The Issue Whether Petitioners are entitled to recover costs and attorney's fees against Respondent and, if so, in what amount.
Findings Of Fact At all times relevant to this proceeding, Petitioner, Marsha Strange, was the Mayor of McIntosh, Florida, having served in that position for approximately ten years. The Town of McIntosh (Town or Town of McIntosh) has a population of approximately 400 and has only three paid employees on its staff. The Town of McIntosh has a weak mayoral form of government. Under this system of government, the mayor does not have the power to appoint, promote, or dismiss Town employees or to appoint members to the Town's various committees or boards. Rather, these decisions are made by the elected five-member Town Council. The mayor is not a member of the Town Council and has no power to vote on issues coming before that governing body. Moreover, the mayor of the Town of McIntosh is not paid. On March 5, 1998, Respondent, Mary Lueders Burnett (Respondent), filed a verified ethics complaint against Mayor Marsha Strange, alleging Mayor Strange had violated Section 112.3135, Florida Statutes, regarding the appointment of relatives. In the complaint, Respondent stated that the mayor's brother-in-law, Thurman Kingsley, was appointed as the only person authorized to sign building permits. The complaint stated: I believe that this appointment to a position involving the approval of the Mayor by virtue of her management responsibilities mandated in the Town Charter, constitutes a violation of Section 112.3135, Florida Statutes, regarding the appointing of relatives. While our municipality is less than 35,000, our population is 413. I believe the function involves land planning or zoning as stated in the statute. Within a month of filing the initial complaint against Mayor Strange, Respondent separately filed three additional verified complaints against Mayor Strange. On March 20, 1998, Respondent filed a second complaint against Mayor Strange which alleged that the Town of McIntosh failed to comply with its Comprehensive Plan. Specifically, Respondent claimed that the official zoning map, Public Works Manual, and Land Development Regulations, documents required by the Town's Comprehensive Plan, did not exist. Respondent asserted that this alleged act "constitutes malfeasance and is a gross misuse of public position in violation of Florida Statutes." Notwithstanding Respondent's allegation that the Town had no land development regulations, in a letter dated March 13, 1998, signed by Respondent and attached to this ethics complaint, Respondent cites extensively from the Town's Land Development Code. On April 3, 1998, Respondent filed a third complaint against Mayor Strange alleging that the mayor had (1) improperly determined that the terms of members of the Town's Code Enforcement Board had expired; (2) failed to post notice of vacancies on that board; and (3) failed to adopt rules for the recruitment and appointment of board members. In this complaint, Respondent contended that the alleged acts were a breach of public trust in violation of Sections 112.311(6) and 286.011, Florida Statutes. On April 5, 1998, Respondent filed a fourth ethics complaint against Mayor Strange alleging that on certain property in the Town, land development by a former Town official was taking place without proper permits. In this ethics complaint, Respondent indicated that on March 4, 1998, she had filed a Notice of Complaint with the Town regarding this issue but that the Town's Code Enforcement Officer had determined that the complaint was unfounded. In the ethics complaint, Respondent stated that: It is my belief that the code enforcement officer as well as the mayor and the members of the McIntosh Town Council, under whose pleasure the code enforcement officer is appointed, have violated Section 112.313(6), Florida Statutes, for allowing this unpermitted land development by a former town official. Respondent's second, third, and fourth ethics complaints against Mayor Strange were found to be without merit and dismissed by the Ethics Commission without the necessity of an investigation. The Ethics Commission authorized an investigation of the allegations contained in Respondent's initial complaint, Complaint No. 98-37, alleging a nepotism violation against Mayor Strange. Larry Hill, a senior investigator, investigated the allegations in Respondent's Complaint No. 98-37 on behalf of the Ethics Commission. As a part of his investigation, Mr. Hill interviewed Respondent and Mayor Strange. Following the investigation, Mr. Hill incorporated his factual findings in a Report of Investigation dated June 19, 1998. After considering the Report of Investigation and the Advocate’s recommendation, the Ethics Commission determined that there was no evidence that Mayor Strange advocated, recommended, or otherwise played any role in having Mr. Kingsley appointed to the municipal position. Thereafter, the Ethics Commission issued an Order finding that there was no probable cause to believe that Mayor Strange violated Section 112.3135, Florida Statutes, regarding her brother-in-law's appointment to a Town position as alleged in Respondent's complaint. According to the Report of Investigation, Thurman Kingsley was Mayor Strange’s brother-in-law. However, Respondent admitted she had no evidence that Mayor Strange had advocated or was in any way involved in Mr. Kingsley's appointment to his municipal position as a building official. Furthermore, according to the report, Respondent acknowledged that she knew that Mayor Strange did not have a vote on any official Town matters. During Mr. Hill's interview with her, Mayor Strange indicated that she had taken no action to appoint or promote Thurman Kingsley as the building official for the Town of McIntosh. Also, at hearing, Mayor Strange provided credible testimony that she did not take part in the Town's hiring of Thurman Kingsley and did not have the power to do so. Thurman Kingsley was appointed as building permit official for the Town of McIntosh approximately four years prior to Respondent's filing the complaint of a violation of the nepotism law by Mayor Strange. The minutes of the Town Council meeting at which Mr. Kingsley was approved as a building permit official reflect that Mayor Strange played no role in his appointment to the building committee. At the time Respondent filed the verified complaint against Mayor Strange, she was aware that the mayor had no power to appoint any town official. Moreover, Respondent had no first-hand knowledge of the alleged violations nor had the factual allegations been provided to her by reliable sources. Although Respondent had no knowledge or reliable information to support the allegations, she filed a verified complaint against Mayor Strange. In light of the foregoing, the statements and allegations contained in the Respondent's complaint against Mayor Strange were filed with knowledge that they were false or with reckless disregard for whether the complaint contained false allegations of fact material to a violation of the Code of Ethics. On October 9, 1997, Petitioner, Maxine Holst, was appointed on a temporary basis as Town Clerk for the Town of McIntosh. Six months later, on April 9, 1998, Ms. Holst was appointed to the position as permanent Town Clerk. In both instances, Ms. Holst was appointed by the Town Council and served at the pleasure of and answered to that body. On March 3, 1998, Respondent filed a complaint with the Ethics Commission against Maxine Holst. The complaint alleged that "the issuing clerk" misused her public office by issuing a building permit to the relative of a Town Council member. The complaint further alleged that the permit was issued contrary to applicable issuance criteria and in spite of the fact that the permit had been denied by the former Town Clerk because the necessary requirements had not been met. In Respondent's complaint against Ms. Holst, Respondent, wrote: The issuing clerk was aware of the previous denial of permit. I believe this act represents a direct violation of the Florida Statutes, Section 112.313(6) as misuse of public position. The building permit referred to in Respondent's complaint was for construction of a carport on property owned by Wilshire Walkup, a family member of Howard Walkup. According to Respondent's complaint, when the subject permit was issued, Howard Walkup was a member of the Town Council. On March 9, 1998, Respondent filed a second ethics complaint against Ms. Holst, alleging that she (1) failed to file applicable financial disclosure after being appointed to her public position; and (2) refused to return the former Town Clerk's notary seal left through oversight at the clerk's office. In regard to the first allegation, Respondent stated: A Town Clerk was appointed in October 1997. This was on a temporary basis but later became a permanent appointment. As of this date, according to the [O]ffice of the Marion County Supervisor of Elections, the town clerk has not filed Form 1, Limited Financial Disclosure. This is a violation of the Sunshine Amendment. In regard to the allegation concerning the notary seal, Respondent stated in her complaint: A Town Clerk was appointed in October of 1997. The former Town Clerk, by oversight, left her notary seal at the office. The newly appointed town clerk, M. Maxine Holst, refused, upon the former clerk's three requests to give the notary seal to it's [sic] owner." The letter acknowledged that the notary seal was returned to the former Town Clerk but noted that the act of refusing to return the notary stamp constituted a misdemeanor according to Section 117.05(9), Florida Statutes. Finally, Respondent's letter stated that the alleged act "constituted misuse of public position in violation of Section 112.313(6) of Florida Statutes." On April 3, 1998, Respondent filed a third ethics complaint against Ms. Holst. The allegations in this complaint were identical to those made in the ethics complaint filed by Respondent against Mayor Strange on the same date and described above in paragraph 7. In fact, a copy of the same letter was attached to the complaints filed on April 3, 1999, against Mayor Strange and Ms. Holst. In the third complaint filed against Ms. Holst, Respondent alleged that the terms of members of the Code Enforcement Board had been determined without documentation and concluded that the new members appointed to the Board were chosen without public notice and search. In this complaint, Respondent alleged that: The Town Clerk, Maxine Holst, Mayor Marsha Strange, and Council Members Stott, Smith, McCollum and Walkup determined without documentation that the [Code Enforcement Board] Chairman's and another member's terms had expired. Although the Chairman and the other members wished to be considered for reappointment, the Town Council recruited, without posting a notice that interested residents might apply for the position, and appointed their replacements. I believe that the bogus expirations and the reappointments of hand-picked replacements without notice to board members or the public posting of the vacancies represents a breach of public trust in violation of Florida Statute 112.313(6). The Ethics Commission authorized a preliminary investigation of the complaints filed by Respondent against Maxine Holst. The investigation was conducted by Larry D. Hill, a senior investigator with the Ethics Commission. The results of Mr. Hill’s findings were recorded in a Report of Investigation dated June 19, 1998. Based on the Report of Investigation and the Advocate’s recommendation, the Ethics Commission issued an Order finding that there was no probable cause to believe that Maxine Holst was guilty of the violations alleged in the three complaints filed by Respondent. The initial ethics complaint filed by Respondent against Ms. Holst alleged that Ms. Holst (1) improperly issued a building permit although the application had been previously denied; (2) was aware, when she issued the permit, that the permit had been denied; and (3) issued the permit only because the applicant was related to a member of the Town Council. These allegations were not true. Moreover, at the time the complaint was filed, there was no basis in fact for the allegations made by Respondent. When Margaret Walkup, wife of Wilshire Walkup, first submitted the permit application, it was accepted by the Town Clerk, Barbara Bessent. At the direction of June Glass, the chairperson of the Town's Historic Preservation Board, Ms. Bessent told Mrs. Walkup that the application must also include a site plan. Mrs. Walkup drew a diagram of a carport that was to be constructed and re-submitted the application. Ms. Bessent accepted the application. When a permit application involved a request for construction in the Town’s historic district, the Town's Historic Preservation Board would typically be required to review and approve the application. In this case, Ms. Glass believed that Mrs. Walkup’s application was incomplete in that the diagram drawn on the application did not, in Ms. Glass' opinion, constitute a site plan. In light of her belief, Ms. Glass told Ms. Bessent to send a letter to Mrs. Walkup notifying her that the application was incomplete and/or that it was denied. The letter was never written and no official action was taken on the application. Ms. Holst’s immediate predecessor, Ms. Bessent, never approved or denied the permit application nor did she create a file or in any way document the status of the application. Rather, she put the application in the correspondence file. This failure to document would make it impossible for anyone to know or determine what action, if any, had been taken on the application. On or about October 13, 1999, Margaret Walkup went to the Town Clerk's office and inquired about the status of the previously-filed building permit application. When the inquiry was made, Ms. Holst had been in the position of Town Clerk less than a week, was unfamiliar with the permitting process, and had no knowledge of the permit application in question. Therefore, prior to responding to Mrs. Walkup’s inquiry, Ms. Holst sought the advice of Town Council member Eunice Smith, who was in the office training Ms. Holst. Ms. Smith was an appropriate person to train Ms. Holst for her new position because, several years ago and prior to being elected to the Town Council, Ms. Smith had worked as the Town Clerk. After Ms. Holst and/or Town Councilwoman Smith located the application, Councilwoman Smith advised Ms. Holst that the Town's Land Development Regulations required issuance of the permit because the permit had been pending for more than 45 days. Based on Town Councilwoman Smith's advice and directive, Ms. Holst issued the permit, which allowed the construction of an aluminum carport on the property owned by Wilshire Walkup. Respondent's statements in the March 3, 1999, complaint against Ms. Holst, that the subject permit application was initially denied and that Ms. Holst was "aware" of the denial, were false and had no basis in fact. Finally, Respondent alleged that Ms. Holst issued the permit to Wilshire Walkup because he was related to Howard Walkup, a member of the McIntosh Town Council. This allegation was false and was easily discernable as such. Although Howard Walkup was a member of the McIntosh Town Council when Respondent filed her complaint against Ms. Holst, he was not a member of the Town Council in October 1997 when the permit was issued by Ms. Holst as alleged by Respondent. Respondent offered no explanation of the basis of her belief that at the time she filed the complaint, these statements were true. Thus, the allegations contained in Respondent's first complaint against Ms. Holst were filed with knowledge that they were false or with reckless disregard for whether the complaint contained false allegations of fact material to a violation of the Code of Ethics. As noted in paragraphs 21 and 22, Respondent's second complaint alleged that Ms. Holst failed to file a financial disclosure and also refused to return the notary seal to its owner and the former Town Clerk, Barbara Bessent. The allegation concerning Ms. Holst's failing to file a financial disclosure form is true. As of March 9, 1998, Ms. Holst had not filed the required financial disclosure form. In fact, it was only after Respondent filed this complaint that Ms. Holst first learned that the filing was required. However, upon learning of the requirement, Ms. Holst immediately filed the required financial disclosure form. Respondent stated that the former Town Clerk, Ms. Bessent, left her notary seal in the Town Clerk's Office through "oversight" and, thereafter, requested on three occasions that Ms. Holst give her the seal. There is no indication that Respondent had first-hand knowledge of the facts surrounding the return of Ms. Bessent's notary seal nor was there any evidence that Respondent's allegations were based on information obtained from reliable sources. Moreover, these statements made by Respondent in the March 9, 1998, complaint against Ms. Holst are contradicted by the credible testimony of Ms. Bessent, the person most knowledgeable about the situation involving her notary seal. Respondent's statement that Ms. Bessent left her notary seal in the Town Clerk's office through an oversight is not true. On Ms. Bessent's last day as Town Clerk, she voluntarily and intentionally left her notary seal in the Town Clerk's office after being asked to do so by Town Council member McCullum. Councilman McCullum explained to Ms. Bessent that he wanted to "clear" her and indicated that it would "be safer" for her to leave the notary seal at the office. Ms. Bessent complied with Councilman McCullum's request and never expressed an unwillingness to temporarily leave the notary seal in the Town Clerk's office. The second allegation included in the second ethics complaint, that Ms. Holst refused to return a notary stamp to the former Town Clerk, is false. The former Town Clerk, Barbara Bessent, provided credible testimony that Ms. Holst never refused to return the notary seal on the one occasion that Ms. Bessent asked Ms. Holst for the notary seal. When Ms. Bessent made this request, Ms. Holst, who had been Town Clerk only a few days, told her that if the Town paid for the seal that it belonged to the Town and that she would have to check with the Town Council. Ms. Bessent was familiar with how the Town Council worked and knew and understood that Council members wanted to be consulted on most matters. Ms. Bessent did not believe that Ms. Holst was refusing to give her the seal and did not believe Ms. Holst intended to use the seal. In fact, Ms. Bessent had reason to believe that Ms. Holst was a notary. Several weeks after Ms. Bessent requested that Ms. Holst give her the notary seal, a Town Council member authorized Ms. Holst to give Ms. Bessent her notary seal. Upon receiving this authorization, Ms. Holst gave Ms. Bessent the notary seal. Prior to Ms. Holst's returning the notary seal to Ms. Bessent, and soon after Ms. Bessent resigned as Town Clerk, the Town maintenance man came to the Town Clerk's Office to retrieve Ms. Bessent's personal items that she had left in the office. A few weeks later, Ms. Glass wanted to have Ms. Bessent notarize something for her. After Ms. Bessent told Ms. Glass that her notary seal was in the Clerk's Office, Ms. Glass volunteered to go to the Clerk's Office and retrieve the seal. Ms. Glass went to the office and asked for Ms. Bessent's notary seal. Ms. Holst did not give Ms. Bessent's notary seal to either the maintenance man or to Ms. Glass because she believed that it was improper to give Ms. Bessent's notary seal to a third party. At the time Respondent made the statements regarding the notary seal in the March 9, 1998, complaint against Ms. Holst, she either knew they were false or made them with reckless disregard for whether the complaint contained false allegations of fact material to a violation of the Code of Ethics. The allegation in Respondent's third ethics complaint against Ms. Holst was that she, the mayor, and Town Council members had improperly determined that the terms of the Town's Code Enforcement Board had expired. This allegation is false and has no basis in fact. When Respondent made the statements and allegations in the complaint, filed on April 3, 1998, she either knew they were false or made them with reckless disregard for whether the complaint contained false allegations of fact material to a violation of the Code of Ethics. On January 8, 1998, Petitioner Richard McGath, a retired Sarasota building inspection official and resident of the Town of McIntosh, was appointed as the Town's code enforcement officer. This is a voluntary position, and one for which Mr. McGath receives no compensation. Mr. McGath spends about two hours a week performing duties associated with his position as the Town's code enforcement officer. On March 3, 1998, less than two months after Mr. McGath agreed to accept the Town's position of code enforcement officer, Respondent filed a verified ethics complaint against him. In the complaint, Respondent alleged that Mr. McGath failed to act on a matter and that such failure was a misuse of his position. The alleged act giving rise to Respondent's complaint against Mr. McGath was that the Town Clerk had improperly issued a building permit to Town resident Wilshire Walkup for construction of a carport, although it failed to meet the requirements of the Town's Historic Preservation Board. Respondent felt that the permit was issued only because Wilshire Walkup was related to Town Council member Howard Walkup. On or about December 10, 1997, two months after the subject permit was issued, Respondent filed a Notice of Complaint with the Town Clerk, alleging that Mr. McGath refused to take action when he determined that Wilshire Walkup had constructed an aluminum carport. The position of code enforcement officer was vacant at or near the time Respondent's December 1997 Notice of Complaint was filed. Therefore, no immediate action was taken on the Respondent's complaint. However, soon after Mr. McGath's appointment as code enforcement officer, he investigated Respondent's complaint regarding the permit issued to Wilshire Walkup. During the course of his investigation, Mr. McGath determined that the building permit had been issued to Wilshire Walkup on October 13, 1997. Mr. McGath then went to Wilshire Walkup's property and observed that an aluminum carport had been constructed. Mr. McGath believed that the structure was in violation of Town ordinances. However, Mr. McGath issued a one-time waiver for the structure because the Town Clerk had issued the building permit on October 13, 1997, and by the time he assumed the position of code enforcement officer, the structure already had been constructed. Based on Respondent's December 1997 Notice of Complaint, the structure had likely been constructed as early as December 10, 1997. Mr. McGath explained to Mr. Walkup that any further modifications on the structure would have to comply fully with all applicable code requirements. These comments were noted on the response portion of Respondent's Notice of Complaint. Mr. McGath took the action he did with respect to Wilshire Walkup's carport because, prior to his investigation, the building permit had been issued and the carport had already been constructed. Both of these events occurred before Mr. McGath was appointed as the Town's code enforcement officer. Based on his experience and given the facts related to the Wilshire Walkup project, Mr. McGath believed that the course of action he chose was a prudent one. Respondent also alleged that Mr. McGath took no action against Wilshire Walkup because he was related to Howard Walkup, a member of the Town council. First, as stated in paragraph 33, Howard Walkup was not a member of the Town Council at the time the permit was issued. Second, after Howard Walkup was elected to the Town Council in November 1997, he never attempted to influence or even discuss the matter with Mr. McGath during his investigation of the matter. Finally, prior to his investigating Respondent's December 1997 Notice of Complaint, Mr. McGath had never met Wilshire Walkup and did not know that he was related to Town Councilman Howard Walkup. The action taken by Mr. McGath relative to Respondent's complaint regarding Wilshire Walkup's aluminum carport was not a misuse of his position as alleged by Respondent. Respondent had no evidence to base her claim that Richard McGath misused his public office for private gain. Yet, she filed a verified complaint with the Commission alleging that he had done so. Respondent offered no reasonable explanation or basis for her believing that when the statements in her ethics complaint were made, that they were true. In light of the foregoing, the statements and allegations contained in Respondent's complaint, filed on March 3, 1998, against Mr. McGath were filed with knowledge that they were false or with reckless disregard for whether the complaint contained false allegations of fact material to a violation of the Code of Ethics. On April 14, 1998, Respondent filed a second ethics complaint against Mr. McGath. In that complaint, Respondent alleged that Mr. McGath had violated Section 112.313(6), Florida Statutes, by allowing unpermitted land development by a former Town official. In the complaint, Respondent noted that she had previously filed a Notice of Complaint with the Town regarding the alleged unpermitted land development and that the code enforcement officer, Mr. McGath, had determined that the complaint was unfounded. Respondent's Notice of Complaint regarding the alleged unpermitted land development was filed with the Town on March 4, 1998. Mr. McGath investigated the matter and determined that on the property in question, a culvert was being put in to replace another culvert that had been crushed. Based on his investigation, Mr. McGath did not find that there was unpermitted land development and thus concluded that Respondent's complaint was unfounded. This finding was made on March 12, 1998. Respondent learned of Mr. McGath's finding on April 1, 1998, but never questioned him regarding the reason for his finding. On April 14, 1998, without making any inquiry into the basis of Mr. McGath's finding, Respondent filed an ethics complaint alleging that Mr. McGath misused his public position by allowing alleged unpermitted land development. Respondent had no factual basis upon which to base the statements and allegations contained in the ethics complaint against Mr. McGath. In light of the foregoing, the statements and allegations contained in Respondent's complaint filed on April 14, 1998, against Mr. McGath were filed with knowledge that they were false or with reckless disregard for whether the complaint contained false allegations of fact material to a violation of the Code of Ethics. The Ethics Commission authorized a preliminary investigation of the complaints filed by Respondent against Mr. McGath. The investigation was conducted by Larry Hill, a senior investigator with the Ethics Commission. Thereafter, the Ethics Commission issued an Order finding no probable cause to believe that Mr. McGath was guilty of the violations alleged in the two complaints filed by Respondent. Respondent frequently attends the Town Council meetings and is knowledgeable of the workings of the Town of McIntosh. Moreover, Respondent knows how to obtain public documents through public records requests and has made such requests on a regular basis. The record reveals that for many years Respondent attended many Town Council meetings, made numerous public record requests to the Town of McIntosh, and wrote numerous letters to the Town Council, various governmental agencies, and officials. In many of those letters, Respondent complained of alleged violations by Town officials, cited statutes, codes, and ordinances, and quoted liberally from Town ordinances, Town council minutes, and other documents. Many of the letters prepared by Respondent reflect that she had extensively researched selective issues contained therein. In fact, Respondent indicated in one letter that based on her research, she had determined that certain conduct constituted a misdemeanor offense. However, in the instant case, Respondent not only failed to research the facts alleged in the complaints, but apparently never made even a cursory review of the Town records prior to leveling her complaints against Petitioners. Where allegations are made under oath, as in this case, it is appropriate for a complainant to at least make a cursory review of the facts before filing a complaint alleging officials have violated Florida Statutes. In the instant case, between March 3, 1998, and April 5, 1998, Respondent filed a total of nine verified ethics complaints against Petitioners. Three of the complaints were dismissed by the Ethics Commission without an investigation. In the remaining six complaints which are the subject of this proceeding, Respondent made numerous unsubstantiated allegations and statements of fact to which she had no personal knowledge. Respondent also failed to check the accuracy and veracity of statements before she filed these complaints. Based on the foregoing, it is clear that Respondent filed the ethics complaints against Petitioners with a malicious intent to injure the reputations of Petitioners because they were filed with the knowledge that the complaints contained one or more false allegations, or with reckless disregard for whether the complaints contained false allegations of fact material to a violation of the Code of Ethics. In defending themselves against the allegations in the subject complaints and in this proceeding, Petitioners have been represented by S. Scott Walker, Esquire, and Gary Printy, Esquire. The normal hourly rate for S. Scott Walker and Gary Printy, counsel for Petitioners, is $175.00 per hour. This is a reasonable hourly rate. However, in this case, the hourly rate assessed to Petitioners was $75.00. The hourly rate of $75.00 is also reasonable. S. Scott Walker expended 47.70 hours on this matter, including time spent in this proceeding. Mr. Printy expended four hours on this matter. The total attorney time expended on this matter, 51.70 hours, is reasonable. The attorney's fee of $4,109.47 incurred by Petitioners as a result of Mr. Walker's representation is reasonable. Also, the attorney's fee of $400.00 incurred by Petitioners as a result of Mr. Printy's representation is reasonable. Reasonable costs of $231.98 were incurred in connection with defense of the ethics complaints against Petitioners and in this proceeding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that a final order be entered finding that Respondent, Mary Lueders Burnett, is liable for attorney's fees of $4,509.47 and costs of $231.98. RECOMMENDED this 15th day of September, 1999, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of September, 1999. COPIES FURNISHED: S. Scott Walker, Esquire Post Office Box 1070 Gainesville, Florida 32602-1070 Mary Lueders Burnett Post Office Box 381 McIntosh, Florida 32664-0381 Sharon Moultry, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149 Dana Baird, General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32303-4149
Findings Of Fact Pursuant to its authority to regulate water and sewer rates, charges and rate structures embodied in Chapters 367, Florida Statutes, and 25-30, Florida Administrative Code, the Public Service Commission entered Orders numbered 16971 and 17058, which adopted specific guidelines and conditions for utilities to implement certain income tax impact charges for contributions-in-aid- of-construction ("CIAC gross-up charges"). (See Orders numbered 20409, p.3; 16971, p.2-4; and 17058). One of these conditions requires that utilities submit appropriate tariff sheets (rates and charges sheets) for the Commission's approval prior to implementation of the CIAC gross-up charge. CIAC is the payment or contribution of cash or property to a utility from a customer or entity seeking service from that utility in order to secure the provision of such services or to reserve it for a future time. The Internal Revenue Code of 1986 changed the treatment of CIAC from being non-taxable to being taxable as income. A CIAC gross-up charge is a method by which a utility can recover that tax expense, represented by the income tax assessed against collected CIAC, through approved rates and charges to customers. The amount of CIAC tax impact funds collected by a utility is not itself treated as CIAC for rate-making purposes. The Respondent, St. Johns North Utility Corp., collected gross-up charges which were not authorized by its filed and approved tariff schedules (rate schedules), and without securing the requisite approval from the Commission. (See Orders numbered 20409 and 20762). The Commission was made aware of the charging of unauthorized CIAC gross-up charges by the Utility Respondent when a developer, Fruit Cove Limited, communicated with the Commission concerning its doubts about utility service being available for one of its subdivisions, when required, from the Respondent. Fruit Cove Limited had paid CIAC gross-up charges to St. Johns. On June 3, 1988, the Commission, through its staff, contacted Mr. Joseph E. Warren, the General Manager for the Respondent, and explained the Commission's requirements regarding the requisite pre-approval of the charging of CIAC gross-up charges. Mr. Warren agreed to file a written request for authorization to implement such charges. No request was filed, despite repeated admonitions and solicitations by the Commission and its staff and a lengthy opportunity to comply. Finally, Order No. 20409 was issued by the Commission on December 5, 1988, requiring the Utility to file a written request for authorization to implement CIAC gross-up charges within thirty (30) days of that Order. A written request was not timely filed, however. The Utility finally filed its written request for approval of these charges on September 5, 1989. The accompanying tariff sheets representing such charges were ultimately filed in response to Orders numbered 16971 and 20409, and Show Cause Order No. 20762. They became effective on September 15, 1989. The Commission, through its staff, also made repeated inquiries to the Utility regarding certain service availability charges and practices, initially by letter of July 29, 1988. The Utility was allowed until August 19, 1988 to make the requested responses. The letter was addressed to Mr. Joseph Warren at the Utility's mailing address of record. The Utility, however, did not provide written responses to the comments and questions by the Commission, despite repeated assurances that it would do so. Order No. 20409, issued on December 5, 1988, required the Utility to provide the full written responses to the July 29, 1988 letter within thirty (30) days of the date of that Order. The responses were not timely made. Order No. 20762 was issued on February 17, 1989, requiring the Utility to show cause in writing on or before March 13, 1989 why it should not be fined up to $5,000.00 per day, in accordance with the Commission's penalty authority, for failure to comply with the provisions of Order No. 20409, regarding the necessity for written responses to the Commission's specified questions and the submission of a written request to implement the CIAC gross-up charges referenced above. The first item in the Commission's July 29, 1988 letter to the Utility had requested the Utility to seek approval, including submission of proposed rate tariff sheets for authorization to implement the CIAC tax impact charge referenced above. That item was responded to on September 5, 1989, more than eight months after the deadline set by Order No. 20409. The second item in the Commission's July 29, 1988 letter to the Utility had requested the Utility to provide the names and addresses of financial institutions in which gross-up charge funds were being retained. That item was responded to as requested. The third item in the Commission's July 29, 1988 letter to the Utility had requested the Utility to provide a listing of all gross-up monies received from each contributor. No response was ever provided by the Respondent. The significance of the information requested by the Commission is that it would provide identity of the individuals who were entitled to a refund of the unauthorized CIAC gross-up charges collected by the Utility, as provided in Order No. 20762. The fourth item in the Commission's July 29, 1988 letter to the Utility had requested the Utility to provide a copy of all current developer agreements. That item was responded to within the deadline set by Order No. 20409. The fifth item in the Commission's July 29, 1988 letter to the Utility had requested the Utility to file revised tariff sheets indicating the actual legal description of the Utility's certificated service territory. No response was ever provided. Order No. 20762 was ultimately issued on February 17, 1989 imposing a $5,000.00 fine on the Utility for serving outside of its authorized service area. Order No. 20409 requested the Utility to indicate to the Commission whether, with regard to the developer agreement between the Respondent and Fruit Cove Limited, the charges listed in the various paragraphs of that agreement would, upon completion of the real estate development involved, be adjusted to reflect actual utility service costs incurred. No response to that request was ever provided by the Utility. Additionally, in that Order, the Commission requested information concerning a so- called "step tank", which was referenced in paragraphs 12C and 13D of the developer agreement with Fruit Cove Limited. That request, in Order No. 20409, was never responded to. A certain fee was charged for installation of the step tank by the Utility to Fruit Cove Limited, and no response was given to the Commission's inquiry as to why that fee was omitted from the Utility's approved tariff on file with the Commission. The significance of the requested information was that the omission of the step tank installation fee from the Utility's tariff of rates and charges could cause the developer agreement to constitute a "special service availability agreement", which can only be approved in advance by the Commission. It is not a matter, approval of which has been delegated by the Commission to its staff members. The Order referenced last above also requested an explanation for why a meter installation fee, referred to in that same developer agreement, does not include a "curb stop" or a meter box. This information is significant because it is necessary in order for the Commission to determine whether the charge involved is reasonable. A cost breakdown for the meter installation, including the various hardware components and other charges, was necessary and was not provided by the Utility. Additional information concerning the area of service availability, required to be provided to the commission by Order No. 20409, included the requirement that approval be obtained from the Commission for the CIAC gross-up charge in the developer agreement with Fruit Cove Limited. As stated above, that approval was not requested in writing, as required by the Order, for more than eight months after the deadline set by that Order. By Order No. 20762, St. Johns was fined $5,000.00 for three separate violations of the statutes and rules, and the Orders enumerating them, for a total of $15,000.00. The Utility was fined for serving outside of its authorized service territory, for collecting unauthorized CIAC gross- up charges, and for failing to file its developer agreements with the Commission as required by law. The developer agreements were only submitted after repeated efforts by the Commission's staff which culminated in Order No. 20409 and which were either unresponded to or not properly responded to by the Utility. Additionally, by Order No. 21559, issued on July 17, 1989, St. Johns was fined $5,000.00 for failure to file an application for an extension of its territory as required by Order No. 20409. In the meantime, by Order No. 22342, issued on December 26, 1989, the Commission approved a transfer of the Utility's assets from St. Johns to Jacksonville Suburban Utilities Corporation ("Jacksonville Suburban"). That Order did not authorize transfer of the liabilities of the Respondent to Jacksonville Suburban. The Order specifies that St. Johns, and not Jacksonville Suburban, will remain liable for the previously imposed refund obligations and fines. Only in the event that there remained sales proceeds in excess of the certain debt of St. Johns owed to its institutional lender would funds from the Jacksonville Suburban sale be applied toward payment of the refund and fines found to be due and owing by the above-cited Orders, by way of escrow or otherwise. Any excess proceeds, absent Order No. 22342, were to be paid to St. Johns. Order No. 22342 does not make Jacksonville Suburban liable for the refund and fines at issue. It is speculative whether there will be any sales proceeds available from the sale, after payment of the debt, to be applied toward the refund and fines. The sales price was made dependent upon establishment of the Utility's "rate base" amount, to be established in that transfer proceeding at a point in time after entry of Order No. 22342. That Order, however, specifically preserves the liability of St. Johns for the refund and fines and does not provide for the extinguishment of such liability in the event that the sales proceeds prove to be insufficient to pay them.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, RECOMMENDED that St. Johns be assessed a penalty of $5,000.00 for knowingly and willfully failing to comply with Order No. 20409. DONE AND ENTERED this 13th day of June, 1990, in Tallahassee, Leon County, Florida. Hearings Hearings 1990. P. MICHAEL RUFF Hearing Officer Division of Administrative The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 14th day of June, APPENDIX TO RECOMMENDED ORDER Petitioner's Proposed Findings of Fact 1.-24. Accepted. Respondent's Proposed Findings of Fact. (Respondent filed no proposed Findings of Fact) Copies furnished to: David Schwartz, Esq. Florida Public Service Commission Legal Division 101 E. Gaines Street Tallahassee, FL 32399-0850 Joseph E. Warren, Esq. 1930 San Marco Boulevard Suite 200 Jacksonville, FL 32207 Mr. Steve Tribble Director of Records and Recording Florida Public Service Commission 101 E. Gaines Street Tallahassee, FL 32399-0850 Mr. David Swafford Executive Director Florida Public Service Commission 101 E. Gaines Street, Room 116 Tallahassee, FL 32399-0850 Susan Clark, Esq. General Counsel Florida Public Service Commission 101 E. Gaines Street, Room 212 Tallahassee, FL 32399-0850
The Issue The issue presented for decision in this case is whether the Petitioner is eligible for an exemption from disqualification to work in a position of special trust pursuant to the terms of Section 435.07, Florida Statutes.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: Since December 1997, Petitioner has been employed as a mental health technician at The Harbors, a mental health and behavioral facility in Pinellas County. Petitioner is disqualified from working in a position of special trust as a result of an adjudication regarding battery and improper exhibition of a dangerous weapon. In 1996, Petitioner pled nolo contendere to one count of battery on her spouse, a first degree misdemeanor under Section 784.03(1)(a), Florida Statutes, and to one count of improper exhibition of a dangerous weapon or firearm, a first degree misdemeanor under Section 790.10, Florida Statutes. Adjudication was withheld, and Petitioner received 12 months' probation on the battery charge, commencing August 21, 1996. George H. Seibert, a background screening specialist for the Department of Children and Family Services, testified that Petitioner’s disqualification was premised on her having committed an act of “domestic violence.” See Section 435.04(3)(b), Florida Statutes, authorizing disqualification for having "committed an act that constitutes domestic violence," without reference to having been formally charged with or convicted of "domestic violence." Petitioner testified that her disqualification has not to date affected her job status, but has resulted in her inability to care for children and for elderly or disabled patients. Unlike other mental health technicians, she is not allowed to care for certain patients, even on days when staff is short-handed and her help is needed. Petitioner is thus concerned that at some point her employer may decide to replace her with an employee who can be more flexibly assigned. Petitioner applied to Respondent for an exemption. A hearing was held by the Exemption Review Committee on December 16, 1997. The Exemption Review Committee recommended to the District Administrator that Petitioner be granted the requested exemption. After reviewing the record and the Exemption Review Committee’s recommendation, the District Administrator denied Petitioner’s request by letter dated February 18, 1998. In his letter, the District Administrator stated that the denial was due to the fact that Petitioner has not had sufficient opportunity to demonstrate rehabilitation, given the serious nature of the charges and her recent release from probation, and due to the fact that she falsified her Affidavit of Good Moral Character. Mr. Seibert testified that other factors considered by the District Administrator in denying the exemption were that Petitioner’s children were present during the incident, and the fact that Petitioner attempted serious bodily harm to her husband. Petitioner’s undisputed testimony was that the incident leading to her arrest was the only time in her life she had run afoul of the law. Petitioner forthrightly described the circumstances. One of her two children was in the hospital. She had just learned she was pregnant with her third child. Then, she found out that her husband had been having an affair with her sister. She chased him with a wooden club, which he managed to wrest away from her. She punched him, then went after him armed with a brick. When she couldn’t get to him, she threw bricks at his truck. According to the arrest report, no one was injured during the incident. Petitioner testified that she and her husband have reconciled and currently live together, with their three children. They have received marriage counseling. Petitioner completed her 12-month probation period without incident. Without excusing the actions of Petitioner or minimizing the seriousness of the charges against her, it is found that the District Administrator took insufficient notice of the circumstances surrounding the criminal incident, particularly that this was the only such incident in which Petitioner has ever been involved, that the victim was not a minor, that Petitioner's children were too young to suffer any lasting effects from their presence during the incident, and that no one was injured in the incident. Mr. Seibert testified that the District Administrator applies a policy that one year should pass after completion of probation before an applicant can be said to have had a sufficient opportunity to demonstrate rehabilitation. Respondent made no demonstration that there is a basis for this policy in statute or rule, or that Petitioner received notice of this policy prior to petitioning for exemption. However, even assuming the policy is valid, Petitioner’s probation had been completed for eleven months at the time of hearing in this matter, substantially complying with the District Administrator’s nonrule policy. The Affidavit of Good Moral Character, which Petitioner is alleged to have falsified, contains the following language: By signing this form, I am swearing that I have not been found guilty or entered a plea of guilty or nolo contendere (no contest), regardless of the adjudication, to any of the following charges under the provisions of the Florida Statutes or under any similar statute of another jurisdiction. I also attest that I do not have a delinquency record that is similar to any of these offenses. I understand I must acknowledge the existence of any criminal records relating to the following list regardless of whether or not those records have been sealed or expunged. I understand that I am also obligated to notify my employer of any possible disqualifying offenses that may occur while employed in a position subject to background screening under Chapter 435, Florida Statutes. The affidavit goes on to list the offenses found in Section 435.04(2), Florida Statutes. Respondent contends that Petitioner failed to disclose her adjudication for battery, a violation of Section 784.03, Florida Statutes. However, both Section 435.04(2)(h), Florida Statutes, and the Affidavit of Good Character itself limit the consideration of battery to situations in which the victim of the offense was a minor. The victim of Respondent’s battery was her husband. The court records entered into evidence by Respondent do not indicate the age of Petitioner’s husband. However, the arrest report does indicate that Petitioner was 22 years old at the time of her arrest, and had been married to her husband for two years at the time of the incident. The couple had two small children at the time of Petitioner’s arrest. It is presumed that the victim of Petitioner’s offense was an adult. Respondent presented no evidence that would lead to a finding that the victim was a minor. Petitioner was under no obligation to acknowledge criminal records regarding violations of Section 741.28, Florida Statutes, relating to domestic violence, because Petitioner was never charged with or convicted of a violation of that statute. Petitioner testified that she thought she was not required to acknowledge her battery adjudication because of her mistaken belief that “adjudication withheld” was tantamount to expungement of her record. Petitioner was mistaken as to the legal effect of her adjudication, but is credited with having no intent to falsify her Affidavit of Good Character. In any event, Petitioner’s motive is irrelevant because the plain language of the statute and the affidavit relieved Petitioner of any duty to report the battery. It is found that Petitioner did not falsify her Affidavit of Good Character.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Children and Family Services enter a Final Order granting Petitioner an exemption to work in a position of special trust. DONE AND ENTERED this 18th day of August, 1998, in Tallahassee, Leon County, Florida. LAWRENCE P. STEVENSON 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 18th day of August, 1998. COPIES FURNISHED: Johanna Burkes, pro se 9702 Eldridge Road Spring Hill, Florida 34608 Frank H. Nagatani, Esquire Department of Children and Family Services 11351 Ulmerton Road, Suite 100 Largo, Florida 33778-1630 Gregory D. Venz, Agency Clerk Department of Children and Family Services 1317 Winewood Boulevard Building Two, Room 204 Tallahassee, Florida 32399-0700
Findings Of Fact Respondent, Lori Goldston, was employed by the Petitioner, City of Clearwater, for approximately seven and one-half years as a Building Construction Inspector II. On April 13, 1994, Respondent was placed on administrative leave and on April 21, 1994, she was terminated and all pay and other benefits were terminated as of 4:00 p.m. on April 21, 1994. Specifically, Respondent was terminated for alleged violations of Rule 14, Sections 1(b), (d), (k), and (1) of the Civil Service Rules and Regulations of Respondent, to-wit: (b) Is incompetent in the performance of the specific duties of [her] position. (d) Has been careless or negligent in the care of the property of the City; or has participated in the unauthorized use thereof. Has been . . . guilty of conduct un- becoming a City employee defined as scandalous or disgraceful conduct while on or off duty where such conduct tends to embarrass the City or bring its service into public disrepute. Has violated any lawful and reasonable official regulation or order or failed to obey any lawful and reasonable direction made and given . . . by [her] superior officer when such violation or failure to obey amounts to insubordination or serious breach of discipline which may reasonably be expected to result in a lower morale in the department or to result in loss, inconvenience, or injury to the City or the public. During the week of April 4, 1994, Tom Chaplinsky received two complaints that a City vehicle was observed leaving the city limits with a magnetic sign covering the City seal. The complainants related that the driver appeared to be Respondent and that the vehicle was heading north on alternate route 19 when it was so observed. Vick Chadora, assistant central planning director, requested that Chaplinsky investigate the complaints. Chaplinsky along with Kevin Garriot, a building code analyst, initiated an investigation to check Respondent's inspection schedule and job sites for the day of April 11, 1994. Chadora and Chaplinsky reviewed Respondent's inspection schedules and job sites on April 11, 1994, and discovered that most of Respondent's inspections were completed by mid-morning. Chadora then instructed Chaplinsky to check Respondent's residence which is located north of Palm Harbor, approximately 8 to 10 miles outside of the city limits. During mid-morning on April 11, 1994, Chaplinsky parked near the end of the dead end street on which Respondent's residence is located. He saw what appeared to be her city vehicle but was unable to make a positive identification. On Tuesday, April 12, 1994, Chaplinsky again found that a majority of Respondent's inspections had been completed by mid-morning. Chaplinsky contacted her by radio at approximately 11:00 a.m., to determine her location and she replied that she was in Clearwater Beach. Chadora drove to the beach area while Chaplinsky and Garriot drove to Respondent's residence between 11:00 and 11:15 a.m. Messrs. Chaplinsky and Garriot parked at the entrance to the dead end street where Respondent resides and waited. At approximately 11:45 a.m., Chaplinsky and another staff assistant began trying to reach Respondent by radio. At approximately 12:55 p.m., Respondent answered her radio. At that time, Respondent was asked to investigate a complaint on the beach. At approximately 1:20 p.m., Messrs. Chaplinsky and Garriot observed Respondent in her city vehicle, with the City seal covered, leaving her neighborhood. They lost Respondent in traffic but later caught up with her at the site of the complaint. At that time, the City seal on her vehicle was no longer covered. On April 13, 1994, Messrs. Chaplinsky and Garriot again drove to Respondent's residence during mid-morning and waited at the entrance to her street. Respondent was observed leaving the City in the city vehicle with the City seal covered. At approximately 2:55 p.m. on April 13, 1994, with Messrs. Chaplinsky and Garriot present, Respondent was advised by Chadora that two people had complained that she was using her city vehicle with the City seal covered while leaving the city limits. Before Chadora could complete his inquiry, Respondent immediately denied that it was her. Upon Respondent's repeated and adamant denial, Chadora told her that he and Garriot has observed her leaving her residence on Tuesday, April 12 and Wednesday, April 13 in the City vehicle. Upon being confronted with that information, Respondent admitted that they had caught her in a lie and she admitted that she did leave the city limits in the city vehicle. Respondent indicated that she was trying to complete a construction project at home in order to re-finance and satisfy a balloon note which was coming due and the lender was insisting that certain renovations be completed prior to closing. During 1990, Respondent was disciplined for leaving the city limits and going to her home. At that time she was specifically advised that she should not leave the city limits to return home in the city vehicle without first obtaining permission from her supervisor. For that offense, Respondent was suspended for four days. Petitioner has a system of progressive discipline in effect which is utilized to discipline employees who engage in conduct contrary to the City's rules and regulations. An employee who violates the rules accumulates points under the disciplinary system. An employee who receives up to 60 points within a specified period (24 months), can be subjected to discharge. Respondent accumulated 140 points for the alleged infractions that she received for leaving the City limits during the days April 11-13, 1994. Petitioner also has a liberal sick leave policy which employees may avail by demonstrating need to use sick leave. Respondent did not advise Petitioner that she was suffering from any medical disability or other infirmity which would warrant the utilization of sick leave prior to her discharge. Respondent maintained that she failed to advise Petitioner of her need for sick leave -- she suffers from severe depression which is prompted by a chemical imbalance in her brain -- because she did not want other employees to know about her problems as she feared it would be common knowledge among her colleagues. Respondent attempted to show that she was being treated unfairly and more harshly than other employees had been treated for similar misconduct. Specifically, Respondent related an incident wherein an employee threw a temper tantrum during a grievance meeting, tossed a beeper against a bookcase and was generally insubordinate when he was questioned about an infraction. Petitioner explained that that employee "blew up" when he was confronted about a simple rule infraction and that employee was suspended as was Respondent when she was first disciplined for leaving the City in a vehicle without authorization in 1990. Respondent failed to show that she was treated more harshly or that she was the recipient of disparate treatment by Petitioner. Respondent demonstrated that the other employee was similarly treated when Petitioner was disciplined in 1990. Moreover, that employee was subjected to discharge when he later violated the city's rules and regulations (a drug offense-employee failed a urinalysis screen). Petitioner had no way of knowing prior to April 21, 1994, that Respondent requested or was otherwise in need of "an accommodation" due to her health in April of 1994.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order dismissing Respondent from her position of a Building Construction Inspector II effective April 21, 1994. DONE AND ENTERED this 28th day of February 1995 in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 28th day of February 1995. APPENDIX The following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Paragraph 1, adopted as modified, paragraphs 2, 18, and 19, Recommended Order. Paragraph 3, rejected, unnecessary. Paragraph 4, adopted as modified, paragraph 18, Recommended Order. Paragraph 7, rejected, irrelevant. Paragraph 8, conclusionary and argument. Paragraph 11, adopted as modified, paragraph 22, Recommended Order. Respondent's Proposed Findings of Fact. Paragraph 5, rejected, contrary to the greater weight of evidence, paragraph 16, Recommended Order. Paragraph 8, rejected, irrelevant. Paragraph 11, rejected, contrary to the greater weight of evidence, paragraphs 2, 14, and 19, Recommended Order. Paragraph 13, rejected, contrary to the greater weight of evidence. Paragraphs 15 and 16, rejected, contrary to the greater weight of evidence, paragraph 23, Recommended Order. Paragraph 17, adopted as modified, paragraphs 17-20, Recommended Order. Paragraph 18, rejected, contrary to the greater weight of evidence, paragraph 23, Recommended Order. Paragraphs 19-22, rejected, irrelevant and unnecessary. COPIES FURNISHED: Miles A. Lance, Esquire Assistant City Attorney City of Clearwater Post Office Box 4748 Clearwater, Florida 34618-4748 Robert McCormack, Esquire Prestige Professional Park 2655 McCormick Drive Clearwater, Florida 34619 Karleen DeBlaker City Clerk City of Clearwater P.O. Box 4748 Clearwater, Florida 34618-4748
Findings Of Fact Petitioners, High Point of Orlando/Calton Homes (High Point) and Breedlove, Dennis and Associates, Inc. (BDA) were among named Respondents in a petition for formal hearing filed by Central Florida Wetlands Society, Inc. (CFWS) in DOAH Case number 91-8339. High Point was a Respondent in DOAH Case number 92-0364, also initiated by a CFWS petition. BDA was retained as consultant for High Point for a project in Orange County involving wetlands and requiring the evaluation of impact and the mitigation of that impact on the wetlands. A permit for the project was granted by the St. Johns River Water Management District (SJRWMD). In late 1991 High Point requested a permit modification when it was determined that mitigation could not be accomplished within the deadlines in the permit conditions. There had been delays in planting caused in part by delays in construction of the project's stormwater management system and it was apparent that the required plantings could not grow fast enough to comply with the mitigation conditions. The technical staff report recommending approval describes the modification as extensions of the deadlines for successful establishment of forested and herbaceous mitigation. CFWS is a Florida nonprofit corporation according to its articles of incorporation filed with the Secretary of State on August 3, 1990. Article III provides these purposes for the corporation: To educate on the roll [sic] of wetlands with emphasis on the values of preservation of wetlands and the prevention of destruction of same. To implement the national policy of no loss of wetlands. To coordinate with other environmental groups to focus attention on wetland preservation. All other things that are lawful under the charter of this corporation and under the laws of the State of Florida. (Exhibit filed at DOAH 8/21/92) On October 7, 1991, CFWS filed a petition for administrative hearing with the SJRWMD in opposition to the district's proposed grant of permit modification to High Point. The petition was verified and signed by Michael W. Mingea as President of CFWS. The petition did not identify CFWS as a corporation, but rather "a not-for-profit private organization under the laws of the State of Florida". The petition named as Respondents, High Point, SJRWMD, DBA and another alleged consultant for High Point, Dyer, Riddle, Mills and Precourt, Inc., (DRMP). The petition was forwarded by SJRWMD to the DOAH for hearing on December 30, 1991, and was assigned DOAH Case number 91-8339. On January 8, 1992, CFWS filed a petition for formal administrative hearing with the SJRWMD disputing a proposed consent order between High Point and SJRWMD assessing $2,463.60 penalty and costs for violation of the mitigation conditions and requiring a mitigation survey. Like the petition described in paragraph 4, above, this petition was signed and sworn by Michael Mingea and did not identify CFWS as a corporation. The Respondent named in the petition was SJRWMD. This petition was forwarded to the DOAH by the district and was received at DOAH on January 21, 1992. It was assigned DOAH Case number 92-0364. A motion in opposition to the petition was filed on January 28, 1992 by counsel for SJRWMD requesting dismissal based on Petitioner's lack of standing, as the consent order does not authorize any activity subject to the district's permitting authority. Further, the motion argued, any issues regarding the proposed permit modification would be addressed in pending case number 91-8339. In an order dated January 28, 1992, the two cases, 91-8339 and 92-0364 were consolidated and set for hearing in Orlando, Florida on June 16 and 17, 1992. On March 5, 1992 a telephone conference hearing was conducted on various pending motions and an order was entered on March 6, 1992 granting motions to dismiss the two consultant parties, BDA and DRMP. The order denied BDA's and DRMP's motions for fees and costs pursuant to Section 120.57(1)(b)5., F.S., based on a finding that the error in including the consultants as Respondents did not rise to the level of bad faith required for an award under 120.57(1)(b)5, F.S. The order granted SJRWMD's motion in opposition to the petition in number 92-0364 and closed the file in that case with remand of the petition to the agency. And finally, the order granted High Point's motion for a more definite statement in Case number 91-8339. The order required CFWS to file its amended petition within thirty days stating how the proposed permit modifications would adversely affect the waters of the state or otherwise violate statutes and rules governing management and storage of surface waters (MSSW) permits. On April 14, 1992 Karen West, Esquire, filed her notice of appearance on behalf of CFWS and a motion for extension of time of fourteen days to file a more definite statement. On April 21, 1992 Ms. West filed the Petitioner's notice of voluntary dismissal of the petition in number 91-8339, and an order closing file was entered. On April 28, 1992, High Point and BDA filed with the SJRWMD their motion for remand which resulted in the district's order of remand discussed in the preliminary statement, above. The sole issue for remand was these Respondents' entitlement to attorneys fees and costs. High Point and BDA also filed separate motions for sanctions dated May 21, 1992 requesting fees and costs of $6,766.88 for High Point and $1,096.49 for BDA. A telephone conference was conducted on June 11, 1992 on Karen West, Esquire's, motion to withdraw as counsel for CFWS. Michael Mingea, President of CFWS participated and stated that the society had no opposition to the motion. The Hearing Officer and parties then discussed procedural matters related to resolution of the fees case, DOAH Case number 92-3010F. Mr. Mingea asked for, and was given, two weeks to obtain substitute counsel prior to Petitioners commencing discovery. The parties agreed to conduct the final hearing by telephone on August 10, 1992. An order and notice of hearing was entered confirming these matters on June 17, 1992. Notwithstanding the parties' agreement, the August 10th hearing was continued because Petitioners were unable to effectuate discovery or serve subpoenas on Michael Mingea or Todd Swearingen, another CFWS board member. Despite frequent filings of well-drafted requests for extensions, responses to Petitioners' pleadings and similar documents, Michael Mingea never appeared at any of the several hearings scheduled in this case after his initial appearance on June 11th. Despite several explicit orders Mr. Mingea never appeared for deposition by Petitioners, either in person or by telephone. Yet, according to the testimony of other board members, Todd Swearingen and Marty Sharpe, only Michael Mingea initiated the petitions involving High Point and he, alone, was cognizant of the specific basis for those petitions. Marty Sharpe who appeared consistently on behalf of CFWS in this proceeding became a board member in February 1992, several months after the petitions were filed. Petitioners were wholly frustrated in their effort to obtain the discovery to which they were entitled with regard to the bases for the CFWS petition in Case number 92-8339 and its abrupt dismissal. In various written documents and attempts to provide evidence through affidavit CFWS argues that its motives were not bad faith; however, throughout this proceeding CFWS has effectively prevented Petitioners from testing those bare assertions through discovery or cross examination. Mr. Mingea apparently travels extensively with his regular employment and the organization's mail goes to a post office box where it is picked up by volunteers. Contact with the organization was most effectively made through Marty Sharpe who attempted, in turn, to reach Mr. Mingea and convey messages. In the absence of competent evidence to the contrary, the record in this and in the underlying cases, number 91-8339 and 92-0364 support a reasonable inference that the petition in number 91-8339 was filed for a frivolous purpose. The order granting CFWS leave to amend its petition acknowledged that the original petition was legally insufficient. The petition was not amended within the allotted period; but rather was voluntarily dismissed shortly after legal counsel appeared on behalf of the organization. This dismissal reduces, but does not eliminate exposure to liability for filing the initial petition. The fees and costs requested by the Petitioners here are reasonable. Those fees are supported by billing logs attached to the motions for sanctions and reflect an hourly rate of $100.00 for BDA and $160.00 for High Point. Douglas Rillstone testified to the reasonableness of a total of $9,592.00 for High Point, and $2,495.00 for BDA. Those totals are not supported by billing logs and it is not possible to determine the basis for those amounts beyond the original amounts requested.
Findings Of Fact Respondent, Invarrary Retirement Center, Inc. (IRC), is licensed by petitioner, Department of Health and Rehabilitative Services (HRS), to operate an adult congregate living facility (ACLF). The facility operates under the name of Inverrary Retirement Center at 5811 Northwest 28th Street, Lauderhill, Florida. On or about April 4, 1984, two HRS inspectors performed a routine relicensure survey of IRC. The purpose of the survey was to determine whether IRC was complying with all HRS requirements relating to record keeping, sanitation, fire and safety. During the course of the survey, the inspectors noted the following violations of HRS rules: There was no staff member within the facility at all times who was certified in an approved first aid course (Rule 10A- 5.19(5)(f), F.A.C.); The facility failed to keep "current" records of self administered medication (Rule 10A-5.18(6)(f), F.A.C.); Menus were not planned and posted where they could be easily viewed by the residents (Rule 10A-5.20(1)(j), F.A.C.); The kitchen was not equipped with an approved exhaust hood over the stove (Rule 10A-5.23(15)(a), F.A.C.); An electrical extension cord was used to service the coffee maker (Rule 10A- 5.23(15)(a), F.A.C.); One of the buildings had an insufficient means of egress for the residents (Rule 10A- 5.23(15)(a), F.A.C.); There were no manually operated fire alarms capable of being heard throughout the facility (Rule 10A-5.23(15)(a), F.A.C.); Respondent failed to provide documenta- tion reflecting the smoke detectors were tested on a weekly basis (Rule 10A- 5.23(15)(a), F.A.C.); and (j) There was a sliding bolt on an exit door on one of the buildings (Rule 10A- 5.23(15)(a), F.A.C.). All of the foregoing constituted a separated violation of HRS rules. 1/ When the survey was completed, the inspectors reviewed all violations with IRC's manager and advised her that a resurvey would be taken in about thirty days, and that all violations must either be corrected by that time, or some action instituted which reflected an intent on the part of the facility to correct the same. This was in accordance with HRS policy governing ACLFs, and approximated the time given other facilities to make similar corrections. On April 10, 1984, a Corrective Action Plan was issued by HRS and sent to IRC. This document set out in detail the various violations found in the April 4 inspection and set a compliance date of May 4, 1984 for all corrections to be made. A resurvey of IRC's facility was made by the same two HRS inspectors on May 18, 1984. With the exception of item (3)(h), which required documentation verifying that smoke detectors be tested weekly, the inspectors noted that no corrections had been made. However, respondent presented evidence that items (3)(b) and (3)(c) had indeed been corrected by that date and such evidence is deemed to be more persuasive than contrary evidence offered by HRS representatives. Further, the violation in item (3)(f), and turns on whether an HRS publication or the City of Lauderdale fire code was controlling when the inspection was made. Because no evidence was presented to establish which standard was in effect, the allegation that an HRS publication was violated must fail. Accordingly, it is found that IRC failed to timely correct items (3)(a), (3)(d), (3)(e), (3)(h), (3)(i), and (3)(j) as required by the Corrective Action Plan. Respondent eventually made all corrections, although not within the HRS imposed deadline. One of the deficiencies [item (3)(d) required extensive renovations, including bids and a city permit, which took considerable time to accomplish. However, IRC's manager neglected to provide HRS inspectors with any evidence on the May 18 visit showing that bids were being solicited, or that there was any "movement" on the project. The same is true for item (3)(g) which required competitive bids from suppliers. IRC also failed to advise HRS that it could not immediately enroll an employee in the Broward County First Aid Course [item (3)(a)] because of the large number of participants in the class. IRC failed to do so even though its manager had been told that an extension on the May 4 deadline could be obtained where IRC gave some evidence to the inspectors that action was being instituted to correct the deficiency.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating agency rules as set forth in items (3)(a), (3)(d), (3)(e), (3)(h), (3)(i) and (3)(j) of the administrative complaint, and that a $900 administrative fine be imposed, to be paid within thirty days after the data of the final order rendered in this proceeding. All other charges should be DISMISSED. DONE and ORDERED this 11th day of March, 1985, 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 11th day of March, 1985.
The Issue The issue in this case is whether Petitioner's application for licensure as a real estate salesperson should be granted even though, in 2003, NASD imposed discipline against Petitioner pursuant to a settlement agreement wherein Petitioner neither admitted nor denied allegations that he had been involved in improper trading activities.
Findings Of Fact Respondent Florida Real Estate Commission ("FREC") is the agency responsible for licensing real estate brokers and salespersons in the State of Florida. In September 2005, Petitioner Michael Silverstein ("Silverstein") applied for licensure as a real estate sales associate. In his application, Silverstein disclosed that in 2003, NASD——a private-sector securities regulator——had imposed discipline against him, pursuant to a settlement agreement known formally as a Letter of Acceptance, Waiver and Consent ("AWC"), for allegedly having engaged in improper trading activities. The disciplinary matter had arisen out of certain bids that Silverstein had made to buy shares, for his own account, in Chromatic Color Sciences International, Inc. ("CCSI"), a company whose fortunes (and stock price), Silverstein had believed, were due to rise. The bids in question——of which there were 29——had taken place over a two-month period between December 31, 1999, and February 29, 2000. At that time, Silverstein and a partner had owned a brokerage firm called Your Discount Broker, Inc. ("YDB"). Each of the 29 bids had been placed within 30 seconds or so of the close of the trading day on which the bid was made. Each bid had exceeded the day's previous highest bid for CCSI, by an amount ranging from about three cents to 20 cents per share. NASD had alleged that the bids were not bona fide offers to purchase (five had resulted in a consummated sale) but rather artifices made in furtherance of a "manipulative, deceptive, and/or fraudulent" scheme undertaken to artificially inflate the value (on paper, at least) of Silverstein's investment in CCSI.1 NASD had accused Silverstein, his partner, and YDB of violating NASD Conduct Rules 2110 and 2120.2 Ultimately, in June 2003, Silverstein and the two other respondents had entered into the aforementioned AWC, wherein, "without admitting or denying the allegations, and solely for the purposes of [the then-pending] proceeding and any other proceeding [that might later be] brought by or on behalf of NASD, or to which NASD [might be] a party," they had agreed to the imposition of specified penalties. The stipulated sanctions against Silverstein were a fine of $75,000, which he had paid, and a "suspension from association with any member firm for a period of two months," which Silverstein had served, as agreed, from July 7, 2003, through September 6, 2003. After Silverstein had served his suspension, NASD had reinstated his registrations, allowing Silverstein once again to engage in securities transactions under NASD's oversight. Later, the New York Stock Exchange ("NYSE") had granted Silverstein a license. As of the final hearing in this case, Silverstein still held his securities licenses, although he was not then active in the industry. Placing a bid near the close of the trading day was not, of itself, a violation of any NASD rule.3 Likewise, merely offering to pay more for a particular company's shares than any other investor previously had offered on a given day was not a disciplinable act under any NASD rule. Silverstein's conduct in relation to the 29 bids for which NASD disciplined him was wrongful, therefore, only if undertaken with bad intent. At hearing in this case, Silverstein denied any intent to manipulate the value of CCSI's shares. The only evidence opposing Silverstein's testimony is the AWC, which is, to be sure, some proof of wrongdoing, because Silverstein agreed therein to be punished. On the other hand, in entering into the AWC, Silverstein was not required expressly to admit wrongdoing, and he did not do so. Further, the undersigned credits Silverstein's unrebutted testimony that he agreed to accept punishment, not because he believed he was guilty of violating NASD rules, but because, at the time, YDB was being acquired by another company, and the deal could not be completed until the NASD matter had been resolved. In addition, there was no evidence about the volume of trading that typically occurred, during the relevant time period, within minutes or seconds of the trading day's close. The undersigned therefore cannot make any rational determination, based on the evidence in the record, as to whether Silverstein's 29 last-minute bids were highly unusual (and hence especially suspicious), relatively routine, or something in-between. There was, as well, no evidence concerning either the volume of trading that was then occurring in connection with CCSI shares, or the prices at which that company's shares were trading during the relevant period, making it impossible for the undersigned reasonably to draw any inferences from the dollar-amounts of Silverstein's bids. In short, there is no persuasive circumstantial evidence (besides the AWC itself) from which the undersigned might infer that Silverstein acted with fraudulent or dishonest intent when he made the 29 bids. At bottom, the evidence in the instant record is simply insufficient to persuade the undersigned that Silverstein's conduct in relation to the 29 bids for which NASD disciplined him was, in fact, manipulative, deceptive, or fraudulent. The undersigned is convinced, however, that, apart from the AWC, Silverstein's past (so far as the evidence shows) is spotless. He has maintained a reputation in his community for truth and honesty, which NASD's disciplinary action failed to sully. Silverstein's conduct after February 29, 2000 (when he stopped making last-minute bids) has been good, even exemplary. Indeed, FREC itself concedes (and the undersigned finds) that Silverstein "is a well-respected member of his community." Resp. Prop. Rec. Order at 4. In view of Silverstein's good conduct and reputation; the facts that NASD and the NYSE presently consider him fit to work in the securities industry; and the fact the that last allegedly improper bid was placed more than six years ago, the undersigned determines as a matter of ultimate fact that granting Silverstein a license to work as a real estate sales associate will not likely endanger the public generally or investors specifically.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that FREC enter a final order granting Silverstein's application for licensure as a real estate sales associate. DONE AND ENTERED this 26th day of June, 2006, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of June, 2006.
