Findings Of Fact Petitioner Coggin and Deermont, Inc. (C&D) has forty-odd employees. The company owns a building and, among other equipment, bulldozers, loaders, scrapers, graders, draglines, and dump trucks. Respondent's Exhibit No. 1. C&D clears, grubs, grades, and otherwise prepares roadbeds and constructs roads through the stage called "base work." C&D has qualified as a prime contractor with respondent Department of Transportation. The firm also builds culverts and storm drainage structures, including head walls, and does other concrete work. After Mr. Deermont died, at age 94, his partner carried on their road- building business with the help of Ralph C. Carlisle, a 25-year employee, and, until recently, president of C&D. Mr. Coggin died last year at 88, and the Carlisle family decided to acquire the rest of C&D's stock. Mr. Carlisle's wife Bertha, nee Lopez, had inherited Six Thousand Dollars ($6,000) from her father, who, like her mother, was born in Mexico. Blonde and blue-eyed, Mrs. Carlisle herself was born in the United States, on April 26, 1929. Petitioner's Exhibit No. 1. FAMILY BUYS COMPANY On February 10, 1982, the Carlisles bought all of C&D's stock Mr. Carlisle did not already own. They used Bertha's inheritance to make a Six Thousand Dollar ($6,000) cash payment and executed a promissory note in the amount of One Hundred Seventy-three Thousand, Three Hundred Twenty-five Dollars ($173,325), Petitioner's Exhibit No. 3, for the balance of the purchase price. The note was secured by a mortgage encumbering three parcels of real estate owned jointly by Ralph C. and Bertha L. Carlisle. Petitioner's Exhibit No. 2. The expectation is that income from C&D will make it possible for Mr. and Mrs. Carlisle to make the installment payments promised in Petitioner's Exhibit No. 3. C&D owes some Ninety Thousand Dollars ($90,000) to various banks. Mr. and Mrs. Carlisle are personally liable for some, if not all, of C&D's debt. They are not obligated to begin installment payments on the note they executed to pay for the stock until March 10, 1983. Mrs. Carlisle paid Two Hundred Twenty-five Dollars ($225) per share for her stock. (T. 58.) Only one hundred (100) shares are outstanding. Respondent's Exhibit No. 1. Mrs. Carlisle holds fifty-one percent (51 percent) of C&D's stock, and her husband holds thirty-four percent (34 percent). Mr. and Mrs. Carlisle have two sons, Ralph C. III and Richard D., to whom they gave ten percent (10 percent) and five percent (5 percent) of C&D's stock, respectively. All the Carlisles are directors of the corporation. Dividends have not been paid since the Carlisles took over. At some point, the Carlisles "decided [they] were going to apply for minority business enterprise [certification] and use [Mrs. Carlisle's] ethnic origin." (T. 64.) PRESIDENT'S DUTIES Mrs. Carlisle did not bring any particular expertise to C&D, even though she had accompanied her husband on some of his travels for C&D (without compensation). After graduation from high school, attendance at "business school," and two years as a clerk in a stock broker's office, she married Mr. Carlisle and began a twenty-five-year career as a housewife, which was interrupted recently by a two-year stint as an interior designer in a gift shop. (T. 65.) When she became majority stockholder, Mrs. Carlisle voted herself president of C&D. She succeeded her husband in that office. Her salary is One Thousand, One Hundred Twenty-Five Dollars ($1,125) weekly, and his is Eight Hundred Ninety-five Dollars ($895) 1/ weekly. They "combine" their salaries. (T. 90.) Machinery is not Mrs. Carlisle's strong point; she has some difficulty distinguishing among the different types of heavy equipment C&D uses. Field operations are not her primary concern. As a matter of company policy, she ordinarily visits job sites only in the company of her husband. (T. 63, 66- 67.) Her routine upon returning from site inspections she described as follows: [W]hen I come back I always check my mail and my phone calls or--something like that. Most of the time when I go out on the job, like I say, it's quite a distance away from home and I go back to the office and check to see what problems we have had, I have had. He checks his desk and I check my desk. And then we'll go on home and that's when we confer with our sons again. And business starts all over again. (T. 67-68.) She also buys most of the office supplies and signs weekly payroll checks, which are prepared by an employee and countersigned both by her husband and Patricia Kirkland, who keeps C&D's books. Mrs. Carlisle has only limited knowledge of basic accounting concepts. (T. 85-86.) She acts as C&D's "EEO representative," (T. 53) a task she took over from a secretary, Mrs. Cook. Mrs. Carlisle has other duties in connection with bid preparation. She reads some ten newspapers published in Chipley, Florida, and surrounds "to see which jobs are going to be coming up" (T. 50) and orders the plans for jobs C&D might be interested in; she and her husband ["he's the engineer and has all the experience . . ." (T. 51)] inspect the site; she inquires by telephone of "salesmen and people to get the prices" (T. 52) for pipe, concrete, and other materials, but does not negotiate prices. According to Mrs. Carlisle, her "husband is the one that is doing all of the figuring on the job," (T. 52) but Mrs. Carlisle works at figuring, particularly when she travels with her husband to Tallahassee. MINORITY OWNERS Both sons work for C&D and had held salaried positions with C&D before the Carlisles bought out the other owners. Their combined experience amounted to less than five years. The older boy, Ralph C. III, serves as corporate treasurer and as general superintendent "overseeing all the work that the company has under construction" (T. 20) and overseeing maintenance. He has power to hire and fire and has exercised it. As treasurer, he reviews a treasurer's report prepared by Mrs. Kirkland and signs rental agreements. He can operate every piece of equipment C&D owns. He has never supervised a road-building project from start to finish, but he worked on one project as a timekeeper and grade man from start to finish. He worked for C&D for a year after he graduated from high school. Since then he has had two years of college; he took math, engineering, and accounting courses. After college, he worked for Ardaman & Associates in Tallahassee for eight or nine months taking soil samples, before returning to C&D in February of 1982. He is paid Two Hundred Twenty-Five Dollars ($225) weekly. Richard D. works as foreman of a six-man crew, at a salary of One Hundred Seventy Dollars ($170) per week, and has full authority in the field in his father's absence, including the power to hire and fire the men he supervises. He began at C&D as a laborer. He has finished 60 hours of drafting technology courses at a junior college and may graduate in December. EFFECTIVE CONTROL As vice-president and general manager, answerable only to his wife, Ralph C. Carlisle has charge of C&D and manages day-to-day operations. He is trained as an engineer and does surveying for C&D. He is "the job estimator" (T. 90); he stakes out jobs and prepares cost reports. Richard D. Carlisle testified as follows: Q: Who do you report to? A: My daddy. Q: Do you receive instructions from him? A: Mostly. And I receive instructions from my brother and my mother. She will help us out. (T. 13.) Ralph C. Carlisle III testified, as follows: Well, basically I have the control of field supervising. If I make a decision in the field and it doesn't work then I ask [my father] to make a decision. That way he has a little more experience than I do, not a little more, a lot more. I make ninety- nine per cent of the decisions in the field. (T. 28-29.) He explained the lines of authority at C&D in these words: Totally to my mama, I'm totally responsible to her. But in the meantime I'm still re- sponsible to my daddy too. What I'm saying is, basically I do not have to report my day to day activities to anybody. If I have to, if there is something that arises I tell my mama first, being the stockholder, if she is available. If not then I go over it with my daddy. Basically my daddy and I have a little conference every evening on the field activ- ities, which my mama is also in on. We have a little conference every evening. We do report our activities to each other every evening. When it gets right down to it we don't have to. When asked whether decisions she makes in the field are joint decisions, Mrs. Carlisle answered: Yes. Just really because I'm president of the company that still doesn't mean -- that still means that we share it. My husband has a lot of say so just like I do. He has more knowledge in this field than I have. And this is what he is educated in too. (T. 70.) Mrs. Carlisle does not make policy for C&D by herself. (T. 76.) Mr. Carlisle is involved with all technical decisions. (T. 91.) The four owners live together as a family and discuss business at home as well as on the job.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent deny petitioner's application for certification as a minority business enterprise. DONE AND ENTERED this 9th day of September, 1982, in Tallahassee, Florida. ROBERT T. BENTON, II 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 9th day of September, 1982.
The Issue Is Petitioner entitled to certification as a Minority Business Enterprise pursuant to Rule 38A-20.005, Florida Administrative Code?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: On February 12, 1998, Teddy L. Serdynski and Janice A. Serdynski entered into a Partnership Agreement which in pertinent part provides as follows: NAME: The name of the partnership shall be known as "Ted's Auto Parts." PURPOSE: The purpose of the partnership shall be the operation of an automobile parts business and related enterprises. * * * COMMENCEMENT: The partnership shall officially commence upon execution of this agreement. DURATION: The partnership shall continue until dissolved, either by the parties or by legal proceedings, or by liquidation. CAPITAL: The capital of the partnership shall be contributed in amounts equalling 51% by JANICE A. SERDYNSKI and 49% by TEDDY L. SERDYNSKI, thereby granting to the said JANICE A. SERDYNSKI the controlling interest of said partnership. WITHDRAWAL: No partner shall withdraw any invested capital without the consent of the other partner. CAPITAL GAINS AND LOSSES: Capital gains and losses shall be shared in a proportionate amount of their investment and ownership interest. * * * MANAGEMENT: Although JANICE A. SERDYNSKI is the owner of a controlling interest in the partnership, each shall have equal voice in the management of the affairs of the partnership. Both parties shall administer to the general affairs of the partnership and shall carry out and put into effect the general policies and specific instructions of their decision on any given matter. BANK ACCOUNTS: The partnership shall maintain checking and other accounts in such bank or banks as the partners shall agree upon. Withdrawals and writing of checks on the partnership account may be done jointly and/or singly. PROFITS AND LOSSES: The partners shall share in accordance with their ownership interest in the profits and losses. . . . LIMITATIONS ON PARTNER: No partner, without the consent of the other partner, shall borrow money in the partnership name for partnership purposes or utilize collateral owned by the partnership as security for such loans, assign, transfer, pledge, compromise or release any of the claims or debts due to the partnership except on payment in full; consent to the arbitration of any dispute or controversy of the partnership; transfer firm assets; make, execute or deliver any assignment for the benefit of creditors; maker, execute or deliver any bond, confession of judgment, guaranty bond, indemnity bond, or surety bond or any contract to sell, bill of sale, deed, mortgage, lease relating to any substantial part of the partnership assets or his/her interest therein; or engage in any business or occupation without the consent of the other partner. * * * 17. DISPUTES: That the parties agree that all disputes and differences, if any, which shall arise between the parties, shall be referred to and decided by two indifferent, competent persons in or well acquainted with the trade, one person to be chosen by each party, or to submit to arbitration by a recognized arbitration service, and his/her or their decisions shall, in all respect, be final and conclusive on all parties. Ted's Auto Parts was a sole proprietorship from May 1, 1985 until February 11, 1998. From May 1, 1985, until February 11, 1998, Janice A. Serdynski shared ownership in Ted's Auto Parts equally with her husband, Teddy L. Serdynski, a non- minority. Janice A. Serdynski does not share income from Ted's Auto Parts commensurate with her 51 percent ownership. Decision-making, withdrawal of funds, borrowing of money, and the day-to-day management of Ted's Auto Parts are shared equally between Janice A. Serdynski and Teddy L. Serdynski. Ted's Auto Parts is a family operated business with duties, responsibilities, and decision-making occurring jointly, and, at time, mutually among family members. Both Janice A. Serdynski and Teddy L. Serdynski are authorized to sign checks on the account of Ted's Auto Parts.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it recommended that the Department enter a final order finding that Petitioner has failed to meet the requirements for Minority Business Enterprise certification and dismiss the petition filed by Petitioner. DONE AND ENTERED this 22nd day of March, 1999, 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 22nd of March, 1999. COPIES FURNISHED: Douglas I. Jamerson. Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Edward A. Dion General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Janice A. Serdynski Ted's Auto Parts 190 Second Avenue, South Bartow, Florida 33830 Joseph L. Shields, Senior Attorney Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189
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 primary issue for determination is whether Petitioner should be granted certification as a Minority Business Enterprise (MBE). Determination of this issue requires resolution of other issues: Namely, whether Respondent's business qualifies as a Minority Business Enterprise (MBE) as defined by provisions of Section 288.703(2), Florida Statutes; and whether Respondent is a minority person as defined by provisions of Section 288.703 (3)(b), Florida Statutes.
Findings Of Fact Alfredo Ramos is the sole owner of the janitorial business known as "A Cleaning Crew." Ramos was born in Rio Hondo, Texas, on August 9, 1938, to Martin and Ada Salazor Ramos. Ramos' birth certificate, issued at that time denoting his race as white, was amended on May 21, 1992, to reflect that his color or race was Hispanic. Ramos' father was born in Texas. Ramos' mother was born in Oklahoma. There is no independent or verifiable knowledge of where any of Ramos' grandparents were born. All are now deceased. By letter dated June 5, 1992, Respondent denied Ramos' application seeking to have "A Cleaning Crew" certified as a MBE. The basis for denial recited in the letter was that the business did not meet the requirements of Section 288.703(2), Florida Statutes, in that Ramos, as sole proprietor, was unable to establish his status as a minority person within the definitional requirements of applicable Florida Statutes and administrative rules.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered denying Petitioner's application for certification as a Minority Business Enterprise. DONE AND ENTERED this 14th day of October, 1992, in Tallahassee, Leon County, Florida. DON W.DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of October, 1992. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. No findings were submitted. Respondent's Proposed Findings. 1.-5. Accepted. COPIES FURNISHED: Alfredo Ramos d/b/a A Cleaning Crew P.O. Box 10293 Jacksonville, Florida 32207 Augustus D. Aikens, Esquire Deputy General Counsel Department of Management Services Suite 309, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Larry Strong, Acting Secretary Department of Management Services Suite 307, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland, Esquire General Counsel Department of Management Services Suite 110, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
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 Petitioner was incorporated in July 1992. Petitioner is a graphic design firm specializing in strategic, market-driven design. Petitioner conducts market analysis of a client and, only after defining the corporate identity of the client, engages in the development of suitable graphic design. Mary Francis Weathington is the president and chief executive officer of Petitioner. Her experience in communications began in 1980 as a technical writer and editor. From 1989-92, Ms. Weathington served as an account supervisor for an advertising firm. In this role, Ms. Weathington supervised all junior account executives, developed marketing plans, presented proposals to clients, and communicated client needs to agency staff. Ms. Weathington started Petitioner with John LoCastro, who had worked with her at the advertising agency during the same period of time. Mr. LoCastro was responsible for concept development, management, and design direction at the advertising agency. A third person, David Miller, was also involved with the formation of Petitioner. Mr. Miller served as secretary and treasurer, Mr. LoCastro as vice president, and Ms. Weathington as president. Until December 31, 1993, when Mr. Miller resigned from Petitioner, the three principals each owned 50 shares of the 150 issued shares of Petitioner. The capital contribution of each principal was valued at $4500. When he left the company, Mr. Miller transferred his stock to Petitioner in a transaction that required him to pay money to the company due to its thin capitalization and performance. At the same time, Ms. Weathington purchased two more shares. In the summer of 1994, Ms. Weathington bought three more shares and Mr. LoCastro's wife bought two shares. Presently, Ms. Weathington owns 55 shares, Mr. LoCastro owns 50 shares, and Mrs. LoCastro owns two shares. Petitioner has not issued other shares. Petitioner's board of directors consists of Ms. Weathington, her husband, Mr. LoCastro, and his wife. However, Mr. Weathington is a nonvoting director. Besides the two principals, Petitioner employs only one other fulltime employee, an office manager who is responsible for answering the phone, bookkeeping, proofreading, and handling miscellaneous clerical duties. Petitioner also employs, as needed, freelance graphic designers. Petitioner has recently employed a freelance copywriter. In a small company like Petitioner, there is necessarily some sharing of responsibilities in order to secure and produce design work and ensure that payables and receivables are properly managed. However, there are clear areas of responsibility for Ms. Weathington and Mr. LoCastro. As his resume states, Mr. LoCastro is "[r]esponsible for overall creative management, with an emphasis on creative development, planning and design." He is in charge of visual graphics and does nearly all of the computer graphics work, unless it is assigned to a freelancer. Ms. Weathington is responsible for marketing in two respects. First, she markets for Petitioner. She has brought a large majority of the clients to Petitioner and continues to remain responsible for their use of the company. Second, Ms. Weathington assists the clients in developing advertising and design programs that will effectively market the products and services of the clients. Ms. Weathington conducts market research of a client's needs and prepares advertising and design strategies to maintain and enhance the client's business. Ms. Weathington also is chiefly responsible for the management and administration of Petitioner. The office manager's bookkeeping duties are performed under the supervision of Ms. Weathington, who handles personnel, purchasing, planning, and accounting. Although the signatures of both principals are required on checks over $500, this requirement reflects security concerns and does not have a bearing on the division of responsibilities between Ms. Weathington and Mr. LoCastro. Although Mr. LoCastro is responsible for the in-house visuals, Ms. Weathington is responsible for copywriting, which is performed in-house nearly in its entirety. Each principal has been required to guarantee personally the debt of Petitioner. But, given the greater assets of Ms. Weathington, the financial risk is actually borne by her, not Mr. LoCastro. Petitioner's lender would not have made the loan on Mr. LoCastro's guarantee alone, but would have on Ms. Weathington's guarantee alone. Ms. Weathington's control of Petitioner is evidenced in other respects. Petitioner pays for a cellular telephone for her, but not Mr. LoCastro. The marketing brochure prepared by Petitioner features Ms. Weathington in a superior role to the subordinate roles of Mr. LoCastro and Mr. Miller. Ms. Weathington's indispensable contribution to Petitioner is documented by gross sales figures for 1993, during which, for personal reasons, she was unable to work in the spring and fall. When she returned to work in the summer, gross sales increased from less than $10,000 per month to over $50,000 per month. When she left work again in the fall, gross monthly sales fell again to the $20,000 level. Profits have also increased by 16 percent since Ms. Weathington's return.
Recommendation It is hereby RECOMMENDED that the Department of Management Services enter a final order granting Petitioner's application for minority business enterprise certification. ENTERED on January 24, 1995, in Tallahassee, Florida. ROBERT E. MEALE 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 on January 24, 1995. APPENDIX Rulings on Petitioner's Proposed Findings 8, 9, and 12: adopted, although based on the facts and not a claimed concession or absence of dispute. 22: adopted, except that the evidence showed only that gross revenues went down during Ms. Weathington's absences. Nothing in the record addressed net earnings or profits during these periods. Remaining proposed findings: adopted or adopted in substance. Rulings on Respondent's Proposed Findings 1 (first sentence): adopted. 1 (remainder)-4 (except for last sentence): rejected as subordinate. 4 (last sentence): adopted. 5-6: rejected as subordinate. 7-8: adopted or adopted in substance. 9: rejected as recitation of evidence and subordinate. 10: to the extent not subordinate, adopted or adopted in substance. 11-12: adopted or adopted in substance. 13 (first sentence): adopted or adopted in substance. 13 (remainder): rejected as unsupported by the appropriate weight of the evidence. 14-15: adopted or adopted in substance. 16-19: rejected as unsupported by the appropriate weight of the evidence, subordinate, and recitation of evidence. 20 (first sentence): adopted or adopted in substance. 20 (second sentence): rejected as legal argument. 21: adopted or adopted in substance, except for the implication that, as a practical matter, Mr. LoCastro's guarantee represents as real a financial risk as Ms. Weathington's guarantee. 22 (first sentence): adopted. 22 (second sentence): rejected as unsupported by the appropriate weight of the evidence. Increased sales does not mean increased profits, and nothing in the record indicates increased profits. 22 (remainder): rejected as unsupported by the appropriate weight of the evidence. COPIES FURNISHED: William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 2737 Centerview Drive Tallahassee, FL 32399-0950 Paul A. Rowell, General Counsel Department of Management Services Knight Building, Suite 312 2737 Centerview Drive Tallahassee, FL 32399-0950 John S. Derr Bush & Derr, P.A. 2874-A Remington Green Circle Tallahassee, FL 32308 Attorney Cindy Horne Office of the General Counsel Department of Management Services Knight Building, Suite 312 2737 Centerview Drive Tallahassee, FL 32399-0950
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 The issue in this case is whether the Petitioner, Transport Analysis Professionals, Inc. (hereinafter sometimes referred to as "TAP"), is eligible for certification as a Minority Business Enterprise. TAP contends that its application for such certification should be granted, asserting that it is in compliance with all lawful requirements for such certification. The Department of Transportation contends that the application should be denied on the grounds that the women owners of TAP do not exercise actual control of the affairs of the company.
Findings Of Fact Based on the relevant testimony of the witnesses and on the relevant exhibits admitted into evidence, I make the following findings of fact. 1/ Introduction Transport Analysis Professionals, Inc., is a Florida corporation which was incorporated on September 1, 1983. The moving forces behind TAP are three married couples; Mary J. and Kenneth J. Bynum, Gloria J. and Douglas R. Campion, and Carol L. and David C. Rhinard. All of the 990 authorized shares of stock of TAP have been issued to these three couples and each couple is the holder of 330 shares of TAP stock. The Board of Directors of TAP is composed of six directors who are now, and always have been, the six individuals who make up the three married couples described above. Each of these six individuals is a "founding principal" of TAP. Although TAP will embark upon just about any type of business project its principals feel it has the qualifications to perform, the primary nature of its business, as described in its application form is: "engineering consulting services, including traffic and transportation planning and design, environmental analysis, roadway and mass transit operational analysis and contract administration services." (T.25-27; JNT.EX. 1) Because TAP is a new company, up to this point the majority of its activity has been the preparation of proposals and various marketing activities. In other words, TAP's principal activity has been trying to find work rather than actually doing the type of work for which the company was created. (T.84) The "credentials" of the male principals of TAP Douglas R. Campion has a Master of Science degree in Transportation Planning and Engineering and a Bachelor of Science degree in Civil Engineering, both from the Polytechnic Institute of Brooklyn. He also has certificates from the Highway and Transportation Management Institute, University of Mississippi, and the American Association of State Highway and Transportation Officials. (JNT.Ex. 1, resume) Douglas R. Campion has over sixteen years of progressively responsible and successful executive management, administration, engineering and planning experience in the public sector and private industry. He was formerly the appointed Regional Administrator (six and one-half years) for the Federal Urban Mass Transportation Administration (UMTA). He managed the design, contracting, and engineering services for construction on a new $960 million urban rapid rail system. He has extensive background in mass transit, transportation systems planning, traffic engineering, economic/financial analysis, and procurement management. (JNT.EX. 1, resume) Kenneth J. Bynum has a Bachelor of Science degree in Civil Engineering from the University of Arkansas and has done post graduate work towards a Master of Science degree in Civil Engineering at West Virginia University. He is currently enrolled in a Master of Business Administration program at Florida International University. He has completed continuing education courses on traffic operations and design at the University of Florida and Georgia Institute of Technology and on area and indoor lighting by the Lighting Systems Institute of the General Electric Company. He is registered as a professional engineer in the States of Florida and Michigan. (JNT.EX. 1, resume) Kenneth J. Bynum has over sixteen years of professional experience in progressively more responsible charge of planning, design, implementation, and maintenance of public and private transportation systems, with particular emphasis in roadways, mass transit, traffic operations, and traffic control devices. He has been practicing his profession since 1972 in Florida, working in the public sector and with private consultants. (JNT.EX. 1, resume) David C. Rhinard has a Master of Science degree in Transportation from Purdue University and a Bachelor of Science degree in Civil Engineering from Pennsylvania State University. Since graduation he has participated in numerous technical, management, and professional development seminars and non-credit courses nationwide and abroad, including Certificates in: Highway Engineering and Administration, Advanced Technical Topics in Urban Transportation, Effective Speaking and Human Relations, U.S. Department of Transportation Highway Engineering, Highway Finance, and Professional Program in Urban Transportation (by Carnegie-Mellon University with on-site investigation of urban transportation systems in selected American, Canadian, and European cities). He is registered as a professional engineer in the State of Florida and Michigan. (JNT.EX. 1, resume) David C. Rhinard has been continuously involved in transportation engineering for over fifteen years and has been in responsible charge of numerous public and private sector transportation projects and programs in South Florida for the last thirteen years. His experience ranges from traffic and transit system planning to financing, preliminary engineering, construction, traffic operations and parking. (JNT.Ex. 1, resume) The "credentials" of the female principals of TAP Gloria J. Campion has a Master of Science degree in Mathematics from Montclair State College and a Bachelor's degree in Mathematics and Business from the same college. She has obtained certificates in Computer Literacy from the Florida International University and in Adult Education Teaching Strategies from the University of Georgia. She has participated in special studies in mathematics and statistics at Chicago Circle Campus, University of Illinois. (JNT.EX. 1, resume) Gloria J. Campion has over thirteen years of experience as a teacher of mathematics and computers and as an educational consultant in the field of mathematics. (JNT.Ex. 1, resume) Carol L. Rhinard has a Bachelor of Science degree in Education from Bloomsburg University of Pennsylvania. She has taken courses in mathematics, statistics, and sampling theory at the University of Miami. (JNT.EX. 1, resume) 2/ Carol L. Rhinard has taught high school off and on over the past seventeen years. (JNT.Ex. 1, resume; T. 33) Mary J. Bynum has attended Miami Dade Junior College, but has not earned any academic degrees. (JNT.Ex. 1, resume) Mary J. Bynum has eighteen years experience as an airline stewardess and as an airline stewardess supervisor, or lead flight attendant. (JNT.EX. 1; T. 22) The "blood, sweat, and tears" contributed to TAP by the male principals All three of the male principals of TAP gave up professional positions in the fields of traffic and engineering consulting in order to devote their full-time efforts towards trying to start a new company of their own. All three of the male principals of TAP work full-time for TAP. None of them receive a salary from TAP. Two of them (Messrs. Rhinard and Bynum) have no other regular employment. In order to have at least some income, Mr. Campion also works nights as a hotel manager. (JNT.EX. 1, T. 13, 17, 42) The "blood, sweat, and tears" contributed to TAP by the female principals All three of the female principals of TAP have other full-time or substantially full-time employment. Of the three, Gloria R. Campion does substantially more for TAP than either of the other two. Gloria Campion devotes about thirty hours per week to work for TAP. She spends about an equal amount of time as a teacher at a private school. (T. 69, 102-104) Carol Rhinard started out working full-time for TAP, but that did not last very long. She now teaches school full-time and devotes, at most, about eight hours per week to work for TAP. Of those eight hours per week, often only two of them are hours actually spent at the TAP office. (T. 40-41) 3/ Mary Bynum is employed full-time as an airline stewardess or lead flight attendant. Her work for TAP is probably about the same as or less than that of Carol Rhinard. 4/ Capital contributions to TAP--Who paid how much for what There is no credible, competent, substantial evidence in this record upon which to make a finding as to how TAP was capitalized. The various shortcomings in the evidence on this subject are discussed at length in the comments at the conclusion of these findings of fact. 5/ How things really get decided and done at TAP The individuals who possess the power to direct or cause the direction of the management and policies of TAP in the areas of policy making, financial decisions, and dismissal of management personnel are the six individual principals/owners acting in their capacities as members of the TAP Board of Directors. As a newly formed small business enterprise, wherein each member of the Board of Directors is a principal in the firm, most of the decisions on matters of policy making, financial decisions, and dismissal of management personnel are matters of Board discussion and involvement. Policy making originates with the President and is finalized at a Board meeting or through Board Member consent. Financial decisions, with the exception of small purchases and regular business expenses, rest with the Board of Directors. The Board of Directors, acting as a body, addresses all issues of management of the business and manager accountability. It is expected that in the future the roles of the President, Treasurer, and other officers will be vested with the authority customary to those offices. (JNT.EX. 1, Supplement to Schedule A) The individuals who make the day-to-day decisions on matters of management, policy, and operations of TAP are the same as those who possess the power to handle the matters described immediately above. The day-to-day decisions on matters of management, policy, and operations are made by the President and Board of Directors in the manner described immediately above. Depending on the type of project involved, one or more of the principals of the firm is asked by the President to lead the developmental efforts and to prepare a recommended course of action for review by the President and final decision by the Board of Directors. (JNT.EX. 1, Supplement to Schedule A) The language of the bylaws regarding the powers of the company president notwithstanding, in reality the President does not exercise any managerial authority on any matter of importance. The minutes of the TAP Board of Directors meetings reflect that even the most routine management decisions are submitted to the Board of Directors for final decisions. (See especially the minutes of the meeting of January 22, 1984, under the captions "OFFICE SPACE," "OFFICE RELATED MATTERS," and "WBE STATUS." This is consistent with the provisions of Article III, Section 2, of the TAP bylaws, which provides: The President shall be the chief executive officer of the corporation, shall have general and active management of the business and affairs of the corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the shareholders and Board of Directors. (Emphasis added) Article VIII, of the Articles of Incorporation of TAP provides: 8. The officers of this corporation shall be a Chairman, Vice Chairman, Secretary, Treasurer, President and such other officers, agents, and factors as may be deemed necessary. All officers, agents, and factors shall be chosen in such manner, hold their offices for such terms, and have such powers and duties as may be prescribed by the by-laws or determined by the Board of Directors. Article III, Section 3, of the TAP bylaws provides that the Board of Directors can remove any officer and fill any vacancy in office. Article II, Section 1, of the TAP bylaws provides: All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board of Directors. Article II, Section 8, of the TAP bylaws provides: At a meeting of shareholders called expressly for that purpose, any director or the entire Board of Directors may be removed, with or without cause, by a vote of the holders of 67 percent of the shares then entitled to vote at an election of directors. Article II, Section 9, of the TAP bylaws provides that five directors constitutes a quorum. That section also provides: "The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors." Article II, Section 10, of the TAP bylaws also provides for certain other actions to be taken by a "majority" of the full Board of Directors. At the Board of Directors meeting of November 11, 1983, all of the principals/owners of TAP, acting in their capacities as Directors, took the following action: By unanimous vote the Board ratified action taken by the President in the proper use of her powers and authority in those business decisions of the Corporation pertaining to representation of the Corporation on engineering consulting services: In fulfillment of her day-to-day decision making duties, the President directed that the Corporation be represented by those Principals of the firm who are engineers on matters which pertain to engineering services of the firm. Further discussion ensued on the matter. By unanimous vote the Board directed that as a policy of the firm, the President should continue to direct engineers who are principals of the firm to represent the firm on engineering and related matters as a general rule; but the President could direct otherwise in specific situations which may arise from time to time that she decides should be treated and the firm represented differently. The duties of the office of Treasurer of TAP, which office is held by Carol Rhinard, are ceremonial rather than substantive; the Treasurer does not independently make any decisions or take any action on any matter of significance relating to the finances of TAP. (See minutes of Board of Directors meeting of November 11, 1983; T. 51-53) In sum, pursuant to the Articles of Incorporation and the bylaws of TAP, the real management power is vested in the Board of Directors and the male principals control 50 percent of the voting power on the Board of Directors. And as a result of the Board of Directors meeting of November 11, 1983, the male principals have, for all practical purposes, full control of all decision-making with regard to the most important decisions in an engineering consulting firm -- i.e., the engineering decisions. 6/ Explication of why certain findings of fact were not made and how conflicts in the evidence were resolved In making these findings of fact I have not made a number of findings of fact proposed by the parties and I have made some findings essentially the opposite of those proposed by the parties. Thus, this explication is required so that the parties will know what I found to be irrelevant, what I found to be insufficient to support a finding of fact, and how I resolved some of the blatant conflicts in the evidence. In making these findings of fact I have not based any findings on the copies of documents reflecting post-hearing changes to Article II, Section 2, and Article II, Section 9 of the TAP bylaws. I am constrained by the provisions of the Administrative Procedure Act to base my findings solely upon testimony and exhibits received in evidence at the formal hearing in this case. Similarly, I have not based any of my findings of fact on the answers to the post-hearing interrogatories which were served on TAP and are referred to at several places in the post-hearing memorandum submitted by DOT. The extent, if any, to which the post-hearing changes in the bylaws of TAP may change the extent of the management control of TAP exercised by the women owners is a matter which will have to wait for another day to be addressed -- perhaps when TAP files a new application for MBE certification based on new facts. But my recommended order in this case must be based on the facts as they existed at the time of the hearing. In the formulation of the foregoing findings of fact I have given little weight to the testimony of Carol L. Rhinard other than those portions of her testimony which constitute admissions against interest. My reason for giving little weight to this testimony is because, on the whole, Ms. Rhinard was not a very credible witness. She was both evasive and hostile on cross- examination. Throughout much of her testimony, particularly on cross- examination, she appeared to be trying to formulate what she thought would be the answer most beneficial to her cause rather than the answer which most nearly corresponded to her recollection of objective fact. Her obvious emotional involvement in the matter at issue appeared to color her testimony on any matter that involved value judgment or comparison of one thing to another. Finally, she displayed either a poor memory of, or limited knowledge of, the business affairs of TAP. I have not based any findings of fact on the testimony of Mr. Frank DeLuca for two reasons. First, it is irrelevant. Nothing in the applicable rules requires the women owners of a Minority Business Enterprise to be good or talented managers --they are just required to be the real managers. Second, even if it were relevant, the level of expertise that Mr. DeLuca purported to measure with his examination was that of ". . . someone who purported to be a traffic or transportation engineer . . . " (T. 196) The quoted standard is higher than the "working knowledge" standard in the U.S.D.O.T. training manual. Finally, I am not convinced of either the accuracy or fairness of the "examination" questions prepared by Mr. DeLuca. While I have no doubts about Mr. DeLuca's sincerity, nor any doubts about his competence as an engineer, there is no showing that Mr. DeLuca has any training or experience in the separate science of testing the knowledge of others. Further, the circumstances under which the "examination" was administered were far from ideal testing circumstances; the "examination" was unannounced, was unexpected, was administered by an adversary, and was administered at a time when the witness' attention was certainly distracted by other matters. With regard to the matter of why each of the individual principals of TAP received different numbers of shares of stock and the related matter of who contributed what in the way of expertise, effort, and cash in exchange for the shares of stock that were issued, I have found none of the evidence worthy of belief; first because too many conflicting versions have been given at different times and, second, because important details have been omitted. The omissions are perhaps more critical than the conflicts when note is taken of the proposition that the failure of a party in possession of material evidence to come forward with that evidence gives rise to an inference that the unproduced evidence would have been adverse to the party who failed to produce it. If one were to give credence to the evidence in the record on this subject, one could only conclude that the allocation of the shares of stock has all of the earmarks of a subterfuge designed to create the appearance of female control of the corporate management, when in fact the real intent of the parties was to divide control of the corporation along family lines, with each family having a voice in corporate affairs equal to that of each other family. This is evidenced by the fact that each family unit was issued 330 shares of stock. Further, the evidence in this case, even when giving the Petitioner the benefit of an abundance of doubts, fails to demonstrate any rational basis for the disparate distribution of the shares of stock. The testimony indicates that Douglas Campion contributed approximately $1,500 to TAP's capitalization and received 30 shares of stock. Thus, he paid approximately $50 per share for his stock. Gloria J. Campion is asserted to have contributed approximately $3,000 to TAP's capitalization and to have received 300 shares of stock. Thus, she paid approximately $10 per share. The Bynum family unit is asserted to have contributed more money to TAP's capitalization than did either of the other two family units, but the Bynum family unit received the same number of shares as the other two family units. These unexplained discrepancies lead only to the conclusion that the share distribution was contrived in an effort to create the appearance of eligibility under the MBE program. The one alternative explanation which was tendered is unpersuasive because, like the foregoing, it is lacking in fundamental logic. There is testimony in the record that the distribution of shares of stock took into consideration the individual talents of the several principals, as well as their contributions of time and effort to the success of TAP. Yet this explanation fails because although all three male principals appear to have substantially similar training, experience, and talent, and although all three of the male members are contributing a full-time effort to TAP, two of the males received 160 shares of stock and one received only 30. Similarly, as valuable as Gloria Campion's talents and experience in mathematics and computers may be to the future success of TAP, it can hardly be argued that her contribution of expertise and effort to TAP is ten times greater than that of Douglas Campion -- yet she received ten times as many shares of stock as he did.
Recommendation For all of the reasons discussed above, it is recommended that the Department of Transportation issue a Final Order denying the application of Transport Analysis Professionals, Inc., for certification as a Minority Business Enterprise. DONE and ORDERED this 10th day of August, 1984, at Tallahassee, Florida. MICHAEL M. PARRISH 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 10th day of August, 1984.
The Issue The central issue in this case is whether the Petitioner is entitled to certification as a minority business enterprise.
Findings Of Fact Iris Reed and her husband, Mark Reed, own and operate a business known as Reed Landscaping, Inc., the Petitioner in this cause. Mrs. Reed is an American woman and owns 60 percent of the subject business. Her husband owns the remaining 40 percent. The Reeds previously owned a lawn maintenance business in New York but moved to Florida several years ago and started doing business as "Landscaping and Lawn Maintenance by Mark." Eventually, approximately 1992, "Landscaping and Lawn Maintenance by Mark" changed its name to Reed Landscaping, Inc. As to Petitioner and all former entities, Mrs. Reed has held an office position with the company while Mr. Reed has operated the field crew or crews. Mr. Reed has the experience and expertise necessary to handle the work at each site for the business. On the other hand, Mrs. Reed has the office and management skills to direct the "paperwork" side of the business. This includes insurance matters and personnel for the office. Mrs. Reed is particularly active in this business since she put up the capital that largely funded the business enterprise. Although her personal financial investment is primarily at risk, creditors and bonding companies require both Reeds to sign for the company and to be individually obligated as well. Mrs. Reed serves as President/Treasurer of the Petitioner and Mr. Reed is Vice-President/Secretary. Both are authorized to sign bank checks for the company. Mr. Reed has formal training and education in landscape architecture and horticulture as well as extensive experience in this field. Mrs. Reed is responsible for many decisions for the company but relies on the opinions of others and delegates, where appropriate, duties to others as well. Among the delegated duties are: all field work for the company (delegated to Mr. Reed, another foreman, or to crews working a job); estimating or preparing bids (an estimator helps with bids); bookkeeping; contract review; and purchasing (some of which she does herself with input from others). As to each delegated area, however, the Reeds stress teamwork; that they are all working together for the common good of the company.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Petitioner's application for certification as a minority business enterprise be denied. DONE AND ENTERED this 16th day of May, 1996, 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 16th day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5684 Rulings on the proposed findings of fact submitted by Petitioner: None submitted. Iris Reed on behalf of Petitioner submitted a letter summary of her position concerning the hearing which, if intended to be a presentation of fact, is rejected as argument or comment not in a form readily reviewable for either acceptance or rejection as required by rule. Rulings on the proposed findings of fact submitted by Respondent: Paragraphs 1 and 2 are accepted. Paragraph 3 is rejected as contrary to the weight of the credible evidence. Paragraphs 4 and 5 are accepted. COPIES FURNISHED: Joseph L. Shields Senior Attorney Commission on Minority Economic & Business Development 107 West Gaines Street 201 Collins Building Tallahassee, Florida 32399-2005 Iris F. Reed, Pro se 951 Southwest 121st Avenue Fort Lauderdale, Florida 33325 Veronica Anderson Executive Administrator Commission on Minority Economic & Business Development 107 West Gaines Street 201 Collins Building Tallahassee, Florida 32399-2005
The Issue The issues in this case concern the question of whether the Petitioners are entitled to certification as a Minority Business enterprise within the meaning of Chapter 288, Florida Statutes and Rule 13-8.005, Florida Administrative Code. The basic question is whether Bonnie M. Mobley, who is the minority person in Council Enterprises, Inc., and majority stockholder controls the management and daily operations of that corporation.
Findings Of Fact On July 1, 1984 council Enterprises, Inc. was incorporated as a Florida corporation. From that date until the Fall of 1985 the corporation was engaged in the business of plumbing and mechanical services in Florida. At the inception Luther E. Council, Jr., who is also known as "Snipes" Council, was the president, a director and stockholder within the corporation. His mother Bonnie M. Mobley, a minority person, was the majority stockholder and a director in the corporation. At the commencement of the corporation, Bonnie Mobley was secretary/treasurer. Her percentage of stock ownership was 51 percent and the other 49 percent was held by the son. The money which was used to capitalize the corporation in its inception was provided by the mother in the amount of $50,000. On June 14, 1985 by action of the Board of Directors, namely the mother and son, Luther E. Council, Jr. submitted his resignation as president. As the minutes of that meeting state, he did this having secured jobs for employees of Council Enterprises, Inc. with a firm known as Hays Heating and Plumbing Company. Council took a job with that company as manager. On the same date of the Board of Directors meeting, Bonnie M. Mobley was appointed as president, secretary and treasurer, in furtherance of a concern that each of these corporate officers be installed during the life of this corporation. When Luther E. Council, Jr. left Council Enterprises, Inc. to go and work with Hays he was no longer a director. It was further recommended by the son that his mother secure a Leon County Mechanical Contractor's License and serve as a qualifying agent and gain registration with the State of Florida. Other recommendations pursuant to Article II of the Articles of Incorporation were that she consider brokering mechanical equipment as a livelihood and secure a wholesaler's license as well. The events that took place by the corporation was in recognition of the fact that the corporation had concluded its business of offering plumbing and mechanical services. In fact, Bonnie Mobley had gone to work with Hays Heating and Plumbing Company on February 1, 1985 and would remain in her position as office manager at that company until January 9, 1987. During that time she was responsible for secretarial and bookkeeping responsibilities for Hays. During part of that time, as an aside, through Council Enterprises, Inc., she sold supplies to Hays for its use in projects. She tried to gain other contracts for supplies from companies other than Hays, without success. Luther E. Council, Jr., while working at Hays as a manager, was his mother's supervisor. He stayed with Hays from February 1, 1985 until June 19, 1987. As a consequence of leaving Council Enterprises, Inc. to go and work with Hays, Luther D. Council, Jr. transferred his stock in Council Enterprises, Inc. to his mother and she continues to hold all the stock in that company. In August, 1987 and to the present, Bonnie Mobley and her son Luther E. Council, Jr. reconstituted Council Enterprises, Inc. for purposes of offering services in plumbing, mechanical, fire protection, underground utilities, pollutant storage and as builders. They opened an office at 110 Perkins Street, Tallahassee, Florida, which continues to be their business location. Following the August, 1987 restructuring of the business Bonnie Mobley made her son vice-president and named him a director. This meant from that point forward, that there were two directors, Ms. Mobley and her son, Luther E. Council, Jr. In the past, Ms. Mobley had some familiarity with the heating, ventilation and air conditioning and plumbing business which her ex-husband, father of Luther E. Council, Jr. began in 1959. This business was Council Brothers, a company which her former husband and his brothers had started. Her awareness of that business corresponded to about an 11 year period in which at times she was involved to some extent in doing "take offs", cost estimating on jobs for her husband's company. Her principal occupation during the course of this period related to working in the Lewis State Bank as a secretary, receptionist and in the personnel department associated with payroll. She had also done some bookkeeping work for a small business which her ex-husband had relating to an air conditioning and heating service. Ms. Mobley has a license with Council Enterprises, Inc. related to Leon County in the mechanical field. As such, she is the qualifying agent for the corporation. Her son, by contrast, holds certified licenses with the State of Florida, Department of Professional Regulation, in the fields of plumbing contracting, mechanical contracting, building contracting, underground utility contracting, and pollutant storage contracting. In order to gain these licenses he had to have requisite experience in these fields and pass an examination. He also holds a First Class Fire Protection Contractor's License, and a Florida LP Underground Gas License issued by the State of Florida, Department of Insurance. Since the corporation returned to the active contracting business in August, 1987 Ms. Mobley's duties include giving instructions to an office secretary, Laverne Taylor, as needed, and generally keeping things running in the office. She is involved with final decisions about business choices to include an awareness of Dodge reports which advertise contract job opportunities and looking at the local newspaper to see about available work. She is involved in the purchase of equipment and has a say in those choices. She is involved with answering the phone at the office, paying bills, and taking care of the payroll. She sometimes goes to jobsites and stays a number of hours or even may stay all day. Luther E. Council, Jr. describes his position with the company as one of doing whatever needs to be done from running equipment, writing letters, raking and shoveling at jobs and doing job estimating. The mother and son and their field foreman, John W. Edwards, III, all involve themselves in bidding jobs which the company is interested in. The arrangement for hiring employees in the company is one in which a number of the employees who work for the company were associated with Hays and came to work at Council Enterprises, Inc. when Luther E. Council, Jr. returned from Hays to Council Enterprises, Inc. Mr. Edwards was an individual whom Luther E. Council, Jr. knew through their interest in law enforcement. Edwards as field manager is responsible for obtaining additional employees as needed in the field, subject to the approval of Ms. Mobley. Ms. Mobley has on occasion fired a couple of foremen with the company. This was against the recommendation of the field foreman Edwards. Another example of hiring relates to Laverne Taylor whom Ms. Mobley hired. The basic arrangement for hiring and firing in the company is premised upon consultation among Ms. Mobley, her son and the field foreman Edwards. Although 95 percent of the checks in the bank account by the company have been signed by Ms. Mobley, her son has signed the other 5 percent of the checks and has the authority to sign checks on the company's single signature accounts. In the bidding process which has been alluded to, all three persons, namely Ms. Mobley, Mr. Edwards and her son, Luther E. Council, Jr. are involved. Edwards is not as experienced as the son and neither is Ms. Mobley. Luther E. Council, Jr. has a better grounding in the business and in the more complicated issues that may arise in the bidding process. Ms. Mobley has been involved in the financial end of the corporation's activities and is well-grounded in that aspect of the business, to include major purchases, heavy equipment, the payment of routine items such as phone bills, and other account activities. Ms. Mobley, Luther E. Council, Jr. and Mr. Edwards are full-time employees for Council Enterprises, Inc. In obtaining recent loans in the amounts of $60,000 and $22,500, the initial amount being for cash flow on accounts receivable and the second amount having to do with a line of credit, it was necessary for Ms. Mobley and her son Luther E. Council, Jr. to guarantee the loans. In a related matter in the purchase of major pieces of equipment, both Ms. Mobley and her son signed the financial agreements involving the lease purchase of equipment. Bonding for the company in its projects include references to the resume's of both Ms. Mobley and her son. Approximately 80 percent of the work of Council Enterprises, Inc. involves underground utility installation and 20 percent is related to plumbing. In this process, Luther E. Council, Jr. is an indispensable person in deciding the direction which the company will pursue in its business activities, most especially related to understanding of the technical aspects of this company's business and the necessity to rely upon his licensing credentials in order to pursue its business functions. For thin's reason, Bonnie Mobley is not in a position to independently control the corporation's affairs and, in fact, has not controlled it, independent of her son a non-minority person. In this connection, Article II, Section 1 of the By Laws of the corporation, Council Enterprises, Inc., speaks in terms' of the business of that corporation being managed and its corporate powers being reposed in its Board of Directors. Further, Article II, Section 6 of those By Laws requires that the majority of the directors shall be necessary as participants at a meeting to constitute a quorum and that it is the act of the majority of those directors present at the meeting where there is a quorum that constitutes the actions of the Board of Directors. Given this circumstance, there are only two directors and Luther E. Council, Jr. has as much authority as Ms. Mobley in his capacity as director. As a result, he necessarily shares in the management of the company. Against this background information concerning Council Enterprises, Inc. it had sought to gain certification as a Minority Business Enterprise by the State of Florida, Department of General Services. It was denied that opportunity by action of the Department on April 8, 1988 and sought a formal hearing under Section 120.57(1), Florida Statutes, to resolve the question of its entitlement to such certification. The basis of denial was briefly described in the issue statement to this recommended order and will be more specifically referred to in the Conclusions of Law section of the recommended order which follows.
Recommendation Based upon consideration of the findings of fact and conclusions of law reached, it is, RECOMMENDED: That a Final Order be entered which denies the application of Council Enterprises, Inc. to be certified as a Minority Business Enterprise. DONE and ENTERED this 6th day of March, 1989, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of March, 1989. APPENDIX The following disposition is made of the proposed fact finding of the parties: Petitioner's Facts The Petitioner's facts are subordinate to the fact found in the recommended order. Respondent's Facts 1.-6. Subordinate to facts found. Subordinate to facts found with the exception of the next to the last sentence which is not necessary to resolution of the dispute. Subordinate to facts found with the exception of the first sentence which is contrary to facts found. First sentence is contrary to facts found. The balance of the sentences within that paragraph are subordinate to facts found with the exception of the discussion of use of Luther E. Council, Jr.'s licenses as qualifying to allow the company to conduct certain business in the contracting field. Although it may be customary to use someone else's license as a qualifier for the benefit of the company, under the present circumstances the person who is the qualifying agent is a director who must be appeased before the corporation can conduct its affairs and who by the facts of thin case, is the dominant figure in the pursuit of the business of the corporation. Contrary to facts found. COPIES FURNISHED: Donald S. Modesitt, Esquire 320 West Park Avenue Tallahassee, Florida 32301 Sandra E. Allen, Esquire Office of General Counsel Department of General Services Room 452 Larson Building 200 E. Gaines Street Tallahassee, Florida 32399-0955 Ronald W. Thomas Executive Director Department of General Services 133 Larson Building Tallahassee, Florida 32399-0955
