STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF EDUCATION, )

)

Petitioner, )

)

vs. ) Case No. 98-5285

)

WILBERT DUDLEY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to agreement of the parties as documented in the motion of Petitioner filed on March 4, 1999, formal hearing scheduled for March 9, 1999, in the above-styled cause was cancelled by Don W. Davis, an Administrative Law Judge of the Division of Administrative Hearings, with leave for the parties to file proposed recommended orders within 20 days and otherwise have this matter decided upon the existing record.

APPEARANCES

For Petitioner: Ronald G. Stowers, Esquire

Department of Education The Capitol, Suite 1701

400 South Monroe Street Tallahassee, Florida 32399-0400

For Respondent: Wilbert Dudley, pro se

1962 Willow Bends, Apt 2-D Sneads, Florida 32460

STATEMENT OF THE ISSUE

The issue for determination is whether Respondent’s lottery prize is subject to an outstanding debt owed to the Department of Education.

PRELIMINARY STATEMENT

By letter dated October 14, 1998, Respondent was informed by Petitioner that Respondent’s lottery prize had been transmitted to Petitioner to be applied against Respondent’s existing indebtedness to Petitioner.

Respondent subsequently requested a formal administrative hearing to contest Petitioner’s action. The matter was transferred to the Division of Administrative Hearings for conduct of a formal hearing pursuant to Section 120.57(1), Florida Statutes.

The March 9, 1999, final hearing was waived by the parties and this matter is decided upon the parties’ proposed recommended orders and the existing record.

Proposed findings of fact submitted by Petitioner have been considered in the preparation of this Recommended Order.

Respondent submitted no proposed findings.

FINDINGS OF FACT

1. Respondent is Wilbert Dudley. His address is 1962 Willow Bends, Apt 2-D, Sneads, Florida 32460.

2. Petitioner is the Florida Department of Education.

   
   

3. In an application dated September 25, 1981, Respondent applied for a federally guaranteed student loan for the 1981-82 academic year. The loan, in the amount of $2,500, was issued by the Ellis Bank of Blountstown (the lender) in two equal disbursements: One on or after November 9, 1981, and one on or

   about January 29, 1982. The loan accrues interest at the rate of

   
   

   7 percent per year unless Respondent is in deferment status, such as attending school on a minimum part-time basis. Respondent’s loan, number 114103, was guaranteed by Petitioner.

4. Respondent and the lender agreed to a repayment schedule for the loan with the first payment beginning November 15, 1984. The lender received no payment from Respondent after March 25, 1985. Subsequently, the lender declared Respondent in default and filed a claim with Petitioner. On August 8, 1986, Petitioner, as guarantor of the loan, paid the lender $2,612.67 in principal and interest for Respondent’s loan.

5. After Petitioner acquired Respondent’s loan, the following payments were applied to Respondent’s loan:

   May 10, 1989 $25.00

   June 13, 1990 $25.00

   December 6, 1991 $50.00

   March 9, 1992 $391.66 (1991 Federal Income Tax

   Return)

   May 5, 1992 $50.00

   
   

6. In a letter dated May 1, 1998, Petitioner notified Respondent that his salary was subject to administrative wage garnishment for the defaulted student loan in accordance with provisions of Section 112.175, Florida Statutes. Petitioner advised Respondent that the total principal and interest due on the loan at that time was $5,335.15 not counting legal fees or collection costs. Thereafter Respondent agreed to voluntary administrative wage garnishment in the amount of $25 biweekly through payroll deduction. The agreement was confirmed by

   Petitioner’s letter dated June 16, 1998. Based on this agreement, regular payments of $25 biweekly have been received since July 17, 1998, and credited to Respondent’s account by Petitioner.

7. By letter dated October 14, 1998, Respondent was informed by Petitioner that a claim again Respondent’s lottery winnings of $2,500 had been made in accordance with provisions of Section 24.115(4), Florida Statutes. At that time, Respondent owed Petitioner $5,268.09 in outstanding principal and interest. Respondent’s lottery winnings were transferred to Petitioner on November 25, 1998, and applied to Respondent’s outstanding balance in accordance with federal requirements. Respondent was informed of his right to review of this action per Chapter 120, Florida Statutes. Respondent timely sought such review.

   CONCLUSIONS OF LAW

   
   

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

9. The only issue in this case is whether Petitioner may collect Respondent’s lottery prize in partial satisfaction of Respondent’s defaulted student loan obligation although Respondent is current with the mutually agreed-upon administrative wage garnishment. Respondent’s contention is that he owes nothing to Petitioner so long as Respondent is current

   with the garnishment agreement. Such an argument is not persuasive.

10. Section 24.115(4), Florida Statutes (1997), directs the Department of the Lottery as follows:

    It is the responsibility of the appropriate state agency and of the judicial branch to identify to the department . . . persons owing an outstanding debt to any state agency or owing child support collected through a court. Prior to the payment of a prize of

    $600 or more to any claimant having such an outstanding obligation, the department shall transmit the amount of the debt to the agency claiming the debt and shall authorize payment of the balance to the prize winner after deduction of the debt. (Emphasis supplied.)

11. Even though Respondent is current under provisions of the administrative wage garnishment, he still owes the entire remaining amount of the defaulted student loan principal and interest. Respondent is not actually forfeiting his lottery prize; rather, it will be applied to reduce his student loan obligation and pay it off sooner.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that Petitioner enter a final order certifying that the Department of Lottery should pay Respondent's $2,500 lottery prize to Petitioner for application to Respondent’s outstanding defaulted student loan balance.

DONE AND ENTERED this 31st day of March, 1999, in Tallahassee, Leon County, Florida.

DON W. DAVIS

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1999.

COPIES FURNISHED:

Ronald G. Stowers, Esquire Department of Education The Capitol, Suite 1701

400 South Monroe Street Tallahassee, Florida 32399-0400

Wilbert Dudley

1962 Willow Bends, Apt 2-D Sneads, Florida 32460

Michael H. Olenick, General Counsel Department of Education

The Capitol, Suite 1701 Tallahassee, Florida 32399-0400

Tom Gallagher Commissioner of Education Department of Education

The Capitol, Plaza Level 08 Tallahassee, Florida 32399-0400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of 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: 98-005285

Orders for Case No: 98-005285