STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MAC'S AUTO & TOOL SUPPLY, ) INC., )

)

Petitioner, )

)

vs. ) CASE NO. 91-0259

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter was heard by William R. Dorsey, Jr., the hearing officer designated by the Division of Administrative Hearings on May 3, 1991 in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: W. A. Maier, qualified representative

Ralph G. McGlauthen, President Mac's Auto & Tool Supply, Inc. 4225 S.W. 57th Avenue

Fort Lauderdale, Florida 33314

For Respondent: Charles B. Gardner, Esquire

Assistant General Counsel

Florida Department of Transportation 605 Suwanee Street, M.S. #58

Tallahassee, Florida 32399-0458 STATEMENT OF THE ISSUE

The issue is whether Mac's Auto & Tool Supply is entitled to additional relocation benefits.

PRELIMINARY STATEMENT

This proceeding arises from a letter written by Mr. Ralph G. McGlauthen, the President of Mac's Auto Parts & Tool Supply Inc., on September 1, 1989 to the Department of Transportation. That letter sought certain costs and expenses which Mac's Auto Parts & Tool Supply claims to have incurred during relocation of the business as a result of a road project. The Department denied the claims, and Mr. McGlauthen requested a hearing on December 14, 1990. The matter was originally set for hearing on February 28, 1991, but upon application of the representative of Mac's Auto & Tool Supply, Inc., that hearing was continued and reset for May 3, 1991.

At the time the continuance was granted the representative of Mac's Tool & Auto Supply, Inc. was required to serve on counsel for the Department of Transportation a detailed agenda to be used at the hearing to organize each item

which was still in dispute between the parties. That agenda was filed on April 12, 1991. During the course of the hearing it became obvious that the agenda was unsuitable for use at the hearing, and instead a letter of September 1, 1989 was used as a general agenda for the hearing. During the hearing, Mac's Auto & Tool Supply, Inc. offered three exhibits which were received in evidence and the president of the company, Mr. McGlauthen, testified. The Department sought and received official recognition of the federal Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970, as amended, Public Law 91-646 codified as 42 U.S.C. Section 4601, et seq; and the Surface Transportation and Uniform Relocation Assistance Act of 1987, Public Law 100-17; Title 49, Code of Federal Regulation part 25; Chapter 334, and Section 421.55, Florida Statutes; and Rule 14-15.005, Florida Administrative Code. The Department offered thirteen exhibits in evidence, and the testimony of Paul S. Warmath and Jacqueline C. Brown.

The parties were granted 21 days after the filing of the transcript in which to file proposed recommended orders. Both parties have filed proposed orders. Rulings on proposed findings of fact are made in the appendix to the recommended order.

FINDINGS OF FACT

1. Mac's Auto & Tool Supply, Inc. (Mac's Auto) is a business which was started by Mr. Ralph G. McGlauthen in approximately 1962. The business specialized in automobile and truck equipment, supply, tools, and custom made hydraulic hoses for machinery. It had been located on State Road 84 in Fort Lauderdale, Florida just west of State Road 7. Due to the construction of an interchange for Florida's Turnpike, State Road 7, and State Road 84, the property Mac's Auto leased was acquired by the Department of Transportation.

   The business moved to 4225 S.W. 57th Avenue in Davie, Florida. Negotiations for the acquisition of the land in Ft. Lauderdale were initiated in November of 1983. The original location had included a main building, and behind it a number of trailers used to store merchandise. Wooden 2' X 4' frames to which pegboard had been attached were used to organize the merchandise in the trailers. Other merchandise was kept in several small storage sheds. This method of maintaining merchandise could not be continued when the business was moved to Davie. The fire code there required the merchandise be stored or displayed on steel framing, rather than on pegboard supported by 2' X 4' wooden framing.

   
   

2. The highway interchange project was a federally aided highway project. Relocation benefits were available to Mac's Auto as a tenant of the property acquired by the Department under the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970, as amended, 42 U.S.C. Section 4601 et seq. (Uniform Act) and the implementing regulations of the United States Department of Transportation published at 49 Code of Federal Regulations, Part

1. The value of any fixtures left at the site would be reimbursable in the eminent domain proceeding, not under the Uniform Act.

   
   

   1. Mac's Auto was paid certain costs connected with its search for a new business location. The Florida Department of Transportation obtained estimates of the charges for relocating the stock to the new business location from two commercial movers. Mac's Tool was not required to use a commercial mover, and Mr. McGlauthen ultimately elected a self move. The cost which is reimbursable to a displaced business for a self move is the lowest commercial estimate. 49

      C.F.R. Section 25.303(c).

   2. In his letter of September 1, 1989 Mr. McGlauthen sought reimbursement of a $3,200 appraisal fee paid to Richard K. Cohen in October of 1985. Mr. McGlauthen maintains that the money was spent to assess the cost of moving the merchandise of the business. A letter dated February 7, 1986 from Mr. Cohen is the only written work product from Mr. Cohen. That letter is a progress report, which states that Mr. Cohen is preparing the "pricing of all of the fixture and machinery items" and projects a "final sound value" of $140,000 to $150,000. No final report was prepared. On the face of the letter, it appears that Mr. Cohen was not evaluating the cost of a move, but was assessing the actual value of the property itself. Mr. McGlauthen did abandon certain fixtures at the old site, and was paid by the Department for those fixtures. There is insufficient evidence that Mr. Cohen's work was ever completed, or if completed that it related to estimates of the cost of the move. That portion of the claim should be denied.

      
      

   3. Ultimately, Mac's Auto was paid $45,350 for a self move, based upon the lowest estimate from a commercial mover. Mr. McGlauthen abandoned at the hearing the claim in his letter for $6,000 for storage fees for seven trailers, because that amount had been paid by the Department.

      
      

   4. Mr. McGlauthen claimed $13,000 as the amount needed to build a mezzanine to hold the merchandise which previously had been stored in four of the trailers parked behind the main building at the old site. There was no documentation or itemization offered at the hearing of the actual expense incurred to build the mezzanine. The proof at hearing was insufficient to establish the amount of the expense. Moreover, the claim is one for improvement to real property, that is, for construction at the new place of business. Costs for improvements to real property are not reimbursable under the Uniform Act. The U.S. Department of Transportation specifically considered and rejected a proposal that physical changes to the replacement site be reimbursed when it adopted the rules implementing the Uniform Act. 50 Fed. Reg. 8955, 8965.

      (March 5, 1985) (Comments on Section 25.305).

      
      

   5. All of the expenses which were categorized on Mr. McGlauthen's letter under the heading "Monies Spent On Electric Installation" were paid by the Department, and are no longer an issue.

      
      

   6. The claims of Mac's Auto for $307.19 for a business license at the new location, $60.00 for a second business license, and $115.00 for an E.P.A. license were not reimbursed, because the Department regarded them as "additional operating expenses . . . incurred because of operating in a new location" which are ineligible expenses under 49 C. F. R. Section 25.305(f). Claims for $500.00 to complete the water hook-up to the water system at the town of Davie and

      $3,634.98 for a permit to hook-up to the Davie water supply were not reimbursed for the same reason. Since the Department's original denial of these fees, such fees have become payable due to an intervening decision of an intermediate Florida appellate court, Skiff's Workingman's Nursery v. Department of Transportation, 557 So.2d 233 (Fla. 4th DCA 1990), and a consequent change in characterization of those costs as permits "required of a displaced [business] at the replacement location" by the federal agency responsible for overseeing the relocation program established by the Uniform Act. 49 C.F.R. Section 25.303(a)(6). All these items therefore should be reimbursed.

      
      

   7. The claim for labor costs paid to employees based on time cards, and the claim for reimbursement of 40% of the salary paid to Mr. Isaac Theodore in the amount of $1,072.28 were not adequately explained at the hearing. The explanation of the manner in which the claim for the labor of employees was

      allocated on the time cards was superficial. There is an insufficient basis in the record to find that the employees were working on the move, rather than on other work, and an insufficient explanation of why this work was not compensated by payment for the self move. No records for Mr. Isaac Theodore could be produced at the hearing. Both of these reimbursement claims should therefore be denied.

      
      

   8. The claim for $903.46 were materials for air, water, and lines to

      hook-up to the sewer had no documentary support at the hearing, and consequently there is a failure of proof which requires that this reimbursement claim be denied.

      
      

   9. A number of other items listed in the claim letter filed by Mr. McGlauthen for Mac's Auto on September 1, 1989 have already been paid by the Department, and therefore need not be reimbursed again. These include $287.60 for installation of the telephone service, $900 for an alarm system, $250 to St. Jean Plumbing, $315 to pay for a carpenter's aid to the plumber and $3.25 in plumbing supplies.

      
      

   10. Mac's Auto also made several claims for lighting fixtures, including

       50 fluorescent fixtures at a total cost of $1,250; four emergency exit lights, at a total cost of $340; and five emergency spotlights at a total cost $450. These claims had been denied by the Department as improvements to real property which were not reimbursable under the Uniform Act. Under regulations of the

       U.S. Department of Transportation published at 49 C.F.R. Section 25.305(j) a displaced person is not entitled to reimbursement for physical changes to the real property at the replacement location, which would include the cost of the lighting fixtures. This claim should be denied.

       
       

       CONCLUSIONS OF LAW

       
       

   11. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes (1990 Supp.).

       
       

   12. Florida follows the provisions of the Surface Transportation and Uniform Relocation Assistance Act of 1987 in providing relocation benefits to businesses required to move due to construction of federally-aided highway projects. Section 421.55(2), Florida Statutes (1990 Supp.).

       
       

   13. Claims for reimbursement of expenses due to relocation under the Surface Transportation and Uniform Relocation Assistance Act, 42 U.S.C. Section 4601 et seq., (Uniform Act) must meet the eligibility criteria adopted in rules of the U.S. Department of Transportation. Under the rules, reimbursement requests must be submitted with appropriate documentation. 49 C.F.R. Section 25.207(a) states:

       
       

   14. Any claim for a relocation payment shall be supported by such documentation as may be reasonably required to support expenses incurred, such as bills, certified prices, appraisals, or other evidence of such expenses. A displaced person must be provided reasonable assistance necessary to complete and file any required claim for payment.

       
       

   15. The evidence available for the appraisal costs paid to Mr. Cohen indicates that Mr. Cohen's services were not estimates of the cost of the move; they were appraisals of the value of property. Estimates of the move's cost would have been reimbursable as an eligible cost of professional services in planning the move under 49 C.F.R. Section 25.303(a)(8)(i), but the cost for an

       appraisal of the value of property left at the old site is not reimbursable under the Uniform Act. Whether the appraisal cost could be reimbursable as part of some claim Mac's Auto might have had for the loss of fixtures attached to the property taken is not at issue here. Those costs would be an item of damage in an eminent domain proceeding in circuit court. Moreover, the documentation provided during the hearing does not justify reimbursement even if the work done by Mr. Cohen would itself be reimbursable.

       
       

   16. The claim for $13,000 for building a mezzanine is ineligible as a "physical change to real property" which is specifically listed as an ineligible cost under 49 C.F.R. Section 25.305(j). Moreover, the documentation offered at the hearing for the $13,000 figure was much too generalized to support the payment, and the claim would have been non-reimbursable due to inadequate documentation. 49 C.F.R. Section 29.207(a).

       
       

   17. The business licenses and impact fee are reimbursable and Mac's Auto should be reimbursed those amounts. Skiff's Workingman's Nursery v. Department of Transportation, 557 So.2d 233 (Fla. 4th DCA 1990); 49 C.F.R. Section 303(a)(6).

       
       

   18. The claim for lighting fixtures is also one for which reimbursement may not be made under 49 C.F.R. Section 25.305(j) as a physical change to real property.

       
       

   19. The claim for reimbursement of labor costs paid to employees of Mac's Auto and for materials used for air, water and sewer lines were properly denied for inadequate documentation. 49 C.F.R. Section 25.207(a). Although Mr. McGlauthen did introduce at the hearing a large volume of employee time sheets, this bulky information is not meaningful. There is no way to determine from these sheets what work was performed by the employees. Ordinary duties cannot be treated as a cost of the move. Mr. McGlauthen's testimony at the hearing was insufficiently specific to allow any reasonable allocation of labor cost between ordinary work and work associated with the move; or to show why the work of the employees had not already been reimbursed by the payment of $45,350 Mac's Auto received for the self move.

RECOMMENDATION

It is RECOMMENDED that the Department of Transportation reimburse Mac's Auto & Tool Supply, Inc. for all items listed in Finding 8, but that all other claims be denied.

DONE and ENTERED this 25th day of June, 1991, in Tallahassee, Florida.

WILLIAM R. DORSEY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 25th day of June, 1991.

APPENDIX TO RECOMMENDED ORDER

All findings proposed by the Department have been adopted, except findings

26 and 27.

COPIES FURNISHED:

Charles G. Gardner, Esquire Department of Transportation 605 Suwanee Street

Tallahassee, FL 32399-0458

Ralph McGlauthern

Mac's Auto and Tool Supply 4225 S.W. 57th Avenue Davie, FL 33314

Ben G. Watts, Secretary Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, FL 32399-0458

Thornton J. Williams, General Counsel Department of Transportation

562 Haydon Burns Building Tallahassee, FL 32399-0458

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.

Docket for Case No: 91-000259

Orders for Case No: 91-000259