The Issue There is little controversy as to the facts in this cause. The issue is essentially a legal issue and is stated as follows: When parties act in reliance and in conformity to a prior construction by an agency of a statute or rule, should the rights gained and positions taken by said parties be impaired by a different construction of said statute by the agency? Both parties submitted post hearing proposed findings of fact in the form of proposed recommended orders filed March 17 and 18, 1983. To the extent the proposed findings of fact have not been included in the factual findings in this order, they are specifically rejected as being irrelevant, not being based on the most credible evidence, or not being a finding of fact.
Findings Of Fact The Petitioner, Vanguard Investment Company, is a Florida corporation with its principal offices at 440 Northeast 92nd Street, Miami Shores, Florida 33138. On or about March 3, 1981, Vanguard purchased an aircraft described as a Turbo Commander, serial number N9RN, from Thunderbird Aviation, Inc., for a purchase price of $120,000 plus $4,800 in sales tax. The sale price plus the sales tax was paid by Vanguard to Thunderbird, which remitted the $4,800 in sales tax to the Department of Revenue (DOR) less a three percent discount as authorized by law. On February 27, 1981, Vanguard had executed a lease of said aircraft to General Development Corporation for a term of two years commencing on March 1, 1981, contingent upon Vanguard's purchase of said aircraft from Thunderbird. Prior to March 1, 1981, General Development had leased said aircraft from Thunderbird, and the least terminated on February 28, 1981. Vanguard purchased said aircraft for the sole purpose and in anticipation of continuing its lease to General Development. Vanguard never took possession or control of said aircraft, which remained in General Development's possession at Opa-locka Airport in Dade County, Florida. No controversy exists that all sales tax payable under General Development's lease of the aircraft, both with Thunderbird and subsequently with Vanguard, had been remitted to DOR with no break in continuity of the lease as a result of the change in ownership of the aircraft on or about March 1, 1981. At the time Vanguard purchased the aircraft from Thunderbird, Vanguard had not applied for or received a sales and use tax registration number pursuant to Rule 12A-1.38, Florida Administrative Code. Vanguard applied for said sales and use tax registration number on or about April 2, 1981, approximately 30 days after the purchase of said aircraft. The sales and use tax registration number was granted by DOR on or about April 23, 1981. Shortly thereafter, Vanguard inquired of DOR concerning a refund of the $4,800 in sales tax paid on the aircraft plus the three percent discount taken by Thunderbird. In lieu of Vanguard's providing Thunderbird a resale certificate and having Thunderbird apply for the sales tax refund, it was suggested that Vanguard obtain an assignment of rights from Thunderbird and apply directly for the refund because Thunderbird had been dissolved immediately after the sale of the aircraft to Vanguard. Acquisition of the assignment of rights from Thunderbird by Vanguard was delayed by the dissolution of Thunderbird and the death of Thunderbird's principal officer. Vanguard received the assignment of rights from Thunderbird on or about July 1, 1982, and immediately applied for a refund of the sales tax. Said application for refund was well within the three years permitted by Florida law to apply for a sales tax refund. On November 22, 1982, the Office of Comptroller (OOC) notified Vanguard of its intent to deny Vanguard's application for the sales tax refund because Vanguard had failed to obtain a sales and use tax registration number prior to purchasing the aircraft from Thunderbird. At the time of the purchase, it was the policy of DOR to permit individuals to apply late for a sales and use tax registration number and not to deny refunds on the basis that the applicant did not have the sales and use tax registration number at the time of the taxable purchase. On or about July 1, 1982, this policy of DOR was altered to conform with the decision of the Florida Supreme Court in State Department of Revenue v. Robert N. Anderson, 403 So.2d 297 (Fla. 1981). Vanguard was aware of the DOR policy at the time of the sale, relied on that policy, and conformed to that policy. It was clearly stated that had Vanguard applied for its refund even a month earlier, in June of 1982, the refund would have been approved under the then-existing policy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the application of Vanguard Investment Company for refund of sales tax be approved, and that said refund be paid by the Office of Comptroller. DONE and RECOMMENDED this 25th day of April, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 25th day of April, 1983. COPIES FURNISHED: Edward S. Kaplan, Esquire 907 DuPont Plaza Center Miami, Florida 33131 William G. Capko, Esquire Assistant Attorney General Office of Comptroller The Capitol, Suite 203 Tallahassee, Florida 32301 Thomas L. Barnhart, Esquire Assistant Attorney General Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301 The Honorable Gerald A. Lewis Office of Comptroller The Capitol Tallahassee, Florida 32301
The Issue Whether the demotion of the Petitioner by the Respondent from an Airplane Pilot I to an Engineering Technician II position was supported by competent substantial evidence and complied with the Florida Statutes and rules and regulations.
Findings Of Fact Petitioner John Clarkson was demoted by Respondent Department of Agriculture, Division of Forestry, after Petitioner failed to receive a satisfactory rating after having received ratings of "conditional" for a period of six months. The ratings were discussed and signed by the Petitioner. By certified letter, return receipt requested, dated April 15, 1976, the Petitioner was formally advised that the Commissioner of the Florida Department of Agriculture had approved his Division Director's recommendation that Respondent be demoted. Petitioner filed his appeal of the Respondent's action on May 6, 1976. On May 18, 1976, the Petitioner was notified by the Career Service Commission that his appeal had been accepted. Petitioner twice requested a continuation of the requested administrative hearing and subsequently filed a Motion for Default and Directed Verdict or Judgment on the pleadings. A response was filed and thereafter, the Motion was withdrawn by Petitioner. Petitioner is a 30-year State employee and has served more than twenty (20) years with the Department of Agriculture. He currently is employed by Respondent as an Engineering Technician II. The Petitioner admits that the demotion of Aircraft Pilot I to Engineering Technician II was procedurally correct and the essence of his argument against the demotion is that the Respondent concentrated on finding "little picky things" about the employee and used these to fortress his demotion. Petitioner contends: That matters in the Petitioner's personal record before 1975 should not be considered. That the major allegations of Respondent were related to his non- flying duties and that the demotion concerned his duties as an Airplane Pilot I. That the charges of tardiness, wasting time, inability to perform non-flying duties were, even if supported by competent and substantial evidence, immaterial to the issue. That Petitioner's actions in relation to a ferrying plane trip to California in 1975 did not endanger the life of colleagues or aircraft; that Petitioner was justified in his takeoff from an airport on a hot day and on his leaving the group on its return to Tallahassee on the said trip. That inaccuracies in reporting; fires, which was a major part of his duties, were not confined to Petitioner and that he considered it better to be "safe than sorry" than save a little money when reporting fires, and that further, he "called them as he saw them." That the supervisors and superiors failed to meet with Petitioner as required and were more intent on building up Petitioner's deficiencies than in trying to help him. Respondent contends: That Petitioner failed to follow instructions of his supervisors. Petitioner failed to adequately perform duties as fire control spotter pilot, which resulted in crews being dispatched unnecessarily. That Petitioner's ratings, letters of reprimand, memorandums, throughout his career showed he failed to follow instructions in performing his job adequately. The Hearing Officer further finds: Petitioner presented evidence and testimony relative to his employment prior to 1975. Contrary to the contentions of the Petitioner, the position of Airplane Pilot I includes not only flying duties and responsibilities of the fire patrol, it includes much paper work such as drawing and tracing and revising plans, revising maps, making maps, handling orders, disseminating fire weather forecasts to field offices, and the coordination of related incoming reports. Work with others is an integral part of the employment. An examination of the voluminous records submitted and entered into evidence at the hearing show that the Petitioner has had an employment history of conflict with his employer for a number of years and the same type of criticism continued from year to year up to the date of Petitioner's demotion. The Respondent presented evidence to show that Petitioner had been sent memorandums calling his attention to numerous complaints about the quality of his work and relationship with other people including many other employees of Respondent. Evidence was submitted to show Petitioner's repeated failure to follow instructions of his superiors. Evidence was submitted showing that during the years of Petitioner's employment there were some "conditional" ratings; some ratings below satisfactory; one previous demotion; memorandums citing Petitioner for failure to perform duties adequately; complaints from passengers, which ultimately resulted in the revision of Petitioner's duties so that he did not carry passengers. Taken as a whole, the various memorandums concerning Petitioner show that contrary to the contention of Petitioner, the supervisors and superiors endeavored to work with Petitioner and were consistently trying to fit him into the work organization so that he could work within his capacities. Other employees were moved within the Division to fill in where the Petitioner was deficient. The charges of tardiness, wasting time, poor work product, go directly to the employment of the Petitioner and no competent evidence was submitted to show that these charges were inaccurate. It was not conclusively shown that Petitioner actually endangered the lives of colleagues or aircraft on a September, 1975 flight to California from Florida during his ferrying duties, however Petitioner failed to follow prior instructions and caused confusion among the other members of the group on that trip. On one occasion he left the group without permission of the designated leader and the group was forced to change its plans and land at a different location. Petitioner failed to follow instructions, left the group and teak off and had to be called back. On the return trip to Tallahassee he left the group and returned to Tallahassee before the others contrary to flight plans that the group remain together. A hot day and eagerness to return home from a trip is insufficient reason to disobey instructions of supervisors. The fire logs show that Petitioner made relatively more errors in reporting fires than the other reporters and evidence was shown that errors wasted money and caused loss of needed services elsewhere. The report of fires was a central part of Petitioner's employment duties. Petitioner is an experienced and evidentally, good pilot, but the evidence shows he fails to follow closely the instructions of his supervisors in relation to his duties and is deficient in his non-flying work. He fails to work well with other employees.
Recommendation Affirm the action of the Agency in demoting Petitioner. DONE and ENTERED this 13th day of December, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Walter Kelly, Esquire Mrs. Dorothy Roberts Department of Legal Affairs Appeals Coordinator The Capitol Building Department of Administration Tallahassee, Florida 32304 Room 530 Carlton Building Tallahassee, Florida 32304 Clinton H. Coulter, Jr., Esquire DUVALL & COULTER Mr. Jerry Gullo 118 S. Gadsden Street Department of Agriculture Tallahassee, Florida 32301 Mayo Building Tallahassee, Florida 32304
Findings Of Fact On January 22, 1986, American Aviation Resources, Inc., sold an airplane to Munur Yurtsever, a resident of Brazil. This aircraft was a Hansa jet model HFB-320 with U.S. registration number N71DL (the subject aircraft). On January 28, 1986, Mr. Yurtsever transferred title of the subject aircraft to Petitioner, Selcuk Yetimoglu. At the time of the transfer, the subject aircraft was in the State of Florida undergoing repairs. At all times pertinent to this proceeding, Mr. Yetimoglu resided at 20530 Jacaranda Road, Cutler Ridge, Miami, Florida, in a residence owned by Mr. Yurtsever. The aircraft bill of sale dated January 28, 1986, reflects that Mr. Yetimoglu was the purchaser of the subject aircraft and that Mr. Yurtsever was the seller. The bill of sale recited that the consideration paid was $20.00 and other good and valuable consideration. While the bill of sale reflects that Mr. Yetimoglu resided in Miami, Florida, the bill of sale does not state that the sale occurred in the State of Florida. On January 29, 1986, Mr. Yetimoglu applied to the U.S. Federal Aviation Administration (FAA) for the registration of the subject aircraft in his name. On March 13, 1986, Mr. Yetimoglu wrote to the FAA regarding the registration and stated, in pertinent part, as follows: Mr. Munur Yurtsever sold the aircraft to me on January 28, 1986, five days after he bought the aircraft from American Aviation Resources, Inc. when he found out that the government of Brazil did not give him a (sic) permission to import the aircraft and that he could not register the aircraft in the United States because he was not a citizen of the United States. By letter dated May 15, 1986, Mr. Yetimoglu provided the FAA proof that the subject aircraft had not been registered in Brazil. Mr. Yetimoglu was the record owner of the subject aircraft between January 28, 1986, and March 13, 1987. On March 13, 1987, Mr. Yetimoglu sold the subject aircraft back to Mr. Yurtsever. The bill of sale identifies the purchaser as being: Munur Yurtsever Rico Taxi Aereo Ltda. Av. Mal. Camara 160-GR. Rio de Janeiro - RJ Brazil On April 8, 1987, Mr. Yetimoglu wrote the FAA and stated, in pertinent part: ... I request cancelation of U.S. registra- tion for the aircraft ... because I sold the aircraft back to Rico Taxi Aereo Ltda. ... On January 11, 1988, Respondent issued to Petitioner a "Notice of Delinquent Tax Penalty and Interest Due and Assessed" (Notice of Assessment) based on the transaction involving Mr. Yetimoglu, Mr. Yurtsever, and the subject aircraft. The Notice of Assessment contained the following statement: "This Department has information that you purchased the following aircraft. However, there is no evidence of payment of Florida Sales and/or Use Tax". The Notice of Assessment reflected that Respondent had, pursuant to Section 212.12(5)(b), Florida Statutes, estimated the value of the aircraft as being $320,000 and assessed the following taxes, interest, and penalties: Florida State Sales/Use Tax 5% $16,000.00 (Estimated) Per 212.06(8), F.S. Penalty 5% per month; Maximum 25% of 4,000.00 (25%) Tax Due Per Section 212.12(2), F.S. Additional Penalty 11,840.00 (50%) Per 212.12(2)(a), F.S. Interest = 1% per month from date of 3,680.00 (23%) Purchase To Date of Payment Per Section 212.12(3), F.S. Less Tax Paid ----------------- TOTAL DUE WITH THIS NOTICE $35,520.00 Respondent requested that Mr. Yetimoglu provide it information and documentation as to the value of the aircraft. Mr. Yetimoglu contends that he paid Mr. Yurtsever nothing for the aircraft, that the title was transferred to him and registered in the FAA in his name so that the aircraft could be test flown after it was repaired, and that Mr. Yurtsever had paid $100,000 for the aircraft. There was no evidence as to the sales price that Mr. Yetimoglu paid for the aircraft other than Mr. Yetimoglu's testimony. Respondent estimated that the reasonable value of the subject aircraft on January 28, 1986, was $320,000. This estimate was based on an appraisal prepared for Respondent and assumed that the aircraft was in a scrapped or junked condition. Respondent generally uses a standard reference work on the value of aircraft to assist it in estimating the value of the subject aircraft. Because of its age and model, the subject aircraft is no longer listed in this standard reference. In support of his contention that Mr. Yurtsever paid $100,000 for the aircraft, Mr. Yetimoglu provided Respondent with a copy of a wire transfer of funds from Mr. Yurtsever to American Aviation Resources, Inc. in the amount of $100,000. However, there was no documentation provided that established that the $100,000 constituted the entire purchase price paid by Mr. Yurtsever. The dispute between the parties as to the value of the aircraft is resolved by finding, based on the greater weight of the evidence, that the reasonable value of the aircraft at the times pertinent to this proceeding was $320,000.00. In December 1986, while Mr. Yetimoglu was the record owner, the subject aircraft engaged in international flight between the Turks and Caicos Islands and the State of Florida. Respondent's Notice of Redetermination, dated February 26, 1990, upheld the Notice of Assessment on the basis that the underlying transaction was subject to use tax pursuant to Section 212.06(8), Florida Statutes. The issue to be resolved was framed by the Notice of Redetermination as being: "The only issue involved pertains to a use tax assessment upon an aircraft brought into this country". This determination was based, in part, upon a letter to Respondent from an attorney who was representing Mr. Yetimoglu at the time the letter was written. 1/ The letter implied that the aircraft was brought into Florida after the title was transferred to Mr. Yetimoglu, and provided, in pertinent part, as follows: The transferor of the aircraft, Munur Yurtsever, is a nonresident alien. His inten- tion is to deliver the plane to a purchaser outside the country. Mr. Yurtsever advises that the F.A.A. will not allow the plane to be flown in this country unless it is owned by a U.S. resident. As it was imperative to fly the plane here in order to prepare it for its flight outside the country, Mr. Yurtsever transferred the plane to his partner, Selcuk Yetimoglu, who is a resident of the United States. ... At the formal hearing, Mr. Yetimoglu established that the aircraft was in Florida undergoing repairs at the time the title was transferred to him. Prior to and at the formal hearing, Respondent asserted the position that use taxes, interest, and penalties were due for this transaction. In its post- hearing submittal, Respondent, for the first time in this proceeding, contends that sales taxes, interest and penalties are due for this transaction.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered which withdraws the subject assessment. RECOMMENDED in Tallahassee, Leon County, Florida, this 11th day of March, 1991. CLAUDE B. ARRINGTON 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 11th day of March, 1991.
Findings Of Fact At present Tony's Fish Market of Ft. Lauderdale, Inc. t/a Tony's Fish Market Restaurant is the holder of license no. 16-1320-SRX, series 4-COP held with the State of Florida, Division of Beverage. Prior to September 1, 1974, Armand Cerami owned 50 shares of stock in Tony's Fish Market, Inc., which represented a 50 percent interest in that corporation. In addition, Armand Cerami held 50 shares of stock in Tony's Fish Market of Ft. Lauderdale, Inc., representing a 50 percent interest in that corporation and was the holder of 50 shares of Tony's Sweet Enterprises, Inc., which represented a 50 percent interest in that corporation. During the time period of September 1, 1974, Armand Cerami had been charged with violation of the Internal Revenue Laws of the United States, under a federal indictment no. 74-407-CR-JE, in the United States District Court for the Southern District of Florida. This charge was placed against Cerami for Internal Revenue Law Violations which allegedly took place on tax returns on the tax year ,1968. In contemplation of a plea of guilty which Cerami intended to enter in the above cited case, he entered into a contract for purchase and sale of the corporate securities in the aforementioned corporations. Petitioner's Exhibit 2, admitted into evidence is a copy of the contract for purchase and sale of corporate securities, which was entered into between Armand Cerami and Pamela Ann Cerami, his wife, on September 1, 1974. The terms of the contract were that Pamela Ann Cerami would pay Armand Cerami $20,000 cash and would give to Armand Cerami a promissory note payable in the amount of $200,000, in ten equal installments of principal and interest at 6-1/2 percent payable on the anniversary date of the contract. On September 20, 1974, the Board of Directors of the three subject corporations accepted the resignation of Armand Cerami as the Secretary-Treasurer of those corporations, and elected Pamela Cerami as Secretary-Treasurer in Armand Cerami's stead. Those Board of Directors were Tony Sweet, Frank Sweet and Armand Cerami. Armand Cerami returned to federal court on October 18, 1974, and entered a plea of guilty to counts one and five of the aforementioned, indictment, for which he was sentenced to three year on each count to run concurrently, but was given a split sentence of 6 months time in confinement, thereafter to be placed on a probationary period for 2-1/2 years. A copy of the judgement and commitment is Petitioner's Exhibit number 1, admitted into evidence. They are felony offenses. Subsequent to his release from prison, Armand Cerami served as a co- manager and host of the licensed premises, Tony's Fish Market, located at 1900 N. Bay Causeway, North Bay Village, Florida, license no. 23-1624-SRX, series 4- COP and in the same capacity at Tony's Fish Market of Ft. Lauderdale, located at 1819 S.E. 17th Street, Ft. Lauderdale, Florida, license no. 16-1320-SRX, series 4-COP. He remained in this capacity until September 30, 1976, when a change in 562.13(3)(a), F.S. prohibited convicted felons from being managers of the licensed premises, licensed by the State of Florida, Division of Beverage. The change in the law took effect on October 1, 1976. At that point two separate individuals were hired as managers of the subject licensed premises. Armand Cerami remained in the position as host of those licensed premises, up to and including the date of the hearing. Although this title and this position was held by Armand Cerami, on December 16, 1976, while conducting a routine visit, beverage officer, William Valentine was told by Frank Sweet, a Director in the subject corporations, that Frank Sweet was in charge of the kitchen of the Tony's Fish Market of Ft. Lauderdale and that Armand Cerami was the real manager, ran the restaurant and was responsible for hiring and firing of employees. Pamela Ann Cerami was not shown to have any active interest in the management of the licensed premises. Pamela Ann Cerami as the Secretary-Treasurer in the three corporations which she purchased shares in, does not draw a salary from the operation of the two restaurants. Her background and financial involvement in the licensed premises, can be traced to certain trusts in her name and a certain gift from her husband, Armand Cerami. The joint composite exhibit number 1, admitted into evidence in the hearing, shows that Pamela Ann Cerami, at one time Pamela Crumly, was a beneficiary of the estates of Gail Crumly and Mildred Crumly, her grandparents. Certain distributions of money were made to Pamela Ann Cerami from those estates. On April 3, 1970, she received $6,093.94; on July 3, 1970, she received $121.88; on October 5, 1970, she received $182.82; and on December 31, 1970, she received $925.65,, which represented a partial distribution of her 1/2 interest in the Gail Crumly estate. As of April 1, 1970, she had been given $5,292.59 as a portion of the 1/3 distribution of her share in the estate of Mildred Crumly. The total value of her share in that estate being $16,157.02, and the conditions of her rights to the estate being set forth in the will of Mildred Crumly which is found in the joint composite exhibit number 1. Pamela Ann Cerami had worked as an airline stewardess prior to her marriage to Armand Cerami and had certain funds from her employment in that capacity. Other funds of the marriage include a certificate of deposit in the Bank of Nova Scotia in Nassau, Bahamas in the amount of $18,000., at 8-1/4 percent interest, as deposited May 20, 1970 with a maturity of November 20, 1970. This certificate of deposit was in the name of Armand D. Cerami and/or Pamela Crumly now Pamela Ann Cerami. The interest received on that certificate of deposit was redeposited along with the principal and a second certificate of deposit was purchased on May 23, 1974 in the amount of $23,480.74, to become mature on November 25, 1974. This certificate was withdrawn on October 18, 1974 and the receipt of 10-1/4 percent interest was paid. The amount of interest thereby being $975.89. Copies of the above mentioned certificates of deposit may be found as part of the joint composite exhibit number 1 admitted into evidence. Continuing an examination of the financial circumstances of Pamela Cerami and Armand Cerami, there is found a warranty deed from Willard H. Keland to Pamela Ann Cerami for certain real estate in Dade County, Florida, for which Pamela Ann Cerami paid Willard H. Keland the amount of $158,000. This deed is found as Petitioner's exhibit number 4 admitted into evidence and was recorded on January 11, 1974. On that same date a closing was held on the property. Petitioner's Exhibit number 5, admitted into evidence is a copy of the closing statement. Conditions of the closing was a cash deposit in the amount of $15,800 and $69,251.64 to close. A first mortgage in the amount of $67,500 and interest of $1,028.75 was given to the Miami Beach First National Bank. The $158,000 paid for this estate corresponds to a gift which was given by Armand Cerami to Pamela Ann Cerami in the amount of $158,000 as shown in the gift tax return, a copy of which is Petitioner's exhibit number 6, admitted into evidence. The effective date of the gift is established in the gift tax return as February, 1974. The federal income tax return filed by Armand Cerami for the year 1974, shows the sale of the stock of the three corporations. That income tax return would further show the $20,000 installment sale payment, a portion of which was treated as income to Armand Cerami. Finally, that return shows $13,000 of interest which was treated as income to Armand Cerami. On October 1, 1975, Pamela Anne Cerami gave a first mortgage on the property that she had paid $158,000 for this mortgage being given to Bob Erra, as trustee. A copy of the mortgage deed is found as Petitioner's Exhibit number 9, admitted into evidence. The amount of the mortgage was $40,000 and the proceeds of the mortgage amount were distributed as $7,000 to Pamela Cerami and $33,000 to Armand Cerami. These distributions were placed as time certificates of deposit with the Pan American Bank of West Dade, copies of which are found as Petitioner's composite exhibit number 8. The amount of interest returnable on the time certificate of deposit held by Armand Cerami is shown in his 1975 federal income tax return. Tony's Fish Market of Ft. Lauderdale, Inc. t/a Tony's Fish Market Restaurant made application with the State of Florida, Division of Beverage, to change Armand Cerami as Secretary-Treasurer of Tony's Fish Market of Ft. Lauderdale, Inc. and substitute Pamela Cerami as Secretary-Treasurer of that corporation and to transfer the stock ownership in the licensee corporation from Armand Cerami to Pamela Cerami. This change of officer and transfer of stock ownership involves the license no. 16-1320-SRX, series 4-COP. This application was denied by letter of April 9, 1975, from the Director of the Division of Beverage. In fact, Armand Cerami had been convicted of a felony, and is interested in an indirect way in the licensed premises.
Recommendation It is recommended that the applications to change the officer and transfer the stock ownership in license no. 16-1320-SRX, series 4-COP, set forth in this hearing be denied DONE AND ENTERED this 24th day of February, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: William Hatch, Esquire Division of Beverage The Johns Building Tallahassee, Florida 32304 Tobias Simon, Esquire 1492 S. Miami Avenue Suite 208 Miami, Florida 33130 Sy Chadroff, Esquire Suite 2806 120 Biscayne Boulevard North Miami, Florida 33132
The Issue Whether petitioner taxpayer is liable for delinquent sales tax, penalties, and interest under Chapter 212, Florida Stat utes, as alleged by respondent Department in its notice of proposed assessment.
Findings Of Fact The Taxpayer Taxpayer is a family-operated Florida corporation which has engaged in retail sales at the Tampa Port Authority since 1975 or 1976; it is a licensed dealer registered with the Department. (Testimony of Roberts, Marylis.) Taxpayer's Sales During Audit Period From June 1, 1977, through July 31, 1980 (the audit period covered by the Department's proposed assessment), Taxpayer had gross sales in the approximate amount of $691,013.46. (Testimony of Roberts; Exhibit 2.) During that period, Taxpayer filed the required DR-15 monthly sales tax reports and paid taxes on all retail sales transactions which took place on the premises of its store located at 804 Robinson Street, (Tampa Port Authority) Tampa, Florida. (Testimony of Roberts.) During the same audit period -- in addition to sales on its store premises -- Taxpayer sold goods to merchant seamen on board foreign vessels temporarily docked at the Port of Tampa. These vessels operated in foreign commerce, entering the port from and returning to international waters outside the territorial limits of the United States. Taxpayer did not report these sales on its monthly sales tax reports; neither did it charge or collect sales tax from the on-board purchasers. (Testimony of Marylis.) Taxpayer failed to charge or collect sales tax in connection with its on-board sales because it relied on what it had been told by Department representatives. Prior to forming Taxpayer's corporation Thomas Marylis went to the local Department office to obtain a dealer's certificate. While there, he asked Manuel Alvarez, Jr., then the Department's regional audit supervisor, whether he was required to collect sales tax on ship-board sales. Alvarez replied that he didn't have to collect sales taxes on sales made to seamen when he delivered the goods to the ship. 1/ (Testimony of Marylis.) The on-board sales transactions took place in the following manner: Taxpayer (through its owner, Thomas Marylis) would board the foreign vessel and accept orders from the captain, chief mate, or chief steward. (Earlier, one of these persons would have taken orders from the rest of the crew.) If individual crewmen tried to place orders, Marylis would refer them to the captain, chief mate, or chief steward. After receiving orders from one of these three persons, Marylis would return to Taxpayer's store, fill the order, and transport the goods back to the vessel. Whoever placed the order would then examine the goods and give Marylis the money /2 collected from the crew. (Testimony of Roberts, Marylis.) The goods sold in this manner were ordinarily for the personal use of individual crew members; typical items were: shoes, underwear, working clothes, small radios, watches, suitcases, soap, paper towels, and other personal care products. (Testimony of Marylis.) Department Audit of Taxpayer In 1980, the Department audited Taxpayer's corporate books to determine if sales tax had been properly collected and paid. Taxpayer could produce no dock or warehouse receipts, bills of lading, resale certificates from other licensed dealers, or affidavits verifying that its on-board sales were made to out-of-state purchasers for transportation outside of Florida. (Testimony of Roberts, Marylis.) Due to Taxpayer's failure to supply documentation demonstrating that its ship-board sales from June 1, 1977, to July 31, 1980, were exempt from sales tax imposed by Chapter 212, Florida Statutes, the Department issued a proposed assessment on September 23, 1980. Through that assessment, the Department seeks to collect $21,201.01 in delinquent sales tax, $5,131.39 in penalties, and $3,892.18 in interest (in addition to interest at 12 percent per annum, or $6.97 per day, accruing until date of payment). (Exhibit 5.) Informal Conference with Department; Alvarez's Representations to Taxpayer In October 1980 -- after the audit -- Taxpayer (through Marylis) informally met with Manuel Alvarez, the Department's regional audit supervisor, to discuss the tax status of the shipboard sales. Specifically, they discussed the Department auditor's inability to confirm that Taxpayer delivered the items to the ships, as opposed to the buyers picking up the goods at the store. Alvarez told him: [I]f the buyers would come and just pick them up and take them. And I [Alvarez] think I told him that, if that was the case, it was taxable. But, if they just placed their orders there -- like we have had other ship supplies -- and they them- selves, or one of their employees, would take the items aboard ships, that would be an exempt sale. I did make that state ment. If we had any type of confirmation to that effect, when it comes to that. (Tr. 61.) 3/ (Testimony of Alvarez.) Alvarez then told Marylis to obtain documentation or verification that the sales were made on foreign vessels, i.e., proof that Taxpayer delivered the goods to the vessels. He assured Marylis that if he could bring such verification back, such sales "would come off the audit." (Tr. 62.)(Testimony of Alvarez.) Alvarez was an experienced Department employee: he retired in 1980, after 30 years of service. It was Alvarez's standard practice -- when dealing with sales tax exemption questions -- to reiterate the importance of documentation. He would always give the taxpayer an opportunity -- 30 days or more -- to obtain documentation that a sale was exempt from taxation. (Testimony of Alvarez.) Taxpayer's Verification In response to the opportunity provided by Alvarez, Taxpayer (through Marylis) obtained affidavits from numerous captains of foreign vessels and shipping agents. Those affidavits read, in pertinent part: I, [name inserted] , am the Captain aboard the vessel [name inserted] from [place of origin]. I am personally aware that Speros International Ship Supply Co., Inc. sells various commodities, supplies, clothing, and various sundry items to for eign ship personnel by delivering the said items to the ships docked at various termi- nals inside the Tampa Port Authority and other locations in Tampa, Florida from [date] to the present. (Testimony of Marylis; Exhibit 8.) Moreover, in an attempt to comply with the tax law and avoid similar problems in the future, Taxpayer printed receipt books to be used in all future on-board sales. The receipts reflect the type of goods sold, the date of delivery to the vessel, the foreign vessel's destination, and the total purchase price. Also included is a signature line for the individual who delivers and receives the goods. (Testimony of Marylis; Exhibit 7.)
Recommendation Based on the foregoing, it is RECOMMENDED: That Department's proposed assessment of Taxpayer for delinquent sales tax, penalties, and interest, be issued as final agency action. DONE AND RECOMMENDED this 17th day of February, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. 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 17th day of February, 1982.
The Issue As to DOAH Case No. 18-4475RX, whether Florida Administrative Code Rule 12A-1.044(5)(a) is an invalid exercise of delegated legislative authority in violation of section 120.52(8), Florida Statutes.1/ As to DOAH Case No. 18-4992RU, whether the Department of Revenue's ("Department") Standard Audit Plan, Vending and Amusement Machines--Industry Specific, section 1.1.3.3 ("SAP") is an unadopted rule in violation of sections 120.54 and 120.56, Florida Statutes.
Findings Of Fact The Parties and Audit Period GBR is a Florida corporation with its principal place of business in Miami, Florida. Gilda Rosenberg is the owner of GBR and a related entity, Gilly Vending, Inc. ("Gilly"). GBR and Gilly are in the vending machine business. At all times material hereto, Amit Biegun served as the chief financial officer of the two entities. The Department is the state agency responsible for administering Florida's sales tax laws pursuant to chapter 212, Florida Statutes. This case concerns the audit period of January 1, 2012, to December 31, 2014. GBR's Provision of Vending Machine Services Prior to the audit period, the school boards of Broward and Palm Beach County issued written solicitations through invitations to bid ("ITB"), seeking vendors to furnish, install, stock, and maintain vending machines on school property. The bids required a "full turn-key operation." The stated objectives were to obtain the best vending service and percentage commission rates that will be most advantageous to the school boards, and to provide a contract that will be most profitable to the awarded vendor. The stated goal was that student choices from beverage and snack vending machines closely align with federal dietary guidelines. GBR operates approximately 700 snack and beverage vending machines situated at 65 schools in Broward, Palm Beach, and Miami-Dade Counties. Of these 65 schools, 43 are in Broward County, 21 are in Palm Beach County, and one is in Miami-Dade County. The snack vending machines are all owned by GBR. Beverage vending machines are owned by bottling companies, such as Coca-Cola and Pepsi. Of the 700 vending machines, approximately 60 percent of the machines are for beverages and the remaining 40 percent are for snacks. GBR has written vending agreements with some schools. In these agreements, GBR is designated as a licensee, the school is designated as the licensor, and GBR is granted a license to install vending machines on school property in exchange for a commission. Furthermore, GBR is solely responsible to pay all federal, state, and local taxes in connection with the operation of the vending machines. Ownership of the vending machines does not transfer to the schools. However, in some cases the schools have keys to the machines. In addition, designated school board employees have access to the inside of the machines in order to review the meter, monitor all transactions, and reconcile the revenue from the machines. GBR places the vending machines on school property. However, the schools control the locations of the vending machines. The schools also require timers on the machines so that the schools can control the times during the day when the machines are operational and accessible to students. The schools also control the types of products to be placed in the machines to ensure that the products closely align with the federal dietary guidelines. The schools also control pricing strategies. GBR stocks, maintains, and services the vending machines. However, Coca-Cola and Pepsi may repair the beverage machines they own. GBR is solely responsible for repairing the machines it owns. The schools require that any vendor service workers seeking access to the vending machines during school hours pass background checks. GBR route drivers collect the revenue from all of the vending machines and the revenues are deposited into GBR's bank accounts. In exchange for GBR's services, the schools receive from GBR, as a commission, a percentage of the gross receipts. However, neither GBR nor the schools are guaranteed any revenue unless sales occur from the machines. On its federal income tax returns, GBR reports all sales revenue from the vending machines. For the tax year 2012, GBR's federal income tax return reflects gross receipts or sales of $5,952,270. Of this amount, GBR paid the schools $1,363,207, a percentage of the gross receipts which GBR characterized on the tax return and its general ledger as a commission and equipment space fee and cost of goods sold. For the tax year 2013, GBR's federal income tax return reflects gross receipts or sales of $6,535,362. Of this amount, GBR paid directly to the schools $1,122,211, a percentage of the gross receipts which GBR characterized on the tax return and its general ledger as a commission and equipment space fee and cost of goods sold. For the tax year 2014, GBR's federal income tax return reflects gross receipts or sales of $6,076,255. Of this amount, GBR paid directly to the schools $1,279,682, a percentage of the gross receipts which GBR characterized on the tax return and its general ledger as a commission and equipment space fee and cost of goods sold. Thus, for the audit period, and according to the federal tax returns and general ledgers, GBR's gross receipts or sales were $18,563,887. Of this amount, GBR paid directly to the schools $3,765,100, as a commission and equipment space fee and cost of goods sold. The Department's Audit and Assessment On January 27, 2015, the Department, through its tax auditor, Mary Gray, sent written notice to GBR of its intent to conduct the audit. This was Ms. Gray's first audit involving vending machines at schools. Thereafter, GBR provided Ms. Gray with its general ledger, federal returns, and bid documents. On October 28, 2015, Ms. Gray issued a draft assessment to GBR. The email transmittal by Ms. Gray to GBR's representative states that "[t]he case is being forwarded for supervisory review." In the draft, Ms. Gray determined that GBR owed additional tax in the amount of $28,589.65, but there was no mention of any purported tax on the monies paid by GBR to the schools as a license fee to use real property. However, very close to the end of the audit, within one week after issuing the draft, and after Ms. Gray did further research and conferred with her supervisor, Ms. Gray's supervisor advised her to issue the B03 assessment pursuant to section 212.031 and rule 12A-1.044, and tax the monies paid by GBR to the schools as a license fee to use real property. Thus, according to the Department, GBR was now responsible for tax in the amount of $246,230.93, plus applicable interest. Of this alleged amount, $1,218.48 was for additional sales tax (A01); $4,181.41 was for purchase expenses (B02); $13,790 was for untaxed rent (B02); and $227.041.04 was for the purported license to use real property (B03). Ms. Gray then prepared a Standard Audit Report detailing her position of the audit and forwarded the report to the Department's dispute resolution division. On January 19, 2016, the Department issued the Notice of Proposed Assessment ("NOPA") against GBR for additional tax and interest due of $288,993.31. The Department does not seek a penalty against GBR. At hearing, Ms. Gray testified that the Department's SAP is an audit planning tool or checklist which she used in conducting GBR's audit. Employees of the Department are not bound to follow the SAP, and the SAP can be modified by the auditors on a word document. The SAP was utilized by Ms. Gray during the audit, but it was not relied on in the NOD.4/
Findings Of Fact The Garemore airport is located in Marion County and is known as the Greystone Airport. The Garemores were issued a private airport license for the period September 24, 1980, through September 30, 1981, and have made timely application for annual renewal of this license. Neighboring property owners and residents who objected to grant of the initial license also object to renewal. Generally, their objections concern excessive noise and unsafe aircraft operations. Several Petitioners raise and breed thoroughbred horses on property adjacent to the airport. They fear for their personal safety and the well-being of these horses and other livestock. These Petitioners also contend that aircraft noise and low flying upset their animals and interfere with mating. However, Respondent introduced opposing evidence, and Petitioners' contention was not established as factual. Through unrebutted testimony, Petitioners established that crop dusters routinely originate operations from Greystone Airport, and that crop dusting chemicals are stored on the site. About six months ago, a crop duster taking off from Greystone Airport dumped his chemical load on a Petitioner's property and subsequently crashed on this property. Petitioners also argue that the airport glide slope does not meet accepted criteria and that runway surfacing is inadequate. Respondent DOT has recently inspected the facility and through the testimony of its airport inspector, demonstrated that the glide slope has been measured and meets the 20 to 1 requirement set forth in Section 14-60.07, Florida Administrative Code. The runway is not surfaced and Petitioners contend it is not hard enough for aircraft operations during the rainy season. As evidence of this, they cite an incident where a visiting airplane ground looped on landing and appeared to lose a wheel. This incident did not establish a runway deficiency, however, nor did Petitioners offer evidence that the runway surface fails to meet any statutory or rule standard. Petitioners related numerous examples of low flying, night flying and acrobatic maneuvering at and near the Greystone Airport. They contend that these activities along with the concentration of World War II and antique aircraft, and the crop dusting operations, have made this a commercial facility.
Recommendation From the foregoing, it is RECOMMENDED: That the private airport license issued to James and Geraldine Garemore be renewed subject to a restriction against crop dusting operations. DONE AND ENTERED this 30th day of November, 1981, in Tallahassee, Florida. R. T. CARPENTER, 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 30th day of November, 1981. COPIES FURNISHED: Mrs. Clark Hardwick 900 Northeast 100th Street Ocala, Florida 32677 Charles and Terry Kerr 8149 West Anthony Road, Northeast Ocala, Florida 32670 Mr. John P. Edson 8610 West Anthony Road, Northeast Ocala, Florida 32671 Sherry and Vince Shofner Post Office Box 467 Anthony, Florida 32617 Frank and Carol Constantini 8545 West Anthony Road, Northeast Ocala, Florida 32670 Mr. James B. Banta, Sr. 9349 West Anthony Road, Northeast Ocala, Florida 32670 Ms. Deborah Allen 8263 West Anthony Road, Northeast Ocala, Florida 32671 Mr. Worthy E. Farr, Jr. 8215 West Anthony Road, Northeast Ocala, Florida 32671 Mr. Michael J. Stavola Post Office Box 187 Anthony, Florida 32617 Frances Spain Post Office Box 128 Anthony, Florida 32617 Ms. Beatrice Shepherd Post Office Box 215 Anthony, Florida 32617 J. W. Houston 900 Northeast 100th Street Ocala, Florida 32670 John F. Welch, Esquire Post Office Box 833 Ocala, Florida 32678 Philip S. Bennett, Esquire Department of Transportation Haydon Burns Building, Suite 562 Tallahassee, Florida 32301
Findings Of Fact The stipulated facts are as follows: The petitioner is GJPR Two Corporation, formerly Employers Insurance Management Corporation, a Florida Corporation, and its address is c/o W. L. Adams, Esquire, Pyszka, Kessler, Adams and Solomon, 2699 South Bayshore Drive, Miami, Florida 33133. Said petitioner has a substantial interest in these proceedings and has proper standing herein. The agencies affected are the Department of Revenue, Tallahassee, Florida, and the Office of the Comptroller of Florida, Tallahassee, Florida; no other agencies are affected. These proceedings have been properly initiated and are now properly before the Division of Administrative Hearings of the Department of Administration of the State of Florida. The parties are not in dispute as to any issues of fact, and agree to the following findings of fact: On or about June 1, 1977, petitioner sold all of its assets of every kind and type in a single transaction to Arthur J. Gallagher and Company. The assets sold included two aircraft. When the registration documents of such aircraft were presented to the State of Florida for transfer, payment of sales tax was required in the sum of $4,056.00. Said sum was paid under protest on or about June 10, 1977. Until the sale of its assets, the business of petitioner had always been the sale of insurance and the administration of self-insurance programs for insureds and self-insureds throughout Florida and other states. The aircraft had been used in the business of petitioner, but petitioner had never engaged in the sale or leasing of aircraft as all or any part of its business. Since the sale of its assets, petitioner has not been engaged in business and petitioner has adopted and filed with the Internal Revenue Service of the United States a Resolution requiring that petitioner conduct no further business and that petitioner be liquidated. The sale of the two aircraft upon which the tax in question was paid under protest is an occasional or isolated sale. Petitioner filed a Claim for Refund upon the ground that the sale was an isolated sale. The Claim for Refund was denied by letter of August 11, 1977 from the Office of the Comptroller of the State of Florida, a copy of which is appended hereto and incorporated herein as Exhibit "A."
Recommendation That the denial of tax refund to the petitioner by the State Comptroller be affirmed. DONE and ENTERED this 24th day of January, 1978, in Tallahassee, Florida. THOMAS C. OLDHAM 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 24th day of January, 1978. COPIES FURNISHED: Richard J. Horwich, Esquire Suite 302 University Federal Building 2222 Ponce de Leon Boulevard Coral Gables, Florida 33134 Cecil Davis, Esquire Department of Legal Affairs The Capitol Tallahassee, Florida 32304 John D. Moriarty, Esquire Department of Revenue Room 104 Carlton Building Tallahassee, Florida 32304
Findings Of Fact Arrowhead Country Club (Arrowhead) is a business entity owned by Can Am Company, Ltd., a limited partnership, which held at all times pertinent to this case a beverage license issued by the Division of Beverage. Can Am Company, Ltd. entered into a lease with EST Corporation (EST) to lease the restaurant and lounge at Arrowhead to EST. Subsequently, RST applied for its corporate charter but was unable to use the name RST. It amended its corporate name to Wilval Corporation (Wilval). RST/Wilval continued to operate the restaurant and lounge under the terms of its lease. EST/Wilval obtained a sales tax number, collected tax, and remitted taxes for several months, May through October, 1978. Thereafter, RST/Wilval failed to remit sales taxes to the Department of Revenue. RST/Wilval also began to fall behind on its payments to Arrowhead under its lease. This resulted in Arrowhead taking certain charges in payment for monies due under the lease and collecting them from club members. Arrowhead remitted the four percent lease tax but not the sales tax on these collections. Testimony was submitted by the Department's auditor that there was no evidence of collusion between RST/ Wilval and Arrowhead or indication that they did not deal at arm's length with one another. The Department audited RST/Wilval and determined that, although the first few months of records were complete, its total records were incomplete. An estimate of sales taxes due was based upon estimates of the sales based upon the records of Arrowhead on the restaurant and lounge operations for the preceding year adjusted for price increases. These estimates, when compared against the records which were maintained by RST/Wilval in its first months of operation, show a close correlation. Based upon these estimates, the sales taxes assessed against RST/Wilval were $7,965.14. This assessment was presented to Ralph Williams, the manager of the RST/Wilval operation. Williams, an officer of the corporation, advised that RST/Wilval was unable to pay the taxes. The Department of Revenue then filed a warrant for collection of delinquent taxes, and the Sheriff of Broward County attempted to levy on the warrant. Williams tendered to Arrowhead a Notice of Termination of the Lease and vacated the premises on March 26, 1979. When the Sheriff attempted to levy the warrant, he found that Williams had left the location and the property on the premises belonged to Arrowhead. On Nay 18, 1979, the Department presented a jeopardy assessment to Arrowhead, which led to the instant controversy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that the sales taxes due not be assessed against Arrowhead Country Club. DONE and ORDERED this 30th day of April, 1980, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Linda C. Procta, Esquire Office of the Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301 Louis J. Pleeter, Esquire 6200 Stirling Road, Davie Post Office Box 8549 Hollywood, Florida 33024
The Issue Whether American Airlines committed the unlawful employment practices alleged in the employment discrimination charges filed by Petitioners and, if so, what relief should Petitioners be granted by the Florida Commission on Human Relations.
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 extensive factual stipulations set forth in the parties' February 23, 2006, Corrected Joint Prehearing Stipulation2: Petitioners are both Hispanic. Hispanics represent a substantial portion of the workforce in American's maintenance department at Miami International Airport (MIA). Among these Hispanic employees in the maintenance department are those who occupy supervisory positions. American’s Vice-President for Maintenance, Danny Martinez, is Hispanic. As aviation maintenance technicians for American, Petitioners' job duties, as set forth in the written job description for the position, were as follows: In addition to the work specified for the Junior Aviation Maintenance Technician, an Aviation Maintenance Technician's responsibility also includes the following: troubleshooting, individually or with Crew Chief, management or professional direction, disassembly, checking and cleaning, repairing, replacing, testing, adjusting, assembling, installing, servicing, fabricating, taxing or towing airplanes and/or run-up engines, de-icing aircraft, required to maintain the airworthiness of aircraft and all their components while in service or while undergoing overhaul and/or modification. Certifies for quality of own workmanship, including signing mechanical flight releases for all work done on field work. In those work positions where stock chasers are not utilized and/or available at the time may chase own parts. May have other Mechanic personnel assigned to assist him/her in completing an assignment. Works according to FAA and Company regulations and procedures and instructions from Crew Chief or supervisor. Completes forms connected with work assignments according to established procedures and communicates with other Company personnel as required in a manner designated by the Company. Performs the following duties as assigned: cleaning of aircraft windshields; connection/removing ground power and ground start units; pushing out/towing of aircraft and related guideman functions, fueling/defueling, de-icing of aircraft. At all times material to the instant cases, Petitioners were members of a collective bargaining unit represented by the Transport Workers Union of America (TWU) and covered by a collective bargaining agreement between American and the TWU (TWU Contract), which contained the following provisions, among others: ARTICLE 28- NO DISCRIMINATION, AND RECOGNITION OF RIGHTS AND COMPLIANCE The Company and the Union agree to make it a matter of record in this Agreement that in accordance with the established policy of the Company and the Union, the provisions of this Agreement will apply equally to all employees regardless of sex, color, race, creed, age, religious preferences, status as a veteran or military reservist, disability, or national origin. The Union recognizes that the Company will have sole jurisdiction of the management and operation of its business, the direction of its working force, the right to maintain discipline and efficiency in its hangars, stations, shops, or other places of employment, and the right of the Company to hire, discipline, and discharge employees for just cause, subject to the provisions of this Agreement. It is agreed that the rights of management not enumerated in this Article will not be deemed to exclude other preexisting rights of management not enumerated which do not conflict with other provisions of the Agreement. * * * Copies of the Peak Performance Through Commitment (PPC) Program will be available to all employees upon request. Any changes to the PPC Program will be provided and explained to the TWU prior to implementation. ARTICLE 29- REPRESENTATION * * * The Union does not question the right of the Company supervisors to manage and supervise the work force and make reasonable inquiries of employees, individually or collectively, in the normal course of work. In meetings for the purpose of investigation of any matter which may eventuate in the application of discipline or dismissal, or when written statements may be required, or of sufficient importance for the Company to have witnesses present, or to necessitate the presence of more than the Company supervisor, or during reasonable cause or post accident drug/alcohol testing as provided in Article 29(h), the Company will inform the employee of his right to have Union representation present. If the employee refuses representation, the supervisor's record will reflect this refusal. At the start of a meeting under the provisions of Article 29(f), the Company will, except in rare and unusual circumstances, indicate the reason that causes the meeting and then provide an opportunity for the employee and his Union representative to confer for a reasonable period of time. Following that period, the 29(f) meeting will be reconvened and continue until concluded by the supervisor. Before written notification of discipline or dismissal is given, an employee will be afforded the opportunity to discuss the matter with his supervisor. If he desires, he will have a Union representative in the discussion. . . . * * * ARTICLE 30- DISMISSAL An employee who has passed his probationary period will not be dismissed from the service of the Company without written notification of that action. The notification will include the reason or reasons for his dismissal. Appeal from dismissal will be made, in writing, by the employee within seven (7) calendar days after receiving the notification and will be addressed to the Chief Operating Officer, with a copy to the appropriate Human Resources Office. The Chief Operating Officer will fully investigate the matter and render a written decision as soon as possible, but not later than twelve (12) calendar days following his receipt of the appeal, unless mutually agreed otherwise. A copy of the written decision will be provided to the Union. * * * If the decision of the Chief Operating Officer is not satisfactory to the employee, the dismissal and decision will be appealed in accordance with Article 30(c), provided, however, the appeal must be submitted within twenty (20) calendar days of receipt of the decision rendered by the Chief Operating Officer. An appeal from the decision of the Chief Operating Officer will be submitted to the appropriate Area Board of Adjustment in accordance with Article 32. . . . * * * ARTICLE 31- GRIEVANCE PROCEDURE An employee who believes that he has been unjustly dealt with, or that any provision of this Agreement has not been properly applied or interpreted, or against whom the Company has issued written disciplinary action, may submit his grievance in person or through his representatives within seven (7) calendar days. The grievance will be presented to his immediate supervisor, who will evaluate the grievance or complaint and render a written decision as soon as possible, but not later than seven (7) calendar days following his receipt of the grievance. . . . If the written decision of the immediate supervisor is not satisfactory to the employee whose grievance is being considered, it may be appealed within ten (10) calendar to the Chief Operating Officer, with a copy to the appropriate Human Resources Office. The Chief Operating Officer will fully investigate the matter and will render a written decision as soon as possible, but not later than twelve (12) calendar days, unless mutually agreed otherwise, following his receipt of the appeal. . . . If the decision of the Chief Operating Officer is not satisfactory to the employee, the grievance and the decision may be appealed to the System Board of Adjustment, as provided for in Article 32. * * * ARTICLE 32- BOARD OF ADJUSTMENT * * * Area Board of Adjustment, Discipline and Dismissal Cases * * * (2) Each Area Board will be composed on one member appointed by the Company, one member appointed by the Union, and a neutral referee acting as Chairman. . . . * * * Procedures Generally Applicable to the Boards * * * Employees and the Company may be represented at Board hearing by such person or persons as they may choose and designate. Evidence may be presented either orally or in writing, or both. The advocates will exchange all documents they may enter and the names of witnesses they may call in their direct case not later than ten (10) calendar days prior to the date set for hearing. Nothing in this paragraph will require either advocate to present the documents or the witnesses provided above during the course of the hearing. The advocates will not be restricted from entering documents or calling witnesses that become known subsequent to the ten (10) ten calendar day exchange, provided a minimum of forty-eight (48) hours notice is provided to the other party and a copies are submitted to the other party prior to the presentation of the direct case. The party receiving the late document or witness has the option to postpone the hearing in light of the new document or witness. Upon the request of either party to the dispute, or of two (2) Board members, the neutral referee will summon witnesses to testify at Board hearing. The Company will cooperate to ensure that all witnesses summoned by the board will appear in a timely fashion. Reasonable requests by the Union for employee witnesses will be honored. The requests for witnesses will normally not be greater than the number, which can be spared without interference with the service of the Company. Disputes arising from this provision will be immediately referred to the Director of the Air Transport Division and the Vice President-Employee Relations, or their respective designees, for resolution. A majority of all members of a Board will be sufficient to make a finding or a decision with respect to any dispute properly before it, and such finding or decision will be final and binding upon the parties to such dispute. . . . * * * ARTICLE 36- MEAL PERIODS Meal periods will be thirty minutes, except when a longer period is agreed upon between the parties. Meal periods will be scheduled to begin not earlier than three (3) hours after commencement of work that day and not later than five hours after commencement of work that day. The commencement of work is from the start of the employee's regular shift. If an employee is not scheduled for a meal period within the foregoing time span, the meal period will be provided immediately before or after it. In the event that a meal period has not been provided in accordance with the foregoing, the employee is then free, if he so desires, to take his meal period. At all times material to the instant cases, American had Rules of Conduct for its employees that (as permitted by Article 28(b) of the TWU Contract) were applicable to TWU- represented bargaining unit members, including Petitioners. These Rules of Conduct provided, in pertinent part, as follows: As an American Airlines employee, you can expect a safe and productive workplace that ensures your ability to succeed and grow with your job. The rules listed below represent the guidelines and principles that all employees work by at American. Attendance * * * During your tour of duty, remain in the area necessary for the efficient performance of your work. Remain at work until your tour of duty ends unless you are authorized to leave early. * * * 17. Work carefully. Observe posted or published regulations. * * * Personal Conduct * * * 34. Dishonesty of any kind in relations with the company, such as theft or pilferage of company property, the property of other employees or property of others entrusted to the company, or misrepresentation in obtaining employee benefits or privileges, will be grounds for dismissal and where the facts warrant, prosecution to the fullest extent of the law. Employees charged with a criminal offense, on or off duty, may immediately be withheld from service. Any action constituting a criminal offense, whether committed on duty or off duty, will be grounds for dismissal. (Revision of this rule, April 10, 1984) * * * Violations of any of the American Airlines Rules of Conduct (listed above) . . . could be grounds for immediate termination depending of the severity of the incident or offense and the employee's record. . . . At all times material to the instant cases, American had a Peak Performance Through Commitment Policy (PPC Policy) to deal with employee performance and disciplinary problems. The policy, which (as permitted by Article 28(b) of the TWU Contract) was applicable to TWU-represented bargaining unit members, including Petitioners, provided, in pertinent part, as follows: Peak Performance Through Commitment (PPC) is a program that fosters ongoing communication between managers and employees. It encourages managers . . . to regularly recognize outstanding performance and to work together with employees to address and correct performance issues fairly. For the few employees whose performance does not respond to regular coaching and counseling, the following steps advise them that continued performance problems have serious consequences, ultimately leading to termination: -First Advisory for employees with problem performance or conduct who do not respond to coaching or counseling. -Second Advisory for employees whose performance fails to respond to initial corrective steps. -Career Decision Advisory for employees whose problem performance or conduct warrants termination. They are given a paid Career Decision Day away from work to consider their future and continued employment with American Airlines. -Final Advisory for employees whose problem performance or conduct requires termination, or those who have failed to honor the Letter of Commitment signed after their Career Decision Day. Please note that steps can sometimes be skipped, in instances where the nature of the conduct is very serious. It is your responsibility as an employee to know the company's rules of conduct and performance standards for your job, and to consistently meet or exceed those standards. In the event that your performance does not measure up to the company's expectations, your manager will work with you to identify the problem and outline steps to correct it. * * * SERIOUS INCIDENTS OR OFFENSES Some violations of our guiding principles and rules of conduct will result in immediate termination. For example, insubordination, violating our alcohol and drug policy, abusing travel privileges, aircraft damage, violations of the work environment policy, and job actions could be grounds for immediate termination, depending on the severity of the incident and the employee's record. Hate-related conduct and dishonesty will always result in termination. In cases when immediate termination may be appropriate but additional information is needed, the employee may be withheld from service while an investigation is conducted. At all times material to the instant case, Petitioners' regular shifts were eight and a half hours, including an unpaid, thirty minute "meal period" (to which TWU-represented bargaining unit members were entitled under Article 36 of the TWU Contract). Although they were paid to perform eight hours of work during their eight and a half hour shifts, TWU-represented bargaining unit members, including Petitioners, were, in practice, allowed to take up to an hour for their meals, without penalty. TWU-represented bargaining unit members "clocked in" at the beginning of their shift and "clocked out" at the end of their shift. They were expected to remain "on the clock" during their "meal periods" (which, as noted above, were to be no longer than one hour). During his eight and a half hour shift which began on July 30, 2004, Petitioner Castellanos was assigned to perform a "routine 'A' [safety] check" on a Boeing 757 aircraft, an assignment it should have taken a "well qualified [aviation maintenance technician] working quickly but carefully" approximately four hours to complete. At the time he left MIA that evening to go to the Quench nightclub, Mr. Castellanos was two hours and 15 minutes into his shift. During his eight and a half hour shift which began on July 30, 2004, Petitioner Pena was assigned to perform "PS checks" on two Boeing 737 aircraft, an assignment it should have taken a "well qualified [aviation maintenance technician] working quickly but carefully" at least six hours to complete. At the time he left MIA that evening to go to the Quench nightclub, Mr. Pena was three hours and 45 minutes into his shift. Walter Philbrick, an investigator in American's corporate security department, covertly followed Petitioners when they left MIA that evening and kept them under surveillance until their return almost four hours later. Petitioners did not clock out until following the end of their shifts on July 31, 2004. In so doing, they effectively claimed full pay for the shifts, notwithstanding that, during the shifts, they had been off the worksite, engaged in non-work- related activity, for well in excess of the one hour they were allowed for "meal periods." Mr. Philbrick prepared and submitted a report detailing what he had observed as to Petitioners' movements and conduct during the time that they had been under his surveillance. Mike Smith is American's maintenance department station manager at MIA. He is "responsible for the entire [American] maintenance operation in Miami." Mr. Smith assigned his subordinate, Anthony DeGrazia, a day shift production manager at MIA, the task of looking into, and taking the appropriate action on behalf of management in response to, the matters described in Mr. Philbrick's report. Neither Mr. Smith nor Mr. DeGrazia is Hispanic. Mr. DeGrazia met separately with both Mr. Pena and Mr. Castellanos. The meetings were held in accordance with the provisions of Article 29(f) of the TWU Contract. Before conducting the meetings, Mr. DeGrazia had reviewed Mr. Philbrick's report. Mr. Castellanos stated, among other things, the following in his meeting with Mr. DeGrazia: on the evening in question, he was trying to complete his assignment as fast as possible because he wanted to have an alcoholic beverage; that evening, he was "away from work" for approximately four hours, which he knew was wrong; and he and Mr. Pena had engaged in similar activity on perhaps six or seven previous occasions. Mr. Pena stated, among other things, the following in his meeting with Mr. DeGrazia: on the evening in question, he was "off the field" for three to four hours, which he knew was not "okay"; this was something he had done "sometimes" in the past; and American was a "great company" to work for. Based on his review of Mr. Philbrick's report and the information he had obtained from Petitioners, Mr. DeGrazia concluded that Petitioners had committed "time clock fraud" in violation of Rule 34 of American's Rules of Conduct and that they therefore, in accordance with American's policy that "dishonesty will always result in termination" (as expressed in the PPC Policy), should be terminated. Before taking such action, Mr. DeGrazia consulted with Mr. Smith and "someone" from American's human resources department, who both "concurred" with Mr. DeGrazia that termination was the appropriate action to take against Petitioners. On August 12, 2004, Mr. DeGrazia issued Final Advisories terminating Petitioners' employment. The Final Advisory given to Mr. Castellanos read, in pertinent part, as follows: On Friday, July 30, 2004, your scheduled tour of duty was 2230-0700. During your scheduled shift you were assigned to complete an A-check on a 757 aircraft. At approximately 0045, Corporate Security observed you leaving the premises and going into a nightclub in Coconut Grove. While there, you were observed at the bar drinking from a plastic cup. You were observed leaving the nightclub at 0315 and driving towards the airport. By your own account, you returned to the airport approximately 0400. During a company investigation, you admitted to leaving the premises, during your scheduled tour of duty and going to a restaurant/bar. Further, you admitted to consuming alcoholic beverages. Additionally, when asked how it was possible for you to complete your assignment in such a short amount of time you stated that you were, "trying to complete the job as fast as I can because I was getting the urge of getting a drink." Based on the above information I have concluded that your actions fall far short of that which may be reasonably expected of our employees and are a direct violation of American Airlines' Rules of Conduct, Rules 3, 4, 17, and 34 . . . . In view of the above rule violations your employment with American Airlines is hereby terminated effective today, August 12, 2004. * * * The Final Advisory given to Mr. Pena read, in pertinent part, as follows: On Friday, July 30, 2004, your scheduled tour of duty was 2100-0530. During your scheduled shift you were assigned to complete two PS-checks on 737 aircraft. At approximately 0045, Corporate Security observed you leaving the premises and going into a nightclub in Coconut Grove. While there, you were observed at the bar drinking from a plastic cup. You were observed leaving the nightclub at 0315 and driving towards the airport. By your own account, you returned to the airport approximately 0400. During a company investigation, you admitted to leaving the premises, during your scheduled tour of duty and going to a restaurant/bar. Further, you admitted to consuming alcoholic beverages. Additionally, when you[] were asked if it is acceptable to go to lunch for 3-4 hours you stated, "no, according to Company Rules, it's not OK." Based on the above information I have concluded that your actions fall far short of that which may be reasonably expected of our employees and are a direct violation of American Airlines' Rules of Conduct, Rules 3, 4, and 34 . . . . In view of the above rule violations your employment with American Airlines is hereby terminated effective today, August 12, 2004. * * * That Petitioners were Hispanic played no role whatsoever in Mr. DeGrazia's decision to terminate them. Mr. DeGrazia terminated Petitioners because, and only because, he believed that they had engaged in dishonesty by committing "time clock fraud." Mr. DeGrazia has never encountered another situation, in his capacity as a production manager for American, where an aviation maintenance technician over whom he had disciplinary authority engaged in conduct comparable to the conduct for which he terminated Petitioners. No one has ever reported to him, nor has he ever observed, any aviation maintenance technician other than Petitioners taking "meal periods" that were longer than an hour while remaining "on the clock." Petitioners both grieved their terminations pursuant to Article 31 of the TWU Contract. Neither of them advanced any allegations of anti-Hispanic discrimination in his grievance. Petitioners' grievances were ultimately denied on September 9, 2004, by William Cade, American's managing director for maintenance. Petitioners appealed the denial of their grievances to the American and TWU Area Board of Adjustment for Miami, Florida (Board), in accordance with Article 32 of the TWU Contract, which provided for "final and binding" arbitration of disputes arising under the contract. A consolidated evidentiary hearing was held before the Board on April 28, 2005. At the hearing, Petitioners were represented by counsel. Through counsel, they called and cross- examined witnesses, submitted documentary evidence, and presented argument. Neither of them testified. The Board issued a decision on June 27, 2005, denying Petitioners' grievances. The TWU Board member dissented. The Discussion and Opinion portion of the decision read, in pertinent part, as follows: There is no dispute that the rule violations by grievants['] actions on July 30, 2004 constituted time card fraud and violation of rules relating to remaining at work. This was not some minor taking of time, such as overstaying lunch for a shortened period. It was a well-planned event. They had with them a change of clothes - in effect "party clothes" apropos to a late night-early morning South Florida nightclub. They had even done this several times before. Once at this nightclub they actually drank very little. Grievant Pena had two drinks and grievant Castellanos appeared to have just one. In fact, when he was later tested after his return to work almost five hours later, the result was negative for drugs and alcohol. Clearly, they failed to remain at work for their tours of duty in violation of Rules 3 and 4. These rules, however, do not by themselves call for immediate discharge nor do any of the Company documents relating to rules, such as its PPC, refer to them as serious violations that would incur discharge. The seriousness here concerns the grievants' badging out after their eight-hour tour and being paid for eight hours, almost five of which they did not work. There is no question that this is time card fraud and as such it involves dishonesty that is covered by Rule 34's "dishonesty of any kind." Numerous arbitrators for the parties have found such conduct to be violative of Rule 34 and have concluded that stealing time from the Company is dishonesty that requires immediate dismissal. * * * [T]he grievants engaged in this misconduct on multiple occasions that involved more than half of their shift being spent at a nightclub. And they knew it was wrong as they readily admitted when finally caught. Mitigation based on the grievants' EAP involvement is insufficient to overcome and reduce in any fashion their core responsibility to be honest employees and abide by all Company rules and regulations. The Company made this clear enough in its current Drug and Alcohol policy, and, as seen, other Boards have found it reasonable, as does this Board. To all of this the Union argues that there are other mitigating factors - seniority, disparate treatment, failure to consider employment records and a common practice permitting employees to extend lunch breaks. As to the latter, there is no evidence that any employee has been allowed to stay away from work for almost five hours with the knowledge or consent of management at any level. There is some evidence of employees overstaying the break by 30 minutes, of employees going for food for the crew and arriving back late and even some two-hour absences. None of this is comparable to the grievants' conduct. Nor is the evidence concerning supervisor Delgadillo enough to warrant the finding of a practice. She was not Pena's supervisor. She called grievant Castellanos' cell, but that alone does not mean that she knew he was off several hours at that point socializing and drinking in Coconut Grove on July 30 or at other times. She may have gone out with them while she was a mechanic, but the evidence does not show that she went for these long journeys to drink and socialize at a night club. Most importantly, the grievants never claimed a practice existed but instead readily admitted at the 29(f)s that their conduct was wrong and they violated Company rules. As to the disparate treatment incidents, although the dishonesty issue appears similar, different treatment only becomes disparate when the employees being compared also have factual situations and records that are similar. The comparators here did not leave work on more than one occasion, or on any occasion, for four hours or more to drink and socialize in a nightclub. Thus, Mora's 45-minute late punch-in resulted from his retrieving his drivers' license; he then immediately informed management of what he did. He did not have to be put under security surveillance for this type of conduct occurring in the past. Although his 30-minute extended lunch was part of the practice referred to above, it hardly qualifies as like conduct when compared to the grievants' activities. The claim by Vizcaino that he was sick when he used his Company travel privilege is the type of violation referred to the Travel Abuse Committee under a rule penalizing employees by suspending their travel privileges. The facts of that incident and the reasoning of this committee are not known to make any clear and relevant comparison. Even if accepted as a valid comparison, it is only one employee incident that by itself is insufficient to show that management disparately treated these grievants. Nor is their any proof that Rule 34 was involved in either of these situations. Manager DeGrazia disclosed that he did not consider the grievants' prior record or their seniority. He explained that the seriousness of their conduct was sufficient for his decision. The Board fully recognizes that the grievants cooperated during the investigation, had no prior discipline, and had seniority from 1989 and 1996. Each of these factors is significant in assessing the suitability of the penalties. But it is well established by the parties and even in arbitration cases involving outside parties, that in light of the gravity of time card fraud, these factors need not be evaluated. The Chairman notes nonetheless, that seniority and work records cannot be entirely ignored. But here, the grievants' propensity in the past to engage in this same outlandish conduct, and to do so undetected, significantly minimized, for mitigation purposes, much of their good record and seniority. Petitioners subsequently filed employment discrimination charges with the FCHR, alleging for the first time that their terminations were products of anti-Hispanic discrimination. There has been no persuasive showing made, in support in these allegations, that the decision to terminate them was motivated by anything other than legitimate business considerations.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations issue a final order finding the American not guilty of the unlawful employment practices alleged by Petitioners and dismissing their employment discrimination charges. DONE AND ENTERED this 15th day of May, 2006, 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 15th day of May, 2006.
