STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARK ALFRED HERRE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-6955

) STATE OF FLORIDA, DEPARTMENT ) OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

This case is before the Hearing Officer on the parties' stipulation that the Hearing Officer issue a Recommended Order on the basis of a stipulated record without conducting a formal evidentiary hearing. The parties in this case are represented by the counsel listed below.

APPEARANCES

For Petitioner: Stephen J. Bronis, Esquire

1395 Coral Way Third Floor

Miami, Florida 33145

For Respondent: Mark T. Aliff, Esquire

Assistant Attorney General Department of Legal Affairs The Capitol - Tax Section

Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUES

In their stipulation the parties described the issues to be resolved in this case as follows:

1. Whether the Fourth Amendment to the United States Constitution applies to the roadside stop of Petitioner's car by the Monroe County Sheriff's Office and subsequent seizure of marijuana from the vehicle?

   
   

2. Whether Section 212.0505, Florida Statutes, is unconstitutional on its face, or as applied herein, on the grounds that it subjects the Petitioner to Double Jeopardy?

   
   

3. Whether Section 212.0505, Florida Statutes, is unconstitutional on its face, or as applied herein, on the grounds that it

   violates Petitioner's rights of Equal Protection and/or Due Process under the United States Constitution?

   
   

4. Whether the Petitioner should be assessed certain sales and use taxes, pursuant to Section 212.0505, Florida Statutes, as set out in the Notice of Assessment and Jeopardy Findings dated November 17, 1988?

PRELIMINARY STATEMENT

During the course of oral arguments on other matters, the parties agreed to submit this case to the Hearing Officer on a stipulated record without a formal hearing. On November 27, 1990, the parties filed a document titled Stipulation Of Facts And Issue Of Law. That document contains stipulations to certain facts and also lists certain documents containing additional facts to be relied upon as the basis for fact-finding in this case. 1/ That document also lists the issues presented by this case.

The parties were allowed until January 23, 1991, within which to file proposed recommended orders and briefs addressed to the issues in the case. The Petitioner filed a timely proposed recommended order. The Respondent filed a timely proposed recommended order, as well as a brief in support of its position.

FINDINGS OF FACT

1. On October 14, 1988, shortly before 9:00 a.m., Sheriff Deputy William Emral of the Monroe County Sheriff's Office was notified by radio that the Sheriff's Office dispatcher had received an anonymous telephone call advising that two white males were loading what appeared to be narcotics into a white four-door Cadillac, with Florida license plate number 367-ZGX. The caller indicated that the Cadillac was headed northbound on the highway from Lower Matecumbe Key.

   
   

2. Deputy Emral then took up a stationary position at mile marker 84 and began watching the northbound traffic. At about 9:05 a.m., he observed the Cadillac described by the anonymous caller. Deputy Emral began to follow the subject Cadillac northbound. He followed the Cadillac for approximately one mile and then activated his emergency lights and pulled the Cadillac over. From the time Deputy Emral first saw the subject Cadillac until the time he pulled the Cadillac over, he did not observe anything about the car or the driver that would have caused him to stop the Cadillac. Had it not been for the information provided by the anonymous caller, Deputy Emral would not have stopped the subject Cadillac.

   
   

3. The Respondent, Mark Alfred Herre, was driving the Cadillac at the time Deputy Emral pulled it over. Mr. Herre did not flee and obeyed the directions given to him by Deputy Emral. He produced his driver's license which showed his name as Mark Alfred Herre. The car was rented and, when requested, he produced the rental contract showing that it had been rented by another individual. Deputy Emral reported this information to his base and to his superior, Captain Wilkinson, who later arrived at the scene.

   
   

4. Deputy Emral observed two bags, one green and one gray. These were soft sided bags and appeared to be stuffed between the rear and front seats of

   the rented car, on both the driver and passenger sides. They were relative large, approximately three feet by four feet in size.

   
   

5. The rental contract produced by Mr. Herre indicated that the vehicle was rented by a Maryland resident named Robert E. Lee. Mr. Herre could produce no authorization from Mr. Lee that he was entitled to use the vehicle nor could he produce the name of someone who could confirm he was authorized to be driving the subject vehicle. At about this time, Captain Wilkinson arrived at the scene as backup.

   
   

6. At this point, Mr. Herre was not suspected of a crime and continued to answer questions from the Deputy. He stated that the bags in the car contained diving gear. Deputy Emral is a certified diver and the story seemed suspicious and inconsistent with the Deputy's previous diving experiences. Mr. Herre did not ask any questions or make other inquiries as to why he was stopped. Deputy Emral did explain that an anonymous tip was received and discussed this information with the Petitioner.

   
   

7. At this point, Deputy Emral and Captain Wilkinson conferred and because of the information received by the anonymous tip to the Sheriff's Office and the inability of the Petitioner to prove he had authorization to be driving the rented vehicle, they decided that the vehicle should be taken into custody. In preparation for taking a vehicle into custody, an inventory of the vehicle is made as a standard procedure. Mr. Herre was not placed under arrest at this time. Mr. Herre was asked for, but declined to give, permission for the Deputy to search the vehicle.

   
   

8. The vehicle was then searched and it was determined that the two bags in the passenger compartment contained bales of marijuana. Captain Wilkinson then took charge of the vehicle and drove it to the Sheriff's Office. Captain Wilkinson stated that even if no contraband were in the vehicle, he would probably have driven it to the substation to await confirmation that Mr. Herre was actually authorized to be in possession of the rented car and the same was not actually stolen.

   
   

9. At the Sheriff's Office, the Cadillac was thoroughly searched and the car and its contents were photographed. Three bales of marijuana were recovered from the back seat and ten bales of marijuana were recovered from the trunk. Samples tested positive for marijuana. For purposes of this case, the parties have stipulated that the marijuana found in the subject Cadillac weighed a total of 300 pounds.

   
   

10. On November 17, 1988, the Department issued a Notice Of Assessment And Jeopardy Findings to the Petitioner, Mr. Herre. The assessment was based on an estimated retail price for marijuana of $700.00 per pound times the stipulated

    300 pounds, which comes to a total estimated retail value of $210,000.00. The tax, surcharge, and penalty assessed against Mr. Herre were as follows:

    
    

    50% Tax	$105,000.00
    25% Surcharge	52,500.00
    Additional penalty of 50%	78,750.00

    
    

    Total Amount of assessment $236,250.00

    
    

    Daily interest on the amount due is $51.78. The Notice of Assessment And Jeopardy Findings described above was properly and correctly prepared and notice of it was properly given to the Petitioner, Mr. Herre.

11. On December 28, 1988, Mr. Herre was sentenced in Case No. 33-88-00446- CF-A to a period of five (5) years probation and to pay $5,000.00 in costs. The sentence in the aforementioned case was as a result of criminal charges arising from Petitioner's arrest for the conduct alleged in the Notice Of Assessment And Jeopardy Findings dated November 17, 1988.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. See Sections 72.011 and 120.57, Florida Statutes.

    
    

13. At the time of the events described in the foregoing findings of fact, Section 212.0505, Florida Statutes (1988 Supp.), read as follows in pertinent part:

    
    

    (1)(a) Every person is exercising a taxable privilege who engages in this state in the unlawful sale, use consumption, distribution, manufacture, derivation, production, trans- portation, or storage of any medicinal drug

    as defined in chapter 465, cannabis as defined in s. 893.02, or controlled substance enumer- ated in s. 893.03. For the exercise of such privilege, a tax is levied on each taxable transaction or incident, including each occasional or isolated unlawful sale, use, consumption, distribution, manufacture, derivation, production, transportation, or storage, at the rate of 50 percent of the estimated retail price of the medicinal drug, cannabis, or controlled substance involved in the transaction or incident.

    
    

    (b) In addition to any other tax there shall also be a 25 percent surcharge on the esti- mated price of the transaction or incident taxable under paragraph (a).

    
    

    * * *

    
    

    (5) Any assessment made pursuant to this section shall be deemed prima facie correct in any judicial or administrative proceeding in this state. The suppression of evidence on any ground by a court in a criminal case involving a transaction or incident taxable under this section or the dismissal of crim- inal charges in such a case shall not affect any assessment made under this section.

    
    

14. It is clear from the facts in this case that on October 14, 1988, the Petitioner was engaged in the transportation of marijuana in this state, within the meaning of Section 212.0505, Florida Statutes (1988 Supp.). Accordingly, such transportation was a taxable incident and he is liable for the taxes, surcharges, penalties, and interest provided by statute. Those taxes,

    surcharges, penalties, and interest were duly assessed and, pursuant to subsection (5) of Section 212.0505, Florida Statutes (1988 Supp.), the assessment is deemed prima facie correct. None of the facts in this case detract from the prima facie correctness of the assessment; to the contrary, the Petitioner has stipulated that the assessment was properly prepared and properly served.

    
    

15. The foregoing notwithstanding, the Petitioner argues that the subject tax cannot properly be assessed against him because the stopping of the car he was driving and the following search of the car were both unlawful violations of the Petitioner's rights under the Fourth and Fourteenth Amendments to the United States Constitution and his rights under Article I, Section 12, of the Florida Constitution. Because of these alleged violations of constitutional rights, the Petitioner argues that the exclusionary rule is applicable and that it bars the Department from assessing the subject tax. For the following reasons, the argument fails.

    
    

16. Implicit in the last sentence of Section 212.0505(5), Florida Statutes (1988 Supp.), is a conclusion by the Florida Legislature that the exclusionary rule does not apply to proceedings involving the assessment of tax. The Florida courts appear to agree with that conclusion. See Harris v. Department of Revenue, 563 So.2d 97 (Fla. 1st DCA 1990), in which the court, in response to arguments similar to those raised by the Petitioner in this case, concluded, at page 100:

    
    

    Finally, Harris argues that section 212.0505 allows liability for the tax notwithstanding the fact that the subject drugs may be illegally seized. We agree with the Depart- ment that Harris lacks standing to assert a Fourth Amendment challenge to section 212.0505, as no drugs were seized in the instant case. We also reject Harris' analogy to the applicability of the Fourth Amendment's exclusionary rule to forfeiture proceedings.

    The second sentence of section 212.0505(5) provides that the suppression of evidence in a criminal case does not affect an assessment under section 212.0505. This provision is consistent with the well-established principle that the seizure of evidence in violation of the Fourth Amendment does not preclude admis- sion of that evidence in a civil proceeding.

    See United States v. Janis, 428 U.S. 433, 96

    S.Ct. 3021, 49 L.Ed.2d 1046 (1976); Tirado v.

    Commissioner of Internal Revenue, 689 F.2d 307, (2d Cir. 1982), cert. den., 460 U.S. 1014, 103

    S.Ct. 1256, 75 L.Ed.2d 484 (1983); Jonas v.

    City of Atlanta, 647 F.2d 580 (5th Cir. 1981). In contrast, forfeiture provides an additional penalty for violating a criminal law to which Fourth Amendment principles absolutely apply. Jonas, 647 F.2d at 587-588.

    In conclusion, we uphold section 212.0505 against Harris' constitutional challenges, and we AFFIRM the tax warrant and jeopardy assess- ment.

    
    

17. The Petitioner also argues that Section 212.0505, Florida Statutes (1988 Supp.), is unconstitutional on its face, or as applied here, on the grounds that it violates the Petitioner's rights to equal protection and/or due process, and subjects the Petitioner to double jeopardy. Neither the Hearing Officer of the Division of Administrative Hearings, nor the heads of administrative agencies in the executive branch of government, are authorized to determine the constitutionality of statutes. See State ex rel Atlantic Coast Line Railroad Co. v. State Board of Equalizers, 94 So.2d 681 (Fla. 1922); Barr

v. Watts, 70 So.2d 347 (Fla. 1953); Dept. of Revenue of Florida v. Young American Builders, 330 So.2d 864 (Fla. 1st DCA 1976); Dept. of Transportation v. Morehouse, 350 So.2d 529 (Fla. 3d DCA 1977); and Adams Packing Ass'n, Inc. v. Florida Dept. of Citrus, 352 So.2d 569 (Fla. 2d DCA 1977). Such determinations are exclusively the function of the judicial branch of government. 2/ Accordingly, both the Hearing Officer and the Department of Revenue must presume the statute to be valid and apply it as enacted.

RECOMMENDATION

For all of the foregoing reasons, it is recommended that the Department of Revenue issue a Final Order in this case concluding that the Petitioner, Mark Alfred Herre, is liable for taxes, surcharges, penalties, and interest pursuant to Section 212.0505, Florida Statutes (1988 Supp.), and assessing the amount of such liability at $236,250.00, plus interest at the rate of $51.78 per day since November 7, 1988.

RECOMMENDED in Tallahassee, Leon County, Florida, this 18th day of March 1991.

COPIES FURNISHED:

Stephen J. Bronis, Esquire 1395 Coral Way

Third Floor

Miami, Florida 33145

MICHAEL M. PARRISH

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 18th day of March 1991.

Mark T. Aliff, Esquire Assistant Attorney General Department of Legal Affairs The Capitol - Tax Section

Tallahassee, Florida 32399-1050

J. Thomas Herndon Executive Director Department of Revenue

104 Carlton Building Tallahassee, Florida 32399-0100

Vicki Weber General Counsel

Department of Revenue

204 Carlton Building Tallahassee, Florida 32399-0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS:

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

=================================================================

AGENCY FINAL ORDER

=================================================================

MARK ALFRED HERRE,

Petitioner,

STATE OF FLORIDA DEPARTMENT OF REVENUE

vs. DOAH Case No. 89-6955

DEPARTMENT OF REVENUE,

Respondent.

/

FINAL ORDER

This matter came before the Department of Revenue for the purpose of considering a Recommended Order. The Hearing Officer assigned by the Division of Administrative Hearings submitted a Recommended Order to the Department of Revenue dated March 18, 1991. A copy of that Recommended Order is attached hereto.

The Hearing Officer recommends that the assessments be sustained. The Findings of Fact of the Hearing Officer are derived from a stipulated record. The Petitioner timely filed certain exceptions to the Findings of Fact and Conclusions of Law, in the Hearing Officer's Recommended Order.

The Findings of Fact in this Final Order are made after a review of the entire record by the agency. S. 120.57(1)(b)10, F.S. While the Findings of Fact are accepted, it should be noted that the Hearing Officer's Findings of Fact were made without a trial.

The Recommended Order is based mainly upon a legal ruling. For the reasons expressed below, the Department adopts the Hearing Officer's recommendation that the assessment be sustained.

FINDINGS OF FACT

1. The Department hereby adopts and incorporates by reference the Finding of Fact set forth in paragraph 1 of the Recommended Order, except that portion of the finding indicating "an anonymous telephone call advising that two white males were loading what appeared to be narcotics." For purposes of clarity, the record indicates and supports that the anonymous caller only reported that he or she observed "two white males loading objects the caller believed to be narcotics. "This evidence is located on page 6, paragraph 2, of the Deposition of Deputy William Emral, which is part of the Stipulation of Facts and Issue of Law, agreed to by the parties. Therefore, the Petitioner's exception number 1 as above indicated, is adopted.

   
   

   Petitioner takes exception to the Hearing Officer's Finding of Fact number 1, to the extent that it indicates that the caller stated that the Cadillac was "headed northbound on the highway. "This exception is rejected as the record indicates and supports, by competent substantial evidence, the Hearing Officer's Finding. This evidence is located on page 5, paragraph 1, of the Deposition of Deputy William Emral, which is part of the Stipulation of Facts and Issue of Law, agreed to by the parties.

   
   

   Petitioner also takes exception to the omission from the Hearing Officer's Finding of Fact number 1 that the caller did

   not state when or where he or she made the observations nor how he or she knew that the objects observed appeared to be narcotics. This exception is not established in the record, is immaterial and is therefore rejected. S.

   120.57(1)(b)8, F.S.

   
   

2. The Department hereby adopts and incorporates by reference the Finding of Fact set forth in paragraph 2, of the Recommended Order.

   
   

3. The Department hereby adopts and incorporates by reference the Finding of Fact set forth in paragraph 3 of the Recommended Order. Petitioner takes exception to the omission from this finding that (1) the rental agreement produced by Mr. Herre was in the name of Robert Lee of Rockville, Maryland; (2)

   that Deputy Emral asked Mr. Herre where Mr. Lee was and Mr. Herre responded that he was having breakfast; (3) that Mr. Herre explained the reason for the stop and replied that he was loading diving gear. These exceptions are immaterial to the validity of the civil assessment against Petitioner for the transportation of the illicit drugs and are therefore rejected.

   
   

4. The Department hereby adopts and incorporates by reference the Finding of Fact set forth in paragraph 4 of the Recommended Order.

   
   

5. The Department hereby adopts and incorporates by reference the Finding of Fact set forth in paragraph 5 of the Recommended Order. Petitioner takes exception to the omission from this Finding of Fact that the rental agreement, produced by Mr. Herre, contained Mr. Lee's address and phone number in Maryland as well as the local (Miami) address and phone number. This exception is not established in the record, is immaterialand is therefore rejected. S. 120.57(1)(b)8, F.S.

   
   

6. The Department hereby adopts and incorporates by reference the Finding of Fact set forth in paragraph 6 of the Recommended Order.

   
   

7. The Department hereby adopts and incorporates by reference the Finding of Fact set forth in paragraph 7 of the Recommended Order. Petitioner takes exception to the omission of facts that: (1) prior to deciding to impound the vehicle the officers did not attempt to contact the rental car company (Avis) to see if the vehicle had been reported stolen, nor (2) did they provide Mr. Herre or the owner (Avis) the opportunity to arrange for the vehicle to be driven from the location of the stop. These exceptions are immaterial to the issue of the validity of the civil assessment against Petitioner for the transportation of the illicit drugs and are therefore rejected.

   
   

8. through 9. The Department hereby adopts and incorporates by reference the Findings of Fact set forth in paragraphs 8 through 9 of the Recommended Order.

10. The Department hereby adopts and incorporates by reference the Finding of Fact set forth in paragraph 10 of the Recommended Order. Petitioner takes exception to the finding that the retail price for the marijuana in this case is

$700 and submits that a true retail price for the type and quality of marijuana seized in this case 15 $200 per pound. This exception is rejected as the record indicates and supports, by competent substantial evidence, the Hearing Officer's Finding as provided in the Recommended Order. This evidence is located on page 2, paragraph 2, of the, Stipulation of Facts and Issue of Law, agreed to by the parties.

CONCLUSIONS OF LAW

1. through 2. The Department hereby adopts and incorporates by reference Conclusions of Law numbered 1 through 2 set forth in the Recommended Order.

1. The Department hereby adopts and incorporates by reference Conclusion of Law number 3 set forth in the Recommended Order. Petitioner takes exception by way of legal argument, to the conclusion that he was engaged in the transportation of marijuana within the meaning of s. 212.0505, F.S. The Department rejects this exception for the reasoning stated by the Hearing Officer in Conclusion of Law number 3 set forth in the Recommended Order.

2. The Department hereby adopts and incorporates by reference Conclusion of Law number 4 as set forth in the Recommended Order.

   
   

3. The Department hereby adopts and incorporates by reference Conclusion of Law number 5 as set forth in the Recommended Order. Petitioner takes exception by way of legal argument, to the conclusion that the exclusionary rule of the Fourth Amendment does not apply to the application of s. 212.0505, F.S. The Department rejects this exception for the reasoning stated by the Hearing Officer in Conclusion of Law number 5 as set forth in the Recommended Order.

   
   

4. The Department hereby adopts and incorporates by reference Conclusion of Law number 6 as set forth in the Recommended Order. Petitioner takes exception, by way of legal argument, to the conclusion that the statute is Constitutional on its face or as applied. The Department rejects this exception for the reasoning stated by the Hearing Officer in Conclusion of Law number 6 as set forth in the Recommended Order.

Finally, petitioner takes exception by way of legal argument, to the Hearing Officer's recommendation that Mr. Herre is liable for any tax, surcharge, penalty or interest under s. 212.0505, F.S., and to the amount of liability and interest of the assessment. Based upon the Findings of Fact and Conclusions of Law as set forth in the Hearing Officer's Recommended Order an reasons previously stated herein, this legal argument is rejected.

CONCLUSION

The Department based upon the Findings of Fact, and Conclusions of Law, as set forth by the Hearing Officer in his Recommended Order as modified above, sustains the assessment against Petitioner in full. Based upon the foregoing, it is ORDERED:

That the subject assessment against Petitioner is sustained.

Any Party to this Order has the right to seek judicial review of the Order as provided in Section 120.68, Florida Statutes, by the filing of a Notice of Appeal as provided in Rule 9.110, Florida Rules of Appellate Procedure, with the Clerk of the Department in the Office of General Counsel, Post Office Box 6668, Tallahassee, Florida 32314-6668 and by filing a copy of the Notice of Appeal accompanied by the applicable filing fees with the appropriate District court of Appeal. The Notice of Appeal must be filed within 30 days from the date this Order is filed with the Clerk of the Department.

DONE AND ENTEREDin Tallahassee, Leon County, Florida this 2nd day of July, 1991.

STATE OF FLORIDA DEPARTMENT OF REVENUE

J. Thomas Herndon Executive Director

Filed with the Agency Clerk this 12th day of July, 1991.

Judy Langston, Agency Clerk

Copies: Mark T. Aliff, Esquire

Assistant Attorney General Department of Legal Affairs

Tax Section, The Capitol Building Tallahassee, FL. 32399-1050

Michael M. Parrish, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL. 32399-1550

Stephen J. Bronis, Esquire Suite 200

2400 South Dixie Highway, Miami, Florida 33133

Victoria L. Weber General Counsel

Eric A. de Moya, Esquire Assistant General Counsel Department of Revenue

Room 204, Carlton Building Tallahassee, FL 32301

1. Copies of the documents containing additional facts were attached to the Stipulation Of Facts And Issue Of Law. The parties are essentially in agreement as to the facts and there are no disputed issues of material fact.

2. Harris v. Department of Revenue, 563 So.2d 97 (Fla. 1st DCA 1990), upheld the validity of Section 212.0505, Florida Statutes, in the face of several challenges to its constitutionality.

Docket for Case No: 89-006955

Orders for Case No: 89-006955