STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE BOARD OF TRUSTEES OF THE ) NORTHWEST FLORIDA COMMUNITY ) HOSPITAL and THE BOARD OF COUNTY ) COMMISSIONERS OF WASHINGTON )

COUNTY, FLORIDA, )

)

Petitioners, )

)

vs. ) CASE NO. 93-1635

) DEPARTMENT OF MANAGEMENT SERVICES, ) DIVISION OF RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on August 25, 1993, in Chipley, Florida.

APPEARANCES

For Petitioner, The Board of Trustees of the Northwest Florida Community Hospital:

Gerald Holley, Esquire Post Office Box 268 Chipley, Florida 32428

For Petitioner, The Board of County Commissioners of Washington County, Florida:

William S. Howell, Jr., Esquire Post Office Box 187

Chipley, Florida 32428

For Respondent, The Department of Management Services, Division of Retirement:

Stanley M. Danek Division Attorney Division of Retirement

Department of Management Services 2639 North Monroe Street, Building C Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUE

Whether J. Glenn Brown, Jr., was an "employee" of Northwest Florida Community Hospital for purposes of the State of Florida retirement system?

PRELIMINARY STATEMENT

By letter dated September 23, 1991, the Respondent notified Petitioner, the Board of Trustees of Northwest Florida Community Hospital, that the Respondent had determined that J. Glenn Brown was an "employee", rather than an "independent contractor", of Northwest Florida Community Hospital and was, therefore, a compulsory member of the State of Florida retirement system. After being requested to review additional information, the Respondent notified the Board of Trustees of Northwest Florida Community Hospital that the Respondent was reaffirming its initial decision.

On March 9, 1993, the Board of Trustees of Northwest Florida Community Hospital and the Board of County Commissioners of Washington County, Florida, executed an Amended Petition for Administrative Hearing contesting the Respondent's determination. The record does not reflect why an amended petition was filed or why the Board of County Commissioners of Washington County was named as a Petitioner. The request for hearing was filed with the Division of Administrative Hearings, with a Notice of Election to Request Assignment of Hearing Officer on March 29, 1993.

The final hearing was scheduled for June 30, 1993, by a Notice of Hearing entered April 30, 1993. A motion to continue the hearing was filed by the Respondent and was granted by Order entered May 18, 1993. The final hearing was rescheduled for August 25, 1993, by a Second Notice of Hearing.

At the final hearing the Petitioners presented the testimony of Albert F. Davis and Celia F. Ward. The Petitioners also offered three exhibits which were accepted into evidence.

The Respondent presented the testimony of David W. Ragsdale. The Respondent also offered three exhibits which were accepted into evidence. The Respondent also filed a Notice of Intent to Request Official Recognition at the commencement of the final hearing. The request was granted.

At the conclusion of the final hearing the Respondent indicated that it did not intend to order a transcript. The Petitioners represented that additional time was needed to determine if a transcript would be ordered. Subsequently, the undersigned was informed by the Petitioners that a transcript would be filed.

The transcript was filed on October 5, 1993. The parties filed proposed recommended orders on October 14, 1993, (Petitioners) and October 15, 1993 (Respondent). The proposed recommended orders contain proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order, or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto.

FINDINGS OF FACT

1. The Parties.

   
   

   1. Petitioner, Board of Trustees of the Northwest Florida Community Hospital (hereinafter referred to as the "Board of Trustees"), is the governing body of the Northwest Florida Community Hospital.

      
      

   2. Petitioner, Board of County Commissioners of Washington County, Florida (hereinafter referred to as the "County Commissioners"), is the governing body of Washington County, Florida, and the owner of the Northwest Florida Community Hospital.

      
      

   3. The Respondent, the Department of Management Services, Division of Retirement (hereinafter referred to as the "Division"), is the agency charged with responsibility for administering the Florida retirement system established by Chapter 121, Florida Statutes.

      
      

2. Operation of Northwest Florida Community Hospital Prior to February of 1988.

   
   

   1. The Northwest Florida Community Hospital (hereinafter referred to as the "Hospital"), is a small, rural acute-care hospital located in Chipley, Washington County, Florida.

      
      

   2. During the mid-1980's, the Hospital suffered from a financial crisis that threatened its continued existence. As a consequence thereof, it was concluded that the Hospital should be sold.

      
      

   3. A contract was negotiated and entered into for the sale of the Hospital to National Healthcare, Inc. (hereinafter referred to as "NHI"). As a part of the contract entered into with NHI, NHI was to operate the Hospital before the contract for sale was completed.

      
      

   4. J. Glenn Brown was an employee of NHI. NHI assigned Mr. Brown to the Hospital to act as the administrator of the Hospital. As administrator of the Hospital, Mr. Brown was the top manager of the Hospital.

      
      

   5. Mr. Brown, while employed by NHI, acted as the administrator of the Hospital from September 1986, until approximately September or October of 1987.

      
      

   6. At some time prior to February 1988, the contract for sale of the Hospital to NHI was cancelled and the Board of Trustees began to operate the Hospital.

      
      

3. The Consulting Contracts.

   
   

   1. On or about February 1, 1988 the Hospital and Mr. Brown entered into a Consulting Contract (hereinafter referred to as the "First Contract"). Petitioner's exhibit 1. Mr. Brown agreed in the First Contract to operate the Hospital.

      
      

   2. Mr. Brown operated the Hospital pursuant to the First Contract until its expiration. Although the term of the First Contract ended January 31, 1991, Mr. Brown continued to operate the Hospital.

   3. A second Consulting Contract (hereinafter referred to as the "Second Contract"), was entered into on or about May 29, 1992 between Mr. Brown and the Hospital. The Second Contract applied to the period February 1, 1992, through February 1, 1993.

      
      

   4. Mr. Brown continued to perform services for the Hospital between the end of the First Contract and the beginning of the Second Contract.

      
      

   5. The differences between the First Contract and the Second Contract (hereinafter referred to jointly as the "Consulting Contracts"), were not substantial other than the amount of the annual fee to be paid to Mr. Brown.

      
      

4. The Treatment of Mr. Brown for Purposes of the Florida Retirement System.

   
   

   1. During the period of time that Mr. Brown operated the Hospital from February 1, 1988 until he departed in the fall of 1992, the Hospital treated Mr. Brown as an "independent contractor" and not an "employee" for purposes of the Florida retirement system.

      
      

   2. Although the Hospital could have requested a determination of Mr. Brown's status for purposes of the Florida retirement system, the Hospital was not required to do so. The Hospital, as it was authorized to do pursuant to Chapter 121, Florida Statutes, made the initial decision to treat Mr. Brown as an independent contractor.

      
      

   3. After Mr. Brown had left the Hospital, an audit of the Hospital was conducted by the management review section of the Division. As a result of the audit, the Division raised a question about the status of Mr. Brown for purposes of the Florida retirement system.

      
      

   4. As a result of the audit of the Hospital, the Division required the Hospital to submit a Florida Retirement System Employment Relationship Questionnaire form requesting a determination of Mr. Brown's status as an employee or independent contractor. The Hospital did so. See Respondent's exhibit 2.

      
      

   5. The Division reviewed the Questionnaire and determined that Mr. Brown was an "employee" for purposes of the Florida retirement system, and so notified the Hospital.

      
      

   6. The Hospital filed a request for a formal administrative hearing to contest the Division's determination that Mr. Brown was an employee.

      
      

   7. Based upon the foregoing, it is the Division that is attempting to change the status quo in this matter. But for the Division's audit and requirement that the Hospital file a Questionnaire, the Hospital's treatment of Mr. Brown as an independent contractor for purposes of the Florida retirement system would have been final.

      
      

5. Services to be Provided by Mr. Brown Pursuant to the Consulting Contracts and Mr. Brown's Relationship with the Board of Trustees.

   1. Mr. Brown, referred to as the "consultant" in the Consulting Contracts, agreed to provide the following services:

      
      

      1:1 The Hospital hereby contracts with Consultant to provide services to the Hospital to perform such services as may be necessary to properly and efficiently run the Hospital for the purpose of providing quality healthcare to the citizens of Washington County and a more productive business operation.

      1:2 Consultant hereby contracts with the Hospital to perform such services as may

      be necessary to provide the Hospital advice, expertise and a more efficient and productive business operation.

      
      

   2. The Consulting Contracts also contained the following provision pertaining to Mr. Brown's operation of the Hospital:

      
      

      2:1 Consultant agrees to devote such of his time and efforts to the performance of such services as are necessary to perform and achieve the objectives set forth in Article I above. Consultant agrees that he will not directly or indirectly render any service of a business, commercial or professional nature to any other Hospital in Northwest Florida, whether for compensation or otherwise, during the term of this Agreement without the prior written consent of the Board of Trustees of the Hospital. Consultant agrees to comply with the Hospital's policies, rules and regulations as determined from time to time by the Board of Trustees of the Hospital.

      
      

   3. It was the intent of the Hospital and Mr. Brown that he would act as an independent contractor, and not an employee, in performing the services contemplated by the Consulting Contracts.

      
      

   4. Mr. Brown was to, and did, provide his services personally. Mr. Brown did not operate through a corporation or other business entity.

      
      

   5. Between February 1988 and the Fall of 1992, Mr. Brown administered the Hospital in essentially the same manner that he had prior to 1988 while employed by NHI.

      
      

   6. The Board of Trustees established policies for the operation of the Hospital during the term of the Consulting Contracts. Mr. Brown carried out policies adopted by the Board of Trustees.

      
      

   7. Mr. Brown was involved in the formulation of policies by the Board of Trustees and he advised the Board of Trustees concerning policies it adopted. The Board of Trustees had little experience in operating the Hospital. The day- to-day operations of the Hospital had been handled by NHI prior to entering into the First Contract. Prior to NHI's operation of the Hospital, the Hospital was administered by Hospital Corporation of America (hereinafter referred to as

      "HCA"). HCA had operated the Hospital through an employee, Buel Sapp. The Board of Trustees, therefore, relied heavily on Mr. Brown and his expertise in developing polices and for his efficient operation of the Hospital.

      
      

   8. The manner in which Mr. Brown administered the Hospital was also largely the same as the manner in which the Hospital has been administered by the person who replaced by Mr. Brown. The new administrator has been treated as an "employee" by the Hospital.

      
      

6. Training.

   
   

   1. Mr. Brown was a professional hospital administrator with a number of years of experience operating hospitals, including the Hospital.

      
      

   2. In light of Mr. Brown's experience, especially at the Hospital, training was not required when Mr. Brown undertook the services contemplated by the First Contract.

      
      

7. Integration.

   
   

   1. The services to be performed pursuant to the Consulting Contacts were integral to the operation of the Hospital. Mr. Brown performed services normally performed by an "administrator" or top manager of any hospital.

      
      

8. Manner In Which Mr. Brown Performed Services.

1. Mr. Brown did not hire any assistants or employees to assist him in the performance of the services required by the Consulting Contracts.

   
   

2. The Consulting Contracts did not prevent Mr. Brown from using the services of others to carry out the services to be provided. Although Mr. Brown was ultimately obligated to insure that the services contemplated by the Consulting Contracts were provided, the manner in which services required by the Consulting Contracts were to be carried out was not specified.

   
   

   1. Continuing Relationship.

      
      

3. Mr. Brown was required, as a condition of the Hospital entering into the First Contract, to move to Washington County.

   
   

4. Pursuant to the First Contract, Mr. Brown was obligated to perform services for the Hospital for a period of four years. The First Contract expired February 1, 1991.

   
   

5. The Second Contract obligated Mr. Brown to perform services for the Hospital for a period of one year. The Second Contract was effective February 1, 1992.

   
   

6. Mr. Brown continued to perform services for the Hospital between February 1, 1991 and February 1, 1992, although the First Contract had expired and the Second Contract had not yet been entered into.

   
   

7. The evidence failed to prove why Mr. Brown continued to perform services for the Hospital between February 1, 1991, and February 1, 1992.

   
   

8. Mr. Brown performed services for the Hospital after he left NHI for between 3 and 4 years.

   1. Mr. Brown's Working Hours.

      
      

9. Mr. Brown's working hours were not specified in the Consulting Contracts. Mr. Brown, therefore, was not legally required to perform services during any set period of time.

   
   

10. Mr. Brown generally performed services for the Hospital from the early morning until the early evening. Mr. Brown's hours were consistent with the hours worked by employees of the Hospital.

    
    

11. Mr. Brown did not keep time-sheets indicating the hours he worked. Nor did Mr. Brown use, or "punch," a time-clock which employees of the Hospital used.

    
    

    1. Full-Time or Part-Time Work.

       
       

12. Mr. Brown was not required to work any set amount of hours pursuant to the Consulting Contracts.

    
    

13. The services expected of Mr. Brown pursuant to the Consulting Contracts reasonably contemplated that Mr. Brown would perform services full- time, only if necessary.

    
    

14. The Consulting Contracts also provided that Mr. Brown was not required to perform services on days he attended seminars or meetings to improve his position.

    
    

15. The Consulting Contracts also required that Mr. Brown make himself available "for all reasonable meetings, engagements, and any and all other reasonable attempts by the Hospital to promote the Hospital."

    
    

16. Mr. Brown did not receive annual or sick leave.

    
    

17. Mr. Brown did not work at the Hospital every day of the week. During some weeks, he only worked three or four days.

    
    

    1. Where Mr. Brown Performed Services.

       
       

18. Although not specifically required to do so, Mr. Brown performed the services contemplated by the Consulting Contracts essentially on the premises of the Hospital.

    
    

19. In order to effectively administer the Hospital, it was necessary that Mr. Brown be available at the Hospital.

    
    

    1. Reports from Mr. Brown to the Hospital.

       
       

20. Mr. Brown regularly reported to the Board of Trustees and kept the Board informed of his actions.

    
    

    1. Compensation for Mr. Brown's Services.

       
       

21. Pursuant to the First Contract, Mr. Brown was paid an annual fee of

    $70,555.00. The annual fee was paid biweekly in twenty-six equal installments. Payments were made on the last day of every other week.

22. The annual fee to be paid to Mr. Brown pursuant to the First Contract was agreed upon during negotiations based upon the average salary paid to administrators of similarly sized hospitals who were serving as employees, and adding thereto the amount of withholding tax, retirement contributions and other amounts which would be paid on behalf of an "employee." Had Mr. Brown been hired as an "employee", presumably he would have only been paid an amount based upon the average salary of other employee/administrators.

    
    

23. Pursuant to the Second Contract Mr. Brown was paid an annual fee of

    $98,770.00. The annual fee was paid monthly on the first day of each month and upon the submission of an invoice from Mr. Brown.

    
    

24. The Consulting Contracts also provided the following:

    
    

    Consultant hereby acknowledges and agrees that he is an independent contractor individually liable for self employment and all other taxes of any nature due on the fees paid by the Hospital to Consultant.

    
    

25. Payments of Mr. Brown's annual fee were made to him by the Hospital out of a separate account and not the Hospital's "payroll" account from which Hospital employees were paid. Payments were made at the same time that Hospital employees were paid.

    
    

26. The Hospital also paid for group health insurance for Mr. Brown. Health insurance benefits provided to Mr. Brown were the same benefits provided to Hospital employees.

    
    

27. The Hospital also paid for disability insurance for Mr. Brown and a life insurance policy larger than provided to Hospital employees.

    
    

    1. Mr. Brown's Expenses; Tools and Materials; Investment.

       
       

28. Pursuant to the Consulting Contracts, the Hospital paid dues Mr. Brown was required to pay to maintain "membership in applicable organizations or associations deemed necessary for promotion of the Hospital "

    
    

29. The Hospital paid expenses incurred by Mr. Brown to attend meetings and seminars on new federal and state health care regulations which impacted the operation of the Hospital.

    
    

30. The Hospital paid Mr. Brown a vehicle allowance of $250.00.

    
    

31. The Hospital also provided Mr. Brown with an office, furniture, office supplies, a secretary (who was an employee of the Hospital) and with telephone and other services necessary to operate as the administrator of the Hospital. The office provided to Mr. Brown was the office used by the Hospital administrator.

    
    

32. Other then Mr. Brown's education, Mr. Brown did not have any substantial investment in his position with the Hospital. Capital investment necessary for Mr. Brown to carry out his duties was provided by the Hospital.

    
    

    1. Profit and Loss Potential.

33. In light of the fact that Mr. Brown was guaranteed payment for his services and the lack of investment and expenses Mr. Brown was required to provide, there was no reasonable potential Mr. Brown would incur a loss.

    
    

34. Mr. Brown operated as an individual.

    
    

    1. Offer of Services to the General Public.

       
       

35. The Consulting Contracts prohibited Mr. Brown from providing his services to others in "Northwest Florida." Mr. Brown was, therefore, free to perform services elsewhere.

    
    

36. During the term of the Consulting Contracts, Mr. Brown did perform services for other companies located outside of Florida.

    
    

37. Article X of the Consulting Contracts provided, in pertinent part, the following:

    
    

    . . . . Consultant further agrees that he shall not participate, directly or indirectly, individually or as a partner, shareholder, employee, agent, consultant, officer, director or otherwise, in any other business where such participation will in any manner interfere (as reasonably determined by the Board of Trustees and Consultant) with the business of the Hospital or which ultimately, in the final opinion of the Board of Trustees, could result in the integrity of the Hospital being subject to doubt.

    
    

    1. Right to Terminate Mr. Brown and Mr. Brown's Right to Quit.

       
       

38. Pursuant to the Consulting Contracts, the Hospital had the right to terminate Mr. Brown's services for "good cause" as determined by majority vote of the Board of Trustees and "upon sixty (60) calendar days written notice of termination to the Consultant." The Hospital was required, however, to pay Mr. Brown for four months of service.

    
    

39. The Hospital also had the right to terminate Mr. Brown's services if he were convicted of a felony, required to take treatment for drug or alcohol abuse, engaged in activity harmful to the reputation of the Hospital or failed to comply with the terms of the Consulting Contract.

    
    

40. Mr. Brown was authorized by the Consulting Contracts to terminate his services upon sixty days written notice.

    
    

41. The Consulting Contracts provide that the agreement terminated upon the death of Mr. Brown.

    
    

    1. Weighted Consideration of the Facts.

42. Several of the facts in this case indicate that Mr. Brown was an independent contractor of the Hospital and several of the facts indicate that he was an employee. Based upon a weighted consideration of the facts in this case, it is concluded that Mr. Brown operated as an independent contractor, and not an employee, for the Hospital.

    
    

    CONCLUSIONS OF LAW

    
    

    1. Jurisdiction.

       
       

43. The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1992 Supp.).

    
    

    1. Burden of Proof.

       
       

44. The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue of the proceeding. Antel v. Department of Professional Regulation, 522 So.2d 1056 (Fla. 5th DCA 1988); Department of Transportation v. J.W.C. Co., Inc. 396 So.2d 778 (Fla. 1st DCA 1981); and Balino v. Department of Health and Rehabilitative Services, 348 So.2d

    249 (Fla. 1st DCA 1977).

    
    

45. In this proceeding it is the Division that is asserting the affirmative. Section 121.051, Florida Statutes, provides that all "employees" employed on or after December 1, 1970, are required to participate in the Florida retirement system. Section 121.061, Florida Statutes, requires that all employers of eligible employees make required contributions to the Florida retirement system.

    
    

46. Chapter 121, Florida Statutes, contemplates that the employer, in this case the Hospital, make the determination of whether an individual is an "employee" required to be included in the Florida retirement system. Although Section 121.051(4), Florida Statutes, provides that employers may be required to provide information to support the inclusion of an individual in the retirement system, the undersigned has been unable to find any provision which requires that employers have their initial determinations approved or even reviewed by the Division. Therefore, employers make an initial determination of the status of their workers under Chapter 121, Florida Statutes--that determination constitutes the "status quo."

    
    

47. In this case, the Hospital made the determination that Mr. Brown was an independent contractor. This decision was not questioned for more than four years. Only after Mr. Brown had left the Hospital did the Division determine that Mr. Brown might have been an employee. The Division then required the Hospital to file a Questionnaire concerning Mr. Brown which the Division then used to decide that Mr. Brown was an "employee." It was, therefore, the Division's action that changed the status quo in this matter.

    
    

48. The Division has argued that it might be considered to have the burden of proof in this case had the Hospital put it on notice of its determination concerning Mr. Brown and the Division had then "taken no action or . . . given its approval." This argument is rejected. The Division has cited no statute or rule that requires that the Hospital, in order to assume its decision to treat Mr. Brown as an independent contractor was a final decision, notify the Division of its action. Absent some requirement that the Hospital actually notify the

Division of its initial action, the Hospital's decision becomes final and any decision of the Division to the contrary more than four years later constitutes an effort to change the status quo.

1. Based upon the foregoing, it is concluded that the Division had the burden of proving that Mr. Brown was an "employee" for purposes of the Florida retirement system.

   
   

   1. Mr. Brown's Status: Independent Contractor or Employee?

   
   

2. At the time that Mr. Brown began working for the Hospital under the First Contract, the Division had provided a definition of a "consultant or other professional person." Rule 22B-6.01(15), Florida Administrative Code (1987), provided that a "consultant or other professional person" is:

   
   

   . . . an individual who: agrees to provide certain services; works according to his own methods; is not subject to the control of his employer, except as to the results of his work; and does not enjoy the fringe benefits offered by the employer. A consultant of other professional person usually: is compensated from another salaries and wages account; does not earn annual or sick leave; and may frequently do a majority of his work in his own office rather than on the employer's premises. . . .

   
   

3. Mr. Brown agreed to provide certain services to the Hospital. He also worked largely according to his own methods, although he was required to adhere to the Hospital's rules and regulations and was required to report to the Board of Trustees, who established policies. The evidence failed to prove that the methods followed by Mr. Brown in providing the services contemplated by the Consulting Contracts were subject to the control of the Hospital or the Board of Trustees. Finally, Mr. Brown was provided with some fringe benefits offered to employees while he was not provided others.

   
   

4. Mr. Brown was compensated out of an account different from the account from which employees were paid and he did not earn sick or annual leave. On the other hand, although Mr. Brown performed some of his services outside the Hospital, he performed most of his services at the offices of the Hospital.

   
   

5. Based upon a weighted evaluation of Rule 22B-6.01(15), Florida Administrative Code, Mr. Brown comes within the definition of an "independent contractor" as he was intended to be by the Hospital and by Mr. Brown.

   
   

6. As pointed out by the Division, the determination of whether an individual is an independent contractor or an employee depends not only on the intent of the parties, but upon a review of all the circumstances of the dealings of the parties with each other. Cantor v. Cochran, 184 So. 2d 173 (Fla. 1966). See also Davis v. Department of Administration, 585 So. 2d 421 (Fla. 1st DCA 1991).

7. In Cantor, the court set forth ten criteria it used to decide whether an individual was an employee or an independent contractor. Those criteria, which were approved in Davis, and their application to this matter, are as follows:

   
   

   1. The First Criterion: "The extent of control which, by the agreement, the master may exercise over the details of the work."

      
      

      1. Facts indicating Mr. Brown was an Employee: The Consulting Contracts required that Mr. Brown adhere to the rules and regulations of the Board of Trustees. Mr. Brown, as the hospital administrator, was also expected to insure that the everyday operations of the Hospital ran smoothly. Mr. Brown was expected to attend all meetings, including Board of Trustees' meetings, engagements and any and all other reasonable attempts by the Hospital to promote the Hospital. Mr. Brown was, therefore, expected to act as the chief operating officer of the Hospital.

         
         

         The Division has argued that the ability to terminate the Consulting Contracts for "good cause" is tantamount to having "control" over Mr. Brown.

         
         

      2. Facts indicating Mr. Brown was an Independent Contractor: The Consulting Contracts contemplated and allowed Mr. Brown to develop and suggest broad policies concerning the operation of the Hospital for consideration of the Board of Trustees. Mr. Brown was to do more than simply see to the everyday operations of the Hospital. The Hospital did not control the specifics of how Mr. Brown carried out his duties. The Hospital, because of its lack of experience, relied upon Mr. Brown to make specific decisions.

      
      

      The Division's position concerning the Hospital's ability to terminate the Consulting Contracts is not supported by the evidence. The Hospital was limited in its ability to terminate the Consulting Contracts by a reasonable standard: "good cause." The Hospital's ability to terminate the Consulting Contracts did not give it the ability to control Mr. Brown.

      
      

   2. The Second Criterion: Whether the individual is employed in a distinct occupation or business.

      
      

      1. Facts indicating Mr. Brown was an Employee: There are certain trades which have been accepted as trades normally engaged in by independent contractors. For example, plumbers and electricians. A plumber may be hired to perform a specific task such as to install the plumbing and plumbing fixtures in a new house. The task is distinct from other tasks required to build the house and is left largely up to the plumber to complete.

         
         

         The Division has suggested that Mr. Brown acted as an administrator of the Hospital, a trade not usually engaged in by independent contractors, and that the services he performed were not different from the enterprise of the Hospital itself.

         
         

      2. Facts indicating Mr. Brown was an Independent Contractor: While it may be true that a hospital administrator may not often be an independent contractor, there is no Division rule or law which prohibits administrators from acting as independent contractors. Mr. Brown was expected to operate the Hospital in his best judgment and based upon his expertise. The fact that he was required to keep the Board of Trustees informed and to comply with the rules

      and regulations of the Board of Trustees is no different than a plumber reporting to the general contractor and the plumber's compliance with rules of the general contractor.

      
      

   3. The Third Criterion: Whether the job is usually performed under the direction of an employer or by a specialist without supervision.

      
      

      1. Facts indicating Mr. Brown was an Employee: The evidence failed to prove whether hospital administrators "usually" act under the direction of an employer or by a specialist. The Division has suggested the fact that Mr. Brown's successor has operated as an "employee" supports the Division's position concerning Mr. Brown.

         
         

      2. Facts indicating Mr. Brown was an Independent Contractor: The evidence also proved that Mr. Brown operated as an independent contractor prior to the First Contract and that Mr. Brown's predecessor also operated as an independent contractor. The only significant difference in Mr. Brown's activities as an independent contractor and during the period at issue in this case is that Mr. Brown did not operate as administrator through another entity.

      
      

   4. The Fourth Criterion: The skill required in the particular occupation at issue. The evidence failed to prove what skills are required of hospital administrators.

      
      

   5. The Fifth Criterion: Who supplies the working material?

      
      

      1. Facts indicating Mr. Brown was an Employee: Employees are normally provided the tools necessary to carry out their duties. In this case, many of the materials and tools necessary for Mr. Brown to carry out his duties were provided to him by the Hospital: his office, a secretary, office supplies, telephone, copier, etc.

         
         

      2. Facts indicating Mr. Brown was an Independent Contractor: The primary service provided by Mr. Brown required no working material. Mr. Brown's primary tool was his knowledge of how a hospital should be operated and the ability to develop programs to make a facility such as the Hospital economically viable. The most important service, therefore, provided by Mr. Brown did not not require working materials.

      
      

   6. The Sixth Criterion: The length of time for which the person performed services.

      
      

      (2) Facts indicating Mr. Brown was an Employee: The First Contract was effective for a period of three years. There was then a period of approximately one year that Mr. Brown continued to serve as administrator until the term of the Second Contract, which was for an additional year. Mr. Brown continued to work for the Hospital as the administrator for four and one-half years.

      
      

   7. The Seventh Criterion: Method of payment.

      
      

      1. Facts indicating Mr. Brown was an Employee: Mr. Brown was paid at the same time that employees of the Hospital were paid; every two weeks. He was also paid equal payments, regardless of the amount of work performed.

         
         

      2. Facts indicating Mr. Brown was an Independent Contractor: Mr. Brown was paid from an account separate from the account employees of the hospital were paid. Payments to Mr. Brown were also not dependent upon time records or

      hours worked. Because of the nature of Mr. Brown's services, it was reasonable for Mr. Brown to be paid equal amounts. The fact that the payments for his services were in part determined based upon what other hospital administrators were being paid, adjusted for the fact that he was not receiving all the benefits of an employee, also supports a finding that Mr. Brown was an independent contractor.

      
      

   8. The Eighth Criterion: Whether the work was part of a regular business of the employer.

   
   

   1. Facts indicating Mr. Brown was an Employee: The work performed by Mr. Brown was an integral part of the coordination and control of the Hospital.

      
      

   2. Facts indicating Mr. Brown was an Independent Contractor: The primary work of the Hospital, however, was the providing of medical services. Mr. Brown was not directly involved in providing those services.

   
   

   i. The Ninth Criterion: Whether the parties believe they were creating the relation of master and servant.

   
   

   1. Facts indicating Mr. Brown was an Employee: Mr. Brown was obligated to adhere to the rules and regulations governing the Hospital.

      
      

   2. Facts indicating Mr. Brown was an Independent Contractor: Mr. Brown and the Hospital, however, did not intend to create a master-servant relationship. The Division concedes this point.

   
   

   j. The Tenth Criterion: Whether the Principal is "in business."

   
   

   1. Facts indicating Mr. Brown was an Employee: Mr. Brown agreed to not provide his services to any other person in North Florida. He could not, therefore, operate as a business in North Florida. He also did not operate as an "administrator" for any other entity.

      
      

   2. Facts indicating Mr. Brown was an Independent Contractor: Mr. Brown was not prohibited from providing professional consulting services outside of North Florida. In fact, Mr. Brown provided his professional services to at least one other entity while providing services to the Hospital. While Mr. Brown was limited in his ability to provide other services from a practical standpoint, legally, Mr. Brown was not prohibited from doing so.

   
   

8. Based upon a weighted consideration of the foregoing criteria, Mr. Brown comes within the definition of an "independent contractor" as he was intended to be by the Hospital and by Mr. Brown.

   
   

9. On November 14, 1991, while Mr. Brown was providing services to the Hospital, the Division amended its definition of a "consultant or other professional person" contained in Rule 22B-6.01(15), Florida Administrative Code (1987). The Division's definition is consistent with the definition of an "independent contractor" adopted by the Internal Revenue Service. The new rule provides twenty criteria to be considered:

   
   

   1. Instructions (from employer to worker);

   2. Training (given to worker);

   3. Integration (of service to business of employer);

   4. Services rendered personally by worker;

   5. Hiring assistants (to perform work);

   6. Continuing relationship (between parties);

   7. Set hours of work (for worker);

   8. Full-time or part-time work (by worker);

   9. Work done on premises (of employer);

   10. Order or sequence of services (performed by worker);

   11. Reports (given by worker to employer);

   12. Payments (made to worker for services);

   13. Expenses (of worker);

   14. Tools and materials (of worker);

   15. Investment (of worker);

   16. Profit or loss (of worker);

   17. Works for more than one person or firm;

   18. Offers services to general public;

   19. Right to terminate employment; and

   20. Right to quit.

       
       

10. Many of these criteria have already been discussed. The following are those criteria not previously discussed:

    
    

    1. Training: Mr. Brown was not provided training by the Hospital. This indicates he was an independent contractor. The fact that he had already acted as the administrator and the fact that he was agreeing to provide "professional" services detracts, somewhat, from this conclusion.

       
       

    2. Services Rendered Personally: While the Consulting Contracts contemplated that the services desired by the Hospital would be, and were, provided personally by Mr. Brown, Mr. Brown was not prohibited from using other professionals.

       
       

    3. Hiring of Assistants: Mr. Brown did not hire assistants but was not legally prevented from doing so by the Consulting Contracts.

       
       

    4. Full-Time or Part-Time Services: The Consulting Contracts did not require that Mr. Brown work any set amount of time or that he provide his services "full-time". He was required to provide whatever services were necessary to make sure the Hospital was an economically viable entity. On the other hand, Mr. Brown did work a fairly normal work week much of the time; he was required to move to Washington County as a condition of the First Contract; and he was limited in his ability to provide consulting services to other entities because of the geographic limitation on the providing of other services.

       
       

    5. The Order or Sequence of Services: Although Mr. Brown received some policy direction from the Board of Trustees, he performed his services according to his own schedule. His services were self-directed.

       
       

    6. Reports: Mr. Brown reported to the Board of Trustees on a regular basis. Because of the nature of his services this may be indicative of an employee or an independent contractor.

       
       

    7. Investment: The type of services required of Mr. Brown did not require any investment on his part. While a lack of investment by an individual is usually indicative of an "employee", the type of services to be provided by Mr. Brown do not require traditional investments such as tools and equipment. Mr.

       Brown's investment in his education, experience and knowledge about his profession should not be ignored, however.

       
       

    8. Profit or Loss: Mr. Brown was not in a position to suffer a traditional loss from the services he was to provide to the Hospital. Mr. Brown was not required to invest in materials and equipment and then attempt to realize a profit after the project was completed. Again, the type of services to be provided by Mr. Brown, because they do not require a direct investment by Mr. Brown, are the type of services from which a profit or loss would not be expected.

       
       

    9. Works for More than One Person or Firm: Although limited in his ability to provide services in North Florida, Mr. Brown did in fact provide services to at least one other person or firm.

       
       

    10. Offers Services to the General Public: Mr. Brown's services were available to a limited portion of the general public that would be interested in those services. He was, however, prohibited from offering his services to any one in North Florida.

    
    

11. Based upon a weighted evaluation of Rule 22B-6.01(15), Florida Administrative Code, as amended, Mr. Brown comes within the definition of an "independent contractor" as he was intended to be by the Hospital and by Mr. Brown.

    
    

12. In reaching the foregoing conclusions, the undersigned has given great weight to the expertise of the Division and its interpretation of the pertinent provisions of law governing this determination. Ultimately, however, the determination of whether Mr. Brown is an employee or an independent contractor is a factual question based upon a weighted consideration of all of the relevant facts. Giving all the facts in this case due consideration, the Division has failed to prove that the facts supporting a finding that Mr. Brown was an employee outweigh those facts which support finding that Mr. Brown was an independent contractor.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of

Retirement, enter a Final Order concluding that J. Glenn Brown, Jr., was not a compulsory member of the Florida retirement system pursuant to Section 121.051, Florida Statutes.

DONE AND ENTERED this 18th day of November, 1993, in Tallahassee, Florida.

LARRY J. SARTIN

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 November, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1635

The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

The Hospital's Proposed Findings of Fact

1. Accepted in 1.

2. Accepted in 2 and hereby accepted.

3. Accepted in 7-8.

4. Accepted in 28.

5. Accepted in 10. See 11-13 and 38-39. The First Contract expired January 31, 1991, and not January 31, 1992.

6. Accepted in 16 and 24.

7. Accepted in 35.

8. Accepted in 54 and hereby accepted. The last sentence is not relevant.

9 Accepted in 26, 42-43, 52, 57 and 63.

1. Hereby accepted.

2. Accepted in 68.

3. Accepted in 48.

4. Accepted in 50.

5. Accepted in 30-31.

6. Accepted in 3.

The Division's Proposed Findings of Fact

1. Accepted in 4-6.

2. Accepted in 7.

3. Accepted in 9 and hereby accepted. 4 Accepted in 10,53-54, 58-59 and 62.

1. Accepted in 28.

2. Accepted in 23.

3. Accepted in 23 and 69. The first sentence is not relevant.

8 Accepted in 41-42, 44, 47, 52-53 and 63.

1. See 41-43 and hereby accepted.

2. Although Ms. Ward did testify consistent with this finding of fact, the testimony was not sufficiently detailed to conclude that Mr. Brown and Mr. Mason provided services in exactly the same manner.

3. Accepted in 61.

12 Accepted in 11-14, 38-39 and 55.

1. Accepted in 14, 25 and 66.

2. Accepted in 23.

3. Accepted in 60-61.

4. See 73.

5. See 53-62. The conclusion on page 10 is not supported by the weight of the evidence.

COPIES FURNISHED:

Gerald Holley, Esquire Post Office Box 268 Chipley, Florida 32428

William S. Howell, Jr., Esquire Post Office Box 187

Chipley, Florida 32428

Stanley M. Danek, Esquire Division of Retirement

Department of Management Services 2639 North Monroe Street, Building C Tallahassee, Florida 32399-1560

A. J. McMullian, III, Director Division of Retirement

Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

Sylvan Strickland, Esquire Department of Management Services Knight Building, Suite 309

Koger Executive Center 2737 Centerview Drive

Tallahassee, Florida 32399-0950

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

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

STATE OF FLORIDA DEPARTMENT OF MANAGEMENT SERVICES

DIVISION OF RETIREMENT

THE BOARD OF TRUSTEES OF THE NORTHWEST FLORIDA COMMUNITY HOSPITAL, and THE BOARD OF COUNTY COMMISSIONERS OF WASHINGTON COUNTY, FLORIDA,

Petitioners,

vs. DOR Case No. DR 93-02

(DOAH Case No. 93-1635)

DEPARTMENT OF MANAGEMENT SERVICES, DIVISION OF RETIREMENT,

Respondent.

/

FINAL ORDER

This matter came up for hearing in Chipley, Florida, on August 25, 1993, before Larry J. Sartin, a duly appointed Hearing Officer of the Division of Administrative Hearings. Petitioner ordered a copy of the transcript of the hearing. The Parties were allowed ten (10) days or until October 15, 1993, to submit proposed findings of fact and conclusions of law. A Recommended Order was issued on November 18, 1993, and a copy of it is attached hereto, incorporated by reference and made a part of this Final Order as an exhibit.

The transcript of the hearing was considered in the determination of the facts of this Final Order. Having considered the Findings of Fact in the Recommended Order, all matters of record and the transcript of the final hearing, the Division of Retirement hereby adopts in part and rejects in part the Findings of Fact of the Recommended Order as follows: The Parties are as follows:

For Petitioner Board of Trustees of the Northwest Florida Community Hospital:

T. Gerald Holley Attorney at Law

102 East Church Street Post Office Box 1831 Chipley, Florida 32428

For Petitioner the Board of County Commissioners of Washington County:

William S. Howell Attorney at Law Post Office Box 98

Chipley, Florida 32428 For Respondent:

Stanley M. Danek Division Attorney Division of Retirement Cedars Executive Center 2639 North Monroe Street Building C

Tallahassee, Florida 32399

PRELIMINARY STATEMENT

At issue in this proceeding is whether or not Glenn Brown, Jr., (hereinafter, Brown) who worked for the Northwest Florida Community Hospital (hereinafter, the Hospital) as the Hospital Administrator from February 1, 1988, to September 30, 1992, was an employee of the Hospital or an independent contractor for the above period of time. If Mr. Brown is determined to be an employee, the Hospital would then be required to pay retirement contributions to the Florida Retirement System (hereinafter, FRS). At the hearing, the Petitioner had two (2) witnesses testify, Albert F. Davis, a county commissioner from 1978 to 1990 and Trustee of the Hospital from 1987 to 1988, and Celia F. Ward, the Hospital Comptroller and Chief Financial Officer. It also introduced three exhibits which included the deposition of Mr. Brown. The Division had one witness, David W. Ragsdale, the Retirement Administrator in the Enrollments Section of the Division and introduced three exhibits.

By letter dated January 5, 1993, the Director of the Division of Retirement (hereinafter, the Division) notified the Chairman of the Board of Trustees of the Hospital that Mr. Brown was an employee filling a regularly established position and therefore a compulsory member of FRS.

Subsequent to the above agency action, a request for administrative hearing was made by the Petitioners in which it was alleged that Mr. Brown was an independent contractor, and therefore, not required to be enrolled in the FRS. The matter was then forwarded to the Division of Administrative Hearings for assignment of a Hearing Officer and the scheduling of the final hearing.

ISSUE TO BE DETERMINED IN THIS PROCEEDING

The issue to be determined in this proceeding was whether or not Glenn Brown was an independent contractor, and therefore, exempt from the provisions of Section 121.051(1)(a), Florida Statutes, or an employee of the Hospital, and therefore, a compulsory employee for the time period from February 1, 1988, to and including September 30, 1992. Having considered the Findings of Fact in the Recommended Order, all matters of record and the transcript of the final hearing, the Division of Retirement hereby adopts in part and rejects in part the Findings of Fact of the Recommended Order as follows:

FINDINGS OF FACT

1. Adopted;

   
   

2. Adopted;

   
   

3. Adopted;

   
   

4. Adopted;

   
   

5. Adopted;

   
   

6. Adopted; National Healthcare, Inc. (hereinafter, NHI) is a hospital management company (Deposition testimony of Glenn Brown, page 7);

   
   

7. Adopted, with the additional finding of fact that Mr. Brown was only one of several NHI employee's sent in at different times to operate the Hospital;

   
   

8. Adopted;

   
   

9. Adopted;

   
   

10. Adopted, except that the term "consulting contract" was a term adopted by the Hospital and Mr. Brown in their contract and has no legal effect in this proceeding;

    
    

11. Adopted, with the additional fact that the first contract terminated on January 31, 1991. The parties operated with no contract from February 1, 1991, to and including January 31, 1992;

    
    

12. Adopted, with the same comment as made in Finding No. 10, above;

    
    

13. Adopted;

    
    

14. Adopted;

    
    

15. Rejected. The relationship between the Hospital and Mr. Brown was set out in the two contracts. In the first contract, the Hospital paid a salary of

    $70,555 based on the average salary paid to administrators in hospitals of this size (Petitioner's Exhibit No. 1). In addition to the salary, the Hospital gave Mr. Brown a monthly travel expense of $250 (Deposition testimony of Mr. Brown, page 33; hearing transcript, page 57), paid a group health insurance plan that was the same as other Hospital employees (hearing transcript, pages 13, 26, 26), had disability insurance coverage (hearing transcript, page 45), and was given a larger that normal life insurance policy (hearing transcript, Id). Further, Mr. Brown worked without a contract for a one-year-period of time. Based on a review of all the factors and the fact that the job of Hospital Administrator is a regularly established position in the Hospital, Mr. Brown was treated in reality as an employee.

    
    

16. Rejected. The position of Hospital Administrator was a regularly established position for the Hospital and was compulsory in the FRS. The Hospital did not have the option under the law not to report Mr. Brown. By not doing so, it violated the provisions of Section 121.051(1)(a), Florida Statutes, and Rule 605-1.004(a), Florida Administrative Code (hereinafter, FAC). Therefore, the Hospital was required to report Mr. Brown as a member of FRS

    unless he was an independent contractor, a decision to be made under these circumstances by the Division of Retirement and not the Hospital. Since the presumption is that Mr. Brown was a statutory employee, the Hospital did not have an option.

    
    

17. Adopted;

    
    

18. Adopted;

    
    

19. Adopted;

    
    

20. Adopted;

    
    

21. Rejected. The Recommended Order is correct is stating that had it not been for the audit and the requirement that the Hospital file a Questionnaire, the Hospital's treatment of Mr. Brown as an independent contractor for the purposes of FRS would have been final. However, given the statutory presumption that persons in regularly established positions are compulsory members of FRS and that the prior incumbents and the successor of Mr. Brown were in FRS, it is the Hospital that changed the status quo by not enrolling Mr. Brown.

    
    

22. Adopted as to statement in the Paragraph but rejected as being an incomplete statement of what the parties agreed to in the contract. In both contracts, Mr. Brown agreed to certain additional performance conditions. In Paragraph 2:1 of both contracts, it was stated that:

    
    

    Consultant agrees to devote such of his time and efforts to the performance of such services as are necessary to perform and achieve the objectives set forth in Article I above.

    
    

    . . .

    
    

    Consultant agrees to comply with the Hospital's policies, rules and regulations as determined from time to time by the Board of Trustees of the Hospital. (Petitioner's Exhibits No. 1 and 2)

    
    

23. Adopted;

    
    

24. Rejected as being a Conclusion of Thaw;

    
    

25. Adopted;

    
    

26. Rejected as to the manner in which Mr. Brown operated the Hospital. When he worked for National Health Corp, Inc. Mr. Brown reported to his supervisor at NHI and did as he was instructed which was to work with and coordinate with the Hospital. Any control the Hospital had over him was as a result of his employment with NHI. Further, he had a contract with the Hospital, and the controls over his activities were imposed by the Hospital, not an outside company. Thus, while Mr. Brown may have administered the Hospital on a day-to-day basis in essentially the same manner as he did under NHI, his instructions came from two different sources, the first was NHI, and the second was the Hospital Board of Trustees.

27. Adopted;

    
    

28. Adopted;

    
    

29. Adopted;

    
    

30. Adopted;

    
    

31. Adopted. Mr. Brown was an experienced hospital administrator and during his employment with NHI, he learned the methods and procedures used at the Hospital. After that, no further training was needed. That seemed to be one of the reasons the Hospital hired him (hearing transcript, page 20).

    
    

32. Adopted;

    
    

33. Rejected. While there is no evidence that Mr. Brown ever hired or terminated anyone, it is also clear from the evidence that he had the power and authority to hire and terminate persons in the Hospital since he functioned as the chief executive officer. He had secretarial support (hearing transcript, pages 26, 38; deposition testimony of Glenn Brown, page 31), and directed the affairs of the Hospital (hearing transcript, pages 28, 29). He did not need to hire an assistant since in his absence, Celia Ward, an employee, operated the Hospital (Deposition testimony of Glenn Brown, page 29). If Mr. Brown had been an independent contractor, he would more than likely have had a person hired by him (as an independent contractor) perform his duties in his absence, and he would also pay that person.

    
    

34. Adopted as to Sentence One; Rejected as to Sentence Two. Mr. Brown's services were no different that those of any hospital administrator and of his successor, Mr. Mason (hearing transcript, pages 39, 40, 48, 50). He was free to hire the necessary individuals to perform the work. As has been pointed out in the Recommended Order, Paragraph 25, Mr. Brown did not operate through a corporation or other business entity; therefore, since he was not a "business entity", he could not hire anyone except for the Hospital. He carried out his services under the contracts through the employees of the Hospital.

    
    

35. Rejected. Mr. Brown did not move to Washington County (Chipley area) (hearing transcript, pages 18, 39).

    
    

36. Rejected in part because the first contract was for the period of three years, not four years (Petitioner's Exhibit No. 1).

    
    

37. Adopted;

    
    

38. Adopted;

    
    

39. Adopted;

    
    

40. Rejected in part because Mr. Brown worked for the Hospital for over 4 1/2 years.

    
    

41. Adopted as to Sentence One; rejected as to Sentence Two as being a legal conclusion and not a finding of fact. While he was not required to keep regular work hours, he worked at least eight (8) hours a day (hearing transcript, page 26) and as necessary for the Hospital business (see also Paragraphs 2:1 of Petitioner's Exhibits No. 1 and 2). The Board required him to be present at all Board meetings, usually on a monthly basis but more often if

    deemed necessary by the Board (hearing transcript, page 14). He was required by the contract to "make himself available for all reasonable meetings, engagements, and any and all other reasonable attempts by the Hospital to promote the Hospital." (Petitioner's Exhibits No. 1 and 2, Paragraphs 7:1 of each contract). He was required by the two contracts also "to use his best efforts, skill and judgment to promote, improve and advance the business and interest of the Hospital . . ." (Id, Paragraphs 10:1 of each contract).

    
    

42. Adopted;

    
    

43. Adopted; however, as hospital administrator, Mr. Brown would not be required to keep a time sheet just as any chief executive of any agency is not required to keep a time sheet or record.

    
    

44. Adopted;

    
    

45. Rejected. The contracts required Mr. Brown:

    
    

    . . . to devote such of his time and efforts to the performance of such services as are necessary to perform and achieve the objectives set forth in Article I above.

    
    

    The reasonable finding of fact was that Mr. Brown devote any and all necessary time to the Hospital business whether that was full time or part time. Further, part-time employees are members of the FRS.

    
    

46. Adopted, with the further fact that attendance at such seminars and meetings was paid for by the Hospital and considered Hospital business (hearing transcript, pages 46, 50).

    
    

47. Adopted;

    
    

48. Adopted;

    
    

49. Rejected as not being supported by competent, substantial evidence in the record.

    
    

50. Adopted;

    
    

51. Adopted;

    
    

52. Adopted;

    
    

53. Adopted, with the further fact that all employees were paid on the same biweekly pay cycle;

    
    

54. Adopted as to Sentence One; rejected as to Sentence Two as not being supported by competent, substantial evidence in the record.

    
    

55. Adopted;

    
    

56. Adopted only as being a factual recitation of a paragraph in the contract;

    
    

57. Adopted;

58. Adopted;

    
    

59. Adopted;

    
    

60. Adopted;

    
    

61. Adopted;

    
    

62. Adopted;

    
    

63. Adopted;

    
    

64. Adopted;

    
    

65. Adopted, with the recognition that Mr. Brown's total compensation was calculated based upon salaries of administrators of other hospitals together with benefits. Since Mr. Brown was operating as an individual, he did not have any overhead expenses that would be associated with a corporation or a business entity. His contract was based on an annual salary and there is little likelihood that he would loose money on that basis especially since the Hospital paid many of the expenses for his professional development.

    
    

66. Adopted;

    
    

67. Adopted;

    
    

68. Adopted;

    
    

69. Adopted. This paragraph prohibited any conflicts of interest between his employment with the Hospital and other business dealings he had.

    
    

70. Adopted as to Sentence One. Rejected as to Sentence Two. Both contracts stated that in the event of termination by the Hospital, it would pay Mr. Brown eight biweekly installments. If Mr. Brown quit, then he was entitled to his "fee actually earned to the date of termination" (Petitioner's Exhibit No. 1, Paragraph 8:3).

    
    

71. Adopted;

    
    

72. Adopted;

    
    

73. Adopted;

    
    

74. Rejected. While the Recommended Order correctly states that several factors indicate Mr. Brown is an independent contractor, the knowledge of the Division and the more significant indicia of the Division rules make the Division determine that Mr. Brown was an employee of the Hospital.

    
    

    CONCLUSION OF LAW

    
    

75. In the Recommended Order, it was determined that the Division had the burden of proof in these types of cases because it was the Division that was:

    
    

    attempting to change the status quo in

    this matters. But for the Division's audit and requirement that the Hospital file a Questionnaire, the Hospital's treatment of Mr.

    Brown as an independent contractor for the purposes of the Florida retirement system would been final.

    
    

76. Under the FRS, employees of member agencies are compulsory employees and neither the agency or the employee have an option to not become a member of FRS. Section 121.051(1)(a), Florida Statutes, states in pertinent part as follows:

    
    

    The provisions of this law shall be compulsory as to all officers and employees, . . . , who are employed on or after December 1, 1970, of an employer other than those referred to in paragraph (2)(b), and each officer and employee, as a condition of employment, shall become a member of the system as of his date of employment, except (stated exceptions not applicable in this cause).

    
    

77. Rule 1.004(1)(4), FAC, states in part that:

    
    

    Participation in the Florida Retirement System shall be compulsory as a condition of employment for all officers and employees enumerated in the following paragraphs who are filling a regularly established position as described in 60S-1.004(4) and defined in

    60S-6.001 . . . Such officers and employees shall participate in one of the five Florida Retirement System classes of membership.

    
    

78. Rule 1.004(4), FAC, states in part as follows:

    
    

    Membership in the Florida Retirement System shall be compulsory if the employee is filling a full-time or part-time regularly established position. An employee filling a regularly established position shall be enrolled on the first day of employment, even if the employee is serving a probationary period, or working part-time. A position meeting the definition below shall be a regularly established position.

    
    

    (a) . . .

    
    

    (b) A regularly established position in a local agency . . . is an employment position which will be in existence beyond

    6 consecutive months. A local agency,. . ., should determine if the position

    will exist beyond 6 consecutive calendar months. If it will, then it is a regularly established position.

79. The position of the Hospital Administrator lasted over 6 months under Mr. Brown. This does not include the period prior to his incumbency and that of his successor, Mr. Mason. Under the above rules, the position of Hospital Administrator is a regularly established position and a compulsory member of FRS. The exception to that membership would be that if the Hospital Administrator is an independent contractor, then he/she would not be enrolled in FRS. However, the statutory requirement is the presumption, and the Hospital has the burden of proving that the position of administrator was an independent contractor, especially when there is no difference between the duties of the predecessor and the successor in the position. In short, why is Mr. Brown an independent contractor when the predecessor and successor were not.

    
    

80. Clearly, the burden of proof to establish why Mr. Brown should be an independent contractor is upon the Hospital. It is the agency that is, in effect, seeking an exemption from the law and it is the agency attempting to change the status quo.

    
    

81. In addition, the Hospital transacted all of the contracts with Mr. Brown without notifying the Division. In view of the statutory requirement as to compulsory FRS membership, an agency must contact the Division prior to its intended action of hiring an "independent contractor" such as a hospital administrator to notify and obtain approval. If the agency does not do so, then it risks the Division finding out about its action and taking corrective action. To hold that it is the responsibility of the Division to seek out these situations is not required in the law and is not feasible given the 850 member agencies and 550,000 active FRS members. The agencies know what they are doing and should have the responsibility of informing the Division of their actions.

    
    

82. At the time Mr. Brown began working for the Hospital on February 1, 1987, the rules of the Division contained a definition of a "consultant or other professional person". Rule 22B-6.01(15), FAC, (1987) "Consultant or Other Professional Person" contained the definition of a consultant or professional person who would be exempt from the employment provisions of the law and stated as follows:

    
    

    . . . an individual who: agrees to provide certain services; works according to his own methods; is not subject to the control of his employer, except as to the results of his work; and does not enjoy the fringe benefits offered by the employer. A consultant or other professional person usually: is compensated from another salaries and wages account; does not earn annual or sick leave; and may frequently do a majority of his work in his own office rather than on the employer's premises. (further citation omitted)

    
    

83. The Hospital bases its claim that Mr. Brown was an independent contractor on four different points. In the Amended Petition for an Administrative Hearing, the Hospital stated that Mr. Brown was in charge of the day-to-day operation of the Hospital while the Board of Trustees was a policy making board only and exercised no operational control. Mr. Brown determined the method and manner in which the work was done, and the Board merely set policy. Mr. Brown set his own hours of work and reported to the Board as to the results, and there was a contract between Mr. Brown and the Hospital.

84. From a review of the contracts the two parties stated several times that Mr. Brown was an independent contractor. However, a determination of that status depends upon a review of all of the circumstances of their dealings with each other and not upon the statements of the parties. Cantor, et al., vs. Cochran et al., 184 So.2d 173 (Fla. 1966). Therefore, the fact that the Hospital considered or treated Mr. Brown as an independent contractor is not determinative in this case.

    
    

85. In Davis vs. Department of Administration, Division of Retirement, 585 So.2d 421 (Fla. 1st DCA 1991), the District Court affirmed the applicability of the Cantor case in matters involving independent contractors under the FRS but held that the Division had misapplied the law. The Cantor case set forth ten

    (10) criteria used to decide the issue of employee vs. independent contractor.

    
    

86. The first criteria in Cantor deals with "(t)he extent of control which, by the agreement, the master may exercise over the details of the work". It is clear from the record that Mr. Brown was retained by the Hospital to perform several jobs. The first was to serve as the Hospital administrator. He did this in accordance with the rules and regulations established by the Board of Trustees, and he had to operate within those rules and regulations. Paragraphs 1:1, 1:2 and 2:1, of the contracts stated as follows: (Petitioner's Exhibits No. 1 and 2).

1:1 The Hospital hereby contracts with Consultant to provide services to the Hospital to perform such services as may be necessary to properly

and efficiently run the Hospital for the purpose of providing quality healthcare to the citizens of Washington County and a more productive business operation.

1:2 Consultant hereby contracts with the Hospital to perform such as may be necessary to provide the Hospital advice, expertise and a more efficient and productive business operation.

Mr. Davis testified that it was Mr. Brown's job to enforce the new policies and procedures of the Board (hearing transcript, page 20). The Board determined policy and saw that it was carried out (hearing transcript, page 14). And who carried it out? Mr. Brown did this as the chief executive officer. Celia Ward was an accountant and the chief financial officer (hearing transcript, page 32). She did not have the authority to run the hospital except during short absences by Mr. Brown. Mr. Brown testified that the Board gave him instructions about hospital policies and procedures and it was his job to implement those policies and procedures (deposition testimony of Glenn Brown, pages 16-17 and 24). To accomplish this, he met with the staff, the financial officer, and held the necessary meetings with Hospital personnel (hearing transcript, pages 28, 40, 41, 52).

1. In addition, he spent most of his time reviewing various projects such as the home health and the clinics and advising the Board of Trustees about their progress and also relaying information to the medical staff and other staff. (Deposition testimony of Glenn Brown, page 19). It was his job to develop and implement new programs to help make the Hospital profitable. He would advise the Board as to new programs, and the Board would give him its approval to proceed (hearing transcript, page 18). He was required to be

   present at all Board of Trustee meetings, usually held on a monthly basis but more often if deemed necessary by the Board. He was required by the contract to "make himself available for all reasonable meetings, engagements, and any and all other reasonable attempts by the Hospital to promote the Hospital." The Board of Trustees had the legal right under the contract and did in fact direct Mr. Brown's activities into the routine operations of the Hospital and into the future operations needed for the Hospital to survive.

   
   

2. The courts of Florida have consistently held that the most important criteria in evaluating a person's status as an independent contractor is the degree of control exerted by the employer Messer vs. Department of Labor and Employment Security, 500 So.2d 1372 (Fla. 5th DCA 1986). In Orcutt vs. Environmental Technologies, Inc., 432 So.2d 701 (Fla. 1st DCA 1983) that court held the appellant therein was an employee because of the existence of several factors as follows:

   
   

   Although there was conflicting evidence on the issue, an examination of the record discloses the following factors which indicated the existence of an employer-employee relationship: (1) all materials used by (appellant) were provided by (appellee); (2) he was paid an hourly wage instead of on a per job basis, and was paid every two weeks; (3) (appellant's) supervisor, provided him with most of the tools used on the job; (4) the work place was provided by (appellee); (5) (appellant) took work breaks with the regular employees; (6) at the time of his injury, he had already completed the job for which he had originally been hired; and (7)(appellee) had an absolute right to terminate the relationship at any time without liability."

   
   

   In Orcutt, above, the right of control of the employer over the individual was considerable.

   
   

3. At the opposite end of the spectrum, the court in Lee vs. Casablanca Restaurant et al., 447 So.2d 951 (Fla. 1st DCA 1984), held that a musician was an independent contractor where he (and a partner) "selected their own music, bought and cleaned their own stage costumes, furnished their own instruments, chose the name for their act, and were not expected to perform duties apart from their musical performances." In the same manner as in Orcutt and Lee, Mr. Brown was furnished working materials by the Hospital, was paid a biweekly wage, was provided the working tools of the job, i.e., secretarial support, office, telephone, travel expenses, staff, right to hire and fire, the right of approval over hospital operations and presumably the right to take breaks with the other employees. He did not select his own materials and tools (music and instruments), did not clean the tools, did not work under a business entity and perform all of the functions normally done by a hospital administrator.

4. The court in Cantor pointed out and quoted from 1 Larson, Workers Compensation Law s. 44.35 that:

   
   

   The power to fire is the power to control. The absolute right to terminate the relationship without liability is not consistent with the concept of independent contractor, under which the contractor should have the legal right to complete the project contracted for and to treat any attempt to prevent completion as a breach of contract.

   
   

   See also LaGrande vs. B & L Services, Inc., 432 So.2d 1364 (Fla. 1st DCA 1983). Under the contracts between Mr. Brown and the Hospital, Mr. Brown could be "fired" by the Hospital for "good cause" upon a thirty (30) day written notice of termination (Petitioner's Exhibits No. 1 and 2, Paragraphs 8:1 of each contract), did not have the right to complete the term of the contract and did not have the legal right to sue for breach of contract. The concept of "good cause" is not normally a basis for terminating a contract with an independent contractor but is often the basis for terminating a employee/employer relationship.

   
   

5. Under this criteria, Mr. Brown was an employee and not an independent contractor.

   
   

6. The second criteria from the Cantor case concerns whether or not the person "employed is engaged in a distinct occupation of business." The court noted that the claimant was working loading groceries in contrast with work in "such distinct occupations such as plastering or plumbing" Id at 174. In the case at bar, Mr. Brown was hired primarily because of two factors, (1) his prior experience with the Hospital when he was working for National Healthcare, Inc., and (2) his extensive, 13 year, experience in the field of hospital administration (deposition testimony of Mr. Brown, pages 9 and 18). The Hospital and Mr. Brown were not engaged in different enterprises but were both in the business of operating the Hospital.

   
   

7. The third criteria from the Cantor case deals with whether the job in that area "is usually done under the direction of an employer or by a specialist without supervision." While no direct evidence on this issue was presented, it was pointed out by Ms. Ward that Mr. Brown's successor (after a short term by her as the acting administrator) was Steve Mason, an employee of the hospital (hearing transcript, page 47). While Mr. Brown did not have the day-to-day instructions from the Board, he was required to agree to certain performance conditions. In Paragraph 2:1 of both contracts, it was stated that:

   
   

   Consultant agrees to devote such of his time and efforts to the performance of such services as are necessary to perform and achieve to objectives set forth in Article I above.

   
   

   . . .

   
   

   Consultant agrees to comply with the Hospital's policies, rules and regulations as

   determined from time to time by the Board of Trustees of the Hospital. (Petitioner's Exhibits No. 1 and 2)

   
   

   The Hospital paid the expenses for his membership in organizations and associations deemed to be for the Hospital's benefit (Petitioner's Exhibits No.

   1 and 2, Paragraphs 5:1 of each contract), and he was even paid for days he used to "enhance his expertise by attending seminars or meetings to improve his position as a Consultant." (Petitioner's Exhibits No. 1 and 2, Paragraphs 6:1 of each contract).

   
   

8. The fourth criteria under Cantor concerned the "skill required in the particular occupation." Mr. Brown's occupation as a hospital administrator is a highly skilled and complex occupation. However, so are many other skills in a hospital such as acute care and intensive care nurses. In addition, most agencies have attorneys as employees, an occupation which is highly skilled and complex. Many agencies dealing with the environment employ biologists, scientists, wildlife experts and computer experts. There are, needless to say, a great number of highly skilled persons who deal with complicated and complex areas who work for governmental agencies and who are employees of those agencies. This test area does not assist us in a meaningful analysis.

   
   

9. The fifth criteria from Cantor deals with who supplies the working material, the employer or the workman. Normally, an employee is furnished the tools of his work by his employer while an independent contractor furnishes his own tools. Mr. Brown used the office provided for the administrator of the Hospital from which to operate; his secretary was a Hospital employee; he used the Hospital telephone system, and all the Hospital facilities and equipment. He would come to work in the morning, work with his secretary, the staff and hold necessary meetings, all using Hospital property and facilities. Thus, the

   Hospital and not Mr. Brown furnished the tools for him to use in his work. This criteria tends to support a finding that Mr. Brown was an employee.

   
   

10. The sixth criteria in the Cantor case focused on "(t)he length of time for which the person is employed." Mr. Brown and the Hospital entered into the first contract effective February 1, 1988, and ended their business relationship on September 30, 1992, a period of over 4 1/2 years. Had Mr. Brown worked up to the end of the second contractual period, February 1, 1993, the period of employment would have been 5 years exactly. In Cantor, the period of employment was about seven years, not very much different than the case at bar. This criteria tends to support a finding that Mr. Brown was an employee.

    
    

11. The seventh criteria in Cantor dealt with the method of payment for the work, by the time devoted by the worker or by the job. Mr. Brown was paid on the same salary schedule as the other employees of the Hospital, every two weeks. His salary was the same each pay period and did not vary as he completed different projects or tasks. This is usually indicative of an employee rather than an independent contractor. see Kane Furniture Corp. vs. Miranda, 506 So.2d 1061 (Fla. 2nd DCA 1987); review dnd 515 So.2d 230 (Fla. 1987). This criteria tends to support a finding that Mr. Brown was an employee.

    
    

12. The eighth criteria dealt with in Cantor was "(w)hether or not the work is a part of the regular business of the employer". In the case at bar, there is no question but that the position of hospital administrator is a vital and essential part of the Hospital operation. Without an administrator, the Hospital would lack central coordination and control. See National Insurance Corp. vs. Windham, 74 So.2d 549, 550 (Fla. 1954) in which the court stated that

    the purpose of the event in question, a trip, had nothing to do with the contractor's business. This criteria tends to support a finding that Mr. Brown was an employee.

    
    

13. The ninth criteria dealt with in the Cantor case was "(w)hether or not the parties believe they are creating the relation of master and servant." Obviously, in the case at bar, the Hospital and Mr. Brown believed that they were establishing an independent contractor situation as evidenced by the numerous recitations in both contracts to that term. This criteria tends to support a finding that Mr. Brown was an independent contractor.

    
    

14. The tenth criteria dealt with in Cantor was "(w)hether the principal is or is not in business." In the Findings of Fact, it was determined that Mr. Brown did not operate through a corporation or other business entity (Findings of Fact No. 25 and 66). In fact, Mr. Brown was prohibited by the terms of the contract from engaging in "any service of a business, commercial or professional nature to any other Hospital in Northwest Florida." Mr. Brown did not conduct his "profession" as a hospital administrator nor have others conduct such a business in his name in the Northwest Florida area during the period of the contract. Thus, he was not "in business" as an independent contractor. This criteria tends to support a finding that Mr. Brown was an employee.

    
    

15. Thus, in the case at bar, there exists at least eight of the ten criteria mentioned in the Cantor case to show that Mr. Brown was an employee of the Hospital and not an independent contractor.

    
    

16. After the contractual relationship began on February 1, 1988, between the Hospital and Mr. Brown, on November 14, 1991, the Division amended its prior definition of a "consultant or other professional person" contained in Rule 22B- 6.01(15), FAC, (1987) to a new definition which adopted the criteria used by the federal Internal Revenue Service to define "independent contractor" (testimony of Mr. Ragsdale, hearing transcript, page 70). The 20 criteria had been used by the Division in the prior definition and had merely been codified in the new rule. The 20 criteria are:

    
    

    1. Instructions (from employer to worker);

    2. Training (given to worker);

    3. Integration (of service to business of employer);

    4. Services rendered personally by worker;

    5. Hiring assistants (to perform work);

    6. Continuing relationship (between parties);

    7. Set hours of work (for worker);

    8. Full-time of part-time work (by worker);

    9. Work done on premises (of employer);

    10. Order or sequence of services (performed by worker);

    11. Reports (given by worker to employer);

    12. Payments (made to worker for services);

    13. Expenses (of worker);

    14. Tolls and materials (of worker);

    15. Investment (of worker);

    16. Profit or loss (of worker);

    17. Works for more than one person or firm;

    18. Offers services to general public;

    19. Right to terminate employment; and

    20. Right to quit.

        Many of the above criteria have already been discussed as criteria used in the Davis and the Cantor cases, supra.

        
        

17. However, as to those criteria not already discussed, supra, it is clear that most of them indicate that Mr. Brown was an employee and not an independent contractor. For example, under "training" (Rule 60S-6.001(33)(b), FAC), it is evident that Mr. Brown began work for the Hospital having been knowledgeable about its operation from his prior relationship when he worked for NHI. Further, he began work as a "professional" and needed little additional training. This is not unlike an attorney, or any licensed professional who works for a governmental agency or a private firm. That person is hired because of his or her professional credentials; the only needed additional element is some "on-the-job" training into the details of the organization's operations. Mr. Brown had already had the necessary training while working for NHI. Under this criteria, he was an employee.

    
    

18. Under "services rendered personally" (Rule 60S-6.001(33)(d), FAC), the evidence and the testimony are clear that Mr. Brown was hired because of his expertise, knowledge and prior relationship with the Hospital. The Hospital apparently approached only him for the position and no one else - in short, it wanted him in the position of administrator. Under this criteria, he was an employee.

    
    

19. Under "hiring assistants" (Rule 60S-6.001(33)(e), FAC), there was some testimony that Mr. Brown "supposed" he could hire an assistant but the evidence is unclear on this point. Under this criteria, the evidence is unclear. However, when he was not at the Hospital personally, Ms. Ward acted in his place (deposition testimony of Glenn Brown, page 29).

    
    

20. Under "full-time or part-time" (Rule 60S-6.001(33)(h), FAC), it is clear that Mr. Brown was required to devote the amount of time and efforts to the job "as are necessary to perform and achieve the objectives set forth in" the contract (Petitioner's Exhibits No. 1 and 2, Paragraph 2:1). The evidence showed that he did just that; in fact, there was no evidence that he worked less than full time. Further, part-time employees are also compulsory members of Florida Retirement System. Under this criteria, he was an employee.

    
    

21. Under "order or sequence of services" (Rule 60S-6.001(33)(j), FAC), Mr. Brown performed many of his duties on a self-directed basis because he was a professional administrator but the direction of his efforts was given to him by the Board of Trustees. That does not lessen the fact that he was given instructions and expected to follow them. Under this criteria, he was an employee.

    
    

22. Under "reports" (Rule 60S-6.001(33)(k), FAC), Mr. Brown was required to meet with the Board of Trustees on a monthly or a more frequent basis to receive instructions and to report on his activities. Under this criteria, he was an employee.

    
    

23. Under "investment" (Rule 60S-6.001(33)(o), FAC), Mr. Brown had no investment in the facilities of the Hospital. Under this criteria, he was an employee.

    
    

24. Under "profit or loss" (Rule 60S-6.001(33)(p), FAC), Mr. Brown was not in a position to suffer a loss but performed his services based on an agreed upon wage. Further, he did not use any of his own capital in his work, and even

    received a travel allowance, had conference fees paid for him and had association dues paid for him. Normally, an independent contractor uses his own equipment and operates with his own capital. He works by the job, and if he exceeds the number of hours, he can suffer a loss. Mr. Brown did not work a required number of hours and in fact was paid on a biweekly basis with no regard to the number of hours worked. Under this criteria, he was an employee.

    
    

25. Under "works for more than one person or firm" (Rule 60S- 6.001(33)(q), FAC), the contract(s) prohibited Mr. Brown from working for another hospital in the Northwest Florida area. Although he testified that he did consulting work for at least one other agency, that is insufficient to qualify him as an independent contractor under this part of the rule. Under this criteria, it is not determinable if he was an employee or an independent contractor.

    
    

26. Under "offers services to general public" (or to other hospitals) (Rule 60S-6.001(33)(r), FAC), the evidence clearly shows that the contract(s) prevented him from making such offers, and he did not do so. Under this criteria, he was an employee.

    
    

27. The effect of the contract(s) between the Hospital and Mr. Brown, if allowed to stand as defining the relationship between the parties, would oust the power and authority of the Division to properly administer the Retirement System. Obviously, such a result would be contrary to the provisions of Chapter 121, Florida Statutes. All contracts or employment relationship between parties governed by FRS are subject to ultimate review by the Division for compliance with the retirement law whether or not the Division reviewed the contract prior to the performance of the services or not. See Cantor, supra.

    
    

28. The Division has extensive experience in making these determinations based upon its administration of the law, its rules and close working relationship with the federal Internal Revenue Service and its criteria. In fact, the Hospital did not appear to be arguing any of the administrative rules did not govern or that the common law rules laying out the distinctions between independent contractors and employees do not govern. The gist of its argument was that regardless of the criteria, Mr. Brown just was not an employee because they did not intend for him to be an employee.

    
    

    STATEMENT OF AGENCY POLICY

    
    

29. It is clear that Mr. Brown was not working in any business capacity while employed by the Hospital in a regularly established position. While it would appear that both the current and the prior rules governing the determination of the statue as an employee vs. an independent contractor would be sufficient to show that Mr. Brown was an employee, the Division now sets forward as a matter of policy that an individual will be considered to be an employee of an agency when he is occupying a regularly established position and is operating in an individual capacity, and not part of a corporation or business entity. Anheuser-Busch, Inc., vs. Department of Business Regulation, 393 So.2d 1177 (Fla. 1st DCA 1981)

    
    

30. Based upon the foregoing, it can only be concluded that the relationship of Mr. Brown with the Hospital for the period of August 1, 1987, to and including June 30, 1988, is one of an employee and employer. Therefore, Mr. Brown should have been enrolled in the Florida Retirement System.

Based on the above and foregoing, it is, therefore,

ORDERED and DIRECTED that Glenn Brown, Jr., was an employee of the Northwest Florida Community Hospital for the period of February 1, 1988, to and including September 30, 1992. Therefore, Mr. Brown should have been enrolled in the Florida Retirement System for those periods of time. The Northwest Florida Community Hospital is directed to take appropriate steps to enroll Mr. Brown based on his salary set forth in the contracts and submit to the Division the proper salary adjustment. The Division of Retirement will give Mr. Brown creditable service for the above period of employment.

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF RETIREMENT, AND A SECOND COPY, ACCOMPANIED BY THE FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

DONE AND ORDERED this 21st day of February, 1994, at Tallahassee, Leon County, Florida.

1. J. McMullian III

State Retirement Director Division of Retirement

FILED WITH THE CLERK OF THE DIVISION OF RETIREMENT, THE

21st DAY February, 1994.

Copies furnished to:

T. Gerald Holley Attorney at Law

102 East Church Street Post Office Box 1831 Chipley, Florida 32428

William S. Howell Attorney at Law Post Office Box 98

Chipley, Florida 32428

Larry J. Sartin Hearing Officer

Division of Administrative Hearings 1230 DeSoto Building

Tallahassee, Florida 32399

Clerk

Division of Administrative Hearings 1230 DeSoto Building

Tallahassee, Florida 32399

Stanley M. Danek Division Attorney Division of Retirement Cedars Executive Center 2639 North Monroe Street Building C

Tallahassee, Florida 32399-1560

Docket for Case No: 93-001635

Orders for Case No: 93-001635