vs.
Respondent.
) Case No. 00-4920RU
On January 17, 2001, a formal administrative hearing was held in this case in Tallahassee, Florida, before William R. Pfeiffer, Administrative Law Judge, Division of Administrative
Hearings.
For Petitioner: Philip J. Stoddard
288 St. George Street
St. Augustine, Florida 32084
There are two issues presented in this case. The first issue is whether a statement by the Department of Banking and
Finance (the "Department"), denying joinder of multiple unrelated abandoned property claims, in a Final Order directed to Petitioner is an unpromulgated rule in violation of Section 120.54(1)(a), Florida Statutes. The second issue is whether the Department has a policy of delaying decisions on unclaimed property claims past the statutory 90th day, such that the policy constitutes an unpromulgated rule in violation of Section 120.54(1)(a), Florida Statutes.
On December 6, 2000, Petitioner filed the instant Petition, dated December 1, 2000, with the Division of Administrative Hearings. In his Petition, Petitioner challenges as an unpromulgated rule a statement by the Department of Banking and Finance which notified Petitioner that his attempted consolidation of four unrelated claim denials was inappropriate. The challenged statement was contained in an Order which denied Petitioner's single petition for hearing based on noncompliance with Rule 28-106.201, Florida Administrative Code.
Petitioner also alleges that the Department has a tacit policy of delaying determinations on claims for unclaimed property beyond the 90th day, thus denying claimants a point of entry for administrative proceedings. Petitioner claims this tacit policy is an unpromulgated rule.
The undersigned was appointed to hear the matter, which was then set for hearing on January 17, 2001.
The Department responded to the Rule Challenge Petition with a Motion for Summary Final Order which was filed
January 10, 2001. The motion was heard on January 14, 2001, and an Order denying the Motion was docketed on January 16, 2001.
The matter was heard as scheduled. Petitioner testified at the hearing and presented the testimony of two additional witnesses, Pat Traylor and Brenda Carson. Ten exhibits were entered into evidence.
Respondent presented one witness, Peter DeVries, the Bureau Chief for Unclaimed Property, and entered one exhibit into evidence.
Official recognition was taken of Chapter 717, Florida Statutes, Rules 3D-20.0021 and 3D-20.0022, Florida Administrative Code, and Rule 1.110, Florida Rules of Civil Procedure.
A Transcript of the proceedings was filed on February 6, 2001. In early March 2001, each of the parties filed Proposed Final Orders which have been duly considered by the undersigned in the preparation of this Final Order.
The Department is the State agency responsible for administering the Florida Unclaimed Property Act, Chapter 717,
Florida Statutes. As such, the Department is responsible for collecting and maintaining unclaimed property and processing claims for the return of the unclaimed property to its missing owners.
The Department accomplishes this task through a staff composed of 12 full-time employees and 14 OPS employees.
Individuals as well as private investigative agencies file claims for property held by the Department. Private investigative agencies account for appropriately 12 percent to
14 percent of the claims filed and approximately 38 percent to
42 percent of the property value returned to owners.
The Department's Claims Process
The Department has established internal procedures so that claims are processed timely, efficiently, and accurately. Claimants must submit claims in writing on a form supplied by the Department. The Department logs-in each claim on the day it is received. If the Department determines a claim is in compliance with Rules 3D-20.0021 and 3D-20.0022, Florida Administrative Code, and the proof submitted with the claim is sufficient to establish the claimant's ownership and entitlement to the funds, it is paid. If the Department determines that the claim is incomplete, within 5 to 15 days of its receipt of the claim, the Department sends the claimant a pre-screen letter advising the claimant of the additional information required to
prove the claim. Rule 3D-20.0021(1), Florida Administrative Code. When the claimant resubmits the claim with the additional material that has been requested, the claim is re-logged into the computer and a 90th day is set. Rule 3D-20.0021(2), Florida Administrative Code.
Claims supervisors receive a daily computer report alerting them of the claims which are 61 days old and aging. They receive high priority. Complex claims which are submitted with initial insufficient proof are referred to the legal department for review and resolution.
During fiscal year 1999/2000 the Department processed and approved approximately 107,000 claims having an aggregate value of approximately $67 million. Throughout the review process, the Department assists claimants in developing the proof necessary to prove the claim in lieu of summarily denying the claim.
In mid-1999, the Department's Unclaimed Property Program went on-line, which significantly increased the number of claims filed.
From around July 1, 1999 through December 31, 2000, the Department processed claims for approximately 132,900 unclaimed property accounts. The statutory 90-day period for determination was exceeded for an estimated 5000 of those accounts: 1,146 claims were denied and 3,991 claims were
approved. However, of those 3991 approved accounts, 1,254 accounts were from an extended project with the FDIC which took about a year to complete. In sum, excluding the 1,254 FDIC accounts, the Department exceeded the 90th day on approximately
3 percent of the claims filed during this period.
The Petitioner
Petitioner is a licensed private investigator who specializes in the recovery of unclaimed property held by the Comptroller's office. Petitioner maintains both an individual and an agency license to engage in the business of locating missing owners of unclaimed property. He has been licensed by the Florida Department of State as a private investigator since 1993.
In the course of Petitioner's business, his clients sign a form agreement which authorizes Petitioner to represent the client in recovering the abandoned property held by the Comptroller's Office. Petitioner represents the client through the entire claims process until the claim is either paid to his trust account or denied. If the claim is paid, Petitioner deducts his fractional share and costs and forwards the net value of the claim to the client. If the claim is denied, Petitioner's agreement with his client authorizes him to file a request for hearing on the client's behalf.
Petitioner's Agreement Form
Petitioner's agreement states that Petitioner has located property which may belong to the client, and pending the requisite proof of ownership, that Petitioner will recover the property for the client. The agreement provides that for his services, the "Agent is assigned a fee of 30 percent" and further provides that the agreement is an "irrevocable limited power of attorney." Lastly, the agreement recites that in any dispute between Petitioner and his client, "proper venue is in Volusia County, Florida."
Petitioner's Business
Since 1998, Petitioner has filed claims for approximately 3,000 unclaimed property accounts. Of those 3,000 accounts, 152, roughly 5 percent of Petitioner's claims, have exceeded the 90-day determination period.
Petitioner files claims for all types of unclaimed property, but primarily involving dissolved corporations.
Because of the nature of his business niche, Petitioner's claims are often more complex because they involve older accounts, lost or destroyed corporate documents, and archived banking information. Moreover, a decision by a bankruptcy trustee about whether or not to reopen a bankruptcy estate may also be needed to establish entitlement to the
property, if the company was liquidated through a bankruptcy proceeding.
Claimants, including Petitioner, routinely request the Department's assistance in obtaining additional information from the reporting company in order to establish ownership and entitlement on behalf of their client.
Prior to August 2000, Petitioner had not requested the Department provide a denial letter of any of his claims in which the 90th day had exhausted while additional information was
gathered.
The Controversy
In August 2000, Petitioner had six claims, representing four separate clients, pending with the Department, all of which were over the 90 days. In each case the Department determined the evidence provided was insufficient to establish the client's ownership of the property. Over the months during which these claims were pending, Petitioner met with the Department on several occasions to address the proof issues.
On August 9, 2000, the Department sent Petitioner a letter outlining the deficiencies in each of the four files and advising Petitioner that unless he could provide the evidence needed by August 25, 2000, the Department would deny each claim.
Petitioner faxed a letter dated September 7, 2000, to the Department stating he would be out of the country during the
month of September and requested that the denials for the files listed in the August 9, 2000, letter be held until after he returned home on September 26, 2000. Petitioner's letter also requested that the "DOAH hearing be held in Daytona Beach, Florida, when each of the hearings takes place."
To accommodate Petitioner's request, the Department delayed issuing the Individual Notices of Intent to Deny each of the four claims until October 3, 2000.
Petitioner timely responded to the four denials with a single Petition for Hearing, attempting to consolidate the four unrelated cases. On November 27, 2000, the Department entered an Order denying his Petition for failure to comply with the Florida Administrative Code and granted Petitioner 20 days in which to re-file a conforming petition. The Order also advised Petitioner that consolidating these unrelated cases was inappropriate.
On December 1, 2000, Petitioner signed and mailed the instant Rule Challenge, which specifically identified these four files. It was received by DOAH on December 6, 2000.
On December 1, 2000, the same day the Rule Challenge was mailed to DOAH, Petitioner and Respondent entered into a standstill agreement, tolling all matters related to these four files as well as several other files. The agreement was reduced to writing and signed on December 7 and 8, 2000.
On December 13, 2000, Petitioner and his attorney again met with the Department to discuss the evidence required to prove the claims in these four files.
The Challenged Statement
Petitioner challenges the "joinder" statement in the Department's Order which advised him that "it is inappropriate to consolidate four unrelated cases in a single Petition for Hearing." Petitioner contends this statement is a rule which has not been adopted pursuant to Section 120.54, Florida Statutes. He further contends that the statement as applied is contrary to Rule 1.110(g), Florida Rules of Civil Procedure.
The Challenged Policy
As a separate but related matter, Petitioner also asserts that the Department has a tacit policy of delaying determinations on claims past the 90th day. Petitioner argues that the effect of this policy is to deny the claimant a point of entry into administrative proceedings. He contends that this policy has the force of a rule which has not been adopted pursuant to Section 120.54, Florida Statutes.
Sanctions
The Department requested that attorneys' fees be assessed against Petitioner. The Department incorrectly asserts this matter is completely without merit and was brought for an improper purpose, namely, to harass.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.56(4), Florida Statutes.
Petitioner has the burden of proof in a rule challenge proceeding instituted pursuant to Section 120.56(4), Florida Statutes, to establish by a preponderance of the evidence, that the challenged statement or policy has the effect of a rule.
The Administrative Procedures Act defines as a rule
. . . each agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the procedure or practice requirement of an agency. . . .
Section 120.52(15), Florida Statutes.
The Challenged Statement
Not every statement made by an agency qualifies or comes within the definition of a rule, nor is every statement an agency statement of general applicability implementing, interpreting, or prescribing law or policy or describing the procedure of practice requirements of that agency.
The challenged statement which denied joinder of multiple unrelated abandoned property claims simply notified Petitioner of the standard pleading practices as identified in the rules of civil procedure, specifically, Rule 1.110(g), Florida Rules of Civil Procedure. Similarly, Rule 28-106.108,
Florida Administrative Code, the consolidation rule of the Uniform Rules for the Division of Administrative Hearings, states that separate matters which involve similar issues of law or fact, or identical parties, may be consolidated for judicial economy when such action would not unduly prejudice the rights of a party. The challenged statement was a statement referring to the Rules of Civil Procedure and the Uniform Rules. It was not a statement describing a procedure or practice requirement of the Department of Banking and Finance.
Petitioner therefore has failed to establish by a preponderance of evidence that the challenged statement is an agency statement within the definition of a rule.
The foregoing notwithstanding, Petitioner argues alternatively that he is an agency "coupled with an interest," or has an "equitable interest in the claim," and is therefore proceeding in his own right and should be allowed to consolidate his denials.
While Rule 1.110(g), Florida Rules of Civil Procedure, provides that a pleader may plead as many claims, causes of action, or defenses as the pleader has, the pleader is limited to only those claims, causes of action, or defenses, the pleader has "in the same right." The courts have consistently interpreted the "in the same right" qualification in Rule 1.110(g), Florida Rules of Civil Procedure, to prevent a party
from combining multiple causes of action brought in different representative capacities into a single lawsuit. See Pages v. Dominguez by and through Dominguez, 652 So. 2d 864 (Fla. 4th DCA 1995); Department of Insurance v. Coopers & Lybrand, 570 So. 2d
369 (Fla. 3rd DCA 1990); Metropolitan Dade County v. Hicks, 323
So. 2d 590 (Fla. 3rd DCA 1975) citing Pensacola Electric Co. v. Soderlind, 60 Fla. 164, 53 So. 722 (Fla. 1910).
The laws of agency is equally well-settled. The "principal always has the power to terminate an agency, though he may be subject to liability if he has agreed not to do so." Peacock v. American Agronomics Corp., 422 So. 2d 55 (Fla. 2d DCA 1982). It is necessary that "the interest be in the subject matter of the power and not in the proceeds which will arise from the exercise of the power. . . ." Id. At 58. Petitioner has no ownership or entitlement to the unclaimed property held by the Department independent from the power granted by his client. The interest Petitioner seeks to protect is his fees.
Where the interest arises only from commissions or out of the proceeds of a transaction, or where the agent's interest is merely his right to receive, by way of compensation or commissions, a certain percent of a collection or sale effected by him, there is no agency coupled with an interest.
Bowling v. National Convoy & Trucking Co., 135 So. 541 (Fla.
1931). Petitioner therefore does not qualify for this limited exception.
Similarly, Petitioner has no equitable interest in a claim which has not been approved or denied. There is no value to the claim prior to a determination on the merits. There is no inherent value in the claim itself.
In sum, Petitioner has failed to establish that the challenged statement is an unpromulgated rule in violation of Section 120.56(4), Florida Statutes. The challenged statement is not an agency statement within the definition of a rule.
The Challenged Policy
The Department's established procedures are to facilitate an efficient, timely, and accurate return of unclaimed property to the rightful owners.
Pursuant to Section 717.124, Florida Statutes, and Rule 3D-20.0021(1), Florida Administrative Code, the Department has 90 days from the date of receipt of a complete claim in which to make a determination on the claim. While there are admitted instances of exceeding the 90-day determination period, the Department makes a determination of 97 percent of the claims filed in less than 90 days.
However, contrary to Petitioner's allegations, the evidence is clear that the Department's policy as reflected in
its internal processing procedures, is to make determinations on claims within the statutory 90 days. Although delays have periodically occurred, they resulted from unavoidable circumstances including the Department's continued assistance to claimants with evidentiary proof issues, the Department's lack of sufficient personnel, and the significant increase in claims filed after the agency went on-line. The Department has identified the circumstances creating the delays, and has taken steps to remedy their process.
Based on the foregoing, Petitioner has failed to carry his burden of establishing by a preponderance of the evidence that the Department has a policy of delay. Petitioner has shown that delays exceeding the 90th day for file processing did occur for approximately 3 percent of the claims filed in the last 18 months, but these delays do not show a policy.
ORDERED that petitioner has not established that the challenged joinder statement, nor the alleged delay policy, are rules within the meaning of Section 120.52, Florida Statutes.
Accordingly, the Rule Challenge Petition filed herein is dismissed. Sanctions are inappropriate in this matter.
Tallahassee, Leon County, Florida.
WILLIAM R. PFEIFFER
Philip J. Stoddard Qualified Representative
288 St. George Street
St. Augustine, Florida 32084
Robert Beitler, Acting General Counsel Department of Banking and Finance Fletcher Building, Suite 526
Honorable Robert F. Milligan Office of the Comptroller Department of Banking and Finance The Capitol, Plaza Level 09 Tallahassee, Florida 32399-0350
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 Clerk of the Division of Administrative Hearings and a second copy, accompanied by 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.
