The Issue On September 22, 1994, the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, Bureau of Timeshare issued a notice to show cause to Erni Hirsch alleging that Ms. Hirsch violated various provisions of Chapter 721, Florida Statutes, regarding vacation and timeshare plans. Specifically, the agency charged that Ms. Hirsch sold multiple timeshare periods as a "successor developer" or "concurrent developer" without providing required notices and filings. The issue is whether the violations occurred and, if so, what penalties and remedial action are appropriate.
Findings Of Fact Erni Hirsch resides in Hollywood, Florida. She has a bachelor's degree in elementary education and a master's degree in public administration, and she has completed a doctorate program in public administration. Prior to 1973, Ms. Hirsch was an elementary school teacher and worked on curriculum for Dade County public schools. From 1973 through 1993, she worked for the Seminole Tribe of Florida setting up adult schools on the reservations, doing grant development and then acting as business manager for the tribe. She was employed full-time by the tribe and worked sometimes sixty to seventy hours a week. She now considers herself retired. Ms. Hirsch is married and has three grown children. The family used to go camping, but in the mid-1980's Ms. Hirsch began purchasing timeshare periods for the family's vacations. She initially purchased a timeshare period in the Hollywood Beach Tower, where she lives, and used it for a beach club and to trade for timeshare periods elsewhere. Ms. Hirsch continued purchasing timeshare periods, upgrading them into better exchange groups. She purchased timeshare periods in other plans, in other cities in Florida and sold them or she traded them in exchange clubs for her personal use and that of her family and friends. While she initially sold timeshares to family and friends, she eventually started advertising timeshare periods in the newspaper, giving her name and home telephone number to contact. In response to inquiries, she sent lists of the various timeshare periods she owned; she also sent letters or information sheets explaining the concept of timesharing and the exchange programs. When she had purchasers, she suggested they get representation by an attorney or title company. She did not receive escrow deposits and did not maintain an escrow account. Any escrow money was held by the attorney or title company. In some cases when purchasers changed their minds before closing, Ms. Hirsch let them have their money back. She never received complaints from purchasers and does not know whether the Department of Business and Professional Regulation (agency) received complaints. As stipulated by Ms. Hirsch, she owned and transferred title from herself to others in thirty-eight timeshare periods in twenty-one timeshare plans, as follows: HOLLYWOOD BEACH HOTEL AND TOWER Project No. PRXI000584: M. Racoma and Helen T. Racoma, No. 305, Wk 25, Deed Recorded 10/11/91 Rolando V. and Concepcion Barcenilla, No. 305, Wk 26, Deed Recorded 10/11/91 HOLLYWOOD BEACH HOTEL Project No. PRXI000186 Jack Sweetser and Virginia Sweetser, No. 604, Wk 22, Deed Recorded 10/4/91 Michael Mikola, No. 603, Wk 27, Deed Recorded 10/23/91 WESTGATE VACATION VILLAS, PHASE I Project No. PRTI000603 Gregory M. Makozy and Maria Makozy, No. B-04, Wk 45, Deed Recorded 9/21/93 Danielle Hirsch, No. A-08, Wk 24, Deed Recorded 2/23/94 WESTGATE VACATION VILLAS, PHASE III Project No. PRTI000608 Paul A. Pritchard and Faith M. Pritchard, No. L9, Wk 13, Deed Recorded 7/23/93 WESTGATE VACATION VILLAS, PHASE IV Project No. PRTI000609 Leonard A. and Louise E. Bussiere, No. K-09, Wk 6, Deed Recorded 4/7/92 WESTGATE VACATION VILLAS, PHASE V Project No. PRTI000610 Sanford Hirsch, No. J-09, Wk 36, Deed Recorded 4/13/94 Ronald T. and Helen D. Reichenbaum, No. G-06, Wk 51, Deed Recorded 11/19/92 WESTGATE VACATION VILLAS, PHASE VII Project No. PRTI000612 Roger L. Deskins, No. P-05, Wk 7, Deed Recorded 4/22/93 Anthony B. and Valerie A. Leatheart, No. X-10, Wk 52, Deed Recorded 2/13/92 WESTGATE VACATION VILLAS, PHASE IX Project No. PRTI000565 Richard D. Penner and Lorna R. Penner, No. U-10, Wk 21, Deed Recorded 3/25/93 Danielle Hirsch, No. V-05, Wk 31, Deed Recorded 2/23/94 Leo and Moreen T. Blanchette, No. T-08, Wk 39, Deed Recorded 9/24/92 WESTGATE VACATION VILLAS, PHASE XI Project No. PRTI000651 Richard and Eileen Wells, No. Q-11, Wk 22, Deed Recorded 1/22/92 RESORT WORLD OF ORLANDO, PHASE I Project No. PRXMI00376 Mitchel Vogel and Bonnie Vogel, No. B-105, Wk 45, Deed Recorded 1/8/93 Delores Miller, No. 212, Wk 46, Deed Recorded 12/23/92 R. P. and M. O. Gardiner, No. B-107, Wk 44, Deed Recorded 7/27/92 R. P. and M. O. Gardiner, No. A-115, Wk 43, Deed Recorded 7/27/92 Annette Carmona, No. C-211, Wk 33, Deed Recorded 9/23/92 Philip J. and Shelagh M. Price, No. 214, Wk 14, Deed Recorded 9/23/92 RESORT WORLD OF ORLANDO, PHASE II Project No. PRXMI00620 Phase II (A) Peter J. and Madeline A. Nolan, No. A-217, Wk 29, Deed Recorded 9/22/92 Phase II (B) George P. and Karen L. Wong, Trustees, No. E-222, Wk 52, Deed Recorded 7/92 Phase II (C) Gregory P. and Carol Gordon, No. C-234, Wk 23, Deed Recorded 8/7/91 Phase II (G) Lillie R. Long, No. 274, Wk 41, Deed Recorded 11/5/92 THE OAKS AT RESORT WORLD, PHASE IV Anthony M. and Debra A. Kozar, No. 425, Wk 15, Deed Recorded 12/2/92 THE SPAS AT RESORT WORLD, PHASE V Mark J. Wilma, Anna E. Wilma, William K. Zelenc and Nicolett J. Zelenc, No. 527, Wk 11, Deed Recorded 6/24/93 CLUB SEVILLA Horace Curry and Sandra E. Curry, No. 321, Wk 44, Deed Recorded 9/20/91 HIGH POINT WORLD RESORT, PHASE I Marc Van Hove, No. 105, Wk 41, Deed Recorded 3/12/92 VISTANA FALLS CONDOMINIUM Robert L. and Hein T. Hopkins, No. 220, Wk 24, Deed Recorded 11/11/93 John T. and Deborah L. Ryan, No. 208, Wk 36, Deed Recorded 7/13/93 VISTANA CONDOMINIUM Project No. PRXPI00605 Prabhas and Madulika Kejriwal, No A-12, Wk 27, Deed Recorded 5/21/93 ORANGE LAKE COUNTRY CLUB VILLAS Project No. PRXPI00325 James O. and Hildegard J.L. Buss, No. 225, Wk 51, Deed Recorded 9/7/93 CLUB ORLANDO VACATION RESORT I Project No. PRTI000652 Mitchel and Bonnie Vogel, No. 144, Wk 18 (even years), Deed Recorded 1/8/93 SAND AND SURF, A CONDOMINIUM Project No. PRXMI00398 Clearwater Properties, Inc., No. 255, Wks 51/52, Deed Recorded 8/3/90 SEVEN SEAS, A CONDOMINIUM Project No. PRXI000431 Bing S. Laj, No. 310, Wk 51, Deed Recorded 10/6/89 Barbara Uzmack, No. 108, Wk 32, Deed Recorded 8/29/88 Each of the timeshare plans is located in the State of Florida. Except for the two grantees named Hirsch, there is no evidence of kinship between Ms. Hirsch and the purchasers. At all times material to the allegations of the order to show cause, each of the timeshare plans was comprised of more than seven timeshare periods over a period of at least three years. The initial purchase price was $1,000 or more in thirty-four of the timeshare periods sold by Ms. Hirsch; in four periods the purchase price was less than $1,000. For each timeshare period the purchaser from Ms. Hirsch was contractually and statutorily obligated to pay a recurring maintenance fee. Ms. Hirsch's income from her sales of timeshare periods was: YEAR TIMESHARE GROSS INCOME TIMESHARE NET INCOME 1995 $ 7,000 ($2,000) 1994 $ 70,000 ($3,000) 1993 $ 75,000 $3,893.02 1992 $109,000 $5,981.12 1991 $ 25,000 $ 500.00 Ms. Hirsch stipulates that, as charged in the notice to show cause with respect to the timeshare periods she offered and sold, she: did not file any public offering statements with the Petitioner for review and approval with respect to the timeshare periods and timeshare plans prior to offering them to the public; did not provide her timeshare purchasers with a public offering statement that had been approved by the Petitioner with respect to the timeshare periods and timeshare plans prior to closing on sales; did not establish an escrow account with an approved escrow agent as to each timeshare plan; did not at any time place all funds or other property received from or on behalf of purchasers into an escrow account with respect to the timeshare plans; closed on sales of the timeshare periods prior to providing her timeshare purchasers with an approved public offering statement; and did not provide Petitioner with the names and addresses of the persons to whom she had sold timeshare periods. During the relevant period Ms. Hirsch did not incorporate as a business, maintain an office outside of her home, maintain a business telephone, or otherwise operate in other than her own individual capacity. Where she lives she is not permitted to operate an office out of her home. The agency began investigating Ms. Hirsch's timeshare sales activities upon complaint from Michael Lucas of American Timeshare Resales, in the Orlando/Kissimmee area. Sometime in 1993, Ms. Hirsch received a notice of the agency's investigation. After being informed of the agency's concern, Ms. Hirsch contacted someone in Orlando with the Department of Business and Professional Regulation's Division of Real Estate. From that contact she understood that she was not subject to regulation as long as she was selling timeshare periods that she owned herself. She also contacted an attorney whom she understood specialized in condominium and timeshare law. She received an opinion letter from another attorney in the same firm, Becker and Poliakoff, P.A. The letter stated that arguably she was not a successor or concurrent developer because she purchased her timeshare periods from individuals who were not themselves developers. The letter concluded there were no cases directly on point and the agency might claim that her sales in the ordinary course of business qualified her as a developer. (Respondent's exhibit no. 2) When the agency did, indeed, pursue its administrative enforcement action, Ms. Hirsch ceased buying and selling timeshare periods. At the time of hearing she had two left, which she used, and she disavowed any further interest in acquiring more. Considering the totality of the facts and circumstances, it is evident that what started as a family vacation program developed into a business pursuit. It is impossible to ignore the volume of the timeshare periods being sold, the active advertising campaign and the gross income being generated (over $100,000 in one year, 1992). The fact that there were net losses or very small net gains only establishes that large sums were being spent in the enterprise. The evidence belies any claim that all of the timeshare periods were acquired by Ms. Hirsch for her own occupancy, even if the trades for other periods in other plans are considered. Ms. Hirsch did not intend to commit any violations and she did not intend to deprive her purchasers of their statutory rights. As a layperson, albeit well-educated and experienced in financial matters, she obviously never considered herself a "developer" of any sort; she relied on advice of counsel in that regard as well. It is evident that Ms. Hirsch unwittingly slipped within the regulatory reach of timeshare law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby recommended that the Department of Business and Professional Regulation enter a final order finding that Ms. Hirsch violated Sections 721.07, 721.08 and 721.10, Florida Statutes, and ordering that she cease and desist. DONE and ENTERED this 21st day of February, 1996, in Tallahassee, Florida. MARY CLARK, 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 21st day of February, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-0951 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-3. Adopted in substance in paragraph 5. 4.-5. Adopted in paragraph 6. 6. Adopted in paragraph 7. 7.-10. Adopted in paragraph 8. Accepted as a conclusion of law. Adopted in paragraph 9. Accepted, but unnecessary. The figures speak for themselves. 14.-16. Adopted in substance in paragraphs 5 and 15. 17.-18. Rejected as argument, but incorporated in part in conclusions of law. Rejected. Respondent's testimony is credited, but only to show that she made some attempts to determine her legal obligations. It is accepted that the Division of Real Estate does not regulate timeshares; it does, however, regulate persons who sell or offer to sell real property. Adopted in paragraph 13. 21.-23. Adopted in part in paragraph 13; otherwise rejected as argument or unnecessary. 24. Adopted in substance in paragraph 15. 25.-26. Rejected as unnecessary. Adopted in paragraph 10. Adopted in paragraph 5. Respondent's Proposed Findings of Fact. 1. Adopted in substance in paragraph 2. 2.-3. Adopted in paragraph 3. Rejected as unsubstantiated by the evidence (as to whether she contacted any agency prior to reselling any timeshare period). Accepted that she understood that to be the agency's response. See paragraph 13. 6.-10. Adopted in substance in paragraph 5. 11. Adopted in substance in paragraph 11. 12.-14. Rejected as unnecessary. Adopted in paragraph 12. Rejected as unnecessary. Adopted in paragraph 12, except that she received notice sometime in 1993. 18.-19. Adopted in part in paragraph 13. The opinion letter was more equivocal than characterized in this proposed finding. Rejected as contrary to the weight of evidence. Respondent did not contact counsel until after she was contacted by the agency. Rejected as contrary to the evidence. The purchase price, only, was less than $1,000. 22.-23. Rejected as contrary to the evidence. 24.-25. Addressed in conclusion of law no. 26. COPIES FURNISHED: Laura L. Glenn, Senior Attorney Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Tracy Hirsch, Esquire John Militana, Esquire Militana, Militana and Militana, P.A. 8801 Biscayne Boulevard, Suite 101 Miami Shores, Florida 33138 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 W. James Norred, Acting Director Department of Business and Professional Regulation Division of Florida Land Sales, Condominiums and Mobile Homes Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact On January 7, 1994, the Petitioner, Idarue Pearl Jackson, executed and submitted a Winner Claim Form to the Respondent, the Department of the Lottery (hereinafter referred to as the "Lottery"). Ms. Jackson filed a lottery ticket with the Winner Claim Form worth a cash prize of $2,500.00. On January 7, 1994, the Respondent, the Department of Health and Rehabilitative Services (hereinafter referred to as "DHRS"), informed the Lottery that Ms. Jackson owed the State of Florida $3,237.00 for excessive Aid to Families with Dependent Children (hereinafter referred to as "AFDC"), payments she had previously received. On or about January 26, 1994, Ms. Jackson was informed that the $2,500.00 prize would be applied in payment of her outstanding AFDC debt. On or about January 31, 1994, Ms. Jackson requested a formal administrative hearing to contest the decision of the Respondents. Prior to August of 1987 Ms. Jackson, then known as Idarue Shepard, began receiving AFDC payments from the Department of Health and Rehabilitative Services. Ms. Jackson signed an information and consent form provided by DHRS prior to receiving AFDC payments. In executing the form, Ms. Jackson agreed, among other things, to the following: C. I KNOW PUBLIC ASSISTANCE RECIPIENTS (APPLICANTS) HAVE THE RESPONSIBILITY TO: . . . . Repay the Department for any assistance received for which they are ineligible. The assistance owed will be deducted for each monthly grant amount until the entire amount is paid back. Ms. Jackson also agreed by executing the DHRS exhibit 3, to inform DHRS of any changes in her employment status which would impact her entitlement to AFDC payments. Beginning in August of 1987 Ms. Jackson began employment for which she earned a sufficient amount that she was no longer eligible for AFDC payments. Whether Ms. Jackson informed DHRS of this change is not clear. From August of 1987 through December of 1988 (excluding June of 1987), Ms. Jackson, continued to receive AFDC payments. Because of her employment, she was not entitled to the payments she received from August of 1987 to December of 1988. Ms. Jackson received a total of $3,336.00 in AFDC payments for which she was not eligible. Whether she received these payments because she failed to inform DHRS of her employment or because DHRS made an error in continuing to send her the payments is not relevant. What is relevant is that Ms. Jackson received the payments by check and that she cashed the checks. DHRS investigated the payments made to Ms. Jackson between August of 1987 and December of 1988 and determined that Ms. Jackson was not eligible for the amounts she received during that period of time. By letter dated November 4, 1989, DHRS informed Ms. Jackson that she owed DHRS for the payments she improperly received. In May of 1993, DHRS began withholding a part of other benefits Ms. Jackson was receiving in payment of the excessive AFDC payments she had received. As of the date of the final hearing of this case, Ms. Jackson still owed $3,192.00 to DHRS.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Ms. Jackson's petition and transferring Ms. Jackson's $2,500.00 lottery prize to the Department of Health and Rehabilitative Services in partial satisfaction of Ms. Jackson's debt to the Department of Health and Rehabilitative Services. DONE AND ENTERED this 24th day of May, 1994, in Tallahassee, Florida. LARRY J. SARTIN 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 May, 1994. APPENDIX Case Number 94-0772 Ms. Jackson and DHRS have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Ms. Jackson's Proposed Findings of Fact The first paragraph (other than the first sentence) is not supported by the weight of the evidence. The first sentence is a statement of the position of the Respondents. The first three sentences of the second paragraph are statements of law. The fourth sentence of the second paragraph is not supported by the weight of the evidence. See finding of fact 13. The fifth sentence of the second paragraph is a statement of law. The sixth sentence of the second paragraph is not supported by the weight of the evidence. The third paragraph is argument. DHRS' Proposed Findings of Fact Accepted in 1 and 2. Accepted in 3. Accepted in 4. Accepted in 6. Accepted in 13 and hereby accepted. Accepted in 7 and 8. See 9 and 11. Accepted in 14 and 15. Accepted in 11. 10-11 Hereby accepted. COPIES FURNISHED: Idarue Pearl Jackson 17011 NW 37th Avenue Miami, Florida 33054 Honorable Gerald Lewis Comptroller, State of Florida Department of Banking and Finance The Capitol, Plaza Level Tallahassee, FL 32399-0350 William G. Reeves, Esquire General Counsel Department of Banking and Finance Room 1302, The Capitol Tallahassee, FL 32399-0350 Kim Tucker, Esquire General Counse Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Scott C. Wright Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Louisa Warren Senior Attorney Department of the Lottery Capitol Complex Tallahassee, Florida 32399-4011 Katrina Saggio, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue Whether Leroy Smith and/or Alice Longwood are entitled to the $5,000.00 prize for a winning lottery ticket presented by Leroy Smith to the Lottery for collection?
Findings Of Fact On March 7, 1988, Mr. Smith completed a Lottery Winner Claim Form (hereinafter referred to as the "Form") and submitted the Form and a Cool Million instant-winning lottery ticket (hereinafter referred to as the "Ticket"), number 02-114569-303, good for a prize of $5,000.00 for collection. On the back of the Ticket Mr. Smith listed his name and address on the spaces provided for the person claiming the prize and signed the Ticket. The space on the back of the Ticket where the first name of the person claiming the prize was to be listed had been covered with a "white-out" material and "Leroy" written in. At the bottom of the Form Mr. Smith indicates that this was done to replace his first name for a nickname that had previously been entered on the ticket. Mr. Smith also listed his name, Social Security Number, address and phone number on the Form. Mr. Smith signed the Form as the "Claimant." In a letter dated March 8, 1988, DHRS notified the Lottery that Mr. Smith owed $7,478.20 in Title IV-D child support arrearages and $150.00 in court-ordered costs, a total of $7,628.20, as of March 8, 1988. By letter dated March 18, 1988, Mr. Smith was notified that the $5,000.00 prize for the Ticket he submitted was being transferred to the Comptroller for possible payment of his Title IV-D child support arrearages and court costs. The $5,000.00 prize was forwarded from the Lottery to the Comptroller on March 22, 1988. Mr. Smith was notified by the Comptroller by letter dated March 23, 1988, that the Comptroller intended to apply the $5,000.00 prize toward his unpaid obligation. Mr. Smith requested a hearing to contest the proposed action of the Comptroller. The Title IV-D child support arrearages and court costs owed by Mr. Smith are related to two child support cases involving Mr. Smith. First, on December 1, 1981, Mr. Smith was ordered to pay child support to Deidah Brown in an Order of Dependency and Support issued by the Circuit Court, Seventh Judicial Circuit, in and for Flagler County, Florida. On November 6, 1984, Mr. Smith was ordered to pay child support to Patti Victoria Smith by the same court. Mr. Smith's total obligation as of the date of the formal hearing was $7,348.20: $3,578.20 in public assistance arrearage, $3,620.00 in non-public assistance arrearage and $150.00 in court-ordered costs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, It is RECOMMENDED that a final order be Issued providing for payment of the $5,000.00 prize attributable to the Ticket to DHRS. DONE and ENTERED this 22nd day of November, 1988, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1743 The Petitioners have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioners' Proposed Findings of Fact Proposed Finding Paragraph number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1-2 1. 3 1-4. 4 5. 5 6. 6 7-8. 7 10. 8 Statement of law COPIES FURNISHED: Jo Ann Levin Senior Attorney Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Leroy Smith Post Office Box 1465 Bunnell, Florida 32010 Patrick Loebig, Esquire Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Louisa Hargrett, Esquire Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Alice Longwood Post Office Box 1753 Bunnell, Florida 32010 Rebecca Paul, Secretary Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Tom Bell, General Counsel Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301
The Issue The issue presented here concerns the entitlement of the Petitioners to be granted licenses to work in the Mutuels Department of the Fronton, Inc., a Florida Jai Alai concession located in West Palm Beach, Florida. More specifically, the matter to be resolved concerns the Respondent's refusal to license the named Petitioners in the aforementioned capacity based upon the alleged activities of those Petitioners during the 1977 season of the New Port Rhode Island Jai Alai Fronton. The Petitioners are alleged to have conspired to commit a fraudulent or corrupt practice in relation to the game of jai alai and committing fraud or corruption in relation to the game through conspiring to use and using positions as handicappers in misleading the public for the Petitioners' benefit, contrary to Rule 7E-3.12, Florida Administrative Code. It is further alleged that the Petitioners have violated Rule 7E-3.05, Florida Administrative Code, by associating with their fellow co-Petitioner with a knowledge that the co-Petitioner has violated State of Florida's rules and regulations related to jai alai by conspiring to commit and committing a corrupt and fraudulent practice in relation to the game of jai alai as specified in the discussion of Rule 7E-3.12, Florida Administrative Code. The Respondent also claims that it has information, to include the information related in the discussion of the two rules provisions, which information is a prima facia indication that the Petitioners are not of good moral character as required by Chapter 550, Florida Statutes, because of their conduct in the relation to the game of jai alai, which conduct would cause a reasonable man to have substantial doubt about the Petitioners' honesty, fairness and respect for the rights of others and would erode the public's confidence and the honest outcome of jai alai matches in the State of Florida. 1/
Findings Of Fact Prior to the season for the jai alai known as the Fronton, Inc., located in West Palm Beach, Florida, for the years 1980-81, the Petitioners In the above-styled actions made application for an occupational license to be granted by the Respondent. The licenses requested were to work as employees of the Fronton, Inc., in the mutuels department. The applications for licensure on the part of the Petitioners concerned re-licensure for the upcoming jai alai season in West Palm Beach, Florida. The Petitione'rs had never been denied an occupational license by the Respondent in the past. After reviewing the license applications, the Division Director of the Division of Pari-Mutuel Wagering issued letters on November 4, 1980, directed to the named Petitioners, denying their license requests. A copy of that correspondence may be found as Respondent's Composite Exhibit No. 1, admitted into evidence. The grounds for license denial were as set forth In the issues statement of this Recommended Order. The letters of denial indicated the Opportunity for the Petitioners to request a Section 120.57, Florida Statutes, hearing and the Petitioners availed themselves of that opportunity. Subsequent to the request for a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, the Respondent forwarded the case to the Division of Administrative Hearings for a formal hearing. That hearing was conducted on the dates as stated in the introductory portion of this Recommended Order. At the time of the hearing, and continuing to the point of the entry of this Recommended Order, the parties are still desirous of being granted the subject occupational licenses. These licenses are required by the terms and conditions set forth in Section 550.10, Florida Statutes (1980). The Petitioners have complied with all procedural requirements for licensure and are entitled to be licensed unless the grounds for license denial as stated in the November 4, 1980, correspondence are well-founded. During the 1977 jai alai season at the Rhode Island Jai Alai in New Port, Rhode Island, Petitioner Gallo was employed as a sellers" This employment involved punching tickets in the mutuels area of the Fronton where tickets are issued to bettors. Petitioner Barth also worked at the Fronton in the calculating room as an employee of the Fronton. This is the area where the money is collected from the bettors and tabulated. In that racing season, while employed by the Fronton in Rhode Island, Gallo, Barth and one Robert Fusco, were involved as partners in a venture known as "list betting." Each of the partners had contributed five to six thousand dollars ($5,000.00 to $6,000.00) for the purpose of conducting "list betting." In particular, the "list betting" involved the placement of numerous combinations of numbers on each jai alai game in an effort to win the trifecta portion of the wagering on the individual games. To be successful in the trifecta wager, it was necessary that the three-number combination which constitutes an individual wager comport with the individual team performance for win, place and show. As example, if the individual number combination bet was 8-1-2, then the number (8) team would need to win, the number (1) team would need to place, and the number (2) team would need to show. The partnership was betting from a list of trifecta combinations which were the result of research conducted by the partnership on the subject of other jai alai seasons. The list of those numbers utilized in the betting may be found as Petitioners' Exhibit No. 4, admitted into evidence. The partnership utilized the "list betting" system for all games during the 1977 season up to August 24, 1977, when the partnership was dissolved. The philosophy of the "list betting" was to win often enough and in sufficient amounts of money to offset the cost of high volume betting. In this pursuit, the partnership leaned toward the utilization of trifecta combination numbers which would grant the largest return in a winning payoff, as opposed to being concerned with the frequency of the payoff of the chosen combination trifecta number. In addition, the skill of the players in the jai alai game was not a critical factor. The amount of money being spent on the individual games varied from five, to, eight hundred dollars ($500.00 to $800.00) and, as a result of the "list betting" activities of the partnership, the partnership realized a profit. The money that was won was constituted of the proceeds from the trifecta pool In a given game less cost deductions extracted by the State and the Fronton. The money pool that remained after these cost items had been deducted was divided between the winning ticket holders in the trifecta pool on an equal basis. Therefore, the fewer winning tickets, the larger the monetary return. After August 24, 1977, the Petitioners still continued to make trifecta bets, but not as part of the partnership. One of the other functions that the Petitioners performed together with another Fronton employee, Thomas F. Dietz, was the position as handicapper. (Dietz was a statistician at the Fronton.) Dietz and the Petitioners each would pick a single combination of three numbers to be placed on the game programs for each of the games during the meet under a code identification. Gallo was under the heading Massachusetts; Barth, Rhode Island; and Dietz, Connecticut. Dietz, In turn, made a determination about the "consensus" of the handicappers and made a three-number combination entry on the program under the heading "consensus." These handicap, picks, are depicted in copies of the racing programs which are found in the Respondent's Composite Exhibit No. 4, admitted into evidence. Gallo stopped making handicap selections some three or four days after August 24, 1977, and Dietz stopped his handicap selections on September 15, 1977. Barth made handicap selections for the entire season. It is not certain what the Fronton intended in having the handicappers place their "handicap line" on the game programs; however, the only compensation which the handicappers would receive from the Fronton for their efforts was a. monetary prize of twenty-five dollars ($25.00) to be awarded at the end of each month for that handicapper who selected the most quiniela predictions. (A quiniela nick is a combination of three numbers in which the successful bettor must have selected the win and place numbers in his three-number selection, without regard for the order of selection. As an example, if the quiniela picked by the bettor was the combination 1-2-3, and the winning number was (2) and the place number was (3), the bettor would win the quiniela selection.) There was no testimony on the subject of the betting public's perception of the "handicap line" found on the programs and nothing about those programs identifies the intended purpose. An analysis of those number combinations on the program, which are picks of a combination of three numbers within the range of (1) through (8)(the numbers representing the players in their game position), leads to the conclusion that the numbers could have been utilized by the betting public as trifecta or quiniela bets. The successful utilization of those numbers as a trifecta pick would always entail success as a quiniela selection, but a successful quiniela bet would not always be a successful trifecta bet. The established breakdown of betting patterns in the jai alai season shows that 55 to 60 percent of bets were made as quinielas. Management expressed no Opposition during the course of the season to the fact that the Petitioners were "list bettors"; employees of the Fronton and handicappers during the same time period. Moreover, it was not, per se, a violation of the regulatory statutes and rules in Rhode Island for an employee to be a "list bettor." It is the juxtaposition of "list bettor/employee/handicapper, which has put the question of the Petitioners' current request for licensure in Florida at issue. In this regard, the witness Dietz' testimony establishes the fact that on numerous occasions, during the 1977 jai alai season in Rhode Island, Gallo requested that Dietz change the numerical order of his picks in his position as handicapper for the individual games as appeared on the programs, because Gallo was of the persuasion that the Dietz selections interfered with the Opportunity for Gallo and Barth to be successful in their trifecta "list betting." Whether the fact of Dietz' changes in his "handicap line" brought about greater success for the Petitioners "list betting" system was not established in the course of the hearing. It is apparent that there was a substantial difference in the utilization of the numbers in Petitioners' Exhibit No. 4 (constituted of "list betting" combination numbers), in Barth's program selection In the "handicap line" several weeks prior to August 24, 1977, and several weeks beyond that point, the August date being the date that the partnership was dissolved. The comparison of these numbers demonstrates that Barth utilized the number combinations found in Petitioners' Exhibit No. 4, four times as much in the several week period beyond August 24, 1977, as contrasted with the several week period prior to August 24, 1977. Gallo had stopped handicapping some three or four days after August 24, 1977, so a comparison of the utilization of numbers in Petitioners' Exhibit No. 4, as a basis for handicap selections is limited to three or four days prior to August 24, 1977, and three or four days beyond that date. Again, Gallo used the numbers from the list for handicap selections subsequent to August 24, 1977, for that three or four day period as compared to the three or four day period prior to that date, roughly four times as frequently. A similar comparison of Dietz' handicap selections from several weeks prior to August 24, 1977, and several weeks after August 24, 1977, in the sense of the utilization of number combinations that were found in the Petitioners' Exhibit No. 4; shows that Dietz used those number combinations essentially with the same frequency prior to and after August 24, 1977. This analysis of the matter takes into account the fact that Gallo and Barth, on a few occasions, did not act as handicappers. An analysis of the Gallo, Barth and Dietz choice of handicap numbers and the comments of Gallo made to Dietz about changing Dietz' number combinations when Dietz was handicapping, leads to the conclusion that the Petitioners felt that there was some relationship between exempting the numbers from their list in Petitioners' Exhibit No. 4 from the handicap selections and Dietz altering his numbers on the handicap selections and success in the Petitioners' "list betting" pursuit. This is further substantiated by the fact that around August 24 or 25, 1977, Dietz asked Gallo why the nature of his selections in handicapping had changed and Gallo replied to the effect that he, Gallo, had stopped his "list betting" activities so he could now use "good numbers' without hurting his winnings. The evidence in this case does not reveal the success that the Petitioners had in this pursuit due to the choice not to use numbers from their list in their handicap selections and due to the change of Dietz' handicap selections promoted by the Petitioner Gallo. The lack of data on the question of the overall effect of removing the Petitioners' numbers in their Exhibit No. 4, from the "handicap line" and the further lack of testimony on the question of the public's utilization of the "handicap numbers," does not allow factual conclusions to be drawn on the question of the effect of the Petitioners' action on the outcome of betting; and the possible additional money to be realized by the Petitioners through the implementation of their technique of withholding the numbers from their list and influencing Dietz to change his numbers on order of finish, which caused the public to use the "handicap numbers" for trifecta betting, thereby decreasing the general public's opportunity to be successful In the trifecta bet.
Recommendation Based upon a full consideration of the facts found and the conclusions of law reached herein, it is RECOMMENDED: That Richard Joseph Barth and John Randy Gallo he denied occupational licenses to work in the mutuels department of the Fronton, Inc., West Palm Beach, Florida, for the 1981-82 season and that this recommendation he effectuated by the entry of a final order agreeing with the findings of fact, conclusions of law and recommendations set forth. DONE and ENTERED this 2nd day of November, 1981, in Tallahassee, Florida. CHARLES C. ADAMS, 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 2nd day of November, 1981.
The Issue Whether the State of Florida, through its agencies, collected the money owed it by the Petitioner prior to receipt of a letter from her doctor certifying her disability.
Findings Of Fact On or about June 21, 1990, the Petitioner, Therese L. Hodge, applied for a student loan to pursue educational courses at Career City College in Gainesville, Florida. The loan applied for was a Stafford Loan, a student loan administered by the Department of Education (DOE) through the Office of Student Financial Assistance (OSFA). Under the Stafford Loan program, DOE through OSFA, serves as the guarantee agent performing its responsibilities in accordance with regulations promulgated by the United States Department of Education (USDOE). The essential elements and operation of the loan program are that a participating bank or financial institution agrees to make a loan to a student on the condition that the DOE will issue a written guarantee that it will repay the loan to the lender if the student defaults on the loan. When DOE repays a defaulted loan to the lender, DOE acquires the promissory note and the right to collect from the student. DOE is required by USDOE to pursue collection in order to receive reimbursement from USDOE of the amount paid to the lender. On or about July 7, 1990, OSFA issued its guarantee of a student loan to the Petitioner, and Florida Federal loaned her $1,213.00. While enrolled in her first term at college, the Petitioner suffered a stroke. The Petitioner was observed at the hearing and it was apparent that she had some moderate limitations on her ability to communicate, comprehend, and remember. Petitioner lives on Social Security disability income. Her brother- in-law, who had accompanied her to the hearing, assisted in presentation of Petitioner's case without objection from the Respondents. After the Petitioner defaulted on her student loan, the Petitioner won $5,000 in a Florida lottery game. The Petitioner made demand for payment of the prize money. The Department of Lottery checks winnings of more than $600 to determine if the winner owes any money to the State. In the course of its comparison, the Department of Lottery determined that the Petitioner owed the State money on the defaulted student loan. The Department of Lottery confirmed the indebtedness with the Department of Education, and it was determined that the Petitioner owed $1,231.98 including interest on the defaulted student loan. On January 9, 1993, the Department of Lottery forwarded the $5,000 to the Office of the Comptroller, and notified the Petitioner of her right to request a formal hearing to controvert the Department's collection of the indebtedness. On January 12, 1993, the Petitioner called the Department of Lottery and advised the Department that she was disabled. The Department forwarded to the Petitioner medical forms on January 20, 1993. Subsequently, the Petitioner's physician certified to the state that she was totally and permanently disabled. Documents introduced at hearing show that the Petitioner advised the lending bank on June 17, 1991 that she was disabled due to a stroke and unable to work. The bank sent the Petitioner medical forms in order for her to have her disability certified. The Petitioner did not return the forms due to her financial inability to obtain the required physical. After the Department of Education had repaid the student loan and had turned the matter over to a collection agency, the Petitioner advised the collection agency that she was disabled and the collection agency sent her medical certification forms which she did not have completed due to her financial inability. After she had won the lottery, the Petitioner had the medical certification forms which were forwarded to her by the Department of Education completed by a physician and these were returned to the State after the end of January, 1993 certifying that the Petitioner was totally and permanently disabled.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of the Comptroller return to the Petitioner the amount $1,231.98. DONE AND ENTERED this 16th day of June, 1993, in Tallahassee, Florida. STEPHEN F. DEAN 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 16th day of June, 1993. APPENDIX TO RECOMMENDED ORDER CASE NO. 93-1218 The Petitioner's sister wrote a letter in the Petitioner's behalf which was read and considered, and is treated as a final argument. The Department of Education filed a proposed order which was read and considered. The following proposed findings were adopted, or rejected for the reason stated: Respondent's (DOE) Proposed Findings: Recommended Order: Paragraph 1-6 Adopted Paragraph 7 Irrelevant Paragraph 8 Adopted Paragraph 9 The Department was on notice of the Petitioner's disability. Total and permanent disability is a medical determination based upon medical certification. The lender was on notice of Petitioner's disability on June 17, 1991. The purpose of the bank sending Petitioner the medical forms was to confirm the medical determination. Paragraph 10-15 Adopted COPIES FURNISHED: Therese L. Hodge and 5855 West Wood Lawn Street Post Office Box 36 Dunnellon, FL 34433 Ocklawaha, FL 32179 Charles S. Ruberg, Esquire Department of Education 325 West Gaines Street Tallahassee, FL 32399-0400 Louisa Warren, Esquire Department of Lottery 250 Marriott Drive Tallahassee, FL 32301 Leslie A. Meek, Esquire Office of the Comptroller The Capitol, Room 1302 Tallahassee, FL 32399-0350 Gerald Lewis, Comptroller Department of Banking and Finance Tha Capitol Tallahassee, FL 32399-0350
The Issue Whether proposed rules 61D-7.021(5)(f) and 61D-7.021(5)(g) are invalid exercises of legislative delegated authority pursuant to Subsection 120.52(8), Florida Statutes (2004),2 and, if so, whether Petitioner is entitled to an award of costs and attorney's fees pursuant to Subsection 120.595(2), Florida Statutes.
Findings Of Fact Calder is a Florida corporation and a pari-mutuel permitholder permitted and licensed by the Department pursuant to Chapter 550, Florida Statutes. Calder seeks to challenge proposed amendments to Florida Administrative Code Rule 61D-7.021. Specifically, Calder challenges Subsection (5)(f), as noticed in the Florida Administrative Weekly, Volume 30, Number 32, August 6, 2004, and Subsection (5)(g), as noticed in the Florida Administrative Weekly, Volume 30, Number 21, May 21, 2004.3 The challenged amendments shall be referred to as the "Proposed Rules." The Proposed Rules provide: For tickets cashed more than 30 days after the purchase of the ticket, the ticket may not be cashed at any type of patron- operated machine or terminal. The totalisator system must be configured to instruct patrons on how to cash the ticket. The totalisator system must have the ability to identify such tickets and indicate to a teller that the ticket falls within this category. Calder is a licensed and permitted pari-mutuel facility which sells tickets and uses totalisator machines, and the Proposed Rules would govern the operation of such facility. The Proposed Rules have the effect of directly regulating the operation of Calder's pari-mutuel facility, and, as such, Calder is substantially affected by the Proposed Rules. The parties have stipulated that Calder "may properly challenge both Proposed Rules 61D-7.021(5)(f) and 61D-7.021(5)(g)." A pari-mutuel ticket evidences participation in a pari-mutuel pool. A winning or refundable pari-mutuel ticket belongs to the purchaser and may be claimed by the purchaser for a period of one year after the date the pari-mutuel ticket was issued. An "outs" or "outs ticket" is a winning or refundable pari-mutuel ticket which is not redeemed. If a ticket remains unclaimed, uncashed, or abandoned after one year from the date of issuance, such uncashed ticket escheats to the state unless the ticket was for a live race held by a thoroughbred permitholder such as Calder, in which case the funds are retained by the permitholder conducting the race. A totalisator machine is "the computer system used to accumulate wagers, record sales, calculate payoffs, and display wagering data on a display device that is located at a pari- mutuel facility." § 550.002(36), Fla. Stat. The Department was prompted to begin the rulemaking process for the Proposed Rules by two major cases involving fraud, one Florida case and one national case. The Florida case involved two totalisator employees named Dubinsky and Thompson, who allegedly accessed outs ticket information in the totalisator's central computer system, counterfeited outs tickets based on the information, and cashed the tickets at self-service machines at two pari-mutuel wagering facilities. The fraudulent conduct involved approximately $13,000. In the Florida case the fraudulent tickets were cashed several months after the tickets were said to have been issued. The fraud came to light when the ticketholder who held the true ticket attempted to cash the ticket, but could not because the fraudulent ticket had been cashed. The national case also involved a totalisator employee who cashed fraudulent outs tickets. In the national case, the fraudulent tickets were cashed less than 30 days after the date the tickets were purportedly issued. The purpose of the Proposed Rules is to deter the cashing of fraudulent tickets. The Department received comments from AmTote International, a totalisator company, at the rule workshop held during the rulemaking process and received written comments submitted by AmTote International after the workshop, indicating that the majority of tickets are cashed within six to nine days after the date of issuance. The older a ticket gets the less likely it becomes that the ticket will be cashed, and the less likely that it becomes that the cashing of a fraudulent ticket would be revealed by the true owner attempting to cash the ticket. Staff of the Department felt that by requiring that outs tickets older than 30 days be cashed by a live person, a thief would be deterred because he would be dealing with a person rather than a machine. The only thing that the self- service machine requires to redeem a ticket is a bar code, so it would be possible to submit a ticket containing nothing but the bar code and receive a voucher which could be submitted to a teller for money.4 If the fraudulent ticket looks different in anyway from a valid ticket, a teller may be able to spot the difference and question the transaction. Calder argues that the way to deter the fraud which has occurred is to stop totalisator employees from being able to print fraudulent tickets. However, the Department is also concerned about computer hackers potentially getting into the computer system which contains the outs tickets numbers and copying the bar code which could be submitted to a self-service machine. By regulating the method of cashing outs tickets, the Department is attempting to deter fraud by totalisator employees and others who may be able to access outs tickets information which could be used in producing counterfeit tickets. During the rule making process, the Department held a workshop, received written comments from the public, and held a hearing to receive comments from the public after the Proposed Rules were first noticed. The Department considered the comments it received and modified the Proposed Rules as noticed in the Notice of Change published on August 6, 2004, to accommodate some of the comments. Calder did not submit a good faith, written proposal for a lower cost regulatory alternative within 21 days after the notice of the Proposed Rules was published in the Florida Administrative Weekly on May 21, 2004, or after the Notice of Change was published.
The Issue The issue is whether Respondent engaged in an unlawful employment practice because of Petitioner's race.
Findings Of Fact Ms. Gainey is an African-American and is currently unemployed. She has a tenth-grade education and at the time of the hearing was 31 years of age. Winn Dixie is a corporation engaged in the grocery business. It is headquartered in Jacksonville, Florida, and has stores throughout the southeastern United States. Winn Dixie is an employer as that term is used in Subsection 760.02(7), Florida Statutes. Beginning in 1996, Ms. Gainey began employment more or less continuously in Winn Dixie stores. In 2005, she was working in Winn Dixie's Port Orange Store. She began her Winn Dixie employment by working as an overnight stocking clerk and then worked in the bakery department. In time she became a general merchandise stocking clerk. Eventually she was promoted to cashier. Subsequently, she was promoted to front-end manager and her responsibilities increased. She was also asked to be an in-store trainer, and she accepted this additional duty. She trained newly hired cashiers and baggers. Ms. Gainey did an excellent job as front-end manager and was such a proficient in-store trainer, that she was asked on occasion to train personnel at other Winn Dixie stores. She was a popular manager. Both her peers and supervisors believed her to be a good employee. At least one Winn Dixie customer testified that at the Port Orange store she was, "Miss Winn Dixie." Training at Winn Dixie had been accomplished at individual stores prior to 2005. Accordingly, there was no standardization. Management at Winn Dixie determined that training should be accomplished regionally so that uniformity could be established. Winn Dixie thereafter established a pilot program in the Jacksonville region, which included Ms. Gainey's store, that would develop specialized district trainers who would be responsible for training all new hires. Winn Dixie issued a "job posting notice" dated March 23, 2005, through March 25, 2005, announcing the job title of "District Trainer 'New Hire Orientation & Cashier Training.'" The notice stated that the position would be responsible for conducting, "training sessions to support the delivery and dissemination of company-wide operational information, job-specific requirements, performance standards, human resource programs and policies, as well as pertinent safety program guidelines." The skills set for an in-store trainer were not transferable to the district trainer position. The district trainer position being contemplated was much more demanding and required intensive training. The position of district trainer would result in a promotion and an increase in salary for Ms. Gainey if she attained it. Consequently, she applied for it. Others did also. In the region in which Ms. Gainey was working, 50 people applied for 21 available positions. Ms. Gainey was selected for an interview. Winn Dixie managerial employees Catherine Cole, Gary Lloyd, and Mathew Toussaint interviewed Ms. Gainey and all of the other applicants. Sixteen applicants were chosen for training as district trainers. Five were black and 11 were white or Hispanic. One person was selected from each district. Ms. Gainey was not selected. Nevertheless, Ms. Cole recommended that Ms. Gainey attend training, and Ms. Cole and Mr. Toussaint overruled the recommendation of the interview board and determined she should attend training. This occurred because of the recommendation of her co-manager, who asserted that her presentation skills were "awesome" and because no one else from her district had applied. Ms. Gainey was informed that she was to participate in the training. Despite Ms. Gainey's belief to the contrary, she was never given a job as district trainer. Rather, she was informed that upon successful completion of training she might be placed in that position. Regrettably, and erroneously believing she had received a promotion, Ms. Gainey bade a tearful farewell to her fellow workers. They threw a going away party for her. The training commenced in Orlando, Florida, on Monday, May 9, 2005, and was scheduled for five days. During classes, Ms. Gainey did not absorb the information provided to her, gave inappropriate responses to questions, did not follow instructions, demonstrated that she could not follow along in the training book, and asked questions not related to the material. Her efforts were such as to evoke ridicule from her fellow students. Her demonstrated deficiencies resulted in a determination that she was unsuitable to be a district trainer. Of the six African-Americans that underwent training, all but Ms. Gainey, were successful. Of the ten whites, all were successful. The one Hispanic was successful. Ms. Gainey departed the training site convinced that she had successfully completed the course. However, a few days later she was informed by Ms. Cole, Mr. Toussaint, and John Koulouris that she had failed the course and would not be promoted. The decision not to promote her was solely based on her performance at the training and was not in any way based on her race. She was a valuable Winn Dixie employee and management wanted her to succeed. Winn Dixie was committed to working with her so that she could develop her skills and eventually advance. She was informed of this. Ms. Gainey, upon learning of her failure, became very emotional. She was offered an opportunity to return to her old job or, should she choose, a job anywhere in the district. Ms. Gainey refused to return to the Port Orange store because she did not want her co-workers to learn of her failure. Ms. Gainey asserted that she wanted to work in Gainesville, so she was assigned to Store 160 in Gainesville. Subsequently, she learned that Store 160 was slated to be closed, and she was allowed to return to her old store. However, she went on sick leave instead and never returned to work for Winn Dixie. She was terminated on May 13, 2006, due to her uncommunicative absence. The job to which Ms. Gainey aspired was never filled. Winn Dixie, within a matter of months, determined that the district trainer plan was not sound and terminated the entire program. Winn Dixie has a strong equal opportunity policy. No evidence was adduced during the course of the hearing that indicated that any action taken in regard to Ms. Gainey was based on discrimination. To the contrary, the evidence clearly demonstrated that Ms. Gainey was not placed in the position she desired because she was not qualified.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief. DONE AND ENTERED this 4th day of June, 2007, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER 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 4th day of June, 2007. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Princess Catrice Gainey Post Office Box 290264 Port Orange, Florida 32129 Tishia Green, Esquire Constangy, Brooks & Smith, LLC 100 North Tampa Street, Suite 3350 Post Office Box 1840 Tampa, Florida 33601 Princess C. Gainey 500 Southeast 18th Street Apartment 67 Gainesville, Florida 32641 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
Findings Of Fact Background On March 12, 1991, the Department of Lottery (Department) issued Request for Proposal No. 91-007-LOT/TEN/P entitled "Request for Proposal for the Provision of Advertising and Related Services to the Florida Lottery" (hereafter "the RFP"). The deadline for submitting sealed proposals in response to the RFP was established as April 22, 1991, but extended to April 29, 1991, by Amendment 3 to the RFP. At the time of the deadline, ten proposals had been filed, including those of petitioner, Bozell, Inc. (Bozell), and intervenors, Earle Palmer Brown (EPB) and BBDO South (BBDO). By "Notice of Selection of Finalists," dated May 1, 1991, and posted at the Department's headquarters, the Department advised all bidders that: After review of written proposals submitted in response to the subject RFP, the Florida Department of the Lottery's Evaluation Committee has ranked the responsive proposals in the following order of preference: Ogilvy & Mather Earle Palmer Brown BBDO South Bozell W.B. Doner Fahlgren Martin Benito West & Company Beber Silverstein LMPM The Ad Team In accordance with Section 5.3 of the RFP, the Department intends to conduct oral presentations with the following firms for the purpose of determining final rankings: Ogilvy & Mather Earle Palmer Brown BBDO South Bozell W.B. Doner Pursuant to Florida Statute and Rule 53ER87-16, failure to file a formal written protest and the bond required by Section 287.042(2)(c), Fla. Stat., with the Secretary within 72 hours shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Here, there was no showing that any protest was timely filed to contest the Department's selection of the five finalists. The five finalists made oral presentations to the evaluation committee on May 7 and 8, 1991, and their cost proposals were opened and scored on May 8, 1991. At the conclusion of its work, the committee awarded EPB an average total score of 174.550 and Bozell an average total score of 171.150; 200 points was the maximum total possible. By notice dated Wednesday, May 8, 1991, at 8:07 p.m., the Department issued its "Notice of Intent to Negotiate a Contract" ranking the top five firms in the following order of preference: (1) EPB, (2) Bozell, (3) Ogilvy & Mather; BBDO; and (5) W.B. Doner. Bozell filed its formal written protest and petition for formal administrative hearing with the Department of Monday, May 13, 1991, at 4:29 p.m. The Request for Proposals The RFP consists of the original RFP issued by the Department, three amendments, and the Department's response to various written questions submitted by potential bidders. Pertinent to this case, the RFP provided: SECTION 1: GENERAL INFORMATION Introduction. This Request for Proposal ("RFP") has been issued by the Florida Department of Lottery ("Lottery") to obtain sealed proposals from qualified firms for the provision of advertising and related services to the Florida Lottery. This RFP, and all other activities leading toward the execution of a contract per this RFP, are conducted under the Lottery policies set forth in Rules 53ER87-10 through 53ER87-19, Florida Administrative Code, and Chapter 24, Fla. Stat. The Lottery considers it in the best interest of the State of Florida to procure the commodities/services described herein through a competitive process. All responding firms should read and be familiar with the Florida Public Education Lottery Act [Chapter 24, Fla. Stat.] to ascertain an understanding of the purposes and requirements placed on the Lottery. A copy of Chapter 24, Fla. Stat., is attached to this RFP. This proposed purchase is a Major Procurement as defined in Section 24.103, Fla. Stat. (1989). Glossary of Terms. * * * Responsive Proposal - Refers to a proposal which contains, in the manner required by this RFP, all documentation, drawings, information, plans, materials, certifications and affirmations, regardless of which section of the RFP sets forth the particular requirements. * * * Questions About This RFP. * * * If revisions to this RFP are necessary after the closing date for submitting proposals, the revisions will be provided to only those Respondents who have submitted Responsive Proposals and have met the basic requirements of this RFP. Such Respondents will then have the opportunity to modify their proposals in conformance with the revisions. Timetable The following timetable will be strictly adhered to in all actions relative to this procurement. * * * All proposals will be opened by Lottery employees at 2:00 p.m. on April 22, 1991 [extended to April 29, 1991, by Amendment 3] in the Purchasing Office at the aforesaid Lottery Headquarters. The public may attend the opening but may not review any proposals submitted. The evaluation process will begin immediately following the proposal opening. The Evaluation Committee will rank the proposals in order of preference based on the evaluation of the technical proposals in accordance with the criteria specified herein. Notice of selection of finalists shall be posted at the Lottery's headquarters. If more than five Responsive Proposals are submitted, at least the five top firms which have submitted Responsive Proposals will be selected for oral presentations to be made in Tallahassee, Florida, at the Lottery's Headquarters. Oral presentations are tentatively scheduled for the week of April 29, 1991 [extended to the week of May 6, 1991, by Amendment 3] . . . . The Evaluation Committee will score the oral presentations and then open and score the cost proposal. The final rankings will be determined based on the evaluation of the technical proposals, oral presentations and cost proposals. Notice of Intent to negotiate with the highest ranked firm will be posted at the Lottery's headquarters. If negotiations with the highest ranked firm are not successful, the Lottery may negotiate with the other listed firms in descending order of rank. Upon successful conclusion of negotiations with a Respondent, a Notice of Award of Contract will be posted at the Lottery's headquarters. * * * 1.12. Proposal Submission. It is the Respondent's responsibility to ensure that its proposal is delivered by the proper time at the place of the proposal opening.... * * * 1.14 Correction or Withdrawal of Proposal. A correction to, or withdrawal of, a proposal may be requested within 72 hours after the proposal opening time and date. Requests received in accordance with this provision may be granted by the Lottery upon proof of the impossibility to perform based upon an obvious error. The Lottery, in its sole discretion, will determine whether a bid may be corrected or withdrawn. Interpretations/Disputes. Any questions concerning conditions and specifications of this RFP shall be directed in writing to the Issuing Officer in the manner provided in Sections 1.8 and 1.9 of this RFP. Inquiries must reference the bid number and the date of proposal opening. No interpretation shall be considered binding unless provided in writing by the Lottery. Any prospective Respondent who disputes the reasonableness or appropriateness of the terms, conditions, and specifications of this RFP shall file a formal written protest in appropriate form within 72 hours of the availability of answers to questions as provided in Section 1.9 of this RFP. Any Respondent who disputes the Lottery's Notice of Selection of Finalists, Notice of Intent to Negotiate, or Notice of Award of Contract, shall file a formal written protest in appropriate form within 72 hours of the notices. Any person who files a formal written protest shall, at the time of filing the formal written protest, post a bond as set forth in Section 287.042(2)(c), Fla. Stat. Failure to file both a protest and bond within the time prescribed in Rule No. 53ER87-16, Florida Administrative Code, shall constitute a waiver of proceedings under Chapter 120, Fla. Stat. Legal Requirements. Applicable provisions of all federal, state, county, and local laws and administrative procedures, regulations, or rules shall govern the development, submittal and evaluation of all proposals received in response hereto and shall govern any and all claims and disputes which may arise between persons submitting a proposal hereto and the Lottery. Lack of knowledge of the law or applicable administrative procedures, regulations or rules by any Respondent shall not constitute a cognizable defense against their effect. * * * Purpose and Overview. A. In accordance with Chapter 24, Fla. Stat., the Florida Department of the Lottery has been charged with the responsibility "to operate the state lottery . . . so as to maximize revenues in a manner consonant with the dignity of the state and the welfare of its citizens." The Contractor will support the Lottery in its mission by providing the advertising services set forth in Section 2.2. The goal of these services is to maximize the sale of tickets, enhance the public image and visibility of the Lottery, and assist in communicating the intent that Lottery proceeds enhance education . . . . Scope of Services. The Contractor shall be the principal advisor and provider to the Lottery for the following advertising and services: Development of strategic advertising plan; Creative strategy, creation and production of all advertising (including television, radio, print, transit and outdoor); Placement of all print, radio, television, transit and outdoor advertising at the lowest competitive rate; Coordination of and contracting for televised broadcasts of lottery drawings; Ticket design; Creation and production of point-of- sales material; Media plans; Educational, promotional and other related activities as directed. The Technical Proposal. The objective of the technical proposal is to demonstrate the Respondent's understanding and proposed method of rendering the requested services. Each Respondent shall provide a written statement of the firm's understanding of the services requested herein as well as a detailed written plan outlining how the firm proposes to go about providing the services set forth in Section 2.2. At a minimum, the technical proposal shall consist of the following information and materials: * * * E. Firm Qualifications. At a minimum, each Respondent must provide the following information which demonstrates the Respondent's ability to provide the services requested: * * * 4. Resumes not to exceed one page each in length of all personnel who would be assigned major roles in the fulfillment of the work obligation outlined in Section 2.2, with a statement identifying the percentage of time, calculated annually, of each person who will work on the Lottery account. * * * 12. Certified financial statements in customary form for the last three (3) fiscal years including an auditor's report. Certified financial statements must be the result of an audit of the Respondent's records in accordance with generally accepted auditing standards by a certified public accountant . . . . * * * 18. List of type and number of additional employees that may be needed if awarded contract. * * * 33. Disclosure information required by and listed in Section 24.111, Fla. Stat. * * * Section 3: INFORMATION REQUIRED FROM RESPONDENT 3.1. GENERAL INSTRUCTIONS. * * * D. Technical proposals must include the following information, be limited to not more than 100 pages (not including cover sheet, table of contents, divider pages, creative materials or resumes) and be presented in the following sequence: * * * Vendor Information Form (Attachment B). * * * Performance bond commitment letter required by Section 6.6. All material or information required to be submitted as part of the technical proposal required by Section 2.3. * * * 13. Any other material or information required by this RFP. * * * 3.4 Use of Subcontractors. If a Respondent proposes to use one or more subcontractors, the proposal must identify the contemplated subcontractor(s) and the scope of the subcontractor's services, and must include evidence of each subcontractor's ability to fulfill its respective duties on behalf of the Respondent. Respondent must also provide the information required by Section 24.111(2), Fla. Stat., for each subcontractor as if the subcontractor were itself a vendor. * * * 3.6 Additional Information and Comments. Respondent shall not submit with their written proposals material beyond that which is covered in the 100-page technical proposal (not including cover sheet, table of contents, divider pages, creative materials or resumes), plus creative comps and samples, resumes of key personnel and the separate cost proposals. The Lottery reserves the right to request additional information from a Respondent in order to make a thorough review and fair comparison of all proposals submitted.... Section 4: MANDATORY REQUIREMENTS Terms. The Lottery has established certain mandatory requirements which must be included as part of any proposal. The use of the terms "shall," "must" or "will" (except to indicate simple futurity) in this RFP indicate a mandatory requirement or condition. The words "should" or "may" in this RFP indicate desirable attributes or conditions, but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself cause rejection of a proposal. 4.2 Non-responsive Proposals. Proposals which do not meet all material requirements of the RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and without which an adequate analysis and comparison of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery. SECTION 5: PROPOSAL REVIEW AND CRITERIA FOR SELECTION 5.1. Proposal Submission. Only proposals submitted in the time frame stated herein and with the content required above will be reviewed and considered by the Lottery. A copy of Chapter 24, Florida Statutes, was attached to the RFP, and Section 24.111, Florida Statutes, was specifically referenced in Sections 2.3.E.33 and 3.4 of the RFP. The vendor information form itself referenced the requirements of Section 24.111(2), Florida Statutes. In accordance with RFP Section 1.8, EPB submitted the following question, among others, to the Department: "Does Attachment B [Vendor Information Form] need to be completed by all company officers?" The Department answered "Yes, see question #8, BBDO Atlanta, letter dated March 26, 1991." The referenced answer to BBDO Atlanta emphasized that "a vendor information form must be completed by each person listed in the instructions on the form [all officers, all directors, all owners, all partners, all trustees, all stockholders holding five percent or more, executive director and chairman of the board]." Even section 1.27 of the RFP required that vendor information forms be submitted to the Department prior to or at the time of submitting the proposal. Responsiveness of proposals Under the terms of the RFP, Sections 5.1 and 5.2, the Department was not to consider and evaluate non-responsive proposals. Non-responsive proposals are defined by Section 4.2 of the RFP as follows: Proposals which do not meet all material requirements of this RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and without which an adequate analysis and comparison of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery. At the time it submitted its proposal, EPB did not submit the vendor information forms required by subsections 2.3E33, 3.1 and 3.4 of the RFP and by Section 24.111(2), Florida Statutes, for at least three of its corporate officers or directors (Sally Brown, Louise Smoak, and Robert Morse), and did not submit any vendor information forms for its designated subcontractor, Premier Maldonado & Associates. The Department, through its counsel, first requested submission of these forms from EPB on May 8, 1991, the date on which the Notice of Intent to Negotiate was posted. EPB did not supply the missing forms for Premier Maldonado & Associates until May 14, 1991, and for the three corporate officers or directors until on or about May 29, 1991. The RFP required that the vendor information forms be submitted with the proposal, and Section 24.111(2), Florida Statutes, provided in mandatory language that: The Department shall investigate the financial responsibility, security, and integrity of any person who submits a bid proposal or offer as part of a major procurement. Any person who submits a bid proposal or offer as part of a major procurement must, at the time of submitting such bid proposal or offer, provide the following: A disclosure of the vendor's name and address and, as applicable, the name and address of the following: If the vendor is a corporation, the officers, directors, and each stockholder in such corporation, except that in the case of owners of equity securities of a publicly traded corporation, only the names and addresses of those known to the corporation to own beneficially 5 percent or more of such securities need be disclosed. If the vendor is a trust, the trustee and all persons entitled to receive income or benefit from the trust. If the vendor is an association, the members, officers, and directors. If the vendor is a partnership or joint venture, all of the general partners, limited partners, or joint ventures. If the vendor subcontracts any substantial portion of the work to be preformed to a subcontractor, the vendor shall disclose all of the information required by this paragraph to the subcontractor as if the subcontractor were itself a vendor. (Emphasis added) The Department, at hearing offered proof that it did not consider the language of the RFP or Section 24.111(2), Florida Statutes, to require that all such forms be submitted at the time the proposal is submitted, and that it had been the Department's policy to allow bidders to submit additional forms after bid submission. The articulated rationale for such policy is that based solely on the proposals or, stated differently, absent investigation, the Department is unable to assure itself that forms for all required individuals are submitted with any proposal. Accordingly, the Department considers the omission of such forms a technical deficiency that can be cured up to the point of contracting, and limits its investigation to the successful bidder. While the Department may find it difficult, absent investigation, to assure itself that the vendor information mandated by section 24.111(2) is submitted with the proposal, the mandate of section 24.111(2) and the RFP is clear and unequivocal: such information "must" be submitted with the proposal. Notably, under the provisions of the statute and RFP, the onus is on the bidder, the party privy to such information, to assure that its disclosure is complete and where, as here, its disclosure is not complete its bid is non-responsive, since it is at variance with the mandate of section 24.111(2) and the RFP. Importantly, under the requirements of section 24.111(2), the Department is precluded from contracting with any bidder who fails to submit the required vendor information. Accordingly, a successful bidder who, wittingly or unwittingly, failed to make the required disclosure (such as EPB in the instant case) could subsequently decline to provide the Department with the information and thereby effectively withdraw its bid, contrary to the provisions of section 1.14 of the RFP. Such renders the failure to submit the required information at the time of bid submittal a material defect, since it accords such bidder an advantage not enjoyed by other bidders that submitted the required information. In accordance with subsection 3.1D9 of the RFP, each bidder was required to submit with its technical proposal the performance bond commitment letter required by section 6.6 of the RFP. Section 6.6, as amended by Amendments 1 and 3, provided, in pertinent part: The successful Respondent shall be required, at the time of executing the Contract with the Lottery, to post an appropriate performance bond or other security acceptable to the Lottery in the amount of $2.5 million . . . The other acceptable forms of security are: irrevocable letter of credit; Certificate of Deposit assigned to the Lottery (which must be obtained from a financial institution having its principal place of business in the State of Florida) . . . . Respondents must submit with their proposal evidence that they will be able to provide the performance bond or other security. Such evidence may include, but is not limited to, a letter from an authorized agent of a bonding company committing to provide the performance bond or indicating that the bond underwriter is processing a request to provide the bond and stating unequivocally that the bond will be available upon execution of the Contract. At the time it submitted its proposal, EPB submitted an April 25, 1991, letter addressed to it from Sovran Bank as evidence of its ability to provide the required security. That letter provided: As follow up to our conversation yesterday, the company can restrict its revolving line of credit by $2,500,000 (Two Million Five Hundred Thousand Dollars) for a Letter of Credit of the same amount. The alternative is to apply for the Letter of Credit as a separate facility. The particular terms and conditions of the Letter of Credit would be worked out at the time of application . . . . While of the opinion that the Sovran letter evidenced EPB's ability to provide the required security, the Department likewise felt that the letter failed to evidence any commitment on EPB's part to restrict its line of credit to secure the subject letter of credit. Accordingly, it requested additional information from EPB, and by letter of May 1, 1991, EPB responded: This is to clarify the language in the Sovran Bank letter of April 25, 1991, included as Page 9 in Earle Palmer Brown's Proposal . . . Should Earle Palmer Brown be a successful respondent we will, at the time of executing the contract with the Lottery, either restrict our revolving line of credit with Sovran Bank by $2,500,000.00 for an irrevocable letter of credit, or will provide the Lottery with a surety bond for a like amount. The letter of May 1, 1991, adds more confusion than enlightenment regarding EPB's commitment to provide a letter of credit. Clearly, under the provisions of subsection 6.6 of the RFP, EPB's bare assurance that it would, alternatively, provide the Department with a surety bond was not acceptable evidence of its ability to provide such bond. As importantly, by phrasing its proposal as an alternative, to be exercised at its discretion, EPB lent confusion to the issue of what form of security it would provide. Notwithstanding, the requirement of the RFP was that the bidders "submit with their proposals evidence that they will be able to provide the . . . security," and the letter of April 25, 1991, while perhaps sparse, is facially adequate in that regard. Notably, the proof in this case confirms that EPB does have an adequate credit line with Sovran Bank which could be so restricted for a $2.5 million irrevocable letter of credit. In accordance with section 2.3E12 of the RFP, each bidder was required to submit with its technical proposal "certified financial statements in customary form for the last three (3) fiscal years including an auditor's report." In response to a question submitted pursuant to section 1.8 of the RFP, which asked: "If a company does not have certified financial statements for the last three years as required by Section 2.3.E.12 of the RFP, will it be disqualified from submitting a proposal?", the Department answered: "No. Although the absence of certified financial statements would render the proposal nonresponsive." At the time EPB submitted its proposal, it submitted certified financial statements for fiscal years 1986, 1987, 1988 and 1989. As EPB's fiscal year is the calendar year, its auditors had not yet completed their audit for fiscal 1990 by the response deadline. When EPB's certified financial statement for its fiscal 1990 became available on May 14, 1991, it promptly delivered a copy to the Department. While the RFP required financial statements for the last three fiscal years, the Department understood that a bidder's ability to provide such statements would depend on when its fiscal year closed. In this regard, it is common for an independent audit to require up to six months following the close of a fiscal year. Here, EPB was faced with exactly such a dilemma, specifically disclosed such dilemma in its proposal, and provided the financial statements for the last four fiscal years that were available to it. Under such circumstances, it cannot be concluded that the Department departed from the essential requirements of law when it declined to declare EPB's proposal non- responsive for its failure to include a certified financial statement for fiscal 1990, and accepted, as satisfying the requirements of the RFP, financial statements for the last three fiscal years that were reasonably available to EPB. In accordance with the RFP, each bidder was to identify all personnel who would be assigned major roles in the fulfillment of work under the contract. Pertinent to this case, subsection 2.3E provided: At a minimum, each Respondent must provide the following information which demonstrates the Respondent's ability to provide the services requested: * * * 4. Resumes not to exceed one page each in length of all personnel who would be assigned major roles in the fulfillment of the work obligation outlined in Section 2.2, with a statement identifying the percentage of time, calculated annually, of each person who will work on the Lottery account. * * * 18. List of type and number of additional employees that may be needed if awarded contract. At the time EPB submitted its proposal, it identified twenty-four key positions in account service, creative, media and several other categories. As to the management supervisor, the employee is identified as "selected," and as to an account executive and public relations supervisor, the employee is identified as "TBD" (To Be Determined). All other positions were identified with specific individuals and resumes were included for each. Here, Bozell contends that EPB's proposal is non-responsive because EPB did not name and include resumes for the foregoing three positions. Such contention is, however, unpersuasive. Section 2.3E18 clearly contemplated that some bidders would have to hire additional personnel if awarded the contract, and EPB complied with that section of the EPB by identifying such positions. Accordingly, EPB's proposal was not at material variance from the RFP in this regard. Although the Department's "Notice of Selection of Finalists," dated May 1, 1991, discussed supra, purported to rank the "responsive proposals" in order of preference, the proof demonstrates that the evaluation committee, who was charged with such responsibility, did not, by consensus or otherwise, ever determine the responsiveness of any proposal. Here, for the reasons heretofore set forth, EPB's proposal was non-responsive to the RFP, and the committee's failure to address the issue of responsiveness prior to scoring the proposals, for reasons discussed infra, materially affected the fairness of the evaluation process. Bozell's proposal was, however, responsive to the RFP. 2/ The evaluation committee Pursuant to Rule 53ER87-13(5)(i)(2), Florida Administrative Code, and Section 5.3 of the RFP, the Secretary of the Department appointed an evaluation committee, consisting of six members, to evaluate the proposals which were received from interested firms. Regarding the composition of such committee, the Department advised all prospective bidders, in response to a question posed pursuant to Section 1.8 of the RFP, that: The Evaluation Committee will be comprised of Lottery staff and volunteers from a cross- section of Florida business and academic communities. Subsequently, by notice of April 16, 1991, the Department advised all prospective bidders that the members of the evaluation committee would be as follows: Bernard Edwards Deputy Secretary Marketing Department of the Lottery Tallahassee, Florida Ben Johnson Newspaper Columnist Homles Beach, Florida Robert W. McKnight Assistant Secretary Department of Lottery Tallahassee, Florida Richard Mizerski Professor Tallahassee, Florida John Ruchalski Retired Businessman Jupiter, Florida Alan Sawyer Professor Gainesville, Florida Of the six committee members, only two, Bernard Edwards and Robert W. McKnight, were employees of the Department. No objection to the composition of the committee was lodged until the filing of the subject protest; however, there was likewise no point of entry provided by the Department to challenge the composition of the committee. Robert W. McKnight, who chaired the committee, has been employed by the Department as Assistant Secretary since March 4, 1991, and in such capacity has been responsible for the day-to-day operations of the Department. Mr. McKnight holds a B.S. and M.B.A. degree in business administration, with concentrations in advertising, and has in excess of fifteen years experience in marketing. Throughout the course of such employments, as well as his tenure as a Florida legislator, he has had the opportunity to monitor or supervise the work of advertising agencies employed to advance his products or person. Bernard Edwards, currently Deputy Secretary for Marketing of the Department, has been with the Department since 1988. During that tenure, he has filled, at various times, all three deputy secretary positions (operations, administration and marketing), and has participated in the advertising operations of the Florida lottery. Prior to his employment with the Department, Mr. Edwards was Executive Director of the Washington, D.C., lottery, and from 1983 to 1987 Deputy Executive Director of the Pennsylvania State lottery. During the course of such employments, Mr. Edwards has acquired significant experience in the marketing of lottery products, and the advertising incident thereto. Alan Sawyer is a Professor of Marketing and Chairman of the Department of Marketing of the University of Florida in Gainesville, and holds a Ph.D. from Stanford University in marketing. In addition to his teaching and research, Dr. Sawyer has worked with the Federal Trade Commission, as well as numerous other clients, on advertising matters, including matters of advertising deception, and is a recognized expert in advertising and marketing. Ben Johnson is a Doctoral Teaching Associate and Adjunct Professor at the University of South Florida where he teaches upper division and graduate College of Education courses in methods of teaching English, reading, and learning skills. In addition to teaching, Mr. Johnson has, for some years, been researching the lottery operations of various states. As a consequence of the knowledge he has gained concerning those operations he has written a book, The Lottery Book, scheduled for publication in September 1991, which provides general information for players of various state lotteries, and has a nationally syndicated newspaper column called "The Lottery Column" wherein he answers readers' questions regarding lottery operations. From such experience, Mr. Johnson has developed a knowledge of lottery operations, as well as an appreciation for effective lottery marketing and advertising. John Ruchalski, currently retired, holds a degree in business and marketing, and has 35 years of retail management experience. Of those years, 17 were spent as Senior Vice President of Burdines, three as Chief Executive Officer of Bullock's, and two as president of Bloomingdale's. Mr. Ruchalski's past activities have also included service as president of the Florida Chamber of Commerce and chairman of the board of the Florida Retail Federation. In all, the proof shows that Mr. Ruchalski has a strong marketing background, and a familiarity with the advertising needs incident to such operations. The final member of the committee, Richard Mizerski, is a Professor of Marketing at Florida State University, and holds a Ph.D. from the University of Florida in Economics and Business Administration, with a major concentration in marketing and a minor concentration in advertising. Dr. Mizerski, like Dr. Sawyer, has, in addition to his teaching and research, extensive consulting experience in marketing and advertising, and is a recognized expert in the field. Overall, the proof demonstrates that the composition of the evaluation committee was appropriate for the work it was tasked to do, and that it had adequate time to perform an appropriate evaluation. Each committee member had experience and knowledge in marketing, and advertizing incident thereto, and lent to the evaluation process common and diverse experiences in such areas which helped provide a balanced consideration of the proposals. As importantly, each was shown to be committed to the integrity of the process, and complied with the provisions of Section 286.011, Florida Statutes, by assuring that all committee meetings at which official acts were to be taken were conducted publicly, and by not discussing any matter pertaining to their evaluations with any other member except during meetings that had been properly noticed. Market research data Prior to reviewing the proposals, one or more of the committee members requested information from the Department that would accord them insight into the program area. In response to such request, the Department provided each committee member with the market research data it had available. Such data provided demographic insight into Florida lottery marketing operations. At hearing, Bozell complained that it was never informed that the market research data had been provided to the committee, and offered proof, if credited, that had it known such fact it would have drafted its proposal differently. Such proof was not, however, persuasive, nor was the provision of such information to the committee inappropriate. Here, the proof demonstrates that the data provided by the Department was a matter of public record, and many of the committee members, through their research and training, were already familiar with it prior to their appointment. Bozell, as the current provider of advertising services to the lottery, was very familiar with the data, its subcontractor had complied it, and Bozell used it extensively in its proposal. In sum, Bozell was not disadvantaged by the provision of such data to the committee, and it was not treated any differently than any other bidder in this regard. As importantly, the provision of such information to the committee to lend insight into the program area for which services were being sought was quite appropriate to the evaluation process. Technical proposed evaluation Section 2.3 of the RFP describes the items required to be submitted with a firm's technical proposal, and was designed to assess a firm's understanding and proposed method of rendering the services requested by section 2.2 of the RFP. It provides that, "at a minimum," the proposal shall contain the information and materials requested by subsections 2.3A through 2.3E. Subsection 2.3A required submittal of a proposed advertising approach for the Florida lottery which addresses a three-year summary outline advertising plan, to include recommendations for advertising and promotion, and a proposed one-year timetable for advertising, showing development of creative, production, approval, placement and run-time. Subsection 2.3B required comprehensive artistic representations consisting of a detailed media plan for an eight-week Florida lottery instant game within a $1,250,000 budget; a name, ticket design and prize structure for the instant game; a 30-second radio spot for the instant game; a print ad for newspaper or magazine placement for the game; and a point- of-sale example for the game. Subsection 2.3C required one complete advertising campaign representative of the firm's work, including budget, creative strategy, positioning, media strategy and execution, and post-buy analysis. Subsection 2.3D required creative samples previously produced by key members of the proposed creative team consisting of TV ads, radio ads, print ads, outdoor campaigns, and point-of-sale samples. Finally, subsection 2.3E, entitled "firm qualifications," required, "at a minimum," information concerning 33 specific items, "which demonstrates the [firm's] ability to provide the services requested." Among the items for which information was required were the following: 3. Brief and concise statement of Respondent's advertising philosophy, taking into consideration the following points and others that you may feel are appropriate: Method the Respondent uses for developing advertising. How the Respondent currently measures the effectiveness of its advertising. * * * Evidence of any work done for a state, multi-state, national or provincial lottery. Information regarding any advertising or other experience with state agencies and other governmental entities. * * * 12. Certified financial statements in customary form for the last three (3) fiscal years including an auditor's report . . . . * * * 29. Discussion of contributions that your firm could make toward the growth of the Lottery. Section 5.4 of the RFP set forth the general criteria by which a firm's response to subsections 2.3A-E would be evaluated. Such general criteria were the overall qualifications, experience and abilities of the firm, its staff, and contractors to provide timely and professional advertising and related services, determined by evaluating the information contained in subsection 2.3E; and, the relative creativity, approach, quality and thoroughness of the firm's proposed plans directed toward subsections 2.3A-D of the RFP. Such section concluded: "The evaluation worksheet for the technical proposal is attached as Attachment F." Attachment F to the RFP set forth the specific criteria by which a firm's response would be evaluated. That attachment provided as follows: This evaluation considers information submitted in the technical proposal. Emphasis is placed on the firm's qualifications and ability to do the work, which is addressed in the Technical Proposal. A total of 80 points is obtainable. The Technical Proposal shall be evaluated in accordance with the following criteria: Overall Ability - 40 points maximum Do the resumes of the account team support the Respondent's competency to provide the services required by Section 2.2? Proposed Account Team: Is the team make-up appropriate for the work? Do the team members have experience with comparable work? Are there any sub-contracted firms involved? Are minority sub-contractors utilized? Are the hours assigned to the various team members for each task appropriate? Has the Respondent provided advertising services of the scope required in the past? Experience of the Respondent and staff providing advertising service within the State of Florida. Experience of the Respondent and staff in providing Lottery, pari- mutuel, or other gaming related advertising. Financial stability of the firm and financial capability to provide the entire scope of services. Experience of the firm in providing advertising services to accounts in excess of $10 million. Experience of the firm in placing large volumes of electronic media in all media markets in Florida. Based on 1-3, award points, as follows: 20-30 points for exceptional experience 10-20 points for average experience 0-10 points for minimal experience Has the Respondent provided advertising services to other state or governmental entities? If the work was acceptable, award up to 3 points. If the firm has not done such work, award zero points. Does the Respondent possess unique abilities which would make a noticeable (positive) impact on the project? If the answer is yes, award up to points and note reasons. If the answer is no, award zero points. Does the team composition and each member's percentage of involvement, the use of subcontractors (if any), office location, and/or information contained in the proposal indicate that the Respondent will meet time and budget requirements? If the answer is yes, award up to points and note reasons. If the answer is no, award zero points. Does the Respondent's current workload make it likely the Respondent can provide timely and complete service? If the answer is yes, award up to 2 points and note reasons. If the answer is no, award zero points. Advertising approach and creative samples required by Sections 2.3A-D = 40 points The relative creativity, approach, quality and thoroughness of the firm's proposed plan for providing the requested services required by Section 2.3(A). Value: 10 points The relative creativity, approach, quality and thoroughness of the comprehensive artistic representations required by Section 2.3(B). Value: 10 points The relative creativity, approach, quality and thoroughness of the advertising campaign required by Section 2.3(C). Value: 5 points The relative creativity, approach, quality and thoroughness of samples required by Section 2.3(D). Value: 15 points The criteria for evaluating the creativity, approach, quality and thoroughness of above items B-1 through B-4 are as follows: Creativity Were the ideas and approach exciting and interesting? Did the samples evoke positive and appropriate emotions? Did the samples capture and hold attention? Did the samples demonstrate fresh and original thought or were they banal and mundane? Approach Was the approach germane and appropriate? Was the approach unified and integrated? Was the approach clear, direct and unambiguous? Quality Were images crisp, sharp, and distinct except where the intention is clearly otherwise? Was the production professional? Was sound free of distortion and visual free of unnecessary clutter? Thoroughness Did the advertising show an appropriate consideration for all facets of the market? Was the advertising comprehensive and balanced? Did the advertising use a full range of tools and techniques to ensure maximum penetration and retention? By memo to all committee members, entitled "Instructions and Timetable for Evaluation Committee Members," and again at the commencement of their deliberations, all committee members were advised that they must evaluate the proposals based on the criteria set forth in the RFP, and to utilize their own individual expertise in applying the criteria. In this regard, the proof demonstrates that the members of the committee abided such directive, and scored the proposals based on the established criteria, except as hereinafter discussed, as applied through their own background and experience. 3/ At the commencement of their deliberations, the committee members agreed that the format they would follow in evaluating the technical proposals would be to first review all the proposals, and then score the proposals individually. This procedure was followed although, not unexpectedly, some members made preliminary assessments as they progressed through the various proposals. Upon completion of their review, the members then scored each proposal and, as appropriate, made adjustments to preliminary assessments they had made based on the perspective they had acquired after their review of all the proposals. Here, Bozell complains that the RFP did not permit the scoring of proposals relative to each other but, rather, required that the proposals be evaluated and scored solely by applying the criteria independently to each proposal, and that the failure of all committee members to so evaluate the proposals is a fundamental flaw in the evaluation process. Bozell's complaint is not, however, persuasive. Here, the RFP required, among other things, a determination of the relative creativity, approach, quality and thoroughness of a firm's plans for providing the services requested by subsections 2.3A-D of the RFP. Under such circumstances, considering the subjective nature of the evaluation, it would not be unreasonable to assign points based on relative merit. And, considering the fact that the proposals were not scored until all proposals had been reviewed that, more likely than not, is what was done by each committee member, consciously or subconsciously. As importantly, each member of the committee scored the proposals independent of any other member of the committee, and was consistent with the approach he took as to each firm's proposal. 4/ Accordingly, it cannot be concluded, based on the proof in this case, that the evaluation process was fundamentally flawed because of the manner in which points were awarded. However, because points were awarded on a relative basis, the inclusions of non-responsive proposals in the evaluation process could have materially affected the scoring of proposals and the Department's failure to exclude non-responsive proposals from the scoring process, as required by section 5.1 of the RFP, was a material departure from the requirements of the RFP. Bozell also complains that Mr. Johnson evaluated the technical proposals in light of his knowledge about the success of other states' lottery advertising. The application of such expertise to the criteria contained in the RFP was, however, appropriate, as discussed supra. As noted by Mr. Johnson: . . . That's my frame of reference against which I measured all of the companies. I could tell that some of the companies really didn't know what they were talking about, because they were suggesting things that were failing in other states. And I was aware of that from my general information background. [Tr. 471] As heretofore noted, selection of committee members with knowledge of the program area, and the exercise of that expertise in applying the criteria, is most appropriate to a reasoned evaluation of a proposal. Finally, with regard to the evaluation of the technical proposals, Bozell offered proof that some committee members failed to apply specific criteria mandated by the RFP, or otherwise scored the proposals in a manner at variance with that called for by the RFP. In this regard, the proof demonstrates that while proposals were to be evaluated, at least in part, based on the different games and formats that were presented in the technical proposals (see subsection 2.3B of the RFP), Mr. Ruchalski did not do so because he had no knowledge upon which to base a decision. Regarding subsections A5-8 of Attachment F (the scoring criteria), Mr. Johnson did not award points in the manner mandated by each subsection. Finally, notwithstanding that an evaluation of the overall ability of the applicant, as set forth in section A of Attachment F to the RFP, required an examination of the "financial stability of the firm and financial capability to provide the entire scope of services," no evaluation of the financial integrity and responsibility of any of the firms was made, and such criteria were not applied in the evaluation process. 5/ In its proposed recommended order, the Department suggests that it would be unnecessarily burdensome to require a detailed financial review by the agency at the initial bid analysis stage since, ultimately, only one firm will be awarded the contract, and because security and financial investigations will be done before a contract is awarded. While such may be the case, it was the Department's election to provide for an analysis of financial stability and capability as part of the review criteria. Oral presentation evaluation The second phase of the evaluation process was the scoring of the oral presentations. Pertinent to this case, section 5.3 of the RFP provided: . . . The oral presentations must be made by the account service, creative and media personnel who would work on the account. There will be no limitation on the information and materials pertinent to this RFP which may be utilized . . . . Section 5.5 of the RFP provided that presentations would be scored based on the following general criteria: Understanding of services requested -- up to 20 points, account team -- up to 25 points, responsiveness to questions -- up to 15 points, and overall impression -- up to 20 points. Finally, Attachment G to the RFP provided that the evaluation relative to the account team would be scored as follows: Account Team = 25 points maximum Did the proposed account team participate? Creativity, quality, uniqueness demonstrated by account team? Respondent's advertising philosophy demonstrated, long term image building? Did account team members prepare samples submitted? EPB's oral presentation was made by Jeb Brown, the chief executive officer of EPB; Craig Davis, the president of EPB's Florida operations; Mike Knaisch, account group head; Kandi Kirkland, account supervisor; Bruce Ayers, media director; Scott Mackey, associate creative director; Pat Hanlon, creative director; Tom Hall, chairman of EPB; and Jeff Tucker, president of public relations. Each of the presenters were identified by EPB as key personnel to be assigned to the Florida lottery account, except Jeb Brown and Tom Hall. As part of its oral presentation, EPB utilized a video tape, which presented favorable comments by the head of the Virginia lottery concerning EPB's performance for it. Addition-ally, EPB included in such video a character it utilizes for the Virginia lottery, "Lady Luck," who also said "nice things" about EPB. Here, Bozell complains that the participation of Jeb Brown and Tom Hall, in the oral presentation, as well as the use of the video which included comments by the head of the Virginia lottery and "Lady Luck," was improper under the provisions of the RFP because they were not members of the account team. Such compliant is, however, unpersuasive. While section 5.3 of the RFP did require that the oral presentation be made by the account, creative, and media personnel who would work on the account, it did not expressly preclude others from participating, and the RFP placed no restrictions on the information and materials pertinent to the RFP that could be utilized. Accordingly, EPB's oral presentation was not at variance from the RFP and, if it were, it was not shown to be a significant deviation. As heretofore noted, the evaluation relative to the account team allowed an award of up to 25 points, and required, among other things, a determination of whether the account team participated; the creativity, quality and uniqueness demonstrated by the account team; and whether the account team members prepared the samples that were submitted. The committee members did not, however, make any specific inquiry regarding whether the account team participated or prepared the samples, although the bidders generally made it a practice to introduce the account team members, but assumed such to be the case for purposes of scoring the presentations. Here, Bozell contends that the committee's failure to expressly inform itself as to whether the account team participated and prepared the samples, as opposed to indulging the assumption that they did, constitutes a significant failing in the evaluation process. However, Bozell failed to demonstrate, at hearing, that the committee's assumption was misplaced. Finally, Bozell offered proof that Dr. Sawyer awarded Bozell 21 points and EPB 22 points for "overall impression," when 20 points were the maximum contemplated by the RFP. Such error was, however, inadvertent, it simply being the intention of Dr. Sawyer to award EPB one more point than Bozell, and was harmless since it did not affect the overall outcome. Cost proposal evaluation Section 5.6 of the RFP provided the criteria for evaluation of the cost proposals and provided that: Finalists' cost proposals will be given points based on an evaluation of the proposed compensation and the experience and qualifications of the proposed staff. A maximum value of 40 points was established for this part of the evaluation. The cost proposals, which the committee members were to evaluate, were contained in a "sealed cost proposal envelope" and were, pursuant to subsection 2.4B of the RFP, to contain: The cost proposal shall include a calculation of the Respondent's proposed compensation for undertaking and completing all phases of the services requested and outlined in this RFP. The cost proposal shall be prepared in the same format as illustrated on Attachment "E" and shall be completed as follows: The Respondent shall provide an aggregate gross salary by work category and position classification for all personnel who will work on the Lottery's account. The aggregate gross salary shall include only that portion of each individual staff member's time that will be attributable to the Lottery account. The portion of time proposed in the cost proposal shall match the labor hour percentages proposed for each individual as required in Section 2.3(E)(4). The Respondent shall also include a proposed multiplier of the type described in paragraph A above. The Respondent shall multiply the aggregate gross salary by the multiplier and the product shall be included in the cost proposal. The Respondent shall also include, in the sealed cost proposal envelope, resumes for all personnel whose salary, or portion thereof, was included in the calculation of the proposed aggregate gross salary resumes shall be included regardless of whether the resumes have also been included in the technical proposal envelope. While the RFP contemplated that all three sections of the proposal (technical, oral presentation, and cost) would be evaluated and scored independent of each other, and that the evaluation of the cost proposal would be limited to an evaluation of the information contained in the "sealed cost proposal envelope," not all committee members so limited their evaluation. Rather, some committee members utilized the knowledge they had gleaned from evaluating the technical proposals and oral presentations, as well as the scores they had assigned during the course of those evaluations, to assist them in assessing the qualifications and experience of the proposed personnel and weighing the firms' proposed compensation. Indeed, it is difficult to imagine how any committee member could ignore the knowledge he had acquired during the course of his evaluations that was reflective of the quality and experience of the proposed staff, any more than he could ignore the expertise he had acquired through his life experiences, in evaluating the cost proposal. Notably, the RFP, as it related to the cost proposals, provided that "the portion of time proposed in the cost proposal shall match the labor hour percentages proposed for each individual as required by section 2.3(E)(4)" of the RFP [the key personnel], and the committee had, as part of their evaluation of the technical proposal, previously evaluated the proposed account team, as well as the relative creativity, approach, quality and thoroughness of their proposals relative to subsections 2.3A-D of the RFP. At the oral presentation, the committee had an opportunity to put faces with names, and broaden their knowledge of the individuals involved. Accordingly, when it came time to evaluate the cost proposals, which involved a consideration of staffing and salary, the members of the committee had certainly formulated opinions regarding the quality of the staff proposed by the respective firms, and balanced that opinion against the proposed compensation to derive the most cost effective proposal. While it may seem unreasonable to restrict the committee to the bare resumes and costs set forth in the cost proposal, as the basis for their evaluation, the reasonableness of the provisions the Department formulated are not at issue in this proceeding. Accordingly, it is concluded that by going beyond the information contained within the cost proposal, the members of the committee materially deviated from the requirements of the RFP. This conclusion prevails, since those bidders who were favored in the evaluation of the technical proposals or oral presentation were, by the consideration of the opinions derived from such evaluations, accorded an unfair advantage over other bidders.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered which rejects all bids, and that a new invitation to bid be extended. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 25th day of July 1991. WILLIAM J. KENDRICK 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 25th day of July 1991.
The Issue This order addresses Petitioner's motion for a recommended order of dismissal. The motion argues that the Department of Highway Safety and Motor Vehicles (Department) is without jurisdiction to consider the verified complaint as the proposal submitted by the Respondents does not comply with Section 320.643, Florida Statutes.
Findings Of Fact Respondent, Rick Starr Lincoln-Mercury, Inc. (RSLM), is a Florida corporation conducting business at 5400 South U.S. Highway 1, Fort Pierce, Florida. Rick Starr is the sole owner of RSLM. Rick Starr is the sole officer and director for RSLM. Rick Starr is the sole owner of Rick Starr Nissan which, at all times material to this issue, is located at 5400 South U.S. Highway 1, Fort Pierce, Florida. Petitioner entered into a dealer agreement with RSLM doing business as Rick Starr Nissan on March 28, 1990. That agreement was later superseded by an agreement between the parties on September 24, 1990. The dealer agreement described above was the subject matter of an administrative hearing conducted by Hearing Officer Rigot. The central issue of that case, DOAH case no. 92-5187, was whether the franchise agreement (used interchangeably herein with "dealer agreement") could be terminated in accordance with Section 320.641, Florida Statutes. Pertinent to this case is the following finding of fact entered by Hearing Officer Rigot: 59. Starr's failure to meet the March 30, 1992, deadline extended to May 1, 1992, by which (sic) to have an exclusive Nissan facility operational constitutes a material and substantial breach of Starr's Term Agreement since Starr's promise to construct or acquire an exclusive facility for Nissan was the basis upon which Nissan entered into the Term Agreement with Starr. Similarly, Starr's failure to meet the interim construction deadlines constituted a material and substantial breach. The fact that Nissan did not declare its Term Agreement with Starr breached and, therefore, terminated as each construction interim deadline passed is unimportant. The construction deadlines only applied if Starr intended to construct a facility. Starr's obligation under the Term Agreement could have been met up to the final deadline by Starr's acquisition of an existing facility which met Nissan's guidelines. Nissan did advise Starr periodically during the Term Agreement that Starr was in default and had committed a material and substantial breach of the contract by failing to meet the construction deadlines; however, Nissan would not have been in a position to consider the contract terminated until after the final deadline for having an operational and exclusive Nissan facility. Additionally, Hearing Officer Rigot reached the following conclusions of law: Starr's breach of the franchise agreement, which is not seriously disputed in this proceeding, was material and substantial. On strikingly similar facts, the Eleventh Circuit Court of Appeals found that the dealer's failure to construct a facility pursuant to the terms of a two-year term franchise agreement warranted its termination. Dick Winning Chrysler-Plymouth of Ft. Myers, Inc. v. Chrysler Motors Corporation, supra. The very reason Nissan required Starr to execute a Term Agreement was to require Starr to provide new dealership facilities for Nissan. Exhibit A in both the March Agreement and the September Agreement specifically provided that Starr's failure to meet the deadlines for providing new dealership facilities would constitute a material breach of the Agreement. Nissan's written and oral communications with Starr stressed the importance of Starr providing exclusive facilities and emphasized that Starr's failure to comply with Exhibit A constituted a material breach of the Agreement. Starr's argument that Nissan waived its right to insist on Starr's performance under the Agreement is without merit. For over two years Nissan attempted to obtain Starr's compliance with his contractual obligation. The evidence shows that Starr did not take seriously his contractual obligation and that Starr made no serious attempt to comply with any of the options given to him for fulfilling that obligation. Other than delay and failure to respond to Nissan's repeated requests for Starr to make a decision and proceed forward, the only affirmative act done by Starr was to send Nissan a drawing of where he would place a Nissan facility on the Lincoln-Mercury site. Nissan did not terminate the Agreement as and when Starr missed each of the interim deadlines. At the same time, however, Nissan insisted on complete performance by final deadline. Starr submitted to Nissan in November 1991 an uninformative drawing of the facility it would provide for Nissan adjacent to the Lincoln-Mercury facility, followed by a second uninformative drawing. On December 23, 1991, Starr submitted a site plan showing the facility and its location on the property and submitted the data reflecting the square footage of the different components in January 1992. Therefore, Starr did not receive approval of its construction plans until early February, shortly before the expiration of the Term Agreement. Nissan in good faith: (A) offered to extend the interim and final deadlines; (B) offered to extend those dates further at Starr's request; and (C) extended the expiration date of the Agreement to May 1, 1992, to enable Starr to execute an amendment memorializing the parties' agreement on a second extension. Nissan's acts do not show a waiver of its right to obtain performance pursuant to its contract with Starr; rather, they demonstrate Nissan's continuing good faith in its dealings with Starr. The final order entered by the Department on August 5, 1993, adopted the recommended order from DOAH case no. 92-5187, and terminated the franchise agreement. Thereafter, RSLM timely filed a notice of administrative appeal. The final order is currently before the First District Court of Appeal with oral argument scheduled for October 12, 1994. The Department has entered an order staying its final order pending the outcome of the judicial review. Subsequent to filing the appeal, on or about April 5, 1994, RSLM adopted a resolution which provided, in part: WHEREAS, the Board of Directors for RICK STARR LINCOLN MERCURY, INC., has determined it to be in the best interest of the corporation to sell the property described in Exhibit "A" attached hereto; it is RESOLVED that RICK STARR, the President of RICK STARR LINCOLN MERCURY, INC., is authorized and directed to execute all documents necessary and proper to carry out the purposes of this resolution. The property described above as "Exhibit 'A'" was Rick Starr Nissan. The franchise is to be acquired by Nissan of St. Lucie, Inc. (NSL), a Florida corporation. Based upon a resolution of NSL, Rick Starr is empowered to execute all documents necessary and proper to carry out the purchase. To that end, Rick Starr executed a notice to Petitioner advising of the proposed transfer to NSL, which, at the time, stated NSL's address to be 5400 South U.S. Highway 1, Fort Pierce, Florida. Additionally, Rick Starr as secretary for NSL, executed a letter to Petitioner's regional general manager dated April 6, 1994, that represented he had read the terms of the franchise agreement and that NSL agrees to comply with all the terms of same. Finally, Rick Starr, again as secretary for NSL, executed a letter to Petitioner's regional general manager dated April 6, 1994, that represented NSL would relocate the dealership to 4405 U.S. Highway 1, Fort Pierce, Florida (the proposed dealership site). Rick Starr owns one-third of the shares of NSL. The other one-third owners are Kenneth Carpi and Jeff Ross. According to Mr. Starr, he and Mr. Carpi are "very, very good friends." Mr. Starr described Mr. Ross as his "best friend." The three men also own JKR Properties, Inc. (JKR), a Florida corporation. JKR owns the property which is the proposed dealership site. On July 1, 1994, RSLM executed a lease with JKR for the proposed dealership site effective August 1, 1994. The NSL shareholder agreement provides, in part: Any dispute between the general manager and the shareholders will be decided by a majority vote. However, the shareholders acknowledge and agree and reserve to Rick Starr so long as Carpi, Ross and Starr remain shareholders, the right to veto the decisions of the remaining shareholders should Starr determine in his sole discretion that any irreparable injury to the corporation is being suffered or is threatened as a result thereof. One of the reasons Mr. Starr insisted on the foregoing language in the shareholder agreement was to insure he would have the final word if another person offered to purchase the dealership. Such protection is understandable since the purchase price to be paid by NSL is below the market value. Mr. Starr executed the purchase and sale agreement for both the buyer and seller. Mr. Starr did not acquire an interest in the proposed dealership site until almost a year after the final order was entered in DOAH case no. 92-5187. Mr. Starr was aware of the availability of the proposed dealership site in as early as mid-1991 since the location was recommended to him by Petitioner's representative. Mr. Starr intends to relocate Rick Starr Nissan to the proposed dealership site regardless of whether or not the transfer to NSL is approved. The relocation of Rick Starr Nissan at this time does not cure the breach of the dealership agreement which resulted in the cancellation of same.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Highway Safety and Motor Vehicles enter a final order concluding that the Department is without jurisdiction to consider the verified complaint as the proposed transfer is not within Section 320.643, Florida Statutes. DONE AND RECOMMENDED this 29th day of August, 1994, in Tallahassee, Leon County, Florida. Joyous D. 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 29th day of August, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-3103 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraphs 1 through 30, 36 through 39, 41 through 44, 46, 48, 49, 50, 52 through 60, 63 through 68, and 70 are accepted. Paragraph 31 is rejected to the extent it suggests that Mr. Carpi must sell his shares by the use of the word "would." It is accepted Mr. Carpi may sell his shares and that if he does so Mr. Starr and Mr. Ross will become 50 percent shareholders. Paragraph 32 is rejected as to the characterization of the paragraph being other than as stated above. The exhibit speaks for itself. Paragraph 33 is rejected as irrelevant. Paragraph 34 is rejected as irrelevant or argument. Paragraph 35 is rejected as irrelevant or argument. The first sentence of paragraph 40 is accepted. The remainder of the paragraph is rejected as irrelevant. Paragraph 45 is rejected as irrelevant. Paragraph 47 is rejected as argument, or not supported by the weight of the evidence. Paragraph 51 is rejected as irrelevant or argument. Paragraph 61 is rejected as irrelevant or argument. Paragraph 62 is rejected as irrelevant or argument. Paragraph 69 is rejected as irrelevant or argument. Paragraph 71 is rejected as irrelevant or argument. Rulings on the proposed findings of fact submitted by the Respondent: 1. Respondents presented additional argument not in the form of an proposed recommended order; therefore, no proposed findings of fact were submitted for acceptance or rejection. COPIES FURNISHED: Michael J. Alderman Room A432 Neil Kirkman Building Division of Motor Vehicles Tallahassee, Florida 32399-0635 Dean Bunch Cabaniss, Burke & Wagner, P.A. 909 East Park Avenue Tallahassee, Florida 32301 Kevin A. Russell Ruth F. Masters Latham & Watkins 233 S. Wacker Drive Suite 5800, Sears Tower Chicago, Illinois 60606 Walter E. Forehand Myers & Forehand 402-B North Office Plaza Drive Tallahassee, Florida 32301 Nissan of St. Lucie, Inc. 5400 South U.S. 1 Fort Pierce, Florida 34982 Kenneth J. Carpi 5810 N.W. 26th Court Boca Raton, Florida 33496 Jeff Ross 8159 Pinnacle Peak Las Vegas, Nevada 89113 Rick Starr 5400 South U.S. 1 Fort Pierce, Florida 34982
