STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WPS OF GAINESVILLE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 96-0023

) COMMISSION ON MINORITY ECONOMIC ) AND BUSINESS DEVELOPMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal hearing before Stephen F. Dean, duly designated Hearing Officer of the Division of Administrative Hearings, on May 14, 1996, in Gainesville, Florida.

APPEARANCES

For Petitioner: David L. Worthy, Esquire

Peter A. Robertson and Associates 4128 Northwest 13th Street Gainesville, Florida 32609

For Respondent: Joseph L. Shields, Esquire

Commission on Minority Economic and Business Development

107 West Gaines Street, Suite 201 Tallahassee, Florida 32399-2005

STATEMENT OF THE ISSUE

The issue is whether the Petitioner is qualified for designation and certification as a minority business enterprise.

PRELIMINARY STATEMENT

On October 26, 1995, the Petitioner applied to the Commission on Minority Economic and Business Development (CMEBD) for certification as a minority business enterprise (MBE) in several occupations; however, Ms. Wendy Stephens limited the application of her company, WPS, to "landscaping."

By letter dated December 11, 1995, CMEBD denied the Petitioner's application for MBE designation because the Petitioner did not qualify as a minority business enterprise within the meaning of Section 288.703(1) and (2), and Section 287.0943(1)(e)3, Florida Statutes, and multiple sections of the implementing rules.

Petitioner filed a Petition for a formal hearing on its application on January 3, 1996. CMEBD forwarded the matter to the Division of Administrative

Hearings, and the case was noticed for March 20, 1996. Upon motion of Petitioner, the matter was continued until May 7, 1996, and upon agreement of the parties that date was extended until May 14, 1996.

At the hearing, the Petitioner presented testimony and evidence in support of her application. The Respondent presented no evidence. Both parties filed proposed findings which were read and considered. The appendix to this order states which of these findings were adopted, and which were rejected and why.

FINDINGS OF FACT

At the hearing, it became apparent that the reasons for denial were principally lack of independence and affiliation with a non-qualifying company. The parties stipulated to the following:

1. Ms. Wendy Stephens, President and Secretary of WPS and sole stockholder WPS, possess the authority to, and does in fact, exercise complete control over the management, daily operations and corporate affairs of WPS.

   
   

2. Ms. Stephens possesses the technical capability, managerial qualifications and expertise to operate WPS.

   
   

   The following facts were proven at hearing:

   
   

3. Ms. Stephens is a white, female and is qualified as a minority person under the statute.

   
   

4. In 1991, Charles Perry, Ms. Stephen's father and a white male, provided

   $7,000 for start up capital and a lease of 3 acres on his farm to house Alachua Greenery, a wholesale/retail nursery which Wendy Stephens began with assistance from Perry. Ms. Stephens has never made payments on the aforementioned lease. Charles Perry and Wendy Stephens were the sole stockholders in Alachua Greenery, each holding 50 percent of the shares in the corporation. Perry has contributed nothing more to the operation of the corporation, and has never exercised any control over the corporation, although he was initially a director.

   
   

5. WPS is a Florida corporation, domiciled and doing business in the state.

   
   

6. WPS is worth less than $3,000,000 and has three employees.

   
   

7. Ms. Stephens is and always has been the sole stockholder of WPS, and has served as its President and Secretary since its incorporation.

   
   

8. Ms. Stephens husband, Gary Stephens, was once a director of WPS upon the advice of counsel; however, he exercised no control over the corporation and resigned as a director on April 12, 1996. Gary Stephens sold a Bobcat tractor to Wendy Stephens upon which he has deferred payments. This Bobcat is used by WPS and Alachua Greenery. Gary Stephens has no other financial or other interest in WPS or Alachua Greenery.

   
   

9. WPS was formed for the purpose of engaging in the retail landscaping business, which is a logical business expansion from the wholesale nursery business. WPS has engaged in the retail landscaping business for several customers.

10. WPS shares equipment, land, vehicles, and employees with Alachua Greenery.

    
    

11. There is no evidence that WPS, which has performed a number of contracts, has been a conduit of money to Alachua Greenery.

    
    

12. On May 13, 1996, Perry gifted his share of Alachua Greenery to Wendy Stephens.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

14. The Petitioner filed a timely protest of the denial of its application for minority business enterprise status.

    
    

15. The Petitioner has the burden to demonstrate its qualifications for designation as a minority business enterprise.

    
    

16. The Petitioner possesses most of the qualifications for designation: Ms. Stephens is a minority person, the corporation is worth less than $3,000,000 and employs only three people, the applicant is engaged in commercial operations, and, except has hereinafter noted, is not merely a conduit to a non- minority business. However, the applicant corporation shares office space, land, equipment, personnel, and a telephone with Alachua Greenery. Although Wendy Stephens is the operator of Alachua Greenery and has full control over the operation of that corporation, her father assisted her in starting this business and was owner until May 13, 1996 of 50 percent of the stock in the business.

    WPS fails to meet the specific requirements of Section 289.0943(1)(e)2., Florida Statutes, which provides:

    
    

    If present ownership was obtained by transfer, require the minority person on who eligibility is based to have owned at least 51 percent of the applicant firm for a minimum of 2 years when any previous majority ownership interest in the firm was by a non-minority who is or was a relative . . .[.]

    
    

17. Eventhough Alachua Greenery is not the applicant and Mr. Perry has never exercised any control over Alachua Greenery or WPS, the applicant fails to comply with the specific statutory qualification stated above. The statute precludes any discretion in making a determination in the case.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner's application for minority business status

be denied.

DONE AND ENTERED this 27th day of June, 1996, in Tallahassee, Florida.

STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675 SunCom 278-9675

Filed with the Clerk of the Division of Administrative Hearings this 27th day of June, 1996.

APPENDIX TO RECOMMENDED ORDER CASE NO. 96-0023

Both parties submitted proposed findings which were read and considered.

The following states which of those findings were adopted, and which were rejected and why. References to numbered paragraphs in Petitioner's findings includes all letter subparagraphs unless otherwise noted.

PETITIONER'S RECOMMENDED ORDER

Paragraphs 1,2 Statement of Case Paragraph 3 Irrelevant Paragraphs 4-6 Statement of Case Paragraph 7a Paragraph 9

Paragraph 7b Subsumed in Paragraph 6 Paragraph 7c Subsumed in Paragraphs 6 & 8

Paragraph 7d Contrary to best evidence Paragraph 7e Irrelevant

Paragraph 7f Subsumed in Paragraph 9 Paragraph 7g Irrelevant

Paragraphs 7h,i Paragraph 7

Paragraphs 7j,k,l Subsumed in Paragraph 8 Paragraphs 7m,n,o,p Paragraph 4 Paragraph 7q Subsumed in Paragraph 12 Paragraph 7r Paragraph 11

Paragraphs 7s,t Irrelevant

RESPONDENT'S RECOMMENDED ORDER

Paragraph 1,2 Subsumed in Paragraph 8

Paragraph 3 Subsumed in Paragraph 10

Paragraph 4 Paragraph 4

Paragraph 5 Subsumed in Paragraph 10 Paragraph 6 Not necessary

Paragraph 7,8 Paragraph 12 Paragraph 9 Not necessary

COPIES FURNISHED:

David L. Worthy, Esquire

Peter A. Robertson and Associates 4128 Northwest 13th Street Gainesville, Florida 32609

Joseph L. Shields, Esquire Commission on Minority Economic

and Business Development

107 West Gaines Street, Suite 201 Tallahassee, Florida 32399-2005

Veronica Anderson, 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 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.

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF LABOR AND EMPLOYMENT SECURITY

WPS OF GAINESVILLE, INC.,

Petitioner,

vs. DOAH CASE NO.: 96-0023

DEPARTMENT OF LABOR AND EMPLOYMENT SECURITY, MINORITY BUSINESS ADVOCACY AND ASSISTANCE . OFFICE,

Formerly,

COMMISSION ON MINORITY ECONOMIC AND BUSINESS DEVELOPMENT,

Respondent.

/

FINAL ORDER

THIS CASE is before the undersigned for the entry of this Final Order. A recommended Order in this case was entered on June 27, 1996, by a Hearing Officer duly appointed by the Division of Administrative Hearings. Petitioner filed exceptions to the Recommended Order and they are addressed herein.

IT IS THEREFORE ORDERED:

1. The Findings of Fact in the Recommended Order adopted.

   
   

2. The Hearing Officer's Finding of Fact, Paragraph 10, and Conclusion of Law, Paragraph 16, support a finding that W.P.S. is an affiliate of Alachua Greenery which is a non-minority company. This is in violation of Rule 60A-2

   .005(4)(b), Florida Administrative Code which provides:

   
   

   To establish that it is a small business concern, the applicant shall demonstrate that it is not an affiliate of a non-minority business nor share (on an individual or combined basis) common ownership, directors, management, employees, facilities, inventory, financial resources and expenses, equipment or business operations with a non-minority person and/or business concern which is in the same or an associated field of operation.

   
   

3. In his Preliminary Statement, the Hearing Officer stated that "the Respondent presented no evidence" (at hearing). In fact, the Respondent put on its witness, Ms. Polly Williams, and introduced certain Exhibits into evidence.

   
   

4. In response to Petitioner's Exceptions; the Respondent finds that it is of no consequence and therefore irrelevant and immaterial that W.P.S. may not share vehicles with Alachua Greenery. Further, the weight of evidence at final hearing was (and the Petitioner's Exception numbered 1 confirms) that the Petitioner does at times use the employees, property and equipment of Alachua Greenery to perform Petitioner's (W.P.S.) tasks. Again, it is irrelevant that those employees are treated as "independent landscaping contractors" because those employees are "shared" within the meaning of Rule 60A-2.005(4)(b), F.A.C.

   
   

   Paragraph 2, above, is responsive to Petitioner's Exception numbered 2. It is evident that the Hearing Officer discerned that, in order to determine that WPS was affiliated with a non-minority company, he must find that Alachua Greenery was a non-minority company as proscribed by Section 287.0943(1)()2, Florida Statutes. That finding is correct.

5. Petitioner's Exception numbered 3 is irrelevant and immaterial and is therefore rejected.

In consideration of the foregoing the Recommended Order is adopted with those comments and the application for certification as a Minority Business Enterprise is DENIED.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 15th of July, 1996.

Veronica Anderson Executive Director

Florida Department of Labor and Employment Security

Minority Business Advocacy and Assistance Office

COPIES FURNISHED:

David L. Worthy, Esquire

Peter A. Robertson and Associates 4128 Northwest 13th Street Gainesville, Florida 32609

Joseph L. Shields, Esquire Department of Labor and Employment Security

2012 Capital Circle, S.E. Suite 307, Hartman Building

Tallahassee, Florida 32399-2189

Stephen F. Dean, Hearing Officer Division of Administrative Hearings The Desoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Docket for Case No: 96-000023

Orders for Case No: 96-000023