The Issue The issue for determination in this proceeding is whether Respondent should deny Petitioner's application for licensure as an agent authorized to sell resident life, variable annuity, and health insurance.
Findings Of Fact Respondent is the state agency responsible for the licensure of insurance agents in the State of Florida, pursuant to Chapter 626, Florida Statutes (2003). On June 12, 2003, Petitioner electronically filed (on-line) a completed application for licensure as an agent authorized to sell resident life, variable annuity, and health insurance (the license). Petitioner answered "no" to the following question on the on-line license application that Petitioner submitted to Respondent on June 12, 2003: [h]ave you ever been charged, convicted, found guilty, or pled guilty or nolo contendere (no contest) to a crime under the laws of any municipality, county, state, territory or country, whether or not adjudication was withheld or a judgment of conviction was entered? Petitioner was convicted of a crime in Tennessee in 1973. Petitioner pled guilty to multiple felony charges relating to the sale of drugs and was sentenced to prison for more than one year. Petitioner's failure to disclose the criminal conviction in Tennessee is a material misstatement within the meaning of Subsection 626.611(2), Florida Statutes (2003). Petitioner failed to show by a preponderance of the evidence that the failure to disclose his criminal history on the application was inadvertent. Petitioner knew, or should have known, the importance of accurate answers to questions on the license application. The final section of the online application, entitled "Step 8: Summary," contained the following language: Applicant Affirmation Statement I do solemnly swear that all answers to the foregoing questions and statements are true and correct to the best of my knowledge and belief . . . . * * * Under penalties of perjury, I declare that I have read the foregoing application for license and that the facts stated in it are true. I understand that misrepresentation of any fact required to be disclosed through this application is a violation of The Florida Insurance and Administrative Codes and may result in the denial of my application and/or the revocation of my insurance license(s). Petitioner signed the foregoing statement, but did not send the signed statement to Respondent for several months. The on-line license application at issue in this proceeding was the second application that Petitioner filed with Respondent. In December 2001, Petitioner filed an application with Respondent's predecessor agency, the Department of Insurance (the Department), for licensure as a resident legal expense sales representative. The question regarding criminal history did not appear on the first application. The Department issued a legal expense sales representative license to Petitioner on December 19, 2001. After the Department issued the legal expense license to Petitioner, Respondent received Petitioner's criminal history report. On January 7 and March 12, 2002, and on July 15, 2003, Respondent wrote letters to Petitioner asking him for documentation and information concerning his criminal history. Petitioner received all three letters in a timely manner. Petitioner's testimony that he responded to the requests for information concerning his criminal history is neither credible nor persuasive. Rather, Petitioner ignored both requests in 2002, and did not respond to the request in 2003 until after Respondent notified Petitioner of Respondent's proposed denial of the license application. The disclosure by Petitioner was not timely and forthcoming. The material misstatement of Petitioner's criminal history on the license application was an intentional, false statement. Petitioner had knowledge that his answer to the criminal history question was not true. Petitioner's failure to disclose his criminal history on the license application was a reckless and careless act. The false statement demonstrates a "lack of fitness or trustworthiness to engage in the business of insurance" within the meaning of Subsection 626.611(7), Florida Statutes (2003).
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order denying the license application without prejudice for Petitioner to reapply in accordance with Respondent's rules. DONE AND ENTERED this 28th day of May, 2004, 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 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of May, 2004. COPIES FURNISHED: Dana M. Wiehle, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Robert Joseph McGuire 8464 Matanzas Road Fort Meade, Florida 33912 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The amount of attorneys' fees and costs to be awarded to Jerry Ann Winters (Petitioner) based on the Order of the Second District Court of Appeals dated November 8, 2002, and pursuant to Subsection 120.595(5), Florida Statutes (2003).
Findings Of Fact The Petitioner retained attorneys Mark F. Kelly and Robert F. McKee to represent her in an administrative proceeding challenging the proposed termination of her employment by USF and in the appeals that followed the issuance of the Final Orders by USF. Petitioner's Exhibit 1 is an invoice dated December 18, 2002, submitted to the Petitioner by her legal counsel. The invoice contains charges billed to the Petitioner for the period between January 17, 2001, and November 22, 2002. The invoice indicates a total of 339.75 hours expended on her behalf. The invoice contains duplicated entries for November 14, 2002. Discounting the duplication reduces the total hours expended to 339.50. The practice of the Petitioner's counsel is to bill in quarter-hour increments and to round up. According to the invoice, the Petitioner was billed at a rate of $275 per hour. Mark F. Kelly graduated from Vanderbilt Law School in 1976. Since then he has practiced labor and employment law in Florida before state and federal agencies and has a substantial appellate practice. He was previously awarded fees in the range of $250 approximately four years ago. Robert F. McKee graduated from Stetson University College of Law in 1979. He received a Master of Laws degree in Labor and Employment Law from Georgetown University Law Center in 1981. Since then he has practiced labor and employment law in Tampa, Florida. He was previously awarded fees in the range of $250 approximately four years ago. At the hearing, the Petitioner presented the testimony of Steven Greg Wenzel. Mr. Wenzel has practiced law in Florida for more than 30 years and is board-certified in Labor and Employment Law. He has extensive trial experience. He has previously provided expert testimony related to the reasonableness of attorneys' fees in approximately 12 cases. Mr. Wenzel is familiar with the fees charged by attorneys representing employees in employment-related cases in central Florida. Mr. Wenzel's testimony related to the experience, reputation, and ability of Petitioner's attorneys. It also indicated that they have substantial experience in the area of labor and employment law and are well-regarded by their peers. No credible evidence to the contrary was presented during the hearing. Mr. Wenzel's testimony adequately addressed the applicable factors set forth in Rule 4-1.5(b)1 of the Florida Bar's Rules of Professional Conduct to be considered in determining the reasonableness of fees. Mr. Wenzel opined that based on their knowledge and experience, the type and complexity of the case, and the aggressive nature of the litigation; a reasonable hourly rate was $290 ranging to $310. Mr. Wenzel's testimony in this regard is credited. The invoiced rate of $275 per hour is reasonable. Mr. Wenzel also opined that the quarter-hour billing practice was reasonable and, in fact, conservative related to other practices with which he was aware. Mr. Wenzel's testimony in this regard is credited. At the same time that the Petitioner was challenging the proposed employment termination, a civil case involving the Petitioner, a number of the basketball players, and USF was proceeding. In that case, different legal counsel represented the Petitioner. Review of Petitioner's Exhibit 1 indicates that the invoice includes charges related to persons and activities involved in the civil case. Neither Mr. Kelly nor Mr. McKee had any official involvement in the civil case. Mr. Kelly participated apparently unofficially in mediation efforts to resolve the pending disputes. The invoice contains daily total charges for billed activity. On some days, activity was recorded for both the administrative case and the civil case. Charges related to the civil case are not reimbursable in this proceeding. Because the invoice precludes an accurate separation of time spent on the administrative case from the civil case, all billings for dates upon which charges were incurred related to the civil case have been excluded from consideration in this Order. The charges related to conversations with John Goldsmith, who represented the Petitioner in the civil case, are excluded. These charges occurred on March 14, 2001; April 2, 2001; April 6, 2001; September 21, 2001; October 19, 2001; and May 13, 2002, and total 8.25 hours. The charges related to conversations with Jonathon Alpert, who represented the basketball players in the civil case, are excluded. The charges occurred on April 10, 2001, and April 11, 2001, and total 6.75 hours. The charge related to a conversation with Tom Gonzalez, who represented USF in the civil case, is excluded. This charge occurred on April 23, 2002, for .50 hours. The charges related to conversations with Mary Lau, who was a mediator assigned to the civil case, are excluded. These charges occurred on April 24, 2002, and May 8, 2002, and totaled 1.25 hours. The invoice includes a charge for May 15, 2002, related to a telephone conference with "Judge Scriven" regarding settlement. Judge Scriven is otherwise unidentified. The charge, for .25 hours, is excluded. The invoice includes a charge for Mr. McKee's attendance at mediation on May 16, 2002, related to the civil case, for 2.5 hours. This charge is excluded. The sum of the excluded time set forth above is 19.50 hours. Deduction of the 19.50 hours from the properly invoiced total of 339.50 results in a total of 320 hours. Based on Mr. Wenzel's testimony that the invoiced hours were reasonable given the nature and complexity of this case, it is found that the reduced level of 320 hours set forth in the invoice and directly applicable to the administrative case is a reasonable expenditure of time. The invoice also sets forth costs that were billed to the Petitioner. The invoice includes numerous routine office expenses (postage, copying, telephone, and facsimile costs) that are not properly recoverable costs in this proceeding. Other billed costs are set forth without sufficient information to determine the relationship of the cost to the administrative proceeding. A filing fee with the District Court of Appeal was billed on January 15, 2001, preceding the administrative hearing in this case. Further the billed charges include witness fees for several witnesses, only one of which testified in the administrative hearing. The invoice also includes service fees for subpoenas that appear to have been charged subsequent to the completion of the administrative hearing. Based on review of the invoice, properly recoverable costs of $307 are found. This sum includes the following items: witness fee and mileage for Paul Griffin ($7) dated April 5, 2001; service fee for subpoena for Paul Griffin ($50) dated April 11, 2001; and filing fee-clerk, District Court of Appeal ($250) dated October 5, 2001. Petitioner's Exhibit 2 is a "Retainer and Fee Agreement" executed by the Petitioner and her counsel which provides as follows: Partial contingency fee. Client will pay for services rendered at the reduced rate of $110 per hour. To compensate attorney for this reduced rate and the risk involved in undertaking a case on these terms, in addition to the $110 hourly rate, attorney will be entitled to 25% of any settlement money or judgment. In the event attorney's fees are awarded to the client by any court or tribunal and collected, attorney will be entitled to such fee (less any amount paid by client, which will be reimbursed pro rata) or the partial contingency fee, whichever is greater. Attorney requires a retainer deposit from client in the amount of $2,500, to be replenished from time-to-time as required to cover outstanding fees and costs. The Retainer and Fee Agreement is dated December 2, 2002, and the Order of the District Court of Appeal for the Second District, which granted the Petitioner's Motion for fees and costs, is dated November 8, 2002. It is unclear whether a written agreement between the Petitioner and legal counsel existed prior to the December 2, 2002, agreement.
The Issue Whether Respondent violated the provisions of chapter 440, Florida Statutes (2016), by failing to secure the payment of workers' compensation coverage, as alleged in the Stop-work Order.1/
Findings Of Fact The Department is the state agency responsible for enforcing the requirement of chapter 440 that employers in Florida secure the payment of workers' compensation coverage for their employees and corporate officers. § 440.107, Fla. Stat. Respondent, M.C. Jennings Jr. Construction Corp., is an active Florida for-profit corporation with its principal office located at 3125 Mundy Street, Miami, Florida 33133. Miles Jennings, Jr., is Respondent's president and registered agent. Respondent admits that during the time period of January 8, 2014, to January 7, 2016, Respondent was a business engaged in the construction industry. The Investigation On January 6, 2016, the Department's compliance investigator, Humberto Rivero, conducted a compliance check at Respondent's business address in response to a public referral. Prior to visiting the business, Mr. Rivero checked the Division of Corporations' website to obtain the federal employee identification number and information on the corporate officers. After this, Mr. Rivero searched the Coverage and Compliance Automated System ("CCAS") to verify whether or not Respondent is covered with workers' compensation insurance and whether there is an exemption for the corporate officers. Mr. Rivero also searched the National Council on Compensation Insurance ("NCCI"). Mr. Rivero routinely checks for coverage before going out for a site visit in response to public referrals. Upon searching the NCCI database and the CCAS database, Mr. Rivero learned that Respondent had no workers' compensation coverage and so the referral appeared to be accurate. Mr. Rivero also determined there were no exemptions. Next, Mr. Rivero arrived at the business address for Respondent, went into a fenced yard, up the steps to a trailer, and identified himself and the reason he was there. Mr. Rivero described the office trailer as the type he goes into on construction projects. There was a desk, manuals, schedules, and drawings or blueprints on a rack. Mr. Rivero did not personally observe any construction activity at the site. Mr. Rivero spoke with Shawn Denise Welch-Perryman. Ms. Welch-Perryman indicated she did not have access to information on workers' compensation and could not get Mr. Jennings because he was in a meeting and could not to be disturbed. Ms. Welch-Perryman said Ms. Hallman, the property manager for Respondent, may be able to help. Mr. Rivero contacted Darlene Hallman by telephone. Ms. Hallman indicated she did not have access to information on workers' compensation. Ms. Hallman admitted she is an employee of Respondent and has been there for several years. Ms. Hallman said she gets paid by company check, but did not want to disclose how much. After this, Mr. Rivero interviewed Ms. Welch-Perryman, as he had with Ms. Hallman, and Ms. Welch-Perryman admitted to being an employee of Respondent. Ms. Welch-Perryman also gets paid by company check. Mr. Rivero was provided with the name Ed Fowler, Respondent's insurance agent. Mr. Rivero talked to Mr. Fowler to check on whether Respondent was covered. Mr. Fowler said the company did not have coverage, but it was working on it. This information was consistent with the searches Mr. Rivero performed prior to his visit at Respondent's business location. Mr. Rivero told Ms. Welch-Perryman to have Mr. Jennings call him by the end of that day, January 6th. Mr. Jennings did not call Mr. Rivero on the 6th. On January 7, 2016, Mr. Rivero spoke with Mr. Jennings by phone. During this conversation, Mr. Jennings confirmed that the two women were his employees and he did not have insurance, but was working on securing it. Mr. Jennings agreed to meet with Mr. Rivero at the office trailer at 1 p.m. When Mr. Rivero returned that afternoon, the site was locked with the fence closed by padlock. Mr. Rivero called Ms. Welch-Perryman and Ms. Hallman to see why the site was locked and left messages, but received no response. Mr. Rivero called his supervisor, Scarlet Aldana, to inform her of what he found. She advised Mr. Rivero to call Mr. Jennings and tell him of the consequences of not being there and not having insurance. Mr. Rivero called Mr. Jennings and left a message. After waiting about 15 minutes, Mr. Rivero called his supervisor again to explain the situation. Ms. Aldana authorized a Stop- work Order to be issued and posted in a prominent place. Mr. Rivero posted the Stop-work Order on Respondent's mailbox and photographed it. While at the business location, Mr. Rivero was with senior investigator Julio Cabrera. Mr. Rivero was directed by Mr. Cabrera to photograph a dump truck on site with a general contractor's number on it. According to Mr. Rivero, there were many more pieces of equipment, but he focused on photographing the posting of the Stop-work Order and the dump truck. According to the records of the Department of Business and Professional Regulation, an active general contractor license number belongs to Mr. Jennings and Respondent. On January 15, 2016, Mr. Jennings contacted Mr. Rivero to say he had come into compliance by purchasing coverage for nine employees. Mr. Rivero asked for the broker's name and phone number so he could verify coverage. Mr. Rivero spoke by phone with Stan Shelton at Madison Insurance Company. Mr. Shelton verified the company had coverage for nine employees, paid a down payment of $500, and the premium was $31,763. On January 19, 2016, Mr. Rivero met with Mr. Jennings and went over the business records request, informing Mr. Jennings that in order to calculate a penalty, the Department needed certain records. Mr. Jennings was informed of the ten business days he had to submit the records. Penalty Calculation Penalty Auditor Sarah Beal was assigned to calculate the penalty in this case. Ms. Beal did not receive any records from Respondent in response to the business records request. Without any records, Ms. Beal had to impute the gross payroll which is equal to two times the average weekly wage that was in effect when the Stop-work Order was issued. Ms. Beal determined the period of noncompliance to be the full two years of January 8, 2014, to January 7, 2016. Ms. Beal identified the employees on the penalty worksheet from the investigator's on- site observations and narrative. Based on Mr. Rivero's observations on January 6, 2016, and the information he had gathered, Ms. Beal initially used the classification code 8810 listed in the Scopes® Manual, which has been adopted by the Department through Florida Administrative Code Rule 69L-6.021(1). Classification codes are four-digit codes assigned to various occupations by the NCCI to assist in the calculation of workers' compensation insurance premiums. Classification code 8810 applies to clerical workers and Ms. Beal preliminarily used this code for Ms. Hallman, Ms. Welch-Perryman, and Mr. Jennings. Ms. Beal then utilized the corresponding approved manual rates for those class codes and the period of noncompliance to determine a penalty, which she submitted to her supervisor for review. Ms. Beal was subsequently directed to change the class code for Mr. Jennings to Scopes Code 5606, a construction class code for construction foreman/project manager. On April 8, 2016, based on Ms. Beal's re-calculation, using class code 5606 for Mr. Jennings, the Department issued an Amended Order of Penalty Assessment to Respondent. The Amended Order of Penalty Assessment assessed a penalty of $8,753.66.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order upholding the Stop-work Order and the Amended Order of Penalty Assessment and assess a penalty against Respondent in the amount of $8,753.66. DONE AND ENTERED this 27th day of June, 2016, in Tallahassee, Leon County, Florida. S MARY LI CREASY 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 27th day of June, 2016.
The Issue Whether various statements or policies attributed to the Department of Health (Department) and the Board of Medicine (Board) in connection with the assessment of costs related to the investigation and prosecution of disciplinary cases coming before the Board are unpromulgated rules in violation of Section 120.54(1)(a), Florida Statutes.1
Findings Of Fact Petitioner is a Florida licensed physician, who received his Florida medical license numbered ME 46054 in 1985. He currently practices medicine at 620 Eichenfeld Drive in Brandon, Florida. Petitioner is currently the subject of a pending disciplinary action initiated by the Department against his medical license. The disciplinary case is styled Department of Health vs. Mohamed I. Abdel-Aziz, Department of Health Case No. 2000-07849, DOAH Case No. 02-4429PL. On June 2, 2003, a Recommended Order was issued in DOAH Case No. 02-4429PL, finding that Petitioner violated Subsection 458.331(1)(t), Florida Statutes. Petitioner is subject to the assessment of the costs related to the investigation and prosecution of his case pursuant to Section 456.072(4), Florida Statutes, should the Board adopt the finding of a violation. Neither the Department nor the Board has promulgated a rule defining "costs related to the investigation and prosecution of the case." Petitioner has challenged the validity of the following statements, which he attributes to Respondents. Complaint Cost Summary. Costs of the investigation and prosecution that are incurred as a part of a license disciplinary case include the costs of the time (salary and benefits) spent by employees of the Department of Health Prosecution Services Unit. Costs of the investigation and prosecution that are incurred as a part of a license disciplinary case include the "overhead expense" of the Prosecution Services Unit. Costs of the investigation and prosecution that are incurred as a part of a license disciplinary case include the "OPS expense" attributable to the Prosecution Services Unit. Costs of the investigation and prosecution that are incurred as a part of a license disciplinary case include the salary and benefits paid by the Department of Health on behalf of employees who have no time keeping responsibility with respect to the time tracking maintenance system of the Department of Health. Costs of the investigation and prosecution that are incurred as a part of a license disciplinary case include the salary and benefits of the attorneys who have been assigned responsibility for and/or who have provided services in connection [sic] a license disciplinary case. Costs of the investigation and prosecution that are incurred as a part of a license disciplinary case include the "expense" of the individual components of the Prosecutions Services Unit. Time Tracking Report. Methodology for Calculating Rate for Billable Hours (pre-January 13, 2003) assessed as costs of the investigation and prosecution. The Department of Health, Board of Medicine procedure for the assessment of costs of the investigation and prosecution of a licenses [sic] found to have violated the disciplinary provisions of Chapters 456 and 458, Florida Statutes, as set forth in the Notice of Voluntary Dismissal of Paragraph (G) of the Prayer for Relief of the Administrative Complaint. Methodology for Calculating Rate for Billable Hours (effective January 24, 2003) assessed as costs of the investigation and prosecution. Notice Regarding Assessment of Costs which stated: Respondent is placed on notice that Petitioner has incurred costs related to the investigation and prosecution of this matter. Pursuant to Section 456.074(4), Florida Statutes, the Board shall assess costs related to the investigation and prosecution of a disciplinary matter, which may include attorney hours and costs, on the Respondent in addition to other discipline imposed. The Department and its predecessor agencies, the Agency for Health Care Administration and the Department of Business and Professional Regulation, have been keeping data of direct and indirect expenses incurred by the Department since at least 1988. Historically, the reason this cost data has been kept is for use in billing the various boards for the amount spent in investigating and prosecuting each board's cases. Section 456.025(8), Florida Statutes, and its predecessors Sections 455.220 and 455.587, Florida Statutes, require that the Department maintain an accounting, by profession, of the expenses incurred by the Department to regulate those professions. These expenses are then, to the maximum extent possible, charged back to the accounts of each regulated profession. Direct expenses include, but are not limited to, costs for investigations, examination, and legal services. For indirect expenses, the Department is to proportionally allocate to the boards the expenses incurred by the Department in the performance of its duties with respect to the regulation of each of the professions. The Department is required to maintain sufficient records to support its allocation of agency expenses and to provide each board an annual report of revenues and direct and allocated expenses related to the operation of that profession. The Department or its predecessors have been keeping data of the costs related to the investigation and prosecution of professional license disciplinary cases. The collection of data includes determining an hourly rate for those persons whose activities are directly attributable to individual and specific cases and an hourly overhead rate for administrative costs and indirect costs. The overhead rate includes salaries plus benefits of clerical staff, rent, office supplies, OPS expense, telephone services, utilities, copier maintenance fees, and other similar expenses. From 1994 until January 13, 2003, the methodology for calculating the overheard hourly rate, called "Methodology for Calculating Rate for Billable Hours," provided as follows: Determine the number of timekeepers and non-timekeepers. Determine the rate for non-timekeepers (annual rate plus + benefits [27.5%]) ? number of timekeepers ? 2080 hours = hourly rate. Determine the rate for expenses (budget expenses and OPS) from operating budget ? number of timekeepers ? 2080 = hourly rate. Add results of steps 2 & 3, for total hourly rate per timekeeper. All employees of the Department's Medical Quality Assurance (MQA) Enforcement Program, which consists of the Consumer Services Unit, the Investigative Services Unit, and the Prosecution Services Unit, are designated either as timekeepers or non-timekeepers. Timekeepers are those employees who perform activities directly related to specific cases. All other employees are considered to be non-timekeepers, and their salary and benefits are part of the costs that are apportioned within the overheard rate calculation. The hourly rate for a timekeeper is calculated by dividing that timekeeper's salary plus benefits by the total annual hours. Under the pre-January 13, 2003, methodology, the total number of hours used was 2080. Benefits were determined based on 27.5 percent of the timekeeper's annual salary. In October or November 2002, James D. Hentz, the Financial Manager for the trust fund of the MQA section of the Department saw this methodology for the first time. He believed that the use of 2080 hours in the methodology was flawed because it included holidays, annual leave, sick leave, and non-billable administrative time, thereby, precluding any possibility of recovering all the costs. Mr. Hentz believed that using 1720 hours better represented the number of hours available to be worked and billed to specific cases, and he proposed that the methodology be adjusted by using 1720 hours instead of 2080 hours. The adjusted methodology proposed by Mr. Hentz was disseminated to the enforcement program units of the Department by Charlene G. Willoughby to be effective January 13, 2003. The methodology, also entitled "Methodology for Calculating Rate for Billable Hours" provided as follows: Determine the number of timekeepers and non-timekeepers. There are 1720 billable hours per year (2080 possible hours worked minus average annual, sick and holiday leave). Determine the rate for non-timekeepers (annual rate + benefits [28%]) ? number of timekeepers ? 1720 hours = hourly rate). Determine the rate for expenses (budget expenses, including OPS) from operating budget ? number of timekeepers ? 1720 hours = hourly rate Add results of steps 3 & 4 for total hourly overhead rate per timekeeper. Add overhead rate to hourly salary + benefits of each timekeeper for individual timekeeper rate. This methodology proposed by Mr. Hentz differed from the previous methodology by the use of 1720 hours instead of 2080 hours and the use of 28 percent of the annual salary to calculate benefits rather than 27.5 percent. These changes resulted in an increase in both the overhead hourly rate and the timekeepers' hourly rate, thereby, increasing the total hourly rate per timekeeper, which is also known as staff rate. The methodology that was disseminated on January 13, 2003, was not implemented by the Investigative Services Unit or the Prosecution Services Unit at the Department. On January 24, 2003, Mr. Hentz sent out another methodology for use in computing overhead and timekeepers' hourly rates. He drafted the methodology in a narrative form, which Ms. Willoughby converted to a format similar to the previous formulas. The January 24, 2003, methodology provides as follows: Determine the number of timekeepers and the non-timekeepers. There are 1720 billable hours per year (2080 possible hours worked minus average annual, sick and holiday leave). Determine the rate for non-timekeepers (annual rate + benefits [as reflected in the COPES Report] ? number of timekeepers ? 1720 hours = hourly rate. Determine the rate for expenses (budget expenses, including OPS) from operating budget ? number of timekeepers ? 1720 hours = hourly rate. Add results of steps 3 & 4 for total hourly rate per timekeeper. Add overhead rate to hourly salary + benefits of each timekeeper for individual timekeeper rate. The salary plus benefits associated with each individual position number for each employee is reported on the COPES Report. In calculating the timekeepers' hourly rate and the overhead hourly rate, the January 24 methodology uses the actual salary plus benefits from the COPES Report instead of calculating benefits by using a percentage of salary as was done in previous methodologies. Timekeepers maintain and submit a daily activity report (DAR) which identifies the cases on which they worked, the activities they performed, and the amount of time they spent in six-minute increments. The DARs are entered into a data system called the Time Track System, where that data is kept by timekeeper identification number, case number, activity, and time spent on each activity. The total hourly rate is also entered into the Time Track System so that the rate can be applied to the time spent on a case by each timekeeper. The total hourly rate is updated at least annually when the new spending plan or budget is issued. It is also reviewed quarterly to make adjustments for salary or benefit changes. The compilations of data from the Time Track System at issue are the Time Tracking Report and the Complaint Cost Summary. The Time Tracking Report is a detailed time accounting report and has two components, the Itemized Cost by Complaint and the Itemized Expense by Complaint. The Itemized Cost by Complaint itemizes the specific activities that have been performed on a specific case by activity code and description, the date of those activities, the timekeeper who performed the activities, the amount of time spent on those activities, and a staff rate for each timekeeper who worked on a specific case. The Itemized Cost by Complaint contains a column that reports "Cost," which is the time spent by a timekeeper for a particular activity multiplied by the staff rate. The Itemized Cost by Complaint is subtotaled by each unit in the MQA Enforcement Program and is finally totaled for all the time spent on a particular case to the date that the report is printed. The Itemized Expense by Complaint itemizes the expenses directly attributable to the specific case. Typical direct expenses would include expert witness fees, travel, and court reporting services. These expenses are ones for which an invoice has been received and paid for a specific expense on a specific case. The Complaint Cost Summary is a summary of the accounting information contained in the Time Tracking Report. It summarizes the total hours spent on a case, by unit, the cost per unit, and the expenses. The total reflected in the Complaint Cost Summary corresponds to the individual subtotals by unit, plus the expenses, which are detailed in the Time Tracking Report. When a specific case goes before the Board for entry of a Final Order that will impose some discipline, various procedures have been used to bring the data concerning the costs related to the investigation and prosecution of that case before the Board. The procedures have varied over time and type of case. For example, when the Board considers defaults and informal hearing recommended orders, it may be informed about the costs in one of several ways, including by written motion, ore tenus motion, or simple statement of the costs. Consent agreements may be considered for assessments of costs in other ways because the amount of the costs would be included in the consent agreement. In the past, cost summaries have not been presented to the Board in cases involving recommended orders; however, more recently cost summaries are being provided to the Board and may include additional materials such as an affidavit from Ms. Willoughby. In some cases, there have been motions to assess costs filed and in others there were oral presentations made to the Board regarding the costs. In the last 13 months, there has been no consistent procedure used by the Department to request the assessment of costs related to the investigation and prosecution by the Board. However, the Department has consistently included its direct and indirect expenses, including an attorney's time in its requests for costs. In Petitioner's disciplinary case, the Department originally requested the assessment of the costs related to the investigation and prosecution in the prayer for relief in the Administrative Complaint, Paragraph (G). Prior to the final hearing, the Department filed a Notice of Dismissal of Paragraph of the Prayer for Relief of the Administrative Complaint, stating that it was dismissing the request concerning the assessment of the costs for the investigation and prosecution of the case. The Department further included the following in the motion: Should the Board enter a final order imposing discipline in this matter, the [Department] intends to request the Board of Medicine to assess costs in the following manner: Upon entry of Recommended Order by the Division of Administrative Hearing, an appropriate Motion to Assess Costs shall be filed with the Board to be considered immediately following Board consideration of said Recommended Order. The motion shall provide [Dr. Abdel-Aziz] an opportunity to file timely written objections to the amount of costs incurred by the Petitioner related to the investigation and prosecution of the case. If a timely written objection to the assessment of costs incurred by the Petitioner related to the investigation and prosecution of the case is filed by [Dr. Abdel-Aziz], the Department shall request the Board to conduct a hearing on the assessment of costs. That hearing shall be conducted either after consideration of the Recommended Order and prior to entry of the Final Order disposing of the case or [sic] a part of a separate bifurcated proceeding if it is appropriate to enter a Final Order before the hearing can be conducted. If a disputed issue of material fact arises, then the matter concerning such dispute shall be forwarded to the Division of Administrative Hearings for a formal hearing. The Department has filed similar notices in at least two other cases before the Division of Administrative Hearings. The Board has not used a specific procedure in the manner in which it addresses the issue of costs related to the investigation and prosecution. It has considered written motions, oral motions, and has, at least on one occasion, just asked the Department representative at the Board meeting what the amount of the costs were. The Board has been interpreting Section 456.072(4), Florida Statutes, to require the inclusion of the direct and indirect expenses of the Department, including those costs listed in subsections b, c, d, e, f, and g of paragraph 4 of this Final Order, when assessing the costs related to the investigation and prosecution of a case against a physician, who is before the Board as a result of a recommended order. In doing so, the Board has implicitly adopted those costs appearing in subsections b, c, d, e, f, and g of this Final Order as the costs it will assess related to the investigation and prosecution of a case.
The Issue The issue posed for decision herein is whether or not the Respondent, Department of Revenue's refusal to eliminate the Petitioner's assessment for penalties based on the subject assessment of Petitioner's books and records during the audit period was proper. Secondly, the remaining issue is whether or not the Respondent's imposition of interest for the subject assessment during the period in which the assessment was questioned by Petitioner was proper. Based upon my observation of the witnesses and their demeanor while testifying, the arguments of counsel, the memoranda submitted and the entire record compiled herein, I hereby make the following:
Findings Of Fact Petitioner, Bill Rivers Corporation, is a Florida corporation engaged principally in the sale of motor vehicles to large corporations, most of which are based out of state. Petitioner's books and records were audited by agents of the Department of Revenue during August of 1978 for the audit period August 1, 1975 through July 31, 1978. The original audit resulted in an assessment dated September 15, 1978 in the amount of $112,434.09 in taxes, penalties and interest. Petitioner contested that assessment and based upon Petitioner's submission of requested substantiating documentation concerning the sale of motor vehicles to out-of-state purchasers for use and registrations in such other states, the assessment was revised downward to $69,637.49. 2/ This revised assessment was issued February 27, 1979. It is the Petitioner's position that no penalty should be imposed as a result of the assessment entered against it based upon the taxability of sales of motor vehicles to a nonresident for use in another jurisdiction since the taxing statute was changed approximately three times during the 11-month period, creating a partial exemption that Petitioner was unable to intelligently determine with reasonable diligence. In this regard, Petitioner points to the fact that relying upon the advice of its controller, its attorney, and two accountants, it was unable to follow the guides of the taxing statutes due to the repeated changes during the above-referred 11-month period. Chapter 77-412, Laws of Florida. Petitioner argues that the Department of Revenue did not properly staff the subject audit review, which resulted in the initial "erroneous" assessment since all documentary records were available to Respondent's (Department of Revenue) agents for review. Based upon the fact that the original assessment was adjusted downward approximately 40 percent, Petitioner contends that it should not have been levied and, thus, forced to pay interest during the five-month period in which the assessment was being contested since the result ended in a downward adjustment. Additionally, Petitioner argues that although Respondent revised its penalty downward from 25 percent to 5 percent penalty, the entire penalty should be eliminated from the assessment. John M. McCrone, the Department of Revenue's Regional Audit Supervisor, became familiar with the audit of Petitioner's records after the audit was completed and reviewed by its auditor, W. R. Woodward, an auditor employed by the Department of Revenue for approximately eight years. Auditor Woodward analyzed all of Petitioner's sales records and numerous sales appeared taxable based on the absence of exemptions, resale certificates or other affidavits which would place them in an exempt category. For example, he noted that there was not on file in Petitioner's records resale certificates for the sale of out- of-state vehicles to one of Petitioner's largest customers, the Winn Dixie Corporation. During the informal conferences held at Petitioner's behest following the issuance of the original audit, extensions of time were granted by Respondent's agents to allow Petitioner an opportunity to obtain substantiating documentation respecting the taxability of numerous sales which ultimately resulted in a downward adjustment. (Testimony of Supervisor McCrone). Also, Auditor Woodward analyzed Petitioner's records during the period of approximately one month during which the audit was ongoing and was in regular consultation with his supervisor and other support personnel. Significantly, Petitioner's Controller and Vice President, Gerald Klansky, conceded that the documentation delineating the consigned parts inventory was unavailable for the Department during the original audit. This, according to the testimony of Petitioner's agents, impacted in part, the "high" original assessment issued which was, of course, based upon the available documentation for Respondent's agent. As initially issued, the assessment contained a penalty factor of 25 percent which was reduced downward to 5 percent following the informal conferences and the corrected assessment which issued on February 27, 1979. The Department's representatives compromised the penalty factor based upon the authority contained in Section 212.12(5), Florida Statutes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Revenue's revised assessment dated June 18, 1990 be UPHELD. DONE and ENTERED this 22nd day of August, 1980, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of August, 1980.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent repay Petitioner $7,866 in monies expended in violation of the contract and applicable regulations. DONE and ENTERED this 14th day of June, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 1982. COPIES FURNISHED: Chad J. Motes, Esquire Suite 131-Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32301 Louise S. Aligood P. O. Box 536 Monticello, Florida 32344
Findings Of Fact The Petitioner and a business associate formed a partnership for the purpose of publishing an administrative reporter. In pursuit of that purpose the Petitioner's partner, in October, 1978, requested from the Division of Personnel, Department of Administration, (hereinafter referred to as "Respondent") copies of several Career Service Commission orders. On October 16, 1978, Petitioner's partner received a packet from Respondent containing the requested orders. The orders totaled 183 pages for which Petitioner and his partner were charged fifty cents a page. Petitioner paid Respondent $91.50 for the copies. The charge of fifty cents a page was assessed by Respondent pursuant to its Rule 22-1.115(1), Florida Administrative Code. It was undisputed at the final hearing that the actual cost of the materials, rental on the copying machine, and the cost to Respondent of its service agreement on the copying machine was less than two cents per page copied. One of Respondent's employees expended time in pulling the requested orders from the files and copying the orders pursuant to the request. The employee did not record nor clearly remember how much time she spent responding to the request for copies. On the evidence presented it is reasonable to conclude that the employee expended one hour of time at the rate of $6.95 per hour, and two hours of time at the rate of $4.63 per hour. Petitioner paid the $91.50 charqe by warrant. Respondent's fiscal officer testified that he did not have at head the cost to Respondent of processing a warrant but he roughtly estimated that cost to be $5.00. The cost items set forth in paragraphs 3, 4, and 5 above are the only elements of the cost of copying for which Petitioner or Respondent could establish a firm dollar value. These elements total $24.87 for the 183 copies. Respondent charged Petitioner $91.50 for the 183 copies. The Respondent presented evidence showing that there are many indirect, "incalculable" costs attributable to the production of copies of public documents pursuant to a request from a member of the public. As examples of these "incalculable" costs Respondent referred to state auditing procedures; budgeting procedures; administrative hearings, such as the instant proceeding; bookkeeping required by the Comptroller's office and Treasurer's office; the cost of obtaining legal opinions; the cost of space for the copying machine; and the cost of electricity for the copying machine. Respondent's witnesses testified that these costs are "incalculable" and therefore have to be estimated. No evidence was presented which would establish that but for the necessity of providing copies to the public these "incalculable" costs would not be incurred. On the contrary, the evidence indicated that these "incalculable" costs would, in large part, be incurred by the agency in the pursuit of their responsibilities without regard to providing the public copies of public records. Respondent's evidence established that, with regard to the challenged rule, these "incalculable" costs were estimated by the Secretary of the Department of Administration and several of his division directors, including the State Budget Director and the State Personnel Director. No evidence was presented to show that these persons had the benefit of any formal or informal estimate or study of these "incalculable" costs. No evidence was presented to establish that these persons made an attempt, beyond their discussion of the matter at a meeting, to accurately and finitely estimate these "incalculable" costs. Other than the fact that these persons occupied senior management positions in State government, no evidence was presented which would establish their expertise or experience in estimating the "incalculable" costs appurtenant to copying public records pursuant to requests from members of the public. No evidence was presented which would establish that the price of fifty cents for the first copy of each page and twenty cents for each additional copy of each page, set forth in Rule 22-1.115(1), Florida Administrative Code, is based on any accounting study or other detailed inquiry into the cost of providing, to the public, copies of public records. Those elements of that price for which known dollar amounts have been established include the costs of the machine, which total less than two cents per copy; the cost of labor involved to produce the copies, which in this case has been established to be 8.86 cents per copy; and the cost of processing the payment warrant, which in this case has been established as 2.7 cents per copy. These identifiable costs with regard to the instant case total approximately 13.6 cents per copy. Respondent argues that the other 36.4 cents charged per copy are accounted for by the above-referenced "incalculable" costs which have been estimated without benefit of any studies as heretofore mentioned.
The Issue By a Notice to Show Cause filed in the above-styled cases, the Petitioner seeks to suspend or revoke the Certificate of Qualification and license issued to Homer (Glen) Leonard Wade, d/b/a American Collection Systems, Inc., Respondent to operate a collection agency for conduct of violative of provisions of provisions of Chapter 559, Florida Statutes; namely -- Threatening to communicate or communicating with a debtor's employer prior to obtaining a final judgment against the debtor or without securing the debtor's written permission in violation of section 559.72(4), Florida Statutes. Collecting or attempting to collect from a debtor or debtors a fee for collection services without authorization to do so in violation of Section 559.75(5), Florida Statutes. Communicating orally or in writing, with a debtor in such a manner as to give the false impression or appearance that the licensee or his agent was an attorney or was associated with an attorney in violation of Section 559.72(12), Florida Statutes. Claiming, attempting or threatening to enforce a consumer claim when knowing the right to collect such claim did not exist in violation of Section 559.72(9), Florida Statutes. While not part of Petitioner's Notice to Show Cause, the issue of Petitioner's jurisdictional authority to revoke or suspend Respondent's license and certificate was raised by its Motion to Dismiss filed herein. NOTICE In that a recommended order was submitted by the hearing officer who conducted the hearing in the instant case and upon consideration of said recommended order the agency intends to reject certain findings of fact and reject or modify certain conclusions of law, it states that such was done only after reviewing the entire record consisting of the specific documents required under Section 120.57(1)(b)(5).
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the arguments of counsel, and the briefs submitted by the parties, the following relevant facts are found. During times materiel herein, Homer (Glen) Leonard Wade, d/b/a American Collection Systems, Inc., has been continuously issued a Certificate of Qualification to operate a collection agency in this State pursuant to Chapter 559, Florida Statutes. At the outset of the hearing, Respondent's counsel contested the Petitioner's jurisdiction to take administrative action to suspend or revoke the Respondent's Certificate of Qualification or license issued pursuant to Chapter 559, Florida Statutes, Part IV, on the basis that Section 559.79, Florida Statutes (1977), provides in pertinent part that only a circuit court and not an administrative agency has the express statutory authority to suspend or revoke certificates of qualification or licenses issued pursuant to Chapter 559, Florida Statutes. After reviewing the arguments and the citations of authorities, the undersigned concludes that the Petitioner is vested with the implied authority to specify conditions under which such certificates (licenses) shall be held and revoked, and such appears to be in keeping and necessarily implied from the power to issue a certificate and thus is in keeping with the necessary and broad power granted to Petitioner to issue certificates. It is thus concluded that the power to issue certificates in this instance carries with it the power to specify the terms and conditions of the issuance, as well as terms and conditions upon which the same may be held or revoked. See, for example, State Board of Education v. Nelson, So.2d 1979, Florida Law Weekly, 880 (1st DCA 1979), and 1 FIa.Jur.Prud., 2nd Adm.Law, 21. In Case No. 78-2428, the Petitioner, in support of its Notice to Show Cause, alleges that the Respondent engaged in the following: On or about January 15, 1976, the Respondent/Licensee or an agent of the Respondent/Licensee, did violate Subsection 559.72(7), Florida Statutes, by willfully communicating with Debtor David Gottlieb or a member of his family with such frequency as to harass the debtor or his family and willfully engaged in other conduct which could reasonably be expected to abuse or harass the debtor or a member of his family during the course of collection agency activity. On or about January 21, 1976, the Respondent/Licensee or an agent of the Respondent/Licensee, did violate Subsection 559.72(5), Florida Statutes, by disclosing to a person other than David Gottlieb or his family information affecting the reputation of Mr. Gottlieb whether or not for credit worthiness, with knowledge or reason to know that the other person did not have a legitimate business need for the information. On or about July 12, 1970, Respondent, American Collection Systems, Inc., by or through its agent, servant or employee did communicate or threaten to communicate with the employer of Mr. Donald Terry, a consumer, prior to obtaining final judgement against Mr. Terry without Mr. Terry having given his permission in writing to contact his employer or having acknowledged in writing the existence of the debt after that debt had been placed for collection in violation of Subsection 559.72(4), Florida Statutes. On or about April 9, 1976, Respondent, American Collection Systems, Inc., by or through its agent, servant or employee did communicate or threaten to communicate with the employer of Mr. James T. Redington, a consumer, prior to obtaining final judgement against Mr. Redington and without Mr. Redington having acknowledged in writing the existence of the debt after that debt had been placed for collection in violation of Subsection 559.72(4), Florida Statutes. On or about April 9, 1976, Respondent, American Collection Systems, Inc., by or through its agent, servant or employee did orally communicate with a consumer, Mr. James T. Redington, in such a manner as to give the false impression or appearance that its agent, servant or employee was associated with an attorney in violation of Subsection 559.72(12), Florida Statutes. On or about August 24, 1976, Respondent, American Collection Systems, Inc., did claim, attempt or threaten to enforce a consumer claim against Ms. Patricia M. Tracey when it, its agents, servant or employee knew the claim was not legitimate or that the right to collect the consumer claim did not exist in violation of Subsection 559.72(9), Florida Statutes. Thereafter, in Cases Nos. 79-910 and 79-911, the parties stipulated that the controversy involves a legal question as to whether or not the Respondent is authorized to exact a fee, an amount agreed to be computed at the rate of 6 percent simple interest, which amount was added to the amount Respondent attempted to collect from each of the debtors cited in the Notice to Show Cause herein is permissible under Subsection 559.75(5), Florida Statutes. J. Lymon Babcock, Jr., is Petitioner's investigator who conducts background investigations for collection agency applications. He has custody of the license end records and is familiar with the Respondent's licensing entity, American Collection Systems, Inc. Babcock testified that Respondent was first licensed on or about January 26, 1973, and has continued to hold a license since that time. Respondent's certificate has been renewed annually and audit numbers are changed when the annual renewal is furnished. (See Petitioner's Exhibits 1 and 2 composites.) On or about August 10, 1976, Respondent, by letter of the same date, advised John and Patricia Tracey of Coral Springs, Florida, that they owed a Dr. Jorge $149.60 and requested payment in the full amount at his office within five days to avoid the exaction of additional court costs and other legal expenses. (Petitioner's Exhibit 4 composite.) Ms. Tracey appeared at the hearing and testified that she spoke to an unidentified female employee of Respondent and a Mr. Hawk and a Mr. Richards, who also requested payment of the $149.00 as set forth in the demand letter of August 10, 1976. At that time, the Tracey's testimony was that they had also been contacted by Respondent and Broward Adjustment Bureau for the same indebtedness to Dr. Jorge which, according to their records, reflected an amount owing of $136.00. The Traceys received a second letter from Respondent on September 8, 1976, from Mr. Richards, the General Manager, and Bruce L. Glaskin, attorney for Respondent. (Petitioner's Exhibits 6 and 7.) Both letters also requested payment within five days of the date of the letters. The Traceys testified that they had made arrangements with Broward Adjustment to pay the indebtedness in two monthly installments of $68.00 each. The Traceys contacted Consumer Affairs prior to the time that they received the last demand letter from Respondent and it appears that the indebtedness had been paid by October 12, 1976. (See Petitioner's Exhibits 3, 4, 5, 6, 7 and 8.) On cross-examination, the Traceys acknowledged that the debt was a legitimate debt which was due and owing and that they never notified the Respondent in writing that the debt had been paid to either Dr. Jorge or the Respondent. Maxine Hughey is employed by Rolando Jorge, M.D., P.A., in the collection department primarily in the workmen's compensation collection section. Ms. Hughey testified that she turned the Tracey account over to Respondent sometime during 1970. It appears that after the Traceys advised Respondent that they had been contacted by another collection service for payment of the same indebtedness to Dr. Jorge, Mr. Godette of Respondent's office advised Ms. Hughey that Respondent was still working the Tracey account for Dr. Jorge. Ms. Hughey advised Respondent by letter dated August 11, 1976, that the accounts for Dr. Jorge had been withdrawn from the Respondent verbally during mid-September, 1974. Ms. Hughey testified that she withdrew the collection accounts of Dr. Jorge from Respondent due to the slow recovery on collections. (See Petitioner's Exhibits 9 and 10.) Ms. Hughey spoke to Respondent, Homer (Glen) Leonard Wade, during August or September, 1976, and inquired of Respondent why he was working the Tracey account. Respondent replied that Dr. Jorge had not withdrawn the accounts that had been assigned to him and that for him (Dr. Jorge) to assign the accounts to anyone without prior contact and arrangement with Respondent would subject Dr. Jorge to a legal suit. On cross-examination, Ms. Hughey testified that the Tracey account was turned over to Respondent during December, 1973, and that Broward adjustment received two payments from the Traceys account on September 15, 1976, and October 26, 1976. She also testified that she formally notified Respondent that Dr. Jorge was withdrawing the accounts assigned to Respondent during 1974. In this regard, no written evidence was offered establishing that any attempt at withdrawal of accounts was sent to Respondent until the letter dated August 11, 1975, was mailed by Ms. Hughey allegedly per instructions from Dr. Jorge. Ms. Hughey forwarded a copy of the letter to Mr. Godette of Consumer Services on or about August 25, 1976, when she received inquiry from the Traceys referencing the demand letters the Traceys had received from the Respondent. In this regard, Respondent introduced a copy of its collection procedures which was submitted to all its clients and prospects. Respecting Respondent's collection procedures, paragraph 2A provides in pertinent part that: We will close any account to you upon your request after listing, with these exceptions: (1) Those paying (2) Those promised to pay (3) Forwarded accounts (4) Those accounts in law or hands of attorney and of course, those we have reduced to judgements for you. (Respondent's Exhibit 1.) James Redington, an engineer for Motorola, appeared and testified that he received demand letters requesting collections from Respondent during January, 1976. Mr. Redington acknowledged a past-due account with Dr. Jacobsen. Mr. Redington testified that "Bob Cash", one of the Respondent's aliases, called him at work and inquired when his delinquent bill would be paid. According to Redington, after receiving two calls from "Bob Cash", he was advised by "Cash" that Respondent was holding a check payable to Dr. Jacobsen which was returned for insufficient funds. Thereafter, in April, 1976, Redington received another call from a Mr. Richardson, who was then Respondent's General Manager, who advised Mr. Redington that there was an outstanding warrant which had been issued due to the outstanding sufficient insufficient funds check made payable to their client, Dr. Jacobsen, and requested that payment be made immediately or the Sheriff would serve the warrant. Redington immediately went to Respondent's office and spoke to "Bob Cash", who advised that Richardson, Respondent's General Manager, had called. Redington tendered "Cash" a money order for the indebtedness and requested that the returned check be given to him. Redington had no further contact with Respondent, although the Sheriff did serve the warrant on him at work. Donald Terry, an instructor at Plantation High School, received a demand letter from Respondent during the summer of 1976 for a $48.00 indebtedness he owed a Dr. Segal. Mr. Terry received a phone call from a representative of Respondent advising him that if he did not make arrangements to pay the indebtedness owed Dr. Segal, the Respondent would "take him to court." Terry testified that within two days he received another call from an employee of Respondent who advised that if he did not pay his indebtedness, his employer would be contacted. Terry received a copy of the letter which, in his opinion, had been mailed to his employer. The letter was received from Respondent at Plantation High School. (Petitioner's Exhibits 12 and 13.) Additionally, Mr. Terry received another demand letter inquiring of the Segal's indebtedness in the mail. (Petitioner's Exhibit 14.) On cross-examination, Terry testified that the letter was not distributed at the school and that he paid the indebtedness in full the following year, which was a legitimate debt owed to Dr. Segal. Derrick Costa, Respondent's manager, was first employed during 1974 and since 1976, has served as a quasi-manager. Costa testified that the name changed from American Collection Service to American Collection Systems, Inc., during September or October of 1976. He testified that at all times material, Wade had ultimate responsibility and authority for the operation of both American Collection Service and American Collection Systems, Inc. Costa expressed familiarity with the Redington account and testified that he worked the account, which was due for Dr. Jacobsen. Costa testified that he never threatened to contact Mr. Redington's employer nor had he violated in any manner Chapter 559, Florida Statutes. On redirect examination, Costa testified that true names were never used when dealing with debtors and that the aliases such as "Richards", "Cash", etc., are used extensively in a collection business. Petitioner also introduced into evidence copies of a letter which had been forwarded to Irving Weislander of Sunrise, Florida, and Jeanette Mims of Boca Raton, Florida. According to Petitioner, these letters were intended as a threat and mailed to the above-named debtors' employers. (See Petitioner's Exhibits 15 and 16.) Another letter of the same type was mailed to James Fannin of Lauderdale Lakes, Florida. (See Petitioner's Exhibit 17.) Homer (Glen) Leonard Wade, Respondent, appeared and testified in his own behalf. Wade heard Costa's testimony and adopted it in all respects. Respondent testified that he never threatened Redington or Terry, nor did be indicate to them that he would contact their employers. He testified that he never held himself out as an attorney with Redington. Respondent testified that he has a collections manual which is given to all employees and that that manual sets forth in vivid detail, the practices and procedures utilized in collecting accounts assigned to him. He testified that new employees are oriented respecting the do's and don'ts of the collection business for approximately four days and they are administered a test on the fifth day. The employees are assigned collection tasks only if they pass the examination. Respondent stressed that he apprises new employees that both the "spirit" and "letter" of the law must be adhered to rigidly. Respondent testified that he uses the "gag" of long distance calls on occasion as the situation dictates. He testified that it is not improper to engage in such gags in the collection business. He testified that the gag of making a long distance telephone call was used in the case wherein the James T. Redington account was serviced because, in his personal opinion, a review of Redington's credit history file revealed that his account was in fact collectible. Respondent has serviced the collection accounts for Dr. Jorge since approximately 1973. A problem in the servicing of Dr. Jorge's accounts when he was unable to pick up same accounts that Dr. Jorge wanted serviced one day during 1973. According to Respondent, there was never any conversations with Dr. Jorge respecting termination of his contract with him, nor did Dr. Jorge ever write him a letter advising that he wanted to terminate his contract with Respondent. Respondent has been engaged in business since 1951. CASE NOS. 79-910; 79-911 The Petitioner has alleged that the Respondent violated Subsections 559.72(4) and 559.72(5), Florida Statutes, by its allegation dent Respondent has either communicated or threatened to communicate with the employers of debtors without first obtaining the debtors' written permission to do so and by sending certain demand letters to debtors demanding payment of sums which are in excess of the original amount of the debt. Respecting the allegation that the Respondent has attempted to collect a fee violative of Subsection 599.75(5), Florida Statutes, the parties stipulate that the method of calculating the amount set forth in the demand letter is based on an amount less than 6 percent simple interest. The uncontroverted evidence clearly indicates that in every instance Respondent's letters to the debtors are for an amount in excess of the original obligation. However, the difference between the original amount of the debt and the amount sought to be collected, in each instance, falls below the permissible interest rate allowed by Section 687.01, Florida Statutes. Respondent gave sworn testimony that the excess amounts demanded represented interest and was not a collection fee. Both Subsections 559.75(1) and 687.01, Florida Statutes, provide for the calculation and collection of interest. Subsection 559.75(1), Florida Statutes, states in applicable part: Any payment made by a debtor to a collection agency shall be deemed to be made to the creditor and such payment shall be made in the following order: Court costs and attorney fees; Principal amount of the consumer claim and incurred interest; and Other legally chargeable fees. Additionally, Section 687.01, Florida Statutes, states: In all cases where interest shall accrue without a special contract for the rate thereof, the rate shall be 6 percent per annum, but parties may contract for a lesser or greater rate by contract in writing. Inasmuch as the language of Subsection 559.75(1), Florida Statutes, provides that a collection entity such as Respondent is permitted to charge interest at the legal rate for all debts collected and inasmuch as all of the requested sums fall within the prescribed rate of interest, it can only be concluded that such was a legally chargeable rate of interest and not a fee for the collection of the debt which is passed on to the debtor. This is especially true in view of the sworn testimony of Respondent and/or its employees. Respecting the allegations that the Respondent either communicated or threatened to communicate with the employers of the debtors without first obtaining the debtors' written permission, the evidence reveals that Respondent's employees sent to the employee-debtor carbon copies of letters addressed to the employee's employer. The contents of the letters are demands to assist the Respondent in collecting a lawful debt owed by the debtor- employee. In all instances, the debtors acknowledged that the debts were in fact legal debts which had not been paid. The evidence also reveals that the original of the letters were never sent to the employers or anyone else and at no time did the debtors' employers ever receive the letter. It view thereof, it is impossible for the Respondent to have violated the cited statutes under its terms concerning "communication" with the debtors' employers. The remaining portion of the above allegation is to the effect that the Respondent "threatened to communicate with the debtor's employer. . .,". Under the above-referred to facts, it is impossible to "threaten" to do the act which the statutes proscribes. The Respondent's action herein is clearly not a "declaration of intention. . .to do an unlawful act." An intent to do an act evidences the accomplishment of it sometime in the future. Under the circumstances herein, any act in the mind of the debtor was clearly consummated. Nothing remained to be done and hence no threat was possible at the time the debtors received the communication from the Respondent. Although the debtor could only believe in his mind after reading the letter that the employer had already been contacted, which if said act had occurred, would be a violation of the statute, it cannot operate to take away the debtor's voluntary consent to allow Respondent to contact his employer. No such request or demand was made by the letter and, in fact, it never happened. In view thereof, and inasmuch as no future action remains to be done, the letter can in no way be interpreted as a threat in violation of Subsection 559.72(4), Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby, RECOMMENDED: That the allegations contained in the Notice to Show Cause filed herein be DISMISSED. RECOMMENDED this 26th day of September, 1979, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Francis Bayley, Esquire Division of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Emerson Allsworth, Esquire and Charles L. Curtis, Esquire Allsworth, Doomar, Schuler, Padula & Laystrom, P.A. 1177 Southeast Third Avenue Fort Lauderdale, Florida 33310 ================================================================= AGENCY FINAL ORDER =================================================================
