STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STEVEN A. RAMUNNI,

Petitioner,

vs.

DEPARTMENT OF MANAGEMENT SERVICES, DIVISION OF RETIREMENT,

Respondent.

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) Case No. 03-1966

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RECOMMENDED ORDER

Pursuant to notice and in accordance with Section 120.569 and Subsection 120.57(1), Florida Statutes, a final hearing was held in this case, on July 30, 2003, in LaBelle, Florida, before Fred L. Buckine, the designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Steven A. Ramunni, Esquire

Post Office Box 1118 LaBelle, Florida 33975

For Respondent: Thomas E. Wright, Esquire

Department of Management Services Division of Retirement

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950

STATEMENT OF THE ISSUE

The issue for determination is whether Petitioner,

Steven A. Ramunni, owner of Steven A. Ramunni, P.A., employed by the City of Moore Haven, Florida, as the part-time city attorney, is entitled to participate in the Florida Retirement System from November 25, 1986, through the present.

PRELIMINARY STATEMENT

By letter dated March 21, 2003, Respondent, Department of Management Services, Division of Retirement, informed Petitioner, Steven A. Ramunni, that Respondent had reconsidered its prior determination that Petitioner was ineligible for participation in the Florida Retirement System. After consideration of all supporting documentation provided, Respondent again reviewed Petitioner's request and determined for a second time that the relationship between Petitioner and the City of Moore Haven, Florida, was that of an independent contractor and, as such, Petitioner was excluded from Florida Retirement System participation. Petitioner was advised that the independent contractor relation determination was final agency action.

On May 27, 2003, Petitioner's Petition for Review and Formal Request for Administrative Hearing, the Final Agency Action, and the Agency Referral were received at the Division of Administrative Hearings.

On June 5, 2003, the Initial Order was entered, and on June 13, 2003, a Notice of Hearing was entered scheduling the final hearing for July 30, 2003, in LaBelle, Florida.

At the final hearing, Petitioner testified in his own behalf and offered three exhibits (P-A through P-C), which were accepted in evidence. Respondent presented the testimony of two witnesses: Cathy Brantley, Benefits Administrator, Division of Retirement; Maxine Brantley, City Clerk, City of Moore Haven, Florida; and Petitioner. Respondent offered seven exhibits (R-1 through R-7), which were accepted in evidence.

At the request of the parties, official recognition was taken of Subsections 121.021(22), (24), (50), (52), and (53) and Subsection 121.051(1)(d)2., Florida Statutes; Rule 60S- 1.004(3)(g), (5)(b), and (5)(d) and Rule 60S-6.001(6)(b),

(16)(b), (33), (52), and (63), Florida Administrative Code; and Sections 6.01 and 7.01 of the City of Moore Haven Charter. All citations are to Florida Statutes (2002) unless otherwise indicated.

No transcript was requested, and the parties were allowed ten days to file their proposed recommended orders. On

August 11 and 21, 2003, Respondent and Petitioner, respectively, filed their Proposed Recommended Orders, and they have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

Based upon observation of the witnesses and their demeanor while testifying in person and the documentary materials received in evidence, stipulations by the parties, evidentiary rulings made pursuant to Section 120.57, and the entire record compiled herein, the following relevant and material facts are found:

1. The City of Moore Haven, Florida (City), is a Florida Municipal Corporation classified as a local agency and participates in the Florida Retirement System (FRS).

2. The city attorney part-time position is established by Article IV of the City of Moore Haven Charter.

3. The City has no legal department. The cost for legal services rendered by its part-time city attorney is included in the City's annual budget.

4. Petitioner, Steven A. Ramunni (Mr. Ramunni), owner of Steven A. Ramunni, P.A., was hired November 25, 1986, as the City's part-time city attorney. His immediate supervisors are the mayor and the City Council of Moore Haven (City Council).

5. Mr. Ramunni's primary legal duties consist of mandatory appearances at two regularly scheduled monthly meetings and attendance at special meetings at the discretion of the City Council. He performs the legal duties and services needed or required by the City Council. He represents the City in all

   litigation and official business. He provides legal advice/opinions to the mayor, the City Council, and to all city department heads. Mr. Ramunni, by virtue of a monthly retainer, is obligated to be available as needed by his retainer client on a daily basis, if necessary.

6. The City provides administrative assistance to

   
   

   Mr. Ramunni when he is engaged in legal projects for the City. However, the City hires and supervises the administrative staff. Additionally, Mr. Ramunni has authority and does use his private law firm's administrative staff to assist him in performing legal services for the City. The City is billed separately from the monthly retainer agreement for other legal services. The City pays for those legal seminars attended by Mr. Ramunni that are related to local agencies as that term is defined in Subsection 121.021(52)(b). Mr. Ramunni is responsible for attending and making payment for additional seminars necessary to comply with mandatory Florida Bar requirements.

7. Mr. Ramunni has held the position of part-time city attorney for the City and has continuously performed legal services as the part-time city attorney continually since November 25, 1986.

8. There was no formal contract of employment entered into by Mr. Ramunni and the City on November 25, 1986, and no formal contract of employment presently exists.

   Reimbursement for legal services rendered to the City

   
   

9. For attending City Council meetings twice a month,

   
   

   Mr. Ramunni is on a fixed monthly retainer. Other than attending the two monthly City Council meetings, Mr. Ramunni has no other established legal duties as the part-time city attorney. He is available and he does provide requested legal counsel and engages in litigation when needed only on those issues determined by the City Council and/or the mayor.

10. Other than his fixed monthly retainer for attending City Council meetings, any and all other legal services performed for the City require additional compensation, billed by the hour, plus cost, to be paid to Mr. Ramunni. This hourly billing rate plus expenses is separate and apart from his fixed monthly retainer for attending City Council meetings as part- time city attorney.

    Reporting income paid Mr. Ramunni for services rendered

    
    

11. Mr. Ramunni asserts that he has not received an Internal Revenue Service (IRS) Form 1099 or a Form W-2 reflecting annual compensation paid him by the City from November 25, 1986, to the present. The Department of Management Services, Division of Retirement's (the Agency), ERQ-1 form,

    dated October 3, 2002, question 15, page 3, completed with the assistance of Maxine Brantley, City Clerk, and submitted to the Agency, answered the question, "How did the worker report the earnings for income tax purposes?" to the contrary.

12. Answering the above question regarding how monies paid to Mr. Ramunni are reported to state and federal agencies for income tax purposes, the ERQ-1 form confirms that the City does not report annual earned income payments made to Mr. Ramunni as "Wages" for income tax purposes by Form W-2. The City chose to report, and Mr. Ramunni acquiesced, annual earned income paid to Mr. Ramunni by the City as "self employed income" for tax purposes by using Form 1099.

13. The City chose, and Mr. Ramunni acquiesced, not to withhold federal income taxes and federal social security deductions from Mr. Ramunni's payment for services rendered.

14. The City chose, and Mr. Ramunni acquiesced, not to withhold medicare deductions from Mr. Ramunni's annual pay.

15. The City chose, and Mr. Ramunni acquiesced, not to make matching contributions for Mr. Ramunni's federal social security or medicare payments.

16. The City chose, and Mr. Ramunni acquiesced, not to provide statutorily required workers' compensation coverage for Mr. Ramunni.

17. The City is insured by its Public Risk Management Self Insurance coverage, to include legal work performed on behalf of the City by Mr. Ramunni. This coverage is not insurance coverage for legal malpractice claims that may be made against Mr. Ramunni, personally.

18. Mr. Ramunni maintains a law firm, Stevens A. Ramunni, P.A., with offices in LaBelle and Fort Myers, Florida, offering legal services to the general public. Mr. Ramunni does not have office equipment or office space on the City's premises. The City makes remittance of the monthly retainer and of fees charged by Mr. Ramunni to Steven A. Ramunni, P.A., and not Mr. Ramunni personally. The City's remittance checks are deposited in the Steven A. Ramunni, P.A., law firm's account and not Mr. Ramunni's personal banking account.

19. Mr. Ramunni, at his sole discretion, uses the administrative staff of his private law firm to assist him with the City's legal projects. The cost for use of the administrative staff of his private law firm is an integrated portion of his hourly total billing totals to the City.

20. Although Mr. Ramunni may terminate his independent relationship with the City as city attorney without personal financial liability, he continues to have a professional and ethical duty to assist in the transition of ongoing litigation to a new attorney. As part-time city attorney, Mr. Ramunni may

    not substitute another attorney to provide legal services assigned to him by the City without expressed authority and approval of the proposed new attorney from the City Council and the mayor.

21. Based upon the Findings of Fact herein above, the evidence demonstrates that Mr. Ramunni's relationship as the part-time city attorney is not that of an "employee" of the City as that term is defined by rule of the Agency, for participation in the FRS.

22. Based upon the Findings of Fact herein above,

    
    

    Mr. Ramunni has failed to prove that his part-time city attorney relationship with the City is and always has been an employer- employee relationship as that term is defined by rule of the Agency and that he is eligible for participation in the FRS.

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings pursuant to Section 120.569 and Subsection 120.57(1).

24. The FRS is codified in Chapter 121. Section 121.051 provides for compulsory participation in the FRS for all employees hired after December 1, 1970. Subsection 121.021(11) defines employee as any person receiving salary payment for work

    performed in a regularly established position and, if employed by a city or special district, employed in a covered group.

25. Subsection 121.021(52)(b) defines a regularly established position as follows:

    In a local agency (district school board, county agency, community college, city, or special district), the term means a regularly established position which will be in existence for a period beyond 6 consecutive months, except as provided by rule.

    
    

26. Herein, the duty to go forward and the burden of proof by a preponderance of the evidence is upon Petitioner. See Subsections 120.57(1)(j) and (k), Florida Statutes (2000); Young

    1. Department of Community Affairs, 625 So. 2d 831 (Fla. 1993); Florida Department of Transportation v. J.W.C. Company, 396 So. 2d 778 (Fla. 1st DCA 1981); and Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977).

27. Petitioner has not proffered evidence that he was employed in any capacity other than that of an independent contractor on a month-by-month retainer basis and that he would handle, at an additional hourly rate, plus cost, travel and other expenses, all other legal matters assigned.

28. At hearing, Petitioner asserted, notwithstanding his private law firm's serving the general public, the personal legal service he provides his private clientele, the absence of an employment contract with the City, and the City's method of

    payment for his services, that he is and always has been an "employee" of the City. However, Petitioner offered nothing in support of his assertion.

29. Petitioner's Proposed Findings of Fact and Conclusions of Law submit that "[A]lthough Petitioner works for other persons or organizations, this is based upon Moore Haven's needs for a part-time rather than full-time attorney." However, this is not what the evidence shows. (See Findings of Fact 11 through 17)

30. Petitioner's proposals advanced the legal theory that he is "subject to the control and direction of the Mayor and/or City Council" not only as to what duties are assigned him but also as to how those assigned duties shall be done by him. Citing as an example of this subjection and control Petitioner maintains that "the Mayor and/or City Council can direct Petitioner to proceed with a foreclosure action instead of a demand letter or some lesser form of collection." This argument, advancing the theory that an attorney representing a client in the judicial system in Florida is subjected to, controlled and directed by that client, defeats professional legal independence of counsel and is without merit.

31. Pursuant to Subsection 121.021(50) an "independent contractor" is defined as follows:

    "Independent contractor" means an individual who is not subject to the control and direction of the employer for whom work is being performed, with respect not only to what shall be done but to how it shall be done. If the employer has the right to exert such control, an employee-employer relationship exists, and, for purposes of this chapter, the person is an employee and not an independent contractor. The division shall adopt rules providing criteria for determining whether an individual is an employee or an independent contractor.

    
    

32. Factors to be considered by the fact finder in determining whether one is an Independent Contractor are found in Rule 60S-6.001(33), Florida Administrative Code, which

provides:

INDEPENDENT CONTRACTOR -- Means an

individual who is not subject to the control and direction of the employer for whom work is being performed, with respect not only to what shall be done but to how it shall be done. If the employer has the right to exert such control, an employee-employer relationship exists and the person is an employee and not an independent contractor. The Division has adopted the following factors as guidelines to aid in determining whether an individual is an employee or an independent contractor. The weight given each factor is not always the same and varies depending on the particular situation.

1. INSTRUCTIONS: An employee must comply with instructions from his employer about when, where, and how to work. The instructions may be oral or may be in the form of manuals or written procedures which show how the desired results is to be accomplished. Even if no actual instructions are given, the control factor

   is present if the employer has the right to give instructions.

   
   

2. TRAINING: An employee is trained to perform services in a particular manner. This is relevant when the skills and experience which would be used as in independent contractor were gained as a result of previous employment. Independent contractors ordinarily use their own methods and received no training from the purchasers of their services.

   
   

3. INTEGRATION: An employee's services are integrated into the business operations because the services are critical and essential to the success of continuation of an agency's progress/operation. This shows that the employee is subject to direction and control.

   
   

4. SERVICES RENDERED PERSONALLY: An employee renders services personally. This shows that the employer is interested in the methods as well as the results. Lack of employer control may be indicated when a person has the right to hire a substitute without the employer's knowledge or approval.

   
   

5. HIRING ASSISTANTS: An employee works for an employer who hires, supervises, and pays assistants. An independent contractor hires, supervises, and pays assistants under a contract that requires him or her to provide materials and labor and to be responsible only for the results.

   
   

6. CONTINUING RELATIONSHIP: An employee has a continuing relationship with an employer. A continuing relationship may exist where work is performed at frequently recurring, although irregular intervals.

   
   

7. SET HOURS OF WORK: An employee usually has set hours of work established by an employer. An independent contractor is

   the master of his or her own time and works on his own schedule.

   
   

8. FULL-TIME OR PART-TIME WORK: An employee may work either full-time or part- time for an employer. Full-time does not necessarily mean an 8-hour day or a 5 or 6- day week. Its meanings may vary with the intent of the parties, the nature of the occupation and customs in the locality. These conditions should be considered in defining "full-time." An independent contractor can work when and for whom he or she chooses.

   
   

9. WORK DONE ON PREMISES: An employee works on the premises of an employer, or works on a route or at a location designated by an employer. The performance of work on the employer's premises is not controlling in itself; however, it does imply that the employer has control over the employee. Work performed off the employer's premises does indicate some freedom from control; however, it does not in itself mean the worker is not an employee.

   
   

10. ORDER OR SEQUENCE OF SERVICES: An employee generally performs services in the order or sequence set by an employer. This shows that the employee is subject to direction and control of the employer.

    
    

11. REPORTS: An employee submits oral or written reports to an employer. This shows that the employee must account to the employer for his or her actions.

    
    

12. PAYMENTS: An employee is usually paid by the hour, week, or month. An independent contractor is paid periodically (usually a percent of the total payment) by the job or on a straight commission.

    
    

13. EXPENSES: An employee's business and/or travel expenses are paid by an employer. This shows that the employer is

    in a position to control expenses and therefore the employee is subject to regulations and control.

    
    

14. TOOLS AND MATERIALS: An employee is furnished significant tools, materials, and other equipment by an employer. An independent contractor usually provides his own tools, materials, etc.

    
    

15. INVESTMENT: An employee is usually furnished the necessary facilities. An independent contractor has a significant investment in the facilities he or she uses in performing services for someone else.

    
    

16. PROFIT OR LOSS: An employee performs the services for an agreed upon wage and is not in a position to realize a profit or suffer a loss as a result of his services. An independent contractor can make a profit or suffer loss. Profit or loss implies the use of capital by the individual in an independent business of his own.

    
    

17. WORKS FOR MORE THAN ONE PERSON OR FIRM: An employee usually works for one organization. However, a person may work for a number of people or organizations and still be an employee of one or all of them. An independent contractor provides his or her services to two or more unrelated persons or firms at the same time.

    
    

18. OFFERS SERVICES TO GENERAL PUBLIC: An independent contractor makes his or her services available to the general public. This can be done in a number of ways: Having his/her own office and assistants, hanging out a "shingle", holding business licenses, having listings in business directors and telephone directories, and advertising in newspapers, trade journals, etc.

    
    

19. RIGHT TO TERMINATE EMPLOYMENT: An employee can be fired by an employer. An

    independent contractor cannot be fired so long as he or she produces a result that meets the specifications of the contract. An independent contractor can be terminated but usually he will be entitled to damages for expenses incurred, lost profit, etc.

    
    

20. RIGHT TO QUIT: An employee can quit his or her job at any time without incurring liability. An independent contractor usually agrees to complete a specific job and is responsible for its satisfactory completion, or is legally obligated to make good for failure to complete it.

33. Applying Rule 60S-6.001(33)(a), (b), (e), (g), (h),

(i), (j), (k)(1), (n), (o), (q), (r) and (t), of the above criteria to the Findings of Fact hereinabove, it is evident that Petitioner is not an "employee" of the City, and the City is not his "employer."

1. First, regarding subsection (a) of the rule--the City cannot instruct Petitioner on where and how to practice law. Venue, for example, is determined by statute, not the City. The City can only instruct him on the legal problem--leaving the legalities necessary to resolve the problem to his independent professional expertise.

2. Second, regarding subsection (c)--Petitioner's legal training, skills, and legal expertise were gained as a result of law school, and his legal experiences were acquired prior to being appointed part-time city attorney.

3. Third, regarding subsection (e)--Petitioner hires, supervises, and pays his law firm's administrative assistants, the City provides him only with City letterhead for correspondence.

4. Fourth, regarding subsection (g)--Petitioner manages and bills his own time. Dividing his time and his billing for servicing other clients and for servicing the City evidences that Petitioner is the master of his own schedule, subject only to judicial rules and constraints.

5. Fifth, regarding subsection (h)--Petitioner can work for whom he chooses and when he chooses from among his general public clients--with the City having priority only on his presence during their twice a month meetings. Petitioner can choose what legal action to file first, when to file, how to prepare, how to proceed, and how to resolve each legal matter submitted for his attention.

6. Sixth, regarding subsection (i)--Petitioner does a majority, if not all, of his legal preparation work off the City's premises in his office at Steven A. Ramunni, P.A.

7. Seventh, regarding subsection (j)--the City cannot order the sequence of legal functions before the courts, notwithstanding counsel who is representing the City.

8. Eighth, regarding subsection (l)--Petitioner is paid a monthly retainer for a specific function-attending meetings. He

   is paid periodically, usually at the conclusion, for all other legal work determined by the City Council to be performed.

9. Ninth, regarding subsections (n) and (o)--Petitioner provides his own legal tools and materials and has a significant investment in the facilities of his law firm, all of which he uses to perform legal services for the City and for his general public clients.

10. Tenth, regarding subsection (q)--Petitioner provides his legal services to the City. He provides his legal services to more than two general public persons or firms, who are not related to each other nor related to the City, at the same time.

11. Eleventh, regarding subsection (r)--Petitioner makes his services available to the general public by means of advertisement in the phone book.

12. Twelfth, regarding subsection (t)- -although Petitioner can quit his part-time city attorney position at any time without incurring liability, he is, however, professionally obligated to complete the City's ongoing legal matters entrusted in his care and/or effectuate a transfer of unfinished legal matters to another attorney, only with the advice and consent of the City Council or by order of the courts.

13. Based upon the Findings of Fact and the Conclusions of Law herein above, Petitioner has failed to carry the burden of proof and demonstrate by a preponderance of evidence that the

City is his "employer" and that he, as the part-time city attorney performing only professional legal services to the City, a retainer client, as the City's "employee." The evidence demonstrated that Petitioner's professional legal relationship with the City is that of an "independent contractor" as defined by applicable elements of Rule 60S-6.001(33), Florida

Administrative Code.

RECOMMENDATION

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

RECOMMENDED that the Department of Management Services, Division of Retirement, enter a final order denying Petitioner's request to participate in the Florida Retirement System from November 25, 1986, through the present.

DONE AND ENTERED this 3rd day of September, 2003, in Tallahassee, Leon County, Florida.

S

FRED L. BUCKINE

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 3rd day of September, 2003.

COPIES FURNISHED:

Steven A. Ramunni, Esquire Post Office Box 1118 LaBelle, Florida 33975

Thomas E. Wright, Esquire Department of Management Services Division of Retirement

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950

Erin Sjostrom, Director Division of Retirement

Department of Management Services Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

Monesia Taylor Brown, Acting General Counsel Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-1560

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: 03-001966

Orders for Case No: 03-001966