pursuant to statute or rule, or persuasive equitable argument was offered to exclude the expertise evidenced by Mrs. Stephens as of the date of formal hearing.

    
    

16. Mr. Davis' testimony that DOT does not normally equate clerical work, bookkeeping, business office management, and billing in a dentist's office with the administrative, executive, and authority/control necessary for running a grassing and sodding business is accepted as reasonable, but it is noted that there are some minimal similarities. Moreover, Mrs. Stephens already had approximately one year's association with the grading and sodding business as of the date she assumed control. Prior to assuming control, she had handled almost all of "Pro Grading's" office, clerical, and bookkeeping types of work for Mr. Stephens. Specifically, she had dealt with credit lending institutions, reviewed tax matters, and learned how to bid contracts. She had far less field experience at that point than Mr. Stephens did, but she had acquired some such expertise, beginning in January 1987.

    
    

17. After acquiring the company on July 1, 1987, she has increasingly worked in the field. Bonnie Stephens' "hands on" experience in the field increased further over the full year before the DBE application was filed. Now, after nearly two years, that expertise has been further enhanced. Mrs. Stephens currently works approximately 70 hours per week in the business and has done so since July 1987. Her testimony on this score is supported and unrefuted. Under Mrs. Stephens' administration and control, the corporation currently offers not only grading and sodding, as it did during Mr. Stephens' management/ownership, but also handles increasing percentages of grassing and seeding work. By a practical demonstration measuring project bluelines for quoting prices and for estimating the different types of work for preparation of bids and/or for post- job billing Bonnie Stephens demonstrated administrative and field expertise. Through a comprehensive explanation of specific contracts won or jobs undertaken

    and completed by the company while under her management and control, she exhibited comprehensive knowledge and expertise with regard to the purchase and operation of specialized machinery, including but not limited to crimpers, seeders, spreaders, cultipackers, offset disks, hayblowers, and box blades, which machinery had been either utilized or purchased by her for the corporation. Accordingly, she exhibited substantial specialized expertise in the grading, sodding, grassing, and seeding trades.

    
    

18. Although due to the nature of her trade, particularly with regard to the broad geographical area served by the corporation, some types of managerial authority have had to be delegated by Mrs. Stephens to other corporate employees, including her husband, Ronnie Stephens, but the final authority for all major corporate decisions rests with Bonnie Stephens.

    
    

19. Ronnie Stephens, Edgar Freytes, and Billy Huey supervise most jobs in the field. Each job supervisor has more autonomy the further from the main office the job is, but they stay in regular communication with Bonnie Stephens by telephone. Any job done in the Ocala area is also overseen by Bonnie Stephens, regardless of which of the foregoing men supervises in the field. Edgar Freytes was Ronnie Stephens' sole employee prior to incorporation of the business under Mrs. Stephens' control. Mr. Freytes and Mr. Stephens now have the same authority to hire and fire on job-sites as site foremen in any other business, but neither may fire each other. Presumably, this is a change from when Mr. Stephens, as owner, could have fired Mr. Freytes, his sole employee, at will, and evidences Mrs. Stephens' independence and control. Mr. Freytes' work is now largely in the Ocala area, and with regard to field work, he works more closely with Mrs. Stephens than do Ronnie Stephens or Billy Huey. Billy Huey is Bonnie Stephens' brother and the chief mechanic for the company. His emphasis on mechanical work somewhat limits the time he supervises grassing and sodding in the field. He is paid at the rate of $9.00 per hour. Bonnie's mother is also employed by her as an office worker at $200 per week. Bonnie's husband, Ronnie Stephens, is paid $300 per week; he gets no other bonuses. Mr. Freytes makes $10.00 per hour, and his income varies with the hours he works as does that of the brother, Billy Huey. Lesser skilled employees earn at the rate of

    $5.00 per hour. Mrs. Stephens signs all checks for the corporation. As to her exclusive and independent control of employees and her husband's influence on her corporate decisions Mrs. Stephens has personally fired one employee in the field and has refused to fire her mother when Mr. Stephens asked her to do so. This also evidences Mrs. Stephens' independent control. Mrs. Stephens took some "draws" during the first year of Pro Grading, Inc.'s operation, but she now pays herself a regular $3,000 per month salary.

    
    

20. Joseph Ronk, a former full-time salesman for Pro Grading, Inc., testified on behalf of the applicant and is found to be substantially credible, particularly in light of the fact that as of the date of formal hearing, he was no longer financially dependent upon Pro Grading, Inc., or upon Mr. and/or Mrs. Stephens. As of the date of formal hearing, Mr. Ronk no longer worked exclusively for Pro Grading, Inc., based in Ocala, but was employed full-time for Lowe's Building supplies in Lakeland, Florida, and only solicited jobs for Pro Grading, Inc., as sideline commission work. Upon Mr. Ronk's testimony and that of other witnesses, it is determined that Mrs. Stephens established a price list for corporate services, and she is the only one who may vary it. Within the parameters of that price list, Mr. Ronk's duties were, when he was employed exclusively by Pro Grading, Inc., to negotiate jobs with persons or companies wanting to employ Pro Grading, Inc. Although Mr. Ronk had considerable authority within the price range established by Mrs. Stephens, and although his testimony was couched in excessively self-complimentary terms, it clearly

    appears that Mr. Ronk was always required to keep in regular contact with Mrs. Stephens by beeper and by telephone. It was she who calculated the bid items by telephone on most occasions and she then and now who calculates Mr. Ronk's sales commission and signs his commission checks. Sometimes, though, Mr. Ronk filled out and signed bids on behalf of Pro Grading, Inc., and in those situations, the corporation always honored Mr. Ronk's commitments as its agent, whether or not he secured Bonnie Stephens' prior approval. Usually, Bonnie Stephens would sign the actual contract. Sometimes Mr. Ronk signed contracts, but Mr. Ronk volunteered that he always got Mrs. Stephens' signature on "big jobs," an imprecise, undefined term. Before his change of status, Mr. Ronk's dealings on behalf of Pro Grading, Inc., resulted in some friction between the corporation and its customers (See infra). As a result, Mrs. Stephens now does proportionately more of the sales negotiating.

    
    

21. According to the affidavit of Rick Scott, Boyce Company's job supervisor on the City of Inglis waterlines, all his dealings with Pro Grading, Inc., except for the initial contact made by Joe Ronk, has been with Bonnie Stephens. According to the affidavit of Glen Benson, Branch Manager of Volt Co., a pipe and telephone cable installation business, that company's executives have declined to deal with Pro Grading, Inc., through Mr. Ronk, and Mr. Benson now deals exclusively with Bonnie Stephens. According to the affidavit of Vivian Swanson, current accountant-bookkeeper for Pro Grading, Inc., Mrs. Swanson was hired by Bonnie Stephens and all business affairs with regard to Mrs. Swanson's professional independent employment contract with Pro Grading, Inc., are handled directly with Bonnie Stephens. Mrs. Stephens' instructions to Mrs. Swanson have been to keep all corporate economic affairs confidential between themselves. Such an instruction strongly militates against any finding of "cloaked control" of the corporation by Mrs. Stephens' husband.

    
    

22. Consequently, the duties delegated by Mrs. Stephens to subordinates do not reflect an absence of control by her, a pass-through control by her husband, or any inability in Mrs. Stephens to perform the day-to-day tasks of running the company. Mrs. Stephens exhibits the type of real, actual, and independent executive and administrative control normally associated with the head of any corporation of this size and type. She also enjoys the incidences of such control and of sole ownership.

    
    

23. Bonnie Stephens possesses the power, knowledge, and independent control to direct or cause the direction of the management, policies, and operations of the firm. She makes day-to-day as well as major business decisions concerning the firm's management, policy, and operation. Her control is real and substantial and cannot legitimately be characterized as a "paper- tiger."

    
    

    CONCLUSIONS OF LAW

    
    

24. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause pursuant to S120.57(1), Florida Statutes.

    
    

25. The DOT rules with regard to the issues in this case provide in pertinent part, as follows:

    
    

    (c) To be certified under this rule chapter, a DBE shall be an independent business entity. The ownership and control exercised by socially and economically disadvantaged individuals

    shall be real, substantial, and continuing, and shall go beyond mere pro forma ownership of the firm, as reflected in its ownership documents. The socially and economically disadvantaged owners shall enjoy the customary incidence of ownership and shall share in the risk and profits commensurate with their ownership interests, as demonstrated by an examination of the substance rather than form of financial and managerial arrangements. In assessing business independence, the Department shall consider all relevant factors, including the date the firm was established, the adequacy of its resources, and the degree to which financial relationships, equipment leasing, and other business relationships with non-DBE firms vary from industry practice. (Emphasis supplied)

    * * *

    1. To be certified under this rule chapter, the DBE shall be one in which the socially and economically disadvantaged owner shall also possess the power to direct or cause the direction of the management, policies, and operations of the firm and to make day-to-day as well as major business decisions concerning the firm's management, policy, and operation. The discretion of the socially and economically disadvantaged owners shall not be subject to any formal or informal restrictions (including, but not limited to, by law provisions, partnership agreements, trust agreements or charter requirements for cumulative voting rights or otherwise) which would vary managerial discretion customary in the industry.

       In determining whether the socially and economically disadvantaged owners also possess the power of direct or cause the direction of the management, policies and operations of the firm and have the requisite decision-making authority, the Department may look to the control lodged in the owners who are not socially and economically disadvantaged individuals. If the owners where not socially and economically disadvantaged individuals are disproportionately responsible for the operation of the enterprise or if there exists any requirement which prevents the socially and economically disadvantaged owners from making business decisions without concurrence of any owner or employee who is not a

       economically disadvantaged individual, then the enterprise, for purposes of this rule chapter,

       is not controlled by social-ally and economically disadvantaged individuals and shall not be considered a DBE within the meaning of this

       rule chapter. Where the actual management of

       the enterprise is contracted out to individuals other than the owner(s), those persons who have the ultimate power to hire and fire the managers can be considered as controlling the enterprise for the purpose of this rule chapter.

    2. To be certified under this rule chapter, the DBE shall be one in which the contributions of capital or expertise invested by the socially and economically disadvantaged individual owners are real and substantial. Examples of insufficient contributions include, but are not limited to, a promise to contribute capital, a note payable to the DBE enterprise or its owners who are neither socially and economically disadvantaged individuals, or the mere participation as an employee, rather than as a decision-maker. (Emphasis supplied)

       [This paragraph was not listed in the denial letter, but see stipulation of the parties with regard to capitalization].

       * * *

    3. In addition to the above standards, the Department shall give special consideration to the following circumstances:

    1. Newly formed firms and firms whose ownership or control has changed shall be closely scrutinized to determine the reasons for the timing of the formation of or change in the firm.

    2. A previous or continuing employer-employee relationship between or among present owners shall be carefully reviewed to ensure that the employee-owner has sufficient management responsibilities and capabilities.

    3. Any relationship between an applicant and a non-DBE which has an interest in the enterprise seeking certification shall be carefully reviewed to determine if the interest or the non-DBE conflicts with the ownership and

    control requirements of this rule chapter . . . .

    
    

26. The fact that the corporation was formed and management passed to Mrs. Stephens in 1987, a year before the DBE application was filed, militates against a conclusion that the incorporation/acquisition was accomplished merely to obtain DBE status.

    
    

27. The disjunctive use of the words "capital" or "expertise" is significant. The element of control in the minority member qualifying the corporation is paramount and may be measured by either factor.

    
    

28. The DOT non-rule policies with regard to loans from the minority principal to the corporation and permitting consideration only of capitalization as of the date of purchase/acquisition of the corporate stock are policies subject to being proved-up in each formal hearing where they have been applied in the free-form agency action stage. Such non-rule policies do not have the presumption of validity accorded duly promulgated rules. Barker v. Board of

    Medical Examiners, 428 So.2d 720 (Fla. 1st DCA 1983). These policies were not demonstrated at formal hearing to be reasonable, nor were they fully explicated. It is also appropriate, upon the foregoing findings of facts, to consider expertise and capitalization as of the date of the de novo formal hearing. See, McDonald v. Department of Banking and Finance, 346 So.2d 769 (Fla. 1st DCA 1977).

    
    

29. The $29,000 invested by Mrs. Stephens out of her own independent monies after acquisition of all "paper" rights is a real and substantial "risk," whether it is in loan or other form. Without the tax return in evidence or some other refutation that these amounts have somehow been recouped by Mrs. Stephens from the corporation they remain "at risk," and her financial prospects rise or fall with that of the corporation.

    
    

30. Although the prior relationship between Bonnie Stephens and Ronnie Stephens might be characterized as employer-employee and currently could be characterized the same way, it is interesting to note that when single, he was the boss and once married, she is. Since Mrs. Stephens holds 100% of the corporate stock, Mr. Stephens cannot be characterized as a non-minority "owner." Assuming, but not ruling, that DOT has some legitimate interest in assuring that monies do not simply flow from a successful wife to her husband, the absence of "Sub Chapter S" corporate status would suggest this is not happening. Additionally, assuming, and also ruling, that DOT has a legitimate interest in insuring that the wife (minority) is not just a "front" for the controlling husband (not disadvantaged male), nothing of that sort has been shown. Contrariwise, as demonstrated by the foregoing findings of fact, Mrs. Stephens exercises superior, and nearly complete, day-to-day control of all aspects of the business and does not acquiesce in all suggestions of her husband. Moreover the disparity of their salaries [$3,000 (hers) versus $900 (his) per month: and the types of decisions they respectively regularly make typify Mrs. Stephens' independent control and expertise. The minimal authority delegated by her to a commission salesman and to various job foremen does not detract from this conclusion.

RECOMMENDATION

Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Transportation enter a final order certifying Petitioner as a Disadvantaged Business Enterprise.

DONE and RECOMMENDED this 4th day of August, 1989, at Tallahassee, Florida.

ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 4th day of August, 1989.

APPENDIX TO RECOMMENDED ORDER, DOAH CASE NO. 89-1495

The following constitute specific rulings upon the parties' respective proposed findings of fact (PFOF) pursuant to 5120.59(2) F.S.

Petitioner's Proposed Findings of Fact Beginning on page one:

1, 8. Rejected, constitute potential conclusions of law, not proposed facts.

2,7. Covered in introductory material. 3,4,5,6. Accepted

Beginning on page two:

1. Rejected as unnecessary.

2,4. Accepted as modified to conform to the record.

3. The proposed facts are accepted; but the argument of counsel and potential conclusions of law are rejected as not proposed facts.

Beginning on page three:

Unnumbered Paragraph -- Accepted in substance but further analyzed. 5,6,7. Except as accepted within the RO's FOF, rejected as proposed

conclusions of law, not proposed facts.

1. Accepted in substance but modified to reflect more accurately the evidence of record. What is otherwise rejected is rejected as mere argument of counsel or as proposed potential conclusions of law, not proposed facts.

2. Rejected as cumulative, not a proposal of facts, unnecessary.

Respondent's Proposed Findings of Fact:

1,2,3,4,5,6,7,9,10. Except as subordinate or unnecessary, accepted, but with modifications to more accurately reflect the evidence of record.

8,11. Rejected as an incorrect characterization of, or as contrary to, the evidence.

COPIES FURNISHED:

Jean A. Bice, Esquire Patillo & McKeever Post Office Box 1450 Ocala, Florida 32678

Ruth Dillard, Esquire Department of Transportation Haydon Burns Building MS 58 Tallahassee, Florida 32399-0458

Kaye N. Henderson, Secretary Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399-0450

Docket for Case No: 89-001495

Orders for Case No: 89-001495