STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
R. JOHNSON, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 88-5238
) DEPARTMENT OF TRANSPORTATION, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, this cause came on for formal hearing before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings, on January 10, 1989, in Pensacola, Florida. The following appearances were entered:
For Petitioner: Harry B. Stackhouse, Esquire
125 West Romano Street Post Office Box 13010 Pensacola, Florida 32573
For Respondent: Bruce A. Campbell, Esquire
Florida Department of Transportation
Haydon Burns Building 605 Suwannee Street
Tallahassee, Florida 32399-0450 BACKGROUND
This cause concerns a formal request for hearing filed by Petitioner W.R. Johnson, Inc., contesting the Florida Department of Transportation's (DOT) denial of "Disadvantaged Business Enterprise" (DBE) status for the Petitioner. The Department denied the Petitioner's entitlement to that DBE status in its initial agency action, based upon its concern that the ownership and control of the Petitioner corporation by the two minority members involved, Terri Johnson Nelson and Dorothy V. Johnson, was merely pro forma and not substantial and continuing.
The action came to issue on that basis, and at the hearing the Petitioner presented the testimony of William R. Johnson, Terri Johnson Nelson, James Bradley, Don Henderson, Elige Palmer, Joe Whitten and Dorothy Johnson.
Petitioner's Exhibits 1-6 were admitted into evidence. The Department presented no witnesses, but Respondent's Exhibits 1-6 were admitted into evidence on the behalf of the Department.
The issue involved concerns whether W.R. Johnson, Inc., qualifies as a disadvantaged business enterprise based upon the underlying issue of whether the
ownership and control of that business entity truly rests with the minority member owners, and whether that control was real, substantial and continuing.
The parties elected to order a transcript after the hearing and to submit proposed findings of fact and conclusions of law. Those proposed findings of fact have been treated in this Recommended Order and are specifically ruled upon again in the Appendix attached hereto and incorporated by reference herein.
FINDINGS OF FACT
The Department of Transportation (DOT), the Respondent herein, is an agency of the State of Florida charged with the duty of certifying Disadvantaged Business Enterprises (DBE). DBEs, by attaining that status, are accorded the opportunity of participating in a certain percentage of contracts and construction contract monies set aside exclusively for DBEs under the statutory and regulatory authority cited below. Thus attaining DBE status allows a "small business concern" owned and controlled by minorities to compete for state contracts and to grow as a viable business in a more favorable competitive climate, ultimately becoming better able to compete with all businesses which seek public contracts.
W.R. Johnson, Inc., is a small business concern, having annual gross receipts not exceeding $14 million for the fiscal years ending September 30, 1986, and September 30, 1987. There is no dispute that it qualifies as "small business concern," which is a necessary element of establishing entitlement to Disadvantaged Business Enterprise status. W.R. Johnson, Inc., is a construction company engaged in all types of commercial and public construction jobs.
It is undisputed that Terri Johnson Nelson and Dorothy V. Johnson are socially and economically disadvantaged individuals (women) as that term is defined in Chapter 14-78, Florida Administrative Code. Fifty-one percent of the voting stock of W.R. Johnson, Inc., is owned by Terri Johnson Nelson and Dorothy
V. Johnson. The preferred stock issued in return for capital contributions to the business, at its inception, is held by Terri Nelson's father, William R. Johnson. That preferred stock carries no voting rights, however. The board of directors is composed of Terri Johnson Nelson and Dorothy V. Johnson, as well as William R. Johnson. A majority of the board of directors is thus made up of economically and socially disadvantaged individuals. Terri Johnson Nelson is president of the corporation and chairman of the board of directors. Dorothy V. Johnson is secretary/treasurer of W.R. Johnson, Inc., and William R. Johnson is vice president.
William R. Johnson is a licensed general contractor and formerly was an owner of Martin-Johnson, Inc. He was a 49 percent owner of that corporation and was engaged, with that corporation, in the general contracting, construction business. William R. Johnson's daughter, Terri Johnson Nelson, had been an employee of that corporation. She had no ownership in Martin-Johnson, Inc. Sometime in 1985 or shortly before, Martin-Johnson, Inc., was dissolved, Mr. Johnson received in that dissolution, a substantial amount of funds represented by his 49 percent ownership of that corporation. He then organized W.R. Johnson, Inc., the petitioner corporation in 1985. He was the sole initial director and board chairman at the organizational meeting, and the sole incorporator. Shortly after its incorporation, however, the company issued its first common stock and that first issuance of stock was conveyed in the amount of 49 percent to Mr. Johnson, 49 percent to his daughter Terri Johnson Nelson and 2 percent to his wife, Dorothy Johnson, the mother of Terri Nelson. The company at that same time issued non-voting, preferred stock in the amount of
some 800 shares valued at $400,000 to William R. Johnson. Additional shares of preferred stock were issued to Mr. Johnson in return for additional investment capital of $80,000 in July of 1988. This preferred stock was issued to Mr.
Johnson in return for his investing the capital funds in the new corporation which he had received from the dissolution of the preexisting corporation, Martin-Johnson, Inc. That preferred stock carried no voting rights, however. The majority of the common stock, which carries voting rights, is held by the female members of the board of directors. The issuance of the preferred stock, in return for the large amount of capital contributed by William R. Johnson, was done so that Mr. Johnson's daughter could acquire her shares of common stock, with the voting power attached, at a price which she could afford. She acquired her shares of common stock, amounting to a 49 percent ownership of the company, in exchange for $20,000 capital she paid into the corporation. The $20,000 was a gift from her father and mother. The intent behind this arrangement on the part of Mr. Johnson was that his daughter have, along with his wife, controlling ownership and voting power in the company and substantial degree of management and control of its operations. Put simply, he wanted to help his daughter have her own business.
The contractor's license of William R. Johnson has been used to "qualify" the corporation with the Construction Industry Licensing Board. Terri Nelson has passed the State of Florida General Contractor's Exam (on her first attempt), and an application was pending at the time of the hearing to use her license to qualify the corporation as a general contractor with the Construction Industry Licensing Board. The corporation leases its office space from William
R. Johnson, in a building which the corporation built for him. The lease is a written one and provides the normal protections for the corporation as a tenant, as well as a $2,000 per month income to Mr. Johnson. There is no evidence to indicate that it is other than an "arm's length" lease arrangement, nor that the landlord, Mr. Johnson, exercises any degree of control over the affairs and operations of the Petitioner corporation merely because he is the landlord. It is also true that William R. Johnson co-purchased a Chevrolet pickup truck along with W.R. Johnson, Inc., the Petitioner corporation, and that the company's occupational licenses from Santa Rosa County and Escambia County are issued in the name of "William R. Johnson d/b/a W.R. Johnson, Inc."
Finally, it is also true that Terri Johnson Nelson resides in her father's home presently. That residence is temporary, however, and is due only to the fact that Mrs. Nelson and her husband are in the process of moving from Foley, Alabama, to Pensacola. None of these last mentioned facts demonstrate that William R. Johnson is, in fact, in control of the management, policies or operations of W.R. Johnson, Inc., or occupies, in any way, a superior decision making position over the management authority of the minority persons who are the controlling owners.
In that connection, in addition to being a certified general contractor with a statewide license, Terri Nelson has a B.S. Degree in building construction from Auburn University. She also has approximately five years construction experience, in addition to being the president and chairman of the board of directors of the Petitioner corporation. She is actively engaged in management and control of its operations, including participating in estimating and project managing duties. She has played a pivotal role in decisions concerning which projects to bid on, what prices to charge, determining and allocating costs, and decisions concerning what profit margin should be incorporated in bids to be submitted for projects. She has authority to and makes pricing decisions, has prepared all submittals for architects, manages labor crews, both formerly, as an employee of the predecessor corporation, and
as an officer and manager of the Petitioner corporation. In this capacity, she has also exercised her authority as an officer in charge of hiring and terminating employees and otherwise managing payroll functions. She coordinates material deliveries and contracts with and otherwise retains and supervises subcontractors, materialmen and laborers. She recently has had experience in supervising and coordinating all field operations in the construction of an office complex for the United States government at Eglin Air Force Base, a contract valued at approximately $6 million.
Dorothy V. Johnson has a degree in accounting and long experience handling bookkeeping and financial transactions for the family construction business. She handles all bookkeeping and financial transactions and operations for W.R. Johnson, Inc., the Petitioner. She has approximately ten years experience. Decisions regarding the operation, management and policy of the company are made by the three directors with a vote being taken after the matters at issue are discussed. The majority vote rules and determines what decisions are made and how they are implemented. Mrs. Nelson's father has no authority legally, or otherwise, to control the way she votes her stock nor does he attempt to tell her how to vote her stock, and the same is true of Dorothy Johnson's voting power. The two women owners have no restriction on the manner in which they vote their majority common stock ownership, nor in the manner in which they exercise their votes as directors of the corporation, by W.R. Johnson or any other person or entity. There is no related business entity or person exercising control or ownership over the Petitioner corporation.
Terri Johnson Nelson's demonstration that, as chair an of the board of directors and as president of the Petitioner corporation, she has authority to make major decisions and direct the affairs of the corporation, both operationally and financially, is borne out by the testimony of Johnny Bradley, a masonry contractor. He has dealt with W.R. Johnson, Inc. since it was formed and deals primarily Mrs. Nelson regarding all phase of masonry work on the corporation's jobs. He finds that her decisions are not overruled by any other manager of the corporation and would continue to deal with her even if William
R. Johnson were not associated with the company.
The same considerations were true of Dan Henderson, owner of an engineering and testing firm which customarily deals with W.R. Johnson, Inc. He has primarily dealt with Mrs. Nelson regarding jobs his firm has undertaken for
W.R. Johnson, Inc., for the last five years. He finds her very knowledgeable about construction and will continue to deal with her and her corporation even if her father is not associated with it.
Elige Palmer owns Sunbelt Equipment and Rental Company. He supplies construction equipment on a rental basis to W.R. Johnson, Inc., and also repairs the corporation's construction equipment. He has primarily dealt with Terri Nelson regarding all business dealings his firm has had with the Petitioner corporation and would continue to deal with her even if W.R. Johnson were not associated with the Petitioner corporation.
Joseph Whitten of Sherman International Corporation sells concrete, masonry and waterproofing supplies and products to the Petitioner corporation. He also has dealt primarily with Terri Nelson and finds her one of the most competent estimators and project managers that he deals with in his sales area. He would continue to deal with her even were her father not associated with the company.
This testimony in turn is corroborated by letters admitted into evidence (as corroborative hearsay only), pursuant to Section 120.58, Florida Statutes. These letters corroborate the demonstration by these witnesses and Terri Nelson herself that he is primarily responsible for management and control of the operations of the Petitioner corporation, together with her mother, Dorothy Johnson, the financial operations manager.
William R. Johnson is vice president of the corporation and primarily works as an estimator and project manager, as well as handling claims involving the corporation. He participates in solving everyday management problems, but has no authority to overrule the decisions made by Mrs. Johnson and Terri Nelson as majority owners of the corporation and as majority members of the board of directors.
Thus, Terri Nelson and Dorothy Johnson have been shown to possess the power to direct the management, policies and operations of the Petitioner corporation, as well as the power to make day-to-day major business decisions concerning the firm's management. Their discretion in this regard is not subject to formal or informal restrictions which would vary the managerial discretion customarily placed in the officers and majority of the board of directors of such business entities in the construction industry. The ownership and control exercised by these two women over the operations of the Petitioner are real, substantial, and continuing, and not merely pro forma.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes (1987).
The Florida Department of Transportation is required to set side funds and a portion of its public contracts to which the competitive bidding and contracting process applies. These set a side funds and contracts are for the purpose of affording an opportunity for socially and economically disadvantaged individuals and enterprises to bid on those projects, to which a certain, legally prescribed percentage of the Department's budget is committed.
Affording disadvantaged business enterprises the opportunity to bid on such set- aside projects and jobs, to the exclusion of non-DBE firms, is designed to afford such DBE firms and individuals the opportunity to have a fair chance to participate in state public contracting business. In this way, such businesses gain experience in public contract work, so that they will gradually become more financially and operationally viable and better able to compete with the run of non-DBE firms in seeking to perform public contracting. Section 339.0805, Florida Statutes.
Women are presumed at law, to be socially and economically disadvantaged. Section 14-78.002(1)(f), Florida Administrative Code. It is further provided at Rule 14-78.00(3), Florida Administrative Code, that:
"Disadvantaged business enterprise" or "DBE" means a small business concern:
Which is at least 51 percent owned by one or more socially and economically
disadvantaged individuals, or, in the case of a publicly owned business, at least 51 percent of the stock of which is owned by one
or more socially and economically disadvantaged individuals; and
Whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it.
There is no question in this case that the two women involved in the subject business enterprise own 51 percent of the outstanding, voting common stock, and that paragraph (a) quoted above has been complied with by the Petitioner. The Department has however, raised an issue as to whether the management and daily control of business operations rests with one or more of the socially and economically disadvantaged individuals who own the majority of the stock. That question is resolved below.
Rule 14-78.005(3), Florida Administrative Code, contains the standards for certification of a Disadvantaged Business Enterprise. Those standards, as pertinent hereto, are as follows:
(c) To be certified under this rule chapter, a DBE shall be an independent business entity. The ownership and control exercised by socially and economically disadvantaged individuals shall be real, substantial, and continuing, and shall go beyond mere pro forma ownership of the firm, as reflected in its ownership documents. The socially and economically disadvantaged owners shall enjoy the customary incidence of ownership and shall share in the risk and profits commensurate with their ownership interests, as demonstrated by an examination of the substance rather than form of financial and managerial arrangements. In assessing business independence, the Department shall consider all relevant factors, including the date the firm was established, the adequacy of its resources, and the degree to which financial relationships, equipment leasing, and other business relationships with non-DBE firms vary from industry practice.
* * *
To be certified under this rule chapter, the DBE shall be one in which the socially and economically disadvantaged owner shall also possess the power to direct or cause the direction of the management, policies, and operations of the firm and to make day-to-day as well as major business decisions concerning the firm's management, policy, and operation. The discretion of the socially and economically disadvantaged owners shall not be subject to any formal or informal restrictions (including, but not limited to, bylaw provisions, partnership agreements, trust agreements or charter
requirements for cumulative voting rights or otherwise) which would vary managerial discretion customary in the industry.
In determining whether the socially and economically disadvantaged owners also possess the power to direct or cause the direction of the management, policies and operations of the firm and have the requisite decision-making authority, the Department may look to the control lodged in the owners who are not socially and economically disadvantaged individuals. If the owners who are not socially and economically disad- vantaged individuals are disproportionately responsible for the operation of the enterprise or if there exists any requirement which prevents the socially and economically disadvantaged owners from making business decisions without concurrence of any owner or employee who is not a socially and economically disadvantaged individual, then the enterprise, for purposes of this rule chapter, is not controlled by socially and economically disadvantaged individuals and shall not be considered a DBE within the meaning of this rule chapter. Where the actual management of the enterprise is contracted out to individuals other than the owner(s), those persons who have the ultimate power to hire and fire the managers can be considered as controlling the enterprise for the purpose of this rule chapter.
To be certified under this rule chapter, the DBE shall be one in which the contributions of capital or expertise invested by the socially and economically disadvantaged individual owners are real and substantial. Examples of insufficient contributions include, but are not limited to, a promise to contribute capital, a note payable to the DBE enterprise or its owners who are neither socially and economically disadvantaged individuals, or the mere participation as an employee, rather than as a decision-maker.
In addition to the above standards, the Department shall give special
consideration to the following circumstances:
Newly formed firms and firms whose ownership or control has changed shall be closely scrutinized to determine the reasons for the timing of the formation of or change in the firm.
A previous or continuing employer- employee relationship between or among present owners shall be carefully reviewed to ensure that the employee-owner has sufficient
management responsibilities and capabilities.
Any relationship between an applicant and a non-DBE which has an interest in the enterprise seeking certification shall be carefully reviewed to determine if the interest of the non-DBE conflicts with the ownership and control requirements of this rule chapter...
There is no question that the requirements of Rule 14-78.00(3)(b) quoted above, the second prong of the definition of "Disadvantaged Business Enterprise," is met by the Petitioner. That is, the management and daily business operations are clearly controlled by the women owners, who own 51 percent of the voting common stock; representing the majority of the board of directors, and are, respectively, the president and secretary/treasurer of the firm. The record is replete with unrefuted evidence that the president and board chairman, Terri Nelson, makes the majority of the management decisions involved in daily business operations. This includes preparing bids, including all the pricing elements of bids, doing field supervision of construction projects, handling payroll, hiring and firing employees, supervising subcontractors, retaining subcontractors, and generally making binding decisions concerning which labor, material, or equipment the corporation will hire, purchase or rent for use in its construction jobs, as well as directing the activities of the subcontractors of all types. In all pertinent ways she actively functions as the presiding general contractor on given projects in her own right as president and chief executive officer of the Petitioner, as a general contractor. The authority and capability of Mrs. Nelson to make binding decisions concerning all major and minor aspects of the field and office operations of the Petitioner entity, together with Dorothy Johnson's authority to make financial decisions, coupled with their majority posture of voting stock ownership, and board of director membership, establish that the management and daily business operations of the Petitioner corporation are controlled by these two women.
For purposes of the above quoted provisions of Rule 14-78.00(3), Florida Administrative Code, which are pertinent to this proceeding, it is concluded that the Petitioner corporation is indeed an independent business entity for purposes of paragraph (c) quoted above. The ownership and control exercised by the two women involved herein is real, substantial and continuing and is not merely a pro forma or sham management and ownership of the firm. The fact that Mrs. Nelson is a certified general contractor and has a degree in building construction, coupled with her actual field supervisory experience on significant construction projects, as well as her ownership, shows a legitimate basis for the ownership and control. Her active participation in the management of the business and its construction projects in the field is thus "commensurate with her ownership interests," as is the participation of her mother in the financial operations and management of the business. It shows that these two women share the "customary incidents of ownership" and the risk and profits commensurate with their ownership interests. They clearly depend upon the success of the business for their livelihood. Their business decisions made in the capacity of their offices in the corporation, as well as through operation of their votes on the three-person board of directors, have a very real and not a pro forma effect on how the business operates and whether or not it is successful. Thus, they must be concluded to enjoy and share in the customary incidents of ownership and the risks and profits of that business.
There has been no showing that the Petitioner has any affiliation with any non-DBE firms nor that any financial, equipment leasing, or other business relationships with non-DBE firms, such as subcontractors for instance, vary from the normal construction industry practice. The fact that the firm was established in 1985, some three years prior to the filing of the subject petition, militates against a conclusion that the Petitioner corporation was formed merely for the purpose of obtaining DBE status. In fact, the uncontradicted testimony of Mr. Johnson shows that the primary purpose for the organization and ownership of the business in its present status was to allow his daughter to obtain ownership and operation of a business of her own in order to have a substantial and rewarding career.
There is no question that the women owners of the Petitioner corporation possess the power to direct or cause the direction of the management, policy and operations of the firm and to make day-to-day, as well as major, business decisions concerning its policy management and operations. The record reflects that discretion of the women owners of the corporation is no subject to formal or informal restrictions such as those enumerated in paragraph
(e) of the above-quoted rule, which would vary the normal managerial discretion accorded a president and secretary/treasurer and majority members of the board of directors of such a company operating in the construction industry.
The disadvantaged owners of this corporation possess the power to direct or cause the direction of the management, policies and operations of the firm and they have the requisite, binding, decision-making authority, in light of the findings of fact concerning all the duties, responsibilities and decisions which Terri Johnson Nelson engages in regarding the general field and office operations of the business, as well as the financial management decisions that both she and her mother, Dorothy V. Johnson make. In point of fact, the two women make the majority of both minor and significant decisions involved in the operation of the business. William R. Johnson primarily does estimating for the company's construction projects and assists, because of his years of expertise, with formulating prices for various elements of jobs and preparing bids for those jobs. It has thus not been demonstrated that non-economically disadvantaged individuals or entities "... are disproportionately responsible for the operation of the enterprise." No requirement exists preventing the two women involved in the business from making business decisions, without the concurrence of a non-socially and economically disadvantaged individual (i.e. William R. Johnson). Thus, it must be concluded, for purposes of paragraph (e) of the above-quoted rule, that the business at issue is indeed controlled by socially and economically disadvantaged individuals.
Paragraph (f) quoted above requires that, for DBE status to exist, contributions of capital or expertise invested by socially and economically disadvantaged individuals must be real and substantial. The $20,000 invested by Mrs. Nelson is a real and substantial investment in the capitalization of this corporation, even though her father, the non-economically disadvantaged owner, has invested in excess of $400,000. It is also true that Mrs. Nelson as well as Mrs. Johnson have invested a great deal of time, effort, and years of expertise, acquired through their educations, respectively, in building construction and in accounting, as well as their years of experience in those field and in conducting the operations of this corporation, as well as its predecessor.
Thus, it is must be concluded that even though they have contributed far less in the way of cash capital to the business, they have contributed a great deal of expertise. Thus, their contributions of capital and expertise considered together must be considered to be real, substantial and continuing contributions and it must also be concluded that their participation in the operations and
management of the business respectively, are not as mere employees, but rather as decision makers, in light of the conclusions reached above.
Concerning paragraph (g) quoted above, special consideration must be given to the timing of the formation of newly formed firms whose ownership and control has changed, or to changes in the ownership of existing firms. This firm was organized as a new corporation in 1985. It does not really amount to a "newly formed firm" if that is deemed to mean newly formed immediately before filing the petition for DBE status. The reasons for the formation of the corporation were shown to really involve William R. Johnson's desire to set up a company which his daughter could use to launch her career in the construction industry, as owner and operator of a construction company. It has not been demonstrated that the formation of the firm as solely, or even primarily, for the purpose of seeking DBE status.
Although the prior relation between Terri Johnson Nelson and her father and the predecessor, Martin-Johnson Corporation, was that of employer- employee, the employee status clearly ended with the formation of the new corporation. Both Mrs. Nelson as well as Mrs. Johnson, clearly have sufficient management responsibilities, capabilities and decision-making authority to demonstrate that their present relationship with William R. Johnson, who might be deemed to be a former employer, is no longer that of employer-employee. Terri Nelson, as well as Dorothy v. Johnson, have "grown up" to occupy controlling, decision-making positions and have the necessary expertise, and exercise it in controlling the management and operation of the business.
Additionally, for purposes of subparagraph (3) of paragraph (g) quoted above, there has not been shown to be any relationship between the Petitioner corporation and any non-DBE having an interest in the Petitioner enterprise.
The Petitioner DBE applicant here under consideration has been shown to have no such affiliation with any other non-DBE entity and the only non-minority owner is William R. Johnson. His interests are not shown to conflict with the ownership and control of the two women involved as owners and managers of the corporation. He is only one vote of a three-member board of directors, and, as a vice-president with certain operational duties, described above, that interest does not conflict with the ownership and control requirements of the above- quoted portion of the relevant rule chapter. The female owners have the capability to control the operations of the business in all its facets in carrying out their duties and responsibilities as officers, as well as because of their majority position on the board of directors, which in turn can assure that they maintain their positions as officers of the corporation.
It has thus been shown that the women involved in W.R. Johnson, Inc., participate on a superior footing to William R. Johnson in the management and daily operations of that firm and must be deemed to have "control" of the business. The women possess the power to direct or cause the direction of management policies and operations of the firm and to make day-to-day business decisions. The family relationship between Mr. Johnson and he two women notwithstanding, the totality of the circumstances shown by the above findings of fact establishes that, indeed, they primarily control the business.
Finally, an important point should be made, and that is that he makeup of a corporate board of directors can be changed by a vote of the majority of shareholders. Mrs. Johnson and Mrs. Nelson own the majority of the corporation's stock, with full voting power. They could thus convene a meeting of the board of directors and remove and replace another member of the board.
It is not important that they have not historically exercised that power. The
point is that they have the authority to do so, and that authority carries with it the most important element and indicator of control of the operation and ownership of this business. By controlling the majority of the outstanding share of the corporation, the women can remove and replace the members of the board at will and replace them with directors who will vote in accordance with their wishes. Thus, notwithstanding their positions as chief executive officer and secretary/treasurer, with all the attendant authority those offices embody in controlling the operations of the business, the female majority owners and members of the board could combine their votes and exercise controlling authority over the board and the business, independent of their power as officers of the corporation. Recognition of this power of majority stockholders has been considered pivotal in the case of Aguiar Defense v. Department of General Services, DOAH 87-1552 (June 20, 1988); Final Order entered June 29, 1988, a case involving a minority business certification very similar to the instant one.
In summary, the allocation of specific tasks, duties and responsibilities amongst the owners and directors of the Petitioner corporation does not indicate a lack of control by the president, Terry Johnson Nelson and secretary/treasurer, Dorothy V. Johnson, over the manner in which those tasks are formed, including those tasks performed primarily by William R. Johnson. It is concluded, that Mrs. Nelson and Mrs. Johnson are indeed active administrators of the business and have ultimate authority over decisions made by the other co- owner or employees. Regardless of the fairly recent inception of the corporation, this degree of control has been true, in actual fact, since the corporation's founding. The burden of proof lies with the Petitioner to prove by a preponderance of the evidence that it qualifies as a disadvantaged business enterprise. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977); Florida Department of Transportation v. J.W.C. Company Inc., 396 So.2d 778 (Fla. 1st DCA 1981). The Petitioner herein has clearly sustained that burden, as to the operative requirements of the above- quoted rule.
Accordingly, from the foregoing, it is concluded that the majority shareholders of W.R. Johnson, Inc., are women and minority members who exercise control over the management and daily business operations of that entity and that the Petitioner otherwise meets the standard for certification of a "Disadvantaged Business Enterprise" in the particulars enumerated above.
In consideration of the foregoing findings of fact and conclusions of law, it is
RECOMMENDED that a Final Order be entered certifying W.R. Johnson, Inc. as a disadvantaged business enterprise.
DONE and ORDERED this 26th day of May, 1989, in Tallahassee, Leon County, Florida.
P. MICHAEL RUFF 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 26th day of May, 1989.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-5238
Petitioner's Proposed Findings of Fact
All of Petitioner's proposed findings of fact were accepted.
Respondent's Proposed Findings of Fact 1-8 Accepted.
9-10 Accepted, but not dispositive of material issue.
11 Accepted, but subordinate to Hearing Officer's findings on this subject matter.
12-14 Accepted, but not dispositive of material issue. 15-16 Accepted.
Rejected as not in accordance with the Hearing Officer's findings on this subject and with the evidence.
Accepted.
COPIES FURNISHED:
Harry B. Stackhouse, Esquire
125 West Romano Street Post Office Box 13010 Pensacola, Florida 32573
Bruce A. Campbell, Esquire
Florida Department of Transportation Haydon Burns Building
605 Suwannee Street
Tallahassee, Florida 32399-0450
Thomas H. Bateman III, Esquire General Counsel
562 Haydon Burns Building Tallahassee, Florida 32399-0450
Kaye Henderson, Secretary
Florida Department of Transportation 605 Suwannee Street
Tallahassee, Florida 32399-0450
| Issue Date | Proceedings |
|---|---|
| May 26, 1989 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| May 26, 1989 | Recommended Order | Petitioner corp is independ Minority Business Enterprise entity. Mother and daughter have majority on board; make all binding business and financial decision daughters education relevative to her position of control |
ROBERT L. JOHNSON vs GENERAL PARCEL SERVICE OF FLORIDA, INC., 88-005238 (1988)
TERRELL OIL COMPANY, INC. vs. DEPARTMENT OF TRANSPORTATION, 88-005238 (1988)
AMERISEAL OF NORTHEAST FLORIDA, INC. vs DEPARTMENT OF TRANSPORTATION, 88-005238 (1988)
S AND S CONTRACTING, INC. vs DEPARTMENT OF TRANSPORTATION, 88-005238 (1988)
TRANSPORTATION SOLUTIONS, INC. vs DEPARTMENT OF TRANSPORTATION, 88-005238 (1988)
