The Issue The issue for determination at final hearing was whether Petitioner should be certified as a minority business enterprise pursuant to Section 287.09451, Florida Statutes, and Chapter 38A- 20, Florida Administrative Code, by the Office of the Supplier Diversity of the Department of Management Services.
Findings Of Fact Petitioner is a Florida corporation seeking certification in the field of "Sales and Installation of Network and Telephone Cabling" under the minority status of female-owned company. Fifty-one percent of Petitioner's stock is owned by Cynthia Martin, a white female, and 49 percent is owned by her husband, a white male. Until shortly before submitting its application, Petitioner corporation had previously operated as a sole proprietorship under the ownership of Keith Martin. The majority of the assets of Petitioner came from the previous sole proprietorship when Petitioner was formed. According to Mrs. Martin's testimony and payroll information submitted by Petitioner, Keith Martin received twice the salary of Cynthia Martin. Cynthia Martin is a full-time employee of the State of Florida. There is no evidence of employment for Keith Martin other than with Petitioner. The corporate documents in evidence reflect that since incorporation Cynthia Martin has been vice-president and secretary of the corporation, while Keith Martin has been president and treasurer. Petitioner's checks may be signed by either Keith Martin or Cynthia Martin and only one signature is required on each corporate check. Petitioner's Articles of Incorporation provide that the number of directors shall be determined in the By-Laws. The initial directors were Keith Martin and Cynthia Martin. The By- Laws provide that the corporation shall be managed by two directors, and that the number of directors may be increased only by amendment of the By-Laws. Also, a majority of the directors shall constitute a quorum for the transaction of business. This provision of the By-Laws has not been changed. At the organizational meeting of Petitioner, Keith Martin was elected president and treasurer, and Cynthia Martin was elected vice- president and secretary. No other documents were introduced into evidence reflecting any changes to the articles of incorporation or the By-Laws. The documentation submitted by Petitioner, and prepared by Cynthia Martin, consistently reflect Keith Martin as the president of the company and Cynthia Martin as vice-president. Cynthia Martin's duties include bookkeeping and performing administrative functions. Keith Martin's duties include the installation of cabling for local area networks and phone systems, picking up goods to be used on contracts, preparing daily timesheets and generating the paperwork necessary for billing clients, preparing quotations for clients, consulting with clients to determine needs, installation of phone systems and providing sales, service, and repair for clients. Cynthia Martin's duties for Petitioner are performed on her days off from her full-time employment, and on nights and weekends. The fact that Cynthia Martin owns 51 percent of the stock of Petitioner is important at stockholder meetings. At such meetings, she is entitled to one vote for each share owned, thereby allowing her to control stockholder meetings and effectively determine the directors of the company. The company is managed by the directors, while the day-to-day operations are managed by the officers.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Office of Supplier Diversity enter a final order denying Tele-Net Communications, Inc.'s, application to be a certified minority business enterprise. DONE AND ENTERED this 25th day of October, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of October, 2000. COPIES FURNISHED: O. Earl Black, Jr., Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Cynthia Martin Tele-Net Communications, Inc. Post Office Box 11784 Jacksonville, Florida 32239 Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Windell Paige, Director Office of Supplier Diversity Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950
Findings Of Fact Respondent is the governmental agency responsible for certifying persons as minority business enterprises. Petitioner applied for certification as a minority business enterprise. Petitioner is a minority business enterprise within the meaning of Section 288.703(2), Florida Statutes. 1/ Petitioner is a small business concern, domiciled in Florida, and organized to engage in commercial transactions. Petitioner is a Florida corporation wholly owned by Ms. Sandra A. Pichney, vice president, and by Mr. D.B. Young, president. Petitioner engages in the roof consulting business. Ms. Pichney owns 51 percent of Petitioner's outstanding stock. Ms. Pichney is a member of a minority group for purposes of Chapter 288. The remaining 49 percent of Petitioner's outstanding stock is owned by Mr. Young. Mr. Young is a licensed architect. No professional license is required for Petitioner to engage in the business of roof consulting. Petitioner has all of the occupational licenses required to engage in the commercial transactions required to conduct its business. Ms. Pichney has 16 years experience in the roof consulting business. Ms. Pichney controls the daily management and operations of Petitioner's business. Ms. Pichney: manages and operates the office; and is responsible for payroll, accounts receivable, and general financial matters. Ms. Pichney conducts field visits, estimates jobs, reviews projects, and rewrites specifications. Ms. Pichney is the person who signs checks for Petitioner in the ordinary course of Petitioner's trade or business. Mr. Young is authorized to sign checks but only signs checks in emergencies. Ms. Pichney hires and fires personnel. Ms. Pichney consults with Mr. Young, but the ultimate responsibility is born by Ms. Pichney. Ms. Pichney reviews specifications and design work for specific projects and makes amendments where appropriate. Original specifications and design work are prepared by Mr. Young and other personnel. Mr. Young, and other personnel, can be terminated by Ms. Pichney without cause. Mr. Young can be terminated as an employee at any time by Ms. Pichney, without cause. Mr. Young has no employment agreement or shareholder agreement with the company. The board of directors are comprised of Ms. Pichney and Mr. Young. Any director may be dismissed by a majority of the shareholders. As the majority shareholder, Ms. Pichney can terminate Mr. Young, as a director, without cause. Ms. Pichney and Mr. Young receive salaries and monthly draws. Although salaries are equal, monthly draws and dividends are distributed in proportion to the stock ownership of each shareholder. Ms. Pichney has exclusive use of the company car. Ms. Pichney's stock ownership has increased over the last two years because Mr. Young has been unable to attend to the demands of Petitioner's business due to Mr. Young's divorce. Ms. Pichney has properly reported the increase in stock ownership, for purposes of the federal income tax, and has, and will, pay the requisite income tax on her increased stock ownership. Ms. Pichney and Mr. Young consult with each other in making significant decisions in the ordinary course of Petitioner's business. However, the ultimate responsibility for those decisions is born by Ms. Pichney.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order granting Petitioner's application for certification as a minority business enterprise. RECOMMENDED this 22nd day of July, 1995, in Tallahassee, Florida. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of July, 1995.
Findings Of Fact At all times pertinent to the matters concerned herein, either the Department of Management Services, or its successor, the Commission of Minority Economic and Business Development, was the state agency in Florida responsible for certification of Minority Business Enterprises in this state. Johnston was started by Mrs. Cloversettle's grandfather and operated by him and his three sons, including Conrad Johnston, Mrs. Cloversettle's father, for many years. As a child and young woman, Mrs. Cloversettle worked at the place of business in differing capacities and learned something of the business operation. At some point in time, she married Mr. Cloversettle who was and has been an employee of the firm, and over the years, he operated much of the equipment used in the business. Mrs. Cloversettle is also a licensed cosmetologist, and owns and operates a beauty salon through a corporation she owns with her husband. He does much of the handyman work at that shop and she works, part time, as a cosmetologist. Most of her time, however, is occupied with the affairs of Johnston. There are currently 60 shares of common stock issued in Johnston Lithograph & Engraving, Inc.. Seven and three quarters shares are owned by Mr. and Mrs. Cloversettle. Three and three-quarters shares came from her father, and she acquired four additional shares at the time she bought the business. Three and three quarters shares are owned by Mrs. Cloversettle's aunt, Ms. Sims, who lives in North Carolina; fifteen shares are held in the name of her father, Conrad Johnston; and eighteen and three-quarters shares each are held by his two brothers, Bert and Don. Ms. Sims takes no income from Johnston, does not participate in the management of the company, and plays no role in it other than as share owner. At one point, Mr. Cloversettle owned a one-half interest in the four shares his wife got at the time of purchase, but she considered herself the owner in that they were titled jointly only "for simplicity", just as the house and their bank accounts are also owned jointly. On April 26, 1994, after the initial denial of Petitioner's application for MBE certification, the joint ownership was terminated and the shares registered in Ms. Cloversettle's name only without any exchange of consideration therefor. Much the same pertains to the company bank accounts. Before the denial, both George and Brenda Cloversettle could sign company checks. Since then, however, George Cloversettle has been removed as an authorized signatory on company accounts. The shares owned by Ms. Cloversettle's father and his brothers, Donald, Bertram, are presently held as "security" for the payment of the purchase of Johnston by Mrs. Cloversettle. The shares are not voted and are held in escrow under an escrow agreement. A stock pledge agreement, dated February 7, 1986, to which the Cloversettles were not parties, produced after the hearing, pertains only to the corporation and Conrad and Margaret Johnston. Its terms, somewhat confusing, can best be interpreted as providing that upon default in payment, the stock held in escrow would revert to the original holder as titled on the face of the certificate or, at the option of the original owner, be sold. At the time of denial, the shares owned by Donald and Bertram had not been properly endorsed into the escrow but this was done prior to formal hearing when, by affidavit dated August 1, 1994, the escrow agent indicated both Donald's and Bertram's shares were subject to the 1986 escrow agreement. The 1986 agreement prohibits the issuance of any new or additional shares of stock until the purchase obligation is paid off. This provision may have been violated when the four additional shares were issued to the Cloversettles in 1990. The shares owned by both Bertram and Donald were the subject of a stock sale agreement for $93,000.00 for each block of eighteen and three-quarters shares. Both the date of the agreement and the signatures of the parties are not evidenced on the documents, however, but it appears Bertram deposited fifteen of his shares with the Tampa 1st National Bank in 1975, some fifteen years prior to the Cloversettle's 1990 purchase of the company. Conrad Johnston entered into a purchase agreement in 1985 with the original owners which did not include the Cloversettles. His fifteen shares were signed into escrow on February 6, 1986. These discrepancies in capital ownership were not clarified at hearing. Mr. and Mrs. Cloversettle entered into the agreement to buy the company from the Johnstons in 1990 for a purchase price of $300,000. Though in an earlier deposition, Mrs. Cloversettle indicated only about $3,000 of the purchase price had been paid, which money allegedly came from the proceeds of an insurance policy loan and a mortgage on their home, at hearing, she testified $30,000 had been paid, all of which came from the mortgage on their home. No payments on the obligation are currently being made by the Cloversettles because each of the original owners executed an agreement deferring payment until the company is financially able to make regular payments. The minutes of a special shareholder's meeting held on July 8, 1994, reflect the above-noted Johnston brothers' certificates were surrendered for cancellation in July, 1990. However, the minutes also note that the sale and redemption of the certificates was subject to an escrow pursuant to the February, 1986 escrow agreement which, in November, 1993, was affixed to an amended agreement naming Edward Hill as Escrow Agent, which referred to the Johnston brothers not as stockholders but as secured creditors. Because of the complex manipulation of the shares and their status, it is impossible to determine the relative ownership of the parties. Petitioner has not established with any degree of clarity that Brenda Cloversettle, though a minority owner, has actual and real ownership of at least 51 percent of the company equity free of any residuary or reversionary interest which could divest her of her 51 percent ownership. The shares covered by the escrow agreement, while classified by Petitioners as treasury stock, cannot legitimately be so considered since it is still in the name of the original owners and does not become property of the company until the obligation incurred for its purchase is satisfied. While, as noted previously, no additional payments have been made on the purchase price, the company maintains a life insurance policy on each Johnston which Ms. Cloversettle indicates is to be used to pay off the outstanding debt upon their respective deaths. She admits however, there is no document requiring the insurance proceeds to be used that way, and no independent evidence of the policies' existence was forthcoming. The primary business of Johnston is commercial printing/graphics. Ms. Cloversettle is the sole director of the corporation whose bylaws, as of July 8, 1994, require all directors to be minority persons. She has asserted, and it was not disproved by evidence to the contrary, that she has the primary role in decision-making concerning the company's business transactions and she is the sole person required to execute any transaction related documents. She has final authority as to all corporate decisions and is not required to consult with anyone else when corporate decisions are being made, though she may do so. Johnston does not keep inventory on hand but purchases supplies necessary on a job driven basis. According to Ms. Cloversettle, she controls the purchase of inventory and determines the need and appropriateness of equipment rentals or purchases. She seems to be familiar with and to understand the use of the products utilized by the company in its daily operations. She has a fundamental knowledge of the equipment used in the company's operation and, though she may not be fully qualified to operate every piece, can operate some of it. Though she periodically consults with her husband regarding business operations, she is not required to do so and has the responsibility for the hiring and management of employees. She alleges she sets employment policies, wages, benefits, and employments conditions at the company without the need to coordinate her actions with anyone. However, in a phone interview with the Department's representative, in February, 1994, Ms. Cloversettle had difficulty correctly answering many of the technical questions she was asked at hearing. Mr. Cloversettle, who has worked with the firm for approximately twenty years, is its key employee in computer graphics and serves as production manager and vice-president. Without doubt, along with Mr. Ezell, the firm's printer, he is primarily responsible for the daily plant operations, supervising the other employees, planning daily work flow, and insuring the vendors who supply the needed raw materials do so in a timely fashion. Ms. Cloversettle is college trained and, as noted previously, a licensed cosmetologist. She has done bookkeeping for the firm and acted as office manager, but has no formal training in printing, or graphics, other than years of observation as she grew up with the operation when it was operated by her father. Her primary hands-on experience is in book bindery and shop cleaning but she can run some of the smaller, less exotic equipment. She is not familiar with all the terms and duties involved in the operation of this business and could not accomplish them all. She acknowledges she spends most of her time in the office. She claims to be solely responsible for the financial affairs of the company and is the only one currently authorized to sign company checks. This situation, as has been noted, is of but recent origin, however. Nonetheless, Mr. Cloversettle continues to remain subject to equal debt responsibility with Ms. Cloversettle because of his prior co-signing of risk documents relative to loans taken by the company prior to the application, denial and hearing. Ms. Cloversettle's testimony regarding her method of evaluating the company's ability to perform potential jobs creates the impression that she is aware of the company's limitations and its abilities. She does not run the cameras or the presses and she need not do so. She does not solicit business but she hires a salesperson to do so and has the authority and capability to evaluate and accept or reject the work brought in. In the last two quarters of 1993, according to company payroll records, Mr. Cloversettle was paid approximately $6,426.00 while Ms. Cloversettle was paid only $2,650.00. However, after the application was denied, the ratio was changed dramatically to where she now earns $180.00 per week, and he, only $52.95.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered denying Johnston Lithograph & Engraving, Inc.'s request for certification as a minority business enterprise. RECOMMENDED this 15th day of September, 1994, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of September, 1994. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: & 2. Accepted and incorporated herein. 3. Accepted as to the shares of Ms. Cloversettle and Ms. Sims. However, this does not indicate acceptance of the proposition that there are no other shareholders, or that the transfer of shares from Mr. Cloversettle to his wife was bona fide. 4. Accepted and incorporated herein. 5. Accepted and incorporated herein. 6. Accepted. However, as noted in the body of the Recommended Order, it is impossible to clearly define the actual status of the brothers' and father's retained shares or whether they have the potential to dilute Ms. Cloversettle's shares. 7. Accepted and incorporated herein. 8. Not proven. 9. Not proven. 10. - 12. Accepted, but based entirely on unsupported testimony of Ms. Cloversettle. 13. & 14. Accepted and incorporated herein. 15. - 18. Accepted, but based entirely on unsupported testimony of Ms. Cloversettle. 19. & 20. Accepted and incorporated herein. 21. Accepted as a restatement of testimony. 22. & 23. Accepted. 24. Accepted as a restatement of testimony. 25. Not an appropriate Finding of Fact but a comment on the evidence. 26. & 27. Accepted and incorporated herein. FOR THE RESPONDENT: First four sentences accepted and incorporated herein. Balance accepted as a comment on the evidence. Accepted. Not a proper Finding of Fact but more a comment on the state of the evidence. Accepted. Accepted but more as a comment on the state of the evidence. - 12. Accepted and incorporated more briefly herein. More a comment on the evidence and a Conclusion of Law than a Finding of Fact. Accepted and incorporated herein. First two sentences accepted and incorporated herein. Balance more a comment on the meaning and effect of the basic fact. & 17. Accepted and incorporated herein. First three sentences accepted and incorporated herein. Balance comment on the evidence. - 22. Accepted and incorporated herein. 23. & 25. This is a restatement of testimony by both sides. 26. & 27. Accepted and incorporated herein. COPIES FURNISHED: Frederick T. Reeves, Esquire Langford, Hill, Trybus & Whalen, P.A. Post Office Box 3277 Tampa, Florida 33601-3277 Wayne H. Mitchell, Esquire Commission on Minority Economic and Business Development Knight Building, Suite 201 2737 Centerview Drive Tallahassee, Florida 32399-0950 John Thomas Interim Executive Director Commission on Minority Economic and Business Development Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue The issue for consideration in this case was whether Petitioner, F & M Concrete Company, Inc., should be recertified as a disadvantaged business enterprise, pursuant to Chapter 14-78, F.A.C.
Findings Of Fact At all times pertinent to the issues herein, Petitioner, F & M Concrete Company, Inc., was a bridge and culvert construction company doing business in the State of Florida with principal offices in Plant City. Respondent, Department of Transportation, is the state agency responsible for certifying minority and disadvantaged business enterprises for bid award purposes with the Department. Prior to February 3, 1988, the Petitioner had been certified by the Department as a minority business enterprise, (women owned). Petitioner's stock is owned as follows: Jaretha Fletcher,. 43.3% Kathleen Fletcher,. 33.0% Jennifer Fletcher Prado,......21.67%, and Vesta Thomas,. 2.0%. All of the above, with the exception of Ms. Thomas, the retired bookkeeper, are members of the Fletcher family. Kathleen is W. Eddie Fletcher's mother, Jaretha is his wife, and Jennifer Fletcher Prado, is his sister. W. Eddie Fletcher is the President of F & M Concrete Company, Inc., and Chief Operating Officer. Kathleen Fletcher is Chairman of the Board of Directors. For approximately 15 years prior to the last 2 years, the stock owned by Jaretha Fletcher was owned in joint tenancy with W. Eddie Fletcher. Approximately 2 years ago, the ownership was transferred to Jaretha Fletcher alone. There is no evidence as to the consideration for that transfer. Mr. Fletcher claims he is not his wife's heir, and will not inherit her stock should she predecease him. Kathleen Fletcher, Mr. Fletcher's mother, has had tuberculosis for many years, and is incapable of taking a substantial, active part in the business. However, she comes to the office approximately once a week, and speaks with Jaretha by phone periodically. Jaretha is employed in the corporate office in a training capacity. Jennifer Fletcher Prado works for the Hillsborough County Road Department as an inspector, and in the course of her travels about the county, periodically sees Petitioner's crews at work. Though she does not interfere with or become involved in the supervision of those crews, if she sees something that causes her to question the crew's performance, she will phone Mr. Fletcher and demand an explanation. This is the extent of her participation in the operation of the business with the exception of serving as a member of the Board of Directors. When she retires from her position with the county, because of her experience, she will be eligible to work with Petitioner corporation but would have to spend some time gaining experience in the contracting end of the business before she could assume any managerial position. On November 1, 1988, Jaretha Fletcher, as Assistant Secretary of F & M Concrete Company, Inc., submitted the corporation's application for DBE certification. The application indicates that the firm was established in September, 1956, and is engaged in the business of building bridges, concrete pavements, curbs, sea walls, storm drainage systems, and culverts. It has 35 full time employees, of whom 57% are minority, and it serves the geographical areas incorporating numerous counties in the central part of the state. The firm is 100% woman owned in that the four individuals mentioned above own 100% of the 100 shares of stock authorized and issued. The firm is managed by a President, Vice President, Assistant Secretary, and Secretary-Treasurer. W. Eddie Fletcher is President. W. Randall Fletcher is Vice President. Jaretha Fletcher is Assistant Secretary, and Dori M. Keeler is Secretary- Treasurer. The Board of Directors is made up of the three Fletcher women. W. Eddie Fletcher received a salary of $33,800.00 in 1987; W. Randall Fletcher received $28,600.00; Dori Keeler received $20,800.00; Kathleen Fletcher received $13,520.00; Jaretha Fletcher received $7,800.00, and David L. Cox, General Manager, received $28,600.00. Question 18 of the application for recertification reflects that policy making and financial decisions are made by Kathleen Fletcher as Chairman of the Board, Jaretha Fletcher, and Jennifer Prado. Management personnel are hired and fired by the Board. Hourly personnel are hired and fired by Mr. Cox and the four job foremen. At question 19 of the application, Petitioner indicates that any decision to bid on a job is made by W. Eddie Fletcher as President and Jaretha Fletcher as Assistant Secretary. Since Mrs. Fletcher is currently serving the corporation as a trainee, her contribution to the decision making process must be minimal. Job estimating is done by W. Eddie Fletcher and David Cox. Purchases of equipment are approved by the Board upon the recommendation of W. Eddie Fletcher. Supervision of field operations is accomplished by Mr. Cox. Jaretha Fletcher, as Assistant Secretary, along with Randall Fletcher, shop foreman and Vice President; W. Eddie Fletcher, President; and Dori M. Keeler, Secretary-Treasurer, all sign the payroll checks. The application was mailed to the Department by certified package delivery on November 1, 1988 and was received by it on November 2, 1988. This was 94 days before the Petitioner's then current certification expired. On December 2, 1988, the Department mailed a letter to the Petitioner requesting additional information. This was 31 days after the date of receipt of the application, which exceeds the rule period of 30 days or requesting additional information. However, Petitioner responded to the request on December 7, 1988, one day after receipt. The additional information requested by the Department was forwarded to it by Petitioner on December 21, 1988, with the exception of two forms that had to be procured from the Department of State. After all the requested information was submitted, the Department set up an onsite review of the Petitioner's operation. According to Petitioner, though the rule governing MBE certification requires that the Department conduct the on- site review within 60 days of receipt of application, it was not done in this case until the 98th day after the application was submitted. The rule also states that approval or denial must be announced within a 90 day period from application. This was not done here until March 14, 1989, when Mr. Pete Davis, DBE Certification Coordinator for the Department, notified the Petitioner by certified mail that its application had been denied. Since the application was submitted on November 1, 1988 and received on November 2, 1988, March 14, 1989 terminates a period of 132 days from the date of receipt of application. Mr. Donnie Alford, an engineer, works for the Department's construction office and is a member of the DBE Certification Committee which considered Petitioner's application. This committee, which consists of three voting members and one nonvoting member, reviewed Petitioner's file. The application was reviewed by all committee members before a vote was taken and Mr. Alford, as a voting member, considered all the information in the file including such items as gross receipts, ownership, directorship, the officers, their salaries, the ethnic status and span of control of the ownership and other personnel, and all other matters mandated for consideration by Rule 14-78 F.A.C. Mr. Alford noted that Jaretha Fletcher, the majority stockholder, was paid the smallest salary of any salaried employee. This indicates to him that the rule in question, which dictates that salary should be consistent with ownership and job responsibility, was not followed. The committee also examined the resumes of the officers and directors with a view toward minority owners. Mr. Alford noted that prior to 1986, two years before the application in question, Mrs. Jaretha Fletcher had been a housewife, and he was concerned that her background did not qualify her to make business decisions. According to Mr. Fletcher, Jaretha signs all checks issued by the corporation though she does not prepare them. She has worked on the preparation of at least one bid. She has acted as signatory for insurance policies covering the operation of the business. She was a personal guarantor on the last capital loan taken out by the business. In addition, the company has developed a computer program which would enable Jaretha to prepare bids on all curb related projects. This, has not yet been implemented, and absent a showing of how much independent judgement and authority she would exercise, by itself, it is not particularly probative of anything. She is also assuming more responsibility in the bidding process though she is not yet qualified to prepare a bid. She has learned to take company owned equipment charges and the daily reports received from the field foremen to prepare reports for the comptroller. She works with the comptroller in determining who of the various business creditors get paid at any given time, and she has begun to serve as a liaison between the corporation and the various contractors who utilize its services. Further, she is in training to use the computer to prepare the weekly payroll. On the other hand, Jaretha is not qualified to go into the field by herself as a supervisor and by her own admission, is "afraid to drive outside the Plant City area." She works in the office daily from 8:00 AM to 3:00 PM except on those days when she has to be with her children. There is substantial evidence to indicate that the participation in business control and operation by Kathleen Fletcher and Jennifer Fletcher Prado is minimal, other than as members of the Board. The Board of Directors' primary function is to set policy for the operation of the Petitioner's business. The business is operated by W. Eddie Fletcher who is employed by the Board as President. He makes the day to day business decisions and decides what matters should be taken to the Board for ratification and approval. It is quite clear from the evidence as presented and all the permissible inferences and presumptions which may be drawn therefrom, that the operation and control of F & M Concrete Company, Inc., is exercised by W. Eddie Fletcher, and the Board of Directors does what he requests of it and provides what he asks. There is evidence, for example, that though the Board must provide for the purchase of major equipment, it "gives approval for whatever Eddie wants." In fact, two contracts, introduced by Respondent, which were prepared and executed by Petitioner with others in the operation of its business, for substantial sums and major projects, failed to reveal the signature or participation of any of the minority owners. All execution was accomplished by W. Eddie Fletcher on behalf of the corporation. After considering all the available information, the Department's committee voted to deny Petitioner recertification. The vote of the committee is not, however, binding on the Director of Administration who has final discretion to approve or disapprove the application for certification. Here the application for recertification was disapproved primarily because it was evident to the committee members and the Director of Administration, that the minority owners did not exercise the requisite amount of control over the operation of the business required under the intent and language of the rule governing minority business enterprise certification. The Department does not claim that the arrangement between the minority owners of the Petitioner corporation and Mr. Fletcher is in any way inappropriate or improper, nor does it deny that Jaretha Fletcher is now learning to participate in the operate in the operation of the business. However, the degree of control over the day to day operations of the business by the minority ownership, notwithstanding the propriety of the delegation of management to Mr. Fletcher, is not sufficient to qualify Petitioner as a minority owned business enterprise. Rule 14-78, F.A.C., allows management to be contracted out, but it does not allow delegation of the policy making function. Here, the committee and the Director of Administration concluded, and it is so found, that the owners of F & M Concrete Company, Inc. did not exercise sufficient control over the business to qualify it for certification. It is abundantly clear from the evidence adduced at the hearing, that Mr. Fletcher is, in fact, F & M Concrete Company, Inc. This conclusion is drawn from the fact that he is closely related by blood and marriage to the three principal owners; that prior to 1987 he owned 43.3% of the stock in the corporation jointly with Jaretha; that none of the principal owners other than Jaretha participate in the decision making process except as members of the Board; and that the Board does not engage in operating the business. Bids are not approved by the Board and operating decisions are within the exclusive province of the management team headed by Mr. Fletcher. Notwithstanding that the terms of the employment agreement between Mr. Fletcher and the Board provide that it may be terminated by the Board at any time for cause, from a pragmatic standpoint, with the Board's makeup being so closely related to Mr. Fletcher, the likelihood of this happening is remote. Instead, it becomes abundantly clear that the attempt to divest Mr. Fletcher from ownership of the corporation and demonstrate a bona fide minority owned and operated business enterprise is in form only and a sham and while the organization is in no way illegal or improper, it is not, in reality, a minority operated business so as to qualify for certification as such.
Recommendation Based on the foregoing findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner, F & M Concrete Company, Inc.'s application for recertification as a disadvantaged business enterprise be denied. RECOMMENDED this 7th day of December, 1989, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of December, 1989. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to s. 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: None submitted. FOR THE RESPONDENT: 1. - 6. Accepted and incorporated herein. & 8. Accepted and incorporated herein. 11.-13. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. 17.&18. Accepted and incorporated herein. 19.-21. Accepted and incorporated herein. COPIES FURNISHED: W. Eddie Fletcher President F & M Concrete Company, Inc. Post Office Box 938 Plant City, Florida 34289-0938 Thomas H. Bateman, III, Esquire General Counsel DOT 562 Haydon Burns Bldg. Tallahassee, Florida 32399-0450 K.N. Henderson, P.E. Secretary Haydon Burns Building 605 Suwanee Street Tallahassee, Florida 32399-0450 Attn: Eleanor F. Turner, M.S. 58 Ruth B. Dillard, Esquire Department of Transportation 605 Suwanee Street, M.S. 58 Tallahassee, Florida 32399-0458 =================================================================
Findings Of Fact At all times pertinent to the issues herein, the Department had the authority to certify those firms who qualified as MBE's for the purpose of contracting with it under the provisions of Chapter 13-8, F.A.C. When an application for MBE status is received at the Department's certification office in Tallahassee, it is assigned to one of five certifying officers who reviews it and determines whether it is complete as submitted or requires additional documentation. This is called a desk audit review. In the event all required documents have not been submitted with the application, they are requested in writing and the applicant has thirty days to provide them. Failure to do so results in denial of the application. If, on the other hand, all the required documentation is present, a decision is then made as to whether an on-site visit of the applicant's operation is necessary. If so, Department personnel go to the site and look to see if the business can qualify as an MBE. If an on-site visit is appropriate, but for some reason cannot be made, Department personnel try to get the required information by phone. The decision to approve or deny certification is made, based on the reviewing certifying officer's recommendation, by the certification manager who, before making a decision, personally reviews the file and, if appropriate, sends it to the Department's legal staff for additional review. Once the legal staff has made its recommendation, if the decision is made to deny the application, a letter of denial is sent to the applicant who may then appeal that decision. An application must meet all criteria set out in Rule 13-8, F.A.C. to be certified as an MBE. Each application is looked at on a case by case basis to see if those criteria are met. In the instant case, the denial was based on the Department's concern over several factors. These are related to Rule 13- 8.005(3), F.A.C. and included A question as to whether the business was actually controlled by Ms. Hogan. The nature of the corporate structure. The application of Chapter 47, F.A.C., dealing with the construction industry. The ability of both Hogan and Perretta to sign business checks. Whether Ms. Hogan had the technical and mechanical capability, skills and training to run a construction company, and Whether Ms. Hogan could effectively control such areas as financing, purchasing, hiring and firing, and the like. In arriving at its decision to deny Petitioner's application, the Department relied only on those matter submitted with the application. It did not ask for or seek any information about the company and its operation beyond that initially provided. Notwithstanding her recommendation in this case, Ms. Freeman has previously recommended the certification of numerous woman owned businesses as MBEs. On April 6, 1990, Ms. Hogan, as owner of E.C. Construction, Inc., a licensed general contractor qualified under the license of Carmen M. Perretta, applied to the Department for certification as a woman owned MBE. The application form reflected Ms. Hogan as the sole owner of the business, a corporation created under the laws of Florida. Ms. Hogan was listed on both the Articles of Incorporation, (1989), and the application form in issue here as the sole officer and director of the corporation, as well. Mr. Perretta was to be merely an employee of the firm, E.C. Construction, Inc.. In that regard Ms. Hogan claims, and it is so found, that the letters, "E. C." in the corporate name do not stand for Elinor and Carmen. Instead, they stand for Elite and Creative. Ms. Hogan is a 63 year old widow who professes a long-standing interest in building, design and decorating. In 1950, she and her husband started a floor covering business in another state which they operated for nineteen years. In 1969 they moved to Florida where her husband started a lawn maintenance business in Sarasota. She worked full time as a nurse at a local hospital and still found time to assist her husband in every aspect of their business including marketing, bookkeeping, public relations, etc. Her husband took ill in early 1986 and from that time on and after his death in May, 1988, until the business was sold almost a year later, she exercised complete control. She still runs a wedding supply and stationery business from her home. She sold the lawn business because she wanted to break the emotional links with the past and since she had some experience in construction, design and remodeling of her own home, went into the construction business establishing the Petitioner firm. In the few preceding years, she had designed and supervised several construction projects in the area in which she attended to financing, hiring the1 subcontractors, and supervision of the work. She also took some courses in design and has taken other courses and seminars in financing, accounting, marketing, advertising and operating a small business. Ms. Hogan and her husband met Mr. Perretta in 1987 when they put an addition on their house and she was impressed by his talents. When she decided to look into going into the construction business, she turned to him for advice and ultimately recruited him as the corporation's qualifying agent. Notwithstanding the fact that neither the corporate documents nor the application for MBE status so reflect, Ms. Hogan's lawyer now indicates that Perretta was also made a Vice-President of the firm, but his authority was limited to those actions necessary to meet the minimum compliance requirements of Florida law. When confronted with this discrepancy, Ms. Hagan claimed that the corporate papers and the application were in error and that she didn't know what they meant when she signed them. Ms. Hogan claims to be in full and complete control of all corporate activities, and to delegate to Mr. Perretta those responsibilities and functions, relating to the actual construction, that he is best qualified to carry out. She claims she does not share dominant control of the daily business activities of the firm though the evidence indicates both she and Mr. Perretta can individually sign corporate checks. In that regard, she claims he has signed only 19 of more than 500 checks issued by the firm since its inception. They have an understanding he will sign checks only for the purchase of materials, and then only in an emergency situation. He claims to no longer use that authority. The Department introduced no evidence to the contrary. Ms. Hogan admits to not having formal construction training or experience but, based on her other experience, believes she is qualified to run a business. Under her leadership the company has reportedly secured over one million dollars in contracts and for the most part, has performed them successfully. Under oath she claims to negotiate the contracts, prepare the estimates and deal with contracting customers in all the projects in which the company is engaged. She claims to have made those contractual decisions independent of Mr. Perretta to whom she is not accountable. Yet, as was seen, the Articles of Incorporation wrongfully indicate her as the only officer when Mr. Perretta was actually a Vice-President, and she claims not to have known that. This gives rise to some doubt as to her business credentials. In reality, Mr. Perretta actually directs and supervises the actual construction work at all job sites and schedules the subcontractors and materials to insure their presence at the job when needed. When changes are required, Mr. Perretta gives the necessary information to Ms. Hogan who prepares the change orders, including the typing, and forwards them as appropriate. Ms. Hogan has also entered into an agreement, dated June 25, 1989, with Mr. Perretta whereby, in lieu of salary as qualifying agent and field superintendent for the company, he is to receive 40% of the gross profits of each construction project. He gets a periodic draw against that percentage. In addition, in May, 1989, Ms. Hogan, as President, and Mr. Perretta, as Vice- President, entered into an agreement with Raymond Meltzer to retain him as general manager of E.C.'s Designer Structures division. Under the terms of the agreement, Mr. Meltzer was to have "absolute, unlimited and exclusive authority" to conduct all affairs of the division, except to incur debt other than short term debt to subcontractors. Mr. Meltzer was to have the right to draw checks on a separate E.C. account in a bank of his choosing, and was to receive 95% of all monies received as a result of the activities of that division. E.C. was to obtain the required permits or licenses for projects and to provide such supervision as is required by law. Though Petitioner did not incorporate under the name Designer Structures, nor did it register that name under the fictitious name statue, it continues to do business under that name. When it does, business is not conducted out of E.C.'s office, but from Meltzer's office instead. This is not consistent with Petitioner's MBE application which reflects only one office. Petitioner submitted at the hearing a notarized statement dated December 8, 1990, from Mr. Meltzer in which he admits to seeking to originally use Mr. Perretta and E.C. primarily as a qualifying agent for his own construction activities. The terms of the agreement referenced above tend to confirm that arrangement. Nonetheless, he is of the opinion that Ms. Hogan possess excellent business acumen and administrative abilities, and, he claims that, based on his initial meeting with her, he abandoned his plans to set up his own business and went into a business relationship with her. The evidence indicates he develops the work for the division and gets 95% of the fee. Ms. Hogan claims to be considering terminating the arrangement since it has not proven to be a lucrative one. She is apparently not aware the agreement specifically states it is for a three year term and carries options to renew. Though both Petitioner's application for MBE status and its bonding application indicate E.C. has no employees, Ms. Hogan testified that both Mr. Perretta and Mr. Meltzer are employees. She claims to use only subcontractors in the accomplishment of company projects and this appears to be so. She claims to have the strength of character and the will. to manage, hire and fire subcontractors as required. There is other evidence in the record, however, to indicate that Mr. Perretta actually schedules the subcontractors and materials to insure their presence at the job site when needed. It is found that there are no other employees who do direct, hands on contracting work, but while there may be a question of word meaning, it is clear that both Perretta and Meltzer qualify as employees. E.C.'s application for MBE status also indicates that it had not executed any promissory notes, yet there is a note for $3,500.00 from E.C. to Mr. Perretta, dated May 10, 1989, on which no payments have been made. Though Ms. Hogan claims to be fully in charge of running the business side of the operation, she is apparently also unaware of certain basic facts other than those previously mentioned. In addition to the inconsistencies regarding the office structure and her mistake concerning the employee status of Mr. Perretta and Mr. Meltzer, as well as her error regarding the loan, she was also in error as to the company's net worth. Whereas she indicated it was set at about $30,000.00, the company's most current financial statement reflects net worth at just above, $6,000.00, revealing her estimate to be 80% off. She also did not know the character of Mr. Perretta's license, (Class E.C. owns very little construction equipment and Ms. Hogan rents all needed equipment as indicated to her by Mr. Perretta. The lack of ownership is not significant, however. The one piece of equipment the company owns is a transit level which was purchased at Mr. Perretta's insistence. He has also donated to the company some used office equipment from his prior business as a contractor. He was not paid for it. Other equipment, in addition to office space, was furnished by Mr. Meltzer.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be issued in this case denying E.C. Construction, Inc.'s application for certification as a Minority Business Enterprise. RECOMMENDED this 22nd day of January, 1991, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1991. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-5217 The following constituted my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of fact submitted by the parties to this case. FOR THE PETITIONER: None submitted FOR THE RESPONDENT: & 2. Accepted and incorporated herein. Accepted. & 5. Accepted and incorporated herein. Accepted and incorporated herein. & 8. Accepted and incorporated herein. 9. & 10. Accepted 11. - 13. Accepted and incorporated herein. 14. & 15. Accepted and incorporated herein. Rejected as to her prior experience though it was limited. Accepted and incorporated herein. - 20. Accepted and incorporated herein. Accepted. - 24. Accepted. Accepted and incorporated herein. & 27. Accepted and incorporated herein. 28. & 29. Accepted. Not proven. - 33. Accepted and incorporated herein. 34. & 35. Accepted and incorporated herein. Unknown but accepted. Accepted. Accepted and incorporated herein. COPIES FURNISHED: Guy Brisson, Personal Representative E. C. Construction, Inc. 105 Island Circle Sarasota, Florida 34232-1933 Dannie L. Hart, Esquire Joan V. Whelan, Esquire Department of General Services Suite 309, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Ronald W. Thomas Executive Director Knight Building Koger Center 2737 Centerview Drive Tallahassee, Florida 3399-0950 Susan Kirkland General Counsel DGS Suite 309, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Petitioner Haul-It, Inc., is a trucking company in the business of hauling road building materials. It owns 19 trucks and 13 trailers worth about $106,000; and owes between $75,000 and $79,000 to a bank. Occasionally petitioner engages additional trucks and drivers. All but eight of its 15 or 16 employees are truck drivers. Haul-It, Inc., was organized in 1973. Jack Taylor and his father started the business but later sold out to Hubert E. Real, the president, half- owner and operator of Columbia Paving, and Wiley Jinwright, a 24-year employee of Columbia Paving. Mr. Jinwright became president of Haul-It, Inc., and Jack Taylor stayed on as truck foreman. Messrs. Real and Jinwright each owned 20 shares of stock, representing half interest in petitioner. Columbia Paving itself has never held any of the 40 shares of stock that petitioner has issued. In November of 1980, Mr. Real conveyed all 20 of his shares to his wife, Helen Real; and Mr. Jinwright conveyed one share to Mrs. Real. Both transfers of stock to Mrs. Real were gratuitous. She knew at the time that her ownership might help Haul-It, Inc., qualify as a minority business enterprise. In addition, Mr. Real "had had a couple of heart attacks" (T. 14) and Mrs. Real "thought it would be nice to have a related [to Columbia Paving] business." (T. 14.) The evidence did not reveal whether Mr. Real has spent more, less, or the same amount of time with petitioner's affairs since his divestiture as before. Mr. Real remains active as president of Columbia Paving. From November of 1980 to the time of hearing, Mrs. Real has owned 52.5 percent of petitioner's stock and Mr. Jinwright has owned 47.5 percent. Petitioner's only offices are housed in a trailer located on land owned by Columbia Paving. Haul-It, Inc., pays Columbia Paving rent for the land on which its office trailer, trucks, and other equipment are parked. At the time of the hearing, between 70 and 80 percent of Haul-It, Inc.'s work was being performed under contract to Columbia Paving. As far as the evidence showed, petitioner has always performed most of its services under contract to Columbia Paving. Although it has had other customers, Columbia Paving is petitioner's only regular customer. (T. 27.) Petitioner uses Columbia Paving's computer to keep its books and shares a bookkeeper with Columbia Paving. Each company pays the bookkeeper a separate salary. Mrs. Real sits on Columbia Paving's board of directors. Neither Columbia Paving nor any other entity uses petitioner's hauling equipment unless it has contracted to do so. When Haul-It, Inc., "bid[s] through Columbia Paving" (T. 39) in response to invitations by the Department of Transportation, Columbia Paving personnel check the bid over to make sure that it "fits whatever plan or whatever estimates they feel are in order." (T. 40.) Soon after she became owner of a majority of petitioner's Stock, Mrs. Real became petitioner's vice-president, secretary, and treasurer, even though she had had no prior experience in the trucking business. Mr. Jinwright remains president of Haul-It, Inc. It was also in November of 1980 that Haul-It, Inc., applied for certification as a minority business enterprise. At that time and for some months afterward, Mrs. Real was not working for Haul-It, Inc., on any regular schedule. On the basis of the information petitioner furnished with its application, respondent, in November of 1980, "certified them for 12 months, on the condition that an on-site review would be conducted and at that time the decision would be made as to the ownership and control and whether this minority business enterprise should be continued as certified." (T. 61.) In April of 1981, respondent's Mr. Nath conducted an on-site review. At that time, Mr. Nath requested additional documents which petitioner eventually mailed to respondent. In September of 1981, respondent for the first time communicated to Haul-It, Inc., its intention to disqualify petitioner as a minority business enterprise. After receiving this news, Mrs. Real began going to work for petitioner daily. She has an office in the trailer that she shares with Mr. Jinwright, whose role in Haul-It, Inc., was reduced to cosigning checks when Mrs. Real began working full time. Most of Mr. Jinwright's time is now spent as Superintendent of Columbia Paving's four asphalt plants. Even so, he still draws a salary from Haul-It, Inc., equal to Mrs. Real's salary. Despite their respective titles, both Mr. Jinwright and Mrs. Real act on the assumption that she, rather than he, has ultimate authority in the conduct of Haul-It, Inc.'s business. Mrs. Real has full authority to hire and fire, authority which she has delegated, in the case of the truck drivers, to Jack Taylor. She has the final say on all questions of policy and operations that arise in the business. Haul-It, Inc., cannot borrow money or make expenditures without her permission. Jack Taylor and two other employees buy for Haul-It, Inc., but she cosigns all checks with Mr. Jinwright. She has not learned how to prepare a written bid for the Department of Transportation, although she is involved with bidding. Mrs. Real relies heavily on Jack Taylor's bidding expertise, as have petitioner's other owners. Petitioner's proposed findings of fact and conclusions of law and respondent's proposed findings of fact, conclusions of law, and recommendation reflect the good work done in this case by counsel on both sides. To the limited extent proposed findings have not been adopted, they have been deemed immaterial or unsupported by the evidence.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent deny Haul-It, Inc., certification as a minority business enterprise. DONE AND ENTERED this 3rd day of March, 1982, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1982. COPIES FURNISHED: Patrick E. Hurley, Esquire Post Office Drawer 1049 Tallahassee, Florida 32302 Vernon L. Whittier, Jr., Esquire Ella Jane P. Davis, Esquire Department of Transportation Haydon Burns Building Tallahassee, Florida 32301 Paul A. Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
The Issue The primary issue for determination is whether Petitioner should be granted certification as a Minority Business Enterprise (MBE). Determination of this issue requires resolution of other issues: Namely, whether Respondent's business qualifies as a Minority Business Enterprise (MBE) as defined by provisions of Section 288.703(2), Florida Statutes; and whether Respondent is a minority person as defined by provisions of Section 288.703 (3)(b), Florida Statutes.
Findings Of Fact Alfredo Ramos is the sole owner of the janitorial business known as "A Cleaning Crew." Ramos was born in Rio Hondo, Texas, on August 9, 1938, to Martin and Ada Salazor Ramos. Ramos' birth certificate, issued at that time denoting his race as white, was amended on May 21, 1992, to reflect that his color or race was Hispanic. Ramos' father was born in Texas. Ramos' mother was born in Oklahoma. There is no independent or verifiable knowledge of where any of Ramos' grandparents were born. All are now deceased. By letter dated June 5, 1992, Respondent denied Ramos' application seeking to have "A Cleaning Crew" certified as a MBE. The basis for denial recited in the letter was that the business did not meet the requirements of Section 288.703(2), Florida Statutes, in that Ramos, as sole proprietor, was unable to establish his status as a minority person within the definitional requirements of applicable Florida Statutes and administrative rules.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered denying Petitioner's application for certification as a Minority Business Enterprise. DONE AND ENTERED this 14th day of October, 1992, in Tallahassee, Leon County, Florida. DON W.DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of October, 1992. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. No findings were submitted. Respondent's Proposed Findings. 1.-5. Accepted. COPIES FURNISHED: Alfredo Ramos d/b/a A Cleaning Crew P.O. Box 10293 Jacksonville, Florida 32207 Augustus D. Aikens, Esquire Deputy General Counsel Department of Management Services Suite 309, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Larry Strong, Acting Secretary Department of Management Services Suite 307, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland, Esquire General Counsel Department of Management Services Suite 110, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Vedder and Associates Incorporated's (VAI's) application for minority certification dated January 22, 1992 was received by the Department of Management Services on January 27, 1992. Petitioner's application for minority certification was denied by the Department of Management Services in a letter dated May 22, 1992. VAI was established in October of 1991 and offers as its principal service "land surveying." VAI is licensed to do business in Florida and is fifty-one percent (51 percent) owned by Kathleen Vedder, a Caucasian female, and forty-nine percent (49 percent) owned by John Vedder her husband, a Caucasian male. Kathleen A. Vedder and John F. Vedder were the sole directors of the corporation at the time of certification denial, with Kathleen A. Vedder serving as president/secretary and John F. Vedder serving as vice-president/treasurer. On September 16, 1992, after the denial of certification, John Vedder resigned as a director of VAI. No business reason was offered for this decision. Kathleen Vedder, the minority owner, is presently the sole director of the corporation. As sole director, she represents a majority of the board of directors. She continues to serve as president and secretary. John Vedder continues to serve as treasurer. It is not clear if he still serves as vice- president. (See Findings of Fact 5-11 and 28-29). At all times material, Kathleen Vedder has owned 51 percent of the stock through a greater monetary investment than John Vedder, who owns 49 percent of the stock. At all times material, Kathleen Vedder has served as the principal officers, president and secretary. At all times material, Kathleen Vedder has made up at least 50 percent of the board of directors. Since September 16, 1992, she has made up 100 percent of the board of directors. At all times material, John Vedder has served as a principal officer, treasurer. Up until September 16, 1992, John Vedder made up 50 percent of the board of directors. Thereafter, he did not serve on the board. At all times material, Article VII of VAI's Articles of Incorporation have permitted an increase or decrease in the board of directors as permitted by the bylaws, but never less than one director. At all times material, Item III of VAI's bylaws have provided that corporate officers hold office at the "satisfaction" of the board of directors; that the president shall be the chief executive officer; and that subject to any specific assignment of duties by the board of directors, the vice-president, the secretary, and the treasurer act under the direction of the president. VAI was formed by the purchase of assets from the Perry C. McGriff Company, which had employed Kathleen and John Vedder. Kathleen Vedder began her career with the surveying firm of Keith & Schnars, P.A., in Fort Lauderdale in 1976. She was the administrative assistant to the President. In 1981 she and John Vedder moved to Gainesville to manage the Perry C. McGriff Company, a wholly owned subsidiary of Keith & Schnars. John Vedder handled the surveying aspects of the business, and Kathleen Vedder handled most of the management of the company other than the surveying portion, including purchasing, handling business accounts and financial affairs, client relations, insurance, and correspondence. This continued until 1991 when the assets of the Perry C. McGriff Company were sold to VAI. Kathleen Vedder now performs for VAI basically the same functions as she did for the predecessor company with certain additions. John Vedder served as the director of survey for the Perry C. McGriff Company which employed both Mr. and Mrs. Vedder prior to the formation of VAI. In his position as director of survey at Perry C. McGriff Company, he was responsible for all contracts and negotiations and coordination of personnel to ensure timely completion of contracts. His background by education, training, and experience is extensive in the technical applications to perform land surveying. The business of VAI essentially began on December 6, 1991. Prior to that date, husband and wife had discussed the purchase of the McGriff assets. Kathleen Vedder discussed the purchase of the business with her husband and informed him that she wanted to run the business. He accepted this relationship and her role as "boss" because he hated working in the office and wanted nothing to do with running the business. Kathleen Vedder contacted the old Perry C. McGriff clients and facilitated the transition from the old company to the new company. The Perry C. McGriff Company was purchased for $100,000 with a $15,000 down payment and the remainder to be paid over 7 years. Funds for the original purchase price of the assets were obtained by cashing Kathleen Vedder's 401K plan, two IRA's, and by loans against her life insurance policies for an investment of $57,185.62 by Kathleen Vedder and $25,682.25 of marital assets held with her husband, John Vedder. John Vedder participated in the negotiations to buy Perry C. McGriff Company. John Vedder provided input and expertise regarding the assets of Perry C. McGriff Company which were to be purchased, whether survey equipment was acceptable, and the vehicles to be purchased. John Vedder discussed and consulted with Kathleen Vedder regarding the financial aspects of the purchase of Perry C. McGriff Company. He discussed with her the starting salaries of employees to be hired/transferred to VAI, and the leasing and location of business premises for VAI and purchase of furniture. Kathleen Vedder established the corporate policies, the accounting procedures, the job costing, and the standard management practices of the new company. Kathleen Vedder, as VAI president, made all of the final decisions regarding implementation of the new business such as renting the office, moving the assets purchased from the old Perry C. McGriff Company, establishing lines of insurance, determining the manner and location of the survey records purchased, and hiring the staff. Kathleen Vedder and John Vedder made it clear to all of the employees from the beginning of the company that she was the "boss". The takeover of Perry C. McGriff Company by VAI was explained to former employees during a field visit by John Vedder. His explanation was made at Kathleen Vedder's direction and took place while these employees were already in the field, during a time of transition, in a spirit of damage control when Kathleen and John Vedder were concerned that rumors might affect the new company's ability to retain good personnel from the old company and over concern that some might have trouble working for a woman. Kathleen Vedder hired six employees initially from the old Perry C. McGriff Company. Kathleen Vedder set the initial pay scale for the employees of the company and maintained the documentation relevant to this function. The additional four persons hired by the company since it began were Robert Henderson, Tom Crossman, George Gruner, and Doug Zimmerman, each of whom were hired by Kathleen Vedder who interviewed them, who set their wages and benefits, and who described their job functions to them as new employees. VAI has a business license posted on its premises issued by the City of Gainesville, Florida, in the name of John Vedder, authorizing the performance of land survey services. VAI currently employs eight permanent employees and the qualifying agent is John F. Vedder, who serves as a principal officer, treasurer. He holds a land survey license issued by the State of Florida, Department of Professional Regulation, Land Surveying Board. In order to be qualified as a licensed land surveying corporation, a principal officer must be a licensed land surveyor. The participation of John Vedder or another duly-licensed land surveyor is required to satisfy the requirements of Chapter 472 F.S., for a qualifying agent. Under that statute, the qualifying agent must have a license as a land surveyor and hold a position as a principal officer in VAI. If John Vedder were to lose his professional land surveyor license, there would be three licensed land surveyors remaining with the company, and it would be possible for VAI to continue if one of these were designated as a principal officer. Kathleen Vedder holds no license or certification other than a notary public. In terms of any special needs or requests, such as medical needs, all employees are required to report to Kathleen Vedder. Kathleen Vedder earns $14.50 per hour. The survey party chiefs, including John Vedder, now earn $13.00 per hour. These amounts are commensurate with Kathleen Vedder's percentage of VAI ownership of fifty-one percent (51 percent). The evidence is conflicting as to whether another crew chief earned more than John Vedder in one year due to a higher rate of pay or more hours worked in that period. No one in the company draws any bonus, commission or has any particular insurance coverage as a benefit of employment. The company has not posted any dividends or distributed any proceeds from business investments or engaged in any profit sharing. The corporation has, as a risk of doing business, the liability connected with its $85,000.00 promissory note to Keith & Schnars, P.A. It also has the risk associated with premises liability, with motor vehicle liability, with general errors and omissions liability, and with professional liability. Kathleen Vedder has procured insurance to cover all these risks. These premiums are paid by the corporation. There has been no additional ownership interest acquired by anyone since the inception of the corporation. There are no third party agreements. There are no bonding applications. The company has not at any time entered into an agreement, option, scheme, or created any rights of conversion which, when exercised, would result in less than fifty-one percent (51 percent) minority ownership and minority control of the business by Kathleen Vedder. Kathleen Vedder controls the purchase of the goods, equipment, business inventory and services needed in the day-to-day-operation of the business. Kathleen Vedder expressly controls the investments, loans to and from stockholders, bonding, payment of general business loans, and payments and establishment of lines of credit. The corporate business account of VAI contains the signatures of John Vedder and Kathleen Vedder on the bank signature card. Only one signature is required to transact business. Of the 823 checks issued by VAI since it began, John Vedder signed one at Kathleen Vedder's direction when it was not possible for her to be in two places at once, and Kathleen Vedder signed 822 checks. Although he is treasurer, John Vedder professed to know nothing of VAI's finances and deferred to Kathleen Vedder in all matters of financing from the very beginning. Nonetheless, the corporate documents list the treasurer as the chief financial officer in ultimate charge of all funds. Kathleen Vedder has knowledge of only the minimum technical standards required for a survey. In her certification interviews, Mrs. Vedder did not know how to establish true north or how a line survey would establish true north. She lacks basic survey knowledge and could not identify Polaris as the north star or state the standard measurement (length of a chain) for a surveyor. Identifying Polaris is not particularly important in modern surveying. Kathleen Vedder is capable of doing the necessary paper search and telephone call regarding underground utilities for surveyors in the field. Kathleen Vedder has extensive experience in the production of a surveying product and is able to manage the surveyors who perform the technical aspects of the business. Upon acquisition of the assets and formation of the new company, Kathleen Vedder began directing the two field crews newly employed by VAI to the various projects and work which she had scheduled. This direction has primarily been in the timing and coordination of projects and is commensurate with some of the work previously done by John Vedder when he was director of survey for the predecessor company, Perry C. McGriff Company. (See Finding of Fact 14). Technical problems involving a particular site do not arise very often so as to require a discussion among the land surveyors of the company but if they do, the professional land surveyors jointly or singly make all technical surveying decisions. Surveys must be signed by a registered land surveyor pursuant to Chapter 472 F.S. John Vedder provides Kathleen Vedder technical advice, coordinates field crews' work, makes decisions pertaining to technical work which is not within Kathleen Vedder's abilities, consults with Kathleen Vedder once a week concerning the general financial picture of VAI, and does some job estimating and quality control. Kathleen Vedder rarely visits work sites in the field. Employees in the field report to John Vedder whenever they have a problem and report to Kathleen Vedder if the problem is in the nature of project coordination. John Vedder is responsible for training and working with employees and providing technical training required for the performance of land surveys. He does computer aided drafting (CAD) and provides technical assistance to the CAD operator, which Kathleen Vedder cannot do, however she works it afterward on her computer. Kathleen Vedder does not work in the field, and of the two, John Vedder performs the majority of work in the field. Kathleen Vedder defers to John Vedder to handle technical matters because he has more experience. Party Chief John Vedder supervises his crew. Party Chief Louis Crosier supervises his crew. Kathleen Vedder supervises Louis Crosier and John Vedder and a third crew chief when one is used, usually Robert Henderson. Kathleen Vedder established a fee schedule for the company and a method of formulating the estimates and bids which the company would propose to prospective clients. John Vedder is not knowledgeable in this area. When a job comes in, the prospective client initially contacts Kathleen Vedder. If a client calls requesting a survey, Kathleen Vedder does the research and provides the estimate or bid without further input from any surveyor if the survey requested is a standard routine survey. If the job is complex, Kathleen Vedder requires man hour estimates from two land surveyors, one of whom is often John Vedder. She takes these estimates and applies previous histories, experience, and adjustments in order to prepare the final bid or survey estimate. Once she has received the man-hour estimate, Kathleen Vedder reviews it, compares it with previous surveys, applies a job costs analysis to it, applies any other known costs to it, and presents the final estimate or bid. There is a difference between compiling the work hours necessary for the estimate and compiling the estimate itself. Kathleen Vedder has the ultimate responsibility for finalizing complex estimates and bids. Kathleen Vedder makes presentations as a part of her function which involve technical presentations of the survey services rendered by VAI. In the fourteen month period since the business began, Kathleen Vedder has given approximately eight presentations of a technical nature to prospective clients, including the Florida Department of Transportation (DOT). Kathleen Vedder is capable of complying with DOT bid specifications to submit material on a DOS disc. DOT has qualified VAI under its Disadvantaged Business Enterprise program. Petitioner's witnesses skilled in land surveying consistently testified that without Kathleen Vedder's skilled contributions to the firm, technical land surveying could be accomplished but the firm would not show a profit. Rule 13A-2.005(3)(d)(4), requires minority owners to have managerial, technical capability, knowledge, training, education and experience to make decisions regarding the business. In interpreting this rule, the Respondent agency relies on Barton S. Amey v. Department of General Services, DOAH Case No. 86-3954, (RO 3/5/87; FO 4/21/87), aff'd Fla. DCA February 11, 1988, No. 87-235. The agency has no further refinement by way of rule or policy which applies specifically to the land surveying industry. It does not require the minority owner to have a land surveying license per se. It does not require the minority business owner to have an extensive knowledge of surveying.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered certifying Vedder Associates, Incorporated as a Minority Business Enterprise. RECOMMENDED this 7th day of June, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of June, 1993. APPENDIX TO RECOMMENDED ORDER 92-3763 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: The so-called "stipulated facts" is accepted, as stipulated, but not as to the inserted conclusion of law/argument. 1-19 Accepted except to the degree it is unnecessary, subordinate, or cumulative. 20-21 Accepted, but not dispositive, subordinate. Rejected as a conclusion of law or argument. Accepted, but not dispositive, subordinate. Rejected as a conclusion of law or argument. 25-33 Accepted as modified to more closely conform to the record, and to eliminate mere leal argument, conclusions of law, and unnecessary, subordinate, or cumulative material. Also testimony was to 823 checks. Rejected as stated as not supported by the greater weight of the credible evidence. Accepted, except to the degree it is unnecessary, subordinate or cumulative. Rejected as out of context, a conclusion of law, or argument. 37-46 Accepted, as modified, except to the degree it is unnecessary, subordinate, or cumulative. 47-48 Rejected as out of context, a conclusion of law, or argument. 49-53 Covered to the degree necessary in Finding of Fact 65, otherwise irrelevant and immaterial to a de novo proceeding under Section 120.57(1) F.S. 54-56 Accepted except to the degree unnecessary, subordinate, or cumulative. 57 Rejected as out of context, a conclusion of law, or argument. 58-60 Accepted except to the degree unnecessary, subordinate, or cumulative. Petitioner's "factual conclusions" are rejected as proposed conclusions of law not proposed findings of fact. Respondent's PFOF: 1-10 Accepted except to the degree unnecessary or cumulative. 11 Rejected as subordinate. 12-14 Rejected as stated as argument. Covered in Findings of Fact 27-30, absent argument, conclusions of law, and erroneous statements not supported by the greater weight of the credible competent evidence. Rejected as argument. Mostly accepted except to the degree it is unnecessary, subordinate or cumulative. However, the job estimating as stated is not supported by the record nor the argument of "day-to-day business." 17-19 Accepted as modified to conform to the record evidence, and except to the degree it is unnecessary, subordinate, or cumulative. 20 Rejected as argument. 21-22 Accepted but incomplete, irrelevant and immaterial in a de novo Section 120.57(1) F.S. proceeding. Also, the footnote is rejected as mere argument. 23-24 Rejected as argument. Accepted, but not complete or dispositive; unnecessary and cumulative. Accepted to the degree stated except to the degree unnecessary, subordinate, or cumulative. She also did more. Rejected as partially not supported by the record; other parts are rejected as unnecessary, subordinate, or cumulative. Accepted except to the degree unnecessary, subordinate, or cumulative or not supported by the record. Accepted in part and rejected in part upon the greater weight of the credible, competent record evidence. Rejected as argument. Rejected as stated as not supported by the greater weight of the credible, competent record evidence, also unnecessary, subordinate, or cumulative. Accepted except to the degree it is unnecessary, subordinate, or cumulative. Rejected as argument 34-35 Accepted in part. Remainder rejected as stated as not supported by the greater weight of the credible, competent record evidence, and as a conclusion of law contrary to Mid State Industries, Inc. v. Department of General Services, DOAH Case No. 92-2110 (RO 9/14/92). 36 Rejected as argument. 37-38 Accepted in part, and rejected in part because not proven as stated. Rejected as argument. Rejected as stated because out of context or not supported as stated by the greater weight of the credible, competent record evidence. Rejected as argument. Accepted, except to the degree unnecessary, subordinate or cumulative. Rejected as argument. 44-46 Rejected as subordinate. 47,(No #48),49 Accepted except to the degree unnecessary, subordinate, or cumulative. 50-55 Rejected as subordinate or unnecessary or as conclusions of law or argument. COPIES FURNISHED: Peter C. K. Enwall, Esquire Post Office Box 23879 Gainesville, FL 32602 Terry A. Stepp, Esquire Department of Management Services Koger Executive Center Suite 309, Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950 William H. Lindner, Secretary Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Susan B. Kirkland, Esquire Department of Management Services Koger Executive Center Suite 309, Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950
Findings Of Fact Upon consideration of the testimony received at the hearing, the following relevant facts are found: Power Line Engineering, Inc. was originally formed in 1983 by Roger Sloan, who initially held 100 percent of the stock. The business of the corporation is the installation of overhead power lines and street lights. In August of 1986, approximately 52 percent of the corporation's stock was transferred to LaVerne Sloan, Roger Sloan's wife, and 10 percent was transferred to Scott Austin. Roger Sloan retained the remainder of the shares. The testimony was unclear as to how many directors the corporation has, and no documentary evidence was offered at the hearing. Roger Sloan is the president, Scott Austin is the vice-president and LaVerne Sloan is the secretary/treasurer of the corporation. It appears that these three individuals are also the sole directors of the petitioner. Roger Sloan is the chief estimator and does most of the public relations work for the company. He solves problems in the field and does cost estimating for bids. Most of the equipment owned by the company was purchased by him prior to August of 1986. Scott Austin is in charge of the field work and he consults with Roger Sloan if there are problems in the field. He also helps with the bid work. It is his view that he and Mr. and Mrs. Sloan are partners in running the company. LaVerne Sloan is the general manager in the office. While the company uses an accountant for the book work, she signs all the checks, except during emergencies, and all purchases are approved by her. She also makes decisions as to whether union or nonunion employees are utilized on jobs. However, if there are problems with employees in the field, Mr. Austin and Mr. Sloan make the decision regarding their retention. LaVerne Sloan assembles the bid packages and does some public relations work for the company. She is a full-time employee for the petitioner. The evidence was unclear as to the amount of time, if any, that LaVerne Sloan was employed by the petitioner prior to August of 1986. Roger Sloan, LaVerne Sloan and Scott Austin talk together each day and discuss what has happened that day with respect to the business. While the application for certification as a Minority Business Enterprise was not offered into evidence, LaVerne Sloan stated that she applied in September of 1986.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the petitioner's application for certification as a Minority Business Enterprise be DENIED. Respectfully submitted and entered this 13th day of August, 1987, in Tallahassee, Florida. DIANE D. TREMOR, 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 13th day of August, 1987. COPIES FURNISHED: LaVerne Sloan Power Line Engineering, Inc. Post Office Box 671 Plant City, Florida 33566 Sandra E. Allen Department of General Services Office of General Counsel Room 452, Larson Building Tallahassee, Florida 32399-0955 Ronald W. Thomas Executive Director Department of General Services Room 133, Larson Building Tallahassee, Florida 32399-0950
Findings Of Fact Wanda Forbess is an American woman. She is the president of the Petitioner corporation, Center Office Products, Inc. She owns 5l percent of that corporation's outstanding stock. The stock is full voting stock and there are no agreements in existence or anticipated which would cause any change in the percentage of ownership of Wanda Forbess, nor any change in the voting power of her stock. The Petitioner corporation and Wanda Forbess has no affiliation or relationship with any other business and Wanda Forbess is not an employee of any other business. The net worth of the Petitioner as of the date of hearing is less than one million dollars. It has also been stipulated that the Petitioner, that is, Wanda Forbess, has been performing a useful business function and operating the Petitioner's business since 1981. Wanda Forbess is the mother of Thomas J. Forbess and Raymond D. Forbess and the wife of Thomas D. Forbess. In 1981 her children were almost out of school, with her youngest child being about to enter college. She decided she wanted to start her own business. She had been active as a homemaker, a volunteer and active member of civic organizations. She decided to enter the office supply retail business in 1981 because of the low initial investment required due to the presence of two wholesale suppliers in Jacksonville who could supply goods for inventory on a rapid basis. She also chose to enter this business because there were no particular special skills, training or licenses required and because she knew something about it, since her husband worked for twenty-five years in one phase of the business, that of sales of paper products. This decision being made, Ms. Forbess approached her sons, Thomas J. Forbess and Raymond D. Forbess, to persuade them to enter into the business with her. They agreed to join her in the venture and she set about to form the Petitioner corporation. She desired to incorporate in order to limit the liability which she and her sons would be exposed to in operating the business. She retained an attorney to incorporate the business, but paid no particular attention herself concerning how the shares were to be issued and held or as to the manner of appointment of the members of the board of the directors. She simply followed her attorney's instructions who advised her to do the "standard type" of incorporation. The corporation estab- lished by her attorney provided, in its by-laws, that there would be three directors. Wanda, Ray and Thomas Forbess were each named as directors since they were the only three individuals involved with the Petitioner at its formation. The attorney also issued stock certificates for 200 shares each to the three directors. Wanda Forbess was appointed as president and chief executive officer of the Petitioner corporation. This was because the formation of the business and the company was Mrs. Forbess' idea and she had provided more than five times the amount of capital of each of the other two owners, her sons. In fact, she had provided $11,000 of her own money as initial capital and her two sons provided $2,000 each. Notwithstanding their equal ownership status and the equal vote each of the three has on the Board of Directors, as well as the requirement in the bylaws that a majority vote of the Board is controlling, Mrs. Forbess has been in control of the Petitioner corporation's operations from the day of its inception. Her sons do not question that control and established the fact of it in their own testimony at the hearing. The vice- president is Raymond D. Forbess and the secretary treasurer is Thomas J. Forbess. The bylaws provide that the property and business of the corporation is managed by its Board of Directors and that a majority of those directors shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of the majority of the directors present at any meeting at which there is a quorum shall be deemed to be the act of the board. It is also provided in the bylaws that the holders of the majority of shares of stock may remove a director at any time, with or without cause, at a duly called meeting. The president of the Petitioner is empowered to call such a meeting at any time. Any vacancy occurring as a result of removal of any director by the majority shareholders may be filled by the affirmative vote of the majority of remaining directors, even if less than a quorum shall be present. Directors are not required to be shareholders. Therefore, as a holder of 51 percent of the shares of the Petitioner, Wanda Forbess has control over the board of directors by the power to elect or remove any director by voting shares accordingly at a meeting which she may call at any time, with or without notice, as the president of the Petitioner corporation. Replacement directors could then be appointed by her vote alone and could be any person she elects, including, for example, an employee over who she has authority and who she may direct to vote a certain way. In any event, from 1981 through 1987, the Petitioner grew from a company with three employees to a company of 18 employees and more than $280,000 gross monthly sales. During this time, the Petitioner enjoyed some State of Florida contract business. Some time in 1987, Mrs. Forbess became aware that she would soon be unable to continue doing business with the state because her business was not a certified minority business enterprise. In fact, however, the Petitioner had been, from its inception, an American woman-controlled corporation in actual practice. On June 1, 1987, Mrs. Forbess directed her sons to convey sufficient stock to her so that she could become a 51 percent shareholder of the Petitioner corporation. This transfer was done to comply with section 288.703(2), Florida Statutes, concerning the definition of "minority business enterprise." It was also done to formally reflect what had been the case, as a practical matter, since the inception of the corporation: that Wanda Forbess controlled the Petitioner corporation. The company by that time had significant value reflected in the value of its stock, but neither son required payment for his stock which he conveyed to Mrs. Forbess. They considered that she was the controlling owner of the corporation from its inception anyway due to the fact that the business was her idea and that she had contributed by far the most significant amount of initial capital. Mrs. Forbess spends a majority of her time conducting the financial affairs of the Petitioner. She is more familiar and more involved with the financial affairs of the Petitioner corporation then any other owner, officer, director or employee. In that capacity, she sets all the salaries, including the salaries of her sons and her husband. All salaries are set completely at the discretion of Mrs. Forbess and always have been. She pays her two sons and her husband a higher salary than she pays herself because their financial requirements are greater, but the salient point here is that she is the manager with the discretion to set their salaries. In 1985, after the Petitioner had been operating successfully for four years, Thomas J. Forbess, the husband of Mrs. Forbess, retired from his position with Jim Walter Paper Company after 25 years of employment with that firm. Prior to that time he had no involvement with the formation, operation or management of the Petitioner corporation. He has never had an ownership interest in the Petitioner. He is an employee of the corporation and assists in some of the operations, including preparation and submittal of bids for some of the work the corporation undertakes. Mrs. Forbess controls the purchase of goods, equipment and business inventory and services used and needed in the day- to-day operation of the business. She frequently purchases significant items used in the business, such as computers, trucks, and postage machines, as well as inventory. In addition to this, the major purchases made by the business by any co-owner or employee must be made only with her approval. Evidence was offered showing the lease agreements and notes evidencing that corporate debts related to large purchases were signed by all corporate officers as a basis for an attempt to show that decisions are made by "consensus" or are joint decisions. However, the fact that lenders and lessors require all corporate officers to sign documents evidencing leases or debts does not mean each corporate officer had an equal part to play in making the decision involved. The record is replete with evidence and testimony from employees and the other owners that Wanda Forbess has a veto power on all decisions concerning purchases, loans, leases of real property and every other major business decision the Petitioner confronts. Further, the fact that discussions are had amongst the owners and officers of the business prior to making major decisions is really a sound business practice and does not mean that one of the owners, directors or officers does not have final authority to make a binding decision. The person who has final authority for such major decisions is Wanda Forbess. Mrs. Forbess also has the authority to hire and dismiss employees, a requirement of subsection 3(b) of Rule 13-8.005(3), Florida Administrative Code. She herself has interviewed employees from time to time and also has final authority to approve all hiring and discharge decisions or to veto them in those instances where she has delegated that authority. She controls which professional services are obtained by the Petitioner corporation, as shown by her decision to discontinue the services of the former company accountant. Indeed, she has delegated some of the hiring processes, given the fact that the Petitioner corporation has grown to be a business with 18 employees. That however, is a normal, acceptable business decision. The delegation of the advertising of a position, the interviewing of prospective employees and the conveying of offers of employment to prospective employees in no way indicates that the delegator does not have the final authority to hire or dismiss the employees. Wanda Forbess also controls all financial affairs of the Petitioner corporation. She thus has unsurpassed knowledge in relation to the other owners, officers and directors, of the financial structure and operations of the business. In fact, the bulk of her time spent working for the Petitioner, corporation since its inception, has been in the field of financial matters. She makes the decisions concerning debt to be incurred by the Petitioner, and approves any major expenditure, without which approval expenditures may not be made. It is significant that Mrs. Forbess has veto authority over the extension of credit to customers and establishment of credit accounts by customers. One instance was described by Jeannine Silcox and Raymond Forbess concerning Raymond Forbess' attempt to open an account to service a particular customer on a credit basis. Mrs. Forbess opposed that procedure and ordered that the account not be opened. The account was not opened. This demonstrates effectively that not only does Mrs. Forbess control the financial affairs of the company, but also wields ultimate authority amongst the co-owners of the Petitioner. Additionally, it is undisputed that Mrs. Forbess writes the vast majority of checks on the Petitioner's two checking accounts, in terms of the requirement, at subsection 3(D) of the above-cited rule, that she control the accounts of the business. She estimates that she writes 97 percent of the checks and there is no evidence to refute that estimate. Thomas J. and Raymond B. Forbess are each authorized signatories on the accounts, but their names are simply there as a matter of convenience and the only instances in which they sign checks are when there is an immediate need for the check to be paid and Mrs. Forbess is unavailable to sign herself. There is no question that Mrs. Forbess is the ultimate authority controlling the Petitioner's bank accounts. In order to comply with subsection 3(e) of the above cited rule, the minority owner must demonstrate capability, knowledge and experience in making decisions concerning the business involved. At the time of the business's inception, neither Mrs. Forbess nor her co-owner sons had the capability, knowledge or experience required to make many of the decisions concerning the retail office supply retail business. Over seven years of operation however, Mrs. Forbess has actively supervised and managed the business of the Petitioner and has developed to a high degree those attributes, in making decisions involved in operating that business successfully. She has delegated certain aspects of the company's business to the supervision of her sons. Thomas J. Forbess, for example, is involved in developing additional retail operations. Raymond B. Forbess is more actively involved in the delivery of merchandise to customers and the monitoring of customer accounts, as well as maintaining and accounting for inventory. Nonetheless, neither of the other owners effects any significant decisions without consulting Mrs. Forbess first and gaining her approval or veto. Through this supervision and control over the past seven years, as well as her current direct involvement in managing the Petitioner's affairs, Mrs. Forbess has developed the capability, knowledge and experience required to make decisions regarding the office supply business involved herein. Her operational and managerial capabilities are demonstrated by the fact that under her leadership the business started with three employees and has grown to an 18 employee business with gross sales in the neighborhood of $280,000 per month in just over seven years. Finally, Mrs. Forbess has displayed independence and initiative in conducting all major operations and details of the Petitioner since its inception, (as required by subsection (f) of the above rule). Although she has done little bid negotiating directly, she has the ability to do so and has some experience in that activity. Further, bid proposals are submitted to her for approval and are not made without her knowledge and assent. Further, she herself negotiates leases and other contracts on behalf of the Petitioner.
