STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

REED LANDSCAPING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 95-5684

) COMMISSION ON MINORITY ECONOMIC ) AND BUSINESS DEVELOPMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its designated Hearing Officer, Joyous D. Parrish, held a formal hearing in the above-styled case on April 3, 1996, in Miami, Florida.

APPEARANCES

For Petitioner: Iris F. Reed, President

Reed Landscaping, Inc.

951 Southwest 121st Avenue

Fort Lauderdale, Florida 33325-3807

For Respondent: Joseph L. Shields

Senior Attorney

Commission on Minority Economic and Business Development

107 West Gaines Street

201 Collins Building Tallahassee, Florida 32399-2005

STATEMENT OF THE ISSUE

The central issue in this case is whether the Petitioner is entitled to certification as a minority business enterprise.

PRELIMINARY STATEMENT

This case began on October 4, 1995, when the Commission on Minority Economic and Business Development (Commission) denied the Petitioner's request for certification as a minority business enterprise (MBE). This denial was based upon the Commission's determination that the Petitioner did not meet the specifications of Section 288.703(2), Florida Statutes.

More specifically, the denial cited the following rule requirements promulgated under the pertinent statute: Rule 60A-2.005(2) and (3), Florida Administrative Code. As to each of these provisions the Commission maintains that the Petitioner's minority owner, Iris Reed, does not control the management and daily operations of the business nor have the technical expertise to do so.

At the hearing Mrs. Reed testified on behalf of the Petitioner and its exhibits numbered 1 through 4 were admitted into evidence. Petitioner's exhibits 5 through 15 were not admitted. Susan Hodge, a certification officer employed by the Commission, testified on behalf of the Respondent. Its exhibits numbered 1 through 6 were admitted into evidence.

A transcript of the proceeding has not been filed. Specific rulings on the proposed findings of fact submitted are included in the appendix at the conclusion of this order.

FINDINGS OF FACT

1. Iris Reed and her husband, Mark Reed, own and operate a business known as Reed Landscaping, Inc., the Petitioner in this cause.

   
   

2. Mrs. Reed is an American woman and owns 60 percent of the subject business. Her husband owns the remaining 40 percent.

   
   

3. The Reeds previously owned a lawn maintenance business in New York but moved to Florida several years ago and started doing business as "Landscaping and Lawn Maintenance by Mark."

   
   

4. Eventually, approximately 1992, "Landscaping and Lawn Maintenance by Mark" changed its name to Reed Landscaping, Inc.

   
   

5. As to Petitioner and all former entities, Mrs. Reed has held an office position with the company while Mr. Reed has operated the field crew or crews. Mr. Reed has the experience and expertise necessary to handle the work at each site for the business.

   
   

6. On the other hand, Mrs. Reed has the office and management skills to direct the "paperwork" side of the business. This includes insurance matters and personnel for the office.

   
   

7. Mrs. Reed is particularly active in this business since she put up the capital that largely funded the business enterprise.

   
   

8. Although her personal financial investment is primarily at risk, creditors and bonding companies require both Reeds to sign for the company and to be individually obligated as well.

   
   

9. Mrs. Reed serves as President/Treasurer of the Petitioner and Mr. Reed is Vice-President/Secretary. Both are authorized to sign bank checks for the company.

   
   

10. Mr. Reed has formal training and education in landscape architecture and horticulture as well as extensive experience in this field.

    
    

11. Mrs. Reed is responsible for many decisions for the company but relies on the opinions of others and delegates, where appropriate, duties to others as well. Among the delegated duties are: all field work for the company (delegated to Mr. Reed, another foreman, or to crews working a job); estimating or preparing bids (an estimator helps with bids); bookkeeping; contract review; and purchasing (some of which she does herself with input from others). As to each delegated area, however, the Reeds stress teamwork; that they are all working together for the common good of the company.

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

13. Section 288.703, Florida Statutes, provides, in part:

    
    

    1. "Minority business enterprise" means any small business concern as defined in sub- section (1) which is organized to engage in commercial transactions, which is domiciled in Florida, and which is at least 51-percent- owned by minority persons who are members of an insular group that is of a particular racial, ethnic, or gender makeup or national origin, which has been subjected historically to disparate treatment due to identification in and with that group resulting in an underrepresentation of commercial enterprises

       under the group's control, and whose management and daily operations are controlled by such persons. A minority business enterprise may primarily involve the practice of a profession.

    2. "Minority person" means a lawful, permanent resident of Florida who is:

       * * *

       (e) An American woman.

       
       

14. Rule 60A-2.005, Florida Administrative Code, provides, in part:

    
    

    (3) An applicant must establish that the minority owners possess the authority to con- trol and exercise dominant control over the management and daily operations of the business.

    * * *

    1. The minority owners must exercise suffi- cient management and technical responsibilities and capabilities to maintain control of the business. If the owners of the business who are not minority persons are disproportionately responsible for the operations of the business, then the business is not controlled by minority owners.

    2. The control exercised by the minority owners shall be real, substantial and continu- ing, and shall go beyond mere pro forma con- trol. In instances where the applicant busi- ness is found to be a family-operated business, with duties, responsibilities and decision- making occurring either jointly and mutually among owners and principals, or severally along managerial and operational lines between minority owners and non-minority owners or principals, the minority owners shall not be considered as controlling the business. Where the minority owners substantiate that the

    assumption of duties is not based on their lack of knowledge or capability to independ- ently make decisions regarding the business' management and day-to-day operations, the minority owners' control may not be affected.

    
    

15. In this case, the Petitioner bears the burden of proof to establish that it meets the requirements of the law and rules. While Iris Reed, an American woman, does own a majority of the company, Petitioner fails to meet the rule criteria for certification in two instances.

    
    

16. First, the minority owner must exercise sufficient management and technical responsibilities and capabilities to maintain control of the business. In this case, Mrs. Reed does not. She must rely on her husband or another to handle the technical side of the business.

    
    

17. Secondly, pursuant to Rule 60A-2.005(3)(d), Florida Administrative Code, in situations such as this, where the business is family-owned and operated, Mrs. Reed must show she has dominant responsibility for the management and daily operation of the business. Again, because she relies extensively on her husband and others, this criteria has not been met.

    
    

18. To her credit, Mrs. Reed acknowledged that good business decisions many times require input from more than one person within a company. She considers the opinions of others helpful in decision-making situations. Her candid appraisal of the business, and the team approach to getting jobs done, speaks well for the cooperative method of family-operated businesses. Unfortunately, it is does not establish a minority business enterprise under the current rules. To become eligible for MBE certification, this company must show that the minority owner has the expertise and capability to manage all aspects of the daily business.

RECOMMENDATION

Based on the foregoing, it is, hereby, RECOMMENDED:

That the Petitioner's application for certification as a minority business enterprise be denied.

DONE AND ENTERED this 16th day of May, 1996, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 16th day of May, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5684

Rulings on the proposed findings of fact submitted by Petitioner:

None submitted. Iris Reed on behalf of Petitioner submitted a letter summary of her position concerning the hearing which, if intended to be a presentation of fact, is rejected as argument or comment not in a form readily reviewable for either acceptance or rejection as required by rule.

Rulings on the proposed findings of fact submitted by Respondent:

1. Paragraphs 1 and 2 are accepted.

2. Paragraph 3 is rejected as contrary to the weight of the credible evidence.

3. Paragraphs 4 and 5 are accepted.

COPIES FURNISHED:

Joseph L. Shields Senior Attorney

Commission on Minority Economic & Business Development

107 West Gaines Street

201 Collins Building Tallahassee, Florida 32399-2005

Iris F. Reed, Pro se

951 Southwest 121st Avenue

Fort Lauderdale, Florida 33325

Veronica Anderson Executive Administrator

Commission on Minority Economic & Business Development

107 West Gaines Street

201 Collins Building Tallahassee, Florida 32399-2005

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

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

Docket for Case No: 95-005684

Orders for Case No: 95-005684