Findings Of Fact Respondent is the governmental agency responsible for certifying persons as minority business enterprises. Petitioner applied for certification as a minority business enterprise. Petitioner is a minority business enterprise within the meaning of Section 288.703(2), Florida Statutes. 1/ Petitioner is a small business concern, domiciled in Florida, and organized to engage in commercial transactions. Petitioner is a Florida corporation wholly owned by Ms. Sandra A. Pichney, vice president, and by Mr. D.B. Young, president. Petitioner engages in the roof consulting business. Ms. Pichney owns 51 percent of Petitioner's outstanding stock. Ms. Pichney is a member of a minority group for purposes of Chapter 288. The remaining 49 percent of Petitioner's outstanding stock is owned by Mr. Young. Mr. Young is a licensed architect. No professional license is required for Petitioner to engage in the business of roof consulting. Petitioner has all of the occupational licenses required to engage in the commercial transactions required to conduct its business. Ms. Pichney has 16 years experience in the roof consulting business. Ms. Pichney controls the daily management and operations of Petitioner's business. Ms. Pichney: manages and operates the office; and is responsible for payroll, accounts receivable, and general financial matters. Ms. Pichney conducts field visits, estimates jobs, reviews projects, and rewrites specifications. Ms. Pichney is the person who signs checks for Petitioner in the ordinary course of Petitioner's trade or business. Mr. Young is authorized to sign checks but only signs checks in emergencies. Ms. Pichney hires and fires personnel. Ms. Pichney consults with Mr. Young, but the ultimate responsibility is born by Ms. Pichney. Ms. Pichney reviews specifications and design work for specific projects and makes amendments where appropriate. Original specifications and design work are prepared by Mr. Young and other personnel. Mr. Young, and other personnel, can be terminated by Ms. Pichney without cause. Mr. Young can be terminated as an employee at any time by Ms. Pichney, without cause. Mr. Young has no employment agreement or shareholder agreement with the company. The board of directors are comprised of Ms. Pichney and Mr. Young. Any director may be dismissed by a majority of the shareholders. As the majority shareholder, Ms. Pichney can terminate Mr. Young, as a director, without cause. Ms. Pichney and Mr. Young receive salaries and monthly draws. Although salaries are equal, monthly draws and dividends are distributed in proportion to the stock ownership of each shareholder. Ms. Pichney has exclusive use of the company car. Ms. Pichney's stock ownership has increased over the last two years because Mr. Young has been unable to attend to the demands of Petitioner's business due to Mr. Young's divorce. Ms. Pichney has properly reported the increase in stock ownership, for purposes of the federal income tax, and has, and will, pay the requisite income tax on her increased stock ownership. Ms. Pichney and Mr. Young consult with each other in making significant decisions in the ordinary course of Petitioner's business. However, the ultimate responsibility for those decisions is born by Ms. Pichney.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order granting Petitioner's application for certification as a minority business enterprise. RECOMMENDED this 22nd day of July, 1995, in Tallahassee, Florida. DANIEL MANRY 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 22nd day of July, 1995.
The Issue This issue in this case is whether the Petitioner's application for certification as a Minority Business Enterprise should be approved.
Findings Of Fact On or about November 17, 1994, Northwest Engineering, Inc., (Petitioner) submitted an application for certification as a Minority Business Enterprise (MBE) to the Florida Commission on Minority Economic & Business Development (Respondent). The application was signed by the Petitioner's president, Gerald Silva. According to the application, the Petitioner is of Portuguese heritage. The Petitioner's mother was born in the Azores. By letter of April 5, 1995, the Respondent advised the Petitioner that it was not eligible for MBE certification. The letter stated that the Azores were not within the geographical restrictions set forth by Florida Statutes. Official notice is taken that the Azores are a group of Portuguese islands lying in the Atlantic Ocean approximately 740 miles west of southern Portugal. The Azores are not part of Mexico, South America, Central America, or the Caribbean. Accordingly, persons with origins in the Azores do not fall within the statutory definition of Hispanic Americans for purposes of certification as a Minority Business Enterprise. The evidence fails to establish that the Petitioner is entitled to certification as a Minority Business Enterprise.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Commission on Minority Economic & Business Development enter a Final Order denying the application of Northwest Engineering, Inc., for certification as a Minority Business Enterprise. DONE and ORDERED this 8th day of September, 1995, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 8th day of September, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-2056 To comply with the requirements of Section 120.59(2), Florida Statutes, the following constitute rulings on proposed findings of facts submitted by the parties. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3,5. Rejected, immaterial. COPIES FURNISHED: Crandall Jones, Executive Administrator Collins Bldg., Suite 201 107 West Gaines St. Tallahassee, FL 32399-2005 Gerald Silva 8409 Sunstate Street Tampa, Florida 33634 Joseph L. Shields, Esquire 107 West Gaines Street, Suite 201 Tallahassee, Florida 32399-2005
Findings Of Fact Wanda Forbess is an American woman. She is the president of the Petitioner corporation, Center Office Products, Inc. She owns 5l percent of that corporation's outstanding stock. The stock is full voting stock and there are no agreements in existence or anticipated which would cause any change in the percentage of ownership of Wanda Forbess, nor any change in the voting power of her stock. The Petitioner corporation and Wanda Forbess has no affiliation or relationship with any other business and Wanda Forbess is not an employee of any other business. The net worth of the Petitioner as of the date of hearing is less than one million dollars. It has also been stipulated that the Petitioner, that is, Wanda Forbess, has been performing a useful business function and operating the Petitioner's business since 1981. Wanda Forbess is the mother of Thomas J. Forbess and Raymond D. Forbess and the wife of Thomas D. Forbess. In 1981 her children were almost out of school, with her youngest child being about to enter college. She decided she wanted to start her own business. She had been active as a homemaker, a volunteer and active member of civic organizations. She decided to enter the office supply retail business in 1981 because of the low initial investment required due to the presence of two wholesale suppliers in Jacksonville who could supply goods for inventory on a rapid basis. She also chose to enter this business because there were no particular special skills, training or licenses required and because she knew something about it, since her husband worked for twenty-five years in one phase of the business, that of sales of paper products. This decision being made, Ms. Forbess approached her sons, Thomas J. Forbess and Raymond D. Forbess, to persuade them to enter into the business with her. They agreed to join her in the venture and she set about to form the Petitioner corporation. She desired to incorporate in order to limit the liability which she and her sons would be exposed to in operating the business. She retained an attorney to incorporate the business, but paid no particular attention herself concerning how the shares were to be issued and held or as to the manner of appointment of the members of the board of the directors. She simply followed her attorney's instructions who advised her to do the "standard type" of incorporation. The corporation estab- lished by her attorney provided, in its by-laws, that there would be three directors. Wanda, Ray and Thomas Forbess were each named as directors since they were the only three individuals involved with the Petitioner at its formation. The attorney also issued stock certificates for 200 shares each to the three directors. Wanda Forbess was appointed as president and chief executive officer of the Petitioner corporation. This was because the formation of the business and the company was Mrs. Forbess' idea and she had provided more than five times the amount of capital of each of the other two owners, her sons. In fact, she had provided $11,000 of her own money as initial capital and her two sons provided $2,000 each. Notwithstanding their equal ownership status and the equal vote each of the three has on the Board of Directors, as well as the requirement in the bylaws that a majority vote of the Board is controlling, Mrs. Forbess has been in control of the Petitioner corporation's operations from the day of its inception. Her sons do not question that control and established the fact of it in their own testimony at the hearing. The vice- president is Raymond D. Forbess and the secretary treasurer is Thomas J. Forbess. The bylaws provide that the property and business of the corporation is managed by its Board of Directors and that a majority of those directors shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of the majority of the directors present at any meeting at which there is a quorum shall be deemed to be the act of the board. It is also provided in the bylaws that the holders of the majority of shares of stock may remove a director at any time, with or without cause, at a duly called meeting. The president of the Petitioner is empowered to call such a meeting at any time. Any vacancy occurring as a result of removal of any director by the majority shareholders may be filled by the affirmative vote of the majority of remaining directors, even if less than a quorum shall be present. Directors are not required to be shareholders. Therefore, as a holder of 51 percent of the shares of the Petitioner, Wanda Forbess has control over the board of directors by the power to elect or remove any director by voting shares accordingly at a meeting which she may call at any time, with or without notice, as the president of the Petitioner corporation. Replacement directors could then be appointed by her vote alone and could be any person she elects, including, for example, an employee over who she has authority and who she may direct to vote a certain way. In any event, from 1981 through 1987, the Petitioner grew from a company with three employees to a company of 18 employees and more than $280,000 gross monthly sales. During this time, the Petitioner enjoyed some State of Florida contract business. Some time in 1987, Mrs. Forbess became aware that she would soon be unable to continue doing business with the state because her business was not a certified minority business enterprise. In fact, however, the Petitioner had been, from its inception, an American woman-controlled corporation in actual practice. On June 1, 1987, Mrs. Forbess directed her sons to convey sufficient stock to her so that she could become a 51 percent shareholder of the Petitioner corporation. This transfer was done to comply with section 288.703(2), Florida Statutes, concerning the definition of "minority business enterprise." It was also done to formally reflect what had been the case, as a practical matter, since the inception of the corporation: that Wanda Forbess controlled the Petitioner corporation. The company by that time had significant value reflected in the value of its stock, but neither son required payment for his stock which he conveyed to Mrs. Forbess. They considered that she was the controlling owner of the corporation from its inception anyway due to the fact that the business was her idea and that she had contributed by far the most significant amount of initial capital. Mrs. Forbess spends a majority of her time conducting the financial affairs of the Petitioner. She is more familiar and more involved with the financial affairs of the Petitioner corporation then any other owner, officer, director or employee. In that capacity, she sets all the salaries, including the salaries of her sons and her husband. All salaries are set completely at the discretion of Mrs. Forbess and always have been. She pays her two sons and her husband a higher salary than she pays herself because their financial requirements are greater, but the salient point here is that she is the manager with the discretion to set their salaries. In 1985, after the Petitioner had been operating successfully for four years, Thomas J. Forbess, the husband of Mrs. Forbess, retired from his position with Jim Walter Paper Company after 25 years of employment with that firm. Prior to that time he had no involvement with the formation, operation or management of the Petitioner corporation. He has never had an ownership interest in the Petitioner. He is an employee of the corporation and assists in some of the operations, including preparation and submittal of bids for some of the work the corporation undertakes. Mrs. Forbess controls the purchase of goods, equipment and business inventory and services used and needed in the day- to-day operation of the business. She frequently purchases significant items used in the business, such as computers, trucks, and postage machines, as well as inventory. In addition to this, the major purchases made by the business by any co-owner or employee must be made only with her approval. Evidence was offered showing the lease agreements and notes evidencing that corporate debts related to large purchases were signed by all corporate officers as a basis for an attempt to show that decisions are made by "consensus" or are joint decisions. However, the fact that lenders and lessors require all corporate officers to sign documents evidencing leases or debts does not mean each corporate officer had an equal part to play in making the decision involved. The record is replete with evidence and testimony from employees and the other owners that Wanda Forbess has a veto power on all decisions concerning purchases, loans, leases of real property and every other major business decision the Petitioner confronts. Further, the fact that discussions are had amongst the owners and officers of the business prior to making major decisions is really a sound business practice and does not mean that one of the owners, directors or officers does not have final authority to make a binding decision. The person who has final authority for such major decisions is Wanda Forbess. Mrs. Forbess also has the authority to hire and dismiss employees, a requirement of subsection 3(b) of Rule 13-8.005(3), Florida Administrative Code. She herself has interviewed employees from time to time and also has final authority to approve all hiring and discharge decisions or to veto them in those instances where she has delegated that authority. She controls which professional services are obtained by the Petitioner corporation, as shown by her decision to discontinue the services of the former company accountant. Indeed, she has delegated some of the hiring processes, given the fact that the Petitioner corporation has grown to be a business with 18 employees. That however, is a normal, acceptable business decision. The delegation of the advertising of a position, the interviewing of prospective employees and the conveying of offers of employment to prospective employees in no way indicates that the delegator does not have the final authority to hire or dismiss the employees. Wanda Forbess also controls all financial affairs of the Petitioner corporation. She thus has unsurpassed knowledge in relation to the other owners, officers and directors, of the financial structure and operations of the business. In fact, the bulk of her time spent working for the Petitioner, corporation since its inception, has been in the field of financial matters. She makes the decisions concerning debt to be incurred by the Petitioner, and approves any major expenditure, without which approval expenditures may not be made. It is significant that Mrs. Forbess has veto authority over the extension of credit to customers and establishment of credit accounts by customers. One instance was described by Jeannine Silcox and Raymond Forbess concerning Raymond Forbess' attempt to open an account to service a particular customer on a credit basis. Mrs. Forbess opposed that procedure and ordered that the account not be opened. The account was not opened. This demonstrates effectively that not only does Mrs. Forbess control the financial affairs of the company, but also wields ultimate authority amongst the co-owners of the Petitioner. Additionally, it is undisputed that Mrs. Forbess writes the vast majority of checks on the Petitioner's two checking accounts, in terms of the requirement, at subsection 3(D) of the above-cited rule, that she control the accounts of the business. She estimates that she writes 97 percent of the checks and there is no evidence to refute that estimate. Thomas J. and Raymond B. Forbess are each authorized signatories on the accounts, but their names are simply there as a matter of convenience and the only instances in which they sign checks are when there is an immediate need for the check to be paid and Mrs. Forbess is unavailable to sign herself. There is no question that Mrs. Forbess is the ultimate authority controlling the Petitioner's bank accounts. In order to comply with subsection 3(e) of the above cited rule, the minority owner must demonstrate capability, knowledge and experience in making decisions concerning the business involved. At the time of the business's inception, neither Mrs. Forbess nor her co-owner sons had the capability, knowledge or experience required to make many of the decisions concerning the retail office supply retail business. Over seven years of operation however, Mrs. Forbess has actively supervised and managed the business of the Petitioner and has developed to a high degree those attributes, in making decisions involved in operating that business successfully. She has delegated certain aspects of the company's business to the supervision of her sons. Thomas J. Forbess, for example, is involved in developing additional retail operations. Raymond B. Forbess is more actively involved in the delivery of merchandise to customers and the monitoring of customer accounts, as well as maintaining and accounting for inventory. Nonetheless, neither of the other owners effects any significant decisions without consulting Mrs. Forbess first and gaining her approval or veto. Through this supervision and control over the past seven years, as well as her current direct involvement in managing the Petitioner's affairs, Mrs. Forbess has developed the capability, knowledge and experience required to make decisions regarding the office supply business involved herein. Her operational and managerial capabilities are demonstrated by the fact that under her leadership the business started with three employees and has grown to an 18 employee business with gross sales in the neighborhood of $280,000 per month in just over seven years. Finally, Mrs. Forbess has displayed independence and initiative in conducting all major operations and details of the Petitioner since its inception, (as required by subsection (f) of the above rule). Although she has done little bid negotiating directly, she has the ability to do so and has some experience in that activity. Further, bid proposals are submitted to her for approval and are not made without her knowledge and assent. Further, she herself negotiates leases and other contracts on behalf of the Petitioner.
The Issue Should Petitioner be certified as a minority business enterprise (MBE) by the Minority Business Advocacy and Assistance Office of the Department of Labor and Employment Security?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Petitioner is a sole proprietor seeking certification as an MBE under the minority status of Native American (Indian). Also in his application seeking MBE certification, Petitioner claimed the category of Hispanic American but did not attempt to prove this category at the hearing. Petitioner is seeking certification as an MBE qualified to perform building maintenance, grounds maintenance, painting, cleaning, landscaping, and clearing and grubbing. Petitioner’s great-grandmother was a full-blooded Cherokee Indian (Native American) who lived her life as an Indian. However, Petitioner presented no evidence that his great-grandmother was a member of any federally recognized Indian Tribe, as that term is defined by Rule 38A-20.001(17), Florida Administrative Code. Petitioner was at one time a member of the American Cherokee Confederacy of Georgia. However, Petitioner resigned from the American Cherokee Confederacy of Georgia and no longer claims any ties to that group. The American Cherokee Confederacy of Georgia is not a federally recognized Indian Tribe as that term is defined by Rule 38A-20.001(17), Florida Administrative Code. Petitioner is not a member of any federally recognized Indian Tribe as that term is defined by Rule 38A-20.001(17), Florida Administrative Code. Respondent stipulated at the hearing that its denial was based solely on the fact that Petitioner had failed to present sufficient evidence to prove that he was a minority person as that term is defined in Section 288.703(3)(d), Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that Petitioner's application for Minority Business Enterprise status be denied. DONE AND ENTERED this 20th of June, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of June, 2000. COPIES FURNISHED: Calvin W. "Bill" Wood 10577 Schaefer Lane Lake Wales, Florida 33853 Joseph L. Shields, Esquire Department of Labor and Employment Security The Hartman Building, Suite 307 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189 Mary Hooks, Secretary Department of Labor and Employment Security The Hartman Building, Suite 303 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Sherri Wilkes-Cape, General Counsel Department of Labor and Employment Security The Hartman Building, Suite 307 2012 Capital Circle, Southeast Tallahassee, Florida
Findings Of Fact At all times pertinent to the matters concerned herein, either the Department of Management Services, or its successor, the Commission of Minority Economic and Business Development, was the state agency in Florida responsible for certification of Minority Business Enterprises in this state. Johnston was started by Mrs. Cloversettle's grandfather and operated by him and his three sons, including Conrad Johnston, Mrs. Cloversettle's father, for many years. As a child and young woman, Mrs. Cloversettle worked at the place of business in differing capacities and learned something of the business operation. At some point in time, she married Mr. Cloversettle who was and has been an employee of the firm, and over the years, he operated much of the equipment used in the business. Mrs. Cloversettle is also a licensed cosmetologist, and owns and operates a beauty salon through a corporation she owns with her husband. He does much of the handyman work at that shop and she works, part time, as a cosmetologist. Most of her time, however, is occupied with the affairs of Johnston. There are currently 60 shares of common stock issued in Johnston Lithograph & Engraving, Inc.. Seven and three quarters shares are owned by Mr. and Mrs. Cloversettle. Three and three-quarters shares came from her father, and she acquired four additional shares at the time she bought the business. Three and three quarters shares are owned by Mrs. Cloversettle's aunt, Ms. Sims, who lives in North Carolina; fifteen shares are held in the name of her father, Conrad Johnston; and eighteen and three-quarters shares each are held by his two brothers, Bert and Don. Ms. Sims takes no income from Johnston, does not participate in the management of the company, and plays no role in it other than as share owner. At one point, Mr. Cloversettle owned a one-half interest in the four shares his wife got at the time of purchase, but she considered herself the owner in that they were titled jointly only "for simplicity", just as the house and their bank accounts are also owned jointly. On April 26, 1994, after the initial denial of Petitioner's application for MBE certification, the joint ownership was terminated and the shares registered in Ms. Cloversettle's name only without any exchange of consideration therefor. Much the same pertains to the company bank accounts. Before the denial, both George and Brenda Cloversettle could sign company checks. Since then, however, George Cloversettle has been removed as an authorized signatory on company accounts. The shares owned by Ms. Cloversettle's father and his brothers, Donald, Bertram, are presently held as "security" for the payment of the purchase of Johnston by Mrs. Cloversettle. The shares are not voted and are held in escrow under an escrow agreement. A stock pledge agreement, dated February 7, 1986, to which the Cloversettles were not parties, produced after the hearing, pertains only to the corporation and Conrad and Margaret Johnston. Its terms, somewhat confusing, can best be interpreted as providing that upon default in payment, the stock held in escrow would revert to the original holder as titled on the face of the certificate or, at the option of the original owner, be sold. At the time of denial, the shares owned by Donald and Bertram had not been properly endorsed into the escrow but this was done prior to formal hearing when, by affidavit dated August 1, 1994, the escrow agent indicated both Donald's and Bertram's shares were subject to the 1986 escrow agreement. The 1986 agreement prohibits the issuance of any new or additional shares of stock until the purchase obligation is paid off. This provision may have been violated when the four additional shares were issued to the Cloversettles in 1990. The shares owned by both Bertram and Donald were the subject of a stock sale agreement for $93,000.00 for each block of eighteen and three-quarters shares. Both the date of the agreement and the signatures of the parties are not evidenced on the documents, however, but it appears Bertram deposited fifteen of his shares with the Tampa 1st National Bank in 1975, some fifteen years prior to the Cloversettle's 1990 purchase of the company. Conrad Johnston entered into a purchase agreement in 1985 with the original owners which did not include the Cloversettles. His fifteen shares were signed into escrow on February 6, 1986. These discrepancies in capital ownership were not clarified at hearing. Mr. and Mrs. Cloversettle entered into the agreement to buy the company from the Johnstons in 1990 for a purchase price of $300,000. Though in an earlier deposition, Mrs. Cloversettle indicated only about $3,000 of the purchase price had been paid, which money allegedly came from the proceeds of an insurance policy loan and a mortgage on their home, at hearing, she testified $30,000 had been paid, all of which came from the mortgage on their home. No payments on the obligation are currently being made by the Cloversettles because each of the original owners executed an agreement deferring payment until the company is financially able to make regular payments. The minutes of a special shareholder's meeting held on July 8, 1994, reflect the above-noted Johnston brothers' certificates were surrendered for cancellation in July, 1990. However, the minutes also note that the sale and redemption of the certificates was subject to an escrow pursuant to the February, 1986 escrow agreement which, in November, 1993, was affixed to an amended agreement naming Edward Hill as Escrow Agent, which referred to the Johnston brothers not as stockholders but as secured creditors. Because of the complex manipulation of the shares and their status, it is impossible to determine the relative ownership of the parties. Petitioner has not established with any degree of clarity that Brenda Cloversettle, though a minority owner, has actual and real ownership of at least 51 percent of the company equity free of any residuary or reversionary interest which could divest her of her 51 percent ownership. The shares covered by the escrow agreement, while classified by Petitioners as treasury stock, cannot legitimately be so considered since it is still in the name of the original owners and does not become property of the company until the obligation incurred for its purchase is satisfied. While, as noted previously, no additional payments have been made on the purchase price, the company maintains a life insurance policy on each Johnston which Ms. Cloversettle indicates is to be used to pay off the outstanding debt upon their respective deaths. She admits however, there is no document requiring the insurance proceeds to be used that way, and no independent evidence of the policies' existence was forthcoming. The primary business of Johnston is commercial printing/graphics. Ms. Cloversettle is the sole director of the corporation whose bylaws, as of July 8, 1994, require all directors to be minority persons. She has asserted, and it was not disproved by evidence to the contrary, that she has the primary role in decision-making concerning the company's business transactions and she is the sole person required to execute any transaction related documents. She has final authority as to all corporate decisions and is not required to consult with anyone else when corporate decisions are being made, though she may do so. Johnston does not keep inventory on hand but purchases supplies necessary on a job driven basis. According to Ms. Cloversettle, she controls the purchase of inventory and determines the need and appropriateness of equipment rentals or purchases. She seems to be familiar with and to understand the use of the products utilized by the company in its daily operations. She has a fundamental knowledge of the equipment used in the company's operation and, though she may not be fully qualified to operate every piece, can operate some of it. Though she periodically consults with her husband regarding business operations, she is not required to do so and has the responsibility for the hiring and management of employees. She alleges she sets employment policies, wages, benefits, and employments conditions at the company without the need to coordinate her actions with anyone. However, in a phone interview with the Department's representative, in February, 1994, Ms. Cloversettle had difficulty correctly answering many of the technical questions she was asked at hearing. Mr. Cloversettle, who has worked with the firm for approximately twenty years, is its key employee in computer graphics and serves as production manager and vice-president. Without doubt, along with Mr. Ezell, the firm's printer, he is primarily responsible for the daily plant operations, supervising the other employees, planning daily work flow, and insuring the vendors who supply the needed raw materials do so in a timely fashion. Ms. Cloversettle is college trained and, as noted previously, a licensed cosmetologist. She has done bookkeeping for the firm and acted as office manager, but has no formal training in printing, or graphics, other than years of observation as she grew up with the operation when it was operated by her father. Her primary hands-on experience is in book bindery and shop cleaning but she can run some of the smaller, less exotic equipment. She is not familiar with all the terms and duties involved in the operation of this business and could not accomplish them all. She acknowledges she spends most of her time in the office. She claims to be solely responsible for the financial affairs of the company and is the only one currently authorized to sign company checks. This situation, as has been noted, is of but recent origin, however. Nonetheless, Mr. Cloversettle continues to remain subject to equal debt responsibility with Ms. Cloversettle because of his prior co-signing of risk documents relative to loans taken by the company prior to the application, denial and hearing. Ms. Cloversettle's testimony regarding her method of evaluating the company's ability to perform potential jobs creates the impression that she is aware of the company's limitations and its abilities. She does not run the cameras or the presses and she need not do so. She does not solicit business but she hires a salesperson to do so and has the authority and capability to evaluate and accept or reject the work brought in. In the last two quarters of 1993, according to company payroll records, Mr. Cloversettle was paid approximately $6,426.00 while Ms. Cloversettle was paid only $2,650.00. However, after the application was denied, the ratio was changed dramatically to where she now earns $180.00 per week, and he, only $52.95.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered denying Johnston Lithograph & Engraving, Inc.'s request for certification as a minority business enterprise. RECOMMENDED this 15th day of September, 1994, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 15th day of September, 1994. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: & 2. Accepted and incorporated herein. 3. Accepted as to the shares of Ms. Cloversettle and Ms. Sims. However, this does not indicate acceptance of the proposition that there are no other shareholders, or that the transfer of shares from Mr. Cloversettle to his wife was bona fide. 4. Accepted and incorporated herein. 5. Accepted and incorporated herein. 6. Accepted. However, as noted in the body of the Recommended Order, it is impossible to clearly define the actual status of the brothers' and father's retained shares or whether they have the potential to dilute Ms. Cloversettle's shares. 7. Accepted and incorporated herein. 8. Not proven. 9. Not proven. 10. - 12. Accepted, but based entirely on unsupported testimony of Ms. Cloversettle. 13. & 14. Accepted and incorporated herein. 15. - 18. Accepted, but based entirely on unsupported testimony of Ms. Cloversettle. 19. & 20. Accepted and incorporated herein. 21. Accepted as a restatement of testimony. 22. & 23. Accepted. 24. Accepted as a restatement of testimony. 25. Not an appropriate Finding of Fact but a comment on the evidence. 26. & 27. Accepted and incorporated herein. FOR THE RESPONDENT: First four sentences accepted and incorporated herein. Balance accepted as a comment on the evidence. Accepted. Not a proper Finding of Fact but more a comment on the state of the evidence. Accepted. Accepted but more as a comment on the state of the evidence. - 12. Accepted and incorporated more briefly herein. More a comment on the evidence and a Conclusion of Law than a Finding of Fact. Accepted and incorporated herein. First two sentences accepted and incorporated herein. Balance more a comment on the meaning and effect of the basic fact. & 17. Accepted and incorporated herein. First three sentences accepted and incorporated herein. Balance comment on the evidence. - 22. Accepted and incorporated herein. 23. & 25. This is a restatement of testimony by both sides. 26. & 27. Accepted and incorporated herein. COPIES FURNISHED: Frederick T. Reeves, Esquire Langford, Hill, Trybus & Whalen, P.A. Post Office Box 3277 Tampa, Florida 33601-3277 Wayne H. Mitchell, Esquire Commission on Minority Economic and Business Development Knight Building, Suite 201 2737 Centerview Drive Tallahassee, Florida 32399-0950 John Thomas Interim Executive Director Commission on Minority Economic and Business Development Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact The Company, Al Raska Contractors, Inc., located at 503 South MacDill Avenue, Tampa, Florida, is a contractor which specializes in installing highway guardrails, rip rap, slope pavement, and signs. Between 1970 and 1980, it was owned by Al Raska and operated as a sole proprietorship. In February, 1980, it was incorporated by Al Raska, Jack Williams, and Dan Fisher, with Al Raska as president. (Testimony of Raska, R-1.) The Company began to experience financial difficulties. Mr. Raska concluded that it needed additional capital and new leadership. He realized that he "was not the one to carry the leadership of it. . . ." (Tr. 39.) Mr. Raska looked to Eugenio Ramos for help. (Testimony of Raska.) They reached an agreement. As a result, Eugenio Ramos -- an Hispanic residing in Texas -- became president and majority (51 percent) owner of the Company in September, 1980. In exchange, Mr. Ramos contributed $25,000 to the Company and established an additional $25,000 letter of credit. (The Company used the $25,000, in cash, to purchase equipment and defray operating expenses.) Mr. Raska became vice-president: . . . I stepped aside [to] do what I could do best, work in the field rather than run [the Company]. . . (Tr. 39.) Jack Williams remained as secretary-treasurer of the Company. (Testimony of Raska, Ramos, Williams.) II. Since September, 1980, Eugenio Ramos, 506 Lake Park, Waxahachie, Texas, has possessed the power to direct the management and policies of the Company, including the power to make day-to-day as well as major business decisions. In practice, he delegated authority to Mr. Raska and, to a lesser extent, to Mr. Williams to supervise and carry out the day-to-day operations of the Company. Mr. Raska, as the supervisor of field operations, corks at the Company's job sites, trains employees, does drawings, develops job estimates, signs payroll, schedules jobs, and maintains close contact with prime contractors. Because of Mr. Raska's years of experience and expertise, Mr. Ramos relies heavily on his advice. Mr. Williams also supervises the various job sites and assists in preparing estimates. (Testimony of Raska, Ramos, Williams.) All major business decisions, however, are made by Mr. Ramos, ordinarily after considering the advice of Mr. Raska. While job estimates are prepared by Mr. Raska, the decision to bid on a project is made by Mr. Ramos. No written contracts are signed without Mr. Ramos' approval. Mr. Raska and Mr. Williams, who Supervise field operations, were hired by and serve at the pleasure of Mr. Ramos. No heavy equipment may be purchased without Mr. Ramos' approval. (Testimony of Ramos, Raska.) Mr. Ramos communicates with Mr. Raska and Mr. Williams frequently, despite Mr. Ramos' residence in Texas. He visits the Company seven or eight times a year to meet with his Supervisors and discuss ongoing work. He spends approximately 97 percent of his time in Texas. But he communicates by telephone with the Company office on almost a daily or weekly basis. During one month, his telephone bill was $900. (Testimony of Raska, Ramos; P-5.) The Company has, under contract, jobs worth more than two million dollars. There are three projects now under construction. Although at hearing Mr. Ramos was familiar with the projects under construction, he could not recall some of the pertinent details. (Testimony of Ramos.) Sunil B. Nath administers the Department's Minority Business Enterprise Liaison Office. Chapter 14-78 is the Department's rule governing certification of minority business enterprises. Mr. Nath interprets this rule as requiring the minority owner to carry out the day-to-day operations of a company; in his view, a minority owner cannot delegate day-to-day management and retain eligibility for Minority Business Certification. (Tr. 150.) No basis was presented for this conclusion other than the language of the rule. (Testimony of Nath.)
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Company's application for certification as a Minority Business Enterprise be granted. DONE and RECOMMENDED this 12th day of October, 1982, in Tallahassee, Leon County, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of October, 1982.
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.
Findings Of Fact Anthony Charles Fabian, a journeyman electrician, is the president of Fabian's Electrical Contracting, Inc. (FEC). Mr. Fabian owns 51 percent of the stock in FEC. FEC was incorporated in 1984 and since that time has been continuously engaged in the electrical contracting business. Although FEC shares office space with other business entities, it is an independent business operation not affiliated with any other business. In 1987, FEC applied for and received certification as a minority business enterprise (MBE). Mr. Fabian has at all times maintained he is entitled to MBE status as a Hispanic American. Mr. Fabian was born in Tampa, Florida and lived in a Hispanic neighborhood there until he was six years old. During the time he resided in Tampa, Mr. Fabian's neighbors, family, and friends used Spanish as their predominant language. The family culture was Cuban as was that of the area where the family resided. At age six Mr. Fabian moved from Tampa to Pensacola, Florida. Mr. Fabian later moved from Pensacola to Tallahassee mid-way through his sixth grade school year. School mates in Pensacola and Tallahassee called him various ethnic nicknames, all related to his Hispanic ancestry. Such names included: "Julio," "Taco," "Spic," "El Cubano," and "Cuban Wheatman." Other than an affection for Cuban food, Mr. Fabian currently has no cultural practices to tie him to his Hispanic heritage. Mr. Fabian does not speak Spanish. Mr. Fabian does not reside in a predominantly Hispanic community. Mr. Fabian does not practice the religious faith of his progenitors. Mr. Fabian does not instruct his child in any Cuban cultural practice. Mr. Fabian does not know of any Spanish cultural practice that came to him from his family. Mr. Fabian has never been refused work because of his Hispanic heritage. Mr. Fabian's mother has no Hispanic progenitors. Mr. Fabian's father, also born in Tampa, Florida, has the following ancestors: his father (Mr. Fabian's grandfather) was born in Spain, his mother (Mr. Fabian's grandmother) was born in Key West. Mr. Fabian's grandmother, Anna Rodriguez Fabian, (who Mr. Fabian spent time with in Tampa) spoke Spanish and claimed Cuban heritage as both of her parents had immigrated from there to Key West. For this reason, Mr. Fabian maintains he is a Cuban from Tampa. None of Mr. Fabian's grandparents was born in Mexico, South America, Central America, or the Caribbean. He has never claimed otherwise. Sometime after FEC obtained certification as a MBE, the Department adopted what is now codified as Rule 60A-2.001(8), Florida Administrative Code. Such rule defines "origins" as used in Section 288.703(3)(b), Florida Statutes, to mean that a Hispanic American must substantiate his cultural and geographic derivations by at least one grandparent's birth. In July, 1992, when FEC submitted its recertification affidavit, the Department notified Mr. Fabian that he had failed to establish that at least one of his grandparents was born in one of the applicable geographic locations. Accordingly, Mr. Fabian was advised his request for recertification would be denied. Approximately eleven other persons have been denied minority status because they were unable to substantiate origin by the birth of a grandparent. Of those eleven, none had been previously certified. FEC is the only formerly certified MBE which has been denied recertification because of the rule. However, when FEC was granted certification in 1987 it was not based upon the Department's agreement that Mr. Fabian met the statutory definition of a Hispanic American. Such certification was issued in settlement to the preliminary denial of certification since the word "origins," as used in the statute, had not as yet been defined by rule. Additionally, the recertification of FEC was based upon Department error and not an acceptance that Mr. Fabian met the "origins" test. Finally, in 1991, the Department cured the rule deficiencies to create parallel requirements for certification and recertification for MBE status. When FEC submitted it recertification affidavit under the current rule, the request was denied. Mr. Fabian has been aware of the Department's position regarding his requests for certification from the outset. The Department promulgated the "origins" rule in response to a number of applications for MBE status from persons with distant relations or ancestors within the minority classifications. The necessity for an "origins" rule was demonstrated since the Department needed a clear standard which staff and the public could recognize as the dividing line for who would and would not qualify as a Hispanic American, and since the purpose of the program is to provide preferences in contracting to businesses run by individuals who have been disadvantaged. The standard devised afforded a narrowly drawn, recognizable criterion. In deciding to use the grandparent test, the Department looked to outside sources. Since there was no legislative history resolving the "origins" issue, the Department sought guidance from dictionary definitions and statutory uses in other contexts. In promulgating the rule, the Department gave notice to outside sources, including groups listed in the publication Doing Business in Florida, such as the Department of Commerce, Bureau of Commerce, small business development centers, community development corporations, local minority business certification offices, and the Minority Business Advocate's office. At the public hearing conducted for the purpose of receiving input regarding the grandparent test, no one offered opposition to the "origins" definition. Mr. Fabian is not a black American as defined in Section 288.703(3)(a), Florida Statutes.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Management Services enter a final order denying Petitioner's recertification as a minority business enterprise. DONE AND RECOMMENDED this 28th day of April, 1994, in Tallahassee, Leon County, Florida. Joyous D. Parrish 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 28th day of April, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-6777 Rulings on the proposed findings of fact submitted by the Petitioner: 1. Paragraphs 1 through 7, 10, 11, 13, 14, 16, 17, 19, 20, 22 through 25, 28 through 31, 33 through 41, 43, 44, 46 through 50, 60, 64, and 70 are accepted. The first sentence in paragraph 8 is accepted. With regard to the second sentence it is accepted that the neighbors et al enjoyed Cuban food and cultural aspects but spoke Spanish. No proof was submitted that a language of "Cuban" was spoken by the community. The last sentence of paragraph 12 is rejected as irrelevant, otherwise the paragraph is accepted. Paragraph 15 is rejected as irrelevant. Paragraph 18 is rejected as an incomplete statement of fact which, of itself, is insufficient to stand without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 21 is rejected as irrelevant. Paragraph 26 is rejected as repetitive and unnecessary. With regard to paragraph 27 it is accepted Mr. Fabian has 16 years of experience, otherwise rejected as repetitive and unnecessary. The first sentence of paragraph 32 is accepted. The remainder of the paragraph is rejected as not supported by the evidence or irrelevant. Mr. Fabian does have a phone number whether that number is listed in the telephone book is not supported by the record cited. Paragraph 42 is rejected as irrelevant. The first two sentences of paragraph 45 are accepted. It is also accepted that Lewis & Thompson have used other minority subcontractors. Whether they "regularly" use them is irrelevant. The first sentence of paragraph 51 is accepted; the remainder is rejected as comment or argument. With regard to paragraph 52, it is accepted that Mr. De La O did not visit a job site; otherwise rejected as irrelevant. Paragraphs 53, 54, and 55 are accepted as the applicable law of this case, not fact. Paragraph 56 is rejected as contrary to the weight of the credible evidence. Paragraph 57 is rejected as contrary to the weight of the credible evidence; the definition also applies to other minorities. Paragraph 58 is accepted as a partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 59 is accepted as a partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 61 is accepted as a partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 62 is rejected as argument. Paragraph 63 is rejected as irrelevant or argument. Paragraph 65 is rejected as irrelevant or argument. Paragraph 66 is rejected as argument. Paragraphs 67, 68, and 69 are rejected as irrelevant or incomplete statements. Paragraphs 71 through 73 are rejected as irrelevant, unnecessary or repetitive. Rulings on the proposed findings of fact submitted by the Respondent: Paragraphs 1, 4, 5, 6, 8, 12, and 17 are accepted. With regard to paragraph 2, the first, second, sixth and seventh sentences are accepted; the remainder is rejected as a recitation of testimony, not statements of fact. The first sentence of paragraph 3 is accepted, the remainder is rejected as a recitation of testimony, not statements of fact. The first sentence of paragraph 9 is accepted; the remainder is rejected as argument or partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. The second and third sentences of paragraph 11 are accepted, the first rejected as recitation of testimony, not statements of fact. Paragraph 13 is rejected as argument or partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 14 is rejected as argument or partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 15 is rejected as irrelevant. Paragraph 16 is rejected as partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. COPIES FURNISHED: Michael F. Coppins Gwendolyn P. Adkins Cooper & Coppins, P.A. 515 North Adams Street Tallahassee, Florida 32302 Cindy Horne Department of Management Services Office of the General Counsel Suite 309 Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of Management Services Suite 307 Knight Building Tallahassee, Florida 32399-0950 Sylvan Strickland Acting General Counsel Office of the General Counsel Suite 309 Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact At all times pertinent to the issues herein, the Respondent, Commission, was the state agency responsible for the certification of Minority Business Enterprises in Florida. Petitioner, Computer Service, was founded by Ronald E. Willett in January, 1987. It is a computer maintenance and repair company of which Brenda Willett is currently President and Chairman of the Board and owner of a 51 percent share of the capital stock issued on December 15, 1993. Ronald E. Willett is the Executive Vice-president, a Director, and owner of a 49 percent share of the capital stock. Mr. Willett was the sole owner and Chairman of the Board until May, 1994, at which time he gave 51 percent of the stock to his wife, Ms. Willett, and the Board elected her Chairman. Ms. Willett has been in the data processing field for 13 years. Before she began working with the Petitioner, she was a computer programmer for the State Attorney's office. She uses computer software to help with managing the affairs of the company, but she is neither a programmer nor a technician. She does not do any repair work for the company because she is not trained to do it. Most of the repair work is done by her husband and two computer engineers employed by the company. A fifth employee works in the warehouse and repairs printers. Of the non-family employees, Ms. Willett interviewed one and hired another. Now she is responsible for all interviewing and hiring. Because of the technical nature of the work, however, she does the initial screening interview after which either Mr. Willett or one of the engineers evaluates the candidates' technical qualifications. She completes the evaluations of her employees' performance by relying on her customers to evaluate the employees' technical performance. In addition, she notes when an employee orders an inordinate amount of parts for a job instead of doing repair work because that generally indicates the employee is not performing properly. Ms. Willett is paid $1,500 every two weeks. Her husband is paid $6,500 per month, and each of the engineers is paid $40,000 per year. Ms. Willett is primarily in charge of the business administration. The inventory of repair parts is maintained at the company warehouse and at the various work sites where the company has contracts to maintain the equipment. Each repairman notifies her of the parts needed. She gets prices and orders the needed parts. The company does not have a line of credit with suppliers. Ms. Willett has, in the past, personally signed for a line of credit which was used for the company. The company presently owes $18,000 to a power supply company under a contract which she negotiated. For the past year, she has been the only company official to sign to commit the company on loans. In addition, Ms. Willett negotiates the company's contracts with customers and she works as a team with the engineers on pricing. The company works on a basis of 35 - 50 percent off IBM prices for similar service. Though her husband helps her decide on what machines the company can buy and repair, she would not need to replace him if he should retire. He is currently working only 18 -20 hours per week. The company submitted its application for minority business enterprise certification on April 18, 1994. Ms. Willett indicated she did not know about the program until it was mentioned to her by an instructor in a course she was taking, and she felt it would help her secure business. As a woman, she was finding it difficult to be taken seriously by the male business officers and managers she dealt with in soliciting business, and she understood that the minority certification would help her qualify for state contracts. The initial review of Petitioner's application was accomplished by Mr. DeLaO, who requested and received from Petitioner matters needed in clarification or amplification of the information contained in the application. Mr. DeLaO also conducted a telephone interview with Ms. Willett to determine how the business was operated and to reaffirm the accuracy of the documentation. Mr. DeLaO did not look elsewhere for information. Based on the information listed above, he recommended denial of the Petitioner's certification. Mr. DeLaO's recommendation was based on several factors, all of which are listed in the recommendation submitted in writing to his supervisor. The problems he found included: The risk of the minority owner, as weighed against the risk of the non-minority owner indicated Ms. Willett, who had received her shares as a gift, had no investment in the corporation to lose. Mr. DeLaO felt the risk of the minority owner should be greater than that of the non-minority owner. Risk was defined as the amount of investment capital put in to start the company or to purchase ownership. The minority owner's wages were not commen- surate with her percentage of ownership. Here, Mr. Willett, the non-minority owner, was making more than she was, as were both engineers. The Board of Governors of the corporation was not controlled by the minority owner. At the time of the review, only Mr. Willett was on the Board. Now that she is on the Board, she still does not control it because she one of only two Directors. Ms. Willett does not appear to have the technical expertise and capability to control the business of the company. She does not appear to have the technical education or experience to do the work of the company herself or to properly evaluate how her employees are performing it - computer repair. Her contribution appeared to be only administrative. Ms. Willett admits her ownership of the 51 percent of the shares of the company was a gift from her husband who felt she deserved it. She claims, however, that the initial cash infusion to the company, when it was first started, came from jointly owned funds utilized to purchase the necessary tools to start Mr. Willett in business. From that initial investment the corporation grew. It should be noted, however, that the actual transfer of stock ownership to Ms. Willett took place just four months prior to the filing of the application for certification, and Ms. Willett's election to the Board came in May, 1994, after the application was filed. The allegation regarding Ms. Willett's salary relative to that of her husband and two of the three other employees is correct. By the same token, the comments regarding her Board membership are also correct. In addition, it is clear her technical competence is insufficient to permit her to accomplish a majority of the computer repair functions completed by her employees. Whether she must be qualified to perform all tasks done by each employee is debatable. She must, however, have a general knowledge of the business which would make her supervision and management meaningful, and it is not at all clear she possesses either those skills or that knowledge. She is quite correct in her claim, however, that if she did not get the contracts, the workmen would have no work to do. Mr. DeLaO's supervisor, to whom his recommendation for denial of certification was addressed, on August 24, 1994 concurred with his recommendation and notified Ms. Willett, on behalf of the Petitioner, that the request for certification as an MBE was denied. The letter of denial contained the Commission's basis for denial.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Respondent enter a Final Order in this case denying Computer Service Concepts, Inc.'s request for certification as a minority business enterprise. RECOMMENDED this 28th day of February, 1995, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 28th day of February, 1995. COPIES FURNISHED: Brenda J. Willett, pro se Computer Service Concepts, Inc. 7616 Industrial Avenue, Suite 3 New Port Richey, Florida 34668 Susan P. Stephens, Esquire Office of the Attorney General The Capitol, Suite PL-01 Tallahassee, Florida 32399-1050 Crandall Jones Executive Administrator Commission on Minority Economic and Business Development Knight Building 2727 Centerview Drive Tallahassee, Florida 32399-0950 General Counsel Commission on Minority Economic and Business Development Knight Building 2727 Centerview Drive Tallahassee, Florida 32399-0950
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
