The Issue The issue is whether Petitioner is entitled to certification as a minority business enterprise.
Findings Of Fact By undated application, Petitioner filed an Application for Minority Business Enterprise Certification. Stating that the applicant was established in November 1991, the application lists as the sole shareholders Hui Schaefer (a/k/a Gina Schaefer), who is a Korean-American minority, and her husband, Reid, who is a nonminority. The application was filed in July 1995. The application states that Ms. Schaefer is an Asian female owning 81 percent of the shares. The application lists Ms. Schaefer as the chief executive officer, secretary, and treasurer, Mr. Schaefer as the president, and Gordon Holfelder as the vice-president. The application lists these three persons as directors, plus DuWayne Boudin and Lenny LaRose. Except for Ms. Schaefer, the directors are nonminorities. Petitioner's bylaws provide for management of the business and property by a majority of the directors. The articles of incorporation provide similarly. Petitioner claimed at the final hearing that she had fired all of the directors except herself, but she produced no documentary proof of this action. Mr. and Ms. Schaefer purchased all of the stock of Petitioner in 1991. At the time of purchase, Ms. Schaefer received 500 shares and Mr. Schaefer received 400 shares. The sole purpose of this allocation was to enable the corporation to qualify as a minority business enterprise. The sole consideration for the shares was the forgiveness of about $6000 in debt. Mr. and Ms. Schaefer had lent this sum to Petitioner or its parent corporation, Unidyn Corp., so it could pay operating expenses, such as a telephone bill. Upon acquiring the shares, Mr. and Ms. Schaefer contributed capital to Petitioner in the form of furniture and equipment, which they value at $100,000. The evidence does not indicate that Mr. or Ms. Schaefer possessed any disproportionate interest in the $6000 loan, equipment, or furniture. To the contrary, it appears that their interests were equal in the money and assets. Petitioner is in the computer software business. Specifically, at the time of the application, Petitioner was a value-added retailer of computer programs. Petitioner purchased software programs from developers, customized the programs for end users, and resold the program to the end user with a commitment to provide technical support and training. Mr. Holfelder is a computer programmer. Mr. Schaefer is a sales representative. Ms. Schaefer is an office manager. At the time of the application, Petitioner employed nine fulltime permanent employees and earned over $800,000 in the fiscal year ending in 1993. At all material times, the compensation of Mr. Schaefer or Mr. Holfelder at least doubled the compensation of Ms. Schaefer. For calendar year 1995, their salaries were set at $60,000, while Ms. Schaefer's was set at $30,000, which was the same paid to Mr. LaRose. The other director listed on the application, Mr. Boudin, was set to earn $48,000 for 1995. The malleability of salaries in response to the requirements of government programs is reflected by Petitioner's explanation why Mr. Schaefer's salary is greater than Ms. Schaefer's salary. In a latter to Respondent dated August 30, 1995, Petitioner explained that the Schaefers were trying to refinance a home mortgage and "[s]everal of the mortgage companies suggested that it would be much easier to approve a VA mortgage if the husband and veteran, Reid Schaefer, had the highest salary." Ms. Schaefer has little technical experience in software programming. She could provide some technical support to customers for programs with which she was familiar as an end user, but she generally was not involved with the technical end of Petitioner's business. Ms. Schaefer's actual authority over corporation management was quite limited in practice. Hiring and firing authority is divided into departments with persons other than Ms. Schaefer responsible for such personnel decisions in the crucial areas of programming and marketing. Mr. Schaefer is responsible for purchasing. Even Ms. Schaefer's involvement in internal bookkeeping is subordinated to Mr. LaRose, who is Petitioner's in-house accountant. Mr. Boudin handles customer training and assists in sales. Ms. Schaefer signed most of the checks, but appeared to do so at the direction of others. She was not the sole person authorized to sign checks drawn on any of Petitioner's accounts, all of which authorized checks to be signed by a single authorized signer. At the end of 1994, shares were redistributed, leaving Ms. Schaefer with 500 shares, Mr. Schaefer with 100 shares, and Mr. LaRose, Mr. Holfelder, and Mr. Boudin with five shares each. Later, Petitioner issues one share to Brian Risley, a systems installer. These transactions left Ms. Schaefer with 81 percent of the issued shares of Petitioner. Later transactions left her with an even greater percentage of the stock; Petitioner repurchased the shares owned by Mr. Schaefer and Mr. Holfelder, and Ms. Schaefer acquired an additional 89 shares. Petitioner repurchased Mr. Holfelder's shares in connection with her termination in January 1996. By that time, Petitioner had transformed from a value-added retailer to custom applications, designing software programs from scratch. Ms. Schaefer does not control Petitioner either in ownership or operation.
Recommendation It is RECOMMENDED that the Commission on Minority Economic and Business Development enter a final order denying Petitioner's application for certification. DONE and ENTERED on April 29, 1996, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on April 29, 1996. APPENDIX Rulings on Petitioner's Proposed Findings 1: rejected as unsupported by the appropriate weight of the evidence. 2-3 and 6: rejected as legal argument. 4: rejected as unsupported by the appropriate weight of the evidence and subordinate. 5: adopted or adopted in substance except as to implication that Ms. Schaefer controls the business. 7: rejected as not finding of fact. 8-9: rejected as recitation of evidence. 10 (first sentence): rejected as unsupported by the appropriate weight of the evidence. 10 (remainder): rejected as recitation of evidence and unsupported by the appropriate weight of the evidence. 11: rejected as speculative and unsupported by the appropriate weight of the evidence. 12: rejected as speculative. 13: rejected as subordinate. 14 (first sentence): adopted or adopted in substance. 14 (remainder): rejected as irrelevant. 15: rejected as subordinate. 16: rejected as unsupported by the appropriate weight of the evidence, recitation of evidence, and subordinate. 17: rejected as unsupported by the appropriate weight of the evidence and recitation of evidence. 18-19: rejected as unsupported by the appropriate weight of the evidence. 20: rejected as unsupported by the appropriate weight of the evidence. 21 (first sentence): adopted or adopted in substance. 21 (remainder): rejected as unsupported by the appropriate weight of the evidence. 22: rejected as unsupported by the appropriate weight of the evidence and subordinate. 23: rejected as legal argument. 24: rejected as unsupported by the appropriate weight of the evidence, subordinate, and legal argument. 25-26: rejected as unsupported by the appropriate weight of the evidence. Rulings on Respondent's Proposed Findings 1: adopted or adopted in substance except for subsequent transaction, which does not alter findings. 2: adopted or adopted in substance. 3: adopted or adopted in substance except for presence of additional nonminorities. 4-8: adopted or adopted in substance. 9-10: rejected as subordinate and recitation of evidence. 11-14: adopted or adopted in substance. 15: adopted or adopted in substance except that such personnel decisions are divided into three areas with different persons in charge of each area. 16-17: adopted or adopted in substance except that the illustrations are rejected as subordinate and recitation of evidence. COPIES FURNISHED: Veronica Anderson, Executive Administrator Commission on Minority Economic and Business Development Collins Building, Suite 201 107 West Gaines Street Tallahassee, Florida 32399-2000 Joseph Shields, General Counsel Commission on Minority Economic and Business Development Collins Building, Suite 201 107 West Gaines Street Tallahassee, Florida 32399-2000 Kurt A. Streyffeler Kurt A. Streyffeler, P.A. 3440 Marinatown Lane, Northwest Suite 205 North Fort Myers, Florida 33903
Findings Of Fact Petitioner, Jim Neel & Associates, Inc., a Florida corporation, applied to the Department of Transportation (DOT) for certification as a Disadvantaged Business Enterprise. The majority stockholder of Jim Neel & Associates, Inc., is Jim Silver Eagle Neel. On his mother's side Jim Neel is a direct descendant of Creek Indians Who were enrolled in the 1832 Census for that Tribe. Additionally, his father's family is known to be descended from the Cherokee Tribe. In terms of blood lines it is estimated that Mr. Neel is one-quarter American Indian. However, Mr. Neel has the features of a Native American. However, Mr. Neel has actively participated in the activities of the Lower Creek Muskogee Tribe since the beginning of 1986. 1/ He is considered by the National and local Creek Indian Tribes to be a member of their group. Additionally, Petitioner has been recognized by the federal Bureau of Indian Affairs as being a member of the Creek Indian Tribe. Such recognition enables Petitioner to participate in the Eastern Creek Judgment Fund which was awarded against the federal government for treaty violations to members of the Eastern Creek Tribe. Prior to the beginning of 1986, Mr. Neel did not maintain any direct affiliation with a tribe. To the best of his knowledge, his mother did not maintain any direct affiliation with a tribe. However, the evidence did show his mother kept in contact with local Creeks on an informal basis. Additionally, when Mr. Neel was young, his mother would tell him stories about his Indian heritage, but advise him not to reveal the fact of his Indian heritage to others. When Mr. Neel was growing up it was not wise to declare one's Indian heritage due to the racial prejudice which would be inflicted on that individual. In fact, Mr. Neel did not feel he could freely declare his heritage until about ten years ago. Mr. Neel was raised on a poor rural farm in northwest Florida. His mother, due to her Indian heritage, was uneducated. She could not read or write and, therefore could not obtain above menial wages to support her family. The entire family, including Petitioner, existed under an economic as well as social disadvantage. Through sheer determination, Petitioner literally pulled himself up by his own bootstraps. Around 1948 he became an auto/truck mechanic. Around 1955 he began as a service manager for an Oldsmobile dealer. Because the wages of a mechanic were low at that time, Mr. Neel changed careers and joined the Panama City Police force. He was a city police officer for the next fifteen years. In 1972 he was employed by the Panama City Airport Authority as a security officer. He rose by promotion to become the Airport Manager from 1980 through 1987. At present he is a consultant to the Airport Authority. No evidence was presented by the Department which would be sufficient to demonstrate that Mr. Neel had not suffered social and economic disadvantage on an individual basis.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered granting the application of Jim Neel and Associates, Inc. for certification as a Disadvantaged Business Enterprise. DONE and ENTERED this 19th day of April, 1989, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 19th day of April, 1989.
The Issue This issue in this case is whether the Petitioner's application for certification as a Minority Business Enterprise should be approved.
Findings Of Fact On or about November 17, 1994, Northwest Engineering, Inc., (Petitioner) submitted an application for certification as a Minority Business Enterprise (MBE) to the Florida Commission on Minority Economic & Business Development (Respondent). The application was signed by the Petitioner's president, Gerald Silva. According to the application, the Petitioner is of Portuguese heritage. The Petitioner's mother was born in the Azores. By letter of April 5, 1995, the Respondent advised the Petitioner that it was not eligible for MBE certification. The letter stated that the Azores were not within the geographical restrictions set forth by Florida Statutes. Official notice is taken that the Azores are a group of Portuguese islands lying in the Atlantic Ocean approximately 740 miles west of southern Portugal. The Azores are not part of Mexico, South America, Central America, or the Caribbean. Accordingly, persons with origins in the Azores do not fall within the statutory definition of Hispanic Americans for purposes of certification as a Minority Business Enterprise. The evidence fails to establish that the Petitioner is entitled to certification as a Minority Business Enterprise.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Florida Commission on Minority Economic & Business Development enter a Final Order denying the application of Northwest Engineering, Inc., for certification as a Minority Business Enterprise. DONE and ORDERED this 8th day of September, 1995, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 8th day of September, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-2056 To comply with the requirements of Section 120.59(2), Florida Statutes, the following constitute rulings on proposed findings of facts submitted by the parties. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3,5. Rejected, immaterial. COPIES FURNISHED: Crandall Jones, Executive Administrator Collins Bldg., Suite 201 107 West Gaines St. Tallahassee, FL 32399-2005 Gerald Silva 8409 Sunstate Street Tampa, Florida 33634 Joseph L. Shields, Esquire 107 West Gaines Street, Suite 201 Tallahassee, Florida 32399-2005
Findings Of Fact The DOT, as a state agency, is charged with developing a DBE program for contractors dealing with the Department. Burkett is a Florida corporation whose sole stockholder is a white female American. She meets the criteria of a socially and economically disadvantaged individual. Burkett applied for certification as a DBE on July 12, 1991, and was denied by the Department on October 1, 1991. Burkett submitted additional information and made changes to its internal organization to better conform to the Department's requirements; however, the Department has denied Burkett DBE status on the basis of the owner's alleged lack of expertise in the critical areas of the firm's operation, to wit; she does not possess education or training in engineering. The DOT interprets "critical areas of operation" to mean the technical area in which the DBE certification is being sought. Management limited to the day-to-day normal business operations is not considered to be a "critical area of operations." Evidence of expertise is dependent upon the nature of the business; however, the DOT expects to see education or experience on the part of the disadvantaged owner in the technical area of operations of the business. The DOT denied the Petitioner because the disadvantaged owner did not possess engineering experience or education. The disadvantaged owner is the widow of the founder of the business who died of a form of multiple sclerosis. As her husband lost the ability to direct the operations of the company, the owner assumed more and more responsibility for the day to day operations of the company. Professional engineers were hired to handle the technical aspects of the business; however, she clearly directed the hiring and firing of engineering staff. In this regard, her son and son-in- law, who are both trained engineers, came into the business. Her son-in-law left when the owner limited his participation in the business. Her son remains in the business as head of the engineering operation; however, she actively participates in the assessment of projects and preparation and presentation of bids. She is in overall control of the company, and, although she does not make direct assignments of tasks to engineers and draftsman, she does oversee their work. She has pointed out to her son draftsmen who are under utilized, and given directions to assign the men more work and terminate them. The owner does not have any formal engineering training or experience in technical engineering work.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Transportation deny the Petitioner's request for Disadvantaged Business Enterprise (DBE) status. DONE AND ENTERED this 17th day of November, 1992, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of November, 1992. Appendix A to Recommended Order 92-896 The parties submitted supplemental proposed findings which were read and considered. The following states which findings were adopted and which were rejected and why. Petitioner' Proposed Findings: Paragraph 1 True, but rejected in favor of discussion of son-in-law's leaving business. Paragraph 2 Irrelevant. Paragraph 3 True; but rejected in favor of Para 5 in RO. Respondent's Proposed Findings: Paragraph 1-3 Rejected as argument, and conclusions of law. Paragraph 4,5 Irrelevant. Paragraph 6 Irrelevant. The Department based its determination on the owner's lack of education and experience and not lack of participation. Paragraph 7 Irrelevant. She was afforded the opportunity to present her case at the hearing. COPIES FURNISHED: Theodore E. Mack, Esquire Cobb, Cole, and Bell 131 North Gadsden Street Tallahassee, FL 32301 Pamela S. Leslie, Esquire Pamela A. Arthur, Esquire Department of Transportation 605 Suwannee Street, MS # 58 Tallahassee, FL 32399-0458 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street Tallahassee, FL 32399-0458
Findings Of Fact Based on the stipulations and agreements of the parties, the exhibits received in evidence, and the testimony of the witnesses at the hearing, I make the following findings of fact: The costs and attorney fees sought by BTST in the amount of $2,344, are adequately substantiated and constitute reasonable costs and attorney fees for the representation of BTST in DOAH Case No. 88-3885. DOAH Case No. 88-3885 resulted in a Final Order granting recertification as a minority business enterprise to BTST. Therefore, BTST was a prevailing party in that case. The underlying agency action that resulted in DOAH Case No. 88-3885, was a Department letter of July 18, 1988, to BTST which notified BTST that its application for recertification was denied, stated the reasons for denial, and advised BTST of its right to request a hearing if it was dissatisfied with the Department's decision. The Department's letter of July 18, 1988, "initiated" the subsequent formal administrative proceedings. Business Telephone systems of Tallahassee, Inc., is a "small business party." The Department of General Services has the responsibility to certify and recertify minority business enterprises. The Department has developed a procedure which is followed by the Minority Business Enterprise Assistance Office in processing applications for certification and recertification. Upon receipt of an application, the entire business file is assigned by the supervisor of certification activities to an eligibility examiner, frequently referred to as a "reviewer." The reviewer conducts a desk audit and review, searches the Division of Corporation records, and by letter requests any items omitted from the application. The applicant then has 30 days in which to respond by sending the requested information to the Minority Business Enterprise Assistant Office. After receipt of requested additional information, the reviewer schedules an on-site interview with applicants whose eligibility for MBE status cannot be determined immediately. After the on-site review, the reviewer listens to the tape recording of the interview and completes the on- site review questionnaire form. At this point, all documents and on-site interview responses are reviewed by the eligibility examiner for the purpose of preparing a recommendation to grant or deny certification or recertification. The supervisor of certification activities reviews the recommendation and all materials related to the business for the purpose of either concurring or questioning the recommendation. The file is then referred to the coordinator of the Minority Business Enterprise Assistance Office for independent review. If the recommendation is for denial of MBE certification or recertification, the file is forwarded to the Office of the General Counsel for review of all documents, information, recommendations and findings by a staff attorney. By memorandum to the Minority Business Enterprise Assistance Office, the staff attorney will either concur in the recommendation or raise legal questions. In the case of concurrence, a letter of denial is prepared. Legal questions about the potential denial are generally resolved by discussion with all involved staff persons. BTST, a company principally engaged in sales, installation, and service of telephone systems and equipment, filed an application for recertification as a Minority Business Enterprise on April 13, 1988. The application was assigned to Stephen Johnson, an eligibility examiner of the Minority Business Enterprise Assistance Office. The initial recommendation to deny recertification of Petitioner was made by Stephen Johnson. Stephen Johnson received training by the Department in minority business enterprise certification and recertification review during his tenure at DGS. As the first step in the review process, Stephen Johnson, the eligibility examiner, performed a desk audit of the application, noting changes in ownership, management, daily operations, and domicile of the company. He also conducted a document search of State of Florida corporate records which revealed different corporate ownership than that which BTST stated in the application and different composition of the Board of Directors of three non- minority members and two minority members. Upon request of the eligibility examiner, additional documents were submitted by BTST. These documents named Mr. William Nuce as president and treasurer of BTST, listed a Board of Directors composed of one minority person and three non-minority persons, and included a BTST lease agreement signed by William Nuce as President of BTST and attested by Nancy Nuce, Secretary of BTST. An amendment to the lease dated May 4, 1988, was signed in the same manner. Upon review by the eligibility examiner and his supervisor of the information submitted by BTST, changes in the business raised the question of whether a minority person controlled the management and operations of the business. The application for recertification revealed that two of the three women owners of BTST "no longer performed any duties for the company." The minority owner who left the company possessed significant technical knowledge about the telephone systems business which in previous certifications of BTST had been a dispositive factor in the determination. William Nuce had not been working full-time for the company until January 1988. Until that time, the company had been run by three women, one being an out-of-state resident. With the concurrence of his supervisor, the eligibility examiner scheduled an on-site visit to BTST for the purpose of acquiring a new description of how the business operated and to establish whether the applicant owner was eligible for MBE certification. The on-site interview was tape recorded During the on-site review, Mrs. Nuce, the minority owner of BTST, made statements which were considered significant by DGS minority certification reviewers. Mrs. Nuce explained decision-making by her husband William Nuce and herself at BTST as "It is really a partnership." In response to the question, "Is anyone considered a supervisory person?", Mrs. Nuce stated, "Well, I guess Bill would be." Then she was asked, "Is he the installer supervisor?" and Nancy Nuce replied, "Yeah, I would say so." Continuing the on-site interview, in response to the question, "[W]ho employed Don?" Mrs. Nuce replied, "We both went to Jacksonville to where Don lived and interviewed Don in Jacksonville and we discussed it on the way back and when we got back Bill called him and offered him the job." She also said that William Nuce had invested "almost twice" as much as she had in the business. The occupational license issued by the City of Tallahassee was in the name of William Nuce. Concerning a truck which was the only large piece of equipment of the business, Mrs. Nuce said, "Bill signed the guarantee on it." Mrs. Nuce had never received a salary from BTST. During the on-site review, Mrs. Nuce confirmed the composition of the Board of Directors as having four members, one minority person and three non-minority persons. After this on-site interview, the eligibility examiner came back to his office, listened to the interview tapes, and reviewed his notes. He came to the conclusion that the minority owner of BTST did not have the capability, knowledge, and experience required to make the critical decisions in that the company heavily relied on Mr. Nuce's 20 years of experience in the installation and servicing of telephone systems, rather than Mrs. Nuce's limited prior experience and training in the bookkeeping area. The eligibility examiner further relied, as a basis for denial, on the fact that the Board of Directors at the time of the decision to deny recertification were Nancy' Nuce; William Nuce, a non-minority person; Peggy Ingram, a non-Florida resident (and therefore a non-minority person); and Don Ingram, a non-minority person. The corporate bylaws indicated that a majority of the directors legally controlled the management of the company. Since Mrs. Nuce was the only director who was a minority, the eligibility examiner concluded that, pursuant to the statutes, Mrs. Nuce did not have the legal authority to control the corporate Board of Directors and, therefore, the business of thee corporation.. After consultation and review of the BTST file, Stephen Johnson and Marsha Nims, the Labor Employment and Training Manager of the Minority Business Enterprise Assistance Office, reached the tentative decision to deny the recertification application of BTST. At the time of the decision to deny recertification of BTST, Ms. Nims was the Labor Employment and Training Manager in the Minority Business Enterprise Assistance Office and the supervisor of Stephen Johnson, the eligibility examiner. She had been with DGS since March of 1986. Her duties included supervision of the professional staff who conducted eligibility reviews of applications, assistance in eligibility determinations, advising the coordinator, supervision of staff involved in retention of records, preparation of documents, and preparation of the monthly MBE Directory. In evaluating the application for recertification of BTST, Marsha Nims reviewed the application and supporting documentation, the Desk Review and Audit by Stephen Johnson, the additional documents obtained by Stephen Johnson from Business Telephone Systems of Tallahassee, Inc., the Bylaws of BTST, the memo from Stephen Johnson to Marsha Nims, the reviewer's case management log, the on- site review questionnaire form and comments completed by Stephen Johnson, the denial recommendation drafted by Stephen Johnson, and the file of BTST on which previous certification had been based. Marsha Nims relied upon the information about BTST complied by the eligibility examiner. She had no reason to doubt the credibility of Stephen Johnson, the eligibility examiner. At the time of the decision to deny recertification to BTST, Marsha Nims was familiar with the Florida Statutes which governed certification and recertification of minority business enterprises as well as Chapter 13-8, Florida Administrative Code, which the Department promulgated to implement the statutes. Marsha Nims was familiar with the relevant Final Orders of the Department of General Services and the related Recommended Orders of the Division of Administrative Hearings. She concluded that the corporate structure analysis and the determination of lack of control over the management and daily business operations was consistent with the legal conclusions established in prior Department Final Orders denying certification. Following review by Ms. Nims, the entire BTST file described in Finding of Fact Number 15 was referred to Carolyn Wilson-Newton, the Minority Business Enterprise Assistance Officer Coordinator. Mrs. Wilson-Newton was the person charged with making the final decision to grant or deny certification and recertification to applicants. At the time of the decision to deny recertification, Mrs. Wilson- Newton was familiar with the Florida Statutes which govern certification and recertification of minority business enterprises, Chapter 13-8, Florida Administrative Code, and the relevant Final Orders of the Department of General Services and Recommended Orders of the Division of Administrative Hearings. Carolyn Wilson-Newton concurred with the recommendations of Stephen Johnson and Marsha Nims to deny recertification as set forth in the denial recommendation prepared by Stephen Johnson, and made the decision to deny minority business enterprise recertification. The proposed denial was approved by Sandra Allen, an attorney in the General Counsel's Office with previous experience in review of minority business enterprise decisions. The denial letter was mailed to the applicant on July 18, 1988. Although BTST prevailed in Case No. 88-3885, it is important to note that some of the evidence presented at the formal hearing in that case was substantially different from the information furnished to DGS prior to the July 18, 1988, denial letter. Some of the differences resulted from new developments (such as eleventh-hour stock purchases and changes in the corporate provisions regarding directors). Other differences resulted from more careful and precise descriptions than had been furnished earlier. Four competent, experienced MBE certification reviewers for DGS concluded that the information in the possession of the Department at the time of the decision to deny recertification of BTST was sufficient to warrant denial of recertification of the Petitioner. The denial of recertification had a reasonable basis in fact at the time of the decision. This is especially true when note is taken of the fact that BTST's corporate provisions regarding directors at the time of the decision were essentially the same as corporate provisions which had been the basis for denial of certification in other Department final orders.
The Issue Whether Petitioner is entitled to certification as a Disadvantaged Business Enterprise (DBE) pursuant to Section 339.0805, Florida Statutes, and Rule Chapter 14-78, Florida Administrative Code?
Findings Of Fact Adnan Alghita, a licensed general contractor in the State of Florida, is the president and sole owner of Adnan Investment and Development, Inc. (Adnan's). Alghita is a United States citizen2 of Iraqi origin. He came to the United States from Iraq in 1969 and settled in Atlanta, Georgia, where he attended Georgia Tech. He graduated from Georgia Tech after only 15 months. After graduation, Alghita started his own construction company (Adnan's) in Atlanta. For a number of years, Alghita was a very successful businessman. His company evolved into a multi-million dollar business. He and his company suffered a serious setback, however, when the lending institution he had been dealing with on a regular basis terminated his line of credit and severed its relationship with him.3 In 1984, Alghita filed for Chapter 11 bankruptcy. Hoping that a change in location would revive his business, Alghita moved (both his residence and business) from Atlanta to Florida in 1990. At the time, he had very little capital. The change has not produced the results Alghita had hoped it would. Like other owners of businesses of marginal financial status, he has continued to have difficulty obtaining bonding and credit for his business and expanding its customer base.4 Recently, Alghita, on behalf of Adnan's, submitted a bid in response to a request for bids to undertake a construction project for the South Florida Water Management District (SFWMD). Adnan's bid was the lowest priced bid submitted, but it was rejected by SFWMD as non-responsive. There is no indication that Alghita's national origin played any role in SFWMD's decision to reject the bid. On May 2, 1996, Alghita filed an application requesting that the Department certify Adnan's as a Disadvantaged Business Enterprise. On the application, Alghita indicated that the "approximate value of the firm" was $300,000.00 and that its inventory (which included two homes) was worth $460,000.00. In a follow-up letter that he wrote to the Department, Alghita advised that in 1989, 1990, 1991, 1993, 1994, and 1995, his "personal income" was "below the minimum income to file an Income Tax return." In further support of the application, Alghita submitted to the Department a statement of credit denial, dated June 7, 1994, that he had received from the First Bank of Indiantown. The statement indicated that he had been denied a "$5,940 Letter of Credit to Bankers Insurance Co." because of past "bankruptcy" and "lack of collateral." By letter dated August 7, 1996, the Department notified Alghita of its intent to deny the application for DBE certification that he had filed on behalf of Adnan's. Such proposed action (which Alghita has challenged) is the subject of the instant administrative proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department issue a final order denying Petitioner’s application for certification as a Disadvantaged Business Enterprise DONE AND ENTERED IN Tallahassee, Leon County, Florida, this 16th day of April, 1997. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 16th day of April, 1997.
The Issue The issue in the case is whether the Petitioner’s certification as a Minority Business Enterprise (MBE) should be granted.
Findings Of Fact Locker Services, Inc., is a business owned by Kimberly Gates and her husband, James Gates. Kimberly Gates is a Caucasian female. There is no evidence that James Gates is within a protected classification under the minority business enterprise certification program. Kimberly Gates is the president of the corporation and owns 60 percent of the stock. James Gates is the vice-president of the corporation and owns the remaining 40 percent of the stock. The bylaws on record for Locker Service, Inc., establish that the Board of Directors directs the corporation’s business affairs. The Board of Directors consists of Kimberly Gates and James Gates. According to the by-laws, both Mrs. and Mr. Gates manage the business. Both Kimberly Gates and James Gates are authorized to sign checks on the corporate checking account. A General Indemnity Agreement underwrites the corporation’s bonding requirements. James Gates is a signatory on the agreement and is personally liable as an Indemnitor.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Department of Labor and Employment Security enter a final order denying the Petitioner’s application for certification as a minority business enterprise. DONE AND ENTERED this 27th day of March, 2000, in Tallahassee, Leon County, Florida. WILLIAM F. QUATTLEBAUM 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 27th day of March, 2000. COPIES FURNISHED: Kimberly Gates, President Locker Service, Inc. 2303 Bayshore Drive Belleair Beach, Florida 33786 Joseph L. Shields, Esquire Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Sheri Wilkes-Cape, General Counsel Department of Labor and Employment Security Hartman Building, Suite 307 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Mary Hooks, Secretary Department of Labor and Employment Security Hartman Building, Suite 303 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152
The Issue Is Petitioner entitled to certification as a Minority Business Enterprise pursuant to Rule 38A-20.005, Florida Administrative Code?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: On February 12, 1998, Teddy L. Serdynski and Janice A. Serdynski entered into a Partnership Agreement which in pertinent part provides as follows: NAME: The name of the partnership shall be known as "Ted's Auto Parts." PURPOSE: The purpose of the partnership shall be the operation of an automobile parts business and related enterprises. * * * COMMENCEMENT: The partnership shall officially commence upon execution of this agreement. DURATION: The partnership shall continue until dissolved, either by the parties or by legal proceedings, or by liquidation. CAPITAL: The capital of the partnership shall be contributed in amounts equalling 51% by JANICE A. SERDYNSKI and 49% by TEDDY L. SERDYNSKI, thereby granting to the said JANICE A. SERDYNSKI the controlling interest of said partnership. WITHDRAWAL: No partner shall withdraw any invested capital without the consent of the other partner. CAPITAL GAINS AND LOSSES: Capital gains and losses shall be shared in a proportionate amount of their investment and ownership interest. * * * MANAGEMENT: Although JANICE A. SERDYNSKI is the owner of a controlling interest in the partnership, each shall have equal voice in the management of the affairs of the partnership. Both parties shall administer to the general affairs of the partnership and shall carry out and put into effect the general policies and specific instructions of their decision on any given matter. BANK ACCOUNTS: The partnership shall maintain checking and other accounts in such bank or banks as the partners shall agree upon. Withdrawals and writing of checks on the partnership account may be done jointly and/or singly. PROFITS AND LOSSES: The partners shall share in accordance with their ownership interest in the profits and losses. . . . LIMITATIONS ON PARTNER: No partner, without the consent of the other partner, shall borrow money in the partnership name for partnership purposes or utilize collateral owned by the partnership as security for such loans, assign, transfer, pledge, compromise or release any of the claims or debts due to the partnership except on payment in full; consent to the arbitration of any dispute or controversy of the partnership; transfer firm assets; make, execute or deliver any assignment for the benefit of creditors; maker, execute or deliver any bond, confession of judgment, guaranty bond, indemnity bond, or surety bond or any contract to sell, bill of sale, deed, mortgage, lease relating to any substantial part of the partnership assets or his/her interest therein; or engage in any business or occupation without the consent of the other partner. * * * 17. DISPUTES: That the parties agree that all disputes and differences, if any, which shall arise between the parties, shall be referred to and decided by two indifferent, competent persons in or well acquainted with the trade, one person to be chosen by each party, or to submit to arbitration by a recognized arbitration service, and his/her or their decisions shall, in all respect, be final and conclusive on all parties. Ted's Auto Parts was a sole proprietorship from May 1, 1985 until February 11, 1998. From May 1, 1985, until February 11, 1998, Janice A. Serdynski shared ownership in Ted's Auto Parts equally with her husband, Teddy L. Serdynski, a non- minority. Janice A. Serdynski does not share income from Ted's Auto Parts commensurate with her 51 percent ownership. Decision-making, withdrawal of funds, borrowing of money, and the day-to-day management of Ted's Auto Parts are shared equally between Janice A. Serdynski and Teddy L. Serdynski. Ted's Auto Parts is a family operated business with duties, responsibilities, and decision-making occurring jointly, and, at time, mutually among family members. Both Janice A. Serdynski and Teddy L. Serdynski are authorized to sign checks on the account of Ted's Auto Parts.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it recommended that the Department enter a final order finding that Petitioner has failed to meet the requirements for Minority Business Enterprise certification and dismiss the petition filed by Petitioner. DONE AND ENTERED this 22nd day of March, 1999, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd of March, 1999. COPIES FURNISHED: Douglas I. Jamerson. Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Edward A. Dion General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Janice A. Serdynski Ted's Auto Parts 190 Second Avenue, South Bartow, Florida 33830 Joseph L. Shields, Senior Attorney Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189
Findings Of Fact The Company, Al Raska Contractors, Inc., located at 503 South MacDill Avenue, Tampa, Florida, is a contractor which specializes in installing highway guardrails, rip rap, slope pavement, and signs. Between 1970 and 1980, it was owned by Al Raska and operated as a sole proprietorship. In February, 1980, it was incorporated by Al Raska, Jack Williams, and Dan Fisher, with Al Raska as president. (Testimony of Raska, R-1.) The Company began to experience financial difficulties. Mr. Raska concluded that it needed additional capital and new leadership. He realized that he "was not the one to carry the leadership of it. . . ." (Tr. 39.) Mr. Raska looked to Eugenio Ramos for help. (Testimony of Raska.) They reached an agreement. As a result, Eugenio Ramos -- an Hispanic residing in Texas -- became president and majority (51 percent) owner of the Company in September, 1980. In exchange, Mr. Ramos contributed $25,000 to the Company and established an additional $25,000 letter of credit. (The Company used the $25,000, in cash, to purchase equipment and defray operating expenses.) Mr. Raska became vice-president: . . . I stepped aside [to] do what I could do best, work in the field rather than run [the Company]. . . (Tr. 39.) Jack Williams remained as secretary-treasurer of the Company. (Testimony of Raska, Ramos, Williams.) II. Since September, 1980, Eugenio Ramos, 506 Lake Park, Waxahachie, Texas, has possessed the power to direct the management and policies of the Company, including the power to make day-to-day as well as major business decisions. In practice, he delegated authority to Mr. Raska and, to a lesser extent, to Mr. Williams to supervise and carry out the day-to-day operations of the Company. Mr. Raska, as the supervisor of field operations, corks at the Company's job sites, trains employees, does drawings, develops job estimates, signs payroll, schedules jobs, and maintains close contact with prime contractors. Because of Mr. Raska's years of experience and expertise, Mr. Ramos relies heavily on his advice. Mr. Williams also supervises the various job sites and assists in preparing estimates. (Testimony of Raska, Ramos, Williams.) All major business decisions, however, are made by Mr. Ramos, ordinarily after considering the advice of Mr. Raska. While job estimates are prepared by Mr. Raska, the decision to bid on a project is made by Mr. Ramos. No written contracts are signed without Mr. Ramos' approval. Mr. Raska and Mr. Williams, who Supervise field operations, were hired by and serve at the pleasure of Mr. Ramos. No heavy equipment may be purchased without Mr. Ramos' approval. (Testimony of Ramos, Raska.) Mr. Ramos communicates with Mr. Raska and Mr. Williams frequently, despite Mr. Ramos' residence in Texas. He visits the Company seven or eight times a year to meet with his Supervisors and discuss ongoing work. He spends approximately 97 percent of his time in Texas. But he communicates by telephone with the Company office on almost a daily or weekly basis. During one month, his telephone bill was $900. (Testimony of Raska, Ramos; P-5.) The Company has, under contract, jobs worth more than two million dollars. There are three projects now under construction. Although at hearing Mr. Ramos was familiar with the projects under construction, he could not recall some of the pertinent details. (Testimony of Ramos.) Sunil B. Nath administers the Department's Minority Business Enterprise Liaison Office. Chapter 14-78 is the Department's rule governing certification of minority business enterprises. Mr. Nath interprets this rule as requiring the minority owner to carry out the day-to-day operations of a company; in his view, a minority owner cannot delegate day-to-day management and retain eligibility for Minority Business Certification. (Tr. 150.) No basis was presented for this conclusion other than the language of the rule. (Testimony of Nath.)
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Company's application for certification as a Minority Business Enterprise be granted. DONE and RECOMMENDED this 12th day of October, 1982, in Tallahassee, Leon County, Florida. R. L. CALEEN, JR. 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 12th day of October, 1982.
