Findings Of Fact Petitioner R. G. Furniture is in the business of manufacturing and selling extruded aluminum patio furniture. Petitioner is owned by Robert L. Gass, Jr., who was also the owner of the real estate which Petitioner occupies as a tenant. For purposes of this administrative proceeding and for purposes of relocation assistance benefits, the parties have stipulated that R. G. Furniture, Medallion Furniture, Mar-Tec Furniture, R. G. Cushion Co., Robert L. Gass, Jr., and all other related entities, corporations, or persons shall be treated as one party so that there will be no duplicity of claims made or of benefits paid. The patio furniture, umbrellas, and related items are both sold and manufactured by Petitioner on-site. Straight tubes of aluminum are cut to size, bent into shape, welded, finished, and electrostatically painted. Strapping is then applied, and the furniture is then fitted with custom-made cushions. After this process is completed, the furniture is shipped to the customer or sold on the showroom floor. The furniture moves through the system on an overhead conveyor through each stage of the fabrication process. The paint system is extremely complex and critical to the operation of the plant. As the furniture goes through the paint machine, a dry, powdered paint is applied through an electrostatic process which bonds positive and negative charges, after which the dry paint is melted in an oven and cured. Gass was the fee owner of the real property on which Petitioner, a company owned by him, operates. On September 3, 1987, the Department notified Gass that his real property was needed for a new highway, I-595 in Broward County, Florida. The project requiring acquisition of the real property and the relocation of Petitioner is a federally-funded highway construction project. The September 3, 1987, letter also notified Gass of a prenegotiation meeting. Pursuant to a contract with the Department, employees of Kaiser Engineers were responsible for both the acquisition of real property and relocation of personal property of businesses and persons being displaced by the I-595 project. Their duties included advising displacees regarding their rights, negotiating settlements, and approving payment of claims. Some of Kaiser's employees are involved with acquisition (acquiring ownership of real property) and different employees are responsible for relocation assistance (relocating personal property). An appraisal of the land and improvements at the manufacturing site was performed on behalf of the Department. The Department's real estate appraiser called in a machinery and equipment appraiser to estimate the then-current replacement cost new, market value in-place, and salvage value of certain "immovable business fixtures and special purpose process systems". That appraisal was performed by Gary Maehl as of December 19, 1987. The appraisal prepared by Maehl for Kaiser Engineers contained 20 categories/items, consisting primarily of the painting machinery and the assembly line. Although the cover sheet to Maehl's full report is entitled "Immoveable Business Fixtures and Special Purpose Process Systems," there is no evidence that Gass ever saw more of the report than the 3-page listing of the 20 items which was entitled "Inventory." The components of the 20 categories/items are all movable. They are either freestanding or are attached to the building by nuts and bolts. Seventeen of the 20 items are easily movable. The component parts of the painting system and assembly line are bolted together. Those parts are bought and sold new and used on the open market. Even the freight elevator is movable. At all times material hereto, Gass has intended to continue in the furniture manufacturing business at a replacement site. It is not disputed that the painting machinery and assembly line are necessary to the operation of the furniture factory. Gass began receiving correspondence and informational packets from Kaiser Engineers regarding various relocation benefits to which he and his businesses would be entitled as eligible displacees. By March 9, 1988, Gass had been notified of his company's eligibility for relocation benefits, and negotiations for the acquisition of his real property had begun. Using its standard form Right-Of-Way Purchase Agreement, the Department made a written offer to Gass to acquire his property, one of the largest properties involved in the I-595 project. Gass, through his attorney, rejected that offer. One of Gass' concerns involved the "down time" he would incur in his business if he were required to disassemble, move, reassemble and install his assembly line and painting system process. The disassembly, moving, reassembly, and installation would take from 3 to 6 months, or more, essentially putting him out of business for an extended period of time. One of the relocation benefits for which a displaced business may be eligible involves the concept of substitute personal property. Under that concept, a business may purchase new equipment and machinery, such as an assembly line or specialized process, and have it fully installed and operational before relocating the business. At that time, the old machinery and equipment is shut down, and the business moves to the relocation site ready to continue production with its operational replacement equipment. In that manner, a business suffers only the disruption involved in the physical move of its other personal property and its employees. It was important to Gass that he have a replacement assembly line and painting system process operational before moving to the relocation site. On August 22, 1988, Gass entered into a Right-Of-Way Purchase Agreement with the Department to which was attached an Addendum required by him. The Addendum was specifically incorporated by reference. The Agreement also required a higher purchase price than the Department's first offer to Gass. Although the Department contends that the Agreement is used only to purchase real property, paragraph III. (c) of the Department's standard form agreement contains the following language: "All personal property included in the purchase price shall be delivered to PURCHASER in the same condition existing as of the date of this agreement." The Addendum also contained, in part, the following language: Seller shall retain title to all movable items and all items of personal property not identified as fixtures in the attached Exhibit "A". Seller retains his right to relocation benefits under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and PURCHASER agrees to pay said benefits upon receipts [sic] of appropriate application from Seller. Exhibit "A" was the listing of 20 items prepared by appraiser Gary Maehl. The total purchase price for the land, improvements thereon, and the 20 items on the Maehl inventory was $3,985,000. The parties to the Agreement added a footnote to specify that the total purchase price included all costs and attorneys fees in settlement in lieu of condemnation. Terry E. Morris, the land acquisition director of Kaiser Engineers, who personally handled the acquisition of the manufacturing site since the parcel was one of the largest properties involved in the project, designated $477,000 of the purchase price to be for the items listed on the Maehl inventory. This figure represents their depreciated value in-place. Gass netted $88,000 from the transaction. Although R. G. Furniture has not yet moved to its replacement site, Gass made application to the Department for relocation benefits to purchase replacement items for the items contained in the Maehl inventory, primarily those items needed to begin assembling and installing a new assembly line and painting system process. The Department's denial of that claim is the subject of this proceeding. Although relocation benefits are usually not payable prior to the relocation, except in cases of justified hardship, the concept of substitute personal property would embody payment prior to relocation, and the parties have stipulated that the issue of eligibility regarding the items listed in the Maehl inventory only is ripe for adjudication. The relocation benefit involving substitute personal property is computed using two different formulas. One of those formulas contemplates that the property being replaced will be sold, and the sales price will be deducted from the cost of purchasing and installing the replacement equipment. There is no prohibition against the Department being the purchaser of the property which is being replaced. Petitioner is an eligible displacee. It is an on-going business being displaced as a result of a federally-funded highway project. All of the items listed in Maehl's inventory are items of personal property. Petitioner is entitled to relocation benefits for substitute personal property for those items. At the time of the final hearing in this cause, the cost of substitute items including installation at the replacement site was $752,900. The estimated cost of moving and reinstalling the replaced items, with no allowance for storage, is $494,100.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Petitioner entitled to relocation benefits for substitute personal property and paying Petitioner the sum of $275,900 as partial payment of the relocation benefits to which Petitioner is entitled. DONE and ENTERED this 12th day of September, 1991, at Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of September, 1991. APPENDIX TO RECOMMENDED ORDER Petitioner's second through fourth, eleventh, and twelfth unnumbered paragraphs have been adopted either verbatim or in substance in this Recommended Order. Petitioner's first, fifth through tenth, and thirteenth through eighteenth unnumbered paragraphs have been rejected as not constituting findings of fact but rather as constituting conclusions of law, argument of counsel, or recitation of the testimony. Respondent's proposed findings of fact numbered 1, 2, 4-8, and 10-13 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed findings of fact numbered 3, 9, 14, 15, 19, 20, 23, and 24 have been rejected as not constituting findings of fact but rather as constituting conclusions of law, argument of counsel, or recitation of the testimony. Respondent's proposed findings of fact numbered 17, 18, 21, and 22 have been rejected as not being supported by the weight of credible evidence in this cause. Respondent's proposed findings of fact numbered 16 and 25 have been rejected as being unnecessary for determination of the issues herein. COPIES FURNISHED: Ben G. Watts, Secretary Florida Department of Transportation Haydon Burns Building 605 Suwannee Street, M.S. #58 Tallahassee, Florida 32399-0458 Attn: Eleanor F. Turner Charles G. Gardner Assistant General Counsel Florida Department of Transportation 605 Suwannee Street, M.S. #58 Tallahassee, Florida 32399-0458 J. Philip Landsman, Esquire Margaret Z. Villella, Esquire Platt, Haas & Landsman, P.A. Broward Financial Centre 500 East Broward Boulevard, Suite 1850 Ft. Lauderdale, Florida 33394
Findings Of Fact At all times material hereto, Respondent was licensed as a residential contractor. Respondent entered into a contract (Exhibit 1) to do the masonry and plumbing work on a residence constructed for J.F. Demers at Citrus Springs, Florida, for a price of $7310. This final price was changed slightly due to additions to and deletions from the work to be done by Respondent. There is no dispute regarding these contract changes, and no issue is thereby raised. Demers paid Respondent as the work progressed, and made a final payment of $3740 on May 31, 1983. At the time this payment was made, Respondent provided Demers with a Waiver of Lien (Exhibit 3) releasing the property from all liens for labor and materials. At this time Respondent owed Carroll Contracting and Ready Mix, Inc. approximately $5000, some of which represented materials delivered to the Demers project. On August 26, 1983, Carroll Contracting filed a Claim of Lien (Exhibit 4) against Demers' property. At the time this lien was filed, Demers was out of state. When he returned, he talked to William Hausman, Secretary-Treasury of Carroll Contracting and presented to Hausman the Waiver of Lien he had received from Respondent. Upon advice of attorney, Carroll Contracting released the lien filed against Demers' property on September 21, 1983 (Exhibit 6). By check dated July 20, 1983 (Exhibit 7) Respondent paid Carroll Contracting $2054.58. Writing on the face of this check indicated balance due of $3600. The exact amount was not disclosed, but a substantial amount of the balance due was for materials purchased for jobs done by Respondent other than the Demers job. Respondent had purchased materials from Carroll Contracting for many years, and had paid his bills promptly before 1983. Prior to delivering the first concrete to the Demers project, Carroll Contracting required Respondent to pay $1000 on his account. When Respondent learned Carroll Contracting had filed a lien against Demers' property, he called Hausman to offer to pay part of his indebtedness if Carroll Contracting would release the lien. Hausman refused and he and Respondent exchanged angry words over the telephone. A consumer complaint was filed against Respondent and an Information was filed against Respondent charging him with diverting funds received from Demers to another purpose (Exhibit 9). Respondent pleaded nolo contendere to petit theft of this charge, was adjudicated guilty, and was sentenced to pay a fine of $1000 with probation for one year or until the fine is paid (Exhibit 11). Exhibit 10 indicates Respondent pleaded guilty to petit theft and was sentenced as shown in Exhibit 11. Respondent denies pleading guilty and the inconsistency between Exhibits 10 and 11 support his testimony. Respondent has paid all of the monies owed to Carroll Contracting, and is paying off his fine at the rate of $100 per month.
Findings Of Fact Petitioner is Central Phosphates, Inc. ("CPI"), a Delaware corporation, engaged in the business of processing phosphate and manufacturing phosphate fertilizer. Petitioner rents and operates a phosphate fertilizer processing plant which is located in the vicinity of Plant City, Florida (the "Plant"). At issue in this proceeding is whether a sales tax under Section 212.05, Florida Statutes (1977), is due on the rental of the Plant. The Plant was constructed in 1974. The construction was financed in an arrangement involving CF Realty, a sister company of CPI which is wholly owned along with CPI by CF Industries, Inc. CF Realty originally purchased the equipment and other personal property that constitute the Plant from certain contractors. CF Realty then sold the Plant to Plantlease Corporation ("Plantlease"), a New York for profit corporation. Plantlease is a wholly owned subsidiary of Morgan Guarantee Company, a New York lending institution. Plantlease was organized solely and specifically to acquire title to the Plant and to lease the Plant back to CPI, which would operate the Plant. Plantlease paid for the Plant by assuming CF Realty's indebtedness on the construction loan and by paying some additional cash. Plantlease then leased the Plant to CPI for an initial term of 15 years. At the end of this initial term CPI has the right to elect to extend the lease for an additional two years or it may elect to purchase the Plant from Plantlease. At the end of the first extended term, CPI has the option of renewing the lease for a second renewal term of two years, or purchasing the Plant. If the lease is extended to the full 19 years, CPI is entitled to purchase the Plant at the end of that term. CPI makes quarterly rental payments to Plantlease pursuant to the lease. Since the first payment of rent in May, 1975, CPI has also been paying to Plantlease a sales tax of four percent of the amount of each payment pursuant to Section 212.05, Florida Statutes (1977). Plantlease, in turn, has remitted these payments to the Florida Department of Revenue with which it has registered as a dealer. Plantlease, as a potential claimant of a refund of the allegedly erroneously paid rental tax, has waived its right to a refund as reflected in its letter dated May 4, 1978, to the Florida Department of Revenue. Since May, 1975, CPI has paid sales taxes into the State Treasury in the amount of $861,322.55 which rental tax along with all other rental tax payments paid on the Plant since May, 1978, would be refunded if CPI were not liable for the rental tax. On May 8, 1978, CPI filed an Application for Refund with the Comptroller's Office of the State of Florida seeking a refund of the amount allegedly erroneously paid by CPI to the State Treasury and giving reasons for the claim for a refund. CPI bases its claim for a refund on the grounds that the Plantlease rental of the Plant to CPI constitutes an occasional or isolated sales transaction under Section 212.02 (9), Florida Statutes (1977). By letter dated May 30, 1978, the Comptroller's Office denied CPI's Application for Refund and determined that CPI's transaction with Plantlease was not exempt from Section 212.05, Florida Statutes (1977), and the regulations pursuant thereto. On or about July 7, 1978, CPI timely filed a Petition for a Section 120.57(1), Florida Statutes (1977), hearing on the issue of whether, for aforementioned reasons, a refund was due on the sales tax paid on the Plant. By application dated May 9, 1975, and received by respondent on May 12, 1975, Plantlease applied to respondent for a certificate of registration to engage in or conduct business as a dealer. Item 10 on the form application calls for "Type of Business." In the blank provided, Plantlease's agent has supplied "Rental of personal property." Underneath the blank, in parentheses, are examples of types of businesses, "Grocery, hardware, jewelry " Exhibit A-I, attached to Joint Exhibit No. 2. The foregoing findings of fact should be read in conjunction with the statement required by Stuckey's of Eastman, Georgia v. Department of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976), which is attached as an appendix to the recommended order.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent deny petitioner's application for refund. DONE and ENTERED this 12th day of January, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 APPENDIX Except for the final paragraph, the findings of fact in the recommended order are based on the parties' stipulation, which was received as joint exhibit No. 2. Paragraphs one, two, three, five, nine and ten of petitioner's proposed findings of fact have been adopted in toto. The first sentence of paragraph four of petitioner's proposed findings of fact has been rejected as not being supported by the evidence. The second sentence has been adopted, in substance. Paragraph six of petitioner's proposed findings of fact has been adopted except for the second sentence, which is actually a proposed conclusion of law. Paragraph seven of petitioner's proposed findings of fact has been adopted, in substance. Paragraph eight of petitioner's proposed findings of fact has been adopted except for the second sentence, which is actually a proposed conclusion of law. Paragraphs eleven and twelve of petitioner's proposed findings of fact have been rejected as contrary to the evidence. COPIES FURNISHED: Charles Alvarez, Esquire Gary P. Sams, Esquire Mahoney, Hadlow & Adams Post Office Box 5617 Tallahassee, Florida 32301 Linda C. Procta, Esquire Harold F. X. Purnell, Esquire Assistant Attorneys General The Capitol, Room LL04 Tallahassee, Florida 32304
Findings Of Fact At all times material hereto, Petitioner has been in the business of manufacturing and selling extruded aluminum patio furniture. Petitioner is owned by Robert L. Gass, Jr., who was also the owner of the real estate which Petitioner occupied as a tenant. It was necessary for the Department to acquire the real property owned by Gass and to relocate Petitioner as a result of a federally-funded highway construction project, I-595 in Broward County, Florida. Accordingly, Gass and Petitioner became entitled to benefits pursuant to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. Pursuant to a contract with the Department, employees of Kaiser Engineers were responsible for both the acquisition of real property and the relocation of personal property of businesses and persons displaced by the I-595 project. Some of Kaiser's employees were involved with acquisition (acquiring ownership of real property) and different employees were responsible for relocation assistance (relocating personal property). An appraisal of the land and improvements at the manufacturing site was performed on behalf of the Department. The Department's real estate appraiser called in a machinery and equipment appraiser to appraise certain "immovable business fixtures and special purpose process systems." The machinery and equipment appraiser prepared an appraisal containing 20 categories/items, consisting primarily of the components of Petitioner's painting machinery and assembly line. A three-page listing of those 20 categories/items was compiled and became entitled "Inventory." Gass and the Department entered into negotiations for the acquisition of his real property. Gass was concerned about the "down time" Petitioner would incur if Petitioner were required to disassemble, move, reassemble, and install its assembly line and painting system process. It was important to Gass that Petitioner have a replacement assembly line and painting system process operational before moving to the relocation site. Gass was aware of the relocation benefit under which a displaced business might be eligible to purchase new equipment and machinery and have it fully installed and operational before the business is physically relocated. On August 22, 1988, Gass entered into a Right-of-Way Purchase Agreement with the Department under which the Department purchased from Gass the real property which was Petitioner's manufacturing site. Exhibit "A" to the Right- of-Way Purchase Agreement was the Inventory of the 20 categories/items prepared by the machinery and equipment appraiser. Petitioner subsequently made application to the Department for relocation benefits to purchase replacement items for the categories/items contained in the Inventory. The Department denied that claim for relocation benefits, and Petitioner timely requested a formal hearing regarding the Department's determination. The matter was thereafter transferred to the Division of Administrative Hearings where it was assigned DOAH Case No. 90-8112. In that dispute, the Department took the position that the 20 items in the Inventory were immovable trade fixtures and, therefore, items of real property, that those items had been purchased by the Department as part of its acquisition of the real property, and that Petitioner was entitled to no relocation benefits relative to those items. Petitioner, on the other hand, contended that the Inventory items were personal property, that they were not converted into real property because the Right-of- Way Purchase Agreement referred to them, and that Petitioner, through Gass, had specifically reserved its right to receive relocation benefits regarding those items due to negotiated language which Gass had required and which was included in the Addendum to the Right-of-Way Purchase Agreement. The threshold issue to be adjudicated in the underlying proceeding was whether the items of property listed in the Inventory were items of personal property, as Petitioner contended, or trade fixtures and items of real property, as the Department contended. Expert real property appraisers and expert machinery and equipment appraisers testified in the evidentiary hearing. The one area of agreement among them was that whether a piece of equipment is considered real property or personal property is a "gray area." On September 12, 1991, a Recommended Order was entered in DOAH Case No. 90-8112. That Recommended Order determined that all of the items listed in the Inventory were items of personal property, that the Right-of-Way Purchase Agreement was ambiguous, and that Petitioner was entitled to relocation benefits for substitute personal property in the amount of $275,900. On December 10, 1991, the Department entered its Final Order essentially adopting the Recommended Order. The Final Order specifically held that all of the items listed in the Inventory were items of personal property and that Petitioner was entitled to relocation payments for substitute personal property in an amount not to exceed $275,900 upon submission of the appropriate documentation. At the time that the Department denied Petitioner's claim for relocation benefits regarding those items listed in the Inventory and advised Petitioner of its right to request an administrative hearing regarding that determination, the Department believed, in good faith, that it had purchased the 20 categories/items listed in the Inventory as part of its acquisition of the real property at Petitioner's manufacturing site. At that same time, the Department believed, in good faith, that the 20 categories/items listed in the Inventory were not items of personal property and that Petitioner was not, therefore, entitled to relocation benefits for that personal property. At the time, the Department's decision to deny Petitioner's claim for relocation benefits was substantially justified. At the time, the Department's determination had a reasonable basis in law and in fact. When the Department and Gass entered into the Right-of-Way Purchase Agreement and Addendum and attached the Inventory as Exhibit "A" thereto, the Department believed that it had paid Petitioner, through Gass, those monies to which Petitioner was entitled related to the 20 categories/items listed in the Inventory. The Department did not foresee that Petitioner would be entitled to additional payments regarding those same items because language added to the Department's standard form contract increased the ambiguity in that document so that there was never a "meeting of the minds" as to whether the 20 categories/items listed in the Inventory were agreed to be real property acquired by the Department in the Right-of-Way Purchase Agreement or were agreed to be personal property and the subject of relocation benefits. Accordingly, circumstances exist which would make the award of attorney's fees and costs in this proceeding unjust.
Findings Of Fact Based on the evidence received at the January 18, 1989, hearing, I make the following findings of fact: Petitioner occupies 17,500 square feet of office space in two buildings in downtown Fort Lauderdale. One of these buildings is located at 105 East Broward Boulevard. It houses Petitioner's local Job Service of Florida office and the office's approximately 50 employees, including Jo Ann Gibson, who has managed the office since February, 1988, and her assistant, Irving Haber. On an average business day, 200 or so members of the public pass through the building to take advantage of the employment-related services offered by the office. The other building has a street address of 108 Northeast 1st Avenue. Fourteen employees of the Broward County tax collection field office of Petitioner's Bureau of Unemployment Compensation and their supervisor, Leon Liebman, as well as five other Department employees, work in this building. The two buildings are a distance of 30 to 35 yards from one another, but they are connected by a covered walkway. Between the two buildings also lies a common parking area for the employees of both buildings. Transients frequently gather in the parking area during non-business hours and often leave behind broken glass and other litter when they depart. There are four restrooms in each of the buildings: one for female employees; one for male employees; one for female members of the public; and one for male members of the public. A part-time, OPS Department employee used to work four hours each business day performing janitorial services in and around the buildings. In 1987, Petitioner contracted with Respondent to perform these services. There was dissatisfaction with Respondent's performance; however, no formal complaint was lodged against Respondent during the term of the contract. Therefore, despite its less than satisfactory performance, Respondent was awarded a second one-year contract to perform these services because it was again the low bidder. This second contract, which Petitioner is now seeking to cancel, expires June 30, 1989. It provides, however, that it "may be cancelled by either party by giving prior written notice of thirty (30) days to the other party." The contract further provides: In the event of violation or breach of terms of this contract or default by the contractor, and in addition to any other remedies provided by terms of this-contract or federal, state or local laws, the Florida Department of Labor and Employment Security reserves the right to recourse to the default procedures and remedies set forth in Rule 13A-1.06(4), Florida Administrative Code. Petitioner is attempting to invoke this latter provision in the instant case. The scope of the services Respondent is required to perform is described in paragraph VI of the contract as follows: Scope: The following tasks are routine janitorial duties to be performed as necessary or as directed by Jo Ann Gibson, Office Manager. DAILY (Monday - Friday) OFFICE AREAS Empty all waste paper containers. Empty and clean all ash trays. Dust all tables, desks, filing cabinets and work surfaces. Dust and remove all finder [sic] prints and marks from ledges, door casings, doors, window sills, walls, ceilings, and glass partitions. Remove floor and carpet stains (coffee, gum, scuff marks, etc.) and vacuum all carpet. Sweep and damp mop all non-carpeted areas. Replace burned out light bulbs (furnished by owner) Clean heat and air conditioning vents. Properly arrange office area and turn off lights upon completion of work. REST ROOMS AND LOUNGES: Wipe down urinals, toilets, and plumbing fixtures and cleaner/disinfectant. Remove dust, fingerprints, and marks from walls, doors, ceilings, mirrors, and stall partitions. Mop floors with cleaner/disinfectant. Restock with soap, towels, and tissue paper (furnished by owner). STAIRWAYS, HALLWAYS, CORRIDORS, ELEVATORS: Sweep and mop stairs and landings daily. Clean and polish all composition flooring. Remove dust, hand prints, and marks from walls, doors, ceilings, handrails, vents, grills, and bannisters. Replace burned out light bulbs (furnished by owner) OUTSIDE AREAS: Police lawn, flower beds, and parking lot. Remove weeks [sic] as necessary. Sweep sidewalks. PERIODIC REQUIREMENTS AND SERVICES (Beginning with contract period) AS NEEDED: (or as directed by Office Manager) Spot clean carpet. Replace waste paper container liners. Spray buff heavy traffic areas. Strip, seal, and wax all non-carpeted floors and landings. WEEKLY: Company representative to have personal contact with Office Manager. MONTHLY: Vacuum all upholstered furniture. Dust light fixtures and window blinds. Clean all interior and exterior glass. Remove all debris from roof. QUARTERLY: Strip and wax all non-carpeted floors. Shampoo or steam clean, as appropriate, all carpet. Clean and sweep parking lot. MISCELLANEOUS REQUIREMENTS AND SERVICES Complete supervision of the work force by a qualified supervisor furnished by the contractor. Public liability and workers' compensation insurance as required. All cleaning supplies and equipment shall be furnished by the contractor. All rest room supplies (i.e., soap, tissue paper, towels, etc.) shall be furnished by owner. All janitorial storage areas are to be kept clean and neat. Outside doors are to be kept locked while work is in progress, during other than normal business hours. Personnel will not be allowed to bring any items (other than job-related items) into the building. Personnel will not be allowed visitors, children, etc., in the building during the work period. All work shall be completed between tee hours of 5 p.m. and 8 a.m. and weekends. Vendor is liable for security of all building contents during work hours which are defined in item 9. above. During the term of this second contract, except for emptying wastebaskets and ashtrays, and arranging the office and turning off the lights upon leaving, Respondent has failed to perform on a daily basis as required the duties described in paragraph VI A-D of contract. Some of these tasks have been completed only occasionally, oftentimes after a complaint has been made by Gibson, Haber, or some other Department employee. Other tasks have not been done at any time during the contract period. Of particular concern has been the condition of the restrooms. They have been disinfected and cleaned on only an irregular basis. With respect to the "periodic requirements and services" referenced in paragraph VI the second contract, Respondent has not always, when needed during the term of the contract, spot cleaned carpeted areas, spray buffed heavy traffic areas to remove scuff marks, and stripped, sealed, and waxed non- carpeted areas. During this time frame, Respondent has also failed to dust the light fixtures and clean all interior and exterior glass every month, and to strip all non-carpeted areas and shampoo or steam clean all carpeted areas every three months. Furthermore, neither Castagna, nor any other representative of Respondent has had weekly contact with Gibson as contemplated by the contract. Regarding the "miscellaneous requirements" set forth in paragraph VI of the contract, specifically those prescribed in subsections 1 and 9 thereof, contract work has frequently been performed in the morning after 8:00 a.m. on business days by an unsupervised employee of Respondent's. In addition, except for disinfectant, Respondent uses Petitioner's, not its own, cleaning supplies. This is done, however, with Gibson's knowledge and consent. On or about September 26, 1988, Petitioner served on Respondent a written Complaint to Vendor in which it complained about Respondent's "[u]nsatisfactory performance" of its contractual obligations. The complaint contained the following statement: The offices are in deplorable condition. The infrequent and haphazard cleaning of the restrooms could be considered a health hazard. All that is being routinely done is the emptying of waste baskets. Under the daily requirement of the contract, numbers 3, 4, 5, 6 and 8 are completely ignored and none of the Periodic and Miscellaneous requirements are being met. Joe Castagna has been called twice and no one has shown up. A janitor showed about 9:00 a.m. and emptied waste basket[s], nothing more. The contract states "all work shall be performed between the hours of 5 PM and 8 AM and weekends." Services must be brought into compliance with contractual requirements within ten (10) calendar days of receipt of this complaint, and maintained satisfactorily for the duration of the contract. Failure to do so may result in a declaration of default in accordance with Rule 13A-1.006(4), Florida Administrative Code, cancellation of the contract, reprocurement of these services, charging all reprocurement costs and costs of cover to Bright Maintenance Inc. and removing Bright Maintenance Inc. from the bid list of the Department of Labor and Employment Security until such charges are paid. Following the issuance of this written complaint, there was some improvement in the contractual services provided by Respondent. They did not improve, however, to such an extent that Respondent was in substantial compliance with all of the requirements of the contract. In any event, Respondent's performance soon reverted to its abysmal pre-written complaint level. Accordingly, in response to Respondent's continuing failure to substantially comply with the terms of its contract, Petitioner, by letter dated October 18, 1988, provided Respondent with written notice of Petitioner's intention to find Respondent in default, cancel the contract, and obtain janitorial services from another source. The services rendered by Respondent subsequent to the issuance of this notice have remained deficient.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner enter a final order finding Respondent in default for failure to meets its obligations under its contract with Petitioner; cancelling the contact; requiring Respondent to pay any reprocurement costs and costs of cover; and removing Respondent from its vendor list until such costs are paid by Respondent. DONE AND ENTERED in Tallahassee, Leon County, Florida this 10th day of February, 1989. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of February, 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-6207 The following are my specific rulings on the findings of fact proposed by Petitioner: Accepted and incorporated in this recommended order. Accepted and incorporated. Accepted, but unnecessary, and therefore not incorporated. Accepted and incorporated. First sentence: Accepted and incorporated, except to the extent that it suggests that Respondent has not on a daily basis arranged the furniture and turned off the lights upon leaving the buildings. To the extent that this proposed finding so suggests, it is unsupported by the evidence. Second sentence: Accepted and incorporated. Third sentence: Accepted and incorporated, except insofar as it reflects that spray buffing has always been done by Respondent when needed; that Respondent has not vacuumed the upholstered furniture each month; and that Respondent has not cleaned and swept the parking lot every three months. Insofar as this proposed finding so reflects, it is unsupported by the evidence. Accepted and incorporated, except to the extent that it indicates that Respondent has not kept clean and neat the janitorial storage area. To the extent that this proposed finding so indicates, it is unsupported by the evidence. COPIES FURNISHED: David J. Busch, Esquire The Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32399-0657 Joseph Castagna, President Bright Maintenance Inc. 160 South University Avenue, Suite A Plantation, Florida 33324 Hugo Menendez, Secretary Department of Labor and Employment Security 206 Berkeley Building 2590 Executive Center Circle, East Tallahassee, Florida 32399-2152
Findings Of Fact 10. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on June 9, 2010, the Amended Order of Penalty Assessment issued on June 25, 2010, and the 24 Amended Order of Penalty Assessment issued on September 9, 2010, attached as “Exhibit A,” “Exhibit B,” and “Exhibit D,” respectively, and fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Jeff Atwater, Chief Financial Officer of the State of Florida, or his designee, having considered the record in this case, including the request for administrative hearing received from RALEIGH CUSTOM CARPENTRY & REMODELING, INC., the Stop-Work Order and Order of Penalty Assessment, the Amended Order of Penalty Assessment, and the 2°4 Amended Order of Penalty Assessment, and being otherwise fully advised in the premises, hereby finds that: 1. On June 9, 2010, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment in Division of Workers’ Compensation Case No. 10-244-1A to RALEIGH CUSTOM CARPENTRY & REMODELING, INC. The Stop-Work Order and Order of Penalty Assessment included a Notice of Rights wherein RALEIGH CUSTOM CARPENTRY & REMODELING, INC. was advised that any request for an administrative proceeding to challenge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28- 106.2015, Florida Administrative Code. 2. On June 9, 2010, the Stop-Work Order and Order of Penalty Assessment was served by personal service on RALEIGH CUSTOM CARPENTRY & REMODELING, INC. A copy of the Stop-Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. 3. On June 25, 2010, the Department issued an Amended Order of Penalty Assessment to RALEIGH CUSTOM CARPENTRY & REMODELING, INC. The Amended Order of Penalty Assessment assessed a total penalty of $1,492.30 against RALEIGH CUSTOM CARPENTRY & REMODELING, INC. The Amended Order of Penalty Assessment included a Notice of Rights wherein RALEIGH CUSTOM CARPENTRY & REMODELING, INC. was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 4. On August 12, 2010, the Amended Order of Penalty Assessment was served by certified mail on RALEIGH CUSTOM CARPENTRY & REMODELING, INC. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On August 26, 2010, RALEIGH CUSTOM CARPENTRY & REMODELING, INC. filed a petition for administrative review with the Department. The petition for administrative review was forwarded to the Division of Administrative Hearings on September 2, 2010, and the matter was assigned DOAH Case No. 10-8819. A copy of the petition is attached hereto as “Exhibit C” and incorporated herein by reference. 6. On September 9, 2010, the Department issued a 2™ Amended Order of Penalty Assessment to RALEIGH CUSTOM CARPENTRY & REMODELING, INC. The 2"* Amended Order of Penalty Assessment assessed a total penalty of $1,047.60 against RALEIGH CUSTOM CARPENTRY & REMODELING, INC. 7. On October 19, 2010, the 2"? Amended Order of Penalty Assessment was served by overnight carrier on RALEIGH CUSTOM CARPENTRY & REMODELING, INC. A copy of the 2" Amended Order of Penalty Assessment is attached hereto as “Exhibit D” and incorporated herein by reference. 8. On October 11, 2010, a Status Report was filed with the Division of Administrative Hearings which stated that there were no longer disputed issued of material fact. 9. On October 25, 2010, the Administrative Law Judge issued an Order Closing File which relinquished jurisdiction to the Department. A copy of the Order Relinquishing Jurisdiction and Closing File is attached hereto as “Exhibit E” and incorporated herein by reference.
The Issue The issue is whether Respondent should reimburse Petitioner for the attorneys' fees and costs Petitioner expended in its successful defense of Respondent's Stop-Work Order.
Findings Of Fact Hernandez, Inc., was a contractor based in the Jacksonville, Florida area, and was in the business of installing dry wall, among other construction-related activities. Its principal owner, Jorge Hernandez, founded the company in 1981. The Department of Financial Services is the state agency responsible for enforcing the Workers' Compensation Law. This duty is delegated to the Division of Workers' Compensation. The Division is a state agency. It is not a nominal party. On February 5, 2004, Hernandez, Inc., was engaged in installing drywall in the Bennett Federal Building in Jacksonville, Florida, using its own personnel, who were leased from Matrix, Inc., an employee leasing company, and two subcontractors, GIO & Sons (GIO), of Norfolk, Virginia, and U&M Contractors, Inc., (U&M), of Charlotte, North Carolina. The leased employees were properly covered by workers' compensation insurance provided by the lessor. Prior to contracting with GIO and U&M, Hernandez, Inc., asked for and received ACORD certificates of insurance, which on their face indicated that the subcontractors had both liability coverage and workers' compensation coverage. It is the practice of Hernandez, Inc., to ensure that certificates of insurance are provided by subcontractors. The office staff of Hernandez, Inc., at all times prior to going out of business, tracked the certificates and ensured that they were kept current. Hernandez, Inc. had relied on hundreds of these ACORD certificates in the past. During times pertinent, neither GIO or U&M maintained workers' compensation insurance on their employees that complied with the requirements of Section 440.38(7), Florida Statutes. On February 5, 2004, Katina Johnson, an investigator with the Division's Jacksonville office, made a routine visit to the Bennett Federal Building with another investigator. She observed personnel from Hernandez, Inc., and its subcontractors GIO and U&M, installing dry wall. She also determined that Hernandez, Inc., had a contract to install dry wall as a subcontractor participating in the construction of the Mayport Naval Station BEQ. U&M worked at both the Bennett Federal Building site and the Mayport BEQ site as a subcontractor of Hernandez, Inc. Ms. Johnson discovered that neither U&M nor GIO had workers' compensation coverage for its employers. Ms. Johnson asked for and received the certificates of insurance that Hernandez, Inc., had obtained from GIO and U&M, which facially suggested that Hernandez, Inc., had determined that its subcontractors had appropriate coverage. Nevertheless, she issued a SWO on February 26, 2004, to Hernandez, Inc., as well as GIO, and U&M. By the SWO, Hernandez, Inc., was charged with failure to ensure that workers' compensation meeting the requirements of Chapter 440, Florida Statutes, and the Florida Insurance Code, was in place for GIO and U&M. She also issued an Order of Penalty Assessment that eventually became an Amended Order of Penalty Assessment dated March 19, 2004. The SWO stated, in bold print, that Hernandez, Inc., was, "Ordered to Stop Work and Cease All Business Operations in the State." Hernandez, Inc., was, at the time, also engaged in construction at the new Jacksonville Library and at the Carlington Apartments, both of which were located in Florida. By the terms of the SWO, Hernandez was required to stop work in those sites also. The Division had no evidence that might cause it to believe that Hernandez, Inc., was operating in violation of the law at those sites. The SWO contained with it a Notice of Rights advising that a formal or informal administrative hearing might be had and required that a petition for a hearing be filed within 21 days of receipt of the SWO, if a hearing was desired. Hernandez, Inc., was not informed that it had the right to an immediate hearing. Hernandez, Inc., timely filed a petition demanding a formal hearing. In an effort to get back to work, Hernandez, Inc., entered into an agreement with the Division, whereby it paid a partial penalty of $46,694.03, but admitted no liability. The formal hearing did not take place until August 16, 2005. Ms. Johnson had the power to issue a stop-work order. She did not have to get approval from a neutral magistrate or from the Division. Because she was a recent employee of the Division, she conferred with her supervisor Robert Lambert before taking action, and he approved her action in writing. In February 2004, it was the policy of the Division to issue SWO's for all work sites even though it concluded that a violation had occurred in only the site or sites visited. The Division policy did not require an investigation into all worksites as a prerequisite to shutting down all worksites. The policy requiring a contractor to cease work at all worksites was not adopted as a rule. In February 2004, the Division asserted that compliance with Section 440.10(1)(c), Florida Statutes, required a general contractor to look beyond an ACORD certificate of insurance to determine if subcontractors had complied with the requirement to maintain the required workers' compensation coverage ". . . under a Florida endorsement using Florida rates and rules pursuant to payroll reporting that accurately reflects the work performed in this state by such employees." This policy was not adopted as a rule and was subsequently abandoned. The Division, in implementing this policy, asserted that a general contractor must actually review the policy of a subcontractor presenting an ACORD certificate and determine if it was in effect and if it complied with Florida law. This policy was not adopted as a rule and the policy was subsequently abandoned. The Division further asserted that the employees of the subcontractor of a general contractor were to be viewed as if they were employees of the general contractor, when contemplating workers' compensation coverage. This policy was not adopted as a rule. Ms. Johnson acted in conformance with the Division's policies in effect at the time the SWO was issued. The net worth of Hernandez, Inc., was a negative $1,821,599, on December 31, 2003. Hernandez, Inc., was struggling financially in February 2004, but was on the way to recovery until the SWO was issued. On November 30, 2004, the net worth of Hernandez, Inc., was a negative $1,161,865, and this figure included the sum of $978,000 that Mr. Hernandez put into the business. Accordingly, Hernandez, Inc., was a small business party for purposes of Subsection 57.111(4)(a), Florida Statutes, during times pertinent. The SWO, which terminated work at all Hernandez work sites, torpedoed any chance the company had to continue in business. Mr. Hernandez mortgaged his house, which he subsequently lost to creditors, in an effort to keep Hernandez, Inc., in business. All of his efforts failed. The failure was a direct result of the actions of the Division. The Division's interpretations of the law that precipitated their policies, and thus the failure of the business, were both wrong and unreasonable. Subsequent to the hearing and Recommended Order in Department of Financial Services, Division of Workers' Compensation v. Hernandez, Inc., Case No. 04-1174 (DOAH October 3, 2005), the Chief Financial Officer entered a Final Order styled, In the Matter of: Hernandez, Enterprises, Inc., Case No. 75492-05-WC (Florida Department of Financial Services, January 25, 2006). The Final Order noted that the contractor, Hernandez, Inc., complied with the extant law when it, ". . . demanded and received proof of insurance. . . . " The Final Order also noted that there was no authority produced by the Division that would permit the imposition of a fine on Hernandez, Inc. The Final Order further recited that there was no statutory duty on the part of a contractor to ensure (emphasis supplied) that its subcontractors had secured workers' compensation coverage for its employees. It noted that, ". . . without some formal delineation of the specific obligations of a contractor in ascertaining proof of insurance from a subcontractor, the Department cannot impose a penalty upon the facts presented in the instant case." The Division was ordered to rescind the SWO issued February 26, 2004, and the Amended Order of Penalty Assessment dated March 19, 2004, and was further ordered to repay the amount of $46,694.03, which had been paid to persuade the Division to abate the SWO. The action was initiated by the Division, which is a state agency. At the time the SWO was initiated, there was no reasonable basis in law and fact to do so. The actions of the Division were not "substantially justified." Hernandez, Inc., prevailed in the hearing because the Chief Financial Officer entered a Final Order in its favor and the Order has not been reversed on appeal and the time for seeking judicial review of the Final Order has expired. Hernandez, Inc., is, therefore, a "prevailing small business party." Hernandez, Inc., paid its law firm, Holbrook, Akel, Cold, Stiefel & Ray, P.A., $51,815.50 in attorneys' fees, and paid $8,837.00 in costs, in its successful defense of the Division's actions.
The Issue The issue in this case is whether the Florida Commission on Human Relations should grant the Petition for Relief alleging that the Respondent discriminated against the Petitioner on the basis of his marital status, in violation of Section 760.10, Fla. Stat. (1995).
Findings Of Fact The Respondent, Shaker Lakes Apartments Company d/b/a Seasons of Tampa, Limited, is a property management company whose principal place of business is in Cuyahoga County, Ohio. The Respondent owns real property or conducts business in Florida and has 15 or more employees. The Petitioner, Jerry Dolinger, was hired by the Respondent on or about August 14, 1989, as a maintenance supervisor at a starting pay of $12,000 a year. On or about May 1, 1991, the Petitioner was promoted to district manager at an annual salary of $20,541.57 ($395.03 per week), plus hospitalization benefits and the use of a company car. By the end of 1992, the Petitioner was demoted to maintenance supervisor, but his salary and benefits remained the same. The Petitioner's wife, Karen Dolinger, also was employed by the Respondent, as property manager for Seasons of Tampa, Limited. On or about April 1, 1993, the Petitioner's wife resigned due to disputes with and conduct of the Respondent's vice-president of operations, Jacqueline McCullough. Upon her resignation, she distributed a letter to all residents of the apartment complex giving the residents information concerning the change in property management and the names, addresses and telephone numbers of the Respondent's management personnel in Ohio. The Respondent did not wish to have the names, addresses and telephone numbers of the Respondent's management personnel in Ohio given to the tenants at Seasons of Tampa. The Respondent wished to have those individuals remain unknown to the tenants so all tenant complaints and similar issues would have to be resolved locally through the property manager and district manager. On or about April 2, 1993, Jacquelyn McCullough telephoned the Petitioner and asked whether he had any knowledge of his wife's letter to the tenants. The Petitioner denied any knowledge and in fact had no such knowledge. She asked if the Petitioner also intended to resign, and the Petitioner answered that he did not. Later on April 2, 1993, the Respondent terminated the Petitioner's employment. One of the reasons given for the termination--an alleged temporary staff reduction--was a pretext. (Within days of the Petitioner's termination, the Respondent hired someone to take the Petitioner's place as maintenance supervisor.) The other reason--alleged insubordination and disloyalty--was based on the Respondent's belief that the Petitioner knew about and participated in the letter to the tenants. But the only basis for this belief was the Petitioner's marital status. Since there was no evidence to support the Respondent's belief, the basis of the Petitioner's termination was his marital status. The Petitioner was unable to find reemployment until approximately June 11, 1993. However, his new employment was at a salary of only $17,000 a year, a reduction of $68.11 a week. The Petitioner suffered this reduction in salary until November 5, 1993, when he obtain employment at a salary higher than what he earned with the Respondent, together with hospitalization benefits and the use of a company car, for a total of salary loss during this period of $1,430.31. The Petitioner's loss of use of the Respondent's company car from April 2 through November 5, 1993, cost him monetary damages of $295 a month for replacement transportation, or approximately $2,100. (The Affidavit of Petitioner's damages incorrectly multiplies the monthly expense by 31 weeks, resulting in an incorrect alleged total loss of $9,145.) In order to redeem the second mortgage on the Petitioner's home, which went into default as a result of the loss of the Petitioner's salary, the Petitioner and his wife had to refinance, at a cost of $2,033.02. The Petitioner also claims damages due to the loss of life and health and hospitalization insurance from April 2 through November 5, 1993. But the Petitioner's testimony was that he could not afford to replace those insurance coverages, and there was not evidence that he suffered any out-of-pocket uninsured expenses that would have been covered by them. The Petitioner also claims damages for the loss of $3,775 worth of personal items sold to pay necessary living expenses for the period from April 2 through November 5, 1993. But those sums already are accounted for in loss of salary and would result in a double recovery if added to the loss of salary. Based on the Affidavit of Plaintiff's Attorney's Fees, a reasonable attorney fee in this case is $6,492.50. Based on the Certificate of Costs, reasonable costs to be taxed to the Respondent in this case is $178.42.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Commission on Human Relations enter a final order: finding the Respondent guilty of illegal discrimination on the basis of the Petitioner's marital status; and (2) requiring that the Respondent pay the Petitioner a total of $9,692.03, together with legal interest from November 5, 1993, plus $6,492.50 as a reasonable attorney fee, together with legal interest from May 1, 1996, as affirmative relief from the effects of the illegal practice. DONE and ENTERED this 6th day of June, 1996, in Tallahassee, Florida. J. LAWRENCE JOHNSTON, 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 6th day of June, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5381 To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the Petitioner's proposed findings of fact: Conclusion of law. 2.-5. Accepted and incorporated to the extent not conclusion of law, subordinate or unnecessary. Accepted and incorporated. Accepted but subordinate and unnecessary. Annual salary rejected as inconsistent with the Affidavit of Petitioner's Damages; otherwise, accepted and incorporated to the extent not subordinate or unnecessary. 9.-10. Accepted but subordinate and unnecessary. 11.-15. Accepted and incorporated. 16. Accepted but subordinate and unnecessary. 17.-23. Accepted and incorporated to the extent not subordinate or unnecessary. Amount of loss rejected as not proven by the evidence; "mental anguish, loss of dignity, and other intangible injuries" rejected as not relevant in this proceeding; otherwise, accepted and incorporated. Accepted and incorporated. COPIES FURNISHED: David E. Davis, Esquire 620 E. Twiggs Street, Suite 305 Tampa, Florida 33602-3929 Jacqueline McCullough Vice President Shaker Lakes Apartments Company 1422 Euclid Avenue, Suite 1146 Cleveland, Ohio 44115-1951 Sharon Moultry, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana Baird, Esquire Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149
