STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF EDUCATION, )

)

Petitioner, )

)

vs. ) Case No. 98-5286

)

DOLLIE M. TUNSIL, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter was heard by video teleconference between Jacksonville and Tallahassee, Florida, on April 16, 1999, before the Division of Administrative Hearings by its designated Administrative Law Judge, Suzanne F. Hood.

APPEARANCES

For Petitioner: Ronald F. Stowers, Esquire

Department of Education The Capitol, Suite 1701

Tallahassee, Florida 32300-0400

For Respondent: Dollie M. Tunsil, pro se

5813 Pompano Drive

Jacksonville, Florida 32211 STATEMENT OF THE ISSUE

The issue is whether Respondent's lottery prize is subject to an outstanding debt owed to Petitioner.

PRELIMINARY STATEMENT

By letter dated September 14, 1998, Petitioner Department of Education (Petitioner) advised Respondent Dollie M. Tunsil (Respondent) that her lottery prize, or portion thereof, had been

transmitted to Petitioner to be applied against her existing indebtedness to Petitioner. Respondent requested a formal hearing to contest Petitioner's action. Petitioner referred the matter to the Division of Administrative Hearings on December 2, 1998.

The undersigned initially scheduled this case for formal hearing by video teleconference on March 26, 1999. Pursuant to the agreement of the parties, a subsequent order scheduled the case for a video teleconference hearing on April 16, 1999.

At the hearing, Petitioner presented the testimony of one witness and offered eleven exhibits which were received into evidence. Respondent testified on her own behalf and offered four exhibits which were received into evidence.

A Transcript of the proceeding was filed on April 28, 1999. Petitioner filed a Proposed Recommended Order on April 30, 1999. Respondent did not file a proposed order.

FINDINGS OF FACT

1. Respondent applied for a student loan in the amount of

   
   

   $2,500 under the Florida Guaranteed Student Loan Program in an application dated August 8, 1986. Respondent needed the loan to pay the cost of her attendance at Roffler Hair Design College (school) for the period of September 1986 through January 1987.

2. Petitioner guaranteed Respondent's loan. The loan number is 0000522112.

3. Glendale Federal Savings and Loan Association (Glendale) issued the loan proceeds in two equal disbursements. The first disbursement took place on or about September 26, 1986. The second disbursement took place on or about November 7, 1986. Glendale subsequently sold the loan to Student Loan Marketing Association/Student Loan Services (SLS).

4. The loan accrues interest at the rate of eight percent (8%) per year unless Respondent is in deferment status, i.e. attending school on a minimum part-time basis. In this case, Respondent dropped out of school for a period of time in 1987.

5. On or about June 25, 1987, the school returned $632.52 of the Respondent's loan to the lender. This sum represented the unused portion of Respondent's loan. Respondent's account was credited accordingly.

6. The last day that Respondent attended the school was May 27, 1988. By letter dated September 1, 1988, SLS notified Respondent of the repayment schedule for her loan. Her first payment was due on December 27, 1988.

7. Respondent made no payments on the loan to Glendale or SLS. Accordingly, SLS declared Respondent's loan in default and filed a claim dated August 14, 1989, with Petitioner.

8. On February 20, 1992, Petitioner, as guarantor of the loan, paid SLS for Respondent's defaulted student loan. On that date, the claim principal was $1,864.48 ($2,500 less the $635.52 credit) and the outstanding interest due was $469.95.

9. After Petitioner acquired the loan, the outstanding interest was capitalized resulting in a balance of $2,334.43. This sum accrues interest at the rate of eight percent (8%) per year.

10. Respondent made no payment on her loan after Petitioner acquired it until a portion of her lottery winnings was applied to her account.

11. By letter dated August 31, 1998, Petitioner notified the Department of Lottery about Respondent's outstanding defaulted loan in the amount of $3,561.89, including principal and interest. Petitioner requested the Department of the Lottery to transmit a portion of Respondent's prize money to be credited toward Respondent's debt. Thereafter, the Department of the Lottery transmitted $3,561.89 of Respondent's prize money to Petitioner.

12. By letter dated September 14, 1998, Petitioner notified Respondent that it was in receipt of $3,561.89 of her $5,000 lottery prize. Petitioner applied Petitioner's winnings to her outstanding balance.

13. Respondent has applied for and received at least one other loan which is held by the United States Department of Education (USDE) in the Federal Direct Consolidation Loan Program. The loan which is the subject of this proceeding is not the same loan which is held by USDE.

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings. Sections 120.569 and 120.57(1), Florida Statutes.

15. Section 24.115(4), Florida Statutes, provides as follows:

    (4) It is the responsibility of the appropriate state agency and of the judicial branch to identify to the department [Lottery], in the form and format prescribed by the department, persons owing an outstanding debt to any state agency or owing child support collected through a court. Prior to the payment of a prize of $600 or more to any claimant having such an outstanding obligation, the department shall transmit the amount of the debt to the agency claiming the debt and shall authorize payment of the balance to the prize winner after deduction of the debt. If a prize winner owes multiple debts subject to offset under this subsection and the prize is insufficient to cover all such debts, the amount of the prize shall be transmitted first to the agency claiming that past due child support is owed. If a balance of lottery prize remains after payment of past due child support, the remaining lottery prize amount shall be transmitted to other agencies claiming debts owed to the state, pro rata, based upon the ratio of the individual debt of the remaining debt owed to the state.

16. Petitioner has met its burden of proving that Respondent owed Petitioner a minimum of $3,561.89 for loan number 0000522112 as of August 31, 1998. Petitioner received that amount from Respondent's lottery winnings of $5,000. Petitioner was authorized to apply the full amount it received toward the satisfaction of Respondent's outstanding debt. The balance of

the winnings were paid to Respondent as required by Section 24.115(4), Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED:

That Petitioner was authorized to apply $3,561.89 of Respondent's lottery prize toward her outstanding debt for a student loan.

DONE AND ENTERED this 12th day of May, 1999, in Tallahassee, Leon County, Florida.

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 1999.

COPIES FURNISHED:

Ronald E. Stowers, Esquire Department of Education The Capitol, Suite 1701

Tallahassee, Florida 32399-0400

Dollie M. Tunsil 5813 Pompano Drive

Jacksonville, Florida 32211

Tom Gallagher Commissioner of Education Department of Education

The Capitol, Plaza Level 08 Tallahassee, Florida 32399-0400

Michael H. Olenick, General Counsel Department of Education

The Capitol, Suite 1701 Tallahassee, Florida 32399-0400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of 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: 98-005286

Orders for Case No: 98-005286