STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
NOEL FREDERICK SHUMANN, )
)
Petitioner, )
)
vs. ) CASE NO. 90-5661
)
DEPARTMENT OF REVENUE, )
)
Respondent. )
)
)
RECOMMENDED ORDER
Pursuant to notice, a final hearing in the above-styled matter was held on February 12, 1992, in Orlando, Florida, before Joyous D. Parrish, a designated Hearing Officer of the Division of Administrative Hearings. The parties were represented at the hearing as follows:
APPEARANCES
For Petitioner: Robert J. Buonauro
14 E. Washington Street Suite 602
Orlando, Florida 32801
For Respondent: James McAuley
Assistant Attorney General Tax Section, Capitol Building
Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUES
The central issue in this case is the Petitioner's challenge to the Department's assessment of sales and use tax.
PRELIMINARY STATEMENT
This case began on February 26, 1990, when the Department of Revenue (Department) filed a notice of assessment and jeopardy findings against the Petitioner, Noel Frederick Shumann. The assessment identified the date of the transaction or incident as February 17, 1990, and claimed an amount of
$10,575.00 as due with interest computed through February 26, 1990. The Petitioner denied that he participated in a taxable event and asserted that, since he was not involved in the transaction that took place on February 17, 1990, the assessment should be dismissed. On July 11, 1990, the Department issued a notice of reconsideration that sustained the amount of the assessment. The Petitioner contested that determination and the case was forwarded to the Division of Administrative Hearings for formal proceedings on September 7, 1990.
At the hearing, the Department presented the testimony of the following witnesses: Chuck Cannon, agent employed by the Orange County Sheriff's Office, formerly assigned to the Metropolitan Bureau of Investigation (MBI) as an undercover narcotics investigator; and Barbara Anderson, formerly a confidential informant employed by the MBI. The Department's exhibit marked for identification as Respondent's exhibit 1 was admitted into evidence. The Petitioner testified in his own behalf and offered a tape recording which was admitted as Petitioner's exhibit 1. The deposition testimony of Vernon Taylor, marked as Petitioner's exhibit 2, was offered as hearsay and has not been the basis for a finding of fact unless supported by direct evidence presented in the case.
The transcript of the proceedings was filed with the Division of Administrative Hearings on March 6, 1992. The parties filed proposed recommended orders which have been considered in the preparation of this order. Specific rulings on the proposed findings of fact are included in the attached appendix.
FINDINGS OF FACT
Based upon the stipulation of the parties, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made:
On February 17, 1990, Frank Vitale was arrested at or near the ABC Liquors at 3097 Curry Ford Road, Orlando, Florida for trafficking in cocaine (400 grams or more).
On February 17, 1990, Noel Frederick Shumann was arrested at or near the ABC Liquors (ABC) at 3097 Curry Ford Road, Orlando, Florida for trafficking in cocaine (400 grams or more).
Noel Frederick Shumann was acquitted for both the charges of trafficking in cocaine and conspiracy to traffic in cocaine on May 2, 1991.
Noel Frederick Shumann was present at the ABC on February 17, 1990.
Noel Frederick Shumann denies that he was involved in any illegal drug transactions; however, he admits that an illegal drug transaction occurred on February 17, 1990 at the ABC.
Frank Vitale, who was convicted of the charges, testified on behalf of Noel Frederick Shumann at the criminal proceeding. Mr. Vitale's testimony is as follows:
That the money used to purchase the estimated retail value of cocaine of $9,400.00 was in fact Mr. Vitale's money. That Mr. Vitale had accumulated this money from the sale of an interest in some green houses and monies from the sale of jewelry from his flea market business. He stored the money at Mr. Shumann's house while living there for a brief period of time. On February 17, 1990, he called Mr. Shumann and asked Mr. Shumann to bring envelopes containing the money to the ABC Lounge. Mr. Vitale was not living at Mr. Shumann's house at the time he called Mr. Shumann and asked him to bring the envelope containing the money to the ABC Lounge. These
envelopes were stored in the bedroom Mr. Vitale resided in while living in Mr. Shumann's house. Mr. Shumann acquiesced with Mr. Vitale's request. Mr. Vitale further testified that Mr. Shumann had nothing to do with the drug transaction, did not know there was a drug transaction taking place at the ABC Lounge until such time as he arrived and remained at the lounge for a period of time. Mr. Vitale further testified that Mr. Shumann was not to share in the cocaine or any expected profits from the sale of the cocaine.
The drug transaction involved 500 grams of cocaine.
The estimated retail value of the cocaine was $9,400.00.
The money used to purchase the cocaine was in Noel Frederick Shumann's vehicle.
Mr. Shumann was assessed on February 26, 1990, pursuant to Section 212.0505, Florida Statutes, for the delinquent tax, penalty and interest relating to the drug transaction which took place on February 17, 1990.
The jeopardy assessment is a correct and proper assessment both as to form and content of an illegal drug transaction involving cocaine with the retail value of $9,400.00.
Mr. Shumann does not contest the mathematical accuracy of the tax assessment nor the procedures followed in issuing the notice.
Mr. Shumann has not paid the sales tax assessed and the amount claimed has not been paid by another on his behalf.
Mr. Shumann asserts that the assessment is improper only because he was not personally involved in the illegal transaction and, therefore, committed no act to give rise to the tax. Consequently, he argues the assessment against him should be dismissed.
Prior to February 17, 1990, Agent Cannon, an undercover narcotics investigator, was introduced to Frank Vitale. Mr. Vitale met Agent Cannon through a third party, a confidential informant, named Barbara Anderson. Ms. Anderson advised Agent Cannon that Mr. Vitale wanted to purchase cocaine.
Ms. Anderson had known Mr. Vitale for some time prior to February 17, 1990. On some occasion prior to February 17, 1990, Mr. Vitale spoke to Ms. Anderson regarding his partner in the drug transaction. When Noel Frederick Shumann arrived at the ABC on February 17, 1990, Mr. Vitale introduced Mr. Shumann to Ms. Anderson as "his partner." Because he remained present during the activities that followed, and because he told Ms. Anderson that he was there to keep an eye on his money, Ms. Anderson presumed Mr. Shumann was the partner in the drug transaction to whom Mr. Vitale had earlier referred.
When Agent Cannon arrived to complete the drug transaction, Mr. Vitale introduced Mr. Shumann to him as his partner but maintained he (Vitale) would be handling the deal. In fact, Mr. Vitale became very upset any time Agent Cannon attempted to speak with Mr. Shumann instead of dealing with him exclusively.
At one point in time, Agent Cannon threatened to abort the transaction since Mr. Vitale would not let him count the money. The money, which was stored in Mr. Shumann's car at that time, was not counted until Mr. Shumann told Mr. Vitale to let Agent Cannon count the money.
Mr. Shumann was aware that Mr. Vitale was attempting to purchase cocaine from Agent Cannon and was aware that the money to be utilized in that purchase was in his (Shumann's) car.
During a second conversation, Mr. Shumann directed Mr. Vitale to weigh and test the cocaine to be purchased and to proceed with the transaction if the substance looked good. Mr. Vitale then left the lounge with Agent Cannon and proceeded across the street to the van where Agent Cannon's partner was located with the drugs. Following the exchange of the money for the cocaine, Mr. Vitale was placed under arrest and the MBI team converged.
Subsequently, Mr. Vitale and Mr. Shumann were placed in a police patrol car that was wired to record their conversation. The taped conversation (Petitioner's exhibit 1) contains statements by Mr. Vitale to the effect that he knew the police were listening, that he was sorry to get Mr. Shumann into "this," and that Mr. Shumann should "put everything on me (Vitale)."
During the counting of the money, the weighing and testing of the cocaine, and the sale and purchase of the cocaine between Agent Cannon and Mr. Vitale, Mr. Shumann remained in the lounge. Mr. Shumann continued to talk to Ms. Anderson even though he knew a cocaine transaction was proceeding, knew that he had been introduced as Mr. Vitale's partner, knew that the money for the transaction was stored first in his house then in his vehicle, and knew that the supplier (Agent Cannon) had sought authorization from him to count the money and complete the deal. It is wholly incredible to conclude that a disinterested party would have remained in the lounge throughout the foregoing events.
Cocaine is a controlled substance as defined by Florida law.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.
Section 212.0505, Florida Statutes, provides, in pertinent part:
Taxation of unlawful sales, use, and other transactions involving medicinal drugs, cannabis, or controlled substances.
(1)(a) Every person is exercising a taxable privilege who engages in this state in the unlawful sale, use, consumption, distribution, manufacture, derivation, production, transportation, or storage of any medicinal drug as defined in chapter 465, cannabis as defined in
s. 893.02, or controlled substance enumerated 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 estimated price of the transaction or incident taxable under paragraph (a).
The sale, use, consumption, distribution, manufacture, derivation, production, transportation, or storage of any medicinal drug as defined in chapter 465, cannabis as defined in s. 893.02, or controlled substance enumerated in s. 893.03 by a federal, state, or local government officer or employee, or his agent, acting in his official capacity is exempt from the tax imposed by this section.
The taxes imposed under this section are subject to the same interest and penalties and the same procedures for collection and enforcement as other taxes imposed under this part, except that a dealer's credit under s. 212.12(1) is not allowed. The department may adopt rules for administering the taxes imposed by this section.
Neither this section nor the assessment or collection of taxes under this section shall be construed as making lawful the transaction or incident which is the subject of the tax.
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 criminal charges in such a case shall not affect any assessment made under this section. * * *
The term "person" is defined in Section 212.02(13), Florida Statutes, as follows:
(13) "Person" includes any individual, firm, copartnership, joint adventure, association, corporation, estate, trust, business trust, receiver, syndicate, or other group or combination acting as a unit and also includes any political subdivision, municipality, state agency, bureau, or department and includes the plural as well as the singular number.
In this case the Department has established that an illegal transaction involving the sale and purchase of cocaine took place at the ABC Lounge on February 17, 1990. By his admissions to Ms. Anderson and Agent Cannon prior to the sale, Mr. Shumann was known to be Mr. Vitale's partner and the money person for the transaction. By his admission Mr. Shumann transported the cash funds to the ABC on the date in question. Mr. Shumann told Ms. Anderson that he was there to keep an eye on his money. Even more convincing is the fact that Mr. Shumann remained at the ABC even though he knew a cocaine purchase was in progress. Logic and common sense dictate that innocent parties do not voluntarily remain in the wake of illegal drug transactions. They do not authorize the counting of the purchase money. They do not allow money to be stored in their vehicles while final negotiations proceed. And they do not direct the middleman to proceed to complete the transaction. Mr. Shumann did all of the foregoing. That he was acquitted of the criminal charges does not
absolve Mr. Shumann of the tax liability for being a party to the illegal sale. The burden of proof in these proceedings is different and the evidence offered may or may not have been the same as that presented in the criminal matter.
The Department has shown that the cocaine in this transaction, as to amount and value, was as stated in the notice of assessment ($9,400.00). The total amount due as of the date of the assessment was $10,575.00. Interest on that amount accrues as specified by law.
Finally, the Petitioner's assertion that these proceedings constitute double jeopardy since the Petitioner has been acquitted of the criminal charges is rejected as a matter of law.
Based on the foregoing, it is RECOMMENDED:
That the Department of Revenue enter a final order confirming the notice of assessment and jeopardy findings and finding the amount due to be $10,575.00 plus interest (1% per month until paid).
DONE and ENTERED this 5th day of May, 1992, in Tallahassee, Leon County, Florida.
JOYOUS D. PARRISH
Hearing Officer
Division of Administrative Hearings
The DeSoto Building 1230 Apalachee Parkway
Tallahassee, Florida 32301
(904)488-9675
Filed with the Clerk of the Division of Administrative Hearings this 5th day of May, 1992.
APPENDIX TO RECOMMENDED ORDER
RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER:
1. Petitioner submitted proposed findings in a form such that rulings cannot be entered. Petitioner summarized: the testimony of Chuck Cannon; the testimony of Mr. Shumann; the patrol car tape (Petitioner's ex. 1); the stipulated statements of facts submitted by the parties; the deposition of Vernon Taylor; and the testimony of Barbara Anderson. Such summaries did not present paragraphs with factual allegations in a form such that specific rulings can be made. Such summaries included argument, irrelevant information and comment on the evidence. Except as set forth in the findings of fact above, they must be rejected as not supported by the weight of credible evidence or as argument.
RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT:
Respondent listed the stipulated facts submitted by the parties. They have been accepted and incorporated in the foregoing recommended order as findings of fact.
As to the proposed findings of fact submitted by Respondent, which began on page
4 of the proposed order, the following specific rulings are given.
Paragraphs 1 through 9 are accepted.
With regard to paragraph 10, it is accepted that Mr. Vitale introduced Mr. Shumann to Ms. Anderson as his partner. It is not accepted that he specifically told Ms. Anderson that Mr. Shumann was his partner in this drug transaction. That factual conclusion has been reached based upon a preponderance of all evidence presented in this case.
Paragraphs 11 through 20 are accepted.
Copies to:
Robert J. Buonauro
14 E. Washington Street Suite 602
Orlando, Florida 32801
James McAuley
Assistant Attorney General Tax Section, Capitol Building
Tallahassee, Florida 32399-1050
Vicki Weber General Counsel
Department of Revenue
204 Carlton Building
Tallahassee, Florida 32399-0100
J. Thomas Herndon Executive Director Department of Revenue
104 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.
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AGENCY FINAL ORDER
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STATE OF FLORIDA DEPARTMENT OF REVENUE
NOEL FREDERICK SHUMANN, )
)
Petitioner, )
)
vs. ) CASE NO. 90-5661
)
DEPARTMENT OF REVENUE, )
)
Respondent. )
)
FINAL ORDER
This cause is being considered based upon a Recommended Order issued by a Hearing Officer assigned by the Division of Administrative Hearings, sustaining the Department's assessment. Respondent timely filed an exception to legal argumentation found in the Hearing Officer's Conclusions of Law, Number 4 in the Recommended Order. As provided in Rules 12-3.004 & 12-3.005, F.A.C., these exceptions are adopted as indicated below. For the reasons expressed herein, the Department adopts the Hearing Officer's recommendation that the assessment be sustained. A copy of that Recommended Order is attached to this Final Order and is specifically incorporated by reference except for Conclusion of Law number 4 which is adopted as provided below:
In this case the Department has established that an illegal transaction involving the sale and purchase of cocaine took place at the ABC Lounge on February 17, 1990. By his admissions to Ms. Anderson and Agent Cannon prior to the sale, Mr. Shumann was known to be Mr. Vital's partner and the money person
for the transaction. By his admission Mr. Shumann was known to be Mr. Vital's partner and the money person for the transaction. By his admission Mr. Shumann transported the cash funds to the ABC on the date in question. Mr. Shumann told Ms. Anderson that he was there to keep an eye on his money. Even more convincing is the fact that Mr. Shumann remained at the ABC even though he knew a cocaine purchase was in progress. Logic and common sense dictate that innocent parties do not voluntarily remain in the wake of illegal drug transactions. They do not authorize the counting of the purchase money. They do not allow money to be stored in their vehicles while final negotiations proceed. And they do not direct the middleman to proceed to complete the transaction. Mr. Shumann did all of the foregoing. The record of the criminal trial of Shumann and the verdict in that
criminal trial is not admissible in this civil case. Issues in this case are to be determined by a preponderance of the evidence in the civil case, entirely exclusive of the record in the criminal proceeding. Carter v Carter, 88 So.2d 153 (Fla. 1956). The outcome of Petitioner's criminal trial was not relevant in this civil case. Therefore, Respondent's objection to the inclusion of the verdict in the criminal trial as a finding of fact is well founded.
Accordingly it is ORDERED:
The Department's assessment is sustained as provided in the Hearing Officer's Recommended Order.
Any Party to this Order has the right to seek judicial review of the Order pursuant to Section 120.68, F.S., by the filing of a Notice of Appeal pursuant to Rule 9.110, Florida Rules of Appellate Procedure, with the Clerk of the Department in this 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 ENTERED in Tallahassee, Leon County, Florida, this 3rd day of, 1992.
STATE OF FLORIDA DEPARTMENT OF REVENUE
James A. Zingale
Assistant Executive Director
I HEREBY CERTIFY that the foregoing Final Order has been filed in the official records of the Department of Revenue, this 3rd day of August, 1992.
JUDY LANGSTON AGENCY CLERK
Copies: Joyous D. Parrish, Hearing Officer Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
James McAuley, Esquire, Assistant Attorney General Department of Legal Affairs
Tax Section, The Capitol Tallahassee, Florida 32399-1050
Robert J. Buonauro
14 D. Washington Street Suite 602
Orlando, Florida 32801
Linda Lettera, General Counsel
Eric A. deMoya, Esquire, Assistant General Counsel Department of Revenue
Room 204, Carlton Building Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Aug. 05, 1992 | Final Order filed. |
| May 05, 1992 | Recommended Order sent out. CASE CLOSED. Hearing held 2/12/92. |
| Mar. 26, 1992 | (proposed) Administrative Hearing Officer's Findings of Facts and Order w/(proposed) Transcript & Notice of Filing Transcript filed. |
| Mar. 26, 1992 | (Respondent) Notice of Filing w/Respondent's Proposed Recommended Order filed. |
| Mar. 06, 1992 | Transcript of Proceedings filed. |
| Feb. 21, 1992 | Subpoena Ad Testificandum w/affidavit of service filed. |
| Feb. 12, 1992 | CASE STATUS: Hearing Held. |
| Feb. 04, 1992 | (Respondent) Notice of Filing Stipulated Facts w/Stipulated Facts filed. |
| Jan. 27, 1992 | (Respondent) Notice of Taking Deposition filed. |
| Jan. 07, 1992 | Notice of Hearing sent out. (hearing set for 2/12/92; 9:00am; Orlando) |
| Jan. 02, 1992 | (Petitioner) Motion to Continue Administrative Hearing filed. |
| Dec. 31, 1991 | Order sent out. (hearing rescheduled for Feb. 12, 1992; 9:00am; Orlando). |
| Dec. 31, 1991 | (Respondent) Notice of Taking Deposition filed. |
| Dec. 30, 1991 | CC: FAX (Petitioner) Motion to Continue Administrative Hearing filed. |
| Nov. 26, 1991 | Notice of Hearing sent out. (hearing set for Jan. 9, 1992; 9:00am; Orlando). |
| Nov. 21, 1991 | (Respondent) Status Report filed. |
| Sep. 10, 1991 | Order (Case in Abeyance until November 20, 1991) sent out. |
| Sep. 06, 1991 | (Respondent) Status Report filed. (From James McAuley) |
| Jul. 22, 1991 | Order sent out. (Case in abeyance until Sept. 6, 1991; Parties' status report due). |
| Jul. 18, 1991 | (Respondent) Status Report filed. (From Mark T. Aliff) |
| May 14, 1991 | Order Granting Continuance sent out. (Hearing cancelled; Parties' status report due June 30, 1991). |
| May 13, 1991 | Agreed Motion for Continuance filed. (From Mark T. Aliff) |
| Mar. 04, 1991 | Notice of Hearing sent out. (hearing set for 05/22/91;9:00AM;Orlando) |
| Mar. 01, 1991 | Order sent out. (hearing set for 05/22/91;9:00AM;Orlando) |
| Jan. 15, 1991 | Respondent's First Set of Interrogatories to Petitioner filed. |
| Jan. 07, 1991 | Petitioner's Request For Extension of Time For Filing Request For Admissions w/exhibit-1 filed. (From Robert J. Buonauro) |
| Jan. 03, 1991 | Notice of Hearing sent out. (hearing set for March 15, 1991: 9:00 am: Orlando) |
| Dec. 31, 1990 | Order (Motion to Continue GRANTED) sent out. (hearing rescheduled for March 15, 1991: 9:00 am: Orlando) |
| Dec. 26, 1990 | Respondent's Motion Requesting Admissions by Deemed Admitted (+ 2 att's) filed. |
| Dec. 24, 1990 | (Petitioner) Motion to Continue Administrative Hearing; PEtitioner's Response to Department of Reveue's Request for Admissions filed. (From Robert J. Bucnauro) |
| Oct. 22, 1990 | Notice of Hearing sent out. (hearing set for Jan. 17, 1991: 9:00 am:Orlando) |
| Oct. 15, 1990 | (Respondent) Notice of Service of Interrogatories; Notice of Serving Respondent, Department of Revenue's Requet For Admissions filed. (fromMark T. Aliff) |
| Oct. 01, 1990 | (Petitioner) Response Re Pe-Trial Order filed. (From Robert J. Buonauro) |
| Sep. 21, 1990 | Response to Initial Order filed. (From Mark T. Aliff) |
| Sep. 21, 1990 | (Respondent) Answer to Petition filed. (from Mark T. Aliff) |
| Sep. 12, 1990 | Initial Order issued. |
| Sep. 07, 1990 | Agency referral letter; Petition for Formal Administrative Hearing (Exhibits 1-3) filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 03, 1992 | Agency Final Order | |
| May 05, 1992 | Recommended Order | Petitioner found to have participated in illegal cocaine transaction that gave rise to tax assessment and jeopardy findings. |
