Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of JEDI Enterprises, Inc., for certification as a minority business enterprise be APPROVED. DONE and ENTERED this 27th day of August, 1984, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 1984. COPIES FURNISHED: Paul A. Pappas, Secretary Department of Transportation Haydon Burns Bldg. Tallahassee, Florida 32301 Thomas G. Brown, Esquire Florida National Bank Bldg. 301 First Street West Palm Beach, Florida 33401 Mark A. Linsky, Esquire Haydon Burns Bldg., M.S. 58 Tallahassee, Florida 32301-8064
The Issue Whether Expedient Services, Inc. should be certified as a minority business enterprise by the Respondent, pursuant to Section 288.703(1) and (2), Florida Statutes and the applicable rules implementing the statute.
Findings Of Fact Petitioner is a Florida corporation founded prior to 1978 by five minority owners who purchased all of the stock originally issued. The primary business of the corporation was to provide janitorial services for corporate and governmental clients. In 1978, Harvey Hughes was hired as president and CEO. As part of his compensation package, Hughes purchased a minority interest in the corporation at par value. Hughes continues to serve in that capacity to the present day. Beginning after 1983, the five original stockholders, on separate occasions, sold their shares back to the corporation leaving Hughes as the sole stockholder with 833 shares outstanding. In the late 1980's, Hughes' son, Carl Hughes, joined the company as Vice-President and began the process of changing the type of services the corporation provided. He became a minority shareholder in 1991. Sherry Hughes has served as a member of the Board of Directors and Secretary/Treasurer to the Corporation for many years. In addition, she is employed by the Corporation as its Human Resources Director. In 1992, for past services rendered and no additional consideration, Horace Hughes transferred 450 shares, or 54 percent of the outstanding shares, to Sherry Hughes, his wife. Fifty-Four percent of the Petitioner/applicant is presently owned by Sherry Hughes, a woman. The Petitioner's current business is the repair and sales of computers and peripheral equipment. The majority owner, Sherry Hughes, is not a computer technician. She cannot diagnose a computer which needs repairs. The corporation hires computer technicians. Sherry Hughes does not hire technicians, as that duty has been delegated to the Service Manager, Vincent Schneider. Additionally, Schneider usually does the firing when needed. Payroll for Petitioner is done by an employee, Kathy Levann. Mrs. Hughes purchases office supplies and leaves the purchasing of technical supplies to a buyer. The company presently has three male Directors and two women Directors, including Sherry Hughes. All the Directors are authorized to sign corporate checks. For their work, Sherry Hughes is paid $5.00 hourly; Horace Hughes is paid $12-14 hourly and Carl Hughes is paid $12-15 hourly. All are stockholders. Horace Hughes, as President, signed the lease for the business location. Horace Hughes signed the affidavit for insurance on the business vehicles. Horace Hughes signed for a business loan in the financed amount of $70,302.71, both as President and Guarantor at SunTrust Bank. Horace Hughes is authorized by corporate resolution to borrow money on behalf of the corporation. Carl Hughes entered into the agreements with various computer dealers on behalf of the Petitioner. Sherry Hughes does not handle invitations to bid. Carl Hughes handles all invitations to bid, cost estimating and negotiations. Applicant has not established by competent evidence that Sherry Hughes exercises a real, substantial continuing ownership and control of the applicant corporation. Other than her salary, no evidence was introduced to establish that Sherry Hughes receives income commensurate with the percentage of her ownership in the company. Sherry Hughes failed to establish that she shares in all of the risk through her role in decision-making, negotiations, and execution of documents as either an individual or officer of the corporation.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application for Minority Business Certification filed by Expedient Services, Inc. on April 7, 1995, be DENIED. DONE and ENTERED this 12th day of June, 1996, in Tallahassee, Florida. DANIEL M. KILBRIDE, 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 12th day of June, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5067 The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Proposed findings of fact submitted by Petitioner. Petitioner did not submit proposed findings of fact. Proposed findings of fact submitted by Respondent. Accepted in substance: paragraphs 1-18. COPIES FURNISHED: Horace Hughes, President Expedient Services, Inc. Post Office Box 5400 Titusville, Florida 32783-5400 Joseph L. Shields General Counsel Commission on Minority Economic and Business Development 107 West Gaines Street 201 Collins Building Tallahassee, Florida 32399-2000 Veronica Anderson Executive Administrator Commission on Minority Economic and Business Development Collins Building, Suite 201 107 West Gaines Street Tallahassee, Florida 32399-2000
Findings Of Fact General Contractors & Construction Management, Inc. (Petitioner), is a Florida corporation engaged in the business of general contracting and construction (construction and renovation of commercial and residential buildings), including subcontracting, since 1985. Petitioner's President is Ms. Akram Niroomand-Rad and its Vice-President is Mr. Kamran Ghovanloo, Ms. Niroomand-Rad's husband. Petitioner is a small business concern as defined by Subsection 288.703(1), Florida Statutes. Prior to April 1990, Ms. Niroomand-Rad owned 50 percent of Petitioner's stock. In April 1990, she acquired 100 percent of the stock and became the Petitioner's sole owner. Ms. Niroomand-Rad is a minority person as defined by Subsection 288.703(3), Florida Statutes. According to Petitioner's articles of incorporation and by-laws, its corporate business is conducted by a majority of the board of directors. Petitioner has two directors, Ms. Niroomand-Rad and Mr. Ghovanloo, 1/ and as such, the minority owner does not control the board of directors. Also, according to Petitioner's by-laws, Petitioner's President manages its business and affairs subject to the direction of the board of directors. Petitioner's licensed contractor is Mr. Ghovanloo who is a certified general contractor. Ms. Niroomand-Rad is not a licensed contractor although she is taking course work to become a licensed contractor. Mr. Ghovanloo is Petitioner's qualifier, and, as its qualifier, brings his expertise and license to the business. Further, as qualifier, he is also responsible for the finances of Petitioner and for pulling the necessary permits in order for Petitioner to perform the contractual work. Additionally, Mr. Ghovanloo performs Petitioner's estimating, handles quality inspection of job sites, assists in the evaluation and preparation of bids, and attends some of the pre-bid meetings on projects. Ms. Niroomand-Rad has been involved in soliciting bids, reviewing bids and estimates, negotiating contracts, visiting clients, responding to correspondence, overseeing financial activities, hiring and firing, and visiting job sites. However, Ms. Niroomand-Rad relies heavily upon Mr. Ghovanloo's technical expertise, expert opinions, and judgment and upon others for guidance and for handling the technical aspects of the business. Further, Ms. Niroomand-Rad relies heavily on Mr. Ghovanloo, and others to a lesser degree, regarding the purchasing of goods, equipment, or inventory, and services needed for the day-to-day operation of the business, including evaluating and retaining subcontractors. Mr. Ghovanloo is authorized to sign checks without restriction. Ms. Niroomand-Rad was reared in a construction environment. Also, she has completed a construction management course offered by the City of Miami and is a licensed real estate broker. Petitioner has been certified as an MBE by Dade County and the Dade County School Board.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Minority Economic and Business Development enter a final order denying General Contractors & Construction Management, Inc., certification as a Minority Business Enterprise. DONE AND ENTERED this 24th day of July, 1995, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 July, 1995.
The Issue The issue for determination is whether Respondent should certify Petitioner as a minority business enterprise ("MBE").
Findings Of Fact Respondent is the governmental agency responsible for granting or denying applications for MBE certification in accordance with Section 288.703(1), Florida Statutes,1 and Florida Administrative Code Rules 60A-2.001 and 60A-2.005.2 Petitioner is an applicant for MBE certification. Petitioner is engaged in the business of installing traffic signal devices. Petitioner is a closely held Florida corporation that was organized in 1990. Minority Ownership All of Petitioner's stock is owned by Ms. Burita Allen. Ms. Allen is a minority person within the meaning of Section 288.703(3) (the "minority owner" or "minority shareholder"). The minority shareholder is majority shareholder. She owns at least 51 percent of Petitioner's stock within the meaning of Rule 60A-2.005(2)1. Financial Risk And Control The minority ownership of Petitioner is real, substantial, and continuing within the meaning of Rule 60A- 2.005(3)(d)3. The minority owner provided all of the $100,000 used for Petitioner's initial capitalization on April 4, 1995.3 Petitioner was inactive from 1990 until it began its first job on May 11, 1995. Petitioner now has completed or started a total of eight jobs. The minority owner has knowledge and control of Petitioner's financial affairs. She has sole control of the day to day operations of the company and its profit and loss. She contributed all of its initial capital, writes the checks, and contracts with employees, subcontractors, and customers. Operating And Management Control The minority owner has operating control of Petitioner and is technically qualified to manage and operate Petitioner's business. She has generated significant growth for Petitioner. Operating revenues have increased from zero to $170,736.28 in less than two years. Petitioner has another $90,268.08 in work performed but not billed. Petitioner's clients include the Florida Department of Transportation, the United States Navy, and Nassau County, Florida. Petitioner has also performed jobs for private companies such as Georgia Pacific, Target, and Haynes & Sons Inc. Affiliation Petitioner's minority owner gained the knowledge and experience needed to operate Petitioner successfully as an employee of J.W. Buckholz Traffic Engineering, Inc. ("Buckholz Engineering"). Buckholz Engineering is a closely held Florida corporation owned by five individuals. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. She owns 52 percent of the stock of Buckholz Engineering. Petitioner shares office space, equipment, and staff with Buckholz Engineering. Petitioner's minority owner allocates approximately 40 percent of the 70 to 102 hours she works each week to Petitioner. The remainder of her work week is allocated to Buckholz Engineering. The affiliation between Petitioner, its minority owner, and Buckholz Engineering does not impair the minority owner's ownership and control of Petitioner. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. Petitioner's minority owner has an unimpeded legal right to share Petitioner's income, earnings, and other benefits in proportion to her stock ownership within the meaning of Rule 60A-2.005(2)(b). Neither the exercise of discretion by Petitioner's minority owner, her financial risk, nor her equity position in Petitioner is subject to any formal or informal restrictions within the meaning of Rule 60A-2.005(3)(a). There are no provisions in any purchase agreement, employment agreement, voting rights agreement, or the corporate by-laws that vary or usurp the minority owner's discretion. Buckholz Engineering assisted Petitioner in obtaining greater bonding limits than Petitioner could obtain on its own. Petitioner was capable of obtaining bonding on its own but increased the amount of bonding by adding Buckholz Engineering as co-applicant. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. Buckholz Engineering is a professional service corporation that provides design services by licensed professional engineers. Buckholz Engineering utilizes professional liability insurance. It is not a construction company and has no need to be bonded. Petitioner derived its name in part to benefit from the goodwill of Buckholz Engineering. However, the two companies are not engaged in the same business. Buckholz Engineering is a professional engineering firm that performs professional services including the design of traffic control systems. Petitioner installs traffic signal devices. Unlike Buckholz Engineering, Petitioner does not need a professional engineering license to conduct its business. Electrical License Petitioner does not offer a trade or profession to the state which requires a trade or professional license within the meaning Section 287.0943(1)(3)1.4 Unlike the professional engineers in Buckholz Engineering, no state statute requires the minority owner to be licensed in a particular trade or profession in order for Petitioner to install traffic signals. Petitioner's minority owner satisfies all certification requirements that are generally required for Petitioner to conduct its business. The minority owner is certified by the International Municipal Signal Association ("IMSA") and by the American Traffic and Safety Association ("ATSA"). In a particular job, Petitioner's customer may require that a licensed electrician pull the necessary permits for the job or that a licensed electrician approve the job. This customer requirement comprises only a de minimis portion of Petitioner's business. Of the eight jobs contracted by Petitioner, only one customer has required the permit to be pulled by a licensed electrician. Petitioner can satisfy these occasional customer requirements by subcontracting with a licensed electrician at a cost that is a small portion of the job cost.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order and therein GRANT Petitioner's application for MBE certification. RECOMMENDED this 18th day of February, 1997, in Tallahassee, Florida. DANIEL MANRY 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 18th day of February, 1997.
Findings Of Fact Upon consideration of the testimony received at the hearing, the following relevant facts are found: Power Line Engineering, Inc. was originally formed in 1983 by Roger Sloan, who initially held 100 percent of the stock. The business of the corporation is the installation of overhead power lines and street lights. In August of 1986, approximately 52 percent of the corporation's stock was transferred to LaVerne Sloan, Roger Sloan's wife, and 10 percent was transferred to Scott Austin. Roger Sloan retained the remainder of the shares. The testimony was unclear as to how many directors the corporation has, and no documentary evidence was offered at the hearing. Roger Sloan is the president, Scott Austin is the vice-president and LaVerne Sloan is the secretary/treasurer of the corporation. It appears that these three individuals are also the sole directors of the petitioner. Roger Sloan is the chief estimator and does most of the public relations work for the company. He solves problems in the field and does cost estimating for bids. Most of the equipment owned by the company was purchased by him prior to August of 1986. Scott Austin is in charge of the field work and he consults with Roger Sloan if there are problems in the field. He also helps with the bid work. It is his view that he and Mr. and Mrs. Sloan are partners in running the company. LaVerne Sloan is the general manager in the office. While the company uses an accountant for the book work, she signs all the checks, except during emergencies, and all purchases are approved by her. She also makes decisions as to whether union or nonunion employees are utilized on jobs. However, if there are problems with employees in the field, Mr. Austin and Mr. Sloan make the decision regarding their retention. LaVerne Sloan assembles the bid packages and does some public relations work for the company. She is a full-time employee for the petitioner. The evidence was unclear as to the amount of time, if any, that LaVerne Sloan was employed by the petitioner prior to August of 1986. Roger Sloan, LaVerne Sloan and Scott Austin talk together each day and discuss what has happened that day with respect to the business. While the application for certification as a Minority Business Enterprise was not offered into evidence, LaVerne Sloan stated that she applied in September of 1986.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the petitioner's application for certification as a Minority Business Enterprise be DENIED. Respectfully submitted and entered this 13th day of August, 1987, in Tallahassee, Florida. DIANE D. TREMOR, 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 13th day of August, 1987. COPIES FURNISHED: LaVerne Sloan Power Line Engineering, Inc. Post Office Box 671 Plant City, Florida 33566 Sandra E. Allen Department of General Services Office of General Counsel Room 452, Larson Building Tallahassee, Florida 32399-0955 Ronald W. Thomas Executive Director Department of General Services Room 133, Larson Building Tallahassee, Florida 32399-0950
Findings Of Fact Vedder and Associates Incorporated's (VAI's) application for minority certification dated January 22, 1992 was received by the Department of Management Services on January 27, 1992. Petitioner's application for minority certification was denied by the Department of Management Services in a letter dated May 22, 1992. VAI was established in October of 1991 and offers as its principal service "land surveying." VAI is licensed to do business in Florida and is fifty-one percent (51 percent) owned by Kathleen Vedder, a Caucasian female, and forty-nine percent (49 percent) owned by John Vedder her husband, a Caucasian male. Kathleen A. Vedder and John F. Vedder were the sole directors of the corporation at the time of certification denial, with Kathleen A. Vedder serving as president/secretary and John F. Vedder serving as vice-president/treasurer. On September 16, 1992, after the denial of certification, John Vedder resigned as a director of VAI. No business reason was offered for this decision. Kathleen Vedder, the minority owner, is presently the sole director of the corporation. As sole director, she represents a majority of the board of directors. She continues to serve as president and secretary. John Vedder continues to serve as treasurer. It is not clear if he still serves as vice- president. (See Findings of Fact 5-11 and 28-29). At all times material, Kathleen Vedder has owned 51 percent of the stock through a greater monetary investment than John Vedder, who owns 49 percent of the stock. At all times material, Kathleen Vedder has served as the principal officers, president and secretary. At all times material, Kathleen Vedder has made up at least 50 percent of the board of directors. Since September 16, 1992, she has made up 100 percent of the board of directors. At all times material, John Vedder has served as a principal officer, treasurer. Up until September 16, 1992, John Vedder made up 50 percent of the board of directors. Thereafter, he did not serve on the board. At all times material, Article VII of VAI's Articles of Incorporation have permitted an increase or decrease in the board of directors as permitted by the bylaws, but never less than one director. At all times material, Item III of VAI's bylaws have provided that corporate officers hold office at the "satisfaction" of the board of directors; that the president shall be the chief executive officer; and that subject to any specific assignment of duties by the board of directors, the vice-president, the secretary, and the treasurer act under the direction of the president. VAI was formed by the purchase of assets from the Perry C. McGriff Company, which had employed Kathleen and John Vedder. Kathleen Vedder began her career with the surveying firm of Keith & Schnars, P.A., in Fort Lauderdale in 1976. She was the administrative assistant to the President. In 1981 she and John Vedder moved to Gainesville to manage the Perry C. McGriff Company, a wholly owned subsidiary of Keith & Schnars. John Vedder handled the surveying aspects of the business, and Kathleen Vedder handled most of the management of the company other than the surveying portion, including purchasing, handling business accounts and financial affairs, client relations, insurance, and correspondence. This continued until 1991 when the assets of the Perry C. McGriff Company were sold to VAI. Kathleen Vedder now performs for VAI basically the same functions as she did for the predecessor company with certain additions. John Vedder served as the director of survey for the Perry C. McGriff Company which employed both Mr. and Mrs. Vedder prior to the formation of VAI. In his position as director of survey at Perry C. McGriff Company, he was responsible for all contracts and negotiations and coordination of personnel to ensure timely completion of contracts. His background by education, training, and experience is extensive in the technical applications to perform land surveying. The business of VAI essentially began on December 6, 1991. Prior to that date, husband and wife had discussed the purchase of the McGriff assets. Kathleen Vedder discussed the purchase of the business with her husband and informed him that she wanted to run the business. He accepted this relationship and her role as "boss" because he hated working in the office and wanted nothing to do with running the business. Kathleen Vedder contacted the old Perry C. McGriff clients and facilitated the transition from the old company to the new company. The Perry C. McGriff Company was purchased for $100,000 with a $15,000 down payment and the remainder to be paid over 7 years. Funds for the original purchase price of the assets were obtained by cashing Kathleen Vedder's 401K plan, two IRA's, and by loans against her life insurance policies for an investment of $57,185.62 by Kathleen Vedder and $25,682.25 of marital assets held with her husband, John Vedder. John Vedder participated in the negotiations to buy Perry C. McGriff Company. John Vedder provided input and expertise regarding the assets of Perry C. McGriff Company which were to be purchased, whether survey equipment was acceptable, and the vehicles to be purchased. John Vedder discussed and consulted with Kathleen Vedder regarding the financial aspects of the purchase of Perry C. McGriff Company. He discussed with her the starting salaries of employees to be hired/transferred to VAI, and the leasing and location of business premises for VAI and purchase of furniture. Kathleen Vedder established the corporate policies, the accounting procedures, the job costing, and the standard management practices of the new company. Kathleen Vedder, as VAI president, made all of the final decisions regarding implementation of the new business such as renting the office, moving the assets purchased from the old Perry C. McGriff Company, establishing lines of insurance, determining the manner and location of the survey records purchased, and hiring the staff. Kathleen Vedder and John Vedder made it clear to all of the employees from the beginning of the company that she was the "boss". The takeover of Perry C. McGriff Company by VAI was explained to former employees during a field visit by John Vedder. His explanation was made at Kathleen Vedder's direction and took place while these employees were already in the field, during a time of transition, in a spirit of damage control when Kathleen and John Vedder were concerned that rumors might affect the new company's ability to retain good personnel from the old company and over concern that some might have trouble working for a woman. Kathleen Vedder hired six employees initially from the old Perry C. McGriff Company. Kathleen Vedder set the initial pay scale for the employees of the company and maintained the documentation relevant to this function. The additional four persons hired by the company since it began were Robert Henderson, Tom Crossman, George Gruner, and Doug Zimmerman, each of whom were hired by Kathleen Vedder who interviewed them, who set their wages and benefits, and who described their job functions to them as new employees. VAI has a business license posted on its premises issued by the City of Gainesville, Florida, in the name of John Vedder, authorizing the performance of land survey services. VAI currently employs eight permanent employees and the qualifying agent is John F. Vedder, who serves as a principal officer, treasurer. He holds a land survey license issued by the State of Florida, Department of Professional Regulation, Land Surveying Board. In order to be qualified as a licensed land surveying corporation, a principal officer must be a licensed land surveyor. The participation of John Vedder or another duly-licensed land surveyor is required to satisfy the requirements of Chapter 472 F.S., for a qualifying agent. Under that statute, the qualifying agent must have a license as a land surveyor and hold a position as a principal officer in VAI. If John Vedder were to lose his professional land surveyor license, there would be three licensed land surveyors remaining with the company, and it would be possible for VAI to continue if one of these were designated as a principal officer. Kathleen Vedder holds no license or certification other than a notary public. In terms of any special needs or requests, such as medical needs, all employees are required to report to Kathleen Vedder. Kathleen Vedder earns $14.50 per hour. The survey party chiefs, including John Vedder, now earn $13.00 per hour. These amounts are commensurate with Kathleen Vedder's percentage of VAI ownership of fifty-one percent (51 percent). The evidence is conflicting as to whether another crew chief earned more than John Vedder in one year due to a higher rate of pay or more hours worked in that period. No one in the company draws any bonus, commission or has any particular insurance coverage as a benefit of employment. The company has not posted any dividends or distributed any proceeds from business investments or engaged in any profit sharing. The corporation has, as a risk of doing business, the liability connected with its $85,000.00 promissory note to Keith & Schnars, P.A. It also has the risk associated with premises liability, with motor vehicle liability, with general errors and omissions liability, and with professional liability. Kathleen Vedder has procured insurance to cover all these risks. These premiums are paid by the corporation. There has been no additional ownership interest acquired by anyone since the inception of the corporation. There are no third party agreements. There are no bonding applications. The company has not at any time entered into an agreement, option, scheme, or created any rights of conversion which, when exercised, would result in less than fifty-one percent (51 percent) minority ownership and minority control of the business by Kathleen Vedder. Kathleen Vedder controls the purchase of the goods, equipment, business inventory and services needed in the day-to-day-operation of the business. Kathleen Vedder expressly controls the investments, loans to and from stockholders, bonding, payment of general business loans, and payments and establishment of lines of credit. The corporate business account of VAI contains the signatures of John Vedder and Kathleen Vedder on the bank signature card. Only one signature is required to transact business. Of the 823 checks issued by VAI since it began, John Vedder signed one at Kathleen Vedder's direction when it was not possible for her to be in two places at once, and Kathleen Vedder signed 822 checks. Although he is treasurer, John Vedder professed to know nothing of VAI's finances and deferred to Kathleen Vedder in all matters of financing from the very beginning. Nonetheless, the corporate documents list the treasurer as the chief financial officer in ultimate charge of all funds. Kathleen Vedder has knowledge of only the minimum technical standards required for a survey. In her certification interviews, Mrs. Vedder did not know how to establish true north or how a line survey would establish true north. She lacks basic survey knowledge and could not identify Polaris as the north star or state the standard measurement (length of a chain) for a surveyor. Identifying Polaris is not particularly important in modern surveying. Kathleen Vedder is capable of doing the necessary paper search and telephone call regarding underground utilities for surveyors in the field. Kathleen Vedder has extensive experience in the production of a surveying product and is able to manage the surveyors who perform the technical aspects of the business. Upon acquisition of the assets and formation of the new company, Kathleen Vedder began directing the two field crews newly employed by VAI to the various projects and work which she had scheduled. This direction has primarily been in the timing and coordination of projects and is commensurate with some of the work previously done by John Vedder when he was director of survey for the predecessor company, Perry C. McGriff Company. (See Finding of Fact 14). Technical problems involving a particular site do not arise very often so as to require a discussion among the land surveyors of the company but if they do, the professional land surveyors jointly or singly make all technical surveying decisions. Surveys must be signed by a registered land surveyor pursuant to Chapter 472 F.S. John Vedder provides Kathleen Vedder technical advice, coordinates field crews' work, makes decisions pertaining to technical work which is not within Kathleen Vedder's abilities, consults with Kathleen Vedder once a week concerning the general financial picture of VAI, and does some job estimating and quality control. Kathleen Vedder rarely visits work sites in the field. Employees in the field report to John Vedder whenever they have a problem and report to Kathleen Vedder if the problem is in the nature of project coordination. John Vedder is responsible for training and working with employees and providing technical training required for the performance of land surveys. He does computer aided drafting (CAD) and provides technical assistance to the CAD operator, which Kathleen Vedder cannot do, however she works it afterward on her computer. Kathleen Vedder does not work in the field, and of the two, John Vedder performs the majority of work in the field. Kathleen Vedder defers to John Vedder to handle technical matters because he has more experience. Party Chief John Vedder supervises his crew. Party Chief Louis Crosier supervises his crew. Kathleen Vedder supervises Louis Crosier and John Vedder and a third crew chief when one is used, usually Robert Henderson. Kathleen Vedder established a fee schedule for the company and a method of formulating the estimates and bids which the company would propose to prospective clients. John Vedder is not knowledgeable in this area. When a job comes in, the prospective client initially contacts Kathleen Vedder. If a client calls requesting a survey, Kathleen Vedder does the research and provides the estimate or bid without further input from any surveyor if the survey requested is a standard routine survey. If the job is complex, Kathleen Vedder requires man hour estimates from two land surveyors, one of whom is often John Vedder. She takes these estimates and applies previous histories, experience, and adjustments in order to prepare the final bid or survey estimate. Once she has received the man-hour estimate, Kathleen Vedder reviews it, compares it with previous surveys, applies a job costs analysis to it, applies any other known costs to it, and presents the final estimate or bid. There is a difference between compiling the work hours necessary for the estimate and compiling the estimate itself. Kathleen Vedder has the ultimate responsibility for finalizing complex estimates and bids. Kathleen Vedder makes presentations as a part of her function which involve technical presentations of the survey services rendered by VAI. In the fourteen month period since the business began, Kathleen Vedder has given approximately eight presentations of a technical nature to prospective clients, including the Florida Department of Transportation (DOT). Kathleen Vedder is capable of complying with DOT bid specifications to submit material on a DOS disc. DOT has qualified VAI under its Disadvantaged Business Enterprise program. Petitioner's witnesses skilled in land surveying consistently testified that without Kathleen Vedder's skilled contributions to the firm, technical land surveying could be accomplished but the firm would not show a profit. Rule 13A-2.005(3)(d)(4), requires minority owners to have managerial, technical capability, knowledge, training, education and experience to make decisions regarding the business. In interpreting this rule, the Respondent agency relies on Barton S. Amey v. Department of General Services, DOAH Case No. 86-3954, (RO 3/5/87; FO 4/21/87), aff'd Fla. DCA February 11, 1988, No. 87-235. The agency has no further refinement by way of rule or policy which applies specifically to the land surveying industry. It does not require the minority owner to have a land surveying license per se. It does not require the minority business owner to have an extensive knowledge of surveying.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered certifying Vedder Associates, Incorporated as a Minority Business Enterprise. RECOMMENDED this 7th day of June, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of June, 1993. APPENDIX TO RECOMMENDED ORDER 92-3763 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: The so-called "stipulated facts" is accepted, as stipulated, but not as to the inserted conclusion of law/argument. 1-19 Accepted except to the degree it is unnecessary, subordinate, or cumulative. 20-21 Accepted, but not dispositive, subordinate. Rejected as a conclusion of law or argument. Accepted, but not dispositive, subordinate. Rejected as a conclusion of law or argument. 25-33 Accepted as modified to more closely conform to the record, and to eliminate mere leal argument, conclusions of law, and unnecessary, subordinate, or cumulative material. Also testimony was to 823 checks. Rejected as stated as not supported by the greater weight of the credible evidence. Accepted, except to the degree it is unnecessary, subordinate or cumulative. Rejected as out of context, a conclusion of law, or argument. 37-46 Accepted, as modified, except to the degree it is unnecessary, subordinate, or cumulative. 47-48 Rejected as out of context, a conclusion of law, or argument. 49-53 Covered to the degree necessary in Finding of Fact 65, otherwise irrelevant and immaterial to a de novo proceeding under Section 120.57(1) F.S. 54-56 Accepted except to the degree unnecessary, subordinate, or cumulative. 57 Rejected as out of context, a conclusion of law, or argument. 58-60 Accepted except to the degree unnecessary, subordinate, or cumulative. Petitioner's "factual conclusions" are rejected as proposed conclusions of law not proposed findings of fact. Respondent's PFOF: 1-10 Accepted except to the degree unnecessary or cumulative. 11 Rejected as subordinate. 12-14 Rejected as stated as argument. Covered in Findings of Fact 27-30, absent argument, conclusions of law, and erroneous statements not supported by the greater weight of the credible competent evidence. Rejected as argument. Mostly accepted except to the degree it is unnecessary, subordinate or cumulative. However, the job estimating as stated is not supported by the record nor the argument of "day-to-day business." 17-19 Accepted as modified to conform to the record evidence, and except to the degree it is unnecessary, subordinate, or cumulative. 20 Rejected as argument. 21-22 Accepted but incomplete, irrelevant and immaterial in a de novo Section 120.57(1) F.S. proceeding. Also, the footnote is rejected as mere argument. 23-24 Rejected as argument. Accepted, but not complete or dispositive; unnecessary and cumulative. Accepted to the degree stated except to the degree unnecessary, subordinate, or cumulative. She also did more. Rejected as partially not supported by the record; other parts are rejected as unnecessary, subordinate, or cumulative. Accepted except to the degree unnecessary, subordinate, or cumulative or not supported by the record. Accepted in part and rejected in part upon the greater weight of the credible, competent record evidence. Rejected as argument. Rejected as stated as not supported by the greater weight of the credible, competent record evidence, also unnecessary, subordinate, or cumulative. Accepted except to the degree it is unnecessary, subordinate, or cumulative. Rejected as argument 34-35 Accepted in part. Remainder rejected as stated as not supported by the greater weight of the credible, competent record evidence, and as a conclusion of law contrary to Mid State Industries, Inc. v. Department of General Services, DOAH Case No. 92-2110 (RO 9/14/92). 36 Rejected as argument. 37-38 Accepted in part, and rejected in part because not proven as stated. Rejected as argument. Rejected as stated because out of context or not supported as stated by the greater weight of the credible, competent record evidence. Rejected as argument. Accepted, except to the degree unnecessary, subordinate or cumulative. Rejected as argument. 44-46 Rejected as subordinate. 47,(No #48),49 Accepted except to the degree unnecessary, subordinate, or cumulative. 50-55 Rejected as subordinate or unnecessary or as conclusions of law or argument. COPIES FURNISHED: Peter C. K. Enwall, Esquire Post Office Box 23879 Gainesville, FL 32602 Terry A. Stepp, Esquire Department of Management Services Koger Executive Center Suite 309, Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950 William H. Lindner, Secretary Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Susan B. Kirkland, Esquire Department of Management Services Koger Executive Center Suite 309, Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950
Findings Of Fact Mill-It Corporation is a Florida Corporation licensed to do business in the State of Florida. Ben Guzman, a stipulated member of a recognized minority group, is the President of the Petitioner Corporation. Additionally, Mr. Guzman owns 26 percent of the stock. The other stockholders are James E. Quinn (24 percent), Myrna Bortell (26 percent), and Edward T. Quinn, Jr., (24 percent). Ms. Bortell is also a member of a qualified minority. The Petitioner Corporation was formed in August, 1983. The first three months of its existence was spent obtaining the necessary licenses, permits, loans, and equipment. Mr. Guzman was primarily responsible for these activities. During this time period, Mr. Guzman was required to return to Chicago, his former home, to undergo surgery on his arm. During his absence, he delegated minimal authority to Edward T. Quinn, Jr., in order that the Corporation could continue to operate. During Mr. Guzman's absence, he maintained control of the Corporation through frequent telephonic communications with Mr. Quinn. Just before Mr. Guzman was required to go to Chicago for the surgery, Mill-It Corporation had taken delivery of its milling machine. The machine had been in the possession of Mill-It Corporation for only one week and Mr. Guzman had not had an opportunity to run the machine prior to his departure. Mr. Guzman relied on Mr. Quinn because they had known each other for approximately 25 years and Mr. Guzman was aware of Mr. Quinn's knowledge of the road building business and the necessary steps to establish Mill-It Corporation as a viable business in Florida. Mr. Guzman returned to Florida for the onsite inspection by an agent of the Respondent, but he was still under a doctor's care and was on various types of medication for pain. Mr. Guzman returned to Chicago for additional medical treatment following the onsite inspection, and he did not return to Florida until January, 1984. In January, 1984, Mr. Guzman began to completely learn the operation and mechanics of running and maintaining the milling machine and he assumed the complete responsibility for overseeing all the projects of the milling operation. Mr. Guzman originally relied upon the expertise of Edward T. Quinn, Jr. in the field of bidding, but Mr. Guzman always supplied the necessary figures and data for the bid. Mr. Guzman hired Edward T. Quinn, Jr., as his sales representative and estimator. After the brief learning period, however, Mr. Guzman began to totally supervise the bidding procedures and began directing Mr. Quinn to attend various bid lettings with the figures supplied by Mr. Guzman. At the time of the onsite inspection, Mill-It Corporation had completed only its organizational phase of becoming a business entity. In fact the milling machine was such a recent acquisition that during the onsite inspection Mr. Guzman had not had time to learn the technical aspects of the operation and mechanics of the machine. After the onsite inspection, Mr. Guzman assumed responsibility for operation of the milling machine and supervising the overall performance of the job. Additionally, James Quinn also operated the machine. Mr. Guzman has the authority to hire and fire employees, sign checks, correspond on behalf of the corporation, enter into contracts, and purchase equipment on behalf of the corporation. Cancelled payroll and vendor's checks, correspondence to and from the company, bonding contracts, insurance contracts, and corporate documents were all signed by Mr. Guzman. All major business decisions are made by Mr. Guzman after considering the advise of the other officers and stockholders. All day-to-day decisions are made by Mr. Guzman.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Mill-It Corporation's application for certification as a Minority Business Enterprise be GRANTED. DONE and ENTERED this 7th day of June, 1984, in Tallahassee, Florida. DIANE K. KIESLING 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 7th day of June, 1984. COPIES FURNISHED: RUSSELL H. CULLEN, JR., ESQUIRE P. O. BOX 1114 ALTAMONTE SPRINGS, FLORIDA 32701 VERNON L. WHITTIER, JR., ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301 PAUL A. PAPPAS, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301
The Issue The basic issue in this case is whether the Petitioner is entitled to certification as a minority business enterprise. The primary area of dispute relates to whether Katherine A. Pernini, who owns 51 per cent of the stock in the Petitioner corporation, actually controls the management and daily operations of the Petitioner corporation. At the final hearing the Petitioner presented the testimony of several witnesses and also offered several exhibits which were received in evidence. The Respondent did not call any additional witnesses, but did offer several exhibits which were received in evidence. Subsequent to the hearing a transcript of the proceedings at hearing was filed with the Hearing Officer, and thereafter both parties filed timely proposed recommended orders containing proposed findings of fact and conclusions of law. The proposed recommended orders have been carefully considered during the preparation of this recommended order and specific rulings on all findings of fact proposed by the parties are contained in the attached Appendix.
Findings Of Fact Based on the stipulations of the parties and on the evidence received at the final hearing, I make the following findings of fact. The Petitioner, R. R. Pernini, Inc., is a Florida corporation, having been incorporated under the laws of Florida in 1985. The principal place of business of R. R. Pernini, Inc., is 605 Northwest 53rd Avenue, Gainesville, Florida. The corporation engages in the business of commercial electrical and plumbing contracting. The corporation has fewer than 25 permanent full-time employees. The only stockholders of the Petitioner corporation are Katherine A. Pernini and Richard R. Pernini, her husband. Katherine A. Pernini is a minority person and is the owner of 51 per cent of the stock of R. R. Pernini, Inc. Richard R. Pernini is a non-minority person and he owns the remaining 49 per cent of the stock of the Petitioner corporation. Richard R. Pernini was the sole incorporator of R. R. Pernini, Inc., when it was initially incorporated. It was decided he would be the sole incorporator because, as explained by Katherine A. Pernini, ". . . if we wanted to get any work, and we wanted to have any credibility, then a man had-to run the construction business," and, as explained by Richard R. Pernini, ". . . we both felt that it would be to our advantage as a business to maintain the male image. " Richard R. Pernini is the president of R. R. Pernini, Inc. Katherine A. Pernini is the vice-president, secretary, and treasurer of R. R. Pernini, Inc. Richard R. Pernini and Katherine A. Pernini were the initial board of Directors of R. R. Pernini, Inc. They are currently the only directors of the Petitioner corporation and are the only directors the Petitioner corporation has ever had. Prior to the incorporation of R. R. Pernini, Inc., in 1985, the two owners were engaged in the same business, operating as a partnership. The business was started in 1972. Prior to incorporation of the business, Katherine A. Pernini worked with Richard R. Pernini in various capacities performing duties such as drafting, sales, bookkeeping and accounting. Richard R. Pernini's duties consisted primarily of building contracting and supervision of building. Katherine A. Pernini also performed field work in the electrical and plumbing areas for approximately three and a half years prior to the incorporation of the Petitioner corporation. Since incorporation, all of the electrical and plumbing work has been performed by persons other than Katherine A. Pernini and Richard R. Pernini. R. R. Pernini, Inc., presently employs five licensed electricians and three licensed plumbers who perform the actual electrical and plumbing work for the corporation. Richard R. Pernini is licensed by the State of Florida as a general contractor, as an electrical contractor, and as a plumbing contractor. Section 489.119(2), Florida Statutes (1987), requires that a corporation that engages in the business of contracting must apply for a license through a "qualifying agent." Richard P. Pernini is the qualifying agent for R. R. Pernini, Inc. He obtained these licenses at the urging of Katherine A. Pernini. Katherine A. Pernini is not licensed by the State of Florida as a general contractor, as an electrical contractor, or as a plumbing contractor, nor does she hold journeyman or master certificates as either a plumber or an electrician. She does, however, have practical experience in performing the work of both a plumber and an electrician under the supervision of Richard R. Pernini prior to the incorporation of the business. Katherine A. Pernini participates in the interviewing of prospective employees. However, the evidence is insufficient to establish that she controls the hiring and firing of employees or that she has the authority to hire and fire employees. The Petitioner corporation has two estimators, an electrical estimator and a plumbing estimator, who prepare bids for the Petitioner along with either Richard R. Pernini or Katherine A. Pernini. Richard A. Pernini oversees and supervises the work of the corporation's two estimators. Katherine A. Pernini and Richard R. Pernini both personally guarantee many, if not all, of the loans made to the Petitioner corporation. Both Katherine A. Pernini and Richard R. Pernini are authorized to sign checks for the Petitioner corporation. Both Katherine A. Pernini and Richard R. Pernini supervise the corporation's purchasing agent. Katherine A. Pernini is a general manager, primarily responsible for administrative activities of the Petitioner corporation's business activities. She performs and supervises administrative and office duties regarding the Petitioner corporation's business activities. Richard R. Pernini is a general manager of building construction for the Petitioner corporation. Katherine A. Pernini does not supervise the actual electrical or plumbing work of the Petitioner corporation. She does not independently control the corporation's contracting activities, nor does she independently control the financial affairs of the corporation. Article IV, Section 3, of the Bylaws of R. R. Pernini, Inc., provides, among other specified duties and powers, that the president shall execute bonds, mortgages, and other contracts on behalf of the corporation. That same provision of the bylaws also provides that the president shall be the chief executive officer of the corporation, shall have the general powers and duties of supervision and management usually vested in the office of president of a corporation, and shall have general supervision, direction, and control of the business of the corporation. Article IV, Section 4, of the Bylaws of R. R. Pernini, Inc., provides that during the absence or disability of the president, the vice-president, if one be elected, or if there are more than one, the executive vice-president, shall have all the powers and functions of the president. It further provides that each vice-president shall perform such other duties as the board shall prescribe. Article VI of the Articles of Incorporation of R. R. Pernini, Inc. provides that initially the corporation would have two directors, but further provides that the directors may be increased or decreased from time to time by vote of the stock- holders, but in no case shall the number of directors be less than two. Article III, Section 1, of the Bylaws of R. R. Pernini, Inc., provides that the business of the corporation shall be managed and its corporate powers exercised by a hoard of two directors. And Article III, Section 6, of those bylaws provides that a majority of the directors shall constitute a quorum for the transaction of business.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's application for minority business certification. DONE AND ENTERED this 2nd day of September, 1988, at Tallahassee, Florida. MICHAEL M. PARRISH, 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 2nd day of September, 1988. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-1371 The following are my specific rulings on all of the proposed findings of fact submitted by all parties. Findings proposed by Petitioner: Paragraph 1: Accepted. Paragraph 2: Rejected as irrelevant. Paragraph 3: All but last sentence accepted in substance. Last sentence rejected as contrary to the greater weight of the evidence. Paragraph 4: Accepted. Paragraph 5: Accepted in part and rejected in part; rejected portion is contrary to the greater weight of the evidence. Paragraph 6: First sentence accepted in substance. Second sentence rejected as not fully supported by persuasive competent substantial evidence. Paragraph 7: Accepted in substance with a number of unnecessary details omitted. Paragraphs 8, 9, 10, and 11: Accepted. Paragraph 12: Rejected as subordinate and unnecessary details. Paragraph 13: Accepted in substance with some details omitted a subordinate or unnecessary. Paragraphs 14 and 15: Accepted. Paragraph 16: Accepted in part and rejected in part; rejected portions are contrary to the greater weight of the evidence in some instances and irrelevant or subordinate details in others. Paragraph 17: Accepted in substance, with some additional findings. Findings proposed by Respondent: All of the findings proposed by the Respondent are accepted in substance, with some additional findings in the interest of clarity, except as specifically noted below: Paragraphs 29 and 30: Rejected as constituting subordinate and unnecessary details. COPIES FURNISHED: Raymond M. Ivey, Esquire Rakusin and Ivey, P.A. 703 North Main Street, Suite A Gainesville, Florida 32601 Deborah S. Rose, Esquire General Counsel's Office Department of General Services 452 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0955 Ronald W. Thomas, Executive Director Department of General Services Room 133, Larson Building Tallahassee, Florida 32399-0955
Findings Of Fact Based on the stipulations and agreements of the parties, the exhibits received in evidence, and the testimony of the witnesses at the hearing, I make the following findings of fact: The costs and attorney fees sought by BTST in the amount of $2,344, are adequately substantiated and constitute reasonable costs and attorney fees for the representation of BTST in DOAH Case No. 88-3885. DOAH Case No. 88-3885 resulted in a Final Order granting recertification as a minority business enterprise to BTST. Therefore, BTST was a prevailing party in that case. The underlying agency action that resulted in DOAH Case No. 88-3885, was a Department letter of July 18, 1988, to BTST which notified BTST that its application for recertification was denied, stated the reasons for denial, and advised BTST of its right to request a hearing if it was dissatisfied with the Department's decision. The Department's letter of July 18, 1988, "initiated" the subsequent formal administrative proceedings. Business Telephone systems of Tallahassee, Inc., is a "small business party." The Department of General Services has the responsibility to certify and recertify minority business enterprises. The Department has developed a procedure which is followed by the Minority Business Enterprise Assistance Office in processing applications for certification and recertification. Upon receipt of an application, the entire business file is assigned by the supervisor of certification activities to an eligibility examiner, frequently referred to as a "reviewer." The reviewer conducts a desk audit and review, searches the Division of Corporation records, and by letter requests any items omitted from the application. The applicant then has 30 days in which to respond by sending the requested information to the Minority Business Enterprise Assistant Office. After receipt of requested additional information, the reviewer schedules an on-site interview with applicants whose eligibility for MBE status cannot be determined immediately. After the on-site review, the reviewer listens to the tape recording of the interview and completes the on- site review questionnaire form. At this point, all documents and on-site interview responses are reviewed by the eligibility examiner for the purpose of preparing a recommendation to grant or deny certification or recertification. The supervisor of certification activities reviews the recommendation and all materials related to the business for the purpose of either concurring or questioning the recommendation. The file is then referred to the coordinator of the Minority Business Enterprise Assistance Office for independent review. If the recommendation is for denial of MBE certification or recertification, the file is forwarded to the Office of the General Counsel for review of all documents, information, recommendations and findings by a staff attorney. By memorandum to the Minority Business Enterprise Assistance Office, the staff attorney will either concur in the recommendation or raise legal questions. In the case of concurrence, a letter of denial is prepared. Legal questions about the potential denial are generally resolved by discussion with all involved staff persons. BTST, a company principally engaged in sales, installation, and service of telephone systems and equipment, filed an application for recertification as a Minority Business Enterprise on April 13, 1988. The application was assigned to Stephen Johnson, an eligibility examiner of the Minority Business Enterprise Assistance Office. The initial recommendation to deny recertification of Petitioner was made by Stephen Johnson. Stephen Johnson received training by the Department in minority business enterprise certification and recertification review during his tenure at DGS. As the first step in the review process, Stephen Johnson, the eligibility examiner, performed a desk audit of the application, noting changes in ownership, management, daily operations, and domicile of the company. He also conducted a document search of State of Florida corporate records which revealed different corporate ownership than that which BTST stated in the application and different composition of the Board of Directors of three non- minority members and two minority members. Upon request of the eligibility examiner, additional documents were submitted by BTST. These documents named Mr. William Nuce as president and treasurer of BTST, listed a Board of Directors composed of one minority person and three non-minority persons, and included a BTST lease agreement signed by William Nuce as President of BTST and attested by Nancy Nuce, Secretary of BTST. An amendment to the lease dated May 4, 1988, was signed in the same manner. Upon review by the eligibility examiner and his supervisor of the information submitted by BTST, changes in the business raised the question of whether a minority person controlled the management and operations of the business. The application for recertification revealed that two of the three women owners of BTST "no longer performed any duties for the company." The minority owner who left the company possessed significant technical knowledge about the telephone systems business which in previous certifications of BTST had been a dispositive factor in the determination. William Nuce had not been working full-time for the company until January 1988. Until that time, the company had been run by three women, one being an out-of-state resident. With the concurrence of his supervisor, the eligibility examiner scheduled an on-site visit to BTST for the purpose of acquiring a new description of how the business operated and to establish whether the applicant owner was eligible for MBE certification. The on-site interview was tape recorded During the on-site review, Mrs. Nuce, the minority owner of BTST, made statements which were considered significant by DGS minority certification reviewers. Mrs. Nuce explained decision-making by her husband William Nuce and herself at BTST as "It is really a partnership." In response to the question, "Is anyone considered a supervisory person?", Mrs. Nuce stated, "Well, I guess Bill would be." Then she was asked, "Is he the installer supervisor?" and Nancy Nuce replied, "Yeah, I would say so." Continuing the on-site interview, in response to the question, "[W]ho employed Don?" Mrs. Nuce replied, "We both went to Jacksonville to where Don lived and interviewed Don in Jacksonville and we discussed it on the way back and when we got back Bill called him and offered him the job." She also said that William Nuce had invested "almost twice" as much as she had in the business. The occupational license issued by the City of Tallahassee was in the name of William Nuce. Concerning a truck which was the only large piece of equipment of the business, Mrs. Nuce said, "Bill signed the guarantee on it." Mrs. Nuce had never received a salary from BTST. During the on-site review, Mrs. Nuce confirmed the composition of the Board of Directors as having four members, one minority person and three non-minority persons. After this on-site interview, the eligibility examiner came back to his office, listened to the interview tapes, and reviewed his notes. He came to the conclusion that the minority owner of BTST did not have the capability, knowledge, and experience required to make the critical decisions in that the company heavily relied on Mr. Nuce's 20 years of experience in the installation and servicing of telephone systems, rather than Mrs. Nuce's limited prior experience and training in the bookkeeping area. The eligibility examiner further relied, as a basis for denial, on the fact that the Board of Directors at the time of the decision to deny recertification were Nancy' Nuce; William Nuce, a non-minority person; Peggy Ingram, a non-Florida resident (and therefore a non-minority person); and Don Ingram, a non-minority person. The corporate bylaws indicated that a majority of the directors legally controlled the management of the company. Since Mrs. Nuce was the only director who was a minority, the eligibility examiner concluded that, pursuant to the statutes, Mrs. Nuce did not have the legal authority to control the corporate Board of Directors and, therefore, the business of thee corporation.. After consultation and review of the BTST file, Stephen Johnson and Marsha Nims, the Labor Employment and Training Manager of the Minority Business Enterprise Assistance Office, reached the tentative decision to deny the recertification application of BTST. At the time of the decision to deny recertification of BTST, Ms. Nims was the Labor Employment and Training Manager in the Minority Business Enterprise Assistance Office and the supervisor of Stephen Johnson, the eligibility examiner. She had been with DGS since March of 1986. Her duties included supervision of the professional staff who conducted eligibility reviews of applications, assistance in eligibility determinations, advising the coordinator, supervision of staff involved in retention of records, preparation of documents, and preparation of the monthly MBE Directory. In evaluating the application for recertification of BTST, Marsha Nims reviewed the application and supporting documentation, the Desk Review and Audit by Stephen Johnson, the additional documents obtained by Stephen Johnson from Business Telephone Systems of Tallahassee, Inc., the Bylaws of BTST, the memo from Stephen Johnson to Marsha Nims, the reviewer's case management log, the on- site review questionnaire form and comments completed by Stephen Johnson, the denial recommendation drafted by Stephen Johnson, and the file of BTST on which previous certification had been based. Marsha Nims relied upon the information about BTST complied by the eligibility examiner. She had no reason to doubt the credibility of Stephen Johnson, the eligibility examiner. At the time of the decision to deny recertification to BTST, Marsha Nims was familiar with the Florida Statutes which governed certification and recertification of minority business enterprises as well as Chapter 13-8, Florida Administrative Code, which the Department promulgated to implement the statutes. Marsha Nims was familiar with the relevant Final Orders of the Department of General Services and the related Recommended Orders of the Division of Administrative Hearings. She concluded that the corporate structure analysis and the determination of lack of control over the management and daily business operations was consistent with the legal conclusions established in prior Department Final Orders denying certification. Following review by Ms. Nims, the entire BTST file described in Finding of Fact Number 15 was referred to Carolyn Wilson-Newton, the Minority Business Enterprise Assistance Officer Coordinator. Mrs. Wilson-Newton was the person charged with making the final decision to grant or deny certification and recertification to applicants. At the time of the decision to deny recertification, Mrs. Wilson- Newton was familiar with the Florida Statutes which govern certification and recertification of minority business enterprises, Chapter 13-8, Florida Administrative Code, and the relevant Final Orders of the Department of General Services and Recommended Orders of the Division of Administrative Hearings. Carolyn Wilson-Newton concurred with the recommendations of Stephen Johnson and Marsha Nims to deny recertification as set forth in the denial recommendation prepared by Stephen Johnson, and made the decision to deny minority business enterprise recertification. The proposed denial was approved by Sandra Allen, an attorney in the General Counsel's Office with previous experience in review of minority business enterprise decisions. The denial letter was mailed to the applicant on July 18, 1988. Although BTST prevailed in Case No. 88-3885, it is important to note that some of the evidence presented at the formal hearing in that case was substantially different from the information furnished to DGS prior to the July 18, 1988, denial letter. Some of the differences resulted from new developments (such as eleventh-hour stock purchases and changes in the corporate provisions regarding directors). Other differences resulted from more careful and precise descriptions than had been furnished earlier. Four competent, experienced MBE certification reviewers for DGS concluded that the information in the possession of the Department at the time of the decision to deny recertification of BTST was sufficient to warrant denial of recertification of the Petitioner. The denial of recertification had a reasonable basis in fact at the time of the decision. This is especially true when note is taken of the fact that BTST's corporate provisions regarding directors at the time of the decision were essentially the same as corporate provisions which had been the basis for denial of certification in other Department final orders.
The Issue The issue for determination at final hearing was whether Petitioner should be certified as a minority business enterprise pursuant to Section 287.09451, Florida Statutes, and Chapter 38A- 20, Florida Administrative Code, by the Office of the Supplier Diversity of the Department of Management Services.
Findings Of Fact Petitioner is a Florida corporation seeking certification in the field of "Sales and Installation of Network and Telephone Cabling" under the minority status of female-owned company. Fifty-one percent of Petitioner's stock is owned by Cynthia Martin, a white female, and 49 percent is owned by her husband, a white male. Until shortly before submitting its application, Petitioner corporation had previously operated as a sole proprietorship under the ownership of Keith Martin. The majority of the assets of Petitioner came from the previous sole proprietorship when Petitioner was formed. According to Mrs. Martin's testimony and payroll information submitted by Petitioner, Keith Martin received twice the salary of Cynthia Martin. Cynthia Martin is a full-time employee of the State of Florida. There is no evidence of employment for Keith Martin other than with Petitioner. The corporate documents in evidence reflect that since incorporation Cynthia Martin has been vice-president and secretary of the corporation, while Keith Martin has been president and treasurer. Petitioner's checks may be signed by either Keith Martin or Cynthia Martin and only one signature is required on each corporate check. Petitioner's Articles of Incorporation provide that the number of directors shall be determined in the By-Laws. The initial directors were Keith Martin and Cynthia Martin. The By- Laws provide that the corporation shall be managed by two directors, and that the number of directors may be increased only by amendment of the By-Laws. Also, a majority of the directors shall constitute a quorum for the transaction of business. This provision of the By-Laws has not been changed. At the organizational meeting of Petitioner, Keith Martin was elected president and treasurer, and Cynthia Martin was elected vice- president and secretary. No other documents were introduced into evidence reflecting any changes to the articles of incorporation or the By-Laws. The documentation submitted by Petitioner, and prepared by Cynthia Martin, consistently reflect Keith Martin as the president of the company and Cynthia Martin as vice-president. Cynthia Martin's duties include bookkeeping and performing administrative functions. Keith Martin's duties include the installation of cabling for local area networks and phone systems, picking up goods to be used on contracts, preparing daily timesheets and generating the paperwork necessary for billing clients, preparing quotations for clients, consulting with clients to determine needs, installation of phone systems and providing sales, service, and repair for clients. Cynthia Martin's duties for Petitioner are performed on her days off from her full-time employment, and on nights and weekends. The fact that Cynthia Martin owns 51 percent of the stock of Petitioner is important at stockholder meetings. At such meetings, she is entitled to one vote for each share owned, thereby allowing her to control stockholder meetings and effectively determine the directors of the company. The company is managed by the directors, while the day-to-day operations are managed by the officers.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Office of Supplier Diversity enter a final order denying Tele-Net Communications, Inc.'s, application to be a certified minority business enterprise. DONE AND ENTERED this 25th day of October, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of October, 2000. COPIES FURNISHED: O. Earl Black, Jr., Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Cynthia Martin Tele-Net Communications, Inc. Post Office Box 11784 Jacksonville, Florida 32239 Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Windell Paige, Director Office of Supplier Diversity Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950
