The Issue Whether Respondent committed the violations described in the Administrative Complaint, as amended? If so, what civil penalty or penalties should be assessed?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made to supplement the factual stipulations into which the parties have entered: Respondent was born in Mexico. She has lived in the United States since October of 1974. Respondent has a fourth grade education that she received in her native land. She is unable to read or write English and speaks and understands very little of the language. She communicates primarily in Spanish. Respondent lives with her husband and five of her six children, including her 21-year old daughter, Anna, who unlike her mother, is fluent in both English and Spanish. Recently, due at least in part to the inability of family members to find work and to the lengthy hospitalization of Raphael, Jr., one of Respondent's sons, the Rivera family has experienced serious financial problems and has been unable to pay all of its bills. As a result, the family home is in foreclosure and water service to the home has been terminated. The family's plight should improve to some extent, however, inasmuch as Respondent's husband started working again approximately a week before the final hearing in this case. Respondent, though, remains unemployed, as does her daughter Anna, although they are both actively seeking employment. At all times material to the instant case, Respondent has been a Florida-registered farm labor contractor. She received the first of her farm labor contractor certificates of registration in 1990. To date, she has an unblemished disciplinary record. Since becoming registered, the only statutory and rule violations with which she has been charged are those that are the subject of the instant case. To obtain her certificates, Respondent simply had to fill out application forms. The application forms were in English. She therefore went to the local Department Job Service office to obtain the assistance of a bilingual Department employee fluent in English and Spanish to help her complete these forms. In each instance, the Department employee assisting Respondent filled out the form after obtaining the necessary information from Respondent and, after doing so, presented the completed form to Respondent for her signature. Jesus Velasquez was the Department employee who helped Respondent complete the application form for her initial certificate of registration. Velasquez has been a Compliance Officer with the Department for the past nine years. During his meeting with Respondent, Velasquez briefly described to her some of the duties and obligations of registered farm labor contractors. Andre Jeudy, who was then an Agricultural Service Representative with the Department, but is now a Department Compliance Officer, helped Respondent complete the application form she submitted to obtain her second certificate of registration. The form was completed, signed and submitted on November 20, 1990. Item 7 of the form requested the applicant to "Check Each Activity to be performed Involving Migrant and/or Seasonal Agricultural Workers for Agricultural Employment." Two "activities" were listed. The first was "Recruit, solicit, hire, employ, furnish, pay." The second was "Transport." Based upon what he had been told by Respondent, Jeudy checked the first, but not the second, of these listed activities. Item 9 of the form asked, "Will Transportation be Provided the Workers?" If the response was in the affirmative, the applicant was further instructed to "Give number and type of vehicles used to transport migrant and seasonal agricultural workers." Based upon the information that he had been provided by Respondent, Jeudy marked the "Yes" box and wrote only the following to supplement this affirmative response: "TRANSP will be provide [sic] By company Bus (Okeelanta)." By her signature, Respondent certified on the form that "all representations made by me in this application are true to the best of my knowledge and belief" and that "I have read or had explained to me and fully understand the State of Florida Farm Labor Registration Law and its implementing regulations, and will fully comply with the requirements therein." By letter dated December 4, 1990, Respondent was advised by the Department that it had issued her the new certificate of registration (hereinafter referred to as the "1990-91 Certificate") for which she had applied. The certificate, which had an "expiration date" of "11/91," was enclosed with letter. Respondent's 1990-91 Certificate indicated that Respondent was "Transportation Unauthorized." The certificate provided the following explanation as to what it meant to be "Transportation Unauthorized:" Transportation Unauthorized- You are not permitted to arrange and/or provide transportation of migrant and seasonal agricultural workers. To obtain a certificate authorizing the transportation of workers within the meaning of the Act, you must file evidence of compliance with applicable safety and health requirements as stated in the Act and regulations and with the insurance of financial responsibility requirements provided therein. On September 18, 1991, Respondent went to the local Job Service office to apply for a successor certificate. The Department employee who assisted Respondent on this occasion was Mary Ann Ruiz. Ruiz accurately conveyed on the application form the information with which she had been provided by Respondent. The application form that Ruiz helped Respondent fill out was identical to the one Respondent had used to obtain her 1990-91 Certificate. With respect to Item 7, Ruiz checked the first ("Recruit, solicit, hire, employ, furnish, pay"), but not the second ("Transport"), of the farm labor contractor activities listed. As to Item 9, Ruiz marked the "Yes" box and gave the following written explanation: "trans provided by Okeelanta." No further information regarding such transportation was furnished on the form. As she had done the year before, Respondent certified the accuracy of the information contained in the application and her knowledge of, and her intention to fully comply with, the "Florida Farm Labor Registration Law and its implementing regulations." At the time of her application, she did not intend to transport any farm workers. By letter dated December 19, 1991, Respondent was advised by the Department that it had issued her the successor certificate of registration (hereinafter referred to as the "1991-92 Certificate") for which she had applied. The certificate, which had an "expiration date" of "11/92," was enclosed with letter. Respondent's 1991-92 Certificate indicated that Respondent was again "Transportation Unauthorized" and it repeated the explanation of the term that had been set forth in the 1990-91 Certificate. In 1990 and 1991, Respondent recruited farm workers to plant sugar cane seed and perform related tasks for the Okeelanta Sugar Corporation (hereinafter referred to as "Okeelanta"). Okeelanta has substantial land holdings in the Everglades Agricultural Area on which it grows and harvests sugar cane that it then processes and converts into refined sugar for sale. Okeelanta paid Respondent a total of $10,958.90 for her services ($4,550.40 for services rendered in 1990 and $6,408.50 for services rendered in 1991). Okeelanta treated Respondent as an independent contractor. The workers she recruited, on the other hand, were considered by Okeelanta to be employees of the corporation. They were paid directly by Okeelanta, which made appropriate deductions from their paychecks. The workers were organized into planting crews made up of eight or nine persons each. At any given time during the 1990-91 and 1991-92 planting seasons, there were several crews comprised of workers Respondent had recruited for Okeelanta (hereinafter referred to as "Respondent's crews"). Okeelanta employed timekeepers to maintain records of the work performed by each of the crews in its fields. Anna Rivera, Respondent's daughter, was the timekeeper responsible for maintaining the records of the work done by Respondent's crews. Respondent's crews were supervised and directed in the field by another Okeelanta employee, Zone Supervisor Raphael Colunga. As the Zone Supervisor, Colunga had the authority to discharge any crew member under his supervision. Respondent frequently went out in the field to monitor the activities of her crews. She did so because the amount of compensation she received from Okeelanta was dependent upon the work performed by her crews. Respondent used her own vehicle to make the trip to the field. There was an Okeelanta bus that drove crew members from the Okeelanta employee parking lot to the field in the morning and back to the parking lot in the afternoon. Respondent's crews did not always arrive early enough in the morning to catch these buses. On those occasions that they missed the bus, the transportation that they used to commute to work was the transportation that they used to get to the field. Every employee that Respondent recruited for Okeelanta for the 1991-92 planting season, before being hired, was screened by the Department at its Belle Glade Job Service office pursuant to a written agreement between Okeelanta and the Department, which provided as follows: RECRUITING ARRANGEMENT Okeelanta Corporation It is the intent of Belle Glade Job Service (hereafter the Job Service) and Okeelanta Corporation (hereafter the "Employer") to bring together individuals, who are seeking employment, and the Employer, who is seeking workers without charging a fee. Therefore, The Job Service and the Employer enter into this arrangement: Assist job seekers in obtaining employment from the employer; Allow the Job Service to facilitate the match between the job seekers and the employer. Both parties enter into this arrangement with the understanding that each will comply with all applicable federal and state laws, rules, and regulations (please see attached addendum of specific responsibilities) pursuant to Title 20 of the Code of Federal Regulations. Part 652, 655 and 658. BOTH PARTIES AGREE THAT THIS RECRUITING ARRANGEMENT WILL - Continue for no longer than one year from the date both parties have signed the document. Constitute the sole exclusive arrangement indicating how they will work together. Terminate upon either party's written notice for the other party that the arrangement will be cancelled in 30 days. Abide by the attached addendums of JS and Employer obligations. Addendum I to the agreement listed the Department's obligations. These obligations were as follows: Provide the Employer notice to renew this arrangement at least 60 days prior to ending date of this arrangement or prior to the expected beginning of the season, whichever is earlier. The notice will contain a request to the employer for written response as to their satisfaction with the arrangement, information on any problem that have [sic] developed and meeting date to renew the arrangement. Provide the employer daily a log summarizing job placement activities for each day in which one or more individuals were referred to the employer. Provide I-9 Certification on individuals hired no later than 48 hours from date JS is notified of hire. Designate one Employment representative to be stationed on daily basis or as needed, to serve as the liaison responsible for working with Okeelanta Corporation. Provide the Okeelanta Corporation with reverse referral recruitment cards to give the applicants. Maintain a pool of qualified applicants for the positions listed with Job Service, who have been screened against the selection criteria of the company. Provide Okeelanta with a list of qualified applicants on file whenever an opening arises. Refer applicants from the pool, with a completed I.D. card, a completed W-4 form, JS Referral Card, (a completed I-9 on recalls) upon receipt of a job order. Addendum II to the agreement listed Okeelanta's obligations. These obligations were as follows: List all job openings for which they wish Job Service to recruit. Provide the Belle Glade JS office a supply of W-4 forms applications for completion by qualified applicants desiring to work for the company. On a daily basis inform the Belle Glade JS office of the hiring decision made on each applicant referred by the JS. Designate one of its employees, within one week of the starting date of this arrangement, to serve as the liaison responsible for working with the JS. Provide a working space for the employee designated to be stationed at the employer premises. Acknowledge receipt of the above referenced regulations as a part of this arrangement, which it will furnish the above referenced employee. The job order Okeelanta placed with the Department's Belle Glade Job Service office in accordance with the foregoing agreement for sugar cane seed planters and other agricultural workers needed for the 1991-92 planting season specified that these employees would be expected to work six days a week, from 7:00 a.m. to 3:00 or 4:00 p.m., weather permitting. Okeelanta hired only those prospective employees who were deemed qualified and given a referral or "yellow" card by the Department. These prospective employees were required to present their card to the Zone Supervisor. After doing so and being accepted for employment, they received an Okeelanta employee identification number and their names appeared on the Okeelanta Day Haul Master List for each day they worked. Prospective employees unable to produce a "yellow" card for the Zone Supervisor were referred to the Department's Belle Glade Job Service office. In light of Okeelanta's policy of turning away prospective employees who did not have "yellow" cards, Respondent advised every employee that she recruited for Okeelanta during the 1991-92 planting season that they had to go to the Department's Belle Glade Job Service office and obtain such a card before they could begin working for Okeelanta. Respondent was never told that she had to verify the qualifications of members of her crews who had been screened and referred to Okeelanta by the Department. She therefore believed that there was no need for her to do so. Miguel Paiz was a member of one of Respondent's crews. He was interviewed at the Department's Belle Glade Job Service office prior to the commencement of the 1991-92 planting season and, although, as he made the interviewer aware, he was only 17 years of age at the time, he was given a "yellow" card. The W-4 form that was completed during his interview indicates that, at least at the time of the interview, Paiz was married. On the morning of Friday, October 18, 1991, three or four days after the start of the 1991-92 planting season, Cruz Hernandez Alvarez, lost control of the 1978 station wagon he was driving on a private road on Okeelanta property and the vehicle went into a canal on the side of the road. Seven of the eight occupants of the vehicle were killed. Alvarez did not have a valid driver's license at the time of the accident. The vehicle he was driving belonged to Juan Andres. Its V.I.N. was 1L35U8S167733. Alvarez and some, but not all, of the other occupants of the vehicle, including the lone survivor of the accident, were members of one of Respondent's crews. Julio Mendoza Corince, a 15-year old boy, was one of the occupants of the vehicle who perished in the accident. Earlier that month, Corince had gone to the Department's Belle Glade Job Service office to obtain a "yellow" card. The Department employee with whom he interviewed, however, refused to refer him because he was underage. Corince was not a member of any of Respondent's crews. Indeed, at no time before the accident had Respondent ever met or spoken with him. After the bodies were recovered from the canal, Respondent, and later her daughter Anna, were called to the scene and asked by the police if they were able to identify any of the victims. Viewing the dead bodies was a very emotionally upsetting experience for both of them. They spent the remainder of the day at home. No work was done by any of Respondent's crews that day. State and federal investigators began their investigation shortly after the accident was reported. Compliance Officer Velasquez was the Department's lead investigator. Rene Callobre, an Assistant District Administrator with the United States Department of Labor, Wage and Hour Division, who, like Velasquez, is fluent in both English and Spanish, conducted the federal investigation. A short time after beginning his investigation on the day of the accident, Velasquez went to the Okeelanta property and asked to speak with Respondent. After being told that Respondent had left for the day, Velasquez proceeded to Respondent's home, where he interviewed Respondent. Velasquez and Respondent conversed in Spanish during the interview. Respondent was still emotionally upset at the time of the interview, but not to the extent that she was irrational or unable to effectively communicate with Velasquez. At no time did she provide an inappropriate response to his inquiries. During the interview, Respondent freely and voluntarily gave a statement in Spanish to Velasquez. Velasquez had not warned Respondent before she gave the statement that what she said could be used against her in an administrative proceeding such as the instant one. 1/ Velasquez wrote down in English what Respondent had told him in Spanish. This written, English translation of the statement, which accurately reflected Respondent's discussion with Velasquez, was then read back to Respondent in Spanish. Respondent thereupon signed the written statement, which read as follows: I am a farm labor contractor with cert # 29482 & expiration date of Nov. 1992. At present I am employed by Okeelanta Sugar Corp. My duties are to recruit & supervise farm workers to plant sugar cane. My fee for this task is $1.10 per row of cane planted by the crew. I recruited my crews by word of mouth. They know I am a contractor, so they come to my house to ask for work. The first thing I tell any worker that comes here to my house is that they must go the Job Service Office in Belle Glade and register. When they are properly registered, they go to the Okeelanta parking lot and there they are transported by company bus to the work site. I tell all the workers they must provide their own transportation to the Okeelanta parking lot. I tell all my workers this because I do not own a vehicle big enough to transport them from their home and back. I tell them that if they want to work, they must come on their own. I recruited 4 crews consisting of 8 workers each crew. Three of the crews were coming from Indiantown (Guatemalans) and one crew from this area (Mexicans). These crews, the ones from Indiantown, worked with me last year. I usually give the driver or the owner of the vehicle $100 per week for gasoline. I did this last year and was intending to do this this year also. The three crews from Indiantown came by car (station wagon) and a van. The station wagon carried 1 crew (8 workers) and the van carried 2 crews (16 workers). On this date, only one crew leader showed up, the station wagon. The van with the 2 crews did not show up. These crews started to work on Tuesday October 15, 1991. I do not pay the workers, Okeelanta does. The statement was in all respects factually accurate. Respondent had not yet during the 1991-92 planting season paid or loaned or agreed to pay or loan anyone "$100 for gasoline" in connection with the transporting of her crews. At no time did Respondent tell any state or federal investigator, including Velasquez or Callobre, otherwise. 2/ On Monday, October 21, 1991, Velasquez went out in the field to visit with Respondent and the members of her crews. Velasquez was accompanied by Compliance Officer Jeudy. Jeudy was being trained by Velasquez. Velasquez and Jeudy observed a 1977 Chevrolet van in the field. The van's V.I.N was CGL257U218651. Neither on the van nor anywhere else in the field was there posted a copy Respondent's application for a certificate of registration or a statement, in English and Spanish, showing Respondent's and her crews' rates of compensation. Velasquez asked Respondent if any of the members of her crews had been transported in the van. Respondent responded in the affirmative and indicated that two of her crews from Indiantown had travelled in the van. Velasquez then asked to speak to the driver of the van. Respondent thereupon retrieved Miguel Paiz, who was working in the field. Although he was 17 years of age and it was during normal school hours, Paiz was at work and not in school. Velasquez asked to see Paiz's driver's license and his farm labor contractor's certificate of registration. Paiz showed Velasquez his driver's license and the "yellow" card he had received from the Department. Paiz advised Velasquez that he did not have, and therefore was unable to produce, a farm labor contractor's certificate of registration. Paiz told Velasquez that Juan Lopez was paying him $10.00 a day for driving the van. During his conversation with Velasquez, Paiz erroneously identified Lopez as the owner of the van. The actual owner of the van was Julio Puentes. After speaking with Paiz, Velasquez interviewed Lopez. Based upon what he understood Lopez to have said during the interview, Velasquez prepared a written statement for Lopez's signature which provided as follows: I borrowed the (vehicle) van that this date transported 16 workers to Okeelanta Sugar Corp. to work in the planting of sugar cane. I was recruited by Araceli Rivera. I am paid $100 per week for the gasoline I use in the vehicle. I am also paid $1.00 per row of sugar cane planted by Okeelanta. I am not registered as a F.L.C. Lopez refused to sign the statement. To the extent that the statement suggests that Lopez was then being paid by Respondent for "the gasoline [Lopez] use[d] in the ['transporting'] vehicle," it is inaccurate. No such payments were made by Respondent to Lopez during the 1991-92 planting season.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order (1) imposing upon Respondent a civil penalty in the amount of $100.00 for having violated Section 450.33(4), Florida Statutes, and Rule 38H-11.008, Florida Administrative Code, as alleged in paragraph (4)(h) of the Administrative Complaint, as amended, by displaying in the area where her crews were working on October 21, 1991, neither a copy of her application for a farm labor contractor certificate of registration nor the requisite statement concerning the compensation that she was receiving from Okeelanta for her recruitment activities, and (2) dismissing the remaining allegations advanced in the Administrative Complaint, as amended. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 10th day of February, 1993. STUART M. LERNER 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 10th day of February, 1993.
Findings Of Fact Based upon the oral and documentary evidence adduced at the hearing, as well as the stipulations of facts as to the accounting figures received into evidence as respondents' Exhibit D, the following relevant facts are found: Petitioner supplied cucumbers and cubanelle peppers to the respondents for the purpose of selling such produce for petitioner. Petitioner received a check in the amount of $1200.00 from the respondents. Frank Hause, who was involved in a joint venture with the petitioner, received another check from the respondents in the amount of $1500.00. Petitioner was not made aware of the Hause payment until a later date. With the exception of one shipment which does not appear on the accounting records involved in this proceeding, respondents received all their cucumbers from petitioner or Frank Hause. Due to the fact that the market for cucumbers was so depressed at the time, respondents neither needed nor received cucumbers from any other source. The accounting figures stipulated as being correct by both petitioner and respondents illustrate that respondents owed petitioner $905.39 for the sale of cucumbers and a figure of minus (-) $681.45 for the sale of peppers. The net amount due petitioner from the respondents for the sale of cucumbers and peppers was $223.94.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the petition and/or complaint filed by the petitioner against the respondents be DISMISSED. Respectfully submitted and entered this 29th day of July, 1982, in Tallahassee, Florida. DIANE D. TREMOR 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 29th day of July, 1982. COPIES FURNISHED: Jerry Wilkinson Post Office Box 86 Webster, Florida 33597 Eric Ruff, Esquire Post Office Drawer TT Plant City, Florida 33566 Charles B. Lawton, Jerry Lawton and J. P. Sizemore d/b/a Dixie Growers Post Office Box 1686 Plant City, Florida 33566 Robert A. Chastain General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Florida Farm Bureau Mutual Ins. Co. Post Office Box 730 Gainesville, Florida 32602 Mr. Earl Peterson, Chief Bureau of Licensing & Bond Department of Agriculture Room 416 Mayo Building Tallahassee, Florida 32301
The Issue The issue is whether Petitioner has shown by a preponderance of the evidence that an indicated rate increase of percent, or, in the alternative, a requested rate increase of 47.1 percent, is not excessive, inadequate, or unfairly discriminatory within the meaning of Subsections 627.062(2)(b), paragraphs 1, 2, 5, 8, 10 through 12, and 14; 627.062(2)(e), paragraphs 1, 3, 6, and 10; 627.062(2)(j); 627.0628; 627.0629; and 627.06291, Florida Statutes (2008).1
Findings Of Fact The petitioner is State Farm Florida Insurance Company (State Farm Florida). Respondent is the state agency responsible for regulating insurance rates in the state. State Farm Florida is a wholly-owned subsidiary of State Farm Mutual Automobile Company (State Farm Mutual). State Farm Mutual is the parent company of four wholly-owned subsidiaries. The four siblings are State Farm Florida; State Farm Fire and Casualty (Fire & Casualty); State Farm Lloyds, Inc. (Lloyds); and State Farm General Insurance Company (General). The parent and siblings are an affiliated group, for purposes of federal and state income taxes, and file a consolidated tax return. State Farm Mutual writes property and casualty insurance, including homeowners insurance, through Fire & Casualty in 47 states. In Florida, Texas, and California, State Farm Mutual conducts the business of insurance through State Farm Florida, Lloyds, and General, respectively. State Farm Florida filed a request for a rate increase of 47.1 percent (the requested rate). The request is a “rate filing” defined in Subsection 627.0621(1)(a). The rate filing is intended to be effective for new business on December 1, 2008, and for renewals on March 1, 2009. The rate filing indicates that a rate increase of 67.6 percent is the actual rate indicated by the documentation in the rate filing (the indicated rate). However, State Farm Florida reduced the indicated rate during the administrative hearing to 67.0 percent to reflect approximately 7,000 policies that State Farm Florida renewed without wind coverage, so-called “ex-winded” policies. State Farm Florida reduced the indicated rate from 67.0 percent to the requested rate of 47.1 percent in an effort to obtain quick approval of the rate filing because State Farm Florida is allegedly, “Losing money every day.” The Notice of Intent states the grounds for denying the rate filing in 23 numbered paragraphs. Respondent dismissed the grounds stated in paragraph number 14. The Findings of Fact refer to the original numbers in the Notice of Intent but address only paragraphs numbered 1 through 13 and 15 through 23. This Recommended Order makes no further reference to the grounds stated in paragraph number 14 of the Notice of Intent. The Notice of Intent and the grounds stated therein constitute proposed agency action. This Recommended Order constitutes recommended agency action. Neither form of agency action may go beyond the powers, functions, and duties delegated by the Legislature in Chapter 627 without constituting an invalid exercise of delegated legislative authority defined in Subsection 120.52(8).2 To that end, the ALJ required the witness for Respondent to identify the statutory authority that Respondent relies on for each numbered ground in the Notice of Intent. The ALJ also required each witness for Petitioner to specify the paragraph number of the ground in the Notice of Intent which his or her testimony addressed. The Notice of Intent relies on Sections 627.062, 627.0628, 627.0629, and 627.06291 as statutory authority for the numbered grounds in the Notice of Intent. Each ground and the corresponding statutory authority is listed as follows: Ground Statutory Authority 1 §§ 627.062(2)(b)8., 627.0628, 627.0629, and 627.06291; 2 § 627.062(2)(b)8.; 3 § 627.062(2)(b)11. and 12.; 4-5 § 627.062(2)(b)11.; 6-8 § 627.062(2)(b)12.; 9-11 § 627.062(2)(b)2.; 12 § 627.062(2)(b)11.; 13 § 627.062(2)(b)2.; 15-16 § 627.062(2)(b)2.; 17 § 627.062(2)(b)10. and 11.; 18 § 627.062(2)(e)1.-3. and 10.; 19 § 627.062(2)(b)8.; 20 § 627.062(2)(b)5.; 21 § 627.062(2)(b)8. and 11.; 22 § 627.062(2)(b) and (2)(e)6.; and 23 § 627.062(2)(j). Respondent has not determined that the rate filing is excessive, inadequate, or unfairly discriminatory within the meaning of Subsection 627.062(1). Rather, Respondent proposes final agency action determining that the information provided by State Farm Florida is insufficient for Respondent to independently determine whether either the indicated or requested rate in the rate filing is excessive, inadequate, or unfairly discriminatory. Respondent asserts that the fact-finder’s determination of the sufficiency of the evidence submitted by State Farm Florida is limited to the information that State Farm Florida submitted with the initial filing. Respondent claims that the fact-finder may not rely on any information submitted by State Farm Florida during the final hearing if that information was not submitted with the initial filing. Respondent relies on the statutory requirement in Subsection 627.062(9)(a) for an insurer to certify, in relevant part, that the initial rate filing does not omit any material fact and fairly presents in all material respects the basis for the rate filing. The ALJ rejects the agency’s conclusion that the certification requirement in Subsection 627.062(9)(a) limits the evidence in the final hearing to the information that State Farm Florida submitted with the initial rate filing. Neither the Legislature nor Respondent has promulgated any explicit standards that prescribe the information that must be included in a rate filing. Other reasons for rejecting the agency’s proposed interpretation of Subsection 627.062(9)(a) are discussed in the Conclusions of Law. The fact-finder has weighed all of the evidence admitted during the final hearing, including information submitted after the initial filing (post-filing evidence). The Findings of Fact are based on evidence of circumstances as they existed through the conclusion of the final hearing. A brief discussion of the history preceding the current rate filing provides context for this proceeding. State Farm Mutual incorporated State Farm Florida in 1998 with an initial capitalization of $607,500,000.00. The hurricanes of 2004 wiped out the surplus of State Farm Florida. In 2004, State Farm Mutual recapitalized State Farm Florida with a loan of $750,000,000.00 so that State Farm Florida could continue doing business in Florida. State Farm Florida obtained an approval from Respondent for a prior rate filing of 52.7 percent. The rate increase became effective November 1, 2006. In November and December 2006, premiums on renewals increased significantly. Beginning sometime in the middle of 2007, average premium began to decline. The direct written premium for State Farm Florida that had been $1,889.00 in November and December 2006 declined to $1,350.00. In the first quarter of 2008 and the third quarter of 2008, direct written premium rose slightly to $1,399.00. The decline in premium revenues is the moving force behind the current rate filing. The Legislature has found in Subsection 627.062(2)(e)3. that rates are inadequate if they are insufficient, together with investment income attributable to them, to sustain projected losses and expenses in the class of business to which the rates apply. The reasons for the reduction in premium revenue are undisputed. State Farm Florida has non-renewed some policies; excluded wind from the covered risk of other policies, a process described by the parties as ex-winding; provided discounts to policyholders who improved covered property with wind-mitigation features identified in Subsection 627.0629(1), identified by the parties as wind-mitigation discounts; and allegedly incurred an increase in costs, not the least of which is the cost of reinsurance for excess losses. State Farm Florida asserts that the decline in premium revenue caused by non-renewals, ex-winding, wind-mitigation discounts, and increased costs such as the cost of reinsurance justifies a rate increase equal to the indicated rate of 67.0 percent or the requested rate of 47.1 percent. The Legislature requires, in Subsection 627.062(2)(g), Petitioner to show by a preponderance of the evidence that either the indicated or requested rate is not excessive, inadequate, or unfairly discriminatory. The fact-finder is unable to determine from a preponderance of the evidence that the indicated and requested rates are not excessive, inadequate, or unfairly discriminatory. This is not a finding that the indicated and requested rates are excessive, inadequate, or unfairly discriminatory. Rather, the evidence of circumstances as they existed through the final hearing is either variable or ambiguous, and therefore neither credible nor persuasive to the fact-finder; or the evidence is insufficient for the fact-finder to make the findings statutorily required to approve either the indicated or requested rate. A preponderance of the evidence does show that State Farm Florida determined the factors used in the rate filing in a manner that is consistent with standard actuarial techniques or practices and that those factors are based on reasonable actuarial judgment within the meaning of Subsection 627.0612(2)(a). However, a finding of actuarial reasonableness does not end the inquiry. The principal purpose of statutory review is to facilitate an independent determination of whether indicated or requested rates which are formulated in accordance with standard actuarial techniques are nevertheless excessive, inadequate, or unfairly discriminatory. Several evidential issues of credibility or insufficiency prevent the fact-finder from determining from a preponderance of the evidence that the indicated and requested rates are not excessive, inadequate, or unfairly discriminatory. The relevant evidential issues are discussed in paragraphs 23 through 65. Non-renewal of policies by State Farm Florida is one reason for a decline in premium revenue. State Farm Florida is voluntarily limiting new property insurance business in the state to in-state transfers of business to inland locations (transfer business). The fact-finder is unable to determine from a preponderance of the evidence whether the portion of the indicated or requested rate which is attributable to transfer business is excessive or reasonable. State Farm Florida has not quantified the number of policyholders that the transfer business entails. For one year, beginning in March 2008, State Farm Florida will decline to renew (non-renew) policyholders. State Farm Florida will also ex-wind renewed policies. The fact-finder is unable to determine from a preponderance of the evidence whether the portions of the indicated or requested rates which are attributable to non- renewal and ex-winding is excessive or reasonable. Evidence of the number of non-renewed and ex-winded policies is ambiguous. After Petitioner submitted the rate filing, the number of non- renewed and ex-winded policies increased from 50,000 to 85,000 through the administrative hearing. Such variability in the evidence is neither credible nor persuasive to the fact-finder. The number of non-renewals and ex-winded policies is important because much of the requested rate increase is based upon forecasts of lower direct written premium. Fewer policyholders and less coverage will naturally generate lower premium. Another “significant contributing factor to the indicated rate need” is the number of policyholders receiving wind-mitigation discounts. Petitioner asserts that wind- mitigation discounts are greater than loss outputs. The fact-finder is unable to determine from a preponderance of the evidence the amount of wind-mitigation discounts. The cross-examination of rebuttal testimony offered by State Farm Florida illustrates the evidential ambiguity. Q. Where in the filing or supplemental materials can I find that the discounts are greater than the loss output? A. Exhibit 5 develops the savings associated with the wind-mitigation discounts. They are part of our projected hurricane losses, and the premium savings are part of our projected premiums that were outlined in Exhibit 2. Q. Can I find them stated separately, or you are saying they are part of this exhibit and part of the other exhibit you mentioned? A. State separately? Q. That the discounts are greater than the losses. Can you show me a place where the discounts are greater? A. There is not a specific statement that says that. It does not say that premium – our premium decline is due to – it discusses several things with regard to wind mitigation discounts. . . . It is implied in the statement that premium is declining due to application of the mitigation discounts. If the reduction in losses were equivalent to the decline in premium, there wouldn’t be a need to increase the premiums to reflect the fact that the savings do not match those discounts. Transcript (TR) at 828-829. As with non-renewals, evidence of the number of policyholders receiving wind-mitigation discounts and the dollar amount of the discounts is variable and less than credible and persuasive to the fact-finder.3 Although State Farm Florida identified wind-mitigation discounts as the “primary cause of reduction in premium per policy,” the evidence does not credibly quantify the discounts. The fact-finder is unable to determine from a preponderance of the evidence whether the rate filing is based on a calculation of wind-mitigation for premiums that is different than the calculation of wind-mitigation discounts for losses. Wind-mitigation discounts must be equal for premiums and losses to avoid being unfairly discriminatory. State Farm Florida gives a discount of 65.0 percent for the hurricane portion of the premium but realizes only a 28.0 percent savings. State Farm Florida may be recovering what it claims to be losing on the wind-mitigation discounts by charging all policyholders equally even though a significantly larger portion of those policyholders do not qualify for the wind-mitigation discounts. To raise rates for all policyholders may negate the savings the discounts were intended to create. By Consent Order dated September 9, 2008, State Farm Florida conceded that it had failed to implement necessary procedures to comply with statutory and administrative rule requirements. State Farm Florida implemented refunds and credits to 98,000 current and former policyholders in the amount of $120 million and paid an additional $1.02 million to the Regulatory Trust Fund. The fact-finder cannot determine from a preponderance of the evidence whether the cost of reinsurance is reasonable or excessive within the meaning of Subsection 627.0612(2)(c). State Farm Florida purchased reinsurance coverage for a probable maximum loss (PML) equal to the difference between $9.25 billion and a retained risk by State Farm Florida of $175 million. Non-renewals, ex-winded policies, and loss savings from wind-mitigation improvements to covered property decreased the PML to $7.1 billion. However, State Farm Florida increased the amount of catastrophe reinsurance that it purchased to cover PML from $7.4 billion in the previous rate filing to $9.25 billion in the current rate filing. State Farm Florida is paying a significant portion of the PML premium to its parent, State Farm Mutual. State Farm Florida retained approximately $175 million of the $9.25 billion in PML. State Farm Florida purchased reinsurance coverage for the remainder of the PML from State Farm Mutual, other private re-insurers, the Florida Hurricane Catastrophe Fund (the Cat Fund), and the temporary increase in coverage limit (TICL).4 State Farm Florida also paid State Farm Mutual $12.8 million for a credit risk provision. The credit risk provision will pay losses that the Cat Fund is contracted to pay but may be unable to pay. The Cat Fund announced in October 2008 that it anticipated a bonding shortfall of $14.5 billion in the event the Cat Fund were called upon to pay all of its reinsurance obligations. State Farm Florida would receive only one-half of the reinsurance coverage it purchased from the Cat Fund in the event of a $14.5 billion bonding shortfall. State Farm Florida paid $842 million for reinsurance coverage. State Farm Florida paid $142 million for reinsurance coverage from the Cat Fund and TICL layer provided by the state and paid approximately $700 million for reinsurance coverage by private re-insurers, including State Farm Mutual.5 Of the total $700 million paid to private re-insurers, State Farm Florida paid approximately $151 million to private re-insurers other than State Farm Mutual. State Farm Florida paid $549 million to its parent company, State Farm Mutual. It is undisputed that the $151 million State Farm Florida paid to private re-insurers other than State Farm Mutual is reasonable. Payments to unrelated private re-insurers represent arms-length transactions between a willing buyer and willing seller of reinsurance coverage. However, the fact- finder is unable to determine from a preponderance of the evidence whether either the cost of reinsurance purchased from State Farm Mutual or the cost of the credit risk provision purchased from State Farm Mutual is excessive or reasonable within the meaning of Subsection 627.0612(2)(c). The economic reality is that State Farm Florida is merely the legal form in which State Farm Mutual chooses to do business in Florida. State Farm Mutual and its wholly-owned subsidiaries, including State Farm Florida, comprise a "group or combination" that the Legislature defines as a "person" in Subsection 1.01(3) or a joint underwriting association defined as a person in Section 624.04 (See 1976 Fla. Atty. Gen, Lexis 130). Transactions between State Farm Mutual and State Farm Florida for reinsurance and credit risk provisions totaling approximately $561.8 million, when viewed in the light of economic reality, Subsection 1.01(3), or Section 624.04, may be transactions which State Farm Mutual engages in with itself and which lack any independent economic significance.6 Transactions with no independent economic significance would be sham transactions which may distort the economic costs of the reinsurance and credit risk provisions purchased from State Farm Mutual. Such economic distortions may enable the group to derive a rate advantage from the legal form in which State Farm Mutual chooses to do business in Florida.7 The reinsurance and credit risk provision which State Farm Florida purchased from State Farm Mutual for approximately $561.8 million may be the economic equivalent of a retained risk amount by State Farm Mutual or the group. The fact-finder cannot determine from a preponderance of the evidence whether the economic cost attributable to a retained risk by State Farm Mutual or the group is more or less than the amount State Farm Mutual charged State Farm Florida for the reinsurance and credit risk coverages. Even if State Farm Florida and State Farm Mutual were distinct persons, State Farm Florida exists for the convenience of State Farm Mutual. State Farm Mutual conducted business in Florida, either directly or through some other member of the group, before State Farm Florida emerged from State Farm Mutual in 1998 with an initial capitalization of $607,500,000.00. State Farm Mutual re-capitalized State Farm Florida with $750,000,000.00 in loans after the 2004 hurricane season. State Farm Mutual owns all of the stock of State Farm Florida. There is no economic, or legal, impediment to State Farm Mutual liquidating State Farm Florida at the convenience of State Farm Mutual and doing business in Florida as it did before it created State Farm Florida in 1998. State Farm Mutual has sustained an annual loss from the reinsurance sold to State Farm Florida from 1998 through 2007. State Farm Mutual can easily end the losses, as well as the costs to State Farm Florida, by liquidating State Farm Florida and doing business in Florida directly. Issues of variability, ambiguity, and credibility pertaining to the reasonableness of the cost of reinsurance is illustrated in testimony during cross-examination of one of the witnesses for State Farm Florida. Q. Am I assuming correctly, then, that, I mean, it’s described on the page. But is there something in this page that indicates to you that it’s a reasonable coverage limit, other than it’s there? A. It would be other than that it’s there, and State Farm [Florida] has chosen that level as a limit that they deem to be reasonable. Q. Okay. So your opinion that it’s a reasonable coverage limit is informed by State Farm [Florida] believing it’s a reasonable coverage limit? A. I suppose that’s the way to say it, yes. Q. You don’t have any independent reason to think it’s either reasonable or unreasonable, other than State Farm [Florida] has it on the page that describes it such as it is? A. I would say that’s correct. TR at 555-556. Another issue of variability, ambiguity, and credibility emerges from the hurricane models used by State Farm Mutual to project PML. State Farm Florida used hurricane models identified in the record as WORLDCAT™, RISKLINK™ and CLASIC™/2 to project both hurricane losses and PML.8 Each model is approved by the Florida Commission on Hurricane Loss Projection Methodology (the Commission) pursuant to Section 627.0628. However, State Farm Florida projected hurricane losses using storm sets identified in the record as “cold water” or “long term” storm sets and projected PML using storm sets identified in the record as “warm water” or “short term” storm sets. It is undisputed that the use of warm water storm sets increases the estimated storm frequency and risk. For example, State Farm Florida justified the requested rate of 47.1 percent, in relevant part, by using cold water storm sets to reduce stated PML by approximately $1.65 billion. State Farm Florida utilized three hypothetical adjustments to reduce the indicated rate of 67.0 percent to the requested rate of 47.1 percent. First, State Farm Florida calculated the impact on the cost of private reinsurance, including that provided by State Farm Mutual, based on the non- renewal and ex-winding activity. That adjustment reduced PML from $9.25 billion to $7.8 billion. Wind-mitigation discounts reduced PML another $700 million to $7.1 billion. The use of cold water, or long term, storm sets to project PML reduced PML another $1.65 billion to $5.45 billion. State Farm Florida is actually purchasing $9.25 billion in re-insurance coverage, less the retained risk by State Farm Florida in the amount of $175 million. If the actual cost of private reinsurance were to justify an indicated rate of 67.0 percent, a requested rate of 47.1 percent would appear to be inadequate, and State Farm Florida would soon return with an additional rate filing. State Farm Florida argues that the use of warm water, or short term, storm sets to determine the actual PML of $9.25 billion is appropriate. The evidence is clear that the global reinsurance market demands and uses warm water models to evaluate risk and to price reinsurance. Warm water storm sets may be the gold standard for re-insurers, but it is also axiomatic that use of the gold standard increases the price of re-insurance and the resulting profit to re-insurers. A preponderance of the evidence does not enable the fact-finder to independently determine that the use of warm water storm sets to project PML is not excessive, inadequate, or unfairly discriminatory. The issue of whether Florida is in a warm water cycle or cold water cycle is not resolved by a preponderance of the evidence. Moreover, State Farm Florida did not provide Respondent with the near term frequency storm set used by State Farm Florida to project PML. Respondent could not independently evaluate the storm sets utilized by State Farm Florida. State Farm Florida argues, in relevant part, that the use of warm water models to estimate PML is justified because the Commission has previously evaluated hurricane models for the sole purpose of estimating hurricane losses, has never evaluated hurricane models for the purpose estimating PML, and legislative authority in Subsection 627.0628(3)(b) for the Commission to evaluate hurricane models used to project PML was not enacted until July 1, 2008. Respondent has a different statutory interpretation. Respondent interprets its legislative authority to mean that the absence of the Commission’s approval of a warm water model to project hurricane losses requires State Farm Florida to use cold water, or long term, storm sets to project PML. Any doubt as to an agency’s statutory authority to act in a manner that accepts warm water storm sets to project PML should be resolved in favor of refusing to exercise the questionable authority. Moreover, the use of storm sets in hurricane models is a matter within the substantive expertise of Respondent. A statutory interpretation involving a matter within an agency’s substantive expertise is entitled to great deference when, as in this proceeding, the agency explicates in the record reasons for such deference. State Farm Florida includes an overall rate of return of 12.2 percent in the rate filing. The fact-finder is unable to determine from a preponderance of the evidence whether the factor used by State Farm Florida for underwriting profit and contingency is reasonable or excessive within the meaning of Subsection 627.0612(2)(b). The Legislature gave the fact-finder authority in Subsection 627.0612(2)(b) to determine whether a factor for underwriting profit and contingencies (a profit factor) is reasonable or excessive. However, the evidence from State Farm Florida is expressed in terms of a rate of return rather than a statutorily authorized profit factor. The rate filing includes a profit of 5.0 percent, a contingency of 2.0 percent, and a retained risk factor of 9.0 percent for a total profit factor of 16.0 percent, but the rate filing uses a rate of return of 12.2 percent. Testimony elicited by counsel for State Farm Florida during the cross-examination of Respondent’s witness illustrates the variability between a 16.0 percent profit factor and 12.2 percent rate of return. Q. Whether it is called retained risk or it is included in profit and contingency, you get the same rate of return, isn’t that correct? A. The rate of return – rate of return or rate indication – Q. Rate of return. A. Rate of return, I would say yes to that. Q. And the placement in the filing has no effect whether the rates are excessive, isn’t that correct? A. That’s correct. Q. The issue of excessiveness is determined by the overall rate of return, not the particular derivation of the 9 percent retained risk, isn’t that right? A. That’s one of the items. Q. Is that a yes? A. Yes. TR at 793-794. The profit factor contemplated by the Legislature and the rate of return utilized by State Farm Florida are distinct investment concepts. Paragraph 72 of the PRO filed by State Farm Florida states that when the income on investments is taken into account the rate of return is 12.2 percent, effectively amending the statutory reference to a profit factor in Subsection 627.0612(2)(b), which is 16.0 percent in this case.9 The Legislature has found in Subsection 627.062(2)(e)2. that rates are excessive if, among other things: [T]he rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when the replenishment is attributable to investment losses. The retained risk of 9.0 percent by State Farm Florida is a “retained hurricane risk.” State Farm Florida claims the retained risk is a necessary cost of writing homeowners insurance in Florida. However, State Farm Florida applies the 9.0 percent factor to the entire premium, not just the portion of the premium attributable to a retained hurricane risk. Moreover, legislation identified in the record as Senate Bill 2860 (SB 2860) removed from former Subsection 627.062(2)(b)11., now 627.062(2)(b)12., expresses authority for a “retained risk” provision. The fact-finder is unable to determine from a preponderance of the evidence whether State Farm Florida passed along to policyholders premium savings attributable to an expansion of the Cat Fund from $16 billion to $28 billion. The Legislature intends in HB 1A that all premium savings resulting from the expansion of the Cat Fund are to be passed along to policyholders. State Farm Florida assumed a zero net-cost of reinsurance purchased from the state. The net-cost of reinsurance, including previously discussed private re- insurance, takes into account the premium paid, the amount of coverage, and the expected recoveries. State Farm Florida paid approximately $700 million for reinsurance from State Farm Mutual and private re-insurers and determined that expected recoveries would amount to slightly more than $106 million. The cost of coverage provided by the Cat Fund and the expected recoveries from the Cat Fund were not included in the determination of the net-cost of reinsurance. The fact-finder is unable to determine from a preponderance of the evidence whether the failure to include the cost of coverage minus the expected recoveries from the Cat Fund led to a cost of that reinsurance which is greater than the services rendered in violation of Section 627.062. Because the Cat Fund makes no profit, has minimal expenses, and has a very large investment income credit due to its tax exempt status, recoveries may, in certain circumstances, be significantly higher than the premiums paid to the Cat Fund. The fact-finder is unable to determine from a preponderance of the evidence whether expenses attributable to agent commissions are reasonable or excessive. State Farm Florida assumes a 13.0 percent commission based on historical commission ratios. However, historical ratios may not accurately predict future costs because State Farm Florida is reducing business through non-renewals and reducing coverage through ex-winding and wind-mitigation discounts. Agent services are rendered either to obtain new business or to service existing policyholders. The voluntary limitation of new business to transfer business may reasonably be expected to reduce agent services attributable to new business. The fact-finder is unable to determine from a preponderance of the evidence whether costs attributable to advertising and marketing are reasonable or excessive. State Farm Mutual advertises for “branding purposes” and allocates a portion of those costs to State Farm Florida. The benefit of advertising for “branding purposes” is the retention of business and the acquisition of new business. However, State Farm Florida is limiting new business to transfer business, and it is unclear what portion, if any, of the cost of branding incurred by State Farm Mutual is misallocated to new business that State Farm Florida is not creating. State Farm Florida made adjustments to hurricane models including the averaging of three models. A preponderance of evidence shows that averaging, by itself, did not materially affect the rate filing because averaging reduced variability between the models. The rate filing includes a factor identified in the record as a sinkhole presumed factor. State Farm Florida corrected a deficiency in the original filing by providing in Petitioner’s Exhibit 11 the calculation required by Respondent. The rate filing included a 10.0 percent loss adjustment factor for hurricane losses. The information included in the initial filing did not support the 10.0 percent factor, but the factor is supported by a preponderance of the post-filing evidence. Respondent’s PRO discusses several alleged violations of Florida Administrative Code Rules 69O-170.0135, 69O-170.014, and 69O-170.003. However, the ALJ concludes that Respondent has the burden of proving the affirmative allegation that State Farm Florida violated an administrative rule.10 Respondent’s insistence on confining the evidence to that submitted with the initial filing makes it unclear whether Respondent disputes the issue of whether the post-filing evidence cures any violations in the initial filing. The fact-finder cannot determine from a preponderance of the evidence as a whole whether Petitioner violated any administrative rule.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order determining that State Farm Florida did not show by a preponderance of the evidence that either the indicated rate or requested rate in the rate filing is not excessive, inadequate, or unfairly discriminatory. DONE AND ENTERED this 12th day of December, 2008, in Tallahassee, Leon County, Florida. S DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of December, 2008.
Findings Of Fact Based upon all of the evidence, including the stipulation of the parties, the following findings of fact are determined: Petitioner, Charles W. Ward, Jr., is a co-owner, with other members of his family, of a cattle ranch in south Hendry County known as Ward Farms. Respondent, Maddox Brothers Produce, Inc., is a licensed agriculture dealer engaged in the business of brokering agriculture products in the State of Florida. As an agriculture dealer, respondent is subject to the regulatory jurisdiction of the Department of Agriculture and Consumer Services (Department). One such requirement of the Department is that all dealers post a surety bond with the Department's Division of Licensing and Bond. To this end, respondent has posted a $50,000 surety bond with Fireman's Fund Insurance Company as the surety. In addition to raising livestock, petitioner also grows watermelons on his property. Pursuant to an agreement by the parties, between April 16 and May 15, 1990, respondent harvested and then transported petitioner's watermelons to other destinations outside the state. The parties have stipulated that respondent still owes petitioner $53,980.92 as payment for the watermelons. Respondent has agreed to pay petitioner the above sum of money on or before February 15, 1991, or within fifteen days after the agency's order becomes final, whichever is later. Otherwise, payment shall be made from respondent's bond posted by the surety, Fireman's Fund Insurance Company.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding that respondent, a licensed agriculture dealer, is indebted to petitioner in the amount of $53,980.92, and that such debt be satisfied in accordance with the time limitations set forth in this recommended order. Otherwise, Fireman's Fund Insurance Company shall be obligated to pay over to the Department the full amount of the bond, or $50,000. DONE and ENTERED this 24th day of January, 1991, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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, 1991. COPIES FURNISHED: Charles W. Ward, Jr. Star Route, Box 72 LaBelle, Florida 33440 Patricia Maddox Harper 4253 Kingston Pike Knoxville, Tennessee 37919 Barbara J. Kennedy, Esquire Fireman's Fund Insurance Company Post Office Box 193136 San Francisco, California 94119-3136 Bob Crawford Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Richard D. Tritschler, Esquire General Counsel Department of Agriculture 515 Mayo Building Tallahassee, Florida 32399-0800 Brenda D. Hyatt, Chief Bureau of Licensing & Bond 508 Mayo Building Tallahassee, Florida 32399-0800
The Issue Whether Respondent, Debruyn Produce Co. owes Petitioner, Florida Farm Management Inc. the sum of $4,846.00 for watermelons shipped by Petitioner and handled by Respondent as Petitioner's agent during the period from May 30, 1989 through July 5, 1989.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant fact are found: At all times material to this proceeding, Petitioner, Florida Farm Management, Inc. was a "producer" of agricultural products in the state of Florida as that term is defined in Section 605.15(5), Florida Statutes. At all times material to this proceeding, Respondent, Debruyn Produce Co. was a licensed "dealer in agricultural products" as that term is defined in Section 604.15(1), Florida Statutes. Respondent was issued license number 596 by the Department, and bonded by Peerless Insurance Company (Peerless) for the sum of $47,000.00, bond number R2-27-13, with an effective date of November 13, 1988 and a termination date of November 13, 1989. At all times material to this proceeding, Debruyn was authorized to do business in the state of Florida. Around the last week of April, 1989, Petitioner and Respondent orally agreed, among other things, for Petitioner to produce certain quantities of Mickey Lee Watermelons and for Respondent to market those watermelons. This oral agreement was reduced to writing, executed by the Respondent and sent to Petitioner to execute. Petitioner, after making certain changes in the agreement and initialing those changes, executed the agreement and returned it to the Respondent. It is not clear if Respondent agreed to the change since they were not initialed by Respondent. However, the parties appeared to operate under this agreement as modified by Petitioner. Under the agreement, Respondent was to advance monies for harvesting and packing, furnish containers and labels for packing and agreed to pay certain chemical bills. Petitioner was to reimburse any monies advanced by the Respondent for (a) harvesting or packing; (b) containers and labels and; (c) chemicals, from the proceeds of the sale of watermelons. Any balance owed Petitioner for watermelons was to be paid within 30 days. Additionally, Respondent was to receive a commission of 8% of net FOB, except 30 cent maximum on sales of less than $6.25 per carton and 40 cents per carton for melons delivered on contract to National Grocers Co. The relationship of the parties was to be that of producer and sales agent. Before entering into the agreement with Respondent, Petitioner had agreed to furnish National Grocers Co. four shipments of melons totalling 8,000 cartons. Respondent agreed to service that agreement. Although Petitioner's accounts receivable ledger shows a credit of $6,007.13 for chemicals paid for by Respondent, the parties agreed that only $3,684.68 was expended by Respondent for chemicals and that Respondent should receive credit for that amount. The parties agree that Respondent advanced a total of $18,960.00 for harvesting and packing and the Respondent should be given credit for this amount. The parties agree that Respondent paid to Petitioner the sum of $12,439.32 and the Respondent should be given credit for this amount. Cartons and pads for packing the melons were shipped on two occasions and the total sum paid by Respondent for those cartons and pads was $17,225.00. The cartons were printed with the logo of Respondent on one side and the logo of Petitioner on the other side. Petitioner agrees that the number of cartons and pads used by him came to $12,463.78 and the Respondent should be given credit for that amount. All cartons and pads in the sum of $17,255.00 were delivered to Petitioner's farm. The amount in dispute for the remainder of the carton is $4,762.22. The Respondent was responsible under the agreement to furnish cartons and pads (containers). Respondent ordered the cartons and pads after determining from Petitioner the number needed. There were two orders for cartons and pads placed and delivered. There was an over supply of cartons and pads delivered to Petitioner. This over supply was the result of a miscommunication between Petitioner and Respondent as to the amount of cartons and pads needed. Petitioner agrees that all of the cartons and pads were delivered to his farm but that he was unable to protect these cartons and pads from the weather. However, Petitioner advised Respondent that the remainder of the carton and pads could be picked up at his farm. Respondent contended that he was denied access to the farm and was unable to pick up the remainder of the cartons and pads and, therefore, they were ruined by exposure to the weather. While there may have been times when Respondent attempted to retrieve the carton and Petitioner was unavailable, there is insufficient evidence to show that Respondent was intentionally denied access to Petitioner's farm to retrieve the cartons. Clearly, the ordering, purchasing and storing of the cartons and pads was a joint effort and both Petitioner and Respondent bear that responsibility. Therefore, the Petitioner is responsible for one-half of the difference between the total cost of the cartons ($17,225.00) and the amount used by Petitioner ($12,462.78) which is $2,381.11 and Respondent should be given credit for this amount. Petitioner's accounts receivable ledger shows that Petitioner shipped melons to Respondent in the amount of $54,715.63, after adjustments for complaints and commission. Respondent's accounts payable ledger shows receiving melons from Petitioner in the amount of $51,483.00, after adjustments for complaints and commission. The difference in the two ledgers in the amount of is accounted for as follows: Invoice No. 210066 - Customer paid $2.00 per carton less on 93 cartons, Petitioner agreed to the reduction. However, Petitioner's account is in error by 9 cents which reduces total amount to $54,715.54. Invoice No. 210067 - Respondent paid for more melons than Petitioner shows were shipped - $39.60. Invoice No. 210068 - difference in calculation of commission $13.32 Invoice No. 2100105 - difference due to Petitioner not agreeing to adjustment in price taken by customer. $2,886.00 Invoice No. 2100239 - difference of $108.04 due to Respondent allowing customer adjustment which Petitioner did not agree to. Invoice No. 2100267 - difference of $210.00 for same reason stated in (e) above. Petitioner should be allowed the difference due to miscalculation of commission in invoice Nos. 210068, 2100134 and 2100160 in the sum of $68.10 since Petitioner's calculation was in accordance with the agreement. There was no dispute as to the condition of melons being as contracted for upon receipt. There was insufficient evidence to establish that the melons shipped under invoice Nos. 2100105, 2100239 and 2100267 by Petitioner were not of the size and number contracted for by the customer. As to invoice Nos. 2100239 and 2100267, the adjustments were made after the fact without contacting Petitioner. As to invoice No. 2100105, the Petitioner shipped the melons to Russo Farms, Inc., Vineland, N.J., as per Respondent's order who then unloaded the melons and reloaded on Russo's truck and shipped to another buyer. It was this buyer's complaint that resulted in Russo demanding an adjustment. Respondent granted such adjustment without approval of the Petitioner. Although Respondent did contact Petitioner in regard to this complaint, Petitioner would not authorize a federal inspection, which he could have, but instead, requested that Respondent obtain an independent verification of the basis of the complaint. Instead of an independent verification of the complaint, Respondent had Russo evaluate the load as to size of melons and number of boxes. No complaint was made as to condition of the melons. Petitioner would not accept Russo's evaluation because based on the total weight of the melons shipped, as indicated by the freight invoice, Russo's evaluation could not have been correct. The only evidence presented by Respondent as to size and number of melon in regard to invoice Nos. 2100105, 2100239 and 2100267 was hearsay unsupported by any substantial competent evidence. Petitioner should be allowed the difference in invoice Nos. 2100105, 2100239 and 2100267 for a sum total of $3,204.00. No adjustment should be made for the differences in invoice No. 210067 other than the 9 cent error made by Petitioner because this amount is not used in Petitioner's calculation of the gross amount due for melons shipped. Therefore, the sum total of all melons sold and shipped is $54,715.63 - 0.09 = $54,715.54. The amount due Petitioner is calculated as follows: Sum total of melons shipped with proper adjustments $54,715.54 Subtract from that the following: Chemicals 3,684.68 Advances 18,960.00 Cost of Cartons $12,462.78 + 2,381.11 14,773.89 Payment 12,439.32 Subtotal of Deductions 49,857.89 Difference and amount owed $4,857.65
Recommendation Upon consideration of the foregoing Findings of Fact and Conclusions of law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED: That Respondent Debruyn Produce Company, Inc. be ordered to pay the Petitioner Florida Farm Management, Inc. the sum of $4,857.65. It is further RECOMMENDED that if Respondent Debruyn Produce Company, Inc. fails to timely pay Petitioner, Florida Farm Management, Inc. as ordered, the Respondent, Peerless Insurance Company be ordered to pay the Department as required by Section 604.21, Florida Statutes, and that the Department reimburse the Petitioners in accordance with Section 604.21, Florida Statutes. DONE and ORDERED this 23rd day of October, 1990, in Tallahassee, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of October, 1990. APPENDIX TO RECOMMENDED ORDER The following constitute my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner. 1. Not a finding of fact but the issue in this case. 2.-3. Adopted in findings of fact 2 and 4. Adopted in finding of fact 8. Adopted in finding of fact 4. First sentence adopted in finding of fact 7. The balance is not material but see findings of fact 16-23. Not material but see findings of fact 16-23. Rejected as not being supported by substantial competent evidence in the record but see findings of fact 9-14. Adopted but modified in findings of fact 21 and 22. 10(A), 10(C)(1), 10(E), and 10(F) adopted in finding of fact 24. 10(C)(2)(3), 10(d) rejected as not being supported by substantial competent evidence in the record. See findings of fact 5, ,7, 9 - 15. Rulings on Proposed Findings of Fact Submitted by Respondent. 1.-7. Adopted in findings of fact 2, 1, 4, 4, 4, 6, and 7 respectively as modified. Not material. This involved invoice Nos. 210066 and 210067 and adjustment were agreed to be Petitioner and is not part of this dispute. See Petitioner's accounts receivable ledger, Petitioner's Exhibit 1. Adopted in finding of fact 21 as modified. Rejected as not being supported by substantial competent evidence in the record. Not material. This involved invoice No. 2100160 and adjustments were granted by Petitioner and is not part of this dispute. See Petitioner's Exhibit 1. 12.-13.Adopted in finding of fact 21 as modified. Adopted in finding of fact 5, and 9-15 as clarified. Rejected as not supported by substantial competent evidence in the record but see findings of fact 9-15. Adopted in finding of fact 13 as clarified. Adopted in finding of fact 23 as clarified but see findings of fact 9-22.
The Issue Whether the respondent is indebted to the complainant for the sale of Florida-grown agricultural products, and, if so, the amount of the indebtedness.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Mr. Rose has a grove of lychee trees on his property; each year he harvests the lychee nuts for sale, but the sale of agricultural products is not his sole source of income. In mid-June, 1996, Mr. Rose heard that the Growers Association was offering $3.50 per pound for lychees, the highest price of which he was aware. Mr. Rose took his fruit to the Growers Association on June 18, 1996. Mr. Rose had not done business with the Growers Association previously but had sold his fruit to another company. Mr. Rose received a grower's receipt showing that, on June 18, 1996, he had brought in 298 pounds of fruit, that 14 pounds were culls, and that the Growers Association had packed 27.9 ten- pound boxes of fruit. The Growers Association packed only marketable fruit. Ninety-nine percent of the tropical fruit grown in Florida is handled in pools.1 According to industry practice, the "handler" does not purchase the fruit outright but is responsible for packing, storing, selling, and shipping the fruit and for accounting for and remitting the proceeds of sale, minus expenses, to the members of the pool on a pro rata basis. The pools are composed of all growers whose fruit is packed during a designated period of time. Prices initially quoted to growers participating in a pooling arrangement are not guaranteed because the actual sales price may vary, depending on market conditions. It was the practice of the Growers Association to handle lychees under a pooling arrangement, and the receipt Mr. Rose received from the Growers Association contained the notation "P- 407LY," which designated the pool to which Mr. Rose's fruit was assigned. The Lychee P-407LY pool to which Mr. Rose's fruit was assigned consisted of fruit packed by the Growers Association between June 15 and 21, 1996. Mr. Rose was told on several occasions by employees of the Growers Association that he would receive $920.70 after expenses for the sale of his lychees. This amount was reflected in a Pool Price Report generated by the Growers Association on July 10, 1997, which also showed that a total of 107.6 pounds of fruit was included in the pool and that the Growers Association anticipated receiving a total of $4,088.65 for the sale of the fruit in the pool. The Growers Association maintained in its files a work order showing that 83 ten-pound boxes of lychees were sold to Produce Services of America, Inc., at a price of $38.00 per box and that the fruit was shipped on June 21, 1996. According to the July 10 report, the Growers Association had received payment of $932.90 for 24.55 ten-pound boxes of lychees sold to "L & V" on June 21, 1996, at $38.00 per box, but there is no indication in the report that the anticipated payment of $3,154.00 had been received from Produce Services of America. Mr. Rose repeatedly called the Growers Association during July and August to inquire about when he would receive payment for his fruit. In accordance with the information he had consistently been given by employees of the Growers Association, he expected to receive $920.70. When he received a check from the Growers Association dated August 29, 1996, in the amount of $367.48, he called the Growers Association for an explanation of why he had received that amount rather than the $920.70 he was expecting. Ultimately, he spoke with Mr. Kendall in early September, who told him that the $367.48 was all he was going to receive as his pro rata share of the pool because Produce Services of American had not paid in full for the 83 boxes of fruit it purchased. As reflected in the Pool Price Report dated September 19, 1996, the Growers Association received a total payment of only $1,847.42 for the fruit in the pool, rather than the $4,088.65 shown in the July 10, 1996, report. After the Growers Association's expenses were deducted, a total of $1,417.25 was distributed to the five growers in the pool. Although a copy of this final price report for the P-407LY pool should have accompanied Mr. Rose’s check, it did not. According to the information contained in the September 19 Pool Price Report, the shortfall in the amount received for the sale of the fruit in the pool is attributable to the Growers Association's receiving only $913.00, or $11.00 per box, for the sale of the 83 boxes of lychees to Produce Services of America, instead of the anticipated $3,154.00. The $913.00 was paid to the Growers Association by check dated August 19, 1996. Mr. Rose did not present sufficient evidence to establish that he had a contract for the outright sale of 27.9 ten-pound boxes of lychees to the Growers Association. Rather, the evidence establishes that Mr. Rose's fruit was handled by the Growers Association under a pooling arrangement and that, consistent with the practice in the tropical fruit industry, the Growers Association assumed responsibility for packing, storing, selling, and shipping the fruit. The Growers Association failed to offer any credible evidence to explain why Produce Services of America paid only $11.00 per box for the 83 boxes of fruit shipped from the pool, notwithstanding that the agreed sales price was $38.00 per box.2 Even if the fruit was damaged or in poor condition when it was delivered to Produce Services of America, the Growers Association packed 27.9 ten-pound boxes of marketable fruit on Mr. Rose’s account, and, once packed, it had complete control of the fruit in the pool. The Growers Association failed to offer any evidence to establish that it acted with reasonable care in fulfilling its responsibilities under the pool arrangement. Consequently, it bears the risk of loss rather than Mr. Rose and is indebted to him for $553.22, which is the difference between the $920.70 Mr. Rose would have received as his pro rata share of the pool had Produce Services of America paid the agreed-upon sales price of $38.00 per box and the $367.48 which the Growers Association paid to Mr. Rose by check dated August 29, 1996.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a Final Order finding that the South Florida Growers Association, Inc., is indebted to Mike Rose for the sale of agricultural products and ordering the South Florida Growers Association, Inc., to pay Mike Rose $553.22 within fifteen (15) days of the date its order becomes final. The Final Order should also provide that, in the event that the South Florida Growers Association, Inc., fails to pay Mike Rose $533.22 within the time specified, Aetna Casualty and Surety Company, as surety for the South Florida Growers Association, Inc., must provide payment under the conditions and provisions of its bond. DONE AND ENTERED this 10th day of April, 1997, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 10th day of April, 1997.
The Issue Whether Petitioner's application for a real estate salesman's license should be approved?
Findings Of Fact Sometime in late February or early March, 1988, Petitioner submitted an application for licensure as a real estate salesman. Petitioner's answers to questions 6 and 7 of the application reflected that in June or July 1987, he had pled guilty to conspiring to defraud the United States and was sentenced to serve 2 years on probation and assessed a $5,000 fine. Based on Petitioner's answers to questions 6 and 7 of the application, Respondent denied Petitioner's application for licensure. Petitioner's conviction for conspiring to defraud the United States was due to his involvement with two Farmers Home Administration projects to build low-income housing in Michigan. In 1983, the Farmers Home Administration had allotted approximately $500,000 to fund each of 2 low-income housing projects consisting of 18 units each. The funding had been committed to a developer other than Petitioner. The developer had been unable to arrange for the projects to be built. The developer had let out bids on both projects. The bid on one project came back under the amount allotted; however, the bid for the other project came back at approximately $105,000 over the amount allotted. At this point, Petitioner was contacted by the developer and became a partner in the development of the two projects. Petitioner's job was to get the projects built. Petitioner determined that it might be possible to construct the two projects for the total amount allotted, $1,000,000, if both projects were bid out together, since efficiencies should be achieved by bidding both projects as one. Petitioner let out a bid for the construction of both projects. The bid came back at a slightly higher amount than that allotted. However, after some negotiations with the Farmers Home Administration the two projects were allowed to proceed. However, the fact still remained that one project was more expensive than the other to build, and that the costs of the more expensive project exceeded the amount allotted by the Farmer's Home Administration. In order to resolve this problem, Petitioner falsified some documents to make the accounting for each project show that both projects came in under the amount allotted even though this was not true. In effect, Petitioner used money allotted to the less expensive project to pay for the more expensive project. In 1985, the Federal Bureau of Investigation began an investigation of all Farmers Home Administration projects in Michigan. Out of this investigation, Petitioner's involvement with the two projects was uncovered, and his subsequent plea of guilty and conviction were due to his falsifying the documents. Petitioner held a real estate salesman's license in Michigan from 1975 to 1978. From 1978 to the present time, Petitioner has held a real estate broker's license in Michigan. No disciplinary action has been taken by the State of Michigan on account of Petitioner's actions which led to his conviction. Also, no action has ever been brought in Michigan arising out of Petitioner's activities representing buyers and sellers of real estate. Petitioner has paid $150.00 of the $5,000.00 fine imposed by the Federal government. He has paid when he has had work. Petitioner is in the process of filing for Chapter 11 reorganization in order to facilitate the payment of some debts.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission issue a Final Order approving Petitioner's application for license as a real estate salesman. DONE and ORDERED this 14th day of November, 1988, in Tallahassee, Florida. JOSE A. DIEZ-ARGUELLES Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-3479 The parties submitted proposed findings of fact which are addressed below. Paragraph numbers in the Recommended Order are referred to as "RO ." Petitioner's Proposed Findings of Fact Proposed Finding of Fact Number Ruling and RO Paragraph Accepted. Accepted. Accepted. Rejected as not a finding of fact. Accepted. Rejected as not a finding of fact, but see Conclusions of Law section of RO. Rejected as not a finding of fact. Respondent's PRO posed Findings of Fact PRO posed Finding of Fact Number Ruling and RO Paragraph Accepted as modified in RO 1. Accepted as modified in RO 3. Subordinate. Accepted as modified in RO 2, 4 and 12. Accepted as modified in RO 11 and 12. Accepted as modified in RO 16 and 17. First 7 words are not a finding of fact; remainder of sentence is Rejected as contrary to the weight of the evidence. COPIES FURNISHED: George Joseph Laufersky 7 Oak Lane Lady Lake, Florida 32659 Lawrence S. Gendzier Assistant Attorney General 400 West Robinson Room 212 Orlando, Florida 32801 Darlene F. Keller, Executive Director Division of Real Estate 400 West Robinson Orlando, Florida 32801 Bruce D. Lamb General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue Whether the Petitioner proved the elements necessary to demonstrate that she was subject to an unlawful employment practice as a result of Respondent, Bradford County Farm Bureau, maintaining a sexually-hostile work environment.
Findings Of Fact At all times material to this proceeding, Petitioner was employed by Respondent, Bradford County Farm Bureau (BCFB or Respondent). She worked for the BCFB from December 15, 2006 until January 1, 2012. The BCFB is an organization created to work for and provide support to farmers in Bradford County. The BCFB has its office in Starke, Florida. At all times relevant to this proceeding, James Gaskins was the President of the BCFB Board of Directors. He served in that capacity as an unpaid volunteer. The alleged actions of Mr. Gaskins towards the Petitioner form the basis for her claim of employment discrimination. Section 760.10(1), provides that: It is an unlawful employment practice for an employer: To discharge or to fail or refuse to hire any individual, or otherwise to discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment, because of such individual?s race, color, religion, sex, national origin, age, handicap, or marital status. To limit, segregate, or classify employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities, or adversely affect any individual?s status as an employee, because of such individual?s race, color, religion, sex, national origin, age, handicap, or marital status. Section 760.02(7) defines "employer" as follows: „Employer? means any person employing 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year, and any agent of such a person. The threshold issue in this proceeding is whether the BCFB had the requisite number of employees to bring it under the jurisdiction of the Florida Civil Rights Act of 1992 as Petitioner?s “employer.” If Petitioner fails in her proof of that issue, any discussion of acts that may have constituted sexual harassment or resulted in the creation of a sexually- hostile work environment become superfluous and unnecessary. Facts Regarding the BCFB as an “Employer” At all times relevant to this proceeding, the BCFB had two paid employees. Ms. Griffith was the office manager and bookkeeper. Ms. Linzy was a part-time secretary and receptionist, although she worked full-time when Ms. Griffith was out. Ms. Linzy retired in October, 2012. In addition to the foregoing employees, the BCFB has a five-member board of directors. Although Mr. Gaskins, who was a member of the Board, served as an unpaid volunteer, there was no evidence as to whether the remaining members were paid for their services. For purposes of this Recommended Order, it will be presumed that they were. Based solely on the number of its employees, BCFB is not an “employer” as defined by section 760.10. Therefore, in order to prove the threshold element of her claim for relief, Petitioner must establish that employees of other entities should be imputed to the BCFB due to integrated activities or common control of BCFB?s operations or employees. Petitioner presented evidence of the relationship between the BCFB, the Florida Farm Bureau, and the Florida Farm Bureau Insurance Company (FFBIC) to establish the requisite integration or common control necessary to impute their employees to the BCFB. Florida Farm Bureau The Florida Farm Bureau has more than 15 employees. The Florida Farm Bureau has a mission similar to that of the BCFB of providing goods, services, and other assistance to farmers, though on a state-wide basis. Each county in Florida has an independent county farm bureau. The Florida Farm Bureau has no common corporate identity with the BCFB. The BCFB is incorporated as a legal entity unto itself. The Florida Farm Bureau and the BCFB have no common officers, directors, or employees. The Florida Farm Bureau does not share or comingle bank accounts with the BCFB. The BCFB maintains its own finances, and has a bank account with the Capital City Bank Group. The Florida Farm Bureau has no operational control over the BCFB. The BCFB Board of Directors makes all employment decisions for the BCFB, has exclusive authority to hire and fire employees of the BCFB, and has exclusive control over the pay and the terms and conditions of BCFB employees. Employees of the BCFB are paid by the BCFB, and not by the Florida Farm Bureau. The Florida Farm Bureau has the telephone numbers of all of the county farm bureaus, and can transfer calls received by the Florida Farm Bureau to any of the county farm bureaus. Other than that, as stated by Ms. Linzy, the county farm bureaus “are all on their own.” Florida Farm Bureau Insurance Company The Florida Farm Bureau Insurance Company is affiliated with the Florida Farm Bureau. The nature and extent of the relationship between those entities was not established. The relationship between those two entities does not affect their relationship, or lack thereof, with the BCFB. Petitioner introduced no evidence as to the FFBIC?s total number of employees. The FFBIC has no common officers or directors with the BCFB, nor do they share or comingle bank accounts. Brent Huber and Travis McAllister are insurance agents authorized to transact business on behalf of the FFBIC. They are self-employed independent contractors. Mr. Huber does business as “Brent Huber, Inc.” Neither Mr. Huber nor Mr. McAllister is an employee of the FFBIC. Mr. Huber is not employed by the BCFB, and does not perform duties on behalf of the BCFB. The evidence suggests that Mr. McAllister?s status, vis-à-vis the BCFB, is the same as that of Mr. Huber. Local FFBIC agents are selected by the FFBIC. Given the close relationship with local farmers/customers, the FFBIC selection of a local agent must be ratified by the county farm bureau in the county in which the agent is to transact business. Once ratified, an FFBIC agent cannot be terminated by the county farm bureaus. Mr. Huber and Mr. McAllister, having been appointed to transact business in Bradford County as agents of the FFBIC, maintain an office at the BCFB office in Starke. There being only four persons in the office, the relationship among them was friendly and informal. Mr. Huber described the group as “tight-knit” and “like a family.” Mr. Huber had no supervisory control over Petitioner or her work schedule. Due to the small size of the BCFB office, and limited number of persons to staff the office, Ms. Griffith?s absences would cause problems for the office as a whole. However, Mr. Huber never evaluated Ms. Griffith?s performance and never disciplined Ms. Griffith. The FFBIC provided sexual harassment, employment discrimination, workers? compensation, and minimum wage informational signs that were placed in the BCFB office break room. Those signs were “shared” between the Florida Farm Bureau Insurance Company and the BCFB. Thus, the BCFB did not maintain a separate set of signs. The BCFB office has a single telephone number, and calls are routed internally. If Mr. Huber was out of the office, Petitioner or Ms. Linzy would take messages for him. If Mr. Huber was alone in the office, he would answer the telephone. Petitioner or Ms. Linzy would occasionally make appointments for Mr. Huber, and assist him when clients visited the office. Mr. Huber did not pay Petitioner or Ms. Linzy for those services. At some point, Mr. Huber and Ms. Griffith determined that it would be mutually advantageous if Ms. Griffith were allowed to speak with FFBIC customers about insurance when Mr. Huber was out of the office. To facilitate that arrangement, Ms. Griffith, at Mr. Huber?s suggestion, obtained a license as a customer service representative, which allowed her to sell policies under Mr. Huber?s insurance agent license. The customer service representative license was not a requirement of Ms. Griffith?s position with the BCFB. Ms. Griffith would sell insurance policies only when Mr. Huber was out of the office. Mr. Huber compensated Ms. Griffith for writing insurance policies through “Brent Huber, Inc.” Ms. Griffith continued to be paid as a full-time employee of the BCFB because she thought the BCFB “would be OK with it.”
Recommendation Upon the consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a final order be entered by the Florida Commission on Human Relations that, based upon Petitioner's failure to meet her burden of proof to establish that Respondent, Bradford County Farm Bureau, is an “employer” as defined in section 760.02(7), the Employment Complaint of Discrimination be dismissed. DONE AND ENTERED this 6th day of May, 2013, in Tallahassee, Leon County, Florida. S E. GARY EARLY 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 6th day of May, 2013. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations Suite 100 2009 Apalachee Parkway Tallahassee, Florida 32301 Robert E. Larkin, III, Esquire Allen, Norton and Blue, P.A. Suite 100 906 North Monroe Street Tallahassee, Florida 32303 Jamison Jessup 557 Noremac Avenue Deltona, Florida 32738 Cheyanne Costilla, Interim General Counsel Florida Commission on Human Relations Suite 100 2009 Apalachee Parkway Tallahassee, Florida 32301
