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LARSEN COMMUNICATIONS AND PROFESSIONAL SERVICES, INC. vs MINORITY ECONOMIC AND BUSINESS DEVELOPMENT, 94-005839 (1994)

Court: Division of Administrative Hearings, Florida Number: 94-005839 Visitors: 26
Petitioner: LARSEN COMMUNICATIONS AND PROFESSIONAL SERVICES, INC.
Respondent: MINORITY ECONOMIC AND BUSINESS DEVELOPMENT
Judges: ARNOLD H. POLLOCK
Agency: Minority Economic and Business Development
Locations: Tampa, Florida
Filed: Oct. 12, 1994
Status: Closed
Recommended Order on Tuesday, August 29, 1995.

Latest Update: Oct. 26, 1995
Summary: The issue for consideration in this hearing is whether Petitioner, Larsen Communications and Professional Services, Inc., should be certified and designated as a Minority Business Enterprise.Evidence undisputed except by opinion of agency evaluator--shows woman owner controlled operations enough to qualify for Minority Business Enterprise status.
94-5839.PDF

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS


LARSEN COMMUNICATIONS AND ) PROFESSIONAL SERVICES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-5839

) COMMISSION ON MINORITY ECONOMIC ) AND BUSINESS DEVELOPMENT, )

)

Respondent. )

)


RECOMMENDED ORDER


A hearing was held in this case in Tampa, Florida on June 29, 1995, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.


APPEARANCES


For Petitioner: Miriam L. Sumpter, Esquire

2700 North MacDill Avenue, Suite 218

Tampa, Florida 33607


For Respondent: Joseph L. Shields, Esquire

Commission on Minority Economic and Business Development

201 Collins Building

107 West Gaines Street Tallahassee, Florida 32399-2000


STATEMENT OF THE ISSUES


The issue for consideration in this hearing is whether Petitioner, Larsen Communications and Professional Services, Inc., should be certified and designated as a Minority Business Enterprise.


PRELIMINARY MATTERS


By letter dated September 16, 1994, Marsha Nims, Certification Manager of the Commission's Minority Business Advocacy and Assistance Office, advised Mrs. Valerie D. Larsen, President of the Petitioner, that her request for certification as a Minority Business Enterprise, (MBE), was denied because it was determined that minority ownership of the corporation is not real and that the minority owner did not control the management and daily operations of the business. Petitioner thereafter requested formal hearing and this hearing ensued.


At the hearing, Petitioner presented the testimony of Valerie D. Larsen, President of Larsen Communications and Professional Services, Inc., (Larsen),

and introduced Petitioner's Exhibits 1 and 2. Respondent presented the testimony of James R. Larsen, Jr., Mrs. Larsen's husband and a 25 percent owner of Larsen, and Lloyd Ringgold, an analyst for the Commission's MBE certification office, and introduced Respondent's Exhibit A.


A transcript of the proceedings was furnished. Subsequent to the hearing, only counsel for Petitioner submitted Proposed Findings of Fact, which have been ruled upon in the Appendix to this Recommended Order. Counsel for Respondent sought additional time to submit post-hearing matters. The additional time was granted but nothing was submitted.


FINDINGS OF FACT


  1. At all times pertinent to the issues herein, the Commission on Minority Economic and Business Development was one of the agencies in Florida responsible for the certification of women and minority owned businesses in Florida as Minority Business Enterprises. Larsen Communications and Professional Services, Inc. was operating a video production and public relations company in Tampa. Petitioner, as a part of its business operation, sought and performed contracts with various agencies of the State of Florida.


  2. Valerie D. Larsen, current President and 75 percent owner of the Petitioner corporation, is a graduate of high school in Hillsborough County. After graduation, she went to work as a legal secretary and worked in that field for several years. She is currently a financial analyst with GTE Data Services. From 1991 through 1993 she was a student at the Tampa Academy of Performing Arts from which she claims to have graduated, though she has no diploma to so indicate. While there, she took training in on-camera acting, camera handling, voice over, and other facets of video production. She also acted in and produced plays, directed plays, and was active in all aspects of theatre production, both from the artistic and the business sides.


  3. In March, 1990, Ms. Larsen married her husband, a 1973 graduate of Florida State University with a bachelor's degree in Broadcast Communications. Mr. Larsen was, for many years, a television reporter in the Tampa area as well as elsewhere. He has considerable experience in the on-camera presentation of news stories and has written many of the pieces he delivered on air.


  4. From the very beginning, Mrs. Larsen wanted to own her own business, and over the years, as she worked as a legal secretary and with GTE, she maintained this ambition. Several years ago, when her husband was put out of work, she got the idea of starting her own production company, not only to give herself an opportunity to do that which she most enjoyed doing, but also to give her husband something to do as well.


  5. Ms. Larsen admits that she made a big mistake in not hiring an attorney to help her draft the business organization papers. Instead, she went to Office Depot and purchased an incorporation kit which she filled out without any professional advice and submitted to the Florida Secretary of State's office for registration. In doing so, she made her husband the President of the company even though she was in charge and actually made the business decisions. She did this in order to help her husband maintain his self respect. This officer designation was corrected sometime thereafter.


  6. When Ms. Larsen graduated from the Tampa Academy of Performing Arts she knew she wanted to start her own company and what she liked to do. Video

    production seemed to fit the bill, and on September 4, 1992, because she no longer could act due to her pregnancy, she started the company.


  7. The initial funding for the company came from a $2,500 withdrawal from funds owned jointly by the parties and to which she had contributed over the years. At the time the company was started, Mr. Larsen had his severance pay of

    $3,200 per month for two or three months. This money was used for the family's living expenses. The money which was invested in the company, and which had been in the joint account, came, Ms.Larsen avers, from her salary from GTE Data Services.


  8. Ms. Larsen is currently President of the company. She professes to make all business decisions. She consistently researches jobs to bid on and is a subscriber to the Florida Administrative Weekly, which lists bid opportunities. If she find something she feels the company can handle, she contacts the agency and asks for a proposal package. Then, she claims, she prepares and submits the company's bid.


  9. Ms. Larsen on the one hand claims to handle all the company accounting, but on the other hand states she hires a CPA to do the payroll. She claims also to make all the arrangements for financing and borrowing for the company, the hiring and firing of personnel, and the solicitation of work for the company. There are no full time employees, however, besides the Larsens. Usually, people with the particular skills needed for a specific job are contracted with on a tempor ary basis. She decides who she wants to use on a particular job, determines the costs as to how much each element will cost, and comes up with a final bid price. She might have Mr. Larsen do some of the research and plug details into the computerized bid shell, but she does the majority of the bid process and makes the ultimate decision as to whether a bid will be submitted. She also pays all the bills.


  10. Mrs. Larsen claims she must do a lot of research for the business which she does in her spare time at work, during her lunch periods and in the evenings. She also calls Mr. Larsen at home and gives him things to look up. For her research, she uses the University of South Florida library, two newspapers and other research sources dealing with the subject matter of the pending bid, so that she can effectively evaluate the project and submit an appropriate bid. Bid prices are based on what it will cost her to hire the required people and lease the required equipment. Since the company is small, she hires most artists, such as writers, photographers, editors and graphic artists, on a per job basis.


  11. If Larsen is successful and is awarded a bid for a particular production, Ms. Larsen has the initial job of preparing the script for the production, the blueprint to present to the photographer. A script is prepared for each production designed around the requirements of that particular subject. Most scripts are written on the basis of her research and that of her husband, and the skills needed to prepare a script include an ability to do research, writing skills, formatting skills, experience and creativity. Once the script is prepared, it is presented to the client for review and suggestions. Upon final approval, Ms. Larsen hires the photographer who will do the shooting. Often the photographer works alone, but sometimes either Ms. or Mr. Larsen accompanies him.


  12. Mr. Larsen does some of the research and the typing and purchases some supplies, but major purchases are approved and determined by Ms. Larsen. He also is responsible for answering the phone. Mr. Larsen is often the narrator

    on their productions, which is appropriate because of his on-air experience and his voice.


  13. In Mr. Larsen's prior career as a news journalist he wrote some of his material and appeared on camera. The nature of news broadcasting, however, is different from the productions of Larsen Communications. Whereas news reporting is primarily a recitation of facts which have occurred, Larsen's productions are far more creative, designed to tell a story or sell a particular product or point of view. Therefore, his prior experience, while good for on camera work, is not necessarily translatable to the management of the work the company does. In fact, Ms. Larsen is of the opinion that he does not have any skills she does not have, and is convinced that if he were not with the company, his absence would not have much effect on its operation. She is quite confident that she could do what he does or could easily hire someone to do what he does.


  14. Larsen Communications is a small company. To date, not more than 10 contracts have been awarded to it, and in each case, the solicitation process described above was used. Earnings from the company are split. Ms. Larsen receives an intermittent draw, depending on the company income. Mr. Larsen receives a set salary of $1,000 per month. There are no bonuses paid because this is all Ms. Larsen feels can be afforded, and even Mr. Larsen's salary is based on the company's money flow. He has been a salaried employee for several years, but only recently has he been paid by check.


  15. Aside from Ms. Larsen's 75 percent of the stock and Mr. Larsen's 25 percent, there are no other owners of the company and no one else shares any risk of loss. If the business fails, Ms. Larsen will bear the biggest loss, and Mr. Larsen would have to find a job elsewhere.


  16. The original application for MBE certification submitted by Larsen in 1994 sought certification in three areas: video production, public relations and media relations. This has been amended and now the only certification sought is that in video production. Ms. Larsen believes that all three areas are interrelated.


  17. Mr. Larsen confirms the testimony of Ms. Larsen regarding the responsibility for accomplishment of duties within the corporation. When the company was formed, he was unemployed and he agreed to support Ms. Larsen in the operation of her business; the company was her brainchild. She is the one who secured and filled out the incorporation forms that were submitted to the Secretary of State's office, and he did not know what the papers intended or what they said he was to do. He knows he was the original President of the company and a Director, but he also recognizes that those designations have been changed in the interim.


  18. Based on his education and experience, he believes he is qualified in video production, public relations and media relations. However, he was in news broadcasting by experience and throughout his career, and the business of Larsen Communications is totally different - more like entertainment.


  19. Mr. Larsen indicated he probably could be called the Marketing Director of the company, but it is a small company and in reality he has no title. He is authorized to make decisions on minor matters, but the ultimate decisions are made by Ms. Larsen. The company is her baby, her brainchild and her business, and he agrees that if he were to walk away from the company, while she might have trouble running the business alone while maintaining a full time

    job elsewhere, she has the skills, the experience and the ability to do so. He could be replaced easily.


  20. At no time, according to Mr. Larsen, did he ever run the company. He has researched and written scripts but Ms. Larsen has always had a major idea or input into whatever he has done and he works, he claims, at her direction.


  21. When Larsen's application was forwarded to the Commission, it was evaluated by Mr. Ringgold who conducted a telephone interview with Mr. and Ms. Larsen on August 29, 1994. At this point, the Commission now agrees there is now no issue as to the ownership of the corporation and that Larsen Communications in owned by Ms. Larsen. Nonetheless, Mr. Ringgold recommended that Larsen's application be denied under the provisions of Rule 60A-2.005,

    F.A.C. because he believed that Ms. Larsen does not assume the majority share of risk; that she does not have the authority to control and the experience to exercise dominant control over the corporation; that she does not have sufficient technical capability to run the corporation; that her control is not real, substantial and continuing; that she does not control the purchase of equipment and supplies; that she does not have independence in seeking business and that she does not have direction and control over all aspects of the business. Because he now accepts the fact that Ms. Larsen has knowledge and control of the company's financial affairs, the preexisting objection on that grounds is withdrawn, but taken together, as of the date of the hearing, Mr. Ringgold still recommended denial. No evidence was presented by the Commission, other than the testimony of Mr. Larsen which tended to support Petitioner's position, which would show with particularity any basis for disbelieving Petitioner's assertions.


  22. When Mr. Ringgold made his recommendation for denial, his decision was based on the matters submitted by the applicant and the information gained in the telephone interview. He did not make an on-site inspection of Larsen's facility. By the same token, he did not know of Ms. Larsen's schooling at the Tampa Academy of performing Arts at the time he made his recommendation. He does not recall ever having changed his mind regarding a recommendation in the nine years he has been doing this work.


  23. Mr. Ringgold has his educational credentials in speech and has some knowledge of video production having worked in that area for his uncle while in school.


    CONCLUSIONS OF LAW


  24. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.


  25. The burden of proof in upon the Petitioner, Larsen Communications and Professional Services, Inc., to establish its entitlement to the requested certification as a minority business enterprise by a preponderance of the evidence. Florida Department of Transportation v. J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981).


  26. A Minority Business Enterprise is defined by Section 288.703, Florida Statutes, as:


    ... any small business concern as defined in subsection (1) which is organized to engage

    in commercial transactions, which is domiciled in Florida, and which is at least 51 percent owned by minority persons who are members of

    an insular group that is of a particular racial, ethnic, or gender makeup or national origin, which has been subjected historically to disparate treatment due to identification in

    and with that group resulting in an under- representation of commercial enterprises under the group's control and whose management and daily operations are controlled by such persons.


  27. The Commission now admits that Ms. Larsen is the majority owner of the Petitioner corporation and, at hearing, conceded that she had knowledge and control of the company's financial affairs. However, because of Mr. Larsen's extensive experience in video production and his long-standing employment as an on-air personality, the Commission's representative still concludes that Ms. Larsen does not have the experience to exercise dominant control over the company's activities; does not have the technical capacity to run the corporation; does not have independence in seeking business and does not exercise control over the business. Save Mr. Ringgold's opinion to that effect, the Commission presented no independent evidence that such was the case.


  28. To the contrary, Ms. Larsen's testimony, and that of Mr. Larsen, uncontroverted in particular as it was, leaves little doubt that she is the focus of the operation and the director of all major facets of the business.


RECOMMENDATION


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


RECOMMENDED that Petitioner, Larsen Communications and Professional Services, Inc., be granted certification as a Minority Business Enterprise.


RECOMMENDED this 29th day of August, 1995, in Tallahassee, Florida.



ARNOLD H. POLLOCK, 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 29th day of August, 1995.


APPENDIX TO RECOMMENDED ORDER IN CASE NO. 94-5839


The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

FOR THE PETITIONER:


  1. Not a Finding of Fact but a Conclusion of Law.

  2. - 4. Accepted and incorporated herein.

    1. Accepted and incorporated herein except for references to F.A.C. which are Conclusions of law.

    2. - 8. Accepted and incorporated herein.


FOR THE RESPONDENT:


None Submitted.


COPIES FURNISHED:


Miriam L. Sumpter, Esquire 2700 North MacDill Avenue Suite 218

Tampa, Florida 33607


Joseph L. Shields, Esquire Commission on Minority Economic

and Business Development

201 Collins Building

107 West Gaines Street Tallahassee, Florida 32399-2000


Crandall Jones Executive Administrator

Commission on Minority Economic and Business Development

Collins Building - Suite 201

107 West Gaines Street Tallahassee, Florida 32399-2000


NOTICE OF RIGHT TO SUBMIT EXCEPTIONS


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


Docket for Case No: 94-005839
Issue Date Proceedings
Oct. 26, 1995 Final Order filed.
Aug. 29, 1995 Recommended Order sent out. CASE CLOSED. Hearing held 06/29/95.
Aug. 03, 1995 (Transcript) w/cover letter filed.
Jul. 17, 1995 Petitioner`s Proposed Findings of Facts filed.
Jun. 29, 1995 CASE STATUS: Hearing Held.
Jun. 26, 1995 (Petitioner) Motion for Continuance filed.
Jun. 19, 1995 (Respondent) Notice of Substitution of Counsel; Subpoena Duces Tecum (from Joe Shields) filed.
May 18, 1995 (Respondent) Notice of Taking Telephonic Deposition filed.
Mar. 06, 1995 Notice of Hearing sent out. (hearing set for 6/29/95; 9:00am; Tampa)
Mar. 02, 1995 (Respondent) Response to Initial Order filed.
Feb. 23, 1995 (Respondent) Notice of Appearance filed.
Dec. 12, 1994 Order of Abeyance sent out. (Parties to file status report within 90 days from the date of this Order)
Nov. 07, 1994 (Petitioner) Notice of Appearance; Cover Letter filed.
Oct. 26, 1994 Initial Order issued.
Oct. 18, 1994 Agency action letter filed. (1 page only)
Oct. 13, 1994 (Respondent) Notice of Withdrawal/Motion for Abeyance filed.
Oct. 12, 1994 Agency referral letter; Petition for Administrative Hearing, letter form filed.

Orders for Case No: 94-005839
Issue Date Document Summary
Oct. 24, 1995 Agency Final Order
Aug. 29, 1995 Recommended Order Evidence undisputed except by opinion of agency evaluator--shows woman owner controlled operations enough to qualify for Minority Business Enterprise status.
Source:  Florida - Division of Administrative Hearings

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