The Issue Whether the full amount of the lottery prize winnings (remaining after deduction of federal tax withholding) that Petitioner claimed (on behalf of herself and 13 other members of her "Lotto pool") should be used to offset the debt Petitioner owes the Department of Education, Office of Student Financial Assistance.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, including the factual stipulations of the parties,2 the following findings of fact are made: Petitioner is in default on three student loans that OSFA, as guarantor, purchased (upon Petitioner's default) from the lender on December 27, 2001, and continues to hold. As of September 10, 2003, Petitioner owed OSFA $12,503.79 on these defaulted loans. In May of 2003, Petitioner participated in a "Lotto pool" with 13 other individuals. Pool members agreed to contribute equally to the purchase of Florida lottery tickets and to share equally in any winnings. Petitioner was assigned the task of purchasing the tickets on behalf of the pool. One of the tickets Petitioner purchased was a winner (having five of the six selected numbers). The amount of the prize, after making an appropriate deduction for federal income tax withholding, was $3,262.00. On behalf of the pool, Petitioner submitted the winning ticket, with her name on it, to the Florida Department of the Lottery to claim the prize. At the request of the Florida Department of the Lottery, she completed an Internal Revenue Service (IRS) Form 5754. On the form, among other things, she identified the others in the pool with whom she intended to share the proceeds of the prize. On May 27, 2003, Olga Roca, a Program Specialist with OSFA, sent the following letter to the Florida Department of the Lottery: I hereby certify that the above referenced person [Petitioner] has an outstanding defaulted student[] loan. Under terms of § 24.115, F.S, I am requesting that lottery prize money won by that person be transmitted to the Florida Department of Education to be credited toward that debt. The balance due including interest accrued as of 6/11/03 totals $12,389.88. By letter dated June 2, 2003, the Florida Department of the Lottery advised Petitioner that, "[p]ursuant to Section 24.115(4), Florida Statutes, [it had] disbursed [her] winnings according to [Ms. Roca's May 27, 2003, letter]." A month later, on July 2, 2003, OSFA sent Petitioner a letter informing her that it "plan[ned] to apply the total amount of [her] $3,262.00 prize to [her] unpaid claim."3 It is this proposed agency action which is the subject of the instant controversy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that OSFA take the action proposed in its July 2, 2003, letter to Petitioner. DONE AND ENTERED this 13th day of October, 2003, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 13th day of October, 2003.
Findings Of Fact THE RFP On April 25, 1991 the Department issued RFP No. 91-1011-LOT/TEN/P soliciting sealed proposals from qualified vendors to provide Instant Game Ticket printing and related services. In accordance with Section 1.8 of the RFP questions that were pertinent to an understanding of the RFP or that would be needed to clarify its terms could be addressed in writing to the Issuing Officer for the Department. Per Section 1.9 questions must have been received by 12:00 noon on May 1, 1991 for the prospective proposer to be entitled to answers to the questions. That section to the RFP obligated the Department to give written responses to any questions timely received. There were timely questions. The answers to questions that had been posed by the prospective vendors which included Dittler, Scientific, Webcraft and British American Banknote (BABN) were provided by the deadline of May 3, 1991 which is set forth in Section 1.9 to the RFP. Those questions and answers led to the amendments number 1 and 2 to the RFP issued on May 6 and 9, 1991, respectively. The RFP as amended and questions and answers formed the basis for the prospective proposers' understanding of the RFP and its terms, conditions and specifications. For purposes here, the relevant change in amendment number 1 was associated with the paper weight of recyclable ticket stock in categories of ticket samples to be submitted with the proposals. The second amendment deleted the category of sample known as recyclable coated ticket stock. None of the questions during the opportunity presented to improve the understanding or clarify the terms, conditions and specifications, found in the RFP were directed to the procedures set forth in the RFP describing the process of evaluation of proposals and entry into a contract with the best responsive vendor. Nor did any vendor take advantage of the opportunity within 72 hours of the availability of answers to questions that had been posed by the respective vendors and is provided in Section 1.9 to the RFP to challenge the terms, conditions and specifications of the RFP, especially as they would relate to the process of evaluation of responses to the RFP leading to the selection of the best responsive vendor and entry into a contract. As contemplated by Section 1.9 to the RFP sealed proposals were received from the four vendors by the deadline of 2:00 p.m., May 13, 1991. Section 1.9 called for technical proposals within the responses to the RFP to be opened by 2:00 p.m. on May 13, 1991 with the evaluation of those proposals to begin immediately following the opening. The cost proposals were to be separately opened following completion of the evaluation of technical proposals. The submissions by the vendors were to be ranked in order of preference based upon the evaluation of the technical and cost proposals in accordance with criteria set out in the RFP, followed by Notice of Intent to Negotiate with the higher ranked vendor posted at the Department's headquarters in Tallahassee, Florida. If the negotiations with the higher ranked or best responsive vendor did not prove successful, Section 1.9 called for the Department to negotiate with the other listed firms in descending order of their rank. Following the successful conclusion of negotiations with a responding vendor, a Notice of Award of Contract would be posted at the Department headquarters. The contract would be awarded and executed as soon as lawfully possible after the posting of the Notice of Award of Contract. On May 13, 1991, the ticket samples that were part of the submissions by the vendors were turned over to the Department's security employees and kept in a secure place pending forensic testing called for in the RFP. The members of the evaluation committee who were selected to exercise the evaluation criteria were not afforded immediate access to those tickets pending the forensic testing and a presentation concerning the test results which was to be made to the Evaluation Committee by Department employees who were familiar with test procedures. This presentation of the test results was made on May 16, 1991. Of the vendors who submitted proposals, Dittler had not been qualified by the Secretary of State to do business in Florida at the time it submitted its proposal on May 13, 1991, however, no mention was made of this when the Department made its preliminary agency decision finding Dittler a responsive vendor and ranking its proposal. Concerning the work to be done by the Evaluation Committee, Section 5.3 sets out the Proposal Evaluation criteria where it states: Proposals will be evaluated based on the following criteria: The overall qualifications, experience, abilities of the firm, its participating staff members, and subcontractors, if any, to timely provide the requested commodities and services, and the extent of minority participation. This includes the relative thoroughness and overall professional quality of the firm's proposed plan for providing the requested commodities and services. Value: Not to exceed 20 points The quality and appropriateness of the marketing plan. Value: Not to Exceed 15 points The quality and appropriateness of the Quality Control Plan. Value: Not to Exceed 15 points The overall security plan, including facility and procedures, with respect to whether the production of the game, manufacture of tickets, operation of the game, prize validation, etc., meet the security needs of the Florida Lottery and offer minimum possibilities of fraud, tampering, theft, counterfeiting, ticket alteration, or other security compromises. Value: Not to Exceed 25 points Proposed Compensation. Value: Not to Exceed 25 The proposed compensation for providing the goods and services requested herein shall be evaluated as follows: Column C of Attachment E of the prices bid for aluminized uncoated white ticket stock (10 point or heavier) will be totaled and divided by 200,000 to give an average cost per thousand tickets for this ticket stock. The average cost per thousand tickets for aluminized un-coated white ticket stock will be the price used in the cost comparison. The maximum number of cost evaluation points (M in the formulas below) shall be one-third of the highest cumulative score (H in the formula below) awarded to a Respondent for the criteria set forth in A through D. The lowest average cost per thousand tickets (L in the formula below) as derived in paragraph 1 above shall be awarded the maximum number of cost evaluation points as determined in paragraph 2 above. All other Respondents shall be awarded points based on the ratio of their average cost per thousand tickets (R in the formula) to the lowest average cost per thousand tickets. Maximum Cost Evaluation Points (M) = 1/3 x H Cost Evaluation Points = L/R x M The total value of points is equal to 100. These criteria are associated with the overall Evaluation Review Process identified at Section 5.4 where it states: The Secretary shall appoint an Evaluation Committee which shall prepare technical scores for all Responsive Proposals. The cost proposal will thereafter be publicly opened and evaluated in accordance with the formula set forth in Section 5.3 E above. Based on the technical and cost proposals, the Evaluation Committee shall rank, in order of preference, the Respondents deemed to be most highly qualified to perform the requested services. The Department reserves the right to make site visits at its own expense to the Respondent's facilities before or after the proposals have been ranked in order of preference. Thereafter, the Secretary shall commence negotiations with the most highly ranked firm. Should the Lottery be unable to negotiate a satisfactory Contract with that firm at a price the Lottery deems to be fair, competitive, and reasonable, negotiations with that firm shall be terminated. The Lottery shall then undertake negotiations with the second most highly ranked firm. Failing accord with that firm, the Lottery shall undertake negotiations with the third most highly ranked firm. Should the Lottery be unable to negotiate a satisfactory Contract with that firm, additional firms may be selected to participate in this negotiation process or negotiations may be reinstated following the original order or priority. Negotiations shall continue until an agreement is reached or all proposals are rejected. The Lottery reserves the right to reject all proposals at any time during negotiations. An initial review was made of the responses to the RFP to determine facial compliance or responsiveness. This was done on May 13 and 14, 1991 by Cristina Brochin, counsel to the Department. She discussed her findings with Louisa Warren, a more senior attorney for the Department. In the mind of Ms. Brochin the Dittler proposal was sufficient, while the Scientific proposal had a potential problem in that it did not set forth the amount of bond to be provided to insure performance under the contract called for in the RFP. This refers to the requirement in Section 6.5 of the RFP to give adequate evidence of the ability to post a performance bond. Ms. Brochin thought Scientific had failed to provide a notice on public entity crimes for its subcontractors. This was not a requirement of the RFP. Ms. Brochin found that Webcraft had failed to list its subcontractors, and likewise had failed to provide public entity crime affidavits for its subcontractors and had failed to provide a time line for limiting the ability to compromise its tickets. The Evaluation Committee was convened at the Department on the morning of May 15, 1991. It consisted of Robert McKnight, Assistant Secretary of the Department; Bernie Edwards, Deputy Secretary of Marketing; Don Pribbenow, Questions and Document Examiner for the Florida Department of Law Enforcement; Dr. Arvid Mukes, Assistant Director of Graphic Arts at the Florida A & M University; Frank Carter, Director of Security for the Department and Brian Woods, Vice President of Marketing of Blockbuster Video. Mr. Woods withdrew from the Committee based upon a concern of a potential conflict of interest associated with a business relationship with one of the vendors. No contest was offered to the make up of the Evaluation Committee. On this date the remaining members of the Evaluation Committee were given general instructions by the Department's staff that they were not to talk to other committee members except in public meetings, that they were to read the proposals, to keep notes about the proposals, to make their own individual evaluations and to not score the proposals until the Evaluation Committee public meeting had been completed. An explanation was made concerning the scoring criteria set forth in the RFP and an overview given of the schedule of events associated with the review process. The evaluators were then given the opportunity to review the responses alone. The best part of May 15, 1991 into the evening was devoted to that task. The evaluators took notes as they went forward with that process. On May 16, 1991 the Evaluation Committee met at the Department headquarters and undertook a discussion in a public setting relating to the marketing and overall qualification sections of the proposals. This was followed by a confidential review outside public scrutiny concerning quality control and security measures set forth in the proposals. Although the evaluators had reviewed the BABN materials on May 15, 1991, the BABN proposal was found nonresponsive by the evaluators in the public meeting of May 16, 1991 and did not undergo further consideration. BABN did not challenge the decision finding it nonresponsive. The reason why the BABN proposal was declared nonresponsive was the failure to submit samples of 10 point uncoated aluminized ticket stock. By contrast the Evaluation Committee found the proposals of Dittler, Scientific and Webcraft to be responsive. In doing so, with the knowledge of the impression of counsel Louisa Warren concerning deficiencies found in each proposal, the Evaluation Committee did not deem the Webcraft omission of a statement of time necessary to compromise its tickets; the Dittler omission of its ink product numbers, and Scientific's omission of the bond dollar amount in its bond commitment letter to be material deviations from the terms of the RFP and as such not subject to correction. Deeming these items to be minor irregularities the Department's staff contacted the vendors to clarify that information and the vendors cooperated in that endeavor. There is a Section 4 to the RFP pertaining to Mandatory Requirements in which 4.1 to that Section is entitled Terms and states: the Lottery has established certain mandatory requirements which must be included as part of any proposal. The use of the term "shall" "must" or "will" (except to indicate simple futurity) in this RFP indicate a mandatory requirement or condition. The words "should" or "may" in this RFP indicate desirable attributes or conditions but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself cause rejection of a proposal. In Section 1.2 of the Glossary of Terms a responsive proposal is defined as, "means a proposal submitted by a responsive and responsible, or qualified offerer which conforms in all material respects to the Request for Proposals." Section 4 goes on at 4.2 to describe what is meant by nonresponsive proposal where it states: Proposals which do not meet all material requirements of the RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and without which an adequate analysis and comparisons of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery. Section 3, within which is found 3.1 entitled General Instructions, identifies information required by the vendors Respondent where it states: General Instructions. Respondents must reference their proposals to the section numbers in this RFP. Respondents must state their agreement with the contractual requirements contained in this RFP. Any additional terms and conditions proposed by a Respondent will be viewed by the Lottery as an exception to the RFP and may cause rejection of the proposal without further evaluation or consideration. Proposals must include the following information and be presented in the following sequence: Identification of Respondent per Section of RFP. Respondent's Affidavit (Attachment A). Sworn Statement on Public Entity Crime (Attachment B). Vendor Information Form (Attachment C). Vendor Information Addendum (Attachment D). List of sub-contractors (if applicable). Statement from vendor saying they will abide by the Code of Ethics Rule 53ER88-79(3), F.A.C. The statement required by Section 1.24. Evidence of ability to provide a performance bond or other security required by Section 6.5. All of the items required in Section 2. All material or information required to be submitted as part of the Cost Proposal enclosed in a separate sealed envelope per Section 1.10 of the RFP. Any other material or information required by this RFP which is not specifically enumerated above. Any other information the Respondent desires to submit to further substantiate its qualifications for providing the goods and services. Another reminder concerning requirements is set forth in Section 5.2, entitled REVIEW CRITERIA which says in relevant part: Any proposal which does not meet all the mandatory material requirements set forth in Section 3.1 will be rejected by the Lottery as non-responsive. As alluded to before, Lawrence Herb, the Department's forensic document examiner and Colin Benton, Chief of Investigations presented the Evaluation Committee with sample tickets that had been tested and the results of those tests. Following this presentation the individual Committee members assigned scores for each vendor in all categories other than the cost proposal, referred to at Section 5.3 as proposed compensation. It was the impression of the committee members that Scientific was the highest ranked responsive vendor in the technical proposal phase. Consequently, by averaging the aggregate scores unrelated to cost proposals Scientific received the most points while Dittler was second and Webcraft third. On the next day, May 17, 1991, the cost proposals were opened by Department staff and the cost scoring accomplished by use of the mathematical formula contemplated by the RFP. The cost formula was based on the prices quoted for aluminized uncoated white ticket stock of 10 points or heavier weight. The technical and cost scores were then added together to determine the final ranking of the vendors. The compiled scores for the vendors were: Dittler: Technical 56.80 Cost 23.13 Total 79.93 Scientific: Technical 69.40 Cost 19.12 Total 88.52 Webcraft: Technical 53.00 Cost 19.55 Total 72.55 Based upon the results achieved in the scoring the Department on May 17, 1991, posted a Notice of Intent to Negotiate with Scientific, being the highest ranked proposer, and identifying that Dittler was running second and Webcraft third. The formal written protest of Dittler mentioned in the Preliminary Statement ensued. THE RESPONSIVENESS OF SCIENTIFIC'S PROPOSAL BOND COMMITMENT LETTER According to Section 3.1(d)9. evidence of the ability of the vendor to provide a performance bond or other security as described in Section 6.5 is a mandatory material requirement. Section 6.5 states: The successful Respondent shall be required, at the time of executing the Contract with the Lottery, to post an appropriate performance bond or other security acceptable to the Lottery in the amount of $1,000,000. The other acceptable forms of security are: irrevocable letter of credit; Certificate of Deposit assigned to the Lottery (which must be obtained from a financial institution having its principal place of business in the State of Florida); U.S. savings bonds, notes and bills; general obligation bonds and notes of any political subdivision of the State of Florida; or corporate bonds of any corporation that is not an affiliate or subsidiary of the Contractor. The aggregate fair market value of securities pursuant to this clause must always exceed the amount stated above. Failure to post an additional bond or security within seven (7) days after notice of an increased Contract value, or notice that the market value of the securities is inadequate, shall be grounds for immediate termination for cause. Respondents must submit with their proposal evidence that they will be able to provide the performance bond or other acceptable security. Such evidence may include, but is not limited to, a letter from an authorized agent of a bonding company or other entity committing to provide the performance bond or other acceptable security or indicating that the bond underwriter or other entity is processing a request to provide the bond or security and stating unequivocally that the bond or security will be available upon execution of the contract. In response to this requirement Scientific submitted a letter from Rollins Burdick Hunter of Illinois, Inc. together with a power of attorney for an amount of up to $20,000,000 bond coverage. This letter from Rollins Burdick Hunter is dated May 13, 1991, the date upon which Scientific submitted its proposal with the letter. In pertinent part the letter states: "RE: THE PRINTING OF INSTANT LOTTERY GAME TICKETS AND RELATED SERVICES FOR THE FLORIDA LOTTERY- Florida Instant RFP (Bid No. 91-011-LOT/TEN/P BID DATE: MAY 13, 1991 OBLIGEE: FLORIDA DEPARTMENT OF THE LOTTERY Letter of Intent We understand that bids are to be taken May 13, 1991 for this project. Please be advised that, subject to our underwriting requirements being met, if Scientific Games, Inc. is the successful bidder on this project and is awarded a contract and enters into said contract, we as surety will write an annual bond for the prosecution of the contract. This Letter of Intent is valid for one hundred eighty (180) days from the bid date, May 13, 1991, and we assume no liability to you if we decide not to issue the referenced bonds beyond this one hundred eighty (180) day period. You understand of course that the relationship between Scientific Games, Inc. and Continental Insurance Company is private, and we assume no liability to you if for any reason we decide not to issue the referenced bond(s). On May 8, 1991 Ken Taylor of Scientific sent the RFP to Rollins Burdick Hunter, the bond broker for Scientific, in the interest of obtaining the letter of May 13, 1991 which letter has been described. The power of attorney for $20,000,000 that was submitted with the proposal by Scientific was from Continental Insurance Company and counsel to Continental Insurance Company James E. Lee signed the Letter of Intent of May 13, 1991 together with William G. Malloy, President and CEO of Scientific. Having considered the evidence presented concerning the adequacy of the bond commitment, the Letter of Intent complies with the requirements stated in Section 6.5 pertaining to a performance bond as the ability to provide that performance bond. The Letter of Intent is not perceived as equivocal. It is not only consistent with the requirement set forth in Section 6.5 to the RFP, it coincides with what the Department has found to be acceptable in a previous RFP related to advertising which had a similar requirement for a statement of commitment to provide a performance bond at the appropriate juncture. In the instance of the advertising RFP certain bond letters by vendors who responded to the advertising RFP failed to state the dollar amount of the bond in the letter of commitment and those vendors were given permission to submit clarifying letters as to the exact amount without a declaration that those vendors were non-responsive. The letter clarifying the bond amount which was submitted by Scientific on May 16, 1991 with permission from the Department is consistent with the prior practice by the Department. This clarification by vendors in the advertising RFP solicitation and in the present solicitation is a minor correction. It is a minor correction which does not afford unfair advantage to Scientific and does not inconvenience the Department. Moreover a strict reading does not lead to the conclusion that the bond commitment letter needed to restate the bond amount of one million dollars. It must only make it evident that the bond commitment letter is addressing the requirement for a one million dollar performance bond. The Scientific Letter of Intent provides ample evidence on that point. The language set forth in the Letter of Intent reminding the reader that the commitment is subject to underwriting requirements being met and the further comment that the commitment does not create liability to the Department if the bond contract is not completed between the private entities does not undermine the fundamental promise to write the bond. It is an adequate response because the RFP did not contemplate a bid bond being provided with the submission of a proposal. It contemplated a commitment to write a performance bond in the future to be available at the place in time where a contract was executed between the vendor and the Department. LOBBYIST DISCLOSURE According to Section 3.1(d)8., which refers to the need to include information concerning Section 1.24, that latter section pertaining to conflict of interest and disclosure and more particularly to the revelation of the affiliation of executive branch lobbyists, as defined by statute or activities by the lobbyist designed to influence the actions of the Department in connection with the RFP, the failure to disclose an executive branch lobbyist would be considered a breach of a mandatory material requirement to the RFP. The consequence would be to cause the submission by a vendor to be declared non- responsive. Dittler alleges that Scientific failed to reveal the name of Barry Horenbein when filling out its proposal in response to Section 1.24 to the RFP. According to Dittler, Barry Horenbein was an executive branch lobbyist for Scientific in the relevant timeframe. That perception is incorrect. The language is Section 1.24 concerning Conflict of Interest and Disclosure states: The award hereunder is subject to the provisions of Chapters 24 and 112, Fla. Stat. Respondents must disclose with their proposals whether any officers, directors, employees or agents are also an officer or an employee of the Lottery, State of Florida, or any of its agencies. All firms must disclose the name of any state officer or employee who owns, directly or indirectly, an interest of five percent (5%) or more in the Respondent's firm or any of its branches or affiliates. All Respondents must also disclose the name of any employee, agent, lobbyist, or other person who has received or in the future will receive compensation of any kind for services related to this RFP, who is a previous employee of the Lottery, or who has or is required to register under Section 112.3215, Fla. Stat., in seeking to influence the actions of the Lottery in connection with this procurement. Respondents must also disclose the amount of compensation paid or to be paid in the future to any person who seeks to influence the actions of the Lottery in connection with this procurement. Respondents must also disclose the existence of any contingency agreements whereby any person will be compensated in any amount or form and the compensation is in any respect dependent on the outcome of this procurement. Each Respondent which has no disclosure to make under Section 1.24 must state affirmatively in its Proposal that it has no such disclosures to make. Failure to make any of the disclosure required by this section, or to make the affirmation required above, will result in rejection of the Proposal. Scientific met the disclosure requirements by listing David Bausch, a former Department employee. Barry Horenbein owns Florida Consultants, Inc. which provides lobbying services. Scientific at relevant times was his client. From December 10, 1986 until November 30, 1990 Horenbein had served as a legislative and executive branch lobbyist for Scientific under a yearly contract. This arrangement was pursuant to the proposal by Horenbein of November 25, 1986 on behalf of his company, Florida Consultants, Inc. in which he offered the services to Scientific in the area of legislative and administrative representation of Scientific as a lobbyist. On December 10, 1986 Gray Bethea, General Counsel to Scientific, confirmed the understanding between Horenbein and Scientific as to services that had been described in the offer of Horenbein dated November 25, 1986. For his work Horenbein received compensation of $5,000.00 per month for the period beginning in 1988 and as recent as November 1, 1991, and, consistently used the same invoice identification of his services as being related to "governmental consulting and lobbying in the State of Florida". Although there was no written documentation which would state any modification or termination of the business relationship between Horenbein and Scientific, there was a change in the position by oral agreement after November 30, 1990. The contract was for month to month to handle legislative lobbying matters for Scientific but not executive branch lobbying. The change in status for Horenbein came about after a November 29, 1990, letter from Horenbein to the president of Scientific explaining that the consulting contract would expire on November 30, 1990. In the course of that correspondence Horenbein pointed out the expected changes that he perceived given the outcome of the gubernatorial elections in which the incumbent lost and a new governor came in. This correspondence of November 29, 1990 expressed the desire by Horenbein to continue on the basis of $5,000.00 a month fee as outlined in Gray Bethea's letter of January 5, 1990, which letter from Bethea spoke of a relationship on the same terms and conditions as the original suggestion of the relationship between the two parties which had been set out on December 10, 1986 by Gray Bethea. The response to this November 29, 1990 letter was the oral agreement to allow representation in the area of legislative branch lobbying. The agreement between Scientific and Horenbein was not renewed in its entirety to include executive branch activities. The reason that Scientific decided to change the duties of Horenbein in representing its interests was based upon the perception that the close association which Horenbein had with the outgoing Governor Martinez and his administration might be harmful to Scientific in the future in that the new administration of Governor Chiles was coming in and Scientific did not wish to have Horenbein continue contact with the Department or the executive branch in connection with Scientific's business in Florida. In 1991, Horenbein registered in Florida as a legislative lobbyist but not as an executive branch lobbyist. Horenbein did provide some services concerning lottery activities to the extent of sending newspaper clippings to Bethea about activities within the Department during the year 1991. This was a continuation of information to include Horenbein's speculation as to the possibility of the change of the head of the Department and the name of a potential candidate to be the Department head discussed in his correspondence of November 29, 1990. On December 24, 1990 the Chairman of the Board of Scientific wrote to Dr. Marcia Mann, the new Department head, expressing, among other things, the common interest which Dr. Mann and the Chairman had in the University of South Florida. A copy of that letter was provided to Horenbein. Related to the letter from the Chairman to Dr. Mann, that letter was prepared based in part on information that had been provided by Horenbein to Scientific. The correspondence from the Chairman to Dr. Mann was prepared not only on newspaper clippings which Horenbein had submitted but on conversations which Horenbein had with his client Scientific. Horenbein provided information to Scientific about the new leadership at the Department with the advent of the Chiles administration to include remarks about Secretary Marcia Mann and Assistant Secretary McKnight. Horenbein considered provision of information as part of consulting services for which he was paid a fee. Although Horenbein had not seen the details of the subject RFP he advised Scientific that Scientific should "sharpen its pencils" and come in with a bid as low as they felt they could to get the contract. Horenbein told top officials within Scientific that he thought that the pricing in the RFP was going to be very important. He related this information in the same manner as he would have to any client under similar circumstances. This was considered by Horenbein to be part of his consulting relationship with his client Scientific. Horenbein was made aware that certain representatives from Scientific were to come to Tallahassee for a meeting with Senator McKnight or Dr. Mann. Horenbein did not attend a meeting between those persons. Horenbein saw Senator McKnight in a Tallahassee restaurant and welcomed him to Tallahassee and chatted with him. He also spoke to Senator McKnight the day the bid in this came out in this procurement. On April 3, 1991 Horenbein attended a Lottery Commission Meeting at the Department headquarters. He was there for his own curiosity to see the new Department administration of Dr. Mann function but acknowledges that it was also an attendance associated with his work for Scientific. Scientific had not asked him to attend this meeting. The topic of the meeting was not related to the present RFP. At the meeting he met Dr. Mann for the first time. Horenbein also saw Senator McKnight at the meeting and spoke with him. The topic of the RFP was not discussed with Dr. Mann or Senator McKnight on this occasion. In fact, Horenbein never discussed the subject RFP with any Department official or employee, nor sought to influence them in connection with the procurement for the advantage of his client Scientific. In his conversation with Senator McKnight on April 3, 1991 Horenbein complemented Senator McKnight concerning the Senator's legislative service in saying that he was "happy to see somebody of my integrity in the administration", referring to Senator McKnight's service in the Department. Following the technical evaluation Scientific asked Horenbein to attend the cost bid opening on May 17, 1991, a session that all vendors were invited to attend. The reason Scientific asked Horenbein to attend was because of the short notice of the cost bid opening and having no other personnel available to Scientific to attend that session. The vendors had been advised of the cost bid opening by one day notice. All evaluations on the technical aspects had been scored prior to the cost bid opening and the scores in the cost bid opening were pursuant to a formula. As part of his attendance at the cost bid opening Horenbein picked up copies of Webcraft and Dittler's proposals and looked at them concerning the bottom line financial quotations by those vendors. He considered this part of his function as a lobbyist for Scientific. Because the petition by Dittler alluded to Horenbein and his activities, Horenbein was provided a copy of material that Scientific had obtained from the Department under a public records request on or about May 24, 1991. The material also included the cost quotes which Horenbein spoke of and evaluators score sheets and the evaluation summary. The decision to send the materials that had been obtained by a request for public information was made by counsel to Scientific, Bethea. In addition to Senator McKnight, one of the other evaluators, Edwards, knew Horenbein before the advent of the RFP, but as stated before, had not discussed the RFP with him. Neither did Edwards nor McKnight know that Horenbein was a lobbyist for Scientific at the time of the RFP. Horenbein did not know the other evaluators Dr. Mukes, Carter or Pribbenow. Horenbein had a conversation with Jack Peeples, an independent contractor to the Governor's office while at a restaurant in Tallahassee. This conversation was not at the instigation of the client Scientific. Peeples held a contract with the Governor's office from February 1, 1991 to June 30, 1991 as advisor to the governor. He was not a state employee as such. In this conversation Horenbein stated that he thought it was, "sinful for Sonny Holtzman to be representing a lottery company in the position he was in" to which Peeples is said to have replied "You're probably right Barry, it shouldn't happen". Sonny Holtzman is mentioned as having an affiliation with Webcraft. Horenbein further stated to Peeples that the RFP disclosure requirement associated with the present case and that of the advertising RFP, as Horenbein stated, "I thought it was ridiculous because I had heard in the RFP that they were supposed to name the lobbyist and how much they made and I told Jack Peeples, I said 'Jack, you know you're going to be in business very shortly, would you want everybody in the world to know how much you were making on a particular client?'" The knowledge which Horenbein had of the disclosure requirements in the advertising and subject RFP came to him through comments from other lobbyists. Horenbein also discussed with Peeples the possibility of the two of them getting together and doing some lobbying. The reason which Horenbein had in mind for opposing the disclosure requirements, especially related to the revelation of compensation was for his own purpose and not that of the client Scientific. Horenbein's specific objection to the RFP disclosure requirement was that he did not want clients to find out how much he was billing each of his clients and that he didn't think it was proper to put such a requirement in a RFP. He told Peeples that the disclosure provision should be changed. This remark was made in the Spring of 1991. When he made the comment Horenbein thought that Peeples was one of the close campaign people to Governor Chiles. He commented to Peeples because he thought that Peeples had substantial influence in the Governor's office. When he had this conversation Horenbein did not know whether the lobbyist disclosure provision was going to be placed in the advertising RFP or the present RFP. He did not know the details of Peeples' payment by the Governor's office as an independent contractor. Horenbein did not discuss the present RFP per se in his conversation with Peeples. Peeples' affiliation with the Governor's office under the terms of his contract was not that of representative of the Governor's office or other department's of state government. Peeples was special counsel to the Governor for legal services. His duties included legal advise to the Governor, working in conjunction with designated staff, agency heads and other persons making available Peeples' full professional knowledge and opinions. He reported to the Governor in this capacity. Senator McKnight established that when he was hired as the Assistant Secretary of the Department by Governor Chiles he had conversation with the Governor's Chief of Staff concerning Senator McKnight's duties as Assistant Secretary. Senator McKnight identified one occasion in which he had a meeting in the Governor's office to discuss the administration's views of the Department. His recollection is that this was held in the office of the Chief of Staff Mr. Krog, with Peeples in attendance. Senator McKnight only knew of Mr. Peeples as being a close, personal friend and advisor to the Governor, to Senator McKnight's understanding of that association. During this meeting in the Governor's office the issue of lobbyist disclosure was emphasized by the Governor's office to Senator McKnight and he was advised that it would mean no contact whatsoever between lobbyists and members of this lottery staff from the point of view of the Governor. Senator McKnight was told that the Lottery operation had to be "squeaky clean". The Governor's office did not discuss the RFP nor influence the drafting of the RFP beyond this conversation with Senator McKnight. Notwithstanding the protestation by Horenbein to Peeples, Section 1.24 to the present RFP contained the disclosure requirements that Horenbein had complained about. FINANCIAL DISCLOSURE AND PENDING LITIGATION As identified in Section 1.1, the project in question is a major procurement as defined in Section 24.103, Florida Statutes. As such, the requirements set forth in Section 24.111(2), Florida Statutes, were incumbent upon the vendors. The RFP also speaks to the matters of financial disclosure at Section 3.1(d). Scientific did the things necessary to comply with those requirements when it submitted its proposal on May 13, 1991. (In this connection Section 1.19 pertaining to the assignment of the contract, if one is entered into, and Section 1.34 pertaining to change of financial conditions which are material adverse circumstances which occur between the time of the submission of the proposal and the award of a contract and continuing during the life of the contract are not items to be considered in this dispute. They are issues which potentially might have to be resolved between the vendor that the Department attempts to contract with and the Department.) Scientific when it submitted its proposal on May 13, 1991, by cover letter, alerted the Department to a potential change in its financial condition and ownership when it alluded to an asset purchase agreement between Scientific and a company formed by members of Scientific's senior management and the firm Centre Capital Investors L.P., an affiliate of Lazard Freres & Co. That asset purchase agreement date is from April 30, 1991. Scientific had this to say about that agreement in its transmittal letter: "On April 30, 1991, a company formed by members of Scientific Games' senior management and Centre Capital Investors L.P., an affiliate of Lazard Freres & Co., entered into an Asset Purchase Agreement with Bally Manufacturing Corporation, Scientific Games, In., and Scientific Games of California, Inc., for the purchase of the instant ticket and video lottery business of Scientific Games. The closing of the transaction is anticipated to take place within several months and is subject to the consents of various state governments and other customary closing conditions. No change in the operation or name of Scientific Games is expected and no interruption of services to customers will occur. As further details become available, Scientific Games will provide information to the Florida Lottery. Notwithstanding the pending asset purchase agreement, it is the Scientific group that submitted the proposal who must comply with the financial disclosure requirements. That is the respondent referred to in the definitional section of the RFP at 1.2 under Glossary of Terms. It is the vendor that is defined in Section 24.104, Florida Statutes. It is the group that submitted the proposal as defined in Section 24.111(2), Florida Statutes. Scientific was not expected under the terms of the RFP and associated requirements of law to submit vendor information forms on the purchasing group. That purchase was not consummated until a closing held on October 1, 1991. At the time that the proposal was submitted by Scientific the purchasers did not control by direct or indirect means the entity Scientific which submitted the proposal. Scientific and the purchaser had different boards of directors. Scientific was controlled by Bally Manufacturing Corporation and the purchasing group was controlled by Centre Capital Investors, L.P. Section 24.111(2), Florida Statutes, requires the Department to investigate the financial responsibility of the vendors who responded. That financial investigation took place to a degree not especially evident when examining the record. Details are sketchy. However, the requirement was responded to. More significantly Section 24.111(2), Florida Statutes, and the RFP present the necessary opportunity to evaluate the implications of the asset purchase before contracting with Scientific. Section 24.111(2)(f), Florida Statutes, makes it necessary for a vendor to provide: a disclosure of the details of any bankruptcy, insolvency, reorganization, or any pending litigation of the vendor. The asset purchase agreement is not such an event. In particular it does not constitute the form of reorganization spoken to in that section. Concerning pending litigation, Scientific did not reveal the existence of the case of Toon Construction Company v. Scientific Games Inc. On May 7, 1991 the parties dismissed an interlocutory appeal before the Supreme Court of the State of Georgia involving that litigation. The litigation had been settled by the parties as of May 13, 1991 when the proposal by Scientific was submitted in response to the RFP. The attorneys for the parties had not dismissed the associated case between those litigants in the Superior Court of the State of Georgia. That dismissal took place on May 14, 1991. Under the circumstances Scientific has not failed to comply with the provision in Section 24.111(2)(f), Florida Statutes, for revealing pending litigation. It did make the Department aware of two other pieces of pending litigation. EVALUATION COMMITTEE AND PROCESS Other than the reference in Section 5.4 to the RFP wherein the Secretary of the Department is required to appoint an Evaluation Committee, no requirement is stated concerning the composition of the Committee or the credentials of its members. The Evaluation Committee was chaired by Robert McKnight, Assistant Secretary of the Department. Committee Member Edwards had been the person most responsible for policy decisions in the development of the RFP document, with assistance in the drafting and in the processing of proposals given by the attorneys Louisa Warren and Cristina Brochin and with assistance by Robert Fiero, then Director of Administrative Services for the Department. In preparing for their participation in the full Committee activities involved in the evaluation process, having considered the criticisms of the amount of time available spoken to by witnesses for Dittler and the remarks of the Committee members concerning the opportunity to review the materials in preparation to carry out the assignment of scores, the evaluators are found to have had an adequate opportunity to prepare themselves to carry forth their duties as Committee members. The committee members indicated that they had sufficient time to evaluate the proposals to the RFP. In this connection Committee Chairman, Senator McKnight, made it clear that the committee members could take as much time as they needed to conclude the evaluation session which all members attended on May 16, 1991. He also asked the committee members during that meeting if they had had enough time for review. Other committee members did not ask the Chairman for additional time to review the materials found within the proposals. ORAL PRESENTATIONS Section 1.1 to the RFP explains that the RFP in the activities which lead to the execution of a contract are associated with the Department policies set out in Rules 53ER87-10 through 53ER87-11, 53ER87-13 through 53ER87-19 and 53ER91-10, Florida Administrative Code together with Chapter 24, Florida Statutes. The vendors were provided copies of those materials. Dittler contends that the RFP by its term required compliance with Rule 53ER87-13(5)(i), Florida Administrative Code. That Section states: (i) When it is considered in the best interest of the State, the Department can acquire goods and services, including major procurement through a competitive negotiation process. A Formal Request for Proposal will be let stating general requirements to be met and that award of the contract will be through a competitive negotiation process. A selection committee appointed by the Secretary or a designee will review all of the proposals and shall select no less than three proposals as finalists deemed to be most highly qualified to perform the required services. The finalists will be notified that they are expected to make a formal presentation to the committee. Based on the presentations, the committee shall select no less than three, whenever possible, proposals in order of preference deemed to be the most highly qualified to perform the requested services. The Secretary or a designee shall negotiate a contract with the most highly qualified firm. Should the Secretary or a designee be unable to negotiate a satisfactory contract with the firm considered to be the most qualified at a price the Department determines to be fair, competitive, and reasonable, negotiations with that firm shall be terminated. The Secretary or a designee shall then undertake negotiations with the second-most qualified firm, the Secretary or a designee shall terminate negotiations with that firm and shall then undertake negotiations with the third-most qualified firm. Should the Secretary or a designee be unable to negotiate a satisfactory contract with any of the selected firms, additional firms may be selected in accordance with this rule, or negotiations may be reinstated following the original order of priority. Negotiations shall continue in accordance with this rule until an agreement is reached or all proposals are rejected. It is this formal presentation which Dittler equates with the need to have an oral presentation. While the RFP through its terms concerning the procedures for selecting a vendor appears to incorporate features under Section 53ER87- 13(5)(i), Florida Administrative Code especially the aforementioned subsections 4 and 5, it also tends to incorporate the alternative procedures for gaining a contract which are set forth in Rule 53ER87-13(5)(b)(c)(d) and (e), Florida Administrative Code, which describe a request for proposal evaluation process where a bid price is quoted when the proposal is submitted. This is as contrasted with subsection (i) where the price is arrived at through negotiations following the ranking of vendors based upon the presentation made to the Evaluation Committee wherein three finalist are selected. The process in this RFP, generally stated, calls for a price quotation, a ranking of vendors based upon a point system that includes points assigned for pricing together with other factors. It does not contemplate under sub (i) a formal presentation to the Evaluation Committee, also referred to as an oral presentation, before entering into a second phase in the process associated with an attempt to negotiate with the best responsive vendor at a price that the Department is satisfied with. Failing the ability to find an acceptable price from the best responsive vendor the Department then attempts to negotiate with the second ranked vendor and then if need be, the third. That corresponds in the hierarchy of rankings to negotiations first with Scientific and then with Dittler and Webcraft if necessary. This hybrid approach to the use of both alternative methods for arriving at a contract as set forth in Rule 53 ER 87-13(5), Florida Administrative Code, is spoken to in Sections 1.1, 1.9, 2.5, 3.1, 4.2, 5.2, 5.3 and 5.4 to the RFP. As stated before, the vendors did not take issue with the blending of concepts set forth in the various provisions of Rule 53 ER 87-13(5), Florida Administrative Code, which deleted any reference to the expectation of the formal presentation to the Committee called for in sub (i). By failing to challenge the procedures for assessment or evaluation within the time allowed in Section 1.25, the parties acquiesced in this arrangement. The process of evaluation described in the RFP is not ambiguous. It does not call for a formal presentation and that requirement may not be inferred. By not reminding the Department that the approach for evaluation employed selected portions from separate alternatives for conducting the process, an approach which the vender might consider contrary to the structure set forth in the rule, within the time frame available for filling a formal written protest, the vendor waived the right to direct the criticism in its petition. That protest should have been filed within 72 hours of the availability of the answers to questions propounded by the vendors to the Department under Section 1.9 to the RFP. That was not done and Dittler and the other vendors must accept the arrangement where formal presentations are not called for and need not be allowed. Concerning the request to present, James Cooney, the Dittler consultant/lobbyist, was aware of the requirements of the RFP when he attended the public session of the evaluation process which took place on May 16, 1991. He requested the opportunity to make an oral presentation from a staff member who was not part of the Evaluation Committee. Cooney was principally interested in being able to respond to the questionable provisions within the response by Dittler to the RFP brought up in discussion by the Evaluation Committee. He did not intend by that request to provide the type formal presentation contemplated by sub (i) to Rule 53 ER 87-13(5), Florida Administrative Code. Neither was Dittler in a position to make that formal presentation on May 16, 1991. Nor did the other vendors come to the evaluation session prepared to make a formal presentation, although Scientific in its cover letter transmitting its proposal stated its willingness to make an oral presentation if requested. Cooney was not allowed to advance his explanations concerning questions about the Dittler proposal. It would have been inappropriate to allow him to do so. The result would have been to give Dittler a competitive advantage. The appropriate arrangement for clarifying minor irregularities technical oversights was upon the impetus by the Department, not the vendors. In any event, these concerns which Cooney intended to address were not disqualifying items in the response to the RFP by Dittler. CONTACTS BETWEEN THE DEPARTMENT AND SCIENTIFIC OUTSIDE THE RFP WHICH MAY HAVE AFFECTED THE DEPARTMENT'S PERCEPTION OF THE RESPONSE BY SCIENTIFIC TO THE RFP. In its proposed fact finding Dittler argues that certain contacts set forth in its Paragraphs 88 through 91 constituted communications outside the RFP process which were improper and intended to disparage the impartiality of the procurement process at issue. That suggestion is not accepted. The contacts which were made did not impair the impartiality of the procurement process. REVIEW STANDARDS USED BY THE EVALUATION COMMITTEE In Paragraphs 92 through 104 of the Dittler proposed fact finding it is suggested that the method of assessment employed by the evaluators, to include the willingness by the Committee to allow the cost formula to be exercised independent of their participation, was not done in a manner consistent with the RFP and was thus unacceptable. The approaches taken were not illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious or done in a manner which is designed to subvert or undermine the purposes and objectives of competitive bidding. Related to the cost proposal, that formula was a mechanical exercise. When the cost results were completed by staff they needed only to be added to the scores which had been assigned by the evaluators for features in the proposal outside the price quotations. The decision by the Committee to rely upon the staff to exercise the formula on cost and add in those scores with the scores arrived at by the evaluators on items other than cost did not violate the spirit and intent set forth in the RFP for assigning overall scores to include the cost component. In this connection the staff that served to support the Evaluation Committee in its activities acted appropriately. CLAIM OF THE USE OF UNARTICULATED CRITERIA PERTAINING TO THE "TIE-IN" OF THE EMPHASIS ON EDUCATION AS PART OF THE MARKETING PLAN Dittler claims that the evaluators acted arbitrarily and in a capricious manner in placing emphasis on an educational "tie-in" in the marketing plan. Dittler complains about giving credit to Scientific for such emphasis in a setting where the RFP did not contemplate the relationship between the educational purposes for which the Florida Lottery was created and the marketing plan prepared by the respective vendors. Dittler goes so far as to assert that this unspoken requirement to promote education in the marketing statement constitutes the use of unarticulated criteria in the evaluation process, in that those criteria concerning education are not found in the RFP. Under Section 2: SPECIFICATIONS, is found the statement of PURPOSE AND OVERVIEW. At Section 2.1 it states: In accordance with Chapter 24, Fla. Stat., the Florida Department of the Lottery has been charged with the responsibility "to operate the state lottery . . . so as to maximize revenues in a manner consonant with the dignity of the state and the welfare of its citizens." The Contractor will support the Lottery in its mission by providing the requisite services identified in Section 2 of the RFP for the Lottery's instant ticket games. The lottery's objective for issuing the RFP is to enter into a Contract with the most highly qualified Respondent who will provide secure gaming products, maximize the sale of instant tickets, and develop game support services which are efficient and assure product knowledge and availability to all lottery retailers and lottery players of Florida. * * * The Lottery is committed to an aggressive marketing plan for instant tickets. It is essential that throughout the Contract period innovative game concepts be developed to assure the growth of instant ticket sales. Further explanations concerning the marketing plan are set forth in Section 2.4.B which states: Between July 1, 1990 and April 1, 1991, the Lottery has released the instant ticket games outlined in Attachment F. Using this information as guidance, Respondents shall provide a detailed strategy and plan for the production of tickets for the fiscal year ending June 30, 1992. This strategy must include projected revenues, game names, ticket quantities, duration, game play, prize structures, and a rationale and plans for advertising, promotion and market research. Respondents shall provide at least five (5) alternative game names for each game included in the plan. The game design and rationale proposed must be creative and directed toward meeting the Lottery's sales goal of $12 million per week with a prize structure of 50%. The plans must include specified methodology for determining game selection, the game break schedule, and supporting market research. The quality and the experience of the Respondent's marketing representative who will be assigned to the Lottery, and the Respondent's marketing, design, advertising and promotional experience with other state lotteries shall be clearly stated. Any offering or proposed feature that is considered by the Respondent as an extra cost item must be fully described as such in the proposal as such. The price for such extra cost items shall be provided separately in the sealed Cost Proposal under "Other Options". As described at 5.3.B the marketing plans were graded on their quality and appropriateness. While the requirement to "tie in" the educational purposes for which the lottery was created is not stated in exact terms, it was not inappropriate for Scientific to place that emphasis and for the evaluators to credit Scientific for its marketing idea. Nor was it inappropriate for the Dittler proposal to be less well received by the absence of such emphasis upon education in its marketing statement. Section 1.1 to the RFP made the vendors aware of that activities involved in the pursuit of a contract are conducted in accordance with Chapter 24, Florida Statutes, among other controlling legal requirements. Section 24.111(1), Florida Statutes, states in part: In all procurement decisions, the department shall take into account the particularly sensitive nature of the state lottery and shall consider the competence, quality of product, experience, and timely performance of the vendors in order to promote and ensure security, honesty, fairness, and integrity in the operation and administration of the lottery and the objective of raising net revenues for the benefit of the public purpose described in this act. Sections 24.102, 24.121 and 24.1215, Florida Statutes, also emphasize the public education purposes of the lottery. Scientific offered its marketing emphasis on education based upon the knowledge of Chapter 24, Florida Statutes, newspaper clippings commenting on the lottery's emphasis on education and past speeches of the Secretary of the Department which placed that emphasis. REQUIREMENTS FOR A MINORITY PROGRAM Section 2.4 A.2. describes the requirements for minority participation expected of vendors responding to the RFP. It states: The Lottery is committed to participation by minorities among its vendors and retailers. The Lottery encourages the use of Minority Business Enterprises as subcontractors whenever the use of such firms is reasonably feasible. Each Respondent should include with its proposal its plans for the use of Minority Business Enterprises as subcontractors, and should set forth any other plans which it has which will positively impact the minority business community. Respondents will receive consideration in the evaluation based on their meaningful use of Minority Business Enterprises. When the RFP calls for the inclusion of a plan for the use of a Minority Business Enterprises as subcontractors, it contemplates a more detailed explanation than was provided by Dittler in its proposal where it said: "As discussed above, Dittler has specific plans to include minority participation if awarded the contract." Dittler also stated concerning minority participation: Dittler is committed to and encourages minority participation in its contracts using Minority Female Loan and Small Businesses. We are proud of out track record and, if awarded this contract, intend to include MBE/WBE participants whereever possible. Concerning the exact intentions in this RFP it was stated: Dittler does not anticipate the use of a subcontractor for any of the date generation, production or support services by the Lottery. As Dittler concedes it did not have a detailed minority participation plan referring to the names of subcontractors it would use with minority ownership certification. Scientific Games and Webcraft's proposals did contain a listing of subcontractors who are minority certified who were proposed to be used if the contract was awarded to one of those vendors. Under the circumstances it was appropriate for the evaluators to mark down Dittler concerning its minority participation. Contrary to Dittler's assertion it was not enough to state the intention to use minority certification without a more detailed statement. Having failed to give a more detailed statement it was not arbitrary and capricious for the evaluators to deduct points from Dittler concerning the requirement for a minority participation plan in that the minority participation plan was part of the evaluation criteria set out at Section 5.3.A. STATEMENTS ON TICKET COMPROMISEABILITY Dittler in its fact proposals at Paragraphs 116 through 119 places emphasis on the misunderstanding by committee member Pribbenow as to distinctions between compromiseability and alterability concerning a statement on compromiseability contained in the Dittler proposal. Dittler also questions a willingness by the Committee to allow Webcraft to amend its proposal to include a statement on the length of time that the Webcraft tickets would withstand compromiseability while not allowing Dittler a chance to explain the statement in the Dittler proposal concerning compromiseability that concerned Pribbenow. Although these criticisms are legitimate they do not pertain to items of such magnitude to demonstrate illegality, dishonestly, fraudulent practice, arbitrariness, unreasonableness, capriciousness or that the actions were done in such a manner as to subvert or undermine the purposes and objectives in competitive bidding. ACCOUNT REPRESENTATIVE At Section 2.4A.1. concerning the vendors organization and credentials, in pertinent part it has this to say about the account representative: The Respondent shall identify the actual persons who will be assigned major roles in the fulfillment of the work obligations outlined on Section 2 herein. The responding firm shall state that each person is available to perform the work if the responding firm is awarded the Contract. In accessing information concerning the account representative that assessment is performed under the criteria set forth at Sections 5.3.A. and 5.4. In carrying out the evaluations concerning the account representative, the evaluators expressed concern that the Dittler account representative had duties in other jurisdictions which would unduly interfere with her ability to meet the needs of the Florida Lottery in servicing the account. It did not appear to have a similar concern about Scientific and its account representative. The Committee also commented on the amount of experience by the designated account representative as an item of concern. There were remarks about the relative placement of the account representative in her organizational hierarchy, that is to say the number of persons in the organizational chain between the account representative and the Chief Executive Officer. The action taken by the evaluation committee concerning the account representatives was not inappropriate. TICKET TESTING Section 2.2B. to the RFP, as amended, called for the submission of the following ticket samples: Aluminized uncoated white card stock, minimum the 10 point or heavier. Aluminized coated white card stock, minimum 10 point or heavier. Recyclable ticket stock, minimum 8 point or heavier. Pursuant to Section 2.4.D.4. . . . each respondent must submit one book of tickets of each type of ticket stock proposed. The tickets will be subjected to testing by the Evaluation Committee to determine whether they meet the criteria set forth in Section 2.3.A5(c). . . . In the question and answer phase of the process BABN had asked the question if the vendors sample tickets could deviate from the requirements for submission of samples and if the Department would extend the time for submitting samples. The answer alluded to the requirements as to types of tickets which were called for up to that point which included categories 1 and 2 under Section 2.2B. BABN was told that they would not be given additional time to submit samples. All vendors were made aware of the question and answer. Prior to the receipt of the proposals on May 13, 1991, a decision was made by the Department, by Evaluation Committee member Carter and one or more other persons employed by the Department to only test 10 point uncoated ticket stock samples. That decision was reached because that was the type of ticket stock currently in use by the Department and the Department was not intending to change the type of ticket stock in this procurement. Dittler submitted four samples of tickets. It had this to say about its uncoated 10 point ticket: A game produced over three years ago for the Vermont Lottery on uncoated 10 point foil. Since the time this game was produced, all of Dittler's customers have requested coded stock. The bar code on this ticket was the first use of a variable bar code for validation of instant tickets in the United States. We submit this particular sample to confirm for the Lottery that Dittler can produce instant tickets on uncoated stock, and not for security evaluations. Dittler made this choice to submit this 10 point uncoated ticket stock realizing that the tickets submitted would be subject to testing. Dittler was not entitled to condition the submission by stating that it was not offered for security evaluations. It was the only aluminized uncoated 10 point stock it submitted. Therefore it had to be offered for all purposes to include security testing. Having failed to meet the requirement to submit a ticket for security testing it was not in compliance with the technical requirements of the RFP. It constituted a failure to meet the requirements set out in Section 3.1(d)10 for providing all items required in Section 2. The failure to comply with the requirement for submission of the ticket for testing made the proposal not responsive under Sections 4.2 and 5.2A in that it failed to meet a mandatory material requirement. The Dittler lack of compliance was similar to the problem with BABN which failed to offer the category of required tickets for testing. Notwithstanding the fact that the RFP called for all categories of tickets submitted to be subjected for testing and only one category was tested, this does not excuse the noncompliance with the requirements of the RFP by Dittler. Under the facts here the decision to test only one category of tickets did not constitute an arbitrary and capricious act on the part of the Department where the RFP calls for the testing of all categories. Lawrence Herb a forensic specialist for the Department with considerable experience as a document examiner tested the tickets which he received on May 13, 1991. He tested only the one category ticket at the instruction of Carter. When Herb tested the one category of ticket he was unaware of the disclaimer in the Dittler proposal concerning its tickets where it was stated that the tickets were not for security purposes. After the decision was reached to test only one category of ticket, Carter did not make persons other than Herb and Colen Benton who were involved with ticket testing aware of that choice. In addition to having been told on May 13, 1991 to only test the 10 point uncoated ticket stock, Carter had told Herb Thursday or Friday the week before the Monday that the proposals were received that only the 10 point uncoated aluminized ticket stock would be tested. Carter did not receive the Dittler proposal for review as an evaluator until May 15, 1991. Consequently, he did not know of the disclaimer in the Dittler proposal concerning the 10 point uncoated ticket stock that Dittler submitted when Carter made the decision to only test that category of ticket and communicated that decision to the testors. None of the vendors were made aware that only the 10 point uncoated ticket stock would be tested before submitting their proposals. In conducting his tests on the 10 point uncoated ticket stock Herb utilized testing methods used by the Department, testing methods that he had seen employed by the current vendor Scientific in its California printing plant and other tests that were not required by the Department standards or the California operation of Scientific. The choice of testing methods, generally described, was not inappropriate nor designed to give advantage to Scientific. Although not in compliance with the requirement to provide tickets for security testing, Dittler's tickets were tested and scores assigned to the test results. The consequence was to treat the Dittler position on security testing of its tickets as being responsive. This was more advantageous treatment than Dittler was entitled to. The ticket testing began on 4:00 p.m. until approximately 10:00 or 11:00 p.m. on May 13, 1991. Work was done from 8:00 a.m. until approximately 11:00 p.m. on May 14, 1991, and on May 15, 1991, work was done from 8:00 a.m. until 11:00 p.m. Some of this time was devoted to generating written reports which were offered to the Evaluation Committee. No test took longer than 24 hours to conclude. Deference need not be paid to the criticisms by Dittler concerning the possibility of a more lengthy testing session. The same test were performed on each vendor's ticket samples. A detailed forensic report based upon the test results, together with a summary of that report commenting on the categories of marketability, compromisability, and alterability and general comments constituted the reporting. Each member received copies of the report and the summary to that report and the actual tickets were made available for examination by the committee members. Under general comments there was a discussion of the appearance of the tickets and other factors. Whether these comments concerning the appearance and associated factors are matters within the parameters of forensic ticket testing, this did not cause any significant disadvantage to Dittler in the criticisms directed under general comments concerned content of construction and security features, matters which Dittler had conceded in its disclaimer. On balance, as Dittler apparently had anticipated, its 10 point uncoated ticket did not perform well when subjected to testing. The other vendors' tickets in this category were acceptable. The presentation by the forensic examiner Herb did not include recommendations as to ranking or scoring and did not promote undue influence in the decision making by the committee members in dealing with security issues. It was appropriate for the evaluators to assign scores under Sections 5.3C and 5.3D of the RFP when taking into account the results of the forensic testing.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED: That a Final Order be entered which finds that the Scientific proposal is responsive; That Scientific is the best responsive vendor in the hierarchy of ranking, followed by Dittler and Webcraft; That allows the process to proceed to the negotiation phase; and That dismisses the Dittler administrative petition. DONE and ENTERED this 9th day of March, 1992, in Tallahassee, Florida. CHARLES C. ADAMS, 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 9th day of March, 1992. APPENDIX Case No. 91-3481BID The following discussion is given concerning the proposed fact finding by the parties. Dittler's Facts: Paragraph 1 is subordinate to facts found. Paragraph 2 is not necessary to the resolution of the dispute. Paragraphs 3 and 4 are subordinate to facts found with the exception of suggesting that Horbein has been an executive branch lobbyist continuously. Paragraphs 5 through 9 are subordinate to facts found. Paragraph 10 is contrary to facts found. Paragraph 11 is recitation of legal argument. Paragraph 12 is subordinate to facts found. Paragraph 13 is a accurate portrayal of the testimony but does not lead to the conclusion that the activities by Hornbein beyond November 19, 1990 constituted any lobbying activities which required disclosure of his name nor did the facts suggested in Paragraphs 14 through 19 fall into that category. Paragraph 20 is subordinate to facts found. Paragraphs 21 and 22, see discussion of Paragraph 13. Paragraph 23, the reference to April 4 is corrected to be April 3, 1991. The second sentence is contrary to facts found. The remaining portion of Paragraph 23 is subordinate to facts found. Paragraphs 24 through 34 are subordinate to facts found. Paragraphs 35 and 36 are contrary to facts found. Paragraphs 37 and 38 are subordinate to facts found. Paragraph 39 is not necessary to the resolution of the dispute. Paragraph 40 is contrary to facts found as is Paragraph 41. Paragraphs 42 through 44 are not necessary to the resolution of the dispute. The first two sentences of Paragraph 45 are subordinate to facts found. The remaining sentences in Paragraph 45 and Paragraph 46 are contrary to facts found. Paragraphs 47 through 49 are subordinate to facts found. Paragraph 50 is subordinate to facts found with the exception of its suggestion that Scientific was undergoing a reorganization. Paragraphs 51 and 52 concerning the buy out as discussed by the evaluators is not considered to have influenced the decision on responsiveness of Scientific nor inappropriately influence the scores assigned to Scientific. Paragraph 53 is not relevant. Paragraph 54 constitutes legal argument. Paragraph 55 is contrary to facts found with the exception of the remarks attributable to evaluation committee members. Their impression did not influence the outcome and to the extent that they believe that the asset purchase was an adverse change, their opinion did not comport with the legal requirement for disclosure. Paragraph 56 is contrary to facts found. Paragraph 57 is not relevant information. Paragraphs 58 through 60 are contrary to facts found. Paragraph 61 is subordinate to facts found. Paragraphs 61 and 62 are subordinate to facts found. The discussion in Paragraphs 63 through 67 concerning the Webcraft proposal is not relevant to the extent that it was not plead and Webcraft has not offered a petition speaking to the relative merits of its proposal. Paragraphs 68 through 71 in its first two sentences are subordinate to facts found. The remainder of Paragraphs 71 through 72 are not necessary to the resolution of the dispute. Paragraphs 73 through 75 are subordinate to facts found. Paragraph 76 is rejected in that the process of review by the trier of fact does not call for an assessment in substitution of the witnesses who testified as to the length of time necessary to read the material. Paragraph 77 is contrary to facts found. Paragraph 78 constitutes recitation of legal argument. Paragraphs 79 and 80 are subordinate to facts found. Paragraph 81 is contrary to facts found in that there are other pertinent provisions of the administrative rule that play a role. Paragraphs 82 and 83 are subordinate to facts found. Paragraphs 84 and 85 are contrary to facts found. Paragraph 86 is subordinate to facts found. Paragraph 87 is contrary to facts found. Paragraphs 88 through 91 in the suggestion of impropriety in the contacts by Scientific with the Department is rejected. Paragraphs 92 through 104 in the suggestion that the evaluators acted inappropriately in their review standard is rejected. Paragraphs 105 through 109 are subordinate to facts found. Paragraph 110 is contrary to facts found. Paragraphs 111 and 112 are subordinate to facts found. Paragraph 113 is an incorrect portrayal by Dittler of the requirements of the RFP. Paragraph 114 is subordinate to facts found. Paragraph 115 is contrary to facts found. Paragraphs 116 through 124 are subordinate to facts found. Concerning paragraphs 125 and 126 the facts do tend to show that criticism was not directed to Scientific about its account representative as contrasted with criticisms of Dittler but this doesn't change the case outcome. Paragraphs 127 through the first sentence of Paragraph 130 are subordinate to facts found. The latter sentence to Paragraph 130 constitutes legal argument. Paragraph 131 is subordinate to facts found. The first sentence of Paragraph 132 is contrary to facts found. The latter sentence is subordinate to facts found. Paragraphs 133 and 134 are not necessary to the resolution of the dispute. Paragraphs 135 through the first sentence of Paragraph 139 are subordinate to facts found. The last sentence in Paragraph 139 and Paragraphs 140 through all sentences save the last sentence in Paragraph 141 are not necessary to the resolution of the dispute. Paragraph 141 in the last sentence is contrary to facts found. Paragraphs 142 through 144 are not necessary to the resolution of the dispute. As to Paragraph 145 it is not incumbent that those matters be attended that are suggested in the first sentence. The second sentence is contrary to facts found. Paragraph 146 is not necessary to the resolution of the dispute. Paragraphs 147 through 149 are subordinate to facts found. Paragraphs 150 through 153 with the exception of the last sentence of Paragraph 153 are not necessary to the resolution of the dispute. The last sentence in Paragraph 153 is contrary to facts found. Paragraphs 154 and 155 are subordinate to facts found as is Paragraph 156 in its first sentence. The last sentence in Paragraph 156 is contrary to facts found. Paragraph 157 is subordinate to facts found as is Paragraph 158 in its first sentence. The last two sentences in Paragraph 158 are rejected in that the vendors are not able to substitute their judgment as to appropriate testing. Paragraph 159 is subordinate to facts found. Paragraphs 160 through 162 are not necessary to the resolution of the dispute. Paragraph 163 is subordinate to facts found. Department's Facts: Paragraphs 1 through 21 are subordinate to facts found. Paragraph 22 is not relevant. Paragraphs 23 through all sentences in Paragraph 28 with the exception of the last sentence are subordinate to facts found. The last sentence in Paragraph 28 is not necessary to the resolution of the dispute. Paragraphs 29 through 34 are subordinate to facts found. Paragraph 35 is not necessary to the resolution of the dispute. Paragraphs 36 through all sentences in Paragraph 51 with the exception of the last sentence are subordinate to facts found. The last sentence is not necessary to the resolution of the dispute. Paragraphs 52 through first sentence in Paragraph 55 are subordinate to facts found. The last sentence in Paragraph 55 is not necessary to the resolution of the dispute. Paragraphs 56 through the first sentence in Paragraph 57 are subordinate to facts found. The last sentence in that Paragraph is not necessary to the resolution of the dispute nor is Paragraph 58 nor the first two sentences of Paragraph 59. The remaining sentences in Paragraph 59 are subordinate to facts found. Paragraph 60 is not necessary to the resolution of the dispute. Paragraph 61 through 66 are subordinate to facts found. NOTE: Scientific employees were not involved in the appropriation of the RFP nor did not make attempts to influence the outcome of the appropriation. Paragraph 67 is not necessary to the resolution of the dispute. Paragraphs 68 through 70 are subordinate to facts found. Scientific's Facts: Paragraph 1 is not necessary to the resolution of the dispute. Paragraphs 2 through 19 are subordinate to facts found. Paragraphs 20 and 21 are not necessary to the resolution of the dispute. Paragraphs 22 through the first two sentences in Paragraph 39 are subordinate to facts found. The last sentence in Paragraph 39 is not necessary to the resolution of the dispute. The first sentence in Paragraph 40 is subordinate to facts found. The last sentence in Paragraph 40 constitutes legal argument. Paragraphs 41 through 48 are subordinate to facts found. Paragraph 49 is not necessary to the resolution of the dispute. Paragraphs 50 through 78 are subordinate to facts found. Paragraph 79 is not necessary to the resolution of the dispute. Paragraph 80 through all sentences in Paragraph 113 are subordinate to facts found with the exception of the last sentence which is not relevant in that it is not part of the proposal. Paragraphs 114 through 116 are subordinate to facts found. Paragraph 117 is not necessary to the resolution of the dispute. Paragraphs 118 through 122 are subordinate to facts found. Paragraph 123 is not relevant in that it was not set out in the proposal concerning use of minorities in other states. Paragraphs 124 through the first sentence in Paragraph 126 is subordinate to facts found. The last sentence in Paragraph 126 is not necessary to the resolution of the dispute. Paragraphs 127 through 135 are subordinate to facts found. Paragraphs 136 through 140 are not necessary to the resolution of the dispute. Paragraphs 141 through 143 are subordinate to facts found. Paragraphs 144 and 145 are contrary to facts found. Paragraph 146 is rejected in that it is not the opinion of the evaluator that matters but the language in the Section. Paragraphs 147 through 152 are subordinate to facts found. Paragraph 153 is not necessary to the resolution of the dispute. Paragraph 154 overlooks the unwillingness of the Department to allow additional time to produce a ticket given the response they made to BABN. Paragraph 155 is not necessary to the resolution of the dispute nor are Paragraphs 156 and 157. Paragraph 158 is subordinate to facts found. COPIES FURNISHED: Marcia Mann, Secretary Department of Lottery 250 Mariot Drive Tallahassee, FL 32301 Betty Steffens, Esquire Frank P. Ranier, Esquire McFarlin, Sternstein, Wiley & Cassedy Post Office Box 2174 Tallahassee, FL 32316-2174 Robert Scanlon, Esquire Department of Legal Affairs The Capitol Tallahassee, FL 32399-1050 Thomas K. Equels, Esquire Holtzman, Krinzman & Equels 1500 San Remo Avenue, Suite 200 Coral Gables, FL 33146 Clifford A. Schulman, Esquire Adrian L. Friesner, Esquire Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel 1221 Brickell Avenue Miami, FL 33131 Jim Trucks BABN Technologies Corporation 129 White Oak Drive Newnan, GA 30265
The Issue The central issue in this case is whether Respondents are guilty of the violations alleged in the Amended Notice to Show Cause; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: At all times material to the allegations in the Amended Notice to Show Cause, Respondents, Julio and Lida Diaz, d/b/a Flor-Lidita Restaurant, held alcoholic beverage license number 23-4636. This license was a 2-COP license which authorized the sale of beer and wine for the premises known as Flor-Lidita Restaurant which is located at 4762 N. W. 183rd Street, Miami, Florida. In July, 1986, the FDLE began an investigation concerning an illegal gambling lottery commonly known as "bolita" which was believed to be operating in connection with the Flor-Lidita Restaurant. The investigation undertaken involved a surveillance of the restaurant together with undercover agents who were used to frequent the restaurant for the purposes of observing activities and placing bets with the restaurant personnel. An individual identified as Rafael Rosquete was determined to be a courier who would enter the restaurant, collect the gambling paraphernalia and returns, and deliver the items to a home located in Broward County. On July 9, 1986, a police officer, Hector Zeno, working undercover in connection with the FDLE, entered the Flor-Lidita Restaurant and observed customers writing numbers on bolita slips. Officer Zeno also observed individuals placing bets with the owner, Julio Diaz. In turn, Zeno filled out a bolita slip and placed a $5.00 bet with the owner Julio Diaz. On July 16, 1986, Joyce Dawley and Jacqueline Sirven entered the Flor- Lidita Restaurant and observed customers placing bolita bets with the Respondents, Lida and Julio Diaz. These agents also observed another employee known to them as "Rolando" (later identified as Rolando Nunez) taking bets. Agents Dawley and Sirven placed $5.00 bets with Julio Diaz on this date and received carbon copies of their bolita slips. On July 22, 1986, Zeno returned to the restaurant for the purpose of observing the customers and again placed a $5.00 bet by completing a bolita slip and tendering money to Julio Diaz. During this visit Zeno observed Nunez and Lida Diaz taking money and bolita slips from other customers within the restaurant. On July 23, 1986, Dawley and Sirven returned to the restaurant and again placed two $5.00 bets with Julio Diaz. During this visit the agents observed other individuals inside the licensed premises place bets with Rolando Nunez and Lida Diaz. On July 24, 1986, Dawley and Sirven returned to the Flor-Lidita Restaurant for the purpose of picking up $70.00 in winnings which Agent Dawley was entitled to as a result of the bet she had placed the previous evening. On July 30, 1986, Dawley and Sirven went to the Flor- Lidita Restaurant and again placed two $5.00 bets. This time Lida Diaz took their money and the original bolita slips and gave them carbon copies of their bets. On July 31, 1986, Sirven entered the Flor-Lidita Restaurant for the purpose of receiving $70.00 in winnings based on the prior day's bolita bet. On August 6, 1986, Dawley entered the Flor-Lidita Restaurant, received a bolita pad from Rolando Nunez and placed a $5.00 bet with Nunez in the present of Julio Diaz. On this visit Nunez showed Dawley a ledger which contained a list of dates together with numbers which indicated the winning numbers for the dates in question. On August 11, 1986, Dawley went to the Flor-Lidita Restaurant and observed Lida and Julio Diaz receiving bolita bets from persons within the restaurant. Dawley also observed Rolando Nunez taking bets. Dawley placed a $5.00 bet with Nunez on this date. After receiving a search warrant for the Flor-Lidita Restaurant, special agents of the FDLE entered the licensed premises on August 12, 1986 and searched the restaurant. During the search, agents took possession of various items of gambling paraphernalia which included bolita betting slips, Puerto Rican lottery tickets, blank bolita pads, currency and ledger books. Over $40,000 worth of U.S. currency and gambling paraphernalia was confiscated in connection with the police raid on the restaurant and the house in Broward County. In connection with the search of the licensed premises, Joseph Ogonowski seized an open bottle of scotch whiskey which was behind the counter at the restaurant. The scotch was not listed on the menu as a designated ingredient for any of the food items available for purchase at the restaurant. During the period of surveillance of the Flor-Lidita Restaurant, Rosquete was repeatedly observed by FDLE agents. Rosquete would routinely visit the restaurant, obtain items of gambling paraphernalia including betting slips and U.S. currency, and deliver the proceeds from the restaurant to a residence located in Broward County. The gambling activities conducted on the licensed premises were open, frequent, and included the active participation of the Respondents, Julio and Lida Diaz.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco enter a Final Order revoking license number 23-4636, series 2-COP, held by Respondents, Julio and Lida Diaz, d/b/a Flor-Lidita Restaurant. DONE and RECOMMENDED this 15th day of July, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4620 Rulings on Petitioner's proposed findings of fact: Paragraphs 1 and 2 are accepted. With the exception of the last sentence paragraph 3 is accepted. The last sentence is rejected as speculation. Paragraph 4 is accepted. Paragraph 5 is accepted. Paragraphs 6-20 are accepted. With the exception of the last sentence in paragraph 21, which is rejected as speculation, paragraph 21 is accepted. Paragraphs 22-23 are accepted. The last two sentences of paragraph 24 are accepted. The first sentence is rejected as argument or a conclusion of law. Rulings on Respondent's proposed findings of fact: Paragraphs 1-3 are accepted. Paragraphs 4 is rejected as contrary to the weight of the evidence. Mr. Ogonowski was qualified to and did identify the substance seized as scotch whiskey. Paragraph 5 is accepted but is unnecessary to the determinations reached by this Recommended Order. Paragraph 6 is rejected as irrelevant, immaterial and unsupported by the record in this cause having previously ruled the adjudications inadmissible. Paragraph 7 is rejected as unsupported by the record in this cause. COPIES FURNISHED: Katherine A. Emrich, Esquire Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 Rene Valdes 1830 N. W. 7th Street Miami, Florida 33125 Daniel Bosanko, Director Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32399-1000
Findings Of Fact Respondent Judy Louise Robinson is currently licensed by the Florida Department of Insurance as a general lines agent, a health agent, and a dental health agent and has been so licensed since November 21, 1984. At all times material, Respondent engaged in the business of insurance as Fleming Island Insurer. At all times material, Respondent maintained two business bank accounts in the name of Fleming Island Insurer: Account No. 1740043215 at Barnett Bank in Orange Park and Account No. 11630004614 at First Union Bank, Park Avenue Office. First Union Bank is currently First Performance Bank. All funds received by Respondent from or on behalf of consumers, representing premiums for insurance policies, were trust funds received in a fiduciary capacity and were to be accounted for and paid over to an insurer, insured, or other persons entitled thereto in the applicable regular course of business. Respondent solicited and procured an application for a workers' compensation insurance policy from Linda Smith on September 13, 1989, to be issued by CIGNA. Respondent quoted Ms. Smith an annual workers' compensation premium of two thousand six hundred four dollars and forty cents ($2,604.40). Linda Smith issued her check payable to Fleming Island Insurer in the amount quoted by Respondent on September 13, 1989, as premium payment for the CIGNA workers' compensation insurance coverage. On September 14, 1989, Respondent endorsed and deposited Linda Smith's $2,604.40 check into Fleming Island Insurer's business bank account No. 1740043215 at Barnett Bank, Orange Park, Florida. On September 17, 1989, Respondent forwarded her check in the amount of two thousand six hundred eighty nine dollars and forty cents ($2,689.40) to NCCI ATLANTIC for issuance of a workers' compensation policy with CIGNA for Linda Smith, Inc. The difference between the amount paid to Respondent by Linda Smith ($2,604.40) and the amount paid by Respondent to CIGNA via NCCI ATLANTIC ($2,689.40) amounts to $85.00 advanced by Respondent because she misquoted the premium amount to Linda Smith. On September 17, 1989, Respondent notified Linda Smith that another $85.00 was due. Linda Smith never paid this amount to Respondent. On September 19, 1989, CIGNA issued a workers' compensation policy for Linda Smith, Inc. Respondent's check was thereafter returned to CIGNA due to insufficient funds. On or about October 20, 1989, CIGNA notified Respondent that her agency check had been returned as unpayable and requested substitute payment within ten days to avoid interruption in Linda Smith, Inc.'s workers' compensation insurance coverage. Respondent asserted that she was injured in an automobile accident on October 1, 1989 and could not work through July of 1990 due to chronic dislocation of her right arm, but she also asserted that she never closed her insurance business and operated it out of her home. Respondent's home is the address at which CIGNA notified her on October 20, 1989 concerning Ms. Smith's policy. Respondent failed to timely submit substitute payment to CIGNA, and as a result, Linda Smith, Inc.'s policy was cancelled January 1, 1990. On January 4, 1990, Linda Smith forwarded her own check in the full amount of $2,689.40 directly to CIGNA and her policy was reinstated. Respondent did not begin to repay Linda Smith the $2,604.40 proceeds of Linda Smith's prior check paid to Respondent until May 1991. At formal hearing, Respondent maintained that she was never notified that Linda Smith paid for the policy a second time. Even if such a protestation were to be believed, it does not excuse Respondent's failure to account to either Linda Smith or CIGNA for the $2,604.40, which Respondent retained. Respondent also testified that Barnett Bank's failure to immediately make available to Respondent the funds from Linda Smith's check, which cleared, resulted in Barnett Bank reporting to CIGNA that there were insufficient funds to cover Respondent's check to CIGNA. From this testimony, it may be inferred that Respondent knew or should have known that she owed someone this money well before May 1991. On November 11, 1989, Lewis T. Morrison paid the Traveler's Insurance Company six thousand forty-three dollars ($6,043.00) as a renewal payment on a workers' compensation policy for Morrison's Concrete Finishers for the policy period December 30, 1988 through December 30, 1989. At the conclusion of the 1988-1989 policy period, Traveler's Insurance Company conducted an audit of Morrison's Concrete Finishers' account. This is a standard auditing and premium adjustment procedure for workers' compensation insurance policies. It is based on the insured's payroll and is common practice in the industry. This audit revealed that Morrison's Concrete Finishers was due a return premium of two thousand one hundred fifty-three dollars and eighty- seven cents ($2,153.87) from the insurer. On March 30, 1990, Traveler's Insurance Company issued its check for $2,153.87 payable to Fleming Island Insurer. This check represented the return premium due Morrison's Concrete Finishers from Traveler's Insurance Company. On April 6, 1990, Respondent endorsed and deposited Traveler's Insurance Company's return premium check into the Fleming Island Insurer's business bank account No. 11630004614 at First Union Bank. The standard industry procedure thereafter would have been for Respondent to pay two thousand two hundred forty-eight dollars ($2,248.00) via a Fleming Island Insurer check to Morrison's Concrete Finishers as a total returned premium payment comprised of $2,153.87 return gross premium from Traveler's Insurance Company and $94.13 representing her own unearned agent's commission. When Respondent did not issue him a check, Lewis T. Morrison sought out Respondent at her home where he requested payment of his full refund. In response, Respondent stated that she would attempt to pay him as soon as she could, that she was having medical and financial problems, and that the delay was a normal business practice. Respondent testified that on or about April 19, 1990, in an attempt to induce Mr. Morrison to renew Morrison's Concrete Finishers' workers' compensation policy through Fleming Island Insurer, she offered him a "credit" of the full $2,248.00 owed him. Pursuant to this offer of credit, Respondent intended to pay Traveler's Insurance Company or another insurance company for Morrison's Concrete Finisher's next year's premium in installments from Fleming Island Insurer's account. This "credit" represented the return premium Respondent had already received from Traveler's Insurance Company on behalf of Morrison's Concrete Finishers for 1988-1989 which she had already deposited into Fleming Island Insurer's business account. Whether or not Mr. Morrison formally declined Respondent's credit proposal is not clear, but it is clear that he did not affirmatively accept the credit proposal and that he declined to re-insure for 1989-1990 through Respondent agent or Traveler's Insurance Company. Respondent still failed to pay the return premium and commission which she legitimately owed to Morrison's Concrete Finishers. On June 28, 1990, the Traveler's Insurance Company issued a check directly to Mr. Morrison for the full amount of $2,248.00. Respondent did not begin repaying Traveler's Insurance Company concerning Mr. Morrison's premium until after intervention by the Petitioner agency. At formal hearing, Respondent offered several reasons for her failure to refund the money legitimately due Mr. Morrison. Her first reason was that the district insurance commissioner's office told her to try to "work it out" using the credit method outlined above and by the time she realized this method was unacceptable to Mr. Morrison, he had already been paid by Traveler's Insurance Company. However, Respondent presented no evidence to substantiate the bold, self-serving assertion that agency personnel encouraged her to proceed as she did. Respondent also testified that she did not know immediately that Traveler's Insurance Company had reimbursed Mr. Morrison directly. However, it is clear she knew of this payment well before she began to pay back Traveler's, and since Mr. Morrison did not reinsure through her or Traveler's she should have immediately known the "credit" arrangement was unacceptable to him. Respondent further testified that she did not want to repay Mr. Morrison until a claim on his policy was resolved. However, there is competent credible record evidence that the Traveler's Insurance Company 1988-1989 workers' compensation policy premium refund was governed solely by an audit based on payroll. Mr. Morrison's policy premium or refund consequently was not governed by "loss experience rating", and the refund of premium would not be affected by a claim, open or closed. Thus, the foregoing reasons given by Respondent for not refunding Mr. Morrison's money are contradictory or not credible on their face. They also are not credible because Respondent admitted to Mr. Morrison in the conversation at her home (see Finding of Fact 24) that she was having trouble paying him because of medical and financial difficulties. Further, they are not credible because Respondent testified credibly at formal hearing that she would have paid Mr. Morrison but for her bank account being wiped out by a fraudulent check given her by an unnamed third party. On August 10, 1992, Respondent was charged by Information with two counts of grand theft. See, Section 812.014(2)(c) F.S. The allegations in the Information charged Respondent with theft of insurance premiums from Linda Smith and Lewis T. Morrison, and arose out of the same facts as found herein. On December 17, 1992, Respondent entered a nolo contendere plea to only the first count of grand theft as to matters involving Linda Smith and the other count was "null prossed." Respondent secured a negotiated sentence on the first count. "Grand theft" is a felony punishable by imprisonment by one year or more. Adjudication was withheld pending satisfactory completion of probation, including community service and payment of restitution and court costs. Respondent has been complying with her probation, including restitution payments.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Insurance enter a final order finding Respondent guilty of violations of Sections 626.561(1), 626.611(7), (9), (10), and (13); 626.621(2) and (6) F.S. under Count I, violations of Sections 626.561(1), 626.611(7), (9), (10), and (13), and 626.621(2) and (6) under Count II, and violations of Sections 626.611(14) and 626.621(8) F.S. under Count III, finding Respondent not guilty of all other charges under each count, and revoking Respondent's several insurance licenses. RECOMMENDED this 23rd day of June, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS 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 23rd day of June, 1993. APPENDIX TO RECOMMENDED ORDER 92-2060 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: As modified to more correctly reflect the whole of the record evidence and avoid unnecessary, subordinate, or cumulative material, all of Petitioner's proposed findings of fact are accepted. Respondent's PFOF: Sentence 1 is accepted as a paraphrased allegation of the Second Amended Administrative Complaint. Sentence 2 is covered in Findings of Fact 4-18. Sentence 3 is accepted but subordinate and to dispositive. Sentence 4 is apparently Respondent's admission that she owed $2,604.40 to Linda Smith and paid her $500.00 of it. Accepted to that extent but not dispositive in that full payment was not made timely. Sentence 1 is accepted as a paraphrased allegation of the Second Amended Administrative Complaint but not dispositive. Sentence 2 is accepted but immaterial. Sentence 3 is rejected as argument and not dispositive. As stated, the proposal also is not supported by the record. Sentence 4 It is accepted that Mr. Morrison admitted he had a claim. However, the record does not support a finding that he requested Respondent to contact Traveler's Ins. Co. about it. Even if he had, that is subordinate and not dispositive of the ultimate material issues. Sentence 5 is rejected as not supported by the credible record evidence. Covered in Findings of Fact 23-28. Sentence 6 is rejected as not supported by the record and as argument. Sentence 7 Accepted. Sentence 8 Accepted. The "Descriptive Narrative" is accepted through page 4, but not dispositive. Beginning with the words "In summary" on page 5, the remainder of the proposal is not supported by the record in this cause which closed April 16. 1993. COPIES FURNISHED: Daniel T. Gross, Esquire Division of Legal Services Department of Insurance and Treasurer 412 Larson Building Tallahassee, FL 32399-0300 Judy Louise Robinson 4336 Shadowood Lane Orange Park, FL 32073-7726 Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Bill O'Neil General Counsel Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, FL 32399-0300
Findings Of Fact Respondents hold license 23-3237 COP and at all times here relevant were so licensed. On 7 November, 1977, Respondent, Juan Rodriguez, sold less than five grams of marijuana to Rocco Delio, an undercover policeman, on the licensed premises. Delio paid Rodriguez $11 for the marijuana and two beers. When arrested in December 1977 on a warrant charging him with the sale of marijuana, Rodriguez had an old lottery ticket in his possession as well as a list of numbers which the arresting officers thought to be lottery numbers. Rodriguez testified that the lottery ticket was an old one he bad obtained in Puerto Rico and that he had forgotten the ticket was in his wallet. He further identified the list of numbers as measurements he had taken for a building. Rodriguez denied ever selling any lottery tickets. At his trial on the charge of possession and sale of marijuana and possession of lottery paraphernalia Rodriguez pleaded guilty, upon the advice of counsel, to unlawful sale of marijuana, and adjudication of guilt was withheld. (Exhibit 1). Rodriguez testified that he paid a $300 fine and was told by his attorney that the plea and subsequent withholding adjudication of guilt would not affect his business. At this hearing Rodriguez denied selling marijuana to the policeman who had testified to the contrary. The Petitioner's witness is deemed a much more credible witness and it was this testimony, plus the guilty plea entered in Circuit Court that resulted in the finding that Respondent possessed and sold marijuana on the licensed premises. No evidence was submitted with respect to Counts 3, 4 and 7 of the Notice to Show Cause. The admissions of Respondent with respect to the facts alleged in Counts 5 and 6 were rebutted by Respondent's testimony, which was not contradicted by Petitioner's witness, that the lottery ticket was old and that the list of numbers found on Rodriguez' person was not a list of lottery numbers.
The Issue Whether Respondent owes $1,568,399.00 or $2,323,765.60 as a penalty for failing to secure workers' compensation insurance for its employees, as required by Florida law.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the sweeping factual stipulations set forth in the parties' June 1, 2005, Joint Stipulation3: Legislative History of the "Penalty Calculation" Provisions of Section 440.107(7), Florida Statutes Since October 1, 2003, the effective date of Chapter 2003-412, Laws of Florida, Section 440.107(7)(d)1., Florida Statutes, has provided as follows: In addition to any penalty, stop-work order, or injunction, the department shall assess against any employer who has failed to secure the payment of compensation as required by this chapter a penalty equal to 1.5 times the amount the employer would have paid in premium when applying approved manual rates to the employer's payroll during periods for which it failed to secure the payment of workers' compensation required by this chapter within the preceding 3-year period or $1,000, whichever is greater. Prior to its being amended by Chapter 2003-412, Laws of Florida, Section 440.107(7), Florida Statutes, read, in pertinent part, as follows: In addition to any penalty, stop-work order, or injunction, the department shall assess against any employer, who has failed to secure the payment of compensation as required by this chapter, a penalty in the following amount: An amount equal to at least the amount that the employer would have paid or up to twice the amount the employer would have paid during periods it illegally failed to secure payment of compensation in the preceding 3-year period based on the employer's payroll during the preceding 3- year period; or One thousand dollars, whichever is greater. The Senate Staff Analysis and Economic Analysis for the senate bill that ultimately became Chapter 2003-412, Laws of Florida, contained the following explanation of the "change" the bill would make to the foregoing "penalty calculation" provisions of Section 440.107(7), Florida Statutes4: The department is required to assess an employer that fails to secure the payment of compensation an amount equal to 1.5 times, rather than 2 times, the amount the employer would have paid in the preceding three years or $1,000, which is greater. There was no mention in the staff analysis of any other "change" to these provisions. The NCCI Basic Manual The National Council on Compensation Insurance, Inc. (NCCI) is a licensed rating organization that makes rate filings in Florida on behalf of workers' compensation insurers (who are bound by these filings if the filings are approved by Florida's Office of Insurance Regulation, unless a "deviation" is permitted pursuant to Section 627.11, Florida Statutes). The NCCI publishes and submits to the Office of Insurance Regulation for approval a Basic Manual that contains standard workers' compensation premium rates for specified payroll code classifications, as well as a methodology for calculating the amount of workers' compensation insurance premiums employers may be charged. This methodology is referred to in the Basic Manual as the "Florida Workers Compensation Premium Algorithm" (Algorithm). According to the Algorithm, the first step in the premium calculating process is to determine the employer's "manual premium," which is accomplished by applying the rates set forth in the manual (or manual rates) to the employer's payroll as follows (for each payroll code classification): "(PAYROLL/100) x RATE)." Adjustments to the "manual premium" are then made, as appropriate, before a final premium is calculated. Among the factors taken into consideration in determining the extent of any such adjustments to the "manual premium" in a particular case are the employer's loss experience, deductible amounts, premium size (with employers who pay "larger premium[s]" entitled to a "Premium Discount"), and, in the case of a "policy that contains one or more contracting classifications," the wages the employer pays its employees in these classifications (with employers "paying their employees a better wage" entitled to a "Contracting Classification Premium Adjustment Program" credit). Petitioner's Construction of the "Penalty Calculation" Provisions of Section 440.107(7), Florida Statutes In discharging its responsibility under Section 440.107(7), Florida Statutes, to assess a penalty "against any employer who has failed to secure the payment of compensation as required," Petitioner has consistently construed the language in the statute, "the amount the employer would have paid," as meaning the aggregate of the "manual premiums" for each applicable payroll code classification, calculated as described in the NCCI Basic Manual. It has done so under both the pre- and post-Chapter 2003-412, Laws of Florida, versions of Section 440.107(7). This construction is incorporated in Petitioner's "Penalty Calculation Worksheet," which Florida Administrative Code Rule 69L-6.027 provides Petitioner "shall use" when "calculating penalties to be assessed against employers pursuant to Section 440.107, F.S." (Florida Administrative Code Rule 69L-6.027 first took effect on December 29, 2004.) Penalty Calculation in the Instant Case In the instant case, "1.5 times the amount the [Respondent] would have paid in premium when applying approved manual rates to [Respondent's] payroll during periods for which it failed to secure the payment of workers' compensation" equals $2,323,765.60.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner order Respondent to pay a $2,323,765.60 penalty for failing to secure workers' compensation insurance for its employees. DONE AND ENTERED this 5th day of August, 2005, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 5th day of August, 2005.
The Issue The issue in this case is whether Respondent should apply $5,000 won by Petitioner in the Florida Lottery toward child support and costs owed by Petitioner pursuant to Section 24.115(4), Florida Statutes (1997). (All chapter and section references are to Florida Statutes (1997) unless otherwise stated).
Findings Of Fact On November 7, 1997, the Circuit Court for the Seventh Judicial Circuit, in and for Volusia County, Florida (the "Circuit Court") entered a Final Judgement on Custody (the "Final Judgment"). The Circuit Court awarded custody of the minor child to Petitioner's ex-wife and ordered Petitioner to pay child support of $485.46 on the first day of each month. Petitioner failed to pay child support in accordance with the Final Judgement. Respondent brought an action to enforce the Final Judgement. On February 10, 1999, a Child Support Hearing Officer for Respondent entered a Report and Recommendation of Hearing Officer on Contempt (the "Contempt Report") determining that Petitioner owed an arrearage in the amount of $8,279.81. The Contempt Report required Petitioner to make timely payments of his monthly obligation for child support in the amount of $485.46 and to make a lump sum payment of $1,000 on or before March 12, 1999, to "purge" himself of contempt. An Income Deduction Order required Petitioner to pay child support of $485.46 each month to the clerk of the court. Petitioner filed a Notice of Exceptions to the Contempt Report and Income Deduction Order. On March 29, 1999, the Circuit Court conducted an emergency hearing to consider Petitioner's exceptions, to direct the Department of Revenue to Release Lottery Funds, and to consider Petitioner's motion to strike the paragraph in the Contempt Report requiring Petitioner to make a lump sum payment of $1,000. The Circuit Court granted Petitioner's Notice of Exceptions and struck the paragraph requiring Petitioner to pay $1,000 on or before March 12, 1999. The Circuit Court also ordered the release of Petitioner's lottery prize to his ex-wife to satisfy part of the arrearage Petitioner owes for child support. In relevant part, the Circuit Court stated: 2. That the [Petitioner'] lottery funds shall be released over to the [ex-wife] . . . . That the Department of Revenue is hereby ordered to release these funds directly to the [ex-wife] in an expedited manner as she is in dire need of said funds. On July 21, 1999, Respondent conducted an audit of the file and determined that Petitioner made some payments between February 10, 1999, and July 21, 1999. As of July 21, 1999, the arrearage of child support and costs owed by Petitioner was $7,395.09. Petitioner submitted no evidence that he has satisfied the arrearage in the amount of $7,395.09. Petitioner argues that he has appealed the order of the Circuit Court authorizing Respondent to disburse Petitioner's lottery prize directly to Petitioner's ex-wife and that DOAH is without jurisdiction.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order finding that Petitioner owes an outstanding obligation for child support in the amount of $7,395.09, through July 21, 1999, and applying the lottery prize to reduce the outstanding obligation of $7,395.09. DONE AND ENTERED this 2nd day of September, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 2nd day of September, 1999. COPIES FURNISHED: Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Chris Walker, Senior Attorney Department of Revenue Post Office Box 8030 Tallahassee, Florida 32314 Ubangi Hajj-Mak Post Office Box 269 2208 Southwest Road Sanford, Florida 32772-0269 Sue M. Cobb, Interim Secretary Department of Lottery 250 Marriot Drive Tallahassee, Florida 32301 Ken Hart, General Counsel Department of Lottery 250 Marriott Drive Tallahassee, Florida 32301
The Issue The issue is whether Respondent is liable for a penalty of $4,741.76 for the alleged failure to maintain workers’ compensation insurance for its employees in violation of Chapter 440, Florida Statutes (2008).1
Findings Of Fact Petitioner is the state agency responsible for enforcing the statutory requirement that employers secure the payment of workers’ compensation for the benefit of their employees in accordance with the requirements of Section 440.107. Respondent is a Florida corporation engaged in the construction business. The corporate officers of Respondent in 2007 were: Julie Magill, Glen Magill, Jamie Guerrero, and Richard Magill. The corporate officers after amendment on June 12, 2008, were: Julie Magill, Albert Farradaz, and Farid O’Campo. Corporate officers are eligible to obtain exemption from the requirements of workers’ compensation through the process described in Section 440.05. Construction exemptions are valid for a period of two years. The expiration date of each exemption is printed on an exemption card issued to each card holder. Julie Magill, Glen Magill, and Jaime Guererro obtained construction exemptions as officers of Respondent, pursuant to Section 440.05. Julie Magill acknowledged receiving a card for each exemption with the expiration date printed on each exemption card. The exemption for Julie Magill expired on June 2, 2008. The exemption for Glen Magill expired on May 29, 2008, and the exemption for Jaime Guererro expired on May 29, 2008. Petitioner notifies exemption holders at least 60 days prior to the expiration date. Petitioner sent the Notice of Expiration to Julie Magill at Respondent's current mailing address. On October 5, 2009, an investigator for Petitioner interviewed Mr. Cliff Chavaria, an installer and repairer of air-conditioner units. Mr. Chavaria was an employee of Respondent. Respondent did not maintain workers’ compensation insurance coverage for Mr. Chavaria in violation of Chapter 440. It is undisputed that Mr. Chavaria did not have any type of coverage for workers’ compensation insurance. Mr. Jaime Guererro and Mr. Glen Magill also had no exemptions and no workers’ compensation insurance coverage. Respondent offered tax records for 2007 as Exhibit 8 at the hearing to show gross payroll for Julie and Richard Magill. The offered exhibit was an attempt to re-create tax information from an internet website. Respondent was given 10 days following the date of the hearing to produce an authenticated version of this document. No documentation was received.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers’ Compensation, issue a final order imposing a penalty assessment in the amount of $4,741.76. DONE AND ENTERED this 15th day of April, 2010, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 15th day of April, 2010.
Findings Of Fact Leroy Wise, Jr.'s Mother purchased lottery ticket number 1888-3620-9444 (hereinafter referred to as the "Ticket") on approximately July 6, 1989. The Ticket was a Fantasy 5 ticket with four correct numbers. The Ticket winnings amounted to $805.00. Mr. Wise took his Mother to the Department of the Lottery's offices in Tallahassee, Florida on July 10, 1989. Mr. Wise's Mother did not have proper identification required by the Department of the Lottery to cash in the Ticket. Therefore, she allowed Mr. Wise to present the ticket for collection because Mr. Wise had proper identification. On July 10, 1989, Mr. Wise completed a Florida Lottery Winner Claim Form (hereinafter referred to as the "Form") and submitted the Form and the Ticket to the Lottery. On the back of the Ticket Mr. Wise listed his name and address on the spaces provided for the person claiming the prize and signed the Ticket. Mr. Wise listed his name, Social Security Number, address and phone number on the Form. Mr. Wise signed the Form as the "Claimant." In a letter dated July 10, 1989, the DHRS notified the Lottery that Mr. Wise owed $4,690.00 in Title IV-D child support arrearages as of July 10, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be issued providing for payment of the $805.00 prize attributable to the Ticket owed by Mr. Wise as child support arrearages as of the date of the Final Order to DHRS. DONE and ENTERED this 21st day of February, 1990, in Tallahassee, Florida. LARRY J. SARTIN 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 21st day of February, 1990. APPENDIX The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioners' Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 1-4 2 6. 3 Not supported by the weight of the evidence. The Petitioner's did not offer any evidence at the formal hearing concerning these proposed findings of fact. Mr. Wise's Proposed Findings of Fact Paragraph Number in Recommended Order Sentence in Letter of Acceptance or Reason for Rejection 1, 13-20 Not proposed findings of fact. 2-3 6. 4-6, 11-12 Not supported by the weight of the evidence. 7-10 Not relevant to this proceeding. Copies Furnished To: Jo Ann Levin Senior Attorney Office of Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Louisa E. Hargrett Senior Attorney Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Chriss Walker Senior Attorney Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Leroy Wise, Jr. 1526-A Patrick Avenue Tallahassee, Florida 32310 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350
The Issue Whether the Proposed Amendment of Rule 7E-6.007, Florida Administrative Code, is arbitrary and capricious and thus constitutes an invalid exercise of delegated authority?
Findings Of Fact The Petitioner, Hialeah, Inc., operates a race track (hereinafter referred to as the "Track") located in Dade County, Florida. The Petitioner is licensed by the Respondent. In December, 1981, the Petitioner was granted permission by letter from Bob Smith, then Director of the Respondent, the Department of Business Regulation, Division of Pari-Mutuel Wagering, to operate Tel-A-Betting. Robert Rosenburg, Director of the Respondent after Mr. Smith, also approved Tel-A- Betting in a letter to the Petitioner. The Petitioner has continuously operated Tel-A-Betting for more than six years. The Petitioner instituted Tel-A-Betting in reliance on the Respondent's approval of Tel-A-Betting. If approval had not been granted to the Petitioner from the Respondent, the Petitioner would not have established Tel-A-Betting. Tel-A-Betting is a procedure for placing wagers on races at the Petitioner's Track. Persons utilizing this system (hereinafter referred to as "Account Holders"), open an account with the Petitioner by making a deposit of $100.00 or more with the Petitioner and paying a $25.00 fee. The funds deposited with the Petitioner are received and accounted for in accounts maintained at the Track. Once an account is opened, a plastic card which contains, among other information, an account number and an "800," toll-free, telephone number is issued to the Account Holder. Wagers may then be placed with the Petitioner by the Account Holder calling the "800" number and placing a wager with a telephone operator/pari-mutuel clerk located at the Track. The Account Holder identifies himself or herself by giving the operator the account number and a code name designated by the Account Holder when the account is opened. The account number is programmed into a computer to determine whether the Account Holder has sufficient funds in the account to make the wager. If the funds in the account are sufficient to cover the wager, the wager is entered into the computer. If the Account Holder wins the wager, the payoff is entered into his or her account. Calls to place wagers through the Tel-A-Betting program can be made from anywhere in Florida and the person making the call and wager need not be physically present at the Track to make the wager. Wagers taken through Tel-A-Betting are only made on races at the Track. Tel-A-Betting allows the Petitioner to receive wagered funds as part of its pari-mutuel pool from persons located anywhere in the State of Florida. When a wager is made through Tel-A-Betting, the operator/pari-mutuel clerk cannot establish the age or identity of the person placing the wager. The Petitioner is the only race track permit holder in the State of Florida which employs Tel-A-Betting. The Proposed Amendment of Rule 7E-6.007, Florida Administrative Code, if valid, will prohibit the Petitioner from continuing the use of Tel-A-Betting. The Respondent has not received any complaints about the use of Tel-A- Betting by minors or any other abuses. No evidence was presented that minors have made, or attempted to make, wagers through the use of Tel-A-Betting. The Respondent has not received any objections to Tel-A-Betting or complaints about unfair competition from other racetrack permit holders.
