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. 10-0634

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RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on June 25, 2010, before Daniel M. Kilbride, Administrative Law Judge of the Division of Administrative Hearings, by video teleconference between Ft. Myers and Tallahassee, Florida.

APPEARANCES

For Petitioner: Amira DaJani Fox, Esquire

Fox & Ramunni, P.A.

2211 Widman Way, Suite 250 Ft. Myers, Florida 33901

For Respondent: Thomas E. Wright, Esquire

Department of Management Services Division of Retirement

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399-0950 STATEMENT OF THE ISSUE

Whether Petitioner, Steven A. Ramunni (Petitioner), employed by a city as a part-time city attorney, is entitled to

membership and service credit in the Florida Retirement System (FRS) from October 1, 2003, through the present.

PRELIMINARY STATEMENT

Petitioner is the attorney for the City of Moore Haven, Florida (City), and has been since November 1986. In

October 2003, the City began paying Petitioner as a W-2 employee and reporting his wages to Respondent, Department of Management Services, Division of Retirement (Respondent). In 2007, while reviewing Petitioner's application for Senior Management Services Class, Respondent learned that Petitioner's wages were being reported and audited the account. After this audit, Respondent issued an Agency Action on November 9, 2009, denying Petitioner service credit in the FRS, and this timely appeal followed. This matter was referred to the Division of Administrative Hearings on February 10, 2010, and was set for hearing. At the request of Petitioner, this matter was continued and re-scheduled for hearing on June 25, 2010, by video teleconference.

At the hearing, Petitioner testified in his own behalf and offered the testimony of Maxine Brantley, city clerk of the City and John Ahern, city commissioner of the City. Petitioner offered four exhibits, which were admitted in evidence. The Respondent presented testimony of Joyce Morgan, benefits administrator of Respondent, and Maxine Brantley, city clerk of

the City. Respondent offered ten exhibits, which were all admitted. At request of the parties, certain provisions of Sections 121.021, 121.029, and 120.051, Florida Statutes (2009),1 Florida Administrative Code Rules 60S-1.004(1)(4) and

60S-6.001(32), as well as Article IV, Sections 6.01 and 7.01 of the Charter of the City were officially recognized.

No transcript was requested, and the parties agreed to file post-hearing submissions more than 10 days after the hearing.

On August 5, 2010, Respondent filed a Motion to Allow Late Filing; Petitioner did not object, and, finding no prejudice to either party, the motion is granted. Both parties submitted proposed recommended orders. Each of the parties' proposals has been carefully considered in the preparation of this Order.

FINDINGS OF FACT

Based on the evidence, the following Findings of Fact are determined.

1. The City is a Florida municipal corporation classified as a local agency, which participates in the FRS.

2. The city attorney is a regularly-established position, pursuant to Article IV of the Charter of the City.

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

   
   

   and Petitioner is permitted to engage in the private practice of law.

4. The city attorney's immediate supervisors are the mayor and City Council of Moore Haven (City Council).

5. Petitioner's primary legal duties consist of mandatory appearances at two regularly-scheduled monthly meetings and attendance at special meetings or workshops, scheduled by the mayor. The meetings always take place in City Council chambers in Moore Haven, Florida. Petitioner's legal duties and the dates and times of all meetings are subject to the discretion and control of the City Council. Petitioner regularly reports to City Council at each meeting. Petitioner provides legal advice/opinions to the mayor, City Council, and to all city department heads. City Council prioritizes all matters assigned to Petitioner. Petitioner represents the City in all litigation and official business.

6. The Petitioner is paid a monthly salary for attendance at the above-described meetings and is obligated to be available, as needed, by city staff or individual council members on a daily basis, if necessary. The salary paid to Petitioner is in the form of W-2 wages, pursuant to the Internal Revenue Service classification. Other legal work is billed to the City by invoice in a pay-as-you-go basis for legal services

   
   

   requested beyond the scope of Petitioner's regular part-time services.

7. The City provides administrative assistance to Petitioner when he is engaged in legal projects for the City and some supplies. Petitioner has no equipment and has limited office space on City premises. More recently, the City hired a city manager whose responsibility, in part, is to draft proposed legislation for review by Petitioner. All costs or expenses incurred by Petitioner are reimbursed by the City. The City hires and supervises the administrative staff.

8. The City pays for legal seminars attended by Petitioner that are related to administrative and local government law. Petitioner is reimbursed for any per diem expenses incurred while performing the City's official business, including travel to and from those seminars.

9. Petitioner has continuously performed legal services as the part-time city attorney since November 25, 1986. Petitioner is hired annually on October 1st (the beginning of the fiscal year), by the majority vote of City Council. Petitioner's services can be ended at will. Likewise, Petitioner can resign at will; there is no written employment contract with Petitioner. The City may not instruct Petitioner how to do his job as an attorney, although the City does have some control over what course of action or inaction he may take in a

   
   

   particular case. As a part-time city attorney, Petitioner 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 City Council and the mayor.

10. Pursuant to an oral employment agreement between Petitioner and City Council on October 1, 2003, Petitioner was included in the FRS. In addition, Social Security and Medicare taxes were paid by the City, and Petitioner was classified as a W-2 employee. The oral employment agreement has been renewed annually since October 1, 2003. However, on October 1, 2007, Petitioner was elevated to Senior Management Classification, under the State of Florida Classification System.

11. Petitioner is paid as an employee. The City reports to state and Federal agencies that annual earned income to Petitioner as "wages for income tax purposes by form W-2." As such, Federal income taxes are withheld and Federal Social Security and Medicare deductions are withheld from Petitioner's annual pay. The City matches contributions for Petitioner's Social Security and Medicare payments.

12. When not engaged in city business, Petitioner is a partner in a law firm, with its principal place of business in Ft. Myers, Florida, from which he offers his legal services to the general public.

    
    

13. The City employs other part-time employees, who are all included in the FRS. All part-time employees, including Petitioner, do not receive any additional benefits from the City. Some of these part-time employees have "side jobs" while not in the employ of the City.

14. At least one similarly-situated person, E. Dan Stevens (Stevens), who was employed as the part-time Hendry County attorney prior to 1997 and again in 1999, was not included in the FRS. Stevens, while serving as part-time Hendry County attorney, also maintained a private law practice in the State of Florida and also in the State of Michigan.

15. The evidence demonstrates that the position of city attorney is a regularly-established position as defined by law and the rules of Respondent.

16. The evidence demonstrates that Petitioner's relationship as the part-time city attorney is that of an "independent contractor" with the City, as that term is defined by law and rule. Therefore, he is not eligible for participation in the FRS from October 1, 2003, through present.

    CONCLUSIONS OF LAW

    
    

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

    
    

18. In administrative proceedings, the burden is on the party seeking the affirmative of an issue. See § 120.57(1)(j) and (k), Fla. Stat.; Young v. Department of Community Affairs, 625 So. 2d 831 (Fla. 1993); Florida Department of Transportation v. J.W.C. Co., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977).

19. The FRS is codified in Chapter 121, Florida Statutes.

    
    

    Section 121.051, Florida Statutes, provides for compulsory participation in the FRS for all employees hired after December 1, 1970. Subsection 121.021(11), Florida Statutes, defines "employee" as any person receiving salary payments for work performed in a regularly-established position and, if employed by a city or special district, employed in a covered group.

20. Subsection 121.021(52)(b), Florida Statutes, defines a regularly-established position as follows:

    (b) With respect to a local agency employer (district school board, county agency, community college, municipality, metropolitan planning organization, charter school, charter technical career center, or special district), a regularly established position that will be in existence for a period beyond 6 consecutive months, except as provided by rule.

    
    

21. While the evidence shows that the relationship between the City and Petitioner has been ongoing for well over 6 months, other factors must also be considered.

22. Subsection 121.021(50), Florida Statutes, defines an independent contractor as follows:

    (50) “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.

    
    

23. Florida Administrative Code Rule 60S-6.001(32)

provides:

(32) 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 result 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 an independent contractor were gained as a result of previous employment. Independent contractors ordinarily use their own methods and receive 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 or 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 result.

   
   

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 directories 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.

1. Reviewing the criteria set forth above, it is evident that Petitioner is an independent contractor. While City Council may direct that certain steps be taken in a particular instance, Petitioner has his own expertise that they rely upon. Petitioner determines the methods by which the instructions are carried out. Petitioner is provided some word-processing assistance by city employees and limited office space, as available. Most of Petitioner's work for the City is done out of his private law firm. Petitioner's work is not integrated into the business operations of the City. Petitioner makes his legal services available to the general public. Other than attendance at council meetings, Petitioner has no set hours of work for the City. Finally, the City provides no training,

   
   

   although it does reimburse Petitioner for certain seminars on local government law issues.

2. In this case, Petitioner has the burden of proof to demonstrate that he is an employee of the City, and Petitioner has failed to meet it.

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 for membership and service credit in the FRS from October 1, 2003, through the present.

DONE AND ENTERED this 3rd day of November, 2010, in Tallahassee, Leon County, Florida.

S

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 2010.

ENDNOTE

1/ All statutory references are to Florida Statutes (2009), unless otherwise noted.

COPIES FURNISHED:

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

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

Amira Dajani Fox, Esquire Fox & Ramunni, P.A.

2211 Widman Way, Suite 250 Fort Myers, Florida 33901

Robert Donald, Esquire

Law Office of Robert L. Donald Post Office Drawer 2424

Fort Myers, Florida 33902

Sarabeth Snuggs, Director Division of Retirement Post Office Box 9000

Tallahassee, Florida 32315-9000

John Brenneis, General Counsel Department of Management Services 4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399-0950

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: 10-000634

Orders for Case No: 10-000634