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 General Contractors & Construction Management, Inc. (Petitioner), is a Florida corporation engaged in the business of general contracting and construction (construction and renovation of commercial and residential buildings), including subcontracting, since 1985. Petitioner's President is Ms. Akram Niroomand-Rad and its Vice-President is Mr. Kamran Ghovanloo, Ms. Niroomand-Rad's husband. Petitioner is a small business concern as defined by Subsection 288.703(1), Florida Statutes. Prior to April 1990, Ms. Niroomand-Rad owned 50 percent of Petitioner's stock. In April 1990, she acquired 100 percent of the stock and became the Petitioner's sole owner. Ms. Niroomand-Rad is a minority person as defined by Subsection 288.703(3), Florida Statutes. According to Petitioner's articles of incorporation and by-laws, its corporate business is conducted by a majority of the board of directors. Petitioner has two directors, Ms. Niroomand-Rad and Mr. Ghovanloo, 1/ and as such, the minority owner does not control the board of directors. Also, according to Petitioner's by-laws, Petitioner's President manages its business and affairs subject to the direction of the board of directors. Petitioner's licensed contractor is Mr. Ghovanloo who is a certified general contractor. Ms. Niroomand-Rad is not a licensed contractor although she is taking course work to become a licensed contractor. Mr. Ghovanloo is Petitioner's qualifier, and, as its qualifier, brings his expertise and license to the business. Further, as qualifier, he is also responsible for the finances of Petitioner and for pulling the necessary permits in order for Petitioner to perform the contractual work. Additionally, Mr. Ghovanloo performs Petitioner's estimating, handles quality inspection of job sites, assists in the evaluation and preparation of bids, and attends some of the pre-bid meetings on projects. Ms. Niroomand-Rad has been involved in soliciting bids, reviewing bids and estimates, negotiating contracts, visiting clients, responding to correspondence, overseeing financial activities, hiring and firing, and visiting job sites. However, Ms. Niroomand-Rad relies heavily upon Mr. Ghovanloo's technical expertise, expert opinions, and judgment and upon others for guidance and for handling the technical aspects of the business. Further, Ms. Niroomand-Rad relies heavily on Mr. Ghovanloo, and others to a lesser degree, regarding the purchasing of goods, equipment, or inventory, and services needed for the day-to-day operation of the business, including evaluating and retaining subcontractors. Mr. Ghovanloo is authorized to sign checks without restriction. Ms. Niroomand-Rad was reared in a construction environment. Also, she has completed a construction management course offered by the City of Miami and is a licensed real estate broker. Petitioner has been certified as an MBE by Dade County and the Dade County School Board.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Minority Economic and Business Development enter a final order denying General Contractors & Construction Management, Inc., certification as a Minority Business Enterprise. DONE AND ENTERED this 24th day of July, 1995, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 24th day of July, 1995.
Recommendation Based on the foregoing, it is RECOMMENDED: That petitioner's application for certification as a Women Business Enterprise be denied. DONE and ORDERED this 29th day of June, 1984, in Tallahassee, 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 29th day of June, 1984. COPIES FURNISHED: Diann Criss Atkinson, Qualified Representative Shurly Contracting, Inc. P. O. Box 15267 West Palm Beach, Florida 33406 Vernon L. Whittier, Jr., Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32301 Paul A Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
Findings Of Fact Petitioner was incorporated on November 17, 1980, and, since that time, has been primarily engaged in the base work and asphalt paving business. James L. Sauder and his wife, Annette, were the incorporators of Petitioner and continue to serve as Petitioner's two directors. From the inception of the corporation through the present time, James Sauder has been Petitioner's president while Annette Sauder has filled the offices of both secretary and treasurer of Petitioner. Additionally, at all times material hereto, James Sauder has been the registered agent for the corporation. Initially, James Sauder drew a salary of $220 a week, while Annette Sauder received no salary for her work. Thereafter, the Sauders decided to declare Petitioner a "subchapter S. corporation" for income tax purposes. At the end of Petitioner's first and second years of operation, all of the undistributed shareholders' profit of the company was drawn out by James Sauder only. Petitioner's income tax returns for both 1981 and 1982 reflect that James Sauder is the stockholder, that he owns 170 shares of Petitioner's stock, and that he devotes all of his time to the business. Petitioner's bylaws describe the duties of the officers of the corporation and provide that: The President shall be the chief executive officer of the corporation, shall have general and active management of the business and affairs of the corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the shareholders and Board of Directors. The bylaws further provide, in addition to some specific duties, that the secretary and the treasurer are also required to ". . . perform such other duties as may be prescribed by the Board of Directors or the President." Accordingly, Petitioner's secretary and treasurer work under the supervision and control of the president. Petitioner's articles of incorporation authorize Petitioner to issue 250 shares of stock with a five-dollar par value. On August 20, 1980, Petitioner's stock certificate No. 1 was issued to James L. Sauder for 125 shares of Petitioner's stock. No shares were issued to Annette Sauder until March 1, 1983, when 70 shares of James Sauder's stock were transferred to her using Petitioner's stock certificate No. 2. At the same time, an additional 55 shares of stock were issued to James L. Sauder using Petitioner's stock certificate No. 3. Accordingly, James Sauder owns 110 shares of Petitioner's stock, while Annette Sauder owns only 70 shares of Petitioner's stock. The occupational license issued to Petitioner by the City of Key West, Florida, for the 1982-83 year lists James L. Sauder as the owner of Petitioner. Decisions as to hiring and firing, the purchase and/or financing of equipment and other personalty, the jobs on which bids will be submitted and the amounts of bids, the supervision of Petitioner's employees, and even actual paving work are duties performed by both James and Annette Sauder. Although operating Petitioner's business appears to be a joint effort on the part of both James and Annette Sauder, it is clear that the ultimate decision maker, as well as chief executive officer, is James Sauder. In addition to testifying primarily using the word "we," the following is illustrative of the testimony given by Annette Sauder as to whether she or her husband controls the operation of Petitioner: (Tr. 72.) Q. If your husband told you that he didn't want a piece of equipment, but you wanted it, would you go out and get it? A. Not unless I wanted a divorce, I don't think I would. On November 28, 1983, Respondent denied Petitioner's application to be certified as a Minority Business Enterprise.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's application for certification as a Minority Business Enterprise and, specifically, Women's Business Enterprise. DONE and RECOMMENDED this 23rd day of July, 1984, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, 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 23rd day of July, 1984. COPIES FURNISHED: John R. Sutton, Esquire 7721 South West 62nd Avenue, First Floor South Miami, Florida 33143 Mark A. Linsky, Esquire Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, Florida 32301-8064 Paul N. Pappas, Secretary Department of Transportation 605 Suwannee Street Tallahassee, Florida 32301-8064
The Issue The Department of Environmental Regulation issued a Reguest for Statement of Qualification for Petroleum Site Cleanup Services, Solicitation #9111C. Attachment F to the solicitation sought information related to utilization of minority business enterprises as subcontractors. Points were available for said utilization. The Department awarded zero points to parties which failed to include the three pages of the attachment in the responses to the solicitation. The issue in this case is whether the Department acted in accordance with law in awarding zero points for failure to submit all three pages of Attachment F.
Findings Of Fact On March 1, 1991, The Department of Environmental Regulation (DER) issued a Request for Statement of Qualifications (RFSOQ) for Petroleum Contamination Site Cleanup Services, Solicitation #9111C. As stated in the RFSOQ, the DER's objective is to enter into approximately ten contracts for petroleum cleanup services with contractors most qualified to perform the services. It is in the best interests of the state and the DER to enter into such contracts with the most qualified contractors available. Selected firms will be placed under contract with the DER to respond to task assignments. There is no work guaranteed to any contractor as a result of being selected and placed under contract. The cover sheet to the DER Solicitation #9111C identifies Attachment B as "General Instructions", Attachment C as "Instructions for Preparation of an SOQ", Attachment F as "Minority Business Certificate" and Attachment N as an "SOQ Checklist." In the RFSOQ, the DER specifically reserved the right to waive minor irregularities. The general instructions set forth at Attachment B provide, that the DER "may waive minor informalities or irregularities in the SOQs received where such are merely a matter of form and not substance, and the corrections of which are not prejudicial to other contractors." The DER is not required to waive all minor irregularities. The ability to waive such defects is within the jurisdiction of the agency. The evidence establishes that the DER applied such discretion consistently. There is no evidence that, at any time prior to the SOQ opening, did the Petitioner or Intervenors seek additional information from the DER regarding the agency's discretion to waive minor irregularities. Attachment C provides that "ANY AND ALL INFORMATION SUBMITTED BY A CONTRACTOR IN VARIANCE WITH THESE INSTRUCTIONS WILL NOT BE REVIEWED OR EVALUATED (e.g. pages beyond the 20-page SOQ limit will not be reviewed) or may result in the response being deemed non-responsive and rejected as noted." The purpose of the statement was to discourage responders from submitting information beyond that required by the RFSOQ, in order to provide a common basis for the evaluation of all SOQs submitted. The provision also provided the DER with the ability to reject an SOQ which failed to substantially comply with the agency's solicitation. Attachment C states that an SOQ shall consist of three parts, a one- page transmittal letter, a 20-page SOQ, and "other required information". According to Attachment C, the SOQ was to contain an introduction, a section on the company's background, a statement of experience and knowledge related to the qualifications required by the RFSOQ, a description of project organization and management appropriate to the tasks assigned, a list of personnel responsible for completion of assigned task, a list of "a minimum of ten separate and verifiable former clients other than the FDER" and related information. Work performed for the DER was to be set forth separately in addition to the ten non-DER clients. "Other required information" included minority business utilization information. Attachment C provides as follows: Contractors submitting SOQs under this solicitation must identify intended minority subcontractors and estimated percentage of total contract amount to be awarded to minority firms on Attachment F of this Request for Statement of Qualifications. Use of any document other that Attachment F shall result in disallowance of any credit for use of minority subcontractors. (emphasis supplied.) Evaluation points were available on a scaled basis to contractors based upon their commitment to utilization of minority businesses enterprises in their SOQs. Attachment B provides that "Minority Business Utilization will be evaluated. provided that the responder complies with the reporting requirements contained in Attachment F...." (emphasis supplied.) Attachment F, page 1 of 3, provides as follows: Directions: Each contractor and/or subcontractor which meets the definition of a certified small minority business, as described below, shall submit an originally signed copy of page 1 of this Attachment in the response package to this solicitation. If more than one minority business is to be used, the prime contractor shall copy this page and have each minority business complete that copy as though it were an original. A prime contractor which intends to utilize subcontractors meeting the definition of small minority business is responsible for completing page 2 of this Attachment. A prime contractor which meets the definition of a small minority business is responsible for completing page 3 of this Attachment. If a particular page of this Attachment is not applicable, the prime contractor shall so indicate on that page and include the page as part of the response package. At a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit-- this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization. (emphasis supplied.) Attachment N, the "SOQ checklist," provides a list of items which are to be "properly completed, signed and enclosed" in order to "ensure that your SOQ is responsive to FDER Solicitation No. 9111C...." Item 3.b. of Attachment N reads: "Minority Business Utilization Form - if applicable (Attachment F)". As stated in Attachment B to the RFSOQ, on March 13, 1991, a mandatory pre-bid meeting was held in Tallahassee, Florida, at the DER's offices for all contractors wishing to submit a Statement of Qualifications (SOQ). Failure to attend the meeting would have resulted in rejection of SOQs submitted by non- attending contractors. The Petitioner and Intervenors were represented at the pre-bid meeting. The meeting provided an opportunity during the solicitation process to have technical, legal or administrative questions answered. Accordingly, potential responders are expected to have read the complete RFSOQ prior to the meeting. At the pre-bid meeting, the DER did not review every part of the solicitation, but invited questions from participants. The DER official conducting the meeting stated that "any and all information submitted by a contractor in variance with these instructions will not be reviewed or evaluated," however, the other directions provided in the RFSOQ were otherwise reviewed only upon request. Although there was a specific discussion of the requirements for reporting proposed minority business utilization, there were no questions asked with regard to the requirements for completion of Attachment F. There were no questions asked regarding the DER's right to waive irregularities, or whether the failure to submit Attachment F in accordance with the directions would be regarded by the agency as a minor irregularity. Potential responders also had an opportunity to submit written questions prior to a time certain. There is no evidence that questions were raised related to the requirements of Attachment F or to the DER's application of it's discretionary authority to waive minor irregularities. On March 22, 1991, the DER issued an addendum, not material to this case, to the Request for SOQs. The addendum was sent by certified mail to each contractor represented at the March 13, 1991 meeting. On March 27, 1991, a second addendum was sent to each contractor. The addendum, among other things, changed the date for submission of an SOQ from April 1, 1991 to April 15, 1991 at 2:00 P.M. On April 15, 1991, SOQs were submitted by the Petitioner and Intervenors in this case. The bids were opened at 2:00 P.M. or shortly thereafter, and subsequently evaluated and scored by DER personnel. In some categories, points were awarded on a weighted basis, which provided a relative ranking of responders. For example, the prime contractor with the highest minority business enterprise subcontractor utilization received 13 points, with lesser ranked contractors receiving fewer points. On June 3, 1991, at 10:05 A.M. bid tabulation results were posted in the DER's contract office. The Petitioner and Intervenors in this case submitted responsive SOQ's to DER solicitation #9111C. The result of the DER's evaluation was the development of a short list of contractors permitted to make oral presentations to agency officials after which the DER will initiate contract discussions with approximately ten contractors. The SOQs were reviewed by DER officials who initially identified information submitted which did not comply with the requirements of the RFSOQ. Irregularities were identified and discussed with DER legal counsel to determine the materiality of the irregularity and to ascertain the appropriate treatment of the defects. The DER officials did not disclose the identity of the responder during the discussions, although the person identifying the defect was aware of the related responder. However, there is no evidence that the three DER officials were aware of an individual non-complying contractor's identity, or that the decision to waive such irregularities was based upon the identity of the participants. The DER determined that, in order to be equitable to all participants, it would not waive irregularities where the directions were clear and the consequences for noncompliance were specifically set forth. If the solicitation were less clear, or the consequence of noncompliance with the requirement was not specifically identified, the Department attempted to be more lenient regarding the waiver of such irregularities. Where the DER waived irregularities, such waivers were awarded on a consistent basis without regard to the individual responders involved. Information which was not to be reviewed or evaluated was concealed by either covering the information with white paper, or stapling excess pages together. The DER waived several types of minor irregularities in the SOQs received for Solicitation #9111C. Some contractors submitted transmittal letters consisting of multiple pages rather than the one page letter specified in the RFSOQ. The transmittal letter received no evaluation points. The DER stapled multiple page letters together and considered only information contained on the first page. Therefore, information submitted at variance with the one- page limit was not reviewed or evaluated. The DER did not waive the failure to attach a transmittal letter. DER waived some irregularities related to subcontractor letters. Multiple page letters were stapled together and only page one information was reviewed. The DER decision to waive such defects was based upon the fact that such subcontractors were less familiar with the DER's submission requirements than were the prime contractors, that such letters were submitted by the subcontractors, that it was unfair to penalize the prime contractors for the minor irregularities of the subcontractor letters, and that the tasks to be performed by subcontractors were generally not critical to the successful completion of the prime contractor's assigned responsibilities. There was sufficient information to permit the DER to conclude that the subcontractor and prime contractor were committed to the project. There is no evidence that the identities of the subcontractors was considered in determining whether such defects should be waived. The DER waived other irregularities related to subcontractor letters, including the failure of a subcontractor to sign the letter. There was no specific requirement that the subcontractor sign the letter. However, the DER did not waive the failure to submit subcontractor letters. In instances where no letters were submitted, the DER awarded zero points and references to the subcontractor in the SOQ were deleted. The DER's actions related to subcontractor letters was reasonable and appropriate. Another irregularity waived by the DER was the failure to supply a minimum of ten separate and verifiable former clients other than the DER, with work performed for the DER set forth separately. The DER did not waive the failure to submit ten references, however, in some cases, not all ten references were acceptable. Attachment C does not state that the failure to submit ten acceptable references shall result in an award of zero points. In such instances, the DER reduced the number of points available to reflect the percentage of acceptable references provided. Therefore, information submitted at variance with the requirements, such as unacceptable references, was not evaluated. The DER acted reasonably and consistently with the provisions set forth in the RFSOQ. The DER requested that responders identify three "deliverables" required through an ongoing contract which had been effective within the past year. The DER did not consider deliverables related to contracts which had not been effective within the past year. The DER checked the references and awarded no points for unacceptable references. Several SOQ's did not appropriately identify key personnel as required. The DER did not consider information which was not reported as required by the RFSOQ. Where minor irregularities were waived, the waiver was applied consistently to all responders. The DER did not waive the failure of any responder to submit the three pages of Attachment F, as clearly required by the directions to the attachment. All parties which failed to submit all three pages of the attachment received a score of zero. There is no evidence that the DER, at any time, indicated that the directions set forth on Attachment F were optional. Approximately 20 of 45 of contractors submitting SOQs failed to include all three pages of the MBE utilization form, Attachment F to the Request for SOQs. Most failed to include page three of the attachment. The Petitioner, as well as Intervenors ERM-South, ITC and Westinghouse, were included in the 20 responders which failed to submit all three pages of Attachment F. As provided in the directions to Attachment F, failure to include all three pages of the attachment resulted in a score of zero points for MBE utilization. The DER could have made certain assumptions about the applicability of Attachment F to specific responders to the solicitation. However, given that the directions were clear and the penalty for not complying with the directions was equally clear, the DER did not waive the failure to submit all three pages of the attachment as part of the SOQs. The evidence is insufficient to establish that the DER's action was outside the agency's discretion or the requirements of law. Extensive testimony was offered in support of the assertion that the directions related to reporting of minority business utilization were confusing and ambiguous. However, the directions to Attachment F are clear and provide that, "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." There is no credible evidence to establish that such directions are confusing or ambiguous. The instructions to the RFSOQ consistently refer to Attachment F as being the only acceptable means of reporting minority business utilization information. Attachment F consists of three pages, with the "Directions" for completing and submitting the attachment set forth at page one, paragraph one. The Petitioner and Intervenors timely filed SOQ's and are substantially affected by the DER's determination that responders failing to submit all three pages of Attachment F were awarded zero points for minority business utilization. There is no evidence that the Petitioner or Intervenors are unable to perform the tasks identified in the RFSOQ.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Environmental Regulation enter a Final Order dismissing the petition of Metcalf & Eddy, Inc., (Case No. 91-4318B1D), as well as Cases No. 91- 43I6BID and 91-4317B1D, as set forth in the preliminary statement to this Recommended Order. DONE and RECOMMENDED this 26th day of September, 1991, 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 26th day of September, 1991. APPENDIX CASE NO. 90-4316B1D, 90-4317B1D, and 90-4318B1D The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner Metcalf & Eddy, Inc. The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 4. Rejected as to the implication that DER had no right to waive minor irregularities, contrary to the evidence. 12, 16, 19. Rejected, unnecessary. 20. Rejected. Such additional points appear to have been awarded to M&E in violation of Section 120.53(5)(c), Florida Statutes. 24-25. Rejected. Although the specific waivers are factually correct, the implication of the proposed finding is contrary to the weight of the evidence which establishes that the DER waives such irregularities, even though the instructions were clear, where the consequences for failing to comply with each specific instruction were unclear. There was no penalty set forth at the requirement that a document be signed or not exceed one page in length. The evidence establishes that the DER's actions were reasonable, logical, and within the authority of the agency. 29-32. Rejected. Contrary to the clear "Directions" of Attachment F, which state that "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." Responders were referred to Attachment F by the instructions cited in the proposed finding. 33-34, 36-38, Rejected, irrelevant. 39. Rejected, immaterial. The fact the DER could have examined the information submitted by M&E and ascertained the information which would have been set forth in the complete attachment is irrelevant. The agency is under no obligation to review the information submitted for the purpose of determining a responders' minority business status. Such information is to be provided in the three pages of the completed attachment. 40-41 Rejected. A logical reading of the checklist reference to Attachment F would be that, if the attachment were applicable, the attachment should be included. The clear and specific directions to Attachment F require the submission of the three page package to receive points. 42-43. Rejected, irrelevant. 44. Rejected. The failure to submit all three pages of Attachment F resulted in zero points, as provided in the directions to the attachment. The DER policy related to waiver of irregularities does not include the waiver of irregularities where the instructions are clear, the penalty for noncompliance is specific, and a responder fails to comply. The policy is reasonable and was applied consistently. 47. Rejected, contrary to the evidence. It appears that M&E's assertion that it would be included in the "short list" requires addition of points awarded by the DER in violation of Section 120.53(5)(c), Florida Statutes. 49-50. Rejected. While "instructions in a competitive bidding solicitation can be rendered ambiguous by their location," in this case, the instructions contained in the RFSOQ referred readers to Attachment F for the reporting of minority business utilization information. Attachment F's directions are not ambiguous or confusing. 51-53. Rejected, immaterial. This proposed finding is also contrary to the suggestion that the instructions were unclear, and indicates, not that the instructions were unclear, but that the M&E representative did not read the RFSOQ. It is not possible to find that a careful and intelligent reader of the directions to Attachment F could misunderstand the meaning of "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." 54-61. Rejected, immaterial. The fact that a substantial number of responders failed to comply with the clear directions of Attachment F does not establish that the directions are confusing. The instructions to the RFSOQ referred readers to Attachment F for the reporting of minority business utilization information. The first paragraph of Attachment F is entitled and contains "Directions" which are clearly set forth. There is nothing at all ambiguous about the requirement that "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." 62-65. Rejected, irrelevant. There is no requirement that the DER waive all irregularities. Such irregularities may be waived at the Department's discretion. The DER chose not to waive irregularities where the requirements, and the penalties for failure to comply with said requirements, were clear. The DER applied this policy appropriately and consistently. There was no appearance of favoritism when the agency's policy is fairly and consistently applied. Rejected, irrelevant. The DER expects potential responders to have read the RFSOQ prior to the pre-bid meeting. The purpose of the meeting is to answer questions and provide clarifying information. The fact that no questions were asked regarding the requirement to submit all three pages of Attachment F indicates that participants either clearly understood the requirement or had not read the RFSOQ prior to the only mandatory opportunity to obtain clarification. In any event, the DER is not obligated to read every sentence of the RFSOQ aloud at a pre-bid meeting in order to make certain that responders who fail to read the document will submit responsive SOQs. Rejected, cumulative. 68-69. Rejected, immaterial, unnecessary. Respondent Department of Environmental Regulation The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 2. Rejected, unnecessary. 6. Rejected, unnecessary. 20. Rejected, unnecessary. 23. Rejected as to the implication that Attachment C, Page 1, indicated the DER could not waive any irregularities. Cited language states that information submitted in variance with instructions would not be reviewed or evaluated. The evidence establishes that information submitted in variance with the instructions was not reviewed or evaluated, but was disregarded. 28. Rejected. It is not clear what is meant by this proposed finding. 37-39. Rejected, irrelevant, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. 41. Rejected, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. Testimony as to the ambiguity of such directions is not credible. 42-43. Rejected, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. Testimony as to the ambiguity of such directions is not credible, especially given M&E/PIECO's correct submission in response to similar requirements of RFSOQ #9003C. Rejected, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. Testimony as to the ambiguity of such directions is not credible. The fact that the cited witness understood the directive and failed to comply due to oversight does not suggest that the directive was unclear. Rejected, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. The reason for the cited witnesses failure to comply is unclear. Rejected, cumulative. 48. Rejected, unnecessary. 50-51. Rejected, immaterial. The issue in this case is not whether to goals of the minority business utilization program are met, but whether the DER acted inappropriately in reviewing SOQs submitted in response to the DER RFSOQ #9111C. 52-53. Rejected, unnecessary. 54-56. Rejected, unnecessary, cumulative. Intervenor ERM-South The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 2. Rejected, cumulative. 14-19. Rejected, irrelevant, unnecessary. See preliminary statement. 21. Last sentence rejected, contrary to the greater weight of the evidence which establishes that the DER applied the language of the RFSOQ in a reasonable way, and that material information submitted in variance with the instructions was not reviewed or evaluated. 32-39, 41. Rejected, immaterial. The issue is whether the failure to follow the clear directions of Attachment F should result, as the directions provide, in zero points being awarded. The fact the DER could have examined the information submitted by ERM-South and ascertained the information which would have been set forth in the complete attachment is irrelevant. The agency is under no obligation to review the information submitted for the purpose of determining a responders' minority business status. Such information is to be provided in the three pages of the completed attachment. 40. Rejected, contrary to the evidence. There is no evidence that the omission of Attachment F, page three, is the sole basis for exclusion of a contractor from the short list. The short list was determined by ranking scores awarded. As stated in the directions to Attachment F, the result of noncompliance with said directions was an award of zero points for minority business utilization. 42-46. Rejected, cumulative, contrary to the greater weight of the evidence which establishes that the DER's action in reviewing the submitted Attachment F was reasonable, logical, and was applied in a consistent manner. As to whether the DER should have contacted other agencies to determine MBE status, the agency is under no obligation to do so. 47-49. Rejected, contrary to the clear directions of Attachment F, which state that "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." It is simply not possible to find, as suggested in the proposed finding, that such language cannot be relied upon to put contractors on notice that the failure to submit the three pages would result in zero points. Rejected, contrary to the evidence and to the clear directions set forth at Attachment F. Rejected, irrelevant. 52-54. Rejected, contrary to the evidence and to the clear directions set forth at Attachment F. 55-57. Rejected, irrelevant. 59-64. Rejected, irrelevant, unnecessary. See preliminary statement. Intervenor ITC The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: Proposed findings of fact #7, #10 and #14-16 relate to evidence introduced at hearing by ITC to support it's position that it had been excluded from the "short list" due to DER's clerical error. As stated in the preliminary statement, ITC failed to timely file a notice of protest subsequent to the posting of the bid tabulation results challenging the DER's clerical error. Accordingly, this Recommended Order does not set forth Findings of Fact related to the clerical error due to ITC's failure to timely file a written notice of protest as required by Section 120.53(5)(b), Florida Statutes. 12. Rejected. The M&E formal written protest does not allege that the DER had improperly drawn the line for the "short list." 18-20. Rejected. Although likely correct, the proposed findings are irrelevant to the issue in this case. Rejected. Such additional points awarded to M&E by the DER appear to have been awarded contrary to Section 120.53(5)(c), Florida Statutes. Rejected, cumulative. ITC had an opportunity to timely file a written notice of protest subsequent to the bid tabulation posting, but failed to do so. An intervenor takes the case as it is found. Rejected, cumulative. 25. Rejected, contrary to the evidence. The evidence does not establish that the failure to complete all of Attachment F was based on it's inapplicability. Attachment F clearly states that inapplicable pages should be so marked and submitted with the response package. If such pages were not returned, as suggested, because there did not apply, then it is reasonable to conclude that the responder failed to read the clearly stated directions to Attachment F. 26-29. Rejected, irrelevant. The DER did nothing more than apply the clearly stated direction that "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package" and imposed the clearly stated penalty, stating that "[f]ailure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." 32-33. Rejected, contrary to the greater weight of evidence that the DER did not waive irregularities where the requirements, and the penalties for noncompliance with said requirements, were clearly stated. The DER did waive other irregularities where the instructions were ambiguous or confusing, or where there was not a specific penalty attached for the failure to follow a specific requirement. The evidence establishes that the DER actions were appropriate. 34. Rejected, immaterial. All three pages of Attachment F were clearly required to be submitted or a score of zero would be awarded. Intervenor E&E The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 2-3. Rejected, cumulative. 12. Rejected, contrary to the cited evidence. Although Attachment F was discussed in terms of reporting requirements, there were no questions asked related to the directions for completing or submitting the attachment. 21. Rejected, cumulative. Intervenors EBASCO, ABB, OHM, Cherokee and Westinghouse jointly filed a proposed recommended order. The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 13, 16-17, 43-45, 47. Rejected, unnecessary. COPIES FURNISHED: Carol Browner, Secretary Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, Esq. General Counsel Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 Carolyn S. Raepple, Esq. Carlos Alvarez, Esq. 123 S. Calhoun Street Post Office Drawer 6526 Tallahassee, Florida 32314 E. Gary Early, Esq. Assistant General Counsel Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 M. Christopher Bryant, Esq. 2700 Blairstone Road, Suite C Post Office Box 6507 Tallahassee, Florida 32301 George N. Meros, Esq. 101 North Monroe Street Tallahassee, Florida 32301 Barrett G. Johnson, Esq. 315 South Calhoun Street, Suite 750 Tallahassee, Florida 32301 Rex D. Ware, Esq. 106 East College Avenue Highpoint Center, Suite 900 Tallahassee, Florida 32301 W. Robert Venzina, III, Esq. Mary M. Piccard, Esq. 1004 DeSoto Park Drive Post Office Box 589 Tallahassee, Florida 32399-0589 Harry R. Detwiler, Jr., Esq. Post Office Drawer 810 Tallahassee, Florida 32302
The Issue Whether Petitioner's application for certification as a minority business enterprise should be granted.
Findings Of Fact Virginia Valletti, an American woman, within the meaning of Section 288.703, Florida Statutes, holds 75 percent of the stock of Petitioner, Commercial Air Tech, Inc., (Commercial Air). Sam Valletti, the husband of Virginia Valletti, owns 15 percent of the stock of Commercial Air, and the two daughters of the Valetti's each owns five percent of the stock of the business. Sam Valletti is not a minority person as defined in Section 288.703, Florida Statutes. Article II, Section 1 of the bylaws of Commercial Air provides that "All Corporate powers shall be exercised by or under the authority of, and the business affairs of the corporation shall be managed under the direction of, the Board of Directors." The bylaws state that the corporation shall have two directors. Those directors are Virginia and Sam Valletti. Article III, Section 2 of the bylaws of Commercial Air sets out the duties of the President of the company as follows: The President shall be the chief executive officer of the corporation, shall have general and active management of the business and affairs of the corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the shareholders and Board of Directors. Commercial Air provides heating, ventilation, and air conditioning (HVAC) services and is required by Florida statutes to be qualified by a licensed contractor. Sam Valletti holds the contractor's license which qualifies Commercial Air. Virginia Valletti testified that she does not believe that she could pass the contractor's test to become the qualifying agent for the company. Sam Valletti is authorized to sign checks on the account of Commercial Air, but Virginia Valletti signs the majority of the checks for the business. Sam Valletti signed the business lease for Commercial Air. Sam Valletti or a male employee, signs the contracts on behalf of the business. According to Virginia Valletti, the two men sign the contracts for appearance sake because the HVAC business is a male-dominated industry. According to the application submitted to the Respondent, Department of Labor and Employment Security, Minority Business Advocacy and Assistance Office (Department), Virginia Valletti's major responsibilities in the business are as follows: Open and close office Monday through Friday Transact all accounts receivables and payables Answer customer calls and inquiry's [sic] all on customers to insure their needs are being met Dispatch technicians to job sites Compose all company forms and form letters and contract forms Track job costs Analyze profit & loss statement, balance sheet and other financial reports Oversee office personnel - hire, review (all personnel) and fire (office only) Shop and purchase all insurance (workman's comp., liability, bond, etc) Figure payroll and all associated taxes Negotiate credit lines and loans Track truck maintenance and inventory Place orders with vendors and track shipments to job sites The application submitted to the Department lists Sam Valletti's major responsibilities as follows: Estimates jobs in construction and service Troubleshoots equipment problems with technicians Recommends and designs new installations with property managers and owners Keeps up to date on So. Florida code changes, labor laws, and union regulations Finds new resources and seeks out leading edge technological advances Customer liaison for technical questions Hires, reviews, and fires service personnel Purchases company vehicles Sam Valletti receives approximately $16,000 per quarter in wages from Commercial Air, and Virginia Valletti receives approximately $3,000 in wages.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Commercial Air, Tech Inc.'s request for certification as a minority business enterprise. DONE AND ENTERED this 28th day of April, 1998, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 28th day of April, 1998. COPIES FURNISHED: Joseph L. Shields, Esquire Florida Department of Labor and Employment Security 2012 Capital Circle, Southeast Suite 307, Hartman Building Tallahassee, Florida 32399-2189 Edmond L. Sugar, Esquire 950 South Federal Highway Hollywood, Florida 33020 Douglas L. Jamerson, Secretary Department of Labor and Employment Security Suite 303, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189 Edward A. Dion, General Counsel Department of Labor and Employment Security Suite 307, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189
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
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
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of JEDI Enterprises, Inc., for certification as a minority business enterprise be APPROVED. DONE and ENTERED this 27th day of August, 1984, in Tallahassee, Florida. DONALD R. ALEXANDER 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 27th day of August, 1984. COPIES FURNISHED: Paul A. Pappas, Secretary Department of Transportation Haydon Burns Bldg. Tallahassee, Florida 32301 Thomas G. Brown, Esquire Florida National Bank Bldg. 301 First Street West Palm Beach, Florida 33401 Mark A. Linsky, Esquire Haydon Burns Bldg., M.S. 58 Tallahassee, Florida 32301-8064
The Issue The issue in this case is whether the Petitioner, Lyons Towing, Inc., is entitled to certification as a minority business enterprise.
Findings Of Fact Mrs. Bobbye Lyons, an American woman, presently owns 89 percent of the corporate stock of the Petitioner, Lyons Towing, Inc. Her husband, Mr. Don Lyons, owns the other 11 percent of the corporate stock of the Petitioner. The only directors of Lyons Towing, Inc., are Bobbye Lyons and her husband, Don Lyons. Mr. Don Lyons is also the vice-president of Lyons Towing, Inc. Mr. Don Lyons is not a "minority person" within the meaning of the definition of that term at Section 288.703(3), Florida Statutes. Mrs. Bobbye Lyons also presently owns 11 percent of the corporate stock of Lyons Autobody, Inc. Her husband, Don Lyons, owns the other 89 percent of the corporate stock of Lyons Autobody, Inc. The only directors of Lyons Autobody, Inc., are Bobbye Lyons and her husband, Don Jones. Mrs. Bobbye Lyons is also the vice-president of Lyons Autobody, Inc. Lyons Autobody, Inc., is not a "minority business enterprise" within the meaning of the definition of that term at Section 288.703(2), Florida Statutes. The Petitioner, Lyons Towing, Inc., shares space with Lyons Autobody, Inc. The Petitioner, Lyons Towing, Inc., leases most of its towing trucks from Lyons Autobody, Inc. Mr. Don Lyons is authorized to sign checks on the Petitioner's checking accounts. Mr. Don Lyons is the co-maker of at least two promissory notes and security agreements on behalf of the Petitioner, Lyons Towing, Inc. The two notes are in the amounts of $36,356.26 and $51,812.65. Mrs. Bobbye Lyons is authorized to sign checks on the checking accounts of Lyons Autobody, Inc. Mrs. Bobbye Lyons and Mr. Don Lyons jointly own at least one of the storage lots on which the Petitioner stores impounded vehicles. The Petitioner corporation, Lyons Towing, Inc., is engaged primarily in the business of towing motor vehicles. Lyons Autobody, Inc., is engaged primarily in the business of repairing wrecked or damaged motor vehicles. Prior to the incorporation of Lyons Towing, Inc., Lyons Autobody, Inc., also engaged in the business of towing motor vehicles. The business of towing motor vehicles and the business of repairing wrecked or damaged vehicles are businesses in associated fields of operation. Mrs. Bobbye Lyons has been married to Mr. Don Lyons since 1975. At the time of their marriage, Mr. Don Lyons was already engaged in business. Mr. Don Lyons and his father had started a business in 1964 that engaged in both repairing wrecked or damaged motor vehicles and in towing motor vehicles. In 1975, Mrs. Bobbye Lyons began to work in her husband's business and continued to do so until 1987. During that period of time Mrs. Bobbye Lyons worked primarily on the towing side of the business, but she also did a little bit of everything in the business, except drive tow trucks. In 1987, Mr. Don Lyons decided to split his business into two separate businesses; one business to be engaged primarily in the business of repairing wrecked and damaged motor vehicles and the other to be engaged primarily in the business of towing motor vehicles. At that time the Petitioner, Lyons Towing, Inc., was incorporated and Mrs. Bobbye Lyons was installed as President and "Chief Operations Officer" of the new corporation. Sometime thereafter, 89 percent of the stock of the Petitioner, Lyons Towing, Inc., was "given" to Mrs. Bobbye Lyons. Mrs. Bobbye Lyons did not make any capital contribution to Lyons Towing, Inc., and did not purchase her shares in that corporation. At least until March 16, 1996, both the Petitioner, Lyons Towing, Inc., and Lyons Autobody, Inc., had a single motor vehicle insurance policy under which all of the vehicles owned by both corporations were co-insured. Mrs. Bobbye Lyons is a high school graduate and a graduate of Clevinger's Business College. She has attended Palm Beach Junior College and has previously been certified as a sworn law enforcement officer. She has been involved in the towing business since 1975 and appears to have sufficient experience and knowledge regarding the towing business to be able to operate a business like Lyons Towing, Inc., without assistance from her husband. Mrs. Bobbye Lyons is a regular and active participant in the day-to- day operations of Lyons Towing, Inc. She is the person who is primarily responsible for the day-to-day operations of Lyons Towing, Inc., and she directly or indirectly supervises and directs all employees of Lyons Towing, Inc. She also supervises and directs the purchase of goods, equipment, business inventory, and services needed in the day-to-day operation of the business. Similarly, she supervises and directs the hiring, firing, and work assignments of all employees. She also establishes employment policies, wages, benefits, and other conditions of employment. She is assisted in this regard by Mr. Allan Gold, who has the title of General Manager of Lyons Towing, Inc. Mr. Gold is subordinate to Mrs. Bobbye Lyons and must receive her approval before he can hire or fire employees, enter into contracts, or purchase equipment. Mrs. Bobbye Lyons makes or participates in all of the major decisions regarding hiring and firing employees, payroll, business expenditures, purchase of equipment, and contract negotiations with customers. In this regard, Mrs. Bobbye Lyons exercises control over the business affairs of Lyons Towing, Inc., on a regular and continuing basis, but always subject to the influence of, and with the tacit approval of, her husband, Mr. Don Lyons. Because of his more extensive experience in the business, Mr. Don Lyons often participates in important business decisions affecting Lyons Towing, Inc., and spends several hours each week providing guidance and assistance in the management of Lyons Towing, Inc. Further, by reason of his status as one of only two board members on the board of directors of Lyons Towing, Inc., he can effectively veto any decision by Mrs. Bobbye Lyons regarding any corporate decision with which he disagrees. And by reason of his status as an officer of Lyons Towing, Inc., and his authority to sign checks on the Lyons Towing, Inc., checking account, he has the power and authority to intervene in the day-to-day operations of the Petitioner corporation.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case denying the certification sought by the Petitioner and dismissing the petition in this case. DONE AND ENTERED this 30th day of August, 1996, at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH, 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 30th day of August, 1996.
