The Issue Whether Respondent timely filed a quarterly report as required under chapter 560, Florida Statutes (2015), or related rules.
Findings Of Fact OFR is the state agency responsible for the administration and enforcement of chapter 560, related to licensing of money services businesses, a term that includes money transmitter services, and the rules promulgated thereunder. Respondent is a money services business and has license number FT30800590. Respondent operates as a check casher, and is located at 3220 Sydney Dover Road, Dover, Florida. Every Florida licensed check casher is required to submit quarterly reports to OFR in a format which includes information specified by rule. See § 560.118(2), Fla. Stat. The due date for a check casher to have filed its money services business quarterly report for the quarter ending December 31, 2014, was February 16, 2015. OFR sent a reminder to Respondent within ten days following December 31, 2014, to file the quarterly report. OFR sent seven additional e-mails before the deadline advising Respondent to file the quarterly report within the deadline. On March 6, 2015, Respondent filed the quarterly report in the proper format; however, it was 18 days after the applicable filing deadline. OFR determined that Respondent’s late filing of the quarterly report is a “Class A” violation pursuant to rule 69V- 560.1000(39) and (150). OFR determined the appropriate penalty to be a $1,000 fine. Mr. Grosmaire’s testimony on the basis of OFR’s imposition of the $1,000 fine is credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Office of Financial Regulation enter a final order imposing an administrative fine of $1,000. DONE AND ENTERED this 19th day of July, 2016, 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 19th day of July, 2016. COPIES FURNISHED: Amjad J. Hijaz Mexican American Grocery 1105 Spurwood Court Brandon, Florida 33511 (eServed) William Michael Oglo, Esquire Office of Financial Regulation Fletcher Building, Suite 550 200 East Gaines Street Tallahassee, Florida 32399-0376 (eServed) Eric O. Husby, Esquire 2001 West Cleveland Street Tampa, Florida 33606 (eServed) Drew J. Breakspear, Commissioner Office of Financial Regulation 200 East Gaines Street Tallahassee, Florida 32399-0350 (eServed) Colin M. Roopnarine, General Counsel Office of Financial Regulation The Fletcher Building, Suite 118 200 East Gaines Street Tallahassee, Florida 32399-0370 (eServed)
The Issue Whether Respondents violated the statutes and rules alleged in the Second Amended Administrative Complaint; and, if so, what is the appropriate penalty to be imposed against Respondents.
Findings Of Fact OFR is the state agency charged with administering and enforcing chapter 560, Florida Statutes, including part II related to money services businesses. At all times material hereto, Payservices has been a foreign corporation and part II licensee pursuant to chapter 560, specifically a "money services business," as defined in section 560.102(22), and "money transmitter," as defined in section 560.102(23).4/ At all times material hereto, Mr. Danenberg has been the chief executive officer, compliance officer, and an owner of Payservices. As such, Mr. Danenberg is an "affiliated party" and a "responsible person" as defined in sections 560.103(1) and 560.103(33). Count I Licensees, such as Payservices, are required to annually file a financial audit report within 120 days after the end of the licensee's fiscal year. The financial audit report is prepared by a certified public accountant and is used to demonstrate to OFR that the licensee has the financial health to conduct its business and transmit funds within the State of Florida. Payservices' fiscal year ends December 31st. Respondents were required to provide Payservices' 2016 financial audit report to OFR by no later than May 1, 2017. On December 20, 2017, William C. Morin, Jr., OFR's Chief of the Bureau of Registration, contacted Payservices by email with regard to Payservices' failure to timely file a financial audit report within 120 days after the 2016 fiscal year ended. Mr. Danenberg responded by email that same day, telling Mr. Morin that Payservices' accountant had prepared a financial audit report "many months ago," and that it was his "impression" that it had been uploaded to the REAL system "at some point when we filed the quarterly reports." Mr. Danenberg attached to his December 20, 2017, email what OFR accepted as the financial audit report that same day. Notably, the document indicated it was prepared by a certified public accountant on June 15, 2017, after the May 1, 2017, deadline. In any event, Mr. Morin reviewed the REAL system regarding Payservices and determined there were no problems with the REAL system's ability to accept uploaded documents. Mr. Morin testified that he could see on the REAL system that Payservices successfully uploaded a quarterly report and Security Device Calculation Form on January 26, 2017, which created a transaction number. Mr. Morin also observed that Payservices started to upload its financial audit report, which would create a transaction number, but no financial audit report was actually attached and uploaded to the REAL system on January 26, 2017, under that transaction number. According to Mr. Morin, Payservices may have attempted to start to file a financial audit report on January 26, 2017, but it did not complete the transaction because no financial audit report was attached. At hearing, Mr. Morin acknowledged that: "When I looked at the Financial Audit Report transaction, nothing was attached. And I also know that the functionality of the REAL system will kind of allow for the transaction to be completed and nothing attached." Tr. p. 100. Mr. Morin testified that Mr. Danenberg was cooperative when he was contacted on Decemeber 20, 2017, and submitted the financial audit report. The persuasive and credible evidence adduced at hearing clearly and convincingly establishes that Respondents did not submit their financial audit report to OFR until December 20, 2017, almost eight months after the May 1, 2017, deadline. Count II Licensees, such as Payservices, are required to annually file Form OFR-560-07, Security Device Calculation Form, by January 31st of each calendar year for the preceding calendar year. The Security Device Calculation Form requires licensees to report to OFR the dollar amount of transactions with Florida consumers. The dollar amount of transactions identified in the form is then utilized by OFR to determine if additional collateral is necessary to protect Florida consumers in the event a claim is made against the collateral for monies that were not properly transmitted by the licensee. Andrew Grosmaire, OFR's Chief of Enforcement in the Division of Consumer Finance, acknowledged at hearing that a licensee has 60 days to amend the face value of its surety bond, should an increase be required, and that at all times material hereto, the value of Payservices' surety bond has been correct for the minimum amount required. Nevertheless, Mr. Morin testified that Respondents did not file Form OFR-560-07, Security Device Calculation Form, until February 10, 2018, ten days late. The persuasive and credible evidence adduced at hearing clearly and convincingly establishes that Respondents did not file Form OFR-560-07, Security Device Calculation Form, until February 10, 2018, ten days late. Count III Licensees, such as Payservices, are required to update information contained in an initial application form, or any amendment to such application, within 30 days after the change is effective. In Payservices' initial application dated September 25, 2015, Respondents identified Corporate Access, Inc., as its registered agent with an address for service of process at 236 East 6th Avenue, Tallahassee, Florida 32303. According to the Department of State, Division of Corporation's records, on January 10, 2017, Mr. Danenberg was appointed as Payservices' registered agent with a new address for service of process at 300 West Palmetto Park Road, A210, Boca Raton, Florida 33432. Respondents filed an amended license application with OFR on August 28, 2017, which still listed Corporate Access, Inc., as the registered agent for service of process. On February 26, 2018, Respondents amended their registered agent information with the Department of State listing a new address for Mr. Danenberg at 14061 Pacific Pointe Place, No. 204, Delray Beach, Florida 33484. Mr. Morin testified that at no time have Respondents updated their initial application with OFR to reflect Mr. Danenberg as the registered agent for Payservices and his address as the registered agent.5/ Mr. Morin and Mr. Grosmaire testified that the reason a licensee needs to update a change in the registered agent's name and address is so that OFR may effectuate service of process against the licensee. Yet, Mr. Grosmaire acknowledged that OFR has access to the Division of Corporation's records. Nevertheless, the persuasive and credible evidence adduced at hearing clearly and convincingly establishes that Respondents did not update their initial application with OFR to reflect Mr. Danenberg as the registered agent for Payservices and his address as the registered agent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that OFR impose an administrative fine against Respondents in the amount of $6,000. DONE AND ENTERED this 16th day of December, 2019, in Tallahassee, Leon County, Florida. S DARREN A. SCHWARTZ 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 December, 2019.
The Issue The issue in this case is whether Petitioner has just cause to terminate Respondent's employment.
Findings Of Fact At all times pertinent to this case, Respondent was employed by Petitioner as a food service worker in the cafeteria at Ballard Elementary School. Respondent was hired by Petitioner on November 5, 1998. Prior to the incidents giving rise to the Complaint, Respondent had a relatively good employment record, with two disciplinary matters documented in her personnel file. On September 17, 2001, Respondent was given a written reprimand for refusing to follow her supervisor's directions and giving inappropriate verbal responses. More recently, on April 16, 2012, Respondent received a verbal reprimand for not properly accounting for student meals. Just days after Respondent received a verbal reprimand related to accounting for student meals, a vehicle in which Respondent was a passenger was stopped by a police detective. As described below, this traffic stop ultimately led to Respondent's arrest and subsequent third-degree felony charge for engaging in a scheme to defraud in an amount less than $20,000, in violation of section 817.034(4)(a)3., Florida Statutes (2011).1/ On February 21, 2013, Respondent pled nolo contendere to the charge. Adjudication was withheld, pending Respondent's successful completion of a five-year term of probation with specified conditions. The circumstances giving rise to the criminal charge against Respondent were described in detail by the City of Bradenton Police Department detective who arrested Respondent. The detective testified that on April 20, 2012, he pulled over a vehicle for failing to stop at a stop sign. The detective approached the passenger side of the vehicle, where Respondent was seated. The detective observed a laptop computer on Respondent's lap, open and in use with a portable internet access device, but Respondent quickly shut the laptop as the detective approached. For reasons that are not germane to the Complaint in this case, the detective instructed Respondent to exit the vehicle, and he placed her in handcuffs. The detective asked for identification, and Respondent told him it was in her purse, which she had placed on the passenger seat when she exited the vehicle. The detective retrieved Respondent's purse and looked inside for her identification. In addition to Respondent's identification, the detective also found several Visa debit cards with different people's names on them. Also in the purse were written instructions for filing tax returns through TurboTax, along with ledgers containing names, social security numbers, dates of birth, and other personal identification information. Some of the names on the ledgers matched the names on the debit cards found in Respondent's purse. Respondent was arrested for an unrelated matter and transported back to the police station for questioning. At the police station, Respondent was given her Miranda rights and then questioned about the laptop and material found in her purse. In her post-Miranda interview, Respondent told the detective that the laptop was hers, but she had sold it to a woman she knew only as "Tiffany" for $200. Respondent told the detective that she and Tiffany entered into an arrangement whereby Respondent would assist Tiffany in a scheme to file tax returns in other people's names using TurboTax. The TurboTax filings would direct that the tax refunds, issued on debit cards, be sent to Respondent's residence. For each debit card received pursuant to this scheme, Tiffany would pay Respondent $500, with one exception: Respondent admitted to the detective that she gave her mother's personal information to Tiffany, who filed a tax return in Respondent's mother's name; for this debit card, the deal was that Respondent and Tiffany would split the amount of the tax refund 50-50. Respondent gave information to the detective regarding where "Tiffany" could be found, but there was no "Tiffany" at the place Respondent identified. The detective determined through a search of Respondent's laptop that Turbotax had been in use when he approached the vehicle and saw Respondent quickly closing the computer. However, Respondent admitted that she had already filed her own tax return, so there would be no reason for her to be using Turbotax, except in furtherance of the scheme to secure other people's tax refunds. The detective traced the individuals whose names were on the debit cards found in Respondent's purse, and he discovered that they all were residents of a nearby retirement community. He interviewed the residents, who reported to the detective that they did not know Respondent and that they had not authorized Respondent or "Tiffany" to file tax returns on their behalf. Respondent admitted to the detective that she knew what she was doing was wrong and illegal. At the hearing, Respondent provided only vague, general, and somewhat contradictory testimony regarding the circumstances giving rise to the criminal charge to which she pled no contest. On the one hand, she claimed that although she was charged, she "didn't have nothing to do with what went on[.]" She later admitted that she was wrong, but took the position that she already had been punished for her wrongdoing and deserved a second chance. The only specific fact Respondent disputed regarding her role in the debit card scheme was whether she was the one who actually filed the tax returns. Respondent did not deny that she took part in the scheme to defraud vulnerable people out of their tax refunds for her own financial gain. Respondent did not deny that she used her own mother's personal information for Respondent's financial gain. Overall, Respondent's testimony lacked credibility and did not effectively refute the detective's more credible testimony. Respondent's court appearance at which her plea was made was on February 21, 2013, at 11:00 a.m. That day was a work day for Respondent, and the hours she was supposed to work were 7:00 a.m. to 9:45 a.m., and 10:15 a.m. to 1:30 p.m. Respondent acknowledged that she left the cafeteria sometime between 10:00 a.m. and 10:30 a.m. for her court appearance and did not return to work that day. However, Respondent filled out her semi-monthly payroll sheet form to reflect that she was present and working from 7:00 a.m. to 9:45 a.m. and from 10:15 a.m. to 1:30 p.m., on February 21, 2013. Respondent signed the payroll sheet that she filled out to falsely reflect that she was working and should be paid for time that she was not actually at work. Petitioner's food services department informed its employees that it considers the accurate completion of time records on the payroll sheet to be very important. A June 2012 written policy was circulated to food service employees to emphasize that each employee must take care to ensure that the time records are accurate, including "[a]ctual start and [a]ctual end times," verified by the employee's signature. As emphasis, a text box on the written policy contained the message that "[p]utting false or incorrect information on your timesheet is Time Card Fraud and is grounds for disciplinary action up to and including recommendation for termination." Respondent acknowledged that she is aware that Petitioner expects employee time records to be accurate and truthful, and that falsification of a time sheet is considered time card fraud. Respondent also acknowledged that it was her signature on the payroll sheet that was filled out inaccurately for February 21, 2013. Respondent testified that she did "not remember" putting down the wrong hours or signing the payroll sheet, but the fact remains that the record was submitted with her signature verifying that she worked hours that she admittedly did not work on February 21, 2013. The result of Respondent's signed submission was that she was paid for hours that she knows she did not work. The credible evidence established that Respondent filled out her time records on the payroll sheet form to reflect that she worked a full day on February 21, 2013, which she knew was not true. Respondent signed the payroll sheet form, vouching for the false information that she knew would be used to pay her for hours she did not work. Respondent did not dispute Petitioner's authority to terminate her for just cause, nor did Respondent dispute most of the facts alleged as the basis for establishing just cause. Instead, Respondent's position was that despite her wrongdoing, she should be given a second chance, having worked for Petitioner for 15 years. Essentially, then, Respondent's defense was an argument for mitigation of the penalty to be imposed. In furtherance of her position, Respondent presented testimony from two character witnesses, but the witnesses knew little to nothing about the nature of the criminal charge to which Respondent pled no contest. Neither witness offered any information about Respondent for the time period at issue in this case. One witness was a neighborhood acquaintance who has only known Respondent for three months. The other witness was a former cafeteria supervisor who was terminated by Petitioner five years ago. The former supervisor testified that during the time she and Respondent worked together, Respondent was a hard worker who had her difficult moments, but who complied with and followed instructions "most of the time." When Respondent asked her former supervisor whether she believed that everyone deserves a second chance, the witness responded as follows: "I believe everyone should have a second chance. Some people need more than two chances, and [Respondent] might be that person. There's been times that maybe she hadn't followed the rules entirely, but who does?" Petitioner advocated against leniency based on the unrefuted evidence that a cafeteria worker, such as Respondent, has access to personal and financial information about students and their families. Accounts are established for students to draw on for their cafeteria purchases. Student account funds are deposited, withdrawn, and accounted for by food service workers. Family names, phone numbers, and addresses are included with the student account records. In addition, many account records reflect personal financial information of the student's family, including information on applications submitted to qualify students for free or reduced-cost lunches and information from governmental programs that provide aid to students, such as the state-federal program to provide temporary assistance for needy families (TANF).2/ It is reasonable for Petitioner to be concerned with the risk that would be presented by allowing Respondent to continue in her position where she has access to individual financial information of students and their families. It is not unreasonable for Petitioner to be unwilling to take that risk, given Respondent's very recent involvement in a scheme to defraud vulnerable people, including her own mother, for Respondent's financial gain.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Manatee County School Board enter a final order terminating the employment of Respondent, Nikki M. Brydson. DONE AND ENTERED this 5th day of December, 2013, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR 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 5th day of December, 2013.
The Issue Should Petitioner's application for registration as an associated person be approved?
Findings Of Fact From April, 1985 to August 1986, Petitioner was employed as a registered associated person of Dean Witter Reynolds in Tallahassee, Florida. The Reebok Trade On March 11, 1986, Petitioner was instructed by one of his customers to sell 200 shares of stock in Reebok International, Ltd. (Reebok). By mistake, Petitioner executed an order to sell 500 shares of Reebok on behalf of the client. On March 17, 1986, the client came to Petitioner's office and while reviewing the client's account, Petitioner discovered the error he had made on March 11, 1986. Petitioner told his supervisor, Mr. Brock, of the mistake. The supervisor told Petitioner that he should "bust" the trade. This meant reversing the transaction and purchasing 300 shares of Reebok. It is Dean Witter's policy that whenever an error is discovered, it should be covered immediately. Petitioner, however, did not cover the error. From March 11, 1986 to March 17, 1986, the price of Reebok stock had increased. Petitioner decided to wait and see if the price would come down. Sometime after March 17, 1986, Mr. Brock left the firm and a new supervisor, Mr. Cavelle, took his place. On April 30, 1986, Mr. Cavelle noticed the Reebok error in the error account and executed an order to cover the error by purchasing 300 shares of Reebok stock. From March 11, 1986 to April 30, 1986, the price of Reebok stock increased substantially, and the error in the Reebok trade resulted in a loss of $9,225.00 to Petitioner's client. The client was reimbursed by Dean Witter. Petitioner received a written reprimand from Dean Witter and agreed to pay Dean Witter the amount of the loss. While Petitioner remained employed with Dean Witter, $400.00 were deducted from his monthly pay check to pay off the loss. After Petitioner was fired from Dean Witter in early August, 1986, he has only been able to make sporadic payments, totalling approximately $600.00 to $700.00. The Corpen One Transactions Sometime in May, 1986, while Petitioner was still employed at Dean Witter, Petitioner and John Collins formed Corpen One, Inc. (Corpen). The corporation was formed to run a hot dog vending cart operation in Tallahassee, Florida. John Collins was named president and Petitioner was the secretary and treasurer responsible for handling the corporation's finances. In order to raise capital for the corporation, Petitioner found three other persons willing to invest in the corporation. Curtis Davis, J.B. Durham and Jeff Burkett each invested approximately $4,000.00, in return for part ownership of the corporation. With the unused cash which the corporation had, Petitioner opened a bank account with Barnett Bank. From May 15, 1986, to July 17, 1986, Petitioner, without the knowledge of other stockholders, wrote checks to himself from the corporate bank account totalling $3,500.00. The dates and amounts of each check were: May 15, $800; May 19, $1,200; May 27, $800; June 26, $100; July 17, $600. These amounts were used by Petitioner for personal expenses. He treated them as loans from the corporation. Eventually, he repaid the loans with interest equal to what would have been earned had the money been invested in a Dean Witter money market account. Sometime in early July, 1986, Petitioner determined that it would be a good idea to open up a Dean Witter money market account for the funds which the corporation had in the bank account. On July 9, 1986, Petitioner, in his capacity as a Dean Witter employee, assigned a Dean Witter new account number, number 531015757, to the corporation. He did this by personally writing the name Corpen One, Inc. in the Dean Witter "New Account Number Assignment" log. This procedure was contrary to Dean Witter's policy which required that the new accounts clerk assign the new account number. In the clerk's absence, a person other than a broker or salesperson should assign the number. When Petitioner returned to his desk to complete the paperwork necessary to open a new account, he discovered that he needed to have a Federal Tax Identification Number for Corpen in order to open the account. Since Corpen did not yet have such a number, Petitioner never opened the account. During the period of time he borrowed money from the corporation, Petitioner filled out Dean Witter receipts which showed Dean Witter as having received $3,300 from Corpen to be invested in a money market account. The dates and amounts of the receipts were: May 15, $800; May 19, $1,200; May 27, $800; July 17, $500. The receipts were filled out completely and included the account number which Petitioner had assigned to Corpen One for the account which was never opened. Sometime in July or early August, 1986, Mr. Durham and other shareholders of Corpen became concerned with the operation of the corporation. Sales were not as high as expected and the corporation was not doing well. Also, Petitioner wanted to be relieved of his duties, because the time needed to run Corpen was interfering with his duties at Dean Witter. The more Mr. Durham checked into the operation of the corporation, he became convinced that improprieties were taking place. After several meetings took place, Petitioner handed over to Mr. Durham the corporate records in his position. These records included the cancelled checks Petitioner had written to himself and the Dean Witter receipts. When Mr. Durham saw the Dean Witter receipts, he asked Petitioner about them. When he did not receive a satisfactory answer, he took the receipts to Dean Witter and met with Mr. Cavelle, the branch manager. Mr. Cavelle tried to look the account up on his computer and discovered there was no account. He then checked the new account log book and discovered that Petitioner had personally assigned the account number. When Mr. Cavelle asked Petitioner to explain what had happened, he received what he considered a "hazy" explanation, and fired Mr. Hicks. Mr. Cavelle's main concern was that the receipts made Dean Witter potentially liable for the amounts shown in each receipt. After being fired, Petitioner was unemployed for four to five months. From February, 1987 to May 1988, Petitioner worked for Corporate Risk Management, a company managing self-insurance funds for employees. Petitioner is now the manager of the Melting Pot restaurant in Panama City Beach, Florida. For 1987, Petitioner earned approximately $13,000. His current salary is $1,200 per month.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a Final Order denying Petitioner's application for registration as an associated person. DONE and ORDERED this 19th day of January, 1989, in Tallahasee, Florida. JOSE A. DIEZ-ARGUELLES Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of January, 1989. APPENDIX The parties submitted proposed findings of fact which are addressed below. Paragraph numbers in the Recommended Order are referred to as "RO ." Petitioner's Proposed Findings of Fact Proposed Finding Ruling and RO Paragraph of Fact Number Second sentence accepted. Rest of paragraph is rejected as irrelevant or argument. Rejected as irrelevant. First three sentences rejected as argument. Fourth and fifth sentences accepted. Supported by the evidence but unnecessary to the decision reached. The implication in the first sentence that the delay was someone else's fault or that the stock market is to blame is rejected. Petitioner has only himself to blame for the delay. Third sentence is rejected as argument. Fourth sentence accepted. Last three unnumbered paragraphs are argument Respondent's Proposed Findings of Fact Proposed Finding Ruling and RO Paragraph of Fact Number Not a finding of fact. Accepted. See Background section of RO. 3.-4. Not a finding of fact. See Background section of this RO. Accepted. See Background. Not a finding of fact. See Background. Accepted RO1. Accepted RO12. Rejected as recitation of testimony. Also, as to the first sentence, Mr. Durham's testimony on direct was weakened by the cross- examination where his memory of events was tested. As to the second, third and fourth sentences, Mr. Hicks executed the receipts, and borrowed money from Corpen One. However, the evidence fails to establish that Mr. Hicks "converted" to his own use money which was to be invested in the money market account. Rejected as recitation of testimony. But see RO18. Accepted. RO20, 21. Rejected as not supported by the evidence. Rejected as recitation of testimony. Rejected as recitation of testimony except fourth and ninth sentences. ,16.,17. Rejected as not a finding of fact. Rejected as irrelevant. Accepted. RO2.-4. Rejected as recitation of testimony. But see RO6. ,22. Rejected as recitation of testimony. But see RO5.-10. 23. Rejected not as a finding of fact. 24.-28. Rejected as recitation of testimony. COPIES FURNISHED: John D. Hicks 3918-A Raven Street Panama City, Florida 32312 Reginald R. Garcia, Esquire Assistant General Counsel Department of Banking and Finance The Capitol, Suite 1302 Tallahassee, Florida 32399-1302 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 Charles L. Stutts General Counsel Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350 =================================================================
The Issue The issues in this case are whether Petitioner, Gary P. Santoro (“Petitioner” or “Mr. Santoro”), undeservedly received a failed grade on the Construction Business and Finance Examination (“Examination”) for licensure as an air-conditioning contractor; whether any questions on the examination had more than one correct answer; whether the examination is unfair; whether there is transparency in the examination review process; and whether the examination grading process is arbitrary and capricious.
Findings Of Fact Mr. Santoro took the Examination on November 16, 2018. Petitioner failed the Examination because he scored less than 70 percent correct. The Examination contains 125 questions, 120 of which are scored. The other five are not scored and are considered “pilot” questions for potential use on future examinations. In order to pass the Examination, a candidate must obtain a score of at least 70 percent. All scored questions on the Examination are weighted equally. As a result of failing to pass the Examination, Petitioner was notified of his results. All questions on the Examination had a single correct answer. Cynthia Woodley, Ph.D., employed by Professional Testing, Inc. (“PTI”), as the chief operating officer, is an expert in psychometrics and exam development. She holds a master’s degree in vocational education and a doctorate in curriculum and instruction with a specialization in measurement. Her current position calls for her to manage a number of licensure and certification exam programs. She explained at length how specific questions become part of a professional licensure exam. To develop questions, her company brings in any number of subject matter experts, people actually employed in the professions being tested, and they help develop subject matter questions for a particular exam. That was the process used for development of the Examination in this matter. Once the subject matter experts are trained in exam question writing techniques, they write questions, which are reviewed by other subject matter experts to determine whether the questions are fair and understandable enough to be answered by prospective test takers. Generally, five subject matter experts review each question before it makes its way onto an exam. PTI measures the “P value” of the questions by determining what percent of individuals taking a given exam answer a particular question correctly. For example, a P value of .90 means that 90 percent of the people taking the exam answered a particular question correctly. PTI looks for a wide range of P values in its exam questions. If a P value is too low, say .40, the company might reexamine that question to determine whether it should be removed from future exams since fewer than half the people taking the exam answered it correctly. The business and finance portion of the exam is given to all contractors, regardless of their specialty, with the exception of pool service contractors. Here, Petitioner, a HVAC contractor was administered the same Examination as plumbing contractors, electrical contractors, general contractors, etc. Each of the 120 questions on the exam in this case was equally weighted. There were also five pilot questions inserted into the exam, which did not count towards the total score, but were included as test questions for future exams. Petitioner provided hearsay documents regarding computer hacking and computer glitches associated with some exams administered around the United States. However, he did not connect the articles submitted into evidence to the exam administered in this case or any exam administered by the Department in Florida. Dr. Woodley was familiar with the allegations of computer glitches in testing, but testified that the problems were with K-12 testing in schools, not with professional licensure exams, such as administered by the Department. Therefore, since the hearsay evidence was not linked to the exam at issue or similar professional licensure exams given in Florida, it is entitled to no weight in arriving at the decision in this case. Question BF 1290 has a single correct answer, which is answer “C.” Petitioner selected answer “B.” Petitioner was unable to demonstrate that the answer he selected was correct. Question BF 0473 has a single correct answer, which is answer “A.” Petitioner selected answer “C.” This question asks for an answer of general applicability. Petitioner’s claim that his answer is equally correct is based on a narrow exception in law. Accordingly, Petitioner was not able to demonstrate that the answer he selected was correct. Question BF 0162 has a single correct answer, which is answer “B.” Petitioner selected answer “C.” Petitioner was unable to demonstrate that the answer he selected was correct. Question BF 1691 has a single correct answer, which is answer “C.” Petitioner selected answer “D.” Petitioner was unable to demonstrate that the answer he selected was correct. Petitioner was unable to submit sufficient evidence to show that the Examination is unfair, that there is insufficient transparency in the examination review process, or that the examination grading process is arbitrary and capricious. Accordingly, he cannot prevail in his challenge to the Examination. Petitioner testified that he took and passed the HVAC contractors special license examination on his first attempt. He has taken the Examination on numerous occasions and is yet to be successful. He testified he studied hard for every administration of the exam, but just cannot reach the finish line successfully. While that is unfortunate, the evidence does not support that his failure to succeed on the Examination is the fault of the exam itself or of the Department either in its contracting to have the exam created or in the administration of the exam. From the way he conducted himself at hearing, Petitioner appears to be an intelligent, diligent, and successful individual in his HVAC business. For some unknown reason he has been unable to successfully complete the Examination. His persistence in retaking the Examination multiple times is admirable and should ultimately pay off with his successful passage of the Examination.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Construction Industry Licensing Board enter a final order upholding the Department’s Amended Grade Report finding that Petitioner failed to achieve a passing score on the Construction Business and Finance Examination, which he took on November 16, 2018. DONE AND ENTERED this 23rd day of August, 2019, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN 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 23rd day of August, 2019. COPIES FURNISHED: Thomas G. Thomas, Esquire Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399-2202 (eServed) Gary Peter Santoro Hometown Air & Services 8229 Blaikie Court Sarasota, Florida 34240-8323 (eServed) Ray Treadwell, General Counsel Office of the General Counsel Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399-2202 (eServed) Daniel Biggins, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399 (eServed) Halsey Beshears, Secretary Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399-2202 (eServed)
The Issue By a Notice to Show Cause filed in the above-styled cases, the Petitioner seeks to suspend or revoke the Certificate of Qualification and license issued to Homer (Glen) Leonard Wade, d/b/a American Collection Systems, Inc., Respondent to operate a collection agency for conduct of violative of provisions of provisions of Chapter 559, Florida Statutes; namely -- Threatening to communicate or communicating with a debtor's employer prior to obtaining a final judgment against the debtor or without securing the debtor's written permission in violation of section 559.72(4), Florida Statutes. Collecting or attempting to collect from a debtor or debtors a fee for collection services without authorization to do so in violation of Section 559.75(5), Florida Statutes. Communicating orally or in writing, with a debtor in such a manner as to give the false impression or appearance that the licensee or his agent was an attorney or was associated with an attorney in violation of Section 559.72(12), Florida Statutes. Claiming, attempting or threatening to enforce a consumer claim when knowing the right to collect such claim did not exist in violation of Section 559.72(9), Florida Statutes. While not part of Petitioner's Notice to Show Cause, the issue of Petitioner's jurisdictional authority to revoke or suspend Respondent's license and certificate was raised by its Motion to Dismiss filed herein. NOTICE In that a recommended order was submitted by the hearing officer who conducted the hearing in the instant case and upon consideration of said recommended order the agency intends to reject certain findings of fact and reject or modify certain conclusions of law, it states that such was done only after reviewing the entire record consisting of the specific documents required under Section 120.57(1)(b)(5).
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the arguments of counsel, and the briefs submitted by the parties, the following relevant facts are found. During times materiel herein, Homer (Glen) Leonard Wade, d/b/a American Collection Systems, Inc., has been continuously issued a Certificate of Qualification to operate a collection agency in this State pursuant to Chapter 559, Florida Statutes. At the outset of the hearing, Respondent's counsel contested the Petitioner's jurisdiction to take administrative action to suspend or revoke the Respondent's Certificate of Qualification or license issued pursuant to Chapter 559, Florida Statutes, Part IV, on the basis that Section 559.79, Florida Statutes (1977), provides in pertinent part that only a circuit court and not an administrative agency has the express statutory authority to suspend or revoke certificates of qualification or licenses issued pursuant to Chapter 559, Florida Statutes. After reviewing the arguments and the citations of authorities, the undersigned concludes that the Petitioner is vested with the implied authority to specify conditions under which such certificates (licenses) shall be held and revoked, and such appears to be in keeping and necessarily implied from the power to issue a certificate and thus is in keeping with the necessary and broad power granted to Petitioner to issue certificates. It is thus concluded that the power to issue certificates in this instance carries with it the power to specify the terms and conditions of the issuance, as well as terms and conditions upon which the same may be held or revoked. See, for example, State Board of Education v. Nelson, So.2d 1979, Florida Law Weekly, 880 (1st DCA 1979), and 1 FIa.Jur.Prud., 2nd Adm.Law, 21. In Case No. 78-2428, the Petitioner, in support of its Notice to Show Cause, alleges that the Respondent engaged in the following: On or about January 15, 1976, the Respondent/Licensee or an agent of the Respondent/Licensee, did violate Subsection 559.72(7), Florida Statutes, by willfully communicating with Debtor David Gottlieb or a member of his family with such frequency as to harass the debtor or his family and willfully engaged in other conduct which could reasonably be expected to abuse or harass the debtor or a member of his family during the course of collection agency activity. On or about January 21, 1976, the Respondent/Licensee or an agent of the Respondent/Licensee, did violate Subsection 559.72(5), Florida Statutes, by disclosing to a person other than David Gottlieb or his family information affecting the reputation of Mr. Gottlieb whether or not for credit worthiness, with knowledge or reason to know that the other person did not have a legitimate business need for the information. On or about July 12, 1970, Respondent, American Collection Systems, Inc., by or through its agent, servant or employee did communicate or threaten to communicate with the employer of Mr. Donald Terry, a consumer, prior to obtaining final judgement against Mr. Terry without Mr. Terry having given his permission in writing to contact his employer or having acknowledged in writing the existence of the debt after that debt had been placed for collection in violation of Subsection 559.72(4), Florida Statutes. On or about April 9, 1976, Respondent, American Collection Systems, Inc., by or through its agent, servant or employee did communicate or threaten to communicate with the employer of Mr. James T. Redington, a consumer, prior to obtaining final judgement against Mr. Redington and without Mr. Redington having acknowledged in writing the existence of the debt after that debt had been placed for collection in violation of Subsection 559.72(4), Florida Statutes. On or about April 9, 1976, Respondent, American Collection Systems, Inc., by or through its agent, servant or employee did orally communicate with a consumer, Mr. James T. Redington, in such a manner as to give the false impression or appearance that its agent, servant or employee was associated with an attorney in violation of Subsection 559.72(12), Florida Statutes. On or about August 24, 1976, Respondent, American Collection Systems, Inc., did claim, attempt or threaten to enforce a consumer claim against Ms. Patricia M. Tracey when it, its agents, servant or employee knew the claim was not legitimate or that the right to collect the consumer claim did not exist in violation of Subsection 559.72(9), Florida Statutes. Thereafter, in Cases Nos. 79-910 and 79-911, the parties stipulated that the controversy involves a legal question as to whether or not the Respondent is authorized to exact a fee, an amount agreed to be computed at the rate of 6 percent simple interest, which amount was added to the amount Respondent attempted to collect from each of the debtors cited in the Notice to Show Cause herein is permissible under Subsection 559.75(5), Florida Statutes. J. Lymon Babcock, Jr., is Petitioner's investigator who conducts background investigations for collection agency applications. He has custody of the license end records and is familiar with the Respondent's licensing entity, American Collection Systems, Inc. Babcock testified that Respondent was first licensed on or about January 26, 1973, and has continued to hold a license since that time. Respondent's certificate has been renewed annually and audit numbers are changed when the annual renewal is furnished. (See Petitioner's Exhibits 1 and 2 composites.) On or about August 10, 1976, Respondent, by letter of the same date, advised John and Patricia Tracey of Coral Springs, Florida, that they owed a Dr. Jorge $149.60 and requested payment in the full amount at his office within five days to avoid the exaction of additional court costs and other legal expenses. (Petitioner's Exhibit 4 composite.) Ms. Tracey appeared at the hearing and testified that she spoke to an unidentified female employee of Respondent and a Mr. Hawk and a Mr. Richards, who also requested payment of the $149.00 as set forth in the demand letter of August 10, 1976. At that time, the Tracey's testimony was that they had also been contacted by Respondent and Broward Adjustment Bureau for the same indebtedness to Dr. Jorge which, according to their records, reflected an amount owing of $136.00. The Traceys received a second letter from Respondent on September 8, 1976, from Mr. Richards, the General Manager, and Bruce L. Glaskin, attorney for Respondent. (Petitioner's Exhibits 6 and 7.) Both letters also requested payment within five days of the date of the letters. The Traceys testified that they had made arrangements with Broward Adjustment to pay the indebtedness in two monthly installments of $68.00 each. The Traceys contacted Consumer Affairs prior to the time that they received the last demand letter from Respondent and it appears that the indebtedness had been paid by October 12, 1976. (See Petitioner's Exhibits 3, 4, 5, 6, 7 and 8.) On cross-examination, the Traceys acknowledged that the debt was a legitimate debt which was due and owing and that they never notified the Respondent in writing that the debt had been paid to either Dr. Jorge or the Respondent. Maxine Hughey is employed by Rolando Jorge, M.D., P.A., in the collection department primarily in the workmen's compensation collection section. Ms. Hughey testified that she turned the Tracey account over to Respondent sometime during 1970. It appears that after the Traceys advised Respondent that they had been contacted by another collection service for payment of the same indebtedness to Dr. Jorge, Mr. Godette of Respondent's office advised Ms. Hughey that Respondent was still working the Tracey account for Dr. Jorge. Ms. Hughey advised Respondent by letter dated August 11, 1976, that the accounts for Dr. Jorge had been withdrawn from the Respondent verbally during mid-September, 1974. Ms. Hughey testified that she withdrew the collection accounts of Dr. Jorge from Respondent due to the slow recovery on collections. (See Petitioner's Exhibits 9 and 10.) Ms. Hughey spoke to Respondent, Homer (Glen) Leonard Wade, during August or September, 1976, and inquired of Respondent why he was working the Tracey account. Respondent replied that Dr. Jorge had not withdrawn the accounts that had been assigned to him and that for him (Dr. Jorge) to assign the accounts to anyone without prior contact and arrangement with Respondent would subject Dr. Jorge to a legal suit. On cross-examination, Ms. Hughey testified that the Tracey account was turned over to Respondent during December, 1973, and that Broward adjustment received two payments from the Traceys account on September 15, 1976, and October 26, 1976. She also testified that she formally notified Respondent that Dr. Jorge was withdrawing the accounts assigned to Respondent during 1974. In this regard, no written evidence was offered establishing that any attempt at withdrawal of accounts was sent to Respondent until the letter dated August 11, 1975, was mailed by Ms. Hughey allegedly per instructions from Dr. Jorge. Ms. Hughey forwarded a copy of the letter to Mr. Godette of Consumer Services on or about August 25, 1976, when she received inquiry from the Traceys referencing the demand letters the Traceys had received from the Respondent. In this regard, Respondent introduced a copy of its collection procedures which was submitted to all its clients and prospects. Respecting Respondent's collection procedures, paragraph 2A provides in pertinent part that: We will close any account to you upon your request after listing, with these exceptions: (1) Those paying (2) Those promised to pay (3) Forwarded accounts (4) Those accounts in law or hands of attorney and of course, those we have reduced to judgements for you. (Respondent's Exhibit 1.) James Redington, an engineer for Motorola, appeared and testified that he received demand letters requesting collections from Respondent during January, 1976. Mr. Redington acknowledged a past-due account with Dr. Jacobsen. Mr. Redington testified that "Bob Cash", one of the Respondent's aliases, called him at work and inquired when his delinquent bill would be paid. According to Redington, after receiving two calls from "Bob Cash", he was advised by "Cash" that Respondent was holding a check payable to Dr. Jacobsen which was returned for insufficient funds. Thereafter, in April, 1976, Redington received another call from a Mr. Richardson, who was then Respondent's General Manager, who advised Mr. Redington that there was an outstanding warrant which had been issued due to the outstanding sufficient insufficient funds check made payable to their client, Dr. Jacobsen, and requested that payment be made immediately or the Sheriff would serve the warrant. Redington immediately went to Respondent's office and spoke to "Bob Cash", who advised that Richardson, Respondent's General Manager, had called. Redington tendered "Cash" a money order for the indebtedness and requested that the returned check be given to him. Redington had no further contact with Respondent, although the Sheriff did serve the warrant on him at work. Donald Terry, an instructor at Plantation High School, received a demand letter from Respondent during the summer of 1976 for a $48.00 indebtedness he owed a Dr. Segal. Mr. Terry received a phone call from a representative of Respondent advising him that if he did not make arrangements to pay the indebtedness owed Dr. Segal, the Respondent would "take him to court." Terry testified that within two days he received another call from an employee of Respondent who advised that if he did not pay his indebtedness, his employer would be contacted. Terry received a copy of the letter which, in his opinion, had been mailed to his employer. The letter was received from Respondent at Plantation High School. (Petitioner's Exhibits 12 and 13.) Additionally, Mr. Terry received another demand letter inquiring of the Segal's indebtedness in the mail. (Petitioner's Exhibit 14.) On cross-examination, Terry testified that the letter was not distributed at the school and that he paid the indebtedness in full the following year, which was a legitimate debt owed to Dr. Segal. Derrick Costa, Respondent's manager, was first employed during 1974 and since 1976, has served as a quasi-manager. Costa testified that the name changed from American Collection Service to American Collection Systems, Inc., during September or October of 1976. He testified that at all times material, Wade had ultimate responsibility and authority for the operation of both American Collection Service and American Collection Systems, Inc. Costa expressed familiarity with the Redington account and testified that he worked the account, which was due for Dr. Jacobsen. Costa testified that he never threatened to contact Mr. Redington's employer nor had he violated in any manner Chapter 559, Florida Statutes. On redirect examination, Costa testified that true names were never used when dealing with debtors and that the aliases such as "Richards", "Cash", etc., are used extensively in a collection business. Petitioner also introduced into evidence copies of a letter which had been forwarded to Irving Weislander of Sunrise, Florida, and Jeanette Mims of Boca Raton, Florida. According to Petitioner, these letters were intended as a threat and mailed to the above-named debtors' employers. (See Petitioner's Exhibits 15 and 16.) Another letter of the same type was mailed to James Fannin of Lauderdale Lakes, Florida. (See Petitioner's Exhibit 17.) Homer (Glen) Leonard Wade, Respondent, appeared and testified in his own behalf. Wade heard Costa's testimony and adopted it in all respects. Respondent testified that he never threatened Redington or Terry, nor did be indicate to them that he would contact their employers. He testified that he never held himself out as an attorney with Redington. Respondent testified that he has a collections manual which is given to all employees and that that manual sets forth in vivid detail, the practices and procedures utilized in collecting accounts assigned to him. He testified that new employees are oriented respecting the do's and don'ts of the collection business for approximately four days and they are administered a test on the fifth day. The employees are assigned collection tasks only if they pass the examination. Respondent stressed that he apprises new employees that both the "spirit" and "letter" of the law must be adhered to rigidly. Respondent testified that he uses the "gag" of long distance calls on occasion as the situation dictates. He testified that it is not improper to engage in such gags in the collection business. He testified that the gag of making a long distance telephone call was used in the case wherein the James T. Redington account was serviced because, in his personal opinion, a review of Redington's credit history file revealed that his account was in fact collectible. Respondent has serviced the collection accounts for Dr. Jorge since approximately 1973. A problem in the servicing of Dr. Jorge's accounts when he was unable to pick up same accounts that Dr. Jorge wanted serviced one day during 1973. According to Respondent, there was never any conversations with Dr. Jorge respecting termination of his contract with him, nor did Dr. Jorge ever write him a letter advising that he wanted to terminate his contract with Respondent. Respondent has been engaged in business since 1951. CASE NOS. 79-910; 79-911 The Petitioner has alleged that the Respondent violated Subsections 559.72(4) and 559.72(5), Florida Statutes, by its allegation dent Respondent has either communicated or threatened to communicate with the employers of debtors without first obtaining the debtors' written permission to do so and by sending certain demand letters to debtors demanding payment of sums which are in excess of the original amount of the debt. Respecting the allegation that the Respondent has attempted to collect a fee violative of Subsection 599.75(5), Florida Statutes, the parties stipulate that the method of calculating the amount set forth in the demand letter is based on an amount less than 6 percent simple interest. The uncontroverted evidence clearly indicates that in every instance Respondent's letters to the debtors are for an amount in excess of the original obligation. However, the difference between the original amount of the debt and the amount sought to be collected, in each instance, falls below the permissible interest rate allowed by Section 687.01, Florida Statutes. Respondent gave sworn testimony that the excess amounts demanded represented interest and was not a collection fee. Both Subsections 559.75(1) and 687.01, Florida Statutes, provide for the calculation and collection of interest. Subsection 559.75(1), Florida Statutes, states in applicable part: Any payment made by a debtor to a collection agency shall be deemed to be made to the creditor and such payment shall be made in the following order: Court costs and attorney fees; Principal amount of the consumer claim and incurred interest; and Other legally chargeable fees. Additionally, Section 687.01, Florida Statutes, states: In all cases where interest shall accrue without a special contract for the rate thereof, the rate shall be 6 percent per annum, but parties may contract for a lesser or greater rate by contract in writing. Inasmuch as the language of Subsection 559.75(1), Florida Statutes, provides that a collection entity such as Respondent is permitted to charge interest at the legal rate for all debts collected and inasmuch as all of the requested sums fall within the prescribed rate of interest, it can only be concluded that such was a legally chargeable rate of interest and not a fee for the collection of the debt which is passed on to the debtor. This is especially true in view of the sworn testimony of Respondent and/or its employees. Respecting the allegations that the Respondent either communicated or threatened to communicate with the employers of the debtors without first obtaining the debtors' written permission, the evidence reveals that Respondent's employees sent to the employee-debtor carbon copies of letters addressed to the employee's employer. The contents of the letters are demands to assist the Respondent in collecting a lawful debt owed by the debtor- employee. In all instances, the debtors acknowledged that the debts were in fact legal debts which had not been paid. The evidence also reveals that the original of the letters were never sent to the employers or anyone else and at no time did the debtors' employers ever receive the letter. It view thereof, it is impossible for the Respondent to have violated the cited statutes under its terms concerning "communication" with the debtors' employers. The remaining portion of the above allegation is to the effect that the Respondent "threatened to communicate with the debtor's employer. . .,". Under the above-referred to facts, it is impossible to "threaten" to do the act which the statutes proscribes. The Respondent's action herein is clearly not a "declaration of intention. . .to do an unlawful act." An intent to do an act evidences the accomplishment of it sometime in the future. Under the circumstances herein, any act in the mind of the debtor was clearly consummated. Nothing remained to be done and hence no threat was possible at the time the debtors received the communication from the Respondent. Although the debtor could only believe in his mind after reading the letter that the employer had already been contacted, which if said act had occurred, would be a violation of the statute, it cannot operate to take away the debtor's voluntary consent to allow Respondent to contact his employer. No such request or demand was made by the letter and, in fact, it never happened. In view thereof, and inasmuch as no future action remains to be done, the letter can in no way be interpreted as a threat in violation of Subsection 559.72(4), Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby, RECOMMENDED: That the allegations contained in the Notice to Show Cause filed herein be DISMISSED. RECOMMENDED this 26th day of September, 1979, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Francis Bayley, Esquire Division of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Emerson Allsworth, Esquire and Charles L. Curtis, Esquire Allsworth, Doomar, Schuler, Padula & Laystrom, P.A. 1177 Southeast Third Avenue Fort Lauderdale, Florida 33310 ================================================================= AGENCY FINAL ORDER =================================================================
Conclusions This cause has come on for final agency action after the filing of a Notice of Voluntary Dismissal With Prejudice (Notice) by Suntree Pharmacy, inc. (Suntree) at the Division Of Administrative Hearings in Case No. 13-4637 on December 27, 2013 and that Division's entry of an Order Closing File And Relinquishing Jurisdiction (Order) on January 9, 2014. Having considered the Notice and the Order and the Order of Conditional Release From Stop Work Order (Release) and the Payment Agreement Schedule For Periodic Payment of Penalty (Payment Agreement) and associated documents (Attachment A hereto), IT IS HEREBY ORDERED that the Notice Of Assignment And Order issued herein on January 30, 2014 is hereby withdrawn as improvidently issued. IT IS HEREBY FURTHER ORDERED that the Order of Conditional Release From Stop Work Order and the Payment Agreement Schedule For Periodic Payment of Penalty are affirmed and remain in full force and effect until all terms and conditions thereof are satisfied. Should any term or condition therein be defaulted on by Suntree, the Release shall be immediately lifted and a bar against further work immediately re- ss igsyerneeminyeevnerttaneimm mee imposed and the Payment Agreement shall be accelerated and the full amount due thereunder shall become immediately due and payable. March THE DONE AND ORDERED this _@rel_day of February, 2014. Robert C. Kneip, Chief of Sta
The Issue The issues in this matter are whether Respondent violated section 112.313(6), Florida Statutes (2013),1/ by obtaining funds from Orange County in the form of a severance payment while remaining employed as General Counsel for the Orange County Clerk of Courts; and, if so, the appropriate penalty.
Findings Of Fact Respondent, Stephan Carter, served as General Counsel for the Orange County Clerk of Courts (the “Clerk’s Office”) from June 2003 through April 1, 2014. Respondent was a public employee at all times material to this action. Respondent was personally hired by Lydia Gardner, the Orange County Clerk of Courts. In January 2005, Respondent and Ms. Gardner executed an employment contract (the “Employment Agreement”). The Employment Agreement was signed by Respondent and Ms. Gardner, in her capacity as the Clerk of Courts, on January 10, 2005, and January 13, 2005, respectively. The Employment Agreement, paragraph 6, entitled “Termination of Employment,” established that the Clerk would pay Respondent a fee should the Clerk terminate the Employment Agreement prior to its expiration date (the “Severance Payment”). Paragraph 6 specifically provided: The Clerk may declare this agreement terminated at any time. . . . The Clerk shall promptly pay to the General Counsel a sum equal to i) the salary and deferred compensation that is accrued but unpaid as of the date of the termination, plus ii) an amount equal to the pro rata portion of his salary for all accrued but unused leave time, plus, iii) an amount equal to the salary and deferred compensation that the General Counsel would have received during the 180 days immediately following the date such termination takes effect, as if this agreement had not been terminated. At the final hearing, Respondent explained that when he accepted the position of General Counsel (then titled “Legal Counsel”) with the Clerk’s Office in June 2003, he informed Ms. Gardner that he would only agree to work for the Clerk’s Office if he could be protected from losing his position. Therefore, Respondent sought and obtained the Severance Payment provision should he be terminated for any reason other than his voluntary resignation. The Employment Agreement provided that Respondent’s term of employment continued until January 6, 2009. On January 7, 2009, Respondent and Ms. Gardner entered a signed agreement wherein the Employment Agreement was “extended indefinitely.” On February 5, 2013, Respondent and Ms. Gardner signed a second amendment to the Employment Agreement.2/ This “clarification of terms” stated: [A]s to the definition of termination in paragraph 6, for the purposes of the contract, termination by the Clerk includes the ending of the employment relationship for any reason other than General Counsel’s voluntary resignation. The amendment also provided that an $11,000 annual payment into Respondent’s deferred compensation plan contained in the original Employment Agreement be considered compensation under Florida Administrative Code Rule 60S-6.001(15)(relating to pensions) and not a fringe benefit. In February 2013, Ms. Gardner became gravely ill. Ms. Gardner’s illness caused her to be absent from the Clerk’s Office. In Ms. Gardner’s absence, Colleen Reilly, the Chief Administrative Officer for the Clerk’s Office, assumed Ms. Gardner’s responsibilities. Ms. Reilly was hired in 2009. At that time, Respondent prepared an employment contract for Ms. Reilly modelled on his own Employment Agreement. In April 2013, Ms. Reilly approached Respondent to talk about their future employment with the Clerk’s Office. Ms. Gardner’s health was deteriorating. Respondent and Ms. Reilly discussed the impact of Ms. Gardner’s death on their positions. Ms. Reilly was also concerned whether the new Clerk of Courts would honor their Employment Agreements. Respondent and Ms. Reilly’s conversation led to a discussion regarding how they could protect the Severance Payments under their respective Employment Agreements. Respondent and Ms. Reilly considered several possibilities. One position was that their Employment Agreements would remain in effect upon Ms. Gardner's death, and they could ask the new Clerk of Courts to honor the payout terms. Respondent, however, determined that the Employment Agreements were not clear on whether he and Ms. Reilly were entitled to the Severance Payments following a change of administration. Therefore, they became concerned whether the new Clerk of Courts would be legally bound to honor the Severance Payments should he or she decide not to retain their services. Respondent, without seeking legal guidance or consulting with outside counsel for the Clerk’s Office, concluded that the Employment Agreements would terminate upon Ms. Gardner’s death. At the final hearing, Respondent explained that he considered his employment to be tied specifically to Ms. Gardner and not the Clerk's Office. Therefore, Respondent reasoned that because both he and Ms. Reilly were hired by and worked directly for Ms. Gardner, her death would terminate their contracts. This termination, of course, would also entitle Respondent (and Ms. Reilly) to the Severance Payment because his employment would have ended for a reason other than his voluntary resignation. Respondent and Ms. Reilly also discussed their plans once their Employment Agreements were terminated. Respondent informed Ms. Reilly that he believed that after the Employment Agreement was terminated, they could continue to work for the Clerk’s Office as “at-will” employees without employment contracts. Respondent encouraged Ms. Reilly to take her Severance Payment then stay in her position with the Clerk’s Office. He intended to do the same. Late in April 2013, Ms. Reilly informed Respondent that she was planning to visit Ms. Gardner, who was on convalescent leave at her home, to ask her to formally terminate the Employment Agreements and make them at-will employees of the Clerk’s Office. Respondent encouraged Ms. Reilly’s endeavor. Respondent then drafted two versions of a memorandum Ms. Gardner could sign to effectuate the termination of their contracts. Ms. Gardner, however, did not agree to terminate the Employment Agreements or sign the paperwork Respondent had prepared. Consequently, the Employment Agreements remained in effect. When Ms. Reilly was not able to obtain Ms. Gardner’s consent to terminate the Employment Agreements, Respondent began to consider Ms. Reilly’s authority to terminate his Employment Agreement. Respondent determined that Ms. Reilly could terminate his contract under section 28.09, Florida Statutes, and they could still receive the Severance Payments. Section 28.09 describes the appointment of a clerk ad interim in the case of a vacancy occurring in the office of a clerk by death. Section 28.09 states that the clerk ad interim “shall assume all the responsibilities [and] perform all the duties” of the clerk. Therefore, because Ms. Reilly would assume all the powers of Ms. Gardner, she would be authorized the terminate his Employment Agreement. Ms. Gardner passed away on May 8, 2013. On May 9, 2013, Ms. Reilly was officially appointed as Clerk Ad Interim for the Clerk’s Office. Also on May 9, 2013, Respondent and Ms. Reilly immediately took steps to obtain their respective Severance Payments. To effectuate their plan, Ms. Reilly promptly terminated both their Employment Agreements using her newfound authority as the interim Clerk. Respondent hoped that this step would remove any questions of their entitlement to the Severance Payment that might be raised by the new Clerk of Courts. Respondent then went directly to the Clerk’s Payroll office. There, he approached Tracy Gasinski, the payroll administrator for the Clerk’s Office. Respondent informed her that Ms. Reilly had approved him to receive a payout. Respondent declared that his payout was authorized because his Employment Agreement was terminated. Respondent also instructed Ms. Gasinski to pay Ms. Reilly’s payout under her Employment Agreement. Respondent stressed that he wanted both payouts processed immediately. Finally, Respondent advised Ms. Gasinski that nobody needed to know about the payout. Ms. Gasinski felt pressured by Respondent. However, based on his representation that Ms. Reilly had approved the payout, she immediately processed a final paycheck for Respondent (and Ms. Reilly), which included the Severance Payment provided in his Employment Agreement. Ms. Gasinski calculated a payout for Respondent in the gross amount of $110,290.61. This figure included a Severance Payment of $76,844.00. In addition, per his request, Respondent was also paid $27,822.10 for all his unused vacation leave (405.57 hours times a rate of $68.60), as well as $5,624.51 for his unused sick leave (327.96 hours times a rate of $17.15). Ms. Gasinski paid 25 percent of Respondent’s sick leave per Clerk’s Office policy. The next day, on May 10, 2013, Ms. Gasinski issued Respondent a check in the amount of $58,400.00 which was deposited directly into Respondent's personal bank account. Ms. Gasinski also deposited a final paycheck into Ms. Reilly's bank account. On or about May 20, 2013, however, Respondent returned to see Ms. Gasinski. He was not happy with his payout. Respondent told Ms. Gasinski that the amount she deposited was incorrect, and he was due more money. Respondent demanded several adjustments which would maximize his Severance Payment. First, referencing the February 5, 2013, amendment to his Employment Agreement, Respondent wanted the $11,000 he received as deferred compensation to be incorporated into his base salary thereby increasing his rate of pay. Second, Ms. Gasinski, in calculating Respondent’s Severance Payment, computed the final payout based on six month’s salary in accordance with the standard practice of the Clerk's Office. Respondent, however, insisted that his Severance Payment be calculated based on “180 days” as specifically stated in his Employment Agreement at paragraph 6. This mathematical adjustment increased Respondent's payout by including payment for all Saturdays and Sundays.3/ Third, Respondent demanded that he receive 100 percent payout for his remaining sick leave instead of just 25 percent as was the Clerk’s Office policy. Fourth, Respondent requested that 56 hours (7 days) be reserved in his vacation leave account and not paid out.4/ Following their meeting, Ms. Gasinski voided the initial payout check. However, she was not comfortable with Respondent’s request based on her understanding of employment contracts. Respondent's and Ms. Reilly's transactions were out of the ordinary course of business for the Clerk's Office. In her experience, final paychecks to Clerk’s Office employees were always accompanied by paperwork from the Clerk’s Office’s Talent Management division. This paperwork came in the form of an Employee Change Notice (“ECN”). However, Respondent did not produce, nor had Ms. Gasinski received, an ECN supporting Respondent’s payout. In Clerk’s Office accounting practices, Talent Management and the Payroll office act as a check and balance for each other. Typically, Talent Management initiates the paperwork, and then Payroll issues the checks. The normal process for a payout when a Clerk's Office employee leaves employment is for Talent Management to notify Ms. Gasinski who then processes the final payout. Respondent did not have the authority to direct Ms. Gasinski to issue the checks. Similarly, Ms. Gasinski did not have the authority to write checks to either Respondent or Ms. Reilly. Furthermore, a final payout upon termination is always via a paper check. Direct deposit to a personal bank account is never an option. The terminated employee picks up the paper check from Talent Management who verifies that the employee's garage pass and badge have been returned. Because of her discomfort with issuing Respondent’s payout check, Ms. Gasinski sought advice from her supervisor, Mike Murphy, the Chief Financial Officer for the Clerk’s Office. Mr. Murphy suggested that Ms. Gasinski contact Talent Management. On May 21, 2013, Ms. Gasinski spoke to Joann Gammichia, the Director of Talent Management, about Respondent’s request for a payout. When Ms. Gammichia learned of the situation, she had immediate concerns. First, Ms. Gammichia wondered why Payroll was issuing a check without any documentation from Talent Management such as an ECN. Ms. Gammichia testified that each employment activity requires completion of an ECN which acts as a recordkeeping system for the Clerk's Office. Because Respondent approached Ms. Gasinski in the Payroll office directly, no ECN or other written record was generated explaining why the Clerk’s Office was issuing the payout to Respondent. Ms. Gammichia explained that the policy of the Clerk’s Office is that payouts, severance checks, termination, or any kind of position change should only occur with an ECN in order to maintain and track the complete history of an employee's tenure with the Clerk's office. Ms. Gammichia also wondered why Respondent went directly to Ms. Gasinski with his demands. The normal starting point for employee changes begins with Talent Management, and the end of the line is financial services and Payroll. The fact that Respondent was attempting to verbally change his employment status in the Payroll office was “highly irregular.” Ms. Gammichia was also puzzled why the Clerk’s Office was issuing a severance payout on an employment contract when the employment was not ending. Consequently, Ms. Gammichia told Ms. Gasinski not to issue the adjusted payout check. Ms. Gasinski then notified Respondent via e-mail dated May 21, 2013, that she could not process the final payout until she received the proper documentation from Ms. Gammichia in Talent Management. Shortly thereafter, Respondent visited Ms. Gammichia’s office to inquire why she was involved in his payout matter. According to Ms. Gammichia, Respondent became “pretty aggressive.” Respondent told Ms. Gammichia that she had no authority or business being involved. It was a personal matter. Respondent warned Ms. Gammichia that she was directly violating an order from Ms. Reilly to make the Severance Payments. Ms. Gammichia informed Respondent that not only was she involved, but she was not authorizing the payout check to go through. Ms. Gammichia further advised Respondent not to contact Ms. Gasinski regarding the payout. Later that day, Ms. Gammichia contacted her supervisor, Cathi Balboa, the Director of Administrative Services for the Clerk’s Office, to discuss Respondent’s payout request. Ms. Gammichia relayed to Ms. Balboa that Ms. Gasinski was upset because she was being asked to prepare a large payout based only on verbal instructions without any supporting paperwork. At the final hearing, Ms. Balboa recalled that Respondent’s urgent request for a payout was highly irregular. Ms. Balboa relayed that the Clerk’s Office should not issue a final payout unless an employee was truly terminated from his or her position. Based on their concerns, Ms. Gammichia and Ms. Balboa called Ms. Reilly, who was sick at home, to confirm whether Ms. Reilly was aware of the payouts that Respondent said she had authorized. Ms. Gammichia also wanted to report the fact that Ms. Gasinski felt that she was being coerced and harassed by Respondent. Ms. Gammichia described Ms. Reilly’s reaction as hostile and negative. Ms. Reilly did not seem happy that others were involved. Ms. Reilly asked Ms. Balboa, “How did you get involved in this?" The next morning, on May 22, 2013, Ms. Reilly returned to the Clerk’s Office and called a meeting with Mr. Murphy, Ms. Balboa, and Respondent. Ms. Reilly opened the meeting by asking Mr. Murphy and Ms. Balboa "what do you think your role is in this organization," and "where do your loyalties lay?" Ms. Reilly then announced that “it was a private matter, it was their personal business, [and] to stay out of it." Ms. Balboa testified at the final hearing that Ms. Reilly intimidated her in their meeting. Mr. Murphy conveyed that he understood that they were not to get involved in the severance payout matter. After the meeting, Ms. Gasinski was told to proceed with the payouts for Respondent and Ms. Reilly. On May 23, 2013, Ms. Gasinski processed a second severance payout check for Respondent and Ms. Reilly. Ms. Gasinski prepared for Respondent a revised final paycheck in the total amount of $156,443.11. This amount included a Severance Payment of $106,387.20. Respondent was also paid $25,826.23 for his vacation leave (349.57 hours times a rate of $73.88), as well as $24,229.68 for all his unused sick leave (327.96 hours times a rate of $73.88). A check in the net amount of $99,125.45 was deposited in Respondent’s personal bank account. On May 23, 2013, Respondent repaid the initial payout of $58,400.00 to the Clerk’s Office by personal check. After Ms. Reilly terminated his Employment Agreement on May 9, 2013, Respondent never left his position with the Clerk’s Office. Respondent considered himself an at-will employee and continued to report to work as General Counsel. There was never any break in his employment. At no time did Respondent (or the Clerk’s Office) initiate or complete any paperwork to rehire Respondent after either Ms. Gardner’s death or Ms. Reilly terminated his Employment Agreement. No documentation was prepared transitioning Respondent from a contract employee to an at-will employee. Respondent continued to perform the same duties under the same terms, conditions, and compensation contained in the Employment Agreement as if he never left office.5/ At the final hearing, Respondent testified why his interpretation of his Employment Agreement justified his actions and motives. Respondent first remarked that his Employment Agreement was not typical for a Clerk’s Office employee. It contained certain provisions which were not to be “exposed generally,” such as the termination clause and the contact termination fee. Therefore, he desired to keep his employment terms quiet. Respondent further disclosed that he did not initiate an ECN because his Severance Payment was not a human resources issue, it was a matter of contract. Respondent also explained that at the end of 2008, when his Employment Agreement was nearing its initial termination date, Respondent became concerned with his future at the Clerk’s Office. He began to wonder what would happen if Ms. Gardner left her position as Clerk. Therefore, he prepared, then executed, the 2009 amendment to the Employment Agreement extending it “indefinitely.” In 2013, Respondent prepared, then executed, the second amendment clarifying the term “termination.” Regarding collecting his Severance Payment without leaving his position with the Clerk’s Office, Respondent contended that just because his Employment Agreement was terminated (thus, entitling him to the Severance Payment) did not mean he had to leave employment with the Clerk’s Office. Respondent characterized the payment as a “contract termination fee.” Therefore, he asserted that the Clerk could terminate his Employment Agreement without actually terminating him from his position as General Counsel. Consequently, nothing prevented him from becoming an at-will employee. Accordingly, when Ms. Reilly terminated the Employment Agreements on May 9, 2013, by exercising her prerogative as the interim Clerk, she also decided that both Respondent and she would stay on with the Clerk’s Office as at-will employees until the new Clerk of Courts determined what to do with them. In February 2014, the new Clerk of Courts, Eddie Fernandez, determined to initiate an investigation to review the propriety of the 2013 Severance Payments to Respondent and Ms. Reilly. On March 28, 2014, Respondent was placed on administrative leave with pay. On April 1, 2014, after the investigation recommended that Respondent’s employment be terminated, Respondent resigned from his position with the Clerk’s Office. As a condition of his resignation, Respondent was not eligible for rehire by the Clerk’s Office. Respondent reimbursed the full amount of the money that he received as the Severance Payment from the Clerk’s Office. Commenting on the circumstances of his resignation and restitution, at the final hearing, Respondent urged that he did not act dishonestly, but, maybe he exercised bad judgment. Respondent also proclaimed that he received his Severance Payment because the interim Clerk ordered it, not by reason of his actions or conduct. Therefore, he personally never violated any duty of his office. Based on the evidence and testimony presented during the final hearing, the competent substantial evidence in the record establishes, by clear and convincing evidence, that Respondent acted corruptly, with a wrongful intent, in seeking and obtaining the Severance Payment when he never intended to leave his public employment with the Clerk’s Office. Accordingly, the Advocate proved that Respondent violated section 112.313(6).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding that Respondent, Steven Carter, violated section 112.313(6), Florida Statutes; and that Respondent be subject to public censure and reprimand. DONE AND ENTERED this 3rd day of January, 2017, in Tallahassee, Leon County, Florida. S J. BRUCE CULPEPPER 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 3rd day of January, 2017.
