STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

EMMA ALLEN, )

)

Petitioner, )

)

vs. ) CASE NO. 94-4899

) 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 May 1, 1995, via teleconference from Jacksonville, Florida.

APPEARANCES

For Petitioner: Emma Allen, pro se

3523-1 Alcoy Road

Jacksonville, Florida 32221

For Respondent: Thomas H. Duffy, Esquire

Department of Transportation

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0458 STATEMENT OF THE ISSUE

The issue to be resolved in this proceeding concerns whether the Department of Transportation (Department) correctly applied standards set out in its rules and procedures, which encompass by reference the related provisions of the Code of Federal Regulations, in determining the amount of relocation assistance to be paid to the Petitioner.

PRELIMINARY STATEMENT

This proceeding was initiated when the Petitioner notified the Department that she wished to have a formal administrative proceeding to contest the Department's determination of the amount of relocation assistance benefits they proposed to pay to her and her family. In due course, the cause was referred to the Division of Administrative Hearings and the undersigned Hearing Officer for formal proceeding.

The cause came on for hearing as noticed, at which the Petitioner presented her own testimony, along with that of Eugenia M. Meadows and Linda Diane Wooten. The Respondent presented the testimony of James E. Jordan, Graillen Crosby, William Kelbaugh, and Richard T. Eddleman. The Respondent offered 15 exhibits, which were received into evidence.

Upon concluding the proceeding, the parties elected to order a transcript thereof and avail themselves of the right to submit Proposed Recommended Orders. An extension of the time for filing Proposed Recommended Orders was agreed to and granted by the Hearing Officer. Thereafter, Proposed Recommended Orders and written arguments were filed by the parties.

FINDINGS OF FACT

1. The Petitioner, at times pertinent hereto, was a resident of Scott's Mobile Home Park (Park), located in Duval County, Florida. She lived in the Park with William Scott, the son of the Park owners, their child, and four other children who are Ms. Allen's natural children. The Petitioner, Mr. Scott, and the five children lived in a three-bedroom, double-wide mobile home, at the pertinent time in 1993. It had been provided by Mr. Scott's parents, the owners of the Park.

   
   

2. The Department acquired certain property in Duval County, Florida, in 1993, as a result of an inverse condemnation action of which the property known as Scott's Mobile Home Park was a part. The Department, in due course, notified the Park residents that it would be closed and that efforts would be undertaken to relocate the residents.

   
   

3. The Department staff obtained information from Ms. Allen and Mr. Scott, as well as from the other Park residents, in order to determine the amount of relocation assistance funds each displaced resident should receive, in accordance with the legal authority cited below. The Allen-Scott family were determined to be "90-day occupants" of the Park, as that term is used in applicable regulatory provisions.

   
   

4. In calculating the relocation assistance amount to which the Petitioner may be entitled, the Department follows certain procedures set out in the Code of Federal Regulations, adopted by reference in its own rules and procedures.

   It must find replacement housing and then pay displaced residents a lump sum equal to 42 months of the difference between the new higher rent, if that be the case, and utility payments and what the displaced residents had been paying for rent and utilities prior to being displaced.

   
   

5. The Department initially located replacement housing for the Allen- Scott family on Phillips Highway in Jacksonville, Florida. While the family had been living in a three-bedroom mobile home, the standards adopted by the Department for decent, safe, and sanitary housing for a family of seven required four bedrooms, which is the type residence the Department sought. The rent and utilities amount for the mobile home suitable to those standards, located on Phillips Highway, was $691.00 per month. The Allen-Scott family, however, desired a mobile home on the west side of Jacksonville, Florida.

   
   

6. In order to calculate the amount due to the Petitioner, the Department had to subtract from the $691.00 per month figure for the property on Phillips Highway, the rent and utility total amount that the family had been paying at the Park. The evidence shows, however, that the living arrangements under which they occupied that dwelling in the Park were not the result of an arms-length transaction and that, in reality, the family was not paying any rent for the premises. Therefore, the Department had to impute a rental figure for them.

   
   

7. Accordingly, Mr. William Kelbaugh, a Property Appraiser for the Department, made that imputed calculation, based upon the square footage of the Allen-Scott mobile home and the amount per square foot paid for other decent,

   safe, and sanitary dwellings in the same area, or comparable residences. After establishing that the average rent for mobile homes was approximately $.41 per square foot, Mr. Kelbaugh multiplied the square footage of the Allen-Scott family mobile home by that figure and, after making a deduction because of the condition of the Park, in terms of the actual rental value of the premises they had been living in, he arrived at a "market rental" of $375.00 per month. He then reduced the "market rental" figure by 15 percent based upon his observation of the premises, its condition, and his experience of 20 years or more in making such appraisals.

   
   

8. The Department also had to include utility payments in its calculation. It received information from two utility companies about the family's utility bill over the prior 12-month period and computed an average monthly utility payment amount of $202.29.

   
   

9. The Department also attempted to establish the family's income. It was required to do so because, in calculating the payment to be made for relocation assistance, the Department must subtract from the new rent and utility payment the smaller of the sums equal to the rent paid or, in the Petitioner's case, imputed, or 30 percent of gross monthly family income.

   
   

10. In trying to determine their income amount, the Department asked the Petitioner and Mr. Scott to provide income information on its income certification form, which the Petitioner and Mr. Scott signed and dated March 10, 1993. The Petitioner represented that their income came from Aid to Families with Dependent Children and other welfare benefits, which are not considered income for purposes of the Department's calculation of relocation assistance. Mr. Scott represented that he earned $3,764.25 in income and

    $3,000.00 in "income from rental" for 1992, which is the year used in making the calculation.

    
    

11. The Department asked repeatedly for verification of their income figures in the form of tax records, payroll stubs, or statements from employers. Mr. Scott, however, worked for his parents, the former owners of the Park. They were asked to provide pay stubs and other verification of his income but did not do so at any time during 1993.

    
    

12. Relocating the family was a protracted affair because the family required a four-bedroom mobile home, and such dwellings for rental are scarce.

    
    

13. On September 14, 1993, the Department delivered an updated income certification form, since the one that the Petitioner and Mr. Scott had signed in March 1993 had expired. The Petitioner signed that form on September 14, 1993, and Mr. Scott signed it on September 22, 1993. That form indicated that Mr. Scott's income was certified by him as gross wages and salaries equal to

    $3,764.25. No verification of this income had been provided, however, so the Department calculated the relocation assistance due the family by using the market rental figure of $375.00, plus $202.29 for utilities. The Petitioner and Mr. Scott refused to accept this figure and appealed the determination to the Department's "central office".

    
    

14. While their appeal was pending in the Department's process, the Department, at the Petitioner's request, located another four-bedroom mobile home for rent on Beaver Road in Jacksonville, Florida. This was with the assistance of Robert Scott, Mr. William Scott's father. The Department re- calculated the Allen-Scott family relocation assistance eligibility supplement.

    The re-calculated amount was $6,161.82. That amount was presented to the Petitioner and Mr. Scott, but they refused to accept it.

    
    

15. On December 7, 1993, Mr. Bud Eddleman, the Department's Administrator of Relocation Assistance, made his decision concerning the Petitioner's appeal and concluded that the $6,161.82 sum to be correct.

    
    

16. On February 17, 1994, the Department received a handwritten note signed by Vivian Scott, William Scott's mother, stating that William Scott had been paid $842.25 in cash in 1992 and was furnished rent in lieu of salary equal to $3,000.00. (See Exhibit 8 in evidence). The Petitioner, thus, took the position that that was the totality of income of the family during the calculation period in question, as that relates to the calculation of the amount of relocation benefits they felt they should receive.

    
    

17. The Department takes the position that this verification is not accurate and acceptable for a number of reasons. The Allen-Scott household had numerous possessions that suggested a lifestyle that could not be supported by a discretionary income of $842.25 annually. The family could apparently afford

    $202.79 per month as an average utility payment. Further, the family acquired a second car during the time period that Department employees were on the premises in the process of making its calculation and appraisal. The family had the funds to acquire and operate two cars, pay the utilities throughout 1993; and their personal property included certain items of antique furniture, at least four televisions, and three videocassette recorders.

    
    

18. The Petitioner contended at hearing that Mr. Scott had no income because of the inverse condemnation proceedings because his work had been as a maintenance man for the operating Park. This is irrelevant in the context of relocation assistance, which concept is not designed to include considerations of whether the displacee is rendered unemployed by the taking of the property involved. It is also irrelevant factually because the year in question was 1992, and the relocation of people from the Park could not begin until 1993. Even then, Mr. Scott's maintenance duties would be needed for a certain period of time. Thirdly, there is also evidence that Mr. Scott worked on projects other than those located in the Park, for which he earned income.

    
    

19. Mr. Scott did not provide tax returns, pay stubs, bank records, or a statement from his employer (his parents) despite numerous entreaties by the Department to do so. No more defining, verified evidence of the family income was offered at hearing. Accordingly, the income figures which the Petitioner provided are not credible. The family lifestyle and possessions evidence much more income than Mr. Scott would admit. The only evidence produced to verify Mr. Scott's income was sent from his mother some two months after the Department denied the "appeal". The statement is not credible, as Mrs. Scott alleged that in 1992, her son had been paid $842.25 for his work as a maintenance man. Mr. Scott's parents paid another resident of the Park $4,609.92 for performing the same type of work, at the same time.

    
    

20. Further, the Petitioner testified inconsistently at hearing regarding income. She said on the one hand that Mr. Scott's parents "took the rent out of his paycheck", and on the other hand, said that he made approximately $127.00 per week as a maintenance man and Mrs. Scott "sometimes wrote him a check" and "would take out, you know, a little bit each week". This testimony demonstrates that, with the other evidence referenced above, the Allen-Scott family has not been forthcoming concerning its income. The totality of the evidence shows that Mr. Scott and his parents, as his employer, the source of the Petitioner's

    relevant income, had not been acting in good faith. Accordingly, it is reasonable to compute the relocation assistance payments by ignoring the 30 percent factor and instead merely subtracting the old rent and utilities from the new rent and utilities chargeable at the new premises occupied by the Allen- Scott family. The income figures presented by the Petitioner are simply unverified and are not credible.

    
    

21. Another candidate for relocation assistance, Kirk Kostenko, a resident of the Park, refused to provide income verification. In his situation, as in that of the Allen-Scott family, represented by the Petitioner, the income figures presented by the Petitioner were not accepted by the Department. In the Kostenko situation, no relocation assistance was paid. While the Petitioner argued and made reference to other families allegedly receiving much larger sums for relocation assistance from the Park, the Petitioner produced no evidence that different standards or criteria were applied in those situations, as opposed to those applied to her family situation involved in the relocation assistance payment question. She adduced no evidence that would demonstrate that the Department had acted in a manner departing from the standards of its rules and procedures or in a manner aberrant from its normal policy in calculating the relocation assistance payments in the manner found above.

    
    

22. The relocation assistance program is not a social welfare program based upon actual financial need of a family or based upon the number of dependents involved. Rather, it is a program to compensate persons forced to find replacement housing because the Department acquires their private property, either through eminent domain or inverse condemnation. The assistance is based upon what the family was paying for its rent and utilities and what it would have to pay for them after relocation. The final figure presented and supported by the Department in this proceeding was calculated by applying the regular, accepted criteria set out in the Department's rules, regulations and procedures.

    
    

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to Section 120.57(1), Florida Statutes.

    
    

24. Section 334.044(2), Florida Statutes, empowers the Department:

    
    

    To adopt rules, procedures, and standards for the conduct of its business operations and the implementation of any provision of law for which the department is responsible.

    
    

    Pursuant to that provision, the Department enacted Chapter 14-66, Florida Administrative

    Code, entitled "Relocation Assistance Regulations". Rule 14-66.009(7), Florida Administrative Code, states:

    A 90-day tenant or owner-occupant displaced from a dwelling is entitled to replacement

    housing as outlined in 49 CFR, Part 24, Subpart E.

    
    

25. Rule Chapter 14-66 governing this proceeding was enacted pursuant to Sections 334.044(2) and 339.09(2),(3), Florida Statutes. Rule 14-66.002, Florida Administrative Code, provides that the provisions of 49 CFR, Part 24, Uniform Relocation Assistance and Real Property Acquisition Regulations, are

    incorporated into Rule Chapter 14-66 by reference. Those federal regulatory provisions became effective October 1, 1990. The regulations govern relocation assistance for the relocation of displaced persons incidental to eminent domain or inverse condemnation "takings" are set forth in Rule 14-66.001-.012. They included procedures for the determination of entitlement and amounts by the Department, through internal proceedings provided for in those rules, including the right to appeal within the Department any initial determination.

    Thereafter, in accordance with Rule 14-66.012, appeals involving requests for administrative hearings are to proceed in accordance with the provisions of Chapter 120, Florida Statutes.

    
    

26. The Code of Federal Regulations Section referenced in Rule 14- 66.009(7) entails a complex system of rules governing the Department- administered relocation assistance program. First, displacees are categorized as "180-day homeowner-occupants" and "90-day occupants, who can be either homeowners or rental tenants". See, 49 CFR, Part 24, Sections 24.401 and 24.402 of the above-cited federal rule. Tenants' benefits are capped at $5,250.00, but provision is made for additional need in Section 24.404, which gives agencies such as the Department the ability to provide "replacement housing of last resort" and, therefore, exceed the maximum amount.

    
    

27. First, the Department must evaluate the present housing at the "displacement dwelling" and find equal or better housing that is decent, safe, and sanitary. Then, the agency calculates the amount of rent and utilities for the new residence (the "replacement dwelling"), subtracts from that figure the amount paid at the displacement dwelling, and multiplies it by 42 months. The money is not paid until the displacee occupies a decent, safe, and sanitary dwelling. There is no requirement that a displacee actually reside in the new housing the Department finds but must, in order to receive a relocation payment, find a decent, safe, and sanitary housing as an alternative.

    
    

28. The Petitioner's family's eligibility is governed by Section 24.402(b), which provides, in pertinent part:

    
    

    Rental assistance payment--(1) Amount of payment. An eligible displaced person who rents a replacement dwelling is entitled to a payment not to exceed $5,250 for rental assistance. (See also Section 24.404) Such payment shall be 42 times the amount obtained by subtracting the base monthly rental of the displacement dwelling from the lesser of:

    1. The monthly rent and estimated average monthly cost of utilities for a comparable replacement dwelling; or

    2. The monthly rent and estimated average monthly cost of utilities for the decent, safe, sanitary replacement dwelling actually occupied by the displaced person.

       1. Base monthly rental for displacement dwelling. The base monthly rental for the displacement of dwelling is the lesser of:

          1. The average monthly cost for rent and utilities at the displacement dwelling for a reasonable period prior to displacement, as determined by the Agency. . . .(For a tenant who paid little or no rent for the displacement

             dwelling, use the fair market rent, unless its use would result in a hardship because of the person's income or other circumstances); or

          2. Thirty (30) percent of the person's average gross household income. (If the person refuses to provide appropriate evidence of income or is a dependent, the base monthly rental shall be established solely on the criteria in paragraph (b)(2)(i) of this section.) . . . .

       
       

29. These provisions are adopted and embellished by the Department's own written procedures, which were referenced in Mr. Eddleman's initial decision on the Allen-Scott appeal. These provisions appear at Chapter 9, Section 4, Subsection B of the Department's written relocation assistance procedures manual, of which official recognition has been taken and which are referenced in Exhibit 15 in evidence for the Department. These provisions provide, in pertinent part:

    
    

    1. This [rental assistance] payment will be computed by subtracting the base monthly rental for the displacement dwelling from the lesser of:

       1. the monthly rent and estimated average monthly utility service cost for a comparable replacement dwelling; or

       2. the monthly rent and estimated average monthly utility service cost for decent, safe and sanitary dwelling actually occupied by the displaced person;

          and multiplying the result by 42.

    2. In calculating the estimated average monthly utility service cost for the displacement dwelling use actual utility service cost paid by the displaced person. For the replacement dwelling refer to the utility service cost scheduled utilized by a utility company in

       the area of the replacement dwelling or use a utility company's past utility service cost

       history for the replacement dwelling, if available.

    3. The base monthly rental for the displacement dwelling is the lesser of:

       1. The average monthly cost for rent and utilities at the displacement dwelling for a reasonable period prior to the displacement, as determined by the Department; or

       2. The economic or fair market rent and average monthly utility service cost. Use economic rent when:

          1. the tenant provides a service in lieu of paying rent;

          2. the rent paid does not represent an arm's length transaction between tenant and landlord;

          3. the tenant pays little or no rent;

          4. Owner-occupants elect to relocate as tenants.

       3. Thirty (30) percent of the person's average gross household income except in the case of the 180-day owner who chooses to rent rather than

    purchase. Income should be documented through a verifiable source, such as pay stubs, signed

    income tax returns, a statement from the employer, or a bank statement. If complete information cannot be obtained in this manner, the Department may supplement the information provided with a signed statement from the displacee certifying

    the amount and source of income (Form 575-040-12). If a person refuses to provide appropriate evidence of income or is a dependent, the base monthly rental shall be established in (4)(a) or (b) above.

    
    

30. The Department's evidence showing its evaluation of the Allen-Scott family claim is consistent with these rules and procedures and historic Department policy in this regard. The Petitioner did not establish that it paid regular rent or exchanged work for rent, according to the credible, substantial evidence. Therefore, the Department had to establish a base rental figure. It did this by sending an experienced appraiser into the field to check comparable dwellings, whereupon he made a calculation based upon comparable rentals, the condition of the displacement dwelling, and its surroundings. Although Mr. Kelbaugh's appraisal inescapably has a subjective element ascribable to it, it was shown to be reasonable and rational and was not arrived at in an arbitrary fashion. It comports with the pertinent Department standards, which were shown to have been uniformly applied to other displacees in the same situation.

    
    

31. Upon establishment of the rental appraisal figure, the Department had to determine if the Petitioner's family is paying more than 30 percent of its gross income on rent and utilities. The Petitioner was not employed, and only Mr. Scott's 1992 income could be considered. In view of the reasons established in the above Findings of Fact and based upon the Hearing Officer determination of the credibility of witnesses and evidence, Mr. Scott's income figures were not shown to be credible, especially in view of the family's lifestyle and possessions, which evidenced considerably more income than that purported by Mr. Scott.

    
    

32. Given the less than forthcoming manner in which Mr. Scott and his parents, as employers, attempted to certify Mr. Scott's income, there is no choice but to compute the relocation assistance payments in the manner in which the Department did, by ignoring the 30 percent factor referenced above and merely subtracting the old rent and utility amounts from the new rent and utility amounts. If the Department were required to accept questionable and unverified income figures, it would lead to abuse of the system by those who understand that the less income shown, the larger the relocation assistance payment will be. The Petitioner and Mr. Scott clearly had enough income to purchase and operate two cars, pay utilities at the average rate of $202.39 per month throughout the year 1993; and they had sufficient personal resources to obtain various pieces of antique furniture, at least four television sets, and three videocassette recorders. Based upon these observations and evidence of them in this record, it would be a valid, rational exercise of discretion to require more documentation of income, and inasmuch as such verification was not provided in the evidence before the Hearing Officer, to calculate the benefit level in the manner advanced by the Department, which is in accord with the above-referenced rules and procedures.

    
    

33. The calculations performed in the manner in which the Department has advanced in its evidence results in an award to the Petitioner in the sum of

$6,161.82 in relocation assistance benefits. The preponderant evidence adduced

by the Department shows that such a result would be in accord with Department policy, the above-referenced regulations and procedures, and would be in accordance with the same standards applied to other families similarly situated.

RECOMMENDATION

Based on the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is

RECOMMENDED that a Final Order be entered finding that the relocation assistance benefit, which the Department proposes to award the Petitioner in the amount of $6,161.82, is reasonable and should be awarded. The Petition should be dismissed in its entirety.

DONE AND ENTERED this 1st day of September, 1995, in Tallahassee, 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 1st day of September, 1995.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-4899

Petitioner's Proposed Findings of Fact

The Petitioner presented no discreetly set forth proposed findings of fact.

Rather, in essence, the Petitioner's post-hearing "pleading", in letter form, consists essentially of argument concerning the quantity and quality of evidence. Therefore, specific rulings on proposed findings of fact cannot be made.

Respondent's Proposed Findings of Fact

The Respondent's proposed findings of fact numbers 1-34 are accepted, to the extent consistent with those made by the Hearing Officer. Those proposed findings of fact which are not consistent with those made by the Hearing Officer are rejected as being either not supported by preponderant evidence of record, being irrelevant, immaterial or unnecessary to the resolution of the disputed issues.

COPIES FURNISHED:

Ms. Emma Allen 3523-1 Alcoy Road

Jacksonville, FL 32221

Thomas H. Duffy, Esq. Department of Transportation 605 Suwannee Street, M.S. 58

Tallahassee, FL 32399-0458

Ben G. Watts, Secretary Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, FL 32399-0450 Attn: Diedre Grubbs, M.S. 58

Thornton J. Williams, Esq. General Counsel

Department of Transportation

562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the agency written exceptions to this Recommended Order. All agencies allow each party at least ten 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: 94-004899

Orders for Case No: 94-004899