The Issue The Department adopts and incorporates in this Final Order the Statement of the Issues in the Recommended Order. The Department's exceptions to the Statement of the Issues in the Recommended Order are not material and are therefore withdrawn.
Findings Of Fact Kjell Bergh operates a Volvo dealership in Minnesota. He also has other business interest in the United States and abroad. In 1986, he received approval from Volvo to open a Volvo dealership in the area of Boca Raton, Florida. Boca Raton zoning makes it very difficult to locate automobile dealerships there. Mr. Bergh therefore located a suitable five acre site to build the Volvo dealership in nearby Delray Beach, Florida. The property was purchased in 1987 solely to build the automobile dealership on it. At some point Mr. Bergh also received a Volkswagen franchise, and operates both the Volvo and the Volkswagen franchises on the Delray Beach property. Title to the land was taken individually in the names of Kjell and his wife Mary Bergh, as joint tenants, on the advice of their tax counsel. The purchase price for the land was approximately one million dollars. The automobile dealership is operated by Borton Motors Incorporated, a Florida corporation organized in 1986. It is owned 75 percent by the Petitioners, Kjell and Mary Bergh, and 25 percent by the vice president and general manager, Loren Sheffer, who has also invested money in the dealership. It is common in the automobile industry for local managers to have a personal stake in automobile dealerships they manage for absentee owners. The manager, however, has only a minority interest, and the automobile manufacturer, Volvo, holds Mr. Bergh responsible for the operation of the dealership. The Berghs financed the purchase of the land and the buildings used as the automobile dealership facilities through the Barnett Bank of Palm Beach County. On July 23, 1987, the Berghs executed a note and mortgage for $2,000,000 in favor of the Barnett Bank for the purchase of the property along with a construction loan agreement to build the dealership facility. The rate and mortgage were modified to increase the amount borrowed to $2,250,000 in May and June of 1988. The land was then leased to Borton Motors, Inc., the legal entity which operated the automobile dealerships. As a condition of obtaining the loan from Barnett Bank, the bank required that Borton Motors, Inc., guarantee the loan which the bank had made to Mr. and Mrs. Bergh, and also required the Berghs to assign the lease to Barnett Bank. The terms of the mortgage give Barnett Bank the right to collect rents and other payments from the property, and prohibits the termination or cancellation of the lease without Barnett's permission. Barnett Bank had the right to approve the lease provisions and to set the amount of the rent so that the debt service coverage ratio would be no less than 1.2 times the amount borrowed. In connection with the loan by Barnett Bank, on July 27, 1987, Borton Motors, Inc., gave to Barnett Bank "its continuing and unconditional guarantee of the payment in full when due of any and all indebtedness of Debtor [Kjell and Mary Bergh] to Bank to the same extent as if Guarantor [Borton Motors, Inc.] were the principal debtor of the indebtedness" (Exhibit 1D). From the inception of the transaction, it was intended that the entity operating the automobile dealership, Borton Motors, Inc., would finance the purchase of the real estate on which the automobile dealership would be located, and the construction of necessary improvements. This was accomplished through the rental payments Borton Motors, Inc., would make to the Berghs, who had actually taken title to the land. Through its guarantee, Borton Motors, Inc., was as liable to Barnett Bank as were the Berghs, from the inception of the loan. The Berghs hoped to receive a return on monies they invested in the automobile dealership, whether for real estate, improvements to the real estate, inventory in the form of cars, or parts, or for payments made for labor to its sales force and service technicians. It is misleading to state that the Berghs intended to receive a return on the real estate investment they made. The return on the real estate is not the result of a separate investment made by the Berghs, it is instead a part of the overall operation of the dealership. The Berghs are not investors in real property who happened to lease property to a tenant who happens to operate a automobile dealership on that property. The Berghs do take a federal income tax deduction for interest paid on the note to Barnett Bank and report the rent received from Borton Motors, Inc., as income on their federal income tax returns. Petitioners have acquired other debt on behalf of the corporation and do not receive any money from the corporation over and above the amount of the mortgage and other indebitness. The Barnett Bank of Palm Beach County eventually sold its loan to the Berghs to Volvo Finance North American, Inc., in late April 1992. This sale has no effect on the taxation of the transaction of issue. On February 8, 1991, the Department of Revenue sent to the Petitioners a form requesting them to file a "application for Sales and Use Tax Registration" and asking them to report the rental income they had received from Borton Motors, Inc., on the dealership property for the period February 1986 through February 1991. The Berghs filed the application and supplied the rental figures to the Department, but maintained no tax was due because the "amount paid reflects the actual debt service." The Department sent the Berghs a Notice of Assessment on February 28, 1991, stating that they owed $71,043.29 in tax, penalties and interest, representing a sales tax at the rate of 6 percent upon the lease payments they had received from Borton Motors, plus penalties and interest. The Department also gave them notice of a right to protest the assessment. The Berghs did protest the assessment to the Department's Bureau of Hearings and Appeals, which sustained the assessment, but agreed to reduce the penalty involved. The Berghs paid $7,043.50 plus interest of $2,327.98 which represents the amount of payments from Borton Motors, Inc., in excess of the debt service due to Barnett Bank.
Recommendation Based on the foregoing, it is recommended that a final order be entered withdrawing the assessment of tax. DONE AND ENTERED this 28th day of September, 1993, 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 28th day of September, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-2106 The following constitutes my rulings pursuant to Section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Petitioner's Proposed Findings: 1.-19. Adopted, though not verbatim. Respondent's Proposed Findings: 1. Accepted, excepted for last sentence which is rejected as unsupported by weight of the evidence. 2.-6. Adopted. Subordinate to hearing officer findings on this point. 8.-10. Accepted, but not verbatim. COPIES FURNISHED: Cynthia S. Tunnicliff Carlton, Fields, Ward, Emmanuel, Smith & Cutler P.A. Post Office Drawer 190 Tallahassee, Florida 32302 Mark T. Aliff, Esquire Assistant Attorney General Department of Legal Affairs Tax Section, Capitol Building Tallahassee, Florida 32399-1050 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue The primary issue for determination is whether the bid of Intervenor, in response to Respondent's invitation to bid, is non-responsive. Secondary issues to be resolved include Petitioner's legal standing to protest all recommended awards to Intervenor in all the bid's categories where intervenor was deemed the successful bidder; whether Intervenor is an operational division of a corporation authorized to conduct business within the State of Florida; whether Intervenor satisfied bid requirements for submission of a valid manufacturer's certificate; and whether intervenor satisfied bid requirements involving identification of a service coordinator and provision of a list of service representatives in the State of Florida for the computer equipment which is the subject of the bid.
Findings Of Fact Respondent issued an Invitation To Bid (ITB) for microcomputers, Bid No. 129-250-040-B, on February 19, 1990. The ITB was revised by a March 22, 1990 addendum which established April 9, 1990, as the date for opening bid responses with bid tabulations to be posted on May 7, 1990. The purpose of the ITB was to establish a twenty-four (24) month contract for the purchase of microcomputers and equipment by all State of Florida agencies and other eligible users. Political subdivisions of the State of Florida, as well as state universities, could exercise the option of purchasing from the contract, if they so desired. The ITB invited bids in several categories of microcomputer equipment. Petitioner's timely filed written protestaddresses 17 of those categories where Intervenor was determined by Respondent to be the successful bidder. Those categories are numbered 255, 256, 257, 258, 259, 260, 266, 267, 268, 269, 271, 272, 273, 275, 276, 277, and 278. However, the bid tabulation posted by Respondent on May 7, 1990, establishes that Petitioner was the next lowest bidder in only four of the 17 categories. Those four categories are 266, 267, 268, and 269. In accordance with Paragraph 13 of the ITB general conditions, all corporations responding to the ITB were required to be registered with the Florida Department of State and authorized to transact business in the state in accordance with requirements of Chapter 607, Florida Statutes. Further, such bidders were required to insert their corporate charter number, resulting from that registration, in the appropriate space in the bidder acknowledgement form provided by Respondent for inclusion in responses to the ITB. Intervenor provided the Department of State Corporate Charter No. 822327 in the bidder acknowledgement form submitted with its response to the ITB. That charter number is assigned by the Department of State to VGC Corporation d/b/a VGC Corporation of Delaware, a corporation organized under laws of Delaware and authorized to transact business in the State of Florida since 1969. Intervenor mistakenly listed, in its bid, the federal employment identification (FEID) number of another subsidiary corporation of VGC Corporation (VGC). The FEID number submitted by intervenor was that of Graphic Arts Supply, Inc., (GAS), acquired by VGC in December of 1986. GAS became a wholly owned subsidiary of VGC at that time and remains such at the present time. At the time of its acquisition, there existed within GAS a particular segment of that business which dealt primarily with computer products. This computer segment of GAS was set up by VGC as a separate division of the parent corporation in November, 1988. The formation of the new division within VGC was announced at that time by the VGC president in an interoffice memorandum which stated in pertinent part: The Computer Products Group of Graphic Arts Supply has grown significantly in the last several years, accounting for approximately 10% of the total corporation's sales. The growth opportunities in this area are enormous and our long term goal is to become one of the major material distributors of computer products in the United States. Accordingly, I am pleased to announce that we will make this operation a separate division, reporting to Tom Mclaughlin. At the time of the issuance of the November 1988 interoffice memorandum, Tom Mclaughlin was a vice-president and subsidiary manager of VGC corporation. Another individual, Pat Mclaughlin, was a VGC vice-president and general manager of the new division, the intervenor in this cause. Another memorandum issued by the VGC president on September 14, 1989, further emphasized that VGC's Business Systems Division, which is also intervenor, was an operating division of VGC. That memorandum stated that the company comprising the Business Systems Division was known as "GA Computer Systems" and further provided in pertinent part that: The Business System Division is an operating unit and not a subsidiary. The Business Systems Division relies on VGC-Rochester for financial and administrative support, and VGC-Florida for all other support and reporting. On the date of Intervenor's response to the ITB, GAS and Intervenor continued to maintain a business relationship. Pursuant to that relationship, GAS provides certain administrative services to Intervenor in the form of certain record keeping and payment of various taxes in the state of New York. Intervenor pays a fee to GAS for these services. Other administrative functions, such as federal and state tax return preparation, are performed by VGC-Rochester and VGC-Florida, other components of VGC. Intervenor's response to the ITB was submitted and signed by John J. Piseck, an employee of VGC who serves as the eastern regional sales manager for Intervenor's computer products. Another of the ITB's general conditions requires that bids from non manufacturers to provide microcomputers must be accompanied by a certification from the manufacturer that the bidder is an authorized representative of the manufacturer. The certification submitted by Intervenor with its bid response was executed by a representative of Hewlett-Packard Corporation, the computer manufacturer, certifying that GA Computer Products is an authorized dealer/representative. On the date of Intervenor's response to the ITB, adealer/representative contract existed between Intervenor and Hewelett-Packard. The agreement was signed on Intervenor's behalf by Patrick Mclaughlin, VGC vice- president and general manager of Intervenor. Page 12 of the ITB special conditions provides in pertinent part that: The bidder shall name a service coordinator and provide a complete list of in-state representatives, and manufacturer's authorized service repair centers on page 19 as part of the bid response. In the course of fulfilling its responsibility to evaluate each vendor's response to the ITB, Respondent accepted either a list of the bidders' own in-state representatives or a list of the manufacturer's in-state representatives as meeting this service requirement of the ITB. Respondent does not, and is not required to, verify information supplied by vendors relating to service locations. Intervenor has fully complied with the ITB requirement relating to naming a service coordinator and providing a list of service representatives and repair centers. Specifically, Intervenor named one of its employees as the service coordinator, provided a toll-free telephone number for communication with the coordinator, and listed five Hewlett-Packard service locations within the State of Florida. These service locations honor the warranties of the manufacturer, Hewlett-Packard, without regard to which Hewlett-Packard dealer sold the product. Intervenor was responsive in all material respects to Respondent's ITB No. 129-250-040-B.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that upon Intervenor's submission of a corrected FEID number, a Final Order be entered denying Petitioner's claims and confirming the award of the contested 17 categories of Respondent's ITB No. 129-250-040-B to GA Computer Products, a division of VGC Corporation. DONE AND ENTERED this 23rd day of July, 1990, in Tallahassee, Leon County, Florida. DON W.DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of July, 1990. 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. Petitioner's proposed findings consisted of 32 pages encompassing unnumbered paragraphs dealing with an intertwined mixture of legal conclusions, argument and proposed factual findings. Therefore, Petitioner's submission cannot be treated by the Hearing Officer in this appendix on an individualized basis for each proposed finding. However, Petitioner's submission has been reviewed and addressed, where possible, by the findings of fact set forth in this recommended order. Otherwise, all disputed issues of material fact have been addressed by the evidence adduced at the hearing held in this cause. Intervenor's Proposed Findings. 1.-32. Adopted in substance. Respondent's Proposed Findings. 1.-2. Adopted in substance. 3.-4. Rejected, unnecessary. 5.-24. Adopted in substance. 25.-27. Rejected, unnecessary. 28. Adopted in substance. COPIES FURNISHED: Thomas F. Morante, Esq. One Biscayne Tower Suite 3750 Two S. Biscayne Boulevard Miami, FL 33131 Susan Kirkland, Esq. Jim Bennett, Esq. Office of General Counsel Department of General Services Suite 309 Knight Building 2737 Centerview Drive Koger Executive Center Tallahassee, FL 32399-0950 Lowell L. Garrett, Esq. 5300 Southeast Financial Center 200 S. Biscayne Boulevard Miami, FL 33131 Ronald W. Thomas Executive Director Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950
The Issue The issue posed for decision herein is whether or not the Petitioner is subject to the Florida corporate income tax for tax years 1972, 1973, 1974 and 1975 plus accrued penalties and interest since July 7, 1977, the date Petitioner was mailed a proposed notice, of deficiency by the Respondent, Department of Revenue.
Findings Of Fact Based on the evidence adduced at the hearing herein; the documentary evidence received; the Respondent's memorandum in support of the assessed deficiency; the Petitioner's memorandum in response thereto; and the entire record compiled herein, the following relevant facts are found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent enter a Final Order herein denying Petitioner's protest of the proposed deficiency and penalties as set forth hereinabove. RECOMMENDED this 14th day of March, 1983, in Tallahassee, Florida. JAMES E. BRADWELL, 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 14th day of March, 1983.
The Issue The issue is whether Florida Housing and Finance Corporation's intended decision to award low income housing tax credits for an affordable housing development in Miami-Dade County to Rio at Flagler, LP (Rio), was contrary to solicitation specifications, and if so, whether that determination was clearly erroneous or contrary to competition.
Findings Of Fact Florida Housing is a public corporation created pursuant to section 420.504. One of its responsibilities is to award low-income housing tax credits, which developers use to finance the construction of affordable housing. Tax credits are made available to states annually by the United States Treasury Department and are then awarded pursuant to a competitive cycle that starts with Florida Housing's issuance of a RFA. In this case, the RFA was issued on November 21, 2014, modified slightly on January 30, 2015, and required the filing of applications by February 10, 2015. According to the RFA, Florida Housing is expected to award up to an estimated $4,367,107 of housing credits for the following demographic set- aside: housing projects targeted for either the family or elderly population in Miami-Dade County. The credits will be awarded to the applicants with the highest total scores. Pinnacle submitted Application No. 2015-211C seeking $2,560,000.00 in annual allocation of housing credits to finance the construction of a 104-unit residential rental development to be known as Pinnacle Heights. Rio submitted Application No. 2015-217C seeking $1,940,000.00 in annual allocation of housing credits to finance the construction of a 76-unit residential development to be known as Rio at Flagler. The agency's Executive Director appointed a review committee comprised of Florida Housing staff to evaluate the applications for eligibility and scoring. Fifty-three applications were received, processed, deemed eligible or ineligible, scored, and ranked pursuant to the terms of the RFA, administrative rules, and applicable federal regulations. Applications are considered for funding only if they are deemed "eligible," based on whether the application complies with various content requirements. Of the 53 applications filed in response to the RFA, 43 were found to be eligible, and ten were found ineligible. Both Pinnacle and Rio were found eligible for the family/elderly demographic. The RFA specifies a sorting order for funding eligible applicants. All eligible applicants in the family/elderly demographic, including Pinnacle and Rio, achieved the maximum score of 23 based on criteria in the RFA. Recognizing that there would be more applications than available credits, Florida Housing established an order for funding for applicants with tied scores using a sequence of six tiebreakers, with the last being a lottery number assigned by the luck of the draw. Applications with lower lottery numbers (closer to zero) are selected before those with higher lottery numbers. Both Pinnacle and Rio received the maximum 23 points and met all tiebreaker criteria. In other words, both had so- called "perfect" applications. The ultimate deciding factor for perfect applications is a randomly generated lottery number that is assigned at the time each application is filed. Rio's number is four, while Pinnacle's number is six. Because Rio had a lower lottery number than Pinnacle, Florida Housing issued its notice of intent to award tax credits to Rio and another applicant (with a lower lottery number) not relevant here. Pinnacle timely filed a formal written protest. As amended, Pinnacle's protest is narrowed to a single issue -- whether the bus stop identified in Rio's application is a Public Bus Transfer Stop, as defined in the RFA. A failure to comply with this provision would lower Rio's total proximity score and make it ineligible to receive tax credit funding. The RFA specifies two Point Items in the family/elderly demographic category. The first Point Item is "Local Government Contributions," for which a maximum of five points could be awarded. The second is "Proximity to Transit and Community Services," for which points are awarded based on the distance between the proposed development and the selected transit and community service. A maximum of six proximity points are allowed for Transit Services, while a maximum of 12 proximity points are allowed for Community Services for a total maximum of 18 proximity points. Under the terms of the RFA, if an applicant achieves a minimum of 12.25 proximity points for Community Services and Transit Services, a "point boost" up to the maximum total score of 18 proximity points is added to the applicant's score. Rio's transit score of six points is the focus of this dispute. The RFA lists five types of Transit Services that an applicant can self-select to obtain proximity points, including Public Bus Stop (maximum two points) and Public Bus Transfer Stop (maximum six points). Applicants may select only one type of transit services on which to base their transit score. Depending on the type of transit service selected, an applicant may receive up to a maximum of six points for Transit Services. To verify the information in the application, an applicant must submit a Surveyor Certification Form, which is completed and signed by a licensed surveyor. In making its preliminary decision to award tax credits, Florida Housing relies on the information provided in the form and does not second-guess the surveyor. Issues regarding the accuracy of the information in the form are presented through challenges by other applicants. Because Rio had only ten points for proximity to Community Services, it needed at least 2.25 transit points in order to obtain the minimum 12.25 proximity points necessary to achieve a point boost up to 18 points and be in the running for funding. Accordingly, Rio's application sought six points for the project site's proximity to a Public Bus Transfer Stop. A Public Bus Transfer Stop is defined on page 19 of the RFA as follows: This service may be selected by Family and Elderly Demographic Applicants. For purposes of proximity points, a Public Bus Transfer Stop means a fixed location at which passengers may access at least three routes of public transportation via buses. Each qualifying route must have a scheduled stop at the Public Bus Transfer Stop at least hourly during the times of 7 a.m. to 9 a.m. and also during the times of 4 p.m. to 6 p.m. Monday through Friday, excluding holidays, on a year-round basis. This would include both bus stations (i.e. hubs) and bus stops with multiple routes. Bus routes must be established or approved by a Local Government department that manages public transportation. Buses that travel between states will not be considered. In sum, a Public Bus Transfer Stop is a fixed location at which passengers may access "at least three routes of public transportation via buses," with each route having a scheduled stop at that location at least hourly during morning and afternoon rush hours, Monday through Friday, on a year-round basis. To comply with this requirement, and based upon oral information provided by customer service at Miami-Dade Transit Authority (Authority), Rio selected a bus stop located at West Flagler Street and Northwest 8th Avenue. Rio represented that this location was served by three qualifying routes: Route 6 (Coconut Grove), Route 11 (Florida International University- University Park Campus), and Route 208 (Little Havana Circulator). The RFA requires that a bus route be established or approved by the "local government department" that manages public transportation, in this case the Authority. Florida Housing defers to the local government in determining whether a selected bus route is a qualifying bus route within the meaning of the RFA. The head of the local government department that manages public transportation is Gerald Bryan, the chief of service planning and scheduling. By deposition, Mr. Bryan testified that the location selected by Rio has only two qualifying routes: 11 and 208. Route 6, the third route relied upon by Rio, does not run hourly during the requisite rush hour times as required by the RFA and therefore is not a qualifying route. With only two qualifying routes, the transit service selected by Rio is a Public Bus Stop for which only two points, rather than six, can be awarded. Had this information been available to Florida Housing when it reviewed Rio's application, Rio's proximity score would have been less than 12.25, making it ineligible to receive a point boost and achieve the maximum total score of 18 proximity points. Because Rio is ineligible for funding, the next applicant in line is Pinnacle, as it has the next lowest lottery number among the eligible applications that received 23 points. Rio does not dispute that Route 6 fails to make the requisite stops during rush hours to be considered a qualifying route. However, it contends that Route 11 functionally serves as two distinct routes because it has two separate destinations: the Mall of the Americas and Florida International University Park Campus. But whether Route 11 is a single route or two routes is a determination that must be made by the local government, and not the applicant. Mr. Bryan testified that the Authority established Route 11 as a single route with two separate termination points. He further explained that it is a standard practice for a single route, such as Route 11, to have more than one terminus in order to provide a higher level of customer service. Because Florida Housing does not second guess the determination of the local government, the undersigned has rejected Rio's assertion that the bus stop is a Public Bus Transfer Stop. Without the inclusion of the six proximity points for this type of transit service, Rio's application is not eligible for funding in this cycle.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order finding that Rio's application is ineligible for funding and that Pinnacle's application should be selected for funding under RFA 2014-116. DONE AND ENTERED this 31st day of August, 2015, in Tallahassee, Leon County, Florida. S D. R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of August, 2015. COPIES FURNISHED: Kate Fleming, Corporation Clerk Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1367 (eServed) Michael P. Donaldson, Esquire Carlton Fields Jorden Burt, P.A. Post Office Box 190 Tallahassee, Florida 32302-0190 (eServed) Hugh R. Brown, General Counsel Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1367 (eServed) Betty C. Zachem, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1367 (eServed) J. Stephen Menton, Esquire Rutledge Ecenia, P.A. 119 South Monroe Street, Suite 202 Tallahassee, Florida 32301-1591 (eServed) Gary J. Cohen, Esquire Shutts and Bowen, LLP 1500 Miami Center 201 South Biscayne Boulevard Miami, Florida 33131-4329 (eServed)
The Issue Is Worldwide Investment Group, Inc. (Worldwide) entitled to apply to the State of Florida, Department of Environmental Protection (the Department) for funds to reimburse Worldwide for costs associated with petroleum clean-up at 500 Wells Road, Orange Park, Florida, Facility ID#108736319? See Section 376.3071(12), Florida Statutes.
Findings Of Fact The Property Howard A. Steinberg is a Certified Public Accountant, (CPA) licensed to practice in Florida. In addition to his work as a CPA, Mr. Steinberg has other business interests. Among those interests is Worldwide, a corporation which Mr. Steinberg formed for the purpose of acquiring certain assets, or properties, from Home Savings Bank and American Homes Service Corporation (Home Savings Bank). Worldwide became a corporation in July 1996. Mr. Steinberg is the sole shareholder of that corporation and has been since the inception of the corporation. In addition to controlling all of the assets within Worldwide, Mr. Steinberg is the sole officer of the corporation. The corporation has no other employees. Worldwide has its office in Hollywood, Florida, in the same physical location as Mr. Steinberg's accounting firm of Keystone, Steinberg and Company, C.P.A. Under its arrangement with Home Savings Bank, Worldwide acquired property known as Save-A-Stop at 500 Wells Road, Orange Park, Florida. Mr. Steinberg engaged the law firm of Burnstein and Knee, to assist Worldwide in the purchase of the Save-A-Stop property. The Save-A-Stop property is a commercial parcel that has experienced environmental contamination from petroleum products. To address that problem the firm of M. P. Brown & Associates, Inc., (Brown) was paid for services in rendering environmental clean-up of that site. Substantial work had been done by Brown to remediate the contamination before Worldwide purchased the property from Home Savings Bank. Home Savings had paid Brown for part of the costs of clean-up before Worldwide acquired the Save- A-Stop property. After the purchase, Mr. Steinberg paid Brown to finish the clean-up. Application for Reimbursement Mr. Steinberg, as owner of Worldwide, understood that the possibility existed that Worldwide could be reimbursed for some of the clean-up costs by resorting to funds available from the Department. On July 29, 1997, Bonnie J. Novak, P.G., Senior Environmental Geologist for Brown, wrote to Mr. Steinberg to provide a cost estimate for preparing a reimbursement application in relation to the Save-A-Stop property. The cost to prepare the application was $1,870.00. On August 27, 1996, Mr. Steinberg accepted the offer that had been executed by Brown by Mr. Steinberg signing a contract, and by calling for Brown to prepare an application, to be presented to the Department for reimbursement of costs expended in the clean-up. In furtherance of the agreement between Worldwide and Brown, $935.00 was paid as part of the costs of preparation of the application. This payment was by a check mailed on August 27, 1996. The balance of the fee was to be paid upon the completion of the preparation of the application. In 1996, outside the experience of his businesses, Mr. Steinberg was having difficulties in his marriage. To address the situation, Mr. Steinberg filed a Petition for Dissolution of Marriage. That Petition was filed in April 1996, at which time Mr. Steinberg assumed custody of the children of that marriage, with no right for their mother to unaccompanied visits. After filing for dissolution, Mr. Steinberg relied on others to assist him in dealing with his personal and business life. From December 1996 through January 6, 1997, Mr. Steinberg was particularly influenced by the upheaval in his personal life. It caused him to request extension of deadlines from the Internal Revenue Service for the benefit of his clients whom he served as a CPA. During December, Mr. Steinberg was only in his office for approximately 10 percent of the normal time he would have spent had conditions in his personal life been more serene. On January 6, 1997, the conditions in Mr. Steinberg's personal life took a turn for the worse when his wife committed suicide. In December 1996, attorney Jerrold Knee, who had assisted Mr. Steinberg as counsel in purchasing the Save-A-Stop property, spoke to someone at Brown concerning the status of the preparation of the application for reimbursement of funds expended in the clean-up. He was told that the application was being worked on. Mr. Knee was aware that the deadline for filing the application was December 31, 1996. Mr. Steinberg was also aware of the December 31, 1996, deadline for submitting the application. In that connection, Mr. Knee was familiar with the difficulties that Mr. Steinberg was having in Mr. Steinberg's marriage in 1996. Mr. Knee knew that Mr. Steinberg was infrequently in the office attending to business. Mr. Knee surmised that Mr. Steinberg was relying upon Mr. Knee to make certain that the application was timely submitted, and Mr. Knee felt personally obligated to assist Mr. Steinberg in filing the application, given the knowledge that Mr. Steinberg was not in the office routinely during December 1996. His sense of responsibility did not rise to the level of a legal obligation between lawyer and client. Although Mr. Knee was aware of the pending deadline for submitting the application for reimbursement, and had inquired about its preparation by Brown, and had discussed it with Mr. Steinberg, Mr. Knee never specifically committed to making certain that the reimbursement application was filed on time. As it had committed to do, Brown prepared the reimbursement application for the Save-A-Stop site. The application was for the total amount of $58,632.85, not including preparation charges and CPA Fees. Written notification of the preparation of the application was provided to Mr. Steinberg on December 12, 1996. The correspondence reminded Mr. Steinberg that the application needed CPA approval, an invoice and registration, and a signed certification affidavit. Most importantly, the notification reminded Mr. Steinberg that an original and two copies of the application must be sent to a person within the Department prior to December 31, 1996. The notification specifically indicated the name of that individual within the Department and set forth that person's address. The notification arrived in Mr. Steinberg's office during the week of December 12, 1996. That notification was not opened until late January or early February 1997. Mr. Steinberg opened the letter at that time. During December 1996 Mr. Steinberg was responsible for opening the mail received in his office. No other person was expected to open that mail for the benefit of Worldwide. Untimely Application On February 6, 1997, Worldwide submitted its application for reimbursement for clean-up at the Save-A-Stop location. That application was received by the Department on February 7, 1997. The Department has consistently interpreted the statutory deadline for submitting reimbursement applications in accordance with Section 376.3071(12), Florida Statutes, (Supp. 1996) to be absolute. Consequently, on February 11, 1997, the Department denied the Worldwide application because it had been filed beyond the December 31, 1996, deadline recognized by the statute. Worldwide contested that proposed agency action by requesting a hearing to examine the issue of the timing of the application submission. Consequences of Untimely Application In Florida, petroleum taxes are deposited for the benefit of the Inland Protection Trust Fund. The Florida Legislature allows monies to be appropriated from those deposited funds. In that budgetary process, the Governor's office serves as liaison in requesting the Legislature to appropriate monies from the Inland Protection Trust Fund in relation to the costs of cleanup of sites contaminated by petroleum products. To assist the Governor's office, the Department identifies the need for covering the costs of the clean-up and makes a recommendation to the Governor to provide to the Legislature concerning the amount to be appropriated for the clean-up. In the history of the clean-up program, in 1995, problems were experienced with fraudulent and inflated claims calling for reimbursement for the cost of clean-up. This led to a debt of approximately $550,000,000.00. There was a concern that that debt could not be repaid in a reasonable time frame. In response, the Department, as authorized by the Legislature in action taken in 1996, negotiated a bond transaction through the Inland Protection Financing Corporation. With the advent of the bond issue, $343,000,000.00, not to include the cost of funding the bond, was made available to pay for petroleum clean-up. That bond issue was designed to fund the payment of reimbursement applications that had been received before the end of the life of the petroleum clean-up reimbursement program in place. During the 1996 session, in which the Legislature approved the bond issue, the Legislature also made changes to the petroleum clean-up program. The changes were fundamental in that applicants were no longer reimbursed for clean-up work that had been performed. With the advent of the legislative changes, petroleum clean-up, under a system calling for payment from the fund, could only be conducted if an applicant was pre-approved to conduct the clean- up. As part of that process of gaining funds pursuant to the bond issue, the Department performed an analysis, as authorized by the Legislature, to determine that amount necessary to pay existing obligations that had accrued under the petroleum clean-up reimbursement program that predated the Legislative change in 1996. To ascertain the existing obligation, the Department totaled the known dollar amount associated with the existing reimbursement applications and a portion of unreviewed reimbursement applications that had been received. The Department adjusted the sum to be paid in association with applications that had not been reviewed to that point, having in mind prior experience in which only 82 percent of claims had been allowed. The overriding concern by the Department was that it needed to determine whether the bond issue would be sufficient to defease the backlog of applications for reimbursement previously filed. Information concerning the reimbursement obligations was made known to the Florida Supreme Court in bond validation proceedings held before that court. The Inland Protection Finance Corporation was also made aware of the reimbursement obligations. In 1997, the Department gave further information to the Inland Protection Financing Corporation, indicating that the amount of bond was sufficient for reimbursement obligations. The Department in association with the terms of the bond transaction agreed that the bond proceeds would not be used to fund claims that were received after January 3, 1997. The deadline for submitting applications had been extended until January 3, 1997, by virtue of a statutory amendment found at Section 376.3071(12), Florida Statutes, (1997). Therefore, consistent with the statutory change, the Department had allowed applications submitted after December 31, 1996, but before January 4, 1997, to be considered on their merits. The December 31, 1996, deadline had existed under Section 376.3071(12), Florida Statutes (Supp. 1996). The statutory change occurred because a number of applications that were filed pursuant to the December 31, 1996, deadline set forth in Section 376.3071(12), Florida Statutes (Supp. 1996) did not meet that deadline. The reason for this failure was due to weather conditions that caused overnight couriers, Federal Express and United Parcel Service, to be unable to deliver parcels to the Tallahassee, Florida, airport. These applications, as other applications, were sent to the Department at a Tallahassee, Florida, address. Based on the inability of the two couriers to deliver applications under the timeline anticipated, the Department did not receive that group of applications until January 2, 1997. Subsequently, the applications were accepted as timely based upon the amendment found in Section 376.371(12), Florida Statutes (1997) which extended the filing deadline until January 3, 1997. As a policy consideration, the Department believes it must strictly enforce the deadline for submission of reimbursement applications, as extended by the Legislature, to avoid the future accrual of debt for applications submitted after January 3, 1997, which the Department cannot reasonably anticipate. Apropos of the present case, the Department does not believe that it is well-advised to allow even a single claim for reimbursement, if that claim was received after January 3, 1997. To date, 64 applications have been received by the Department subsequent to December 31, 1996. All but six of those applications were received no later than January 3, 1997. Two of that six applications for reimbursement are still pending before the Department. Historically 22,000 applications for petroleum clean-up have been received by the Department since 1986. At the time of the hearing, 9,000 applications were pending before the Department. In December 1996, 3,000 applications were received calling for reimbursement of costs. At the time of hearing, approximately $340,000,000 in reimbursement claims had not been satisfied. Petitioner makes its claim to be excepted from the deadline for submitting its application based upon the doctrine of equitable tolling.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED that a Final Order be entered denying the application of Worldwide to participate in the reimbursement program for clean-up expenses as untimely. DONE AND ENTERED this 7th day of May, 1998, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS 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 Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1998. COPIES FURNISHED: P. Tim Howard, Esquire P. Tim Howard and Associates, P.A. 1424 East Piedmont Drive, Suite 202 Tallahassee, Florida 32312 Jeffrey Brown, Esquire Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Kathy Carter, Agency Clerk Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 F. Perry Odom, General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Virginia B. Wetherell, Secretary Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
The Issue Whether the Respondent engaged in a discriminatory employment practice contrary to Chapter 760, Florida Statutes, by paying the Petitioner less that other similarly situated employees and by discharging the Petitioner based upon the Petitioner's race, national origin age and disability?
Findings Of Fact The Petitioner is a black male of Haitian extraction. His date of birth as given in his personnel records (Exhibit 7) is June 16, 1977. The Respondent is an employer within the statutory definition that engages in the rental of trailers, trucks, and moving supplies and sales and installation of equipment used in towing trailers. The Petitioner did not present any evidence regarding disability or age. The Petitioner was initially employed by the Respondent in 2002 as a customer service representative making $6.50/hour. Several month later, he received a raise to $7.00/hour, and before the end of the year, he received another raise to $7.50/hour. In the first half of 2003, the Petitioner was moved to the position of Assistant Moving Center Manager and his salary increased to $8.50/hour. In the fall, he received a raise to $9.25/hour and was given another raise to $11.50/hour before year's end. Testimony was received from Arthur Williams, who was the store manager and familiar with the operations of the company, although at the time of Petitioner's termination, he was new to the position and "in training." The pay for personnel employed by the Respondent is established nationwide and is based upon cost of living factors for an area. The wages paid to the Petitioner were slightly above the average for an area like Tallahassee, and reflected the Petitioner's hard work. His pay was in line with others doing similar work. The Petitioner alleged Clint Barrineau was paid more than he was paid. The evidence indicted that Barrineau had held in his career with the company, every position in its stores, including area manager. Barrineau had left the company for personal reasons, and upon his return in July 2003, was hired at $9.00/hour. Subsequently, he was promoted to the position of Hitch Professional at $11.50/hour. Notwithstanding Barrineau's prior experience, generally, it take less time for a person to be promoted as a hitch professional than as an assistant moving center manager reflecting hitch-related sales as an income center in the business. Both Barrineau and the Petitioner were making the same salary when the Petitioner was terminated. The Petitioner testified that he was denied promotion to store manager on two occasions. The Petitioner did not establish his qualifications for this position; however, evidence was received that the first person employed in that position was Henry Barnes a white male, and the second was Arthur Williams, a black male. Williams was brought in from outside the company; however, he had significant experience in retail sales management. The Petitioner's primary claim related to his discharge. The evidence presented indicated that on May 4, 2004, the Petitioner closed the store as the general manager on duty. As the manager on duty, it was his job to prepare the daily receipts for deposit in the bank, and retain a fixed amount for business operations on the next day. The Petitioner did this, and the bank deposit was made. On the following day, Arthur Williams, the store manager, arrived with Chuck Newell, the Field Relief Manager, who was helping to train Williams. The two men opened the store, which was duly locked, and Williams disarmed the alarm system. Williams opened the store safe, and counted the money. There was supposed to be $1000 kept in the safe for store operations. The count revealed only $800. Williams and Newell recounted and then search the safe and cash registers to ensure it had not been left in one of these places; however, the money was not present. Having assured themselves by checking and rechecking that the money was not present, they proceeded to open the store for business with the money on hand, and then check with the bank. They physically drove to the bank and checked the nightly deposit, which was correct, the deposit receipt having tallied with the money deposited. Williams and Newell returned to the store and called the alarm system center. This center is operated by U-Haul, and each authorized employee has his or her own code for disarming the alarm upon entering the store. If the code is not entered, or if the premise is broken into, the alarm goes off. The alarm center reported that there were no entries into the building after it was locked the previous night until Williams opened it o that morning. There was no evidence of the building being burgled. When the Petitioner reported to work on May 5, 2004, Williams confronted him about the missing money. The Petitioner did not have an explanation. As the manager closing the store, the Petitioner was solely and personally responsible for the deposit and for securing the money left on the premises. Although personnel were permitted to make up cash drawer shortages, the money in question was "store" money, and the amount involved was more significant that typical cash drawer shortages. Having determined that there was in fact a cash shortage and that the Petitioner was the person responsible for the accountability and security of the funds, Williams made the determination to discharge the Petitioner. Williams, although in training, was the sole individual responsible for the decision to discharge the Petitioner. As mentioned above, Williams is a black male. Williams testified further regarding other persons whom he had discharged. Ms. B. Heaulskamp was discharged for refusal to work her assigned schedule. Mr. Zak White, a white male, was discharged for a shortage in his cash drawer. Heaulskamp was provided a letter of termination; however, this was Williams' first termination, and he was advised it was company policy not to provide termination paperwork. He did not provide the Petitioner or White with such paperwork. Williams hired the Petitioner's replacement, William Westry, who was a black male. Williams has hired two Haitians since the Petitioner's termination, both of whom were still employed at the store.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Florida Commission on Human Relations enter its final order dismissing the Petitioner's claims. DONE AND ENTERED this 26th day of May, 2005, in Tallahassee, Leon County, Florida. S STEPHEN F. DEAN 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 26th day of May, 2005. COPIES FURNISHED: Gueslin Vincent Post Office Box 20123 Tallahassee, Florida 32316 Jeremy P. Hertz, Esquire For & Harrison LLP 300 South Orange Avenue, Suite 1300 Orlando, Florida 32801-3379 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
Findings Of Fact On July 1, 1991, the Petitioner filed an application for certification as a MBE. Upon review of the application the Respondent denied the application and notified the Petitioner. The Petitioner subsequently provided additional information; however, the Department's position remained unaltered, and the Petitioner requested a formal hearing in November of 1991. ESTABLISHMENT OF THE APPLICANT BUSINESS Union Trucking, Inc., (Union) was established as a Florida corporation on February 5, 1986. Union is in the business of hauling construction aggregates and construction material in dump trucks. Warren Lee, a Black American, is the President of Union. From February 5, 1986 until April 1, 1991, Union, Warren Lee owned jointly 51% of Union with Denise Willis, an American woman, who owned 49% of Union. Denise Willis was the stepdaughter of M.H. Prichett who is discussed below. In April 1991, Robin Wilson, an Amercian woman, bought Denise Willis' interest in Union. The purchase price was covered by an unsecured note upon which Wilson has made no payments on the principal, and an undetermined amount in interest payments. Robin Wilson is the daughter of M. H. Pritchett, a white male. Currently, Robin Wilson is Secretary/Treasurer of Union, and handles all bidding and financial aspects of the company. FINANCIAL RELATIONSHIPS Startup money for Union was provided by a $4,000 loan from M.H. Pritchett. Conflicting testimony was received as to whom the loan was made, but the application reflects it was a loan to the corporation. Subsequently, Union has borrowed additional money from M.H. Pritchett, as follows: In 1986, $16,862.40 was borrowed from Pritchett at 11.5% interest to purchase a used trailer from Pritchett. In 1989, $12,000 was borrowed from Pritchett at 12.5% interest to purchase another used trailer from Pritchett. Prior to December 31, 1990, $2,000 was borrowed from Pritchett, and was not repaid during the year 1991. While this might have been part of the orginal start up loan, the applicant presented no evidence to indicate this on its financial statement. Prior to December 31, 1990, another $1,000 was borrowed from G.P. Materials, a company owned by M.H. Pritchett. This loan is listed on Union's financial statements for a year, but no evidence was presented that had been repaid. Warren Lee deposits savings from each of his paychecks into the M.H. Pritchett Special Account and receives no interest from his contributions to this account. The bank signature card submitted by Union still contains the signature of Denise Willis who no longer has an interest in the business. COMMON OWNERSHIP Mr. M.H. Pritchett owns all or part of several businesses including Pritchett Trucking, Inc, a trucking firm; Bulldog Trucking, Inc., a truck brokerage firm; Pritchett, Inc., a financing company; and G.P. Materials, a privately owned business. In addition, Mr.Pritchett maintains the M.H. Pritchett Special Account, a personal bank account, from which he loans and receives money from various truckers for purchases and for operating expenses. None of these businesses are certified as MBE's. Wilson is a corporate officer (secretary) of one of the Pritchett corporations, and owns stock in the other companies given to her by her father. Pritchett operates more than 100 tractor-trailer units and a large truck terminal. The terminal sells fuels, tires, and service to truckers in the Lake Butler area. His trucks haul, among other things, construction aggregates. Pritchett has sold and financed trailers and other equipment to various people and firms to include Lee and Union. COMMON EMPLOYEES Immediately prior to starting Union, Warren Lee worked full time for Pritchett Trucking. Union had gross receipts of $214,935.89 in 1990. Warren Lee makes $5.00/ hour driving a truck for Union. This is a take home pay of approximately $16,000/ year. He is not compensated for his work maintaining Union's equipment. Union had corporate earnings in 1991 of $24,000 and most of its gross profits are put back into the business for purchasing capital equipment. The net worth of the company has increased significantly. Gross receipts in 1991 were $479,000, with corporate profits of $24,000. Robin Wilson works full time for Pritchett Trucking, and part time for Union. She receives $425/ month for scheduling trucks and preparing bids and similar financial documents. In doing this, she uses Pritchett office equipment. She does not list her work for Union on her personal resume. Carol Murhee works full time for Pritchett as a bookkeeper, and part time for Union keeping its books. She keeps Union's books at night at her home upon equipment purchased for her by Union. Union employs one other full time driver, Sammie Bullington, who works part time for Bulldog Trucking, Inc., a Pritchett company. A part time driver, Greg Baker, also works for Pritchett Trucking, Inc. COMMON OFFICES AND EQUIPMENT Although Wilson dispatches trucks and prepares bids for Union at Pritchett's, Union does not pay Pritchett for office space or use of the copying machine and facsimile machine. Although Union does pay for the telephone used by Wilson to conduct Union business, it sits on Wilson's desk at Pritchett's office. Union does not reimburse Pritchett for the time which Wilson spends upon Union's business. Lee comes to Pritchett's building to confer with Wilson and to sign bids and contracts. COMMON OPERATIONS Union's trucks are leased by Union to Pritchett when Union has no jobs, and Union leases Pritchett's trucks when it has a contract which it cannot fill with its existing capacity. Such arrangements are common in this business. As a result, each company carries liability insurance covering leased vehicles. Union purchases fuel, equipment, tires and service from Pritchett. Pritchett has the largest truck terminal in the area, and provides Union with these products and services at competitive prices. Pritchett extends credit to Union without problem. Union either purchases its workman's compensation insurance through Pritchett, or does not have coverage.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, RECOMMENDED that the Petitioner's application for certification as a Minority Business Enterprise be denied. DONE AND ENTERED this 9th day of September, 1992, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 9th day of September, 1992. APPENDIX A Both parties submitted proposed findings which were read and considered. The following states which of the proposals was adopted and which was rejected and why: PETITIONER'S PROPOSED FINDINGS: Para 1 RO para 1 Para 2 RO para 2 Para 3a-e RO para 4 Para 3f RO para 11 Para 4 RO para 12 Para 5 RO para 15 Para 6 RO para 13 Para 7 RO para 17 RESPONDENT'S PROPOSED FINDINGS: Para 1,2 RO para 1 Para 3,4,5 RO para 2 Para 6 RO para 3 Para 7 RO para 4 Para 8 Irrelevant Para 9 RO para 9 Para 10 RO para 4 Para 11 RO para 5 Para 12 Irrelevant Para 13 RO para 6 Para 14 Summary subsummed in findings. Para 15 RO para 2 Para 16 Irrelevant Para 17 RO para 7 Para 18 RO para 8 Para 19 RO para 9 Para 20 RO para 10 Para 21,22,23 RO para 7 Para 24,25 RO para 11 Para 26 RO para 10 Para 27 RO para 12 Para 28 Irrelevant Para 29 RO para 12 Para 30 RO para 13 Para 31,32 RO para 14 Para 33,34,35 RO para 15 Para 36,37,38 Irrelevant Para 39 RO para 15 Para 40,43 RO para 16 Para 41,42 Irrelevant Para 44,45,46 RO para 17 Para 47 RO para 18 COPIES FURNISHED: Joan Van Arsdall Staff Attorney Department of Management Services Office of General Counsel Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Frank Gafford, Esquire Post Office Box 1789 Lake City, FL 32056-1789 Larry Strong, Acting Secretary Department of Management Services 307 Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950
The Issue The issue in this case is whether, pursuant to section 112.3173, Florida Statutes (2012),1/ Petitioner forfeited her Florida Retirement System ("FRS") Investment Plan account by having pled guilty/nolo contendere to felony counts of insurance fraud, grand theft, and patient brokering.
Findings Of Fact The Parties Petitioner, Nancy Maradey, was employed as a bus driver by Miami-Dade Transit ("MDT"), a unit of Miami-Dade County government, between January 2003 and July 2012. Respondent, SBA, is the entity of Florida state government that administers the FRS Investment Plan, a defined retirement benefits contribution plan.2/ § 121.4501(1), Fla. Stat. Events Giving Rise to this Proceeding While Petitioner was employed at MDT, she participated in the FRS Investment Plan through her employment with MDT.3/ Petitioner worked a split shift at MDT. This meant that she would punch in her time card in the morning, drive a route, return to the bus station, punch out her time card, return in the afternoon, punch in her time card again, and drive another route. While Petitioner was employed at MDT, a co-worker approached her regarding obtaining treatment at AJZ Medical Center ("AJZ"), a clinic located in close proximity to the MDT bus station. This co-worker told Petitioner that if she went to AJZ, she could receive therapy and be paid money for it. Petitioner claimed that she experienced back pain due to having undergone gastric bypass surgery. She sought and received treatment, consisting of massage and electric shock or stimulation, at AJZ on numerous occasions.4/ It was Petitioner's understanding that AJZ billed an insurance company5/ for the treatments. When the insurance company paid AJZ, AJZ then paid kickbacks to Petitioner. Petitioner estimated that she received between $5,000 and $6,000 in kickbacks from AJZ for receiving the treatments. An AJZ employee told Petitioner that if she referred others to AJZ for treatment, she would receive additional money from AJZ for those referrals. As a result of that communication, Petitioner referred her co-workers at MDT to AJZ for treatment. She told them that if they were treated at AJZ, they would receive money. Petitioner testified that it is common for bus drivers to have back and knee pain. Petitioner referred to AJZ only co- workers who she knew had injuries. On one occasion, Petitioner accompanied a co-worker to AJZ and informed AJZ personnel that the co-worker was there to receive treatment. Petitioner recruited only her co-workers to receive treatment at AJZ. She did not recruit anyone for treatment at AJZ who was not one of her co-workers at MDT. Petitioner claims that despite being told she would receive money for referring others to AJZ, in fact she did not receive any money for the referrals.6/ Petitioner and her co-workers were in the MDT bus station when they had discussions during which she referred them to AJZ.7/ Petitioner told her co-workers it would be easy for them to seek treatment at AJZ because it was close to the bus station. Petitioner was arrested in August 2012 and charged with felony counts of insurance fraud, grand theft, and patient brokering. All of Petitioner's conduct underlying the criminal charges took place while she was employed at MDT. On February 19, 2013, Petitioner entered into a plea agreement in Case No. F-12-20328G,8/ under which she pled guilty to felony counts of insurance fraud, grand theft in the second degree, and patient brokering for her actions in seeking treatment and receiving kickbacks from, and referring others to, AJZ for money. One of the conditions of the plea agreement was that Petitioner not seek future employment with state, county, or municipal government. As a condition of the plea agreement, adjudication would be withheld on these offenses if Petitioner cooperated with the State in investigating the matter. On July 22, 2013, Respondent formally notified Petitioner that as a result of her having pled guilty to felony counts of insurance fraud, grand theft, and patient brokering, she violated section 112.3173, which provides for forfeiture of the right to retirement benefits under the FRS upon a plea of guilty or nolo contendere to a specified offense. Petitioner's guilty plea was changed to a plea of nolo contendere on October 17, 2013.9/ Petitioner admitted that she knew, at the time she committed the offenses to which she pled guilty/nolo contendere, that her actions were wrong. Findings of Ultimate Fact The evidence establishes the existence of a nexus between Petitioner's employment as a bus driver with MDT and her participation in the crimes to which she pled guilty/nolo contendere. Specifically, Petitioner used the personal and professional relationships with her co-workers that she had developed through her employment at MDT and her consequent knowledge of their conditions——i.e. back and neck pain——to recruit them for participation in the insurance fraud scheme by referring them to AJZ. She recruited only her co-workers at MDT for participation in the scheme, and specifically recruited only those who she knew had pain issues. She went so far as to accompany one of her co-workers to AJZ and inform the staff at AJZ that her co-worker was there for treatment. She engaged in conversations with her co-workers while physically present on the MDT premises during which she recruited them for participation in the scheme by referring them to AJZ. But for her employment with MDT, Petitioner would not have had access to, or enjoyed the relationships with, the other MDT employees she recruited for participation in the criminal scheme, and she would not have had the knowledge of their conditions which made them targets for her recruitment efforts. Throughout all of this, Petitioner knew that her actions were wrong; nonetheless, she continued to engage in those actions. Her actions were thus done willfully and with intent to defraud the public of her faithful performance of her duties as a bus driver employed by MDT, her public employer. Plainly put, the public had a right to expect that one of its employees would not use the relationships, knowledge, and physical access to public premises and other public employees that she gained through her public employment to commit crimes. The public was defrauded when Petitioner used the relationships, knowledge, and access that she gained through her public employment position to commit crimes. The evidence further establishes that through Petitioner's use of her public employment position, she realized, obtained, and attempted to realize or obtain, a profit and gain. As discussed above, Petitioner was recruited by a fellow co-worker to seek and obtain treatments from AJZ in exchange for monetary kickbacks. Through her employment, she became involved in the insurance fraud scheme and realized financial profit and gain by receiving the kickbacks. She also used her position as an MDT employee to recruit other MDT employees for involvement in the scheme by referring them to AJZ; she did this for the specific purpose of realizing and obtaining financial profit and gain through payments from AJZ in exchange for referring co-workers for treatment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the State Board of Administration issue a final order finding that Petitioner was a public employee convicted of specified offenses that were committed prior to retirement, and that pursuant to section 112.3173 she has forfeited all of her rights and benefits under the FRS Investment Fund, except for the return of her accumulated contributions as of the date of her termination. DONE AND ENTERED this 16th day of January, 2014, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of January, 2014.
The Issue Whether Respondent’s pension should be forfeited based on his conviction for petit theft, a violation of the City of Tampa personnel manual.
Findings Of Fact Respondent was employed by the City as a Parks and Recreation Services Attendant II beginning in June 1999 through notification of his employment termination in 2012. At the time of his employment and on each three-year anniversary of the Union renegotiation of its contract with the City, Respondent was provided a copy of the City’s personnel manual. Specifically, Respondent was provided “Policy B28.2 Discipline Administration – Cause for Dismissal.” The manual states, in relevant part: Employees may be dismissed from employment for a variety of causes. The examples of misconduct and/or unsatisfactory performance enumerated in this policy for which dismissal is considered appropriate are not all inclusive. . . . The City of Tampa Civil Service Rules and Regulations authorize the City to dismiss employees due to incompetence, insubordination, neglect of duty, moral turpitude, and/or breach of peace (Article J. Section 4.a.). The types of conduct and/or performance which fall into these categories which may be considered cause for dismissal are listed below. As stated above, these lists are not all-inclusive. * * * c. Neglect of Duty * * * 9) Use of City equipment, including vehicles, for any unauthorized purpose. * * * d. Moral Turpitude * * * 2) Violation of City Code or other City policies relating to impartiality, use of public property, conflict of interest, disclosure and/or confidentiality. * * * 11) Theft or unauthorized removal or use of City property. The City has a program to recycle metal through a specific pre-selected vendor. All employees are advised of the process by which recycle materials are to be disposed. Should a City employee dispose of City property in a method not contracted for, that employee must secure a letter and additional documentation for the different method of disposal. In or about July 2012, Respondent and a coworker removed at minimum five metal trash cans from the NFL-YET Center, which is City property. Respondent and the coworker, while in their City uniforms, loaded the metal trash cans into a marked City truck. They proceeded to a non-authorized metal recycling center and attempted to sell the five metal trash cans. That metal recycling center declined to buy the trash cans as Respondent and his coworker did not have the appropriate letter or other documentation. Respondent and his coworker returned the metal trash cans to the NFL-YET Center. On July 11, 2012, Respondent and the coworker, while in civilian clothes, returned to the NFL-YET Center and loaded five metal trash cans belonging to the City into a private vehicle. They also had other metal in the vehicle. They proceeded to Trademark Metal Recycling (TMR). At TMR, Respondent and the coworker sold the five metal trash cans for $42.05. TMR staff reported the transaction to the Tampa Police Department (TPD) as the metal trash cans appeared to belong to the City. TPD conducted a criminal investigation. In July 2012, then TPD Detective Hinsz interviewed Respondent. Respondent admitted that he sold the five metal trash cans belonging to the City to TMR. Respondent further admitted to Detective Hinsz that he knew he was not allowed to sell city property. On July 12, 2012, Respondent was arrested and charged with petit theft and dealing in stolen property. On August 6, 2012, a Charge Sheet was filed in State of Florida v. Rodnick Vincent Boyd, Case No. 12-CM-13833, in the County Court of the Thirteenth Judicial Circuit in and for the County of Hillsborough, State of Florida, charging Respondent with one count of petit theft. In relevant part, the Charge Sheet: RODNICK VINCENT BOYD, on the 11th day of July, 2012, in the County of Hillsborough and State of Florida, did unlawfully obtain or use, or endeavor to obtain or use certain property of another, to-wit: trash cans, the property of CITY OF TAMPA, the value of said property being less than one hundred ($100.00) dollars in money current in the United States of America; and in so doing the defendant intended either to deprive the said CITY OF TAMPA of a right to the property or benefit there from, or to appropriate the property to his own use or to the use of any person not entitled thereto. On September 24, 2012, Petitioner entered a plea of nolo contendere to count one, petit theft. The Court withheld adjudication of guilt. The City’s retirement system is a public retirement system as defined by Florida law. See § 112.3173(5), Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the City of Tampa General Employees Retirement Fund enter a final order determining that Respondent has forfeited his rights and benefits under the Retirement Fund. DONE AND ENTERED this 22nd day of February, 2017, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of February, 2017.
The Issue The issue presented is whether Respondent is guilty of the allegations in the two Administrative Complaints filed against him, and, if so, what disciplinary action should be taken against him, if any.
Findings Of Fact On September 24, 1996, Respondent Lazaro R. Morera was certified by Petitioner Department of Law Enforcement, Criminal Justice Standards and Training Commission, and was issued law enforcement certificate number 166884. At all times material hereto, Respondent was employed as a police officer by the City of Miami Beach. Jose G. Coutin (hereafter referred to as "Coutin, Sr.") owned and operated a business in Miami known as Manhattan Medical Center, a medical clinic providing therapy for persons injured in auto accidents. The procedure at Manhattan Medical was the same for all patients. When a new patient came in, the patient filled out a form. Thereafter, the patient was scheduled for 34 therapy sessions, starting with three sessions a week. Every 30 days the patient signed a therapy sheet, which was a form confirming the patient had received the prescribed treatments, whether the patient had received treatment or not. Manhattan Medical billed the patient's insurance company every 30 days. After the usual 34 therapy sessions, Manhattan Medical then sent a final bill to the patient's insurance company. The patient made no payments or co-payments to Manhattan Medical for treatment. Manhattan Medical accepted whatever amounts the insurance company paid and then gave the patient a percentage of the money Manhattan Medical received. Coutin, Sr., who was not a medical doctor and had no medical training, privately advised the patients coming to Manhattan Medical that in addition to giving them part of the money Manhattan Medical received from that patient's insurance company, Manhattan Medical would also pay patients for referring others to the clinic. Arnaldo Bugallo is a "meter maid" for the City of Miami Beach Parking Department. He frequently spoke with Respondent when they saw each other during work activities. They were not personal friends. Bugallo was treated at Manhattan Medical for a back injury received in an auto accident. He never paid any monies related to his numerous treatments. Although he testified that he thought he could get additional free treatments for referring patients to Manhattan Medical, he denied knowing that he would receive from Manhattan Medical a portion of the money the clinic received from Bugallo's insurance company. When Coutin, Sr., quietly slipped a check for approximately $350 into Bugallo's backpack, Bugallo simply cashed it without questioning the reason he was receiving a check from Manhattan Medical. In early 2000 Respondent was involved in an auto accident. Some time later, Respondent complained at work to Bugallo that his back hurt, and Bugallo gave Respondent the address and telephone number of Manhattan Medical. When Respondent went to Manhattan Medical, Coutin, Sr., explained to him how the billings to Respondent's insurance company would work. Since Respondent had not come to the clinic shortly after his auto accident, Coutin, Sr., explained to Respondent that they would back-date the dates of his treatments in order to relate his treatments to his car accident. Respondent signed his therapy forms in blank. Thereafter, he seldom came in for treatment, but signed more blank forms at the clinic when the clinic called to say he had to come in to sign forms so they could bill his insurance company. The percentage that Manhattan Medical would pay each patient out of the monies received from that patient's insurance company varied. The usual amount was twenty percent. Coutin, Sr., paid Respondent thirty percent, however, because he knew Respondent was a police officer. He paid Respondent $1,932 on August 3, 2000, by check written on one of his other businesses, representing thirty percent of the approximately $6,000 which Manhattan Medical received from Respondent's insurance company. Based upon information received in 2000 from insurance companies, the Department of Financial Services initiated an investigation of Manhattan Medical. Violeta Serrano, one of the Department's insurance fraud investigators, reviewed insurance claim files and interviewed patients who gave sworn statements that they were paid money to treat at Manhattan Medical even though they received no treatments. She also interviewed runners who brought accident participants to Manhattan Medical and were paid by the clinic to do so. Based upon her investigation, she concluded that the clinic was billing for services not rendered and was paying alleged patients for treatments not received by them. She also discovered that doctors were not even present at the clinic every day. She participated in the execution of a search warrant, interviewed clinic employees, and took records from the clinic. The clinic owner, Coutin, Sr., was arrested. Serrano subsequently presented evidence to the State Attorney's Office, and Respondent was arrested. Coutin, Sr., already a convicted felon, was charged with insurance fraud (state charges) and possession of three guns by a convicted felon (a federal charge). Serrano arrested Coutin, Sr., for insurance fraud a second time when he attempted to collect more money while he was out on bond following his first arrest by her. Following his guilty plea, Coutin, Sr., received a sentence of two years in a federal prison for 20 counts of insurance fraud concurrent with two years for the weapons charge. Prior to Coutin, Sr., entering into his plea agreement, Serrano questioned him regarding the information she had on Respondent allegedly being treated at the clinic. He agreed to cooperate in her investigation and told her about Respondent's lack of treatments and about the check that he gave to Respondent. Coutin, Sr., has completed his prison term, has paid $137,000 in restitution, and has completed five years of probation. The charges against Respondent were dropped by the State Attorney's Office after he gave a sworn statement. Also arrested about the same time as Coutin, Sr., were Jose A. Coutin (hereinafter "Coutin, Jr.") and Coutin, Jr.'s, wife. Coutin, Jr., operated a similar clinic near Manhattan Medical. He also worked for Manhattan Medical, and Manhattan Medical processed the billing and claims forms for his clinic. Respondent never sold Luxor gold wire automobile rims to Coutin, Jr., and Coutin, Sr., never gave Respondent any money to pay for those rims. An investigation regarding Respondent was commenced by the internal affairs division of the City of Miami Beach Police Department. On November 12, 2003, the case was re-assigned to Officer Dale Twist. Eldris Rodriguez is a claims processor for Allstate Insurance. One of her co-workers is Ana Ruiz, who is currently Respondent's fiancé. Rodriguez and Ruiz were very good friends, who socialized together. Rodriguez' children and Respondent's children played together. On February 18, 2004, Respondent called Rodriguez at work and asked if she would play a prank on someone for him. She agreed to do so. He gave her a telephone number and asked her to call that number and tell Dale Twist's wife that Rodriguez was Dale Twist's mistress. After work, Rodriguez called the telephone number, but received no answer. She called Respondent to report that, and he told her to try again. Rodriguez waited for a few moments and placed the call again. This time a woman answered, and Rodriguez told the woman what Respondent had instructed her to say, including where Rodriguez and the woman's husband allegedly met each other. When that telephone call was completed, Rodriguez called Respondent and told him what had been said. Rodriguez did not know Dale Twist and did not know that he was a police officer with the City of Miami Beach Police Department. When Respondent gave Rodriguez the name Dale Twist, Respondent did not tell her that Twist was a police officer. He merely told Rodriguez that Twist worked for the City. Before long, Rodriguez was contacted by Cornelious O'Regan of the City of Miami Beach Police Department internal affairs division regarding her telephone call. She gave statements to internal affairs twice during the month of March. On May 21, 2004, Respondent gave a sworn statement as part of the internal affairs investigation. He denied giving Dale Twist's telephone number to Rodriguez and denied asking her to make the telephone call to Twist's wife claiming to be Twist's mistress.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding Respondent guilty of the allegations contained in both Administrative Complaints and revoking Respondent's certification as a law enforcement officer. DONE AND ENTERED this 17th day of September, 2008, in Tallahassee, Leon County, Florida. S LINDA M. RIGOT 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 17th day of September, 2008. COPIES FURNISHED: David H. Nevel, Esquire Nevel & Greenfield, P. A. 6741 Orange Drive Davie, Florida 33314 Sharon S. Traxler, Esquire Department of Law Enforcement - 7100 Post Office Box 1489 Tallahassee, Florida 32302-1489 Michael Crews, Program Director Division of Criminal Justice Professionalism Services Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302-1489 Michael Ramage, General Counsel Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302-1489
