Recommendation Based on the foregoing, it is RECOMMENDED: That petitioner's application for certification as a Women Business Enterprise be denied. DONE and ORDERED this 29th day of June, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1984. COPIES FURNISHED: Diann Criss Atkinson, Qualified Representative Shurly Contracting, Inc. P. O. Box 15267 West Palm Beach, Florida 33406 Vernon L. Whittier, Jr., Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32301 Paul A Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
Findings Of Fact At all times pertinent to the issues herein, the Respondent, Commission, was the state agency responsible for the certification of Minority Business Enterprises in Florida. Petitioner, Computer Service, was founded by Ronald E. Willett in January, 1987. It is a computer maintenance and repair company of which Brenda Willett is currently President and Chairman of the Board and owner of a 51 percent share of the capital stock issued on December 15, 1993. Ronald E. Willett is the Executive Vice-president, a Director, and owner of a 49 percent share of the capital stock. Mr. Willett was the sole owner and Chairman of the Board until May, 1994, at which time he gave 51 percent of the stock to his wife, Ms. Willett, and the Board elected her Chairman. Ms. Willett has been in the data processing field for 13 years. Before she began working with the Petitioner, she was a computer programmer for the State Attorney's office. She uses computer software to help with managing the affairs of the company, but she is neither a programmer nor a technician. She does not do any repair work for the company because she is not trained to do it. Most of the repair work is done by her husband and two computer engineers employed by the company. A fifth employee works in the warehouse and repairs printers. Of the non-family employees, Ms. Willett interviewed one and hired another. Now she is responsible for all interviewing and hiring. Because of the technical nature of the work, however, she does the initial screening interview after which either Mr. Willett or one of the engineers evaluates the candidates' technical qualifications. She completes the evaluations of her employees' performance by relying on her customers to evaluate the employees' technical performance. In addition, she notes when an employee orders an inordinate amount of parts for a job instead of doing repair work because that generally indicates the employee is not performing properly. Ms. Willett is paid $1,500 every two weeks. Her husband is paid $6,500 per month, and each of the engineers is paid $40,000 per year. Ms. Willett is primarily in charge of the business administration. The inventory of repair parts is maintained at the company warehouse and at the various work sites where the company has contracts to maintain the equipment. Each repairman notifies her of the parts needed. She gets prices and orders the needed parts. The company does not have a line of credit with suppliers. Ms. Willett has, in the past, personally signed for a line of credit which was used for the company. The company presently owes $18,000 to a power supply company under a contract which she negotiated. For the past year, she has been the only company official to sign to commit the company on loans. In addition, Ms. Willett negotiates the company's contracts with customers and she works as a team with the engineers on pricing. The company works on a basis of 35 - 50 percent off IBM prices for similar service. Though her husband helps her decide on what machines the company can buy and repair, she would not need to replace him if he should retire. He is currently working only 18 -20 hours per week. The company submitted its application for minority business enterprise certification on April 18, 1994. Ms. Willett indicated she did not know about the program until it was mentioned to her by an instructor in a course she was taking, and she felt it would help her secure business. As a woman, she was finding it difficult to be taken seriously by the male business officers and managers she dealt with in soliciting business, and she understood that the minority certification would help her qualify for state contracts. The initial review of Petitioner's application was accomplished by Mr. DeLaO, who requested and received from Petitioner matters needed in clarification or amplification of the information contained in the application. Mr. DeLaO also conducted a telephone interview with Ms. Willett to determine how the business was operated and to reaffirm the accuracy of the documentation. Mr. DeLaO did not look elsewhere for information. Based on the information listed above, he recommended denial of the Petitioner's certification. Mr. DeLaO's recommendation was based on several factors, all of which are listed in the recommendation submitted in writing to his supervisor. The problems he found included: The risk of the minority owner, as weighed against the risk of the non-minority owner indicated Ms. Willett, who had received her shares as a gift, had no investment in the corporation to lose. Mr. DeLaO felt the risk of the minority owner should be greater than that of the non-minority owner. Risk was defined as the amount of investment capital put in to start the company or to purchase ownership. The minority owner's wages were not commen- surate with her percentage of ownership. Here, Mr. Willett, the non-minority owner, was making more than she was, as were both engineers. The Board of Governors of the corporation was not controlled by the minority owner. At the time of the review, only Mr. Willett was on the Board. Now that she is on the Board, she still does not control it because she one of only two Directors. Ms. Willett does not appear to have the technical expertise and capability to control the business of the company. She does not appear to have the technical education or experience to do the work of the company herself or to properly evaluate how her employees are performing it - computer repair. Her contribution appeared to be only administrative. Ms. Willett admits her ownership of the 51 percent of the shares of the company was a gift from her husband who felt she deserved it. She claims, however, that the initial cash infusion to the company, when it was first started, came from jointly owned funds utilized to purchase the necessary tools to start Mr. Willett in business. From that initial investment the corporation grew. It should be noted, however, that the actual transfer of stock ownership to Ms. Willett took place just four months prior to the filing of the application for certification, and Ms. Willett's election to the Board came in May, 1994, after the application was filed. The allegation regarding Ms. Willett's salary relative to that of her husband and two of the three other employees is correct. By the same token, the comments regarding her Board membership are also correct. In addition, it is clear her technical competence is insufficient to permit her to accomplish a majority of the computer repair functions completed by her employees. Whether she must be qualified to perform all tasks done by each employee is debatable. She must, however, have a general knowledge of the business which would make her supervision and management meaningful, and it is not at all clear she possesses either those skills or that knowledge. She is quite correct in her claim, however, that if she did not get the contracts, the workmen would have no work to do. Mr. DeLaO's supervisor, to whom his recommendation for denial of certification was addressed, on August 24, 1994 concurred with his recommendation and notified Ms. Willett, on behalf of the Petitioner, that the request for certification as an MBE was denied. The letter of denial contained the Commission's basis for denial.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Respondent enter a Final Order in this case denying Computer Service Concepts, Inc.'s request for certification as a minority business enterprise. RECOMMENDED this 28th day of February, 1995, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of February, 1995. COPIES FURNISHED: Brenda J. Willett, pro se Computer Service Concepts, Inc. 7616 Industrial Avenue, Suite 3 New Port Richey, Florida 34668 Susan P. Stephens, Esquire Office of the Attorney General The Capitol, Suite PL-01 Tallahassee, Florida 32399-1050 Crandall Jones Executive Administrator Commission on Minority Economic and Business Development Knight Building 2727 Centerview Drive Tallahassee, Florida 32399-0950 General Counsel Commission on Minority Economic and Business Development Knight Building 2727 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Anthony Charles Fabian, a journeyman electrician, is the president of Fabian's Electrical Contracting, Inc. (FEC). Mr. Fabian owns 51 percent of the stock in FEC. FEC was incorporated in 1984 and since that time has been continuously engaged in the electrical contracting business. Although FEC shares office space with other business entities, it is an independent business operation not affiliated with any other business. In 1987, FEC applied for and received certification as a minority business enterprise (MBE). Mr. Fabian has at all times maintained he is entitled to MBE status as a Hispanic American. Mr. Fabian was born in Tampa, Florida and lived in a Hispanic neighborhood there until he was six years old. During the time he resided in Tampa, Mr. Fabian's neighbors, family, and friends used Spanish as their predominant language. The family culture was Cuban as was that of the area where the family resided. At age six Mr. Fabian moved from Tampa to Pensacola, Florida. Mr. Fabian later moved from Pensacola to Tallahassee mid-way through his sixth grade school year. School mates in Pensacola and Tallahassee called him various ethnic nicknames, all related to his Hispanic ancestry. Such names included: "Julio," "Taco," "Spic," "El Cubano," and "Cuban Wheatman." Other than an affection for Cuban food, Mr. Fabian currently has no cultural practices to tie him to his Hispanic heritage. Mr. Fabian does not speak Spanish. Mr. Fabian does not reside in a predominantly Hispanic community. Mr. Fabian does not practice the religious faith of his progenitors. Mr. Fabian does not instruct his child in any Cuban cultural practice. Mr. Fabian does not know of any Spanish cultural practice that came to him from his family. Mr. Fabian has never been refused work because of his Hispanic heritage. Mr. Fabian's mother has no Hispanic progenitors. Mr. Fabian's father, also born in Tampa, Florida, has the following ancestors: his father (Mr. Fabian's grandfather) was born in Spain, his mother (Mr. Fabian's grandmother) was born in Key West. Mr. Fabian's grandmother, Anna Rodriguez Fabian, (who Mr. Fabian spent time with in Tampa) spoke Spanish and claimed Cuban heritage as both of her parents had immigrated from there to Key West. For this reason, Mr. Fabian maintains he is a Cuban from Tampa. None of Mr. Fabian's grandparents was born in Mexico, South America, Central America, or the Caribbean. He has never claimed otherwise. Sometime after FEC obtained certification as a MBE, the Department adopted what is now codified as Rule 60A-2.001(8), Florida Administrative Code. Such rule defines "origins" as used in Section 288.703(3)(b), Florida Statutes, to mean that a Hispanic American must substantiate his cultural and geographic derivations by at least one grandparent's birth. In July, 1992, when FEC submitted its recertification affidavit, the Department notified Mr. Fabian that he had failed to establish that at least one of his grandparents was born in one of the applicable geographic locations. Accordingly, Mr. Fabian was advised his request for recertification would be denied. Approximately eleven other persons have been denied minority status because they were unable to substantiate origin by the birth of a grandparent. Of those eleven, none had been previously certified. FEC is the only formerly certified MBE which has been denied recertification because of the rule. However, when FEC was granted certification in 1987 it was not based upon the Department's agreement that Mr. Fabian met the statutory definition of a Hispanic American. Such certification was issued in settlement to the preliminary denial of certification since the word "origins," as used in the statute, had not as yet been defined by rule. Additionally, the recertification of FEC was based upon Department error and not an acceptance that Mr. Fabian met the "origins" test. Finally, in 1991, the Department cured the rule deficiencies to create parallel requirements for certification and recertification for MBE status. When FEC submitted it recertification affidavit under the current rule, the request was denied. Mr. Fabian has been aware of the Department's position regarding his requests for certification from the outset. The Department promulgated the "origins" rule in response to a number of applications for MBE status from persons with distant relations or ancestors within the minority classifications. The necessity for an "origins" rule was demonstrated since the Department needed a clear standard which staff and the public could recognize as the dividing line for who would and would not qualify as a Hispanic American, and since the purpose of the program is to provide preferences in contracting to businesses run by individuals who have been disadvantaged. The standard devised afforded a narrowly drawn, recognizable criterion. In deciding to use the grandparent test, the Department looked to outside sources. Since there was no legislative history resolving the "origins" issue, the Department sought guidance from dictionary definitions and statutory uses in other contexts. In promulgating the rule, the Department gave notice to outside sources, including groups listed in the publication Doing Business in Florida, such as the Department of Commerce, Bureau of Commerce, small business development centers, community development corporations, local minority business certification offices, and the Minority Business Advocate's office. At the public hearing conducted for the purpose of receiving input regarding the grandparent test, no one offered opposition to the "origins" definition. Mr. Fabian is not a black American as defined in Section 288.703(3)(a), Florida Statutes.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Management Services enter a final order denying Petitioner's recertification as a minority business enterprise. DONE AND RECOMMENDED this 28th day of April, 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 28th day of April, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-6777 Rulings on the proposed findings of fact submitted by the Petitioner: 1. Paragraphs 1 through 7, 10, 11, 13, 14, 16, 17, 19, 20, 22 through 25, 28 through 31, 33 through 41, 43, 44, 46 through 50, 60, 64, and 70 are accepted. The first sentence in paragraph 8 is accepted. With regard to the second sentence it is accepted that the neighbors et al enjoyed Cuban food and cultural aspects but spoke Spanish. No proof was submitted that a language of "Cuban" was spoken by the community. The last sentence of paragraph 12 is rejected as irrelevant, otherwise the paragraph is accepted. Paragraph 15 is rejected as irrelevant. Paragraph 18 is rejected as an incomplete statement of fact which, of itself, is insufficient to stand without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 21 is rejected as irrelevant. Paragraph 26 is rejected as repetitive and unnecessary. With regard to paragraph 27 it is accepted Mr. Fabian has 16 years of experience, otherwise rejected as repetitive and unnecessary. The first sentence of paragraph 32 is accepted. The remainder of the paragraph is rejected as not supported by the evidence or irrelevant. Mr. Fabian does have a phone number whether that number is listed in the telephone book is not supported by the record cited. Paragraph 42 is rejected as irrelevant. The first two sentences of paragraph 45 are accepted. It is also accepted that Lewis & Thompson have used other minority subcontractors. Whether they "regularly" use them is irrelevant. The first sentence of paragraph 51 is accepted; the remainder is rejected as comment or argument. With regard to paragraph 52, it is accepted that Mr. De La O did not visit a job site; otherwise rejected as irrelevant. Paragraphs 53, 54, and 55 are accepted as the applicable law of this case, not fact. Paragraph 56 is rejected as contrary to the weight of the credible evidence. Paragraph 57 is rejected as contrary to the weight of the credible evidence; the definition also applies to other minorities. Paragraph 58 is accepted as a partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 59 is accepted as a partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 61 is accepted as a partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 62 is rejected as argument. Paragraph 63 is rejected as irrelevant or argument. Paragraph 65 is rejected as irrelevant or argument. Paragraph 66 is rejected as argument. Paragraphs 67, 68, and 69 are rejected as irrelevant or incomplete statements. Paragraphs 71 through 73 are rejected as irrelevant, unnecessary or repetitive. Rulings on the proposed findings of fact submitted by the Respondent: Paragraphs 1, 4, 5, 6, 8, 12, and 17 are accepted. With regard to paragraph 2, the first, second, sixth and seventh sentences are accepted; the remainder is rejected as a recitation of testimony, not statements of fact. The first sentence of paragraph 3 is accepted, the remainder is rejected as a recitation of testimony, not statements of fact. The first sentence of paragraph 9 is accepted; the remainder is rejected as argument or partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. The second and third sentences of paragraph 11 are accepted, the first rejected as recitation of testimony, not statements of fact. Paragraph 13 is rejected as argument or partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 14 is rejected as argument or partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. Paragraph 15 is rejected as irrelevant. Paragraph 16 is rejected as partial statement of fact, incomplete to stand alone without further clarification; therefore rejected as not supported by the total weight of the credible evidence. COPIES FURNISHED: Michael F. Coppins Gwendolyn P. Adkins Cooper & Coppins, P.A. 515 North Adams Street Tallahassee, Florida 32302 Cindy Horne Department of Management Services Office of the General Counsel Suite 309 Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of Management Services Suite 307 Knight Building Tallahassee, Florida 32399-0950 Sylvan Strickland Acting General Counsel Office of the General Counsel Suite 309 Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Wanda Forbess is an American woman. She is the president of the Petitioner corporation, Center Office Products, Inc. She owns 5l percent of that corporation's outstanding stock. The stock is full voting stock and there are no agreements in existence or anticipated which would cause any change in the percentage of ownership of Wanda Forbess, nor any change in the voting power of her stock. The Petitioner corporation and Wanda Forbess has no affiliation or relationship with any other business and Wanda Forbess is not an employee of any other business. The net worth of the Petitioner as of the date of hearing is less than one million dollars. It has also been stipulated that the Petitioner, that is, Wanda Forbess, has been performing a useful business function and operating the Petitioner's business since 1981. Wanda Forbess is the mother of Thomas J. Forbess and Raymond D. Forbess and the wife of Thomas D. Forbess. In 1981 her children were almost out of school, with her youngest child being about to enter college. She decided she wanted to start her own business. She had been active as a homemaker, a volunteer and active member of civic organizations. She decided to enter the office supply retail business in 1981 because of the low initial investment required due to the presence of two wholesale suppliers in Jacksonville who could supply goods for inventory on a rapid basis. She also chose to enter this business because there were no particular special skills, training or licenses required and because she knew something about it, since her husband worked for twenty-five years in one phase of the business, that of sales of paper products. This decision being made, Ms. Forbess approached her sons, Thomas J. Forbess and Raymond D. Forbess, to persuade them to enter into the business with her. They agreed to join her in the venture and she set about to form the Petitioner corporation. She desired to incorporate in order to limit the liability which she and her sons would be exposed to in operating the business. She retained an attorney to incorporate the business, but paid no particular attention herself concerning how the shares were to be issued and held or as to the manner of appointment of the members of the board of the directors. She simply followed her attorney's instructions who advised her to do the "standard type" of incorporation. The corporation estab- lished by her attorney provided, in its by-laws, that there would be three directors. Wanda, Ray and Thomas Forbess were each named as directors since they were the only three individuals involved with the Petitioner at its formation. The attorney also issued stock certificates for 200 shares each to the three directors. Wanda Forbess was appointed as president and chief executive officer of the Petitioner corporation. This was because the formation of the business and the company was Mrs. Forbess' idea and she had provided more than five times the amount of capital of each of the other two owners, her sons. In fact, she had provided $11,000 of her own money as initial capital and her two sons provided $2,000 each. Notwithstanding their equal ownership status and the equal vote each of the three has on the Board of Directors, as well as the requirement in the bylaws that a majority vote of the Board is controlling, Mrs. Forbess has been in control of the Petitioner corporation's operations from the day of its inception. Her sons do not question that control and established the fact of it in their own testimony at the hearing. The vice- president is Raymond D. Forbess and the secretary treasurer is Thomas J. Forbess. The bylaws provide that the property and business of the corporation is managed by its Board of Directors and that a majority of those directors shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of the majority of the directors present at any meeting at which there is a quorum shall be deemed to be the act of the board. It is also provided in the bylaws that the holders of the majority of shares of stock may remove a director at any time, with or without cause, at a duly called meeting. The president of the Petitioner is empowered to call such a meeting at any time. Any vacancy occurring as a result of removal of any director by the majority shareholders may be filled by the affirmative vote of the majority of remaining directors, even if less than a quorum shall be present. Directors are not required to be shareholders. Therefore, as a holder of 51 percent of the shares of the Petitioner, Wanda Forbess has control over the board of directors by the power to elect or remove any director by voting shares accordingly at a meeting which she may call at any time, with or without notice, as the president of the Petitioner corporation. Replacement directors could then be appointed by her vote alone and could be any person she elects, including, for example, an employee over who she has authority and who she may direct to vote a certain way. In any event, from 1981 through 1987, the Petitioner grew from a company with three employees to a company of 18 employees and more than $280,000 gross monthly sales. During this time, the Petitioner enjoyed some State of Florida contract business. Some time in 1987, Mrs. Forbess became aware that she would soon be unable to continue doing business with the state because her business was not a certified minority business enterprise. In fact, however, the Petitioner had been, from its inception, an American woman-controlled corporation in actual practice. On June 1, 1987, Mrs. Forbess directed her sons to convey sufficient stock to her so that she could become a 51 percent shareholder of the Petitioner corporation. This transfer was done to comply with section 288.703(2), Florida Statutes, concerning the definition of "minority business enterprise." It was also done to formally reflect what had been the case, as a practical matter, since the inception of the corporation: that Wanda Forbess controlled the Petitioner corporation. The company by that time had significant value reflected in the value of its stock, but neither son required payment for his stock which he conveyed to Mrs. Forbess. They considered that she was the controlling owner of the corporation from its inception anyway due to the fact that the business was her idea and that she had contributed by far the most significant amount of initial capital. Mrs. Forbess spends a majority of her time conducting the financial affairs of the Petitioner. She is more familiar and more involved with the financial affairs of the Petitioner corporation then any other owner, officer, director or employee. In that capacity, she sets all the salaries, including the salaries of her sons and her husband. All salaries are set completely at the discretion of Mrs. Forbess and always have been. She pays her two sons and her husband a higher salary than she pays herself because their financial requirements are greater, but the salient point here is that she is the manager with the discretion to set their salaries. In 1985, after the Petitioner had been operating successfully for four years, Thomas J. Forbess, the husband of Mrs. Forbess, retired from his position with Jim Walter Paper Company after 25 years of employment with that firm. Prior to that time he had no involvement with the formation, operation or management of the Petitioner corporation. He has never had an ownership interest in the Petitioner. He is an employee of the corporation and assists in some of the operations, including preparation and submittal of bids for some of the work the corporation undertakes. Mrs. Forbess controls the purchase of goods, equipment and business inventory and services used and needed in the day- to-day operation of the business. She frequently purchases significant items used in the business, such as computers, trucks, and postage machines, as well as inventory. In addition to this, the major purchases made by the business by any co-owner or employee must be made only with her approval. Evidence was offered showing the lease agreements and notes evidencing that corporate debts related to large purchases were signed by all corporate officers as a basis for an attempt to show that decisions are made by "consensus" or are joint decisions. However, the fact that lenders and lessors require all corporate officers to sign documents evidencing leases or debts does not mean each corporate officer had an equal part to play in making the decision involved. The record is replete with evidence and testimony from employees and the other owners that Wanda Forbess has a veto power on all decisions concerning purchases, loans, leases of real property and every other major business decision the Petitioner confronts. Further, the fact that discussions are had amongst the owners and officers of the business prior to making major decisions is really a sound business practice and does not mean that one of the owners, directors or officers does not have final authority to make a binding decision. The person who has final authority for such major decisions is Wanda Forbess. Mrs. Forbess also has the authority to hire and dismiss employees, a requirement of subsection 3(b) of Rule 13-8.005(3), Florida Administrative Code. She herself has interviewed employees from time to time and also has final authority to approve all hiring and discharge decisions or to veto them in those instances where she has delegated that authority. She controls which professional services are obtained by the Petitioner corporation, as shown by her decision to discontinue the services of the former company accountant. Indeed, she has delegated some of the hiring processes, given the fact that the Petitioner corporation has grown to be a business with 18 employees. That however, is a normal, acceptable business decision. The delegation of the advertising of a position, the interviewing of prospective employees and the conveying of offers of employment to prospective employees in no way indicates that the delegator does not have the final authority to hire or dismiss the employees. Wanda Forbess also controls all financial affairs of the Petitioner corporation. She thus has unsurpassed knowledge in relation to the other owners, officers and directors, of the financial structure and operations of the business. In fact, the bulk of her time spent working for the Petitioner, corporation since its inception, has been in the field of financial matters. She makes the decisions concerning debt to be incurred by the Petitioner, and approves any major expenditure, without which approval expenditures may not be made. It is significant that Mrs. Forbess has veto authority over the extension of credit to customers and establishment of credit accounts by customers. One instance was described by Jeannine Silcox and Raymond Forbess concerning Raymond Forbess' attempt to open an account to service a particular customer on a credit basis. Mrs. Forbess opposed that procedure and ordered that the account not be opened. The account was not opened. This demonstrates effectively that not only does Mrs. Forbess control the financial affairs of the company, but also wields ultimate authority amongst the co-owners of the Petitioner. Additionally, it is undisputed that Mrs. Forbess writes the vast majority of checks on the Petitioner's two checking accounts, in terms of the requirement, at subsection 3(D) of the above-cited rule, that she control the accounts of the business. She estimates that she writes 97 percent of the checks and there is no evidence to refute that estimate. Thomas J. and Raymond B. Forbess are each authorized signatories on the accounts, but their names are simply there as a matter of convenience and the only instances in which they sign checks are when there is an immediate need for the check to be paid and Mrs. Forbess is unavailable to sign herself. There is no question that Mrs. Forbess is the ultimate authority controlling the Petitioner's bank accounts. In order to comply with subsection 3(e) of the above cited rule, the minority owner must demonstrate capability, knowledge and experience in making decisions concerning the business involved. At the time of the business's inception, neither Mrs. Forbess nor her co-owner sons had the capability, knowledge or experience required to make many of the decisions concerning the retail office supply retail business. Over seven years of operation however, Mrs. Forbess has actively supervised and managed the business of the Petitioner and has developed to a high degree those attributes, in making decisions involved in operating that business successfully. She has delegated certain aspects of the company's business to the supervision of her sons. Thomas J. Forbess, for example, is involved in developing additional retail operations. Raymond B. Forbess is more actively involved in the delivery of merchandise to customers and the monitoring of customer accounts, as well as maintaining and accounting for inventory. Nonetheless, neither of the other owners effects any significant decisions without consulting Mrs. Forbess first and gaining her approval or veto. Through this supervision and control over the past seven years, as well as her current direct involvement in managing the Petitioner's affairs, Mrs. Forbess has developed the capability, knowledge and experience required to make decisions regarding the office supply business involved herein. Her operational and managerial capabilities are demonstrated by the fact that under her leadership the business started with three employees and has grown to an 18 employee business with gross sales in the neighborhood of $280,000 per month in just over seven years. Finally, Mrs. Forbess has displayed independence and initiative in conducting all major operations and details of the Petitioner since its inception, (as required by subsection (f) of the above rule). Although she has done little bid negotiating directly, she has the ability to do so and has some experience in that activity. Further, bid proposals are submitted to her for approval and are not made without her knowledge and assent. Further, she herself negotiates leases and other contracts on behalf of the Petitioner.
The Issue The issues for determination in this proceeding are: (1) whether the Respondent properly rejected the lowest bid because the bid did not comply with the requirements set forth in the Project Manual, and (2) whether the Respondent properly awarded the bid to the second lowest bidder.
Findings Of Fact Findings Based Upon Stipulation of All Parties The Respondent, Florida Board of Regents, issued a Call For Bids, as published in Vol. 16, No. 7, February 16, 1990, issue of the Florida Administrative Weekly, for project number BR-183, Life Safety and Fire Code Corrective Work, J. Hillis Miller Health Center, University of Florida., Gainesville, Florida. Sealed bids were received on March 15, 1990, at which time they were publicly opened and read aloud. Petitioner, Anglin Construction Co. (hereinafter referred to as "Anglin"), submitted the lowest monetary bid for the project; and Charles R. Perry (hereinafter referred to as "Perry") submitted the second lowest monetary bid on the project. By letter dated March 19, 1990, the University of Florida notified Anglin that its bid proposal, submitted on March 15, 1990, had been found to be in non-compliance with the Project Manual and rejected by the University of Florida. The specific reason for non-compliance was that Anglin's advertisement for Minority Business Enterprise ("MBE") participation, as part of its demonstration of good-faith effort, did not appear in the media at least seven (7) days prior to bid opening. On March 23, 1990, the contract for this project was awarded to Perry by the Chancellor of the Florida Board of Regents. By letter dated March 26, 1990, Anglin filed a notice of protest in regard to the award of this contract to Perry. Anglin timely filed a formal bid protest in regard to this action, which was received by the Florida Board of Regents on April 4, 1990. A representative from Anglin and Perry attended the required pre- solicitation/pre-bid meeting scheduled for March 1, 1990 for this project. Mr. Larry Ellis, Minority Purchasing Coordinator, University of Florida, was present at the pre- solicitation/pre-bid meeting and distributed a handbook entitled "Minority Business Enterprise Requirements for Major and Minor Construction Projects Survival Handbook" to those in attendance. Anglin and Perry obtained or examined the Project Manual for BR-183. By letter dated March 6, 1990, Anglin requested the Gainesville Sun newspaper to run an advertisement for seven (7) consecutive days to solicit bids from qualified MBE/WBE companies for BR-183. The advertisement in the Gainesville Sun was initially published in the March 9, 1990 edition and ran consecutively through the March 15, 1990 edition. The Project Manual, at page L-2 of L-13 pages, Special Conditions section, paragraph 1.7.2.2, provides that advertisements for minority business enterprises must run or be published on a date at least seven (7) days prior to the bid opening. Findings Based Upon Documentary Evidence The Call for Bids provided that at least fifteen percent (15%) of the project contracted amount be expended with minority business enterprises certified by the Department of General Services and if fifteen percent (15%) were not obtainable, the State University System would recognize good- faith efforts by the bidder (Jt. Ex. 1). The Call for Bids (Jt. Ex. 1) provided that all bidders must be qualified at the time of their bid proposal in accordance with the Instructions to Bidders, Article B-2. The Instructions to Bidders, Article B-2, at page 9 of the Project Manual (Jt. Ex. 2) provided, in pertinent part, that in order to be eligible to submit a Bid Proposal, a bidder must meet any special requirements set forth in the Special Conditions section of the Project Manual. The Project Manual, Special Conditions, paragraph 1.1 at page L-1 sets forth the MBE requirements. Paragraph 1.1.2 provides that evidence of good- faith efforts will be required to be submitted to the University Planning Office within two working days after the opening of the bids. Paragraph 1.1.2 further provides that incomplete evidence which does not fully support the good-faith effort requirements shall constitute cause for determining the bid to be non- responsive. Subparagraph 1.7.2.2 of the Special Conditions section in the Project Manual at page L-2 (Jt. Ex. 2) provides that a contractor, as part of meeting the good-faith efforts for this project, should advertise to inform MBEs of contracting and subcontracting opportunities, through minority focus media, through a trade association, or one local newspaper with a minimum circulation of 25,000. Subparagraph 1.7.2.3 provides for required documentation and provides for a copy of the advertisement run by the media and the date thereof. The copy of the tear sheet from The Gainesville Sun for Anglin regarding BR-183 and the affidavit from the Gainesville Sun reflect that Anglin's advertisement ran or was published beginning March 9, 1990, which was six (6) days prior to bid opening, through March 15, 1990 (Jt. Ex. 9 at section 1- 7.2). Anglin's advertisement did not run in the Gainesville Sun seven (7) days prior to the bid opening (Jt. Ex. 9 at section 1-7.2, and Jt. Ex. 8). The Respondent interprets paragraph 1.7.2.2 to require that advertising through minority focus media, through a trade association or one local newspaper with a minimum circulation of 25,000 to be run on at least one day, seven (7) days prior to the day the bids are opened. Anglin ran an otherwise qualifying advertisement for seven (7) consecutive days, the seventh of which was the day the bids were opened. Anglin sent letters to fourteen (14) minority businesses qualified for participation in state contracts inviting participation and providing information about the program. These letters indicated that Anglin would subdivide work to assist in their participation and invited them to inspect the drawings. Anglin sent followup letters to the same fourteen (14) minority businesses. Anglin apparently divided portions of the electrical work between two minority businesses and included their estimates totaling $288,000.00 in the bid which is at issue (see Jt. Ex. 9 at section 1-7.7). A representative of Anglin, Dennis Ramsey, attended the pre- solicitation/pre-bid meeting on March 1, 1990 (Jt. Ex. 4). One of the purposes of the pre-solicitation/pre-bid meeting is to invite MBEs to attend to become familiar with the project specifications and to become acquainted with contractors interested in bidding the project. The Project Manual, Instructions to Bidders, B-23 at page 16 (Jt. Ex. 2) provides that the contract award will be awarded by the Respondent for projects of $500,000.00 or more, to the lowest qualified bidder, provided it is in the best interest of the Respondent to accept it. The award of the contract is subject to the provisions of Section 287.0945, Florida Statutes, and the demonstration of "good-faith effort" by any bidder whose Bid Proposal proposes less than fifteen percent (15%) participation in the contract by MBEs. The contract award will be made to the bidder who submits the lowest responsive aggregate bid within the pre-established construction budget. Sealed bids for BR-183 were opened on March 15, 1990 (Jt. Ex. 1). Anglin's bid of $1,768,400.00 was the lowest monetary bid (Jt. Ex. 5). Perry was the second lowest monetary bidder (Jt. Ex. 5). Anglin submitted its bid proposal (Jt. Ex. 6) and documentation of good-faith efforts for BR-183 (Jt. Ex. 9). Anglin was notified by letter dated March 19, 1990 that its bid proposal had been found to be in noncompliance with the requirements of the Project Manual and was, therefore, rejected. The specific reason for Anglin's noncompliance was that the advertisement for MBE participation did not appear in the media at least seven (7) days prior to the day the bids were opened (Jt. Ex. 10). By letter dated March 19, 1990, the Project Manager from the architectural and planning firm responsible for BR-183 recommended to Respondent that the contract be awarded to Perry (Jt. Ex. 11). By letter dated March 20, 1990, the University of Florida recommended to the Director of Capital Programs for Respondent that Perry be awarded the contract for BR-183 for the base bid and alternates #1 through #5 in the amount of $1,789,400.00 (Jt. Ex. 12). The Respondent awarded the contract to Perry on March 23, 1990 (Jt. Ex. 14). The MBE award to electricians of $288,000.00 is 16.29% of the $1,768,400.00 Anglin bid.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, RECOMMENDED that the Board of Regents award the contract to Anglin. DONE AND ENTERED this 18th day of July, 1990, in Tallahassee, Leon County, 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 18th day of July, 1990. APPENDIX "A" TO RECOMMENDED ORDER IN CASE NO. 90-2652BID Anglin and Perry's proposed findings of fact were adopted as paragraphs 1 through 10 of this Recommended Order. The Board of Regents' proposed findings of fact, which duplicated the stipulation, were adopted as paragraphs 1 through 10 of this Recommended Order, and otherwise ruled upon as follows: Adopted as paragraph 11. Adopted as paragraph 12. Adopted as paragraph 20. Rejected as a conclusion of law. Rejected as a conclusion of law. Adopted as paragraph 19. Adopted as paragraph 13. Adopted as paragraph 14. Rejected as a conclusion of law. Adopted as paragraph 21. Adopted as paragraph 22. Adopted as paragraph 15. Adopted as paragraph 23. Adopted as paragraph 24. Adopted as paragraph 25. COPIES FURNISHED: Charles B. Reed Chancellor of Florida State University System 325 W. Gaines Street Suite 1514 Tallahassee, Florida 32399-1950 Gregg Gleason, Esquire General Counsel Board of Regents 107 W. Gaines Street Room 210-D Tallahassee, Florida 32301 Jane Mostoller, Esquire Assistant General Counsel Board of Regents 325 W. Gaines Street Tallahassee, Florida 32399-1950 William B. Watson, III, Esquire Watson, Folds, Steadham, Christmann, Brashear, Tovkach & Walker P.O. Box 1070 Gainesville, Florida 32602 Raymond M. Ivey, Esquire Rakusin, Ivey, Waratuke, Solomon & Koteff, P.A. 703 North Main Street Suite A Gainesville, Florida 32601 =================================================================
The Issue The issue for determination at final hearing was whether Petitioner should be certified as a minority business enterprise pursuant to Section 287.09451, Florida Statutes, and Chapter 38A- 20, Florida Administrative Code, by the Office of the Supplier Diversity of the Department of Management Services.
Findings Of Fact Petitioner is a Florida corporation seeking certification in the field of "Sales and Installation of Network and Telephone Cabling" under the minority status of female-owned company. Fifty-one percent of Petitioner's stock is owned by Cynthia Martin, a white female, and 49 percent is owned by her husband, a white male. Until shortly before submitting its application, Petitioner corporation had previously operated as a sole proprietorship under the ownership of Keith Martin. The majority of the assets of Petitioner came from the previous sole proprietorship when Petitioner was formed. According to Mrs. Martin's testimony and payroll information submitted by Petitioner, Keith Martin received twice the salary of Cynthia Martin. Cynthia Martin is a full-time employee of the State of Florida. There is no evidence of employment for Keith Martin other than with Petitioner. The corporate documents in evidence reflect that since incorporation Cynthia Martin has been vice-president and secretary of the corporation, while Keith Martin has been president and treasurer. Petitioner's checks may be signed by either Keith Martin or Cynthia Martin and only one signature is required on each corporate check. Petitioner's Articles of Incorporation provide that the number of directors shall be determined in the By-Laws. The initial directors were Keith Martin and Cynthia Martin. The By- Laws provide that the corporation shall be managed by two directors, and that the number of directors may be increased only by amendment of the By-Laws. Also, a majority of the directors shall constitute a quorum for the transaction of business. This provision of the By-Laws has not been changed. At the organizational meeting of Petitioner, Keith Martin was elected president and treasurer, and Cynthia Martin was elected vice- president and secretary. No other documents were introduced into evidence reflecting any changes to the articles of incorporation or the By-Laws. The documentation submitted by Petitioner, and prepared by Cynthia Martin, consistently reflect Keith Martin as the president of the company and Cynthia Martin as vice-president. Cynthia Martin's duties include bookkeeping and performing administrative functions. Keith Martin's duties include the installation of cabling for local area networks and phone systems, picking up goods to be used on contracts, preparing daily timesheets and generating the paperwork necessary for billing clients, preparing quotations for clients, consulting with clients to determine needs, installation of phone systems and providing sales, service, and repair for clients. Cynthia Martin's duties for Petitioner are performed on her days off from her full-time employment, and on nights and weekends. The fact that Cynthia Martin owns 51 percent of the stock of Petitioner is important at stockholder meetings. At such meetings, she is entitled to one vote for each share owned, thereby allowing her to control stockholder meetings and effectively determine the directors of the company. The company is managed by the directors, while the day-to-day operations are managed by the officers.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Office of Supplier Diversity enter a final order denying Tele-Net Communications, Inc.'s, application to be a certified minority business enterprise. DONE AND ENTERED this 25th day of October, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. PFEIFFER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of October, 2000. COPIES FURNISHED: O. Earl Black, Jr., Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Cynthia Martin Tele-Net Communications, Inc. Post Office Box 11784 Jacksonville, Florida 32239 Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Windell Paige, Director Office of Supplier Diversity Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950
The Issue Is Petitioner entitled to certification as a Minority Business Enterprise pursuant to Rule 38A-20.005, Florida Administrative Code?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: On February 12, 1998, Teddy L. Serdynski and Janice A. Serdynski entered into a Partnership Agreement which in pertinent part provides as follows: NAME: The name of the partnership shall be known as "Ted's Auto Parts." PURPOSE: The purpose of the partnership shall be the operation of an automobile parts business and related enterprises. * * * COMMENCEMENT: The partnership shall officially commence upon execution of this agreement. DURATION: The partnership shall continue until dissolved, either by the parties or by legal proceedings, or by liquidation. CAPITAL: The capital of the partnership shall be contributed in amounts equalling 51% by JANICE A. SERDYNSKI and 49% by TEDDY L. SERDYNSKI, thereby granting to the said JANICE A. SERDYNSKI the controlling interest of said partnership. WITHDRAWAL: No partner shall withdraw any invested capital without the consent of the other partner. CAPITAL GAINS AND LOSSES: Capital gains and losses shall be shared in a proportionate amount of their investment and ownership interest. * * * MANAGEMENT: Although JANICE A. SERDYNSKI is the owner of a controlling interest in the partnership, each shall have equal voice in the management of the affairs of the partnership. Both parties shall administer to the general affairs of the partnership and shall carry out and put into effect the general policies and specific instructions of their decision on any given matter. BANK ACCOUNTS: The partnership shall maintain checking and other accounts in such bank or banks as the partners shall agree upon. Withdrawals and writing of checks on the partnership account may be done jointly and/or singly. PROFITS AND LOSSES: The partners shall share in accordance with their ownership interest in the profits and losses. . . . LIMITATIONS ON PARTNER: No partner, without the consent of the other partner, shall borrow money in the partnership name for partnership purposes or utilize collateral owned by the partnership as security for such loans, assign, transfer, pledge, compromise or release any of the claims or debts due to the partnership except on payment in full; consent to the arbitration of any dispute or controversy of the partnership; transfer firm assets; make, execute or deliver any assignment for the benefit of creditors; maker, execute or deliver any bond, confession of judgment, guaranty bond, indemnity bond, or surety bond or any contract to sell, bill of sale, deed, mortgage, lease relating to any substantial part of the partnership assets or his/her interest therein; or engage in any business or occupation without the consent of the other partner. * * * 17. DISPUTES: That the parties agree that all disputes and differences, if any, which shall arise between the parties, shall be referred to and decided by two indifferent, competent persons in or well acquainted with the trade, one person to be chosen by each party, or to submit to arbitration by a recognized arbitration service, and his/her or their decisions shall, in all respect, be final and conclusive on all parties. Ted's Auto Parts was a sole proprietorship from May 1, 1985 until February 11, 1998. From May 1, 1985, until February 11, 1998, Janice A. Serdynski shared ownership in Ted's Auto Parts equally with her husband, Teddy L. Serdynski, a non- minority. Janice A. Serdynski does not share income from Ted's Auto Parts commensurate with her 51 percent ownership. Decision-making, withdrawal of funds, borrowing of money, and the day-to-day management of Ted's Auto Parts are shared equally between Janice A. Serdynski and Teddy L. Serdynski. Ted's Auto Parts is a family operated business with duties, responsibilities, and decision-making occurring jointly, and, at time, mutually among family members. Both Janice A. Serdynski and Teddy L. Serdynski are authorized to sign checks on the account of Ted's Auto Parts.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it recommended that the Department enter a final order finding that Petitioner has failed to meet the requirements for Minority Business Enterprise certification and dismiss the petition filed by Petitioner. DONE AND ENTERED this 22nd day of March, 1999, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd of March, 1999. COPIES FURNISHED: Douglas I. Jamerson. Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Edward A. Dion General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Janice A. Serdynski Ted's Auto Parts 190 Second Avenue, South Bartow, Florida 33830 Joseph L. Shields, Senior Attorney Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189
The Issue The issue for consideration in this hearing is whether Petitioner should be certified as a Minority Business Enterprise, (Woman-Owned).
Findings Of Fact At all times pertinent to the allegations herein, the Commission On Minority Economic and Business Development, now the Division of Minority Business Advocacy and Assistance Office of the Department of Labor and Employment Security, was the state agency in Florida charged with the responsibility for certifying minority and women-owned businesses for most state agencies. It is required, by statute, to ensure that the preference for minority business firms obtained by the certification process are awarded only to those firms for which the benefit is intended. Petitioner, Bay Area Window Cleaning, Inc., is a small business corporation registered in Florida on August 7, 1985. At the time of the original incorporation of the corporation, 1,000 shares of corporate stock were issued of the 7,000 shares authorized in the Articles of Incorporation. Of these, 510 were issued to John D. Richeson, the individual who, with his brother in the late 1970's, started the window cleaning business while a student in college as a means of supporting himself and, later, his wife and family. The remaining 490 shares were issued to Hope L. Richeson, his wife. The funds utilized to start the business and ultimately incorporate were jointly owned by Mr. and Mrs. Richeson. The Articles of Incorporation, as filed initially, list John D. Richeson as incorporator and registered agent, and John D. Richeson and Hope L. Richeson as the Initial Board of Directors. On January 1, 1986, an additional 500 shares of corporate stock was issued in her name to give her a total of 990 shares out of a total 1,500 shares issued and outstanding. Mrs. Richeson's percentage of ownership, after the issuance of the additional 500 shares, was 66 percent. Share certificates reflect this fact. No additional funds were contributed to the corporate assets by Mrs. Richeson as consideration for the issuance of those shares. Mrs. Richeson, currently the President of the company, attended Bible College in Kansas for three years, graduating in 1978. She moved to Florida in 1980 where she attended Hillsborough Community College (HCC), taking as many business education courses as she could in pursuit of an Associates Degree in Business. In addition to that, she has taken the Small Business Administration Class offered by the University of South Florida. She married John Richeson in 1982 and they have worked together in the window cleaning business since that time. After graduating from HCC Mrs. Richeson contacted a family friend, an attorney, for the purpose of incorporating the business. It was at this time she began to run the business. Without asking any questions about the division of duties or the responsibility for leadership in the business, the attorney drafted the incorporation papers making Mr. Richeson the president. Ms. Richeson took the position of vice-president. She admits she did not, at the time, understand the ramifications of that action. Had she known the importance of the title, she would not have acquiesced in having her husband made president. Even though Ms. Richeson was the de-facto head of the business from the time of its expansion from a one-man operation, John D. Richeson served as president of the corporation from inception up to January 1, 1996, when Hope L. Richeson was elected president. At the annual meeting of the Board of Directors of the corporation, held on December 20, 1995, attended by Mr. and Mrs. Richeson, the two directors, the Board recognized Mrs. Richeson's control over the operation of the business since its inception and made her president effective January 1, 1996, when Mr. Richeson, the incumbent, became vice- president Mrs. Richeson indicates, and there is no evidence to the contrary, that neither she nor her husband had any specific training in order to operate the business. What was most important was a general business sense and a knowledge, gained by reading trade periodicals and from experience, of specific window cleaning products. Most of the major business contracts obtained by Petitioner come from bids to government entities and corporations. Other than herself, several employees, namely those who were brought into the business because of their experience with large cleaning projects, evaluate prospective jobs and prepare proposals. This proposal is then brought to her for approval before it is submitted to the potential client. These individuals are her husband and the Van Buren brothers. Based on a job costing formula learned in school, Mrs. Richeson then evaluates the bid to determine if it is too low or too high. She determines if the company can do the job for the price quoted. In addition to bidding, Ms. Richeson claims to oversee every aspect of the business. These functions range from buying office supplies to costing jobs. No one but she has the authority to purchase supplies or equipment other than minor items in an emergency. She also supervises the finances of the operation, determining how earnings are to be distributed and how much corporate officers and employees are to receive as compensation. By her recollection, on several occasions, due to a shortage of liquid funds, she has waived her right to be paid for a particular work period. She claims not to have taken a withdrawal from the corporation for a year, but the corporation's payroll documents reflect otherwise. The salary of each employee is set by Mrs. Richeson. Employees are paid on a percentage of job income. Those employees who do the high-rise jobs receive 40 percent of the income from those jobs. From her experience in the business, this arrangement for paying washers works far better than paying a straight salary. On the other hand, office personnel are paid on an hourly basis. In the event the business were to be dissolved due to insolvency, Mrs. Richeson would lose her 66 percent stock interest in the corporation and her husband would lose his 34 percent interest. There are no other owners of the company, and no one other than the Richesons would bear any loss. Not only can no one but Mrs. Richeson make purchases for the company, even Mr. Richeson cannot sign company checks by himself nor can he pay bills or make any major business decisions. Only she has the authority to borrow money in the name of the corporation. This was not always the case, however. In 1994, Mr. Richeson purchased a new vehicle for the corporation, signing the finance arrangement as president of the company, but even then, Mrs. Richeson signed as co-buyer. Also, the 1994 unsigned lease agreement for the company's use of real property owned by the Richesons calls for Mr. Richeson to sign as president of the company. Mrs. Richeson is the only one in the company who has the authority to hire or fire employees. While she believes the company would go out of business if she were not the president, she also believes she would be able easily to hire someone to replace Mr. Richeson if he were to leave the company. These beliefs are confirmed and reiterated by Mr. Richeson who claims that his role in the company from its very beginning has been that of services rather than management. On August 14, 1995, Mrs. Richeson, who at the time owned 990 of 1,500 shares of corporate stock, filed an application for certification as a minority business enterprise. The application reflected Mrs. Richeson as the owner of a 66 percent interest in the corporation, but also reflected Mr. Richeson as president. This was before the change mentioned previously Melissa Leon reviewed this application as a certification office for the Commission in September 1995. She recommended denial of the application on several bases. The Articles of Incorporation submitted with the application reflect the Director of the corporation as John D. and Hope Richeson and list only John Richeson as incorporator in August 1985. The corporate detail record as maintained in the office of the Secretary of State also reflects the resident agent for the corporation is John Richeson. The corporation's 1993 and 1994 federal income tax returns show John Richeson as 100 percent owner. No minority ownership is indicated. Income tax returns are afforded great weight by the Commission staff in determining ownership. Though Mrs. Richeson claims to own the majority interest in the corporation in her application, the tax returns do not reflect this. In addition, the corporation payroll summaries for February 28, 1995, March 31, 1995 and April 30, 1995 all show John Richeson receiving more income from the business than did Hope Richeson. In the opinion of Ms. Leon, Mrs. Richeson's salary was not commensurate with her claimed ownership interest. The same records for the last three months of 1995 and through April 1996 reflect Mrs. Richeson as receiving more than Mr. Richeson, however. Other factors playing a role in Ms. Leon's determination of non- qualification include the fact that the purchase order for the truck reflected Mr. Richeson as president; the lease agreement shows him signing as president; the bank signature card reflects him as president in 1994 and the corporate detail record shows Mrs. Richeson as resident agent by change dated May 14, 1996, after the filing of the application. Upon receipt of the Petitioner's application, Ms. Leon reviewed the documents submitted therewith and did a telephone interview with Mrs. Richeson. Based on this information and consistent with the guidelines set out in the agency's rules governing certification, (60A-2, F.A.C.), she concluded that the application did not qualify for certification. Not only was the required 51 percent minority ownership not clearly established, she could not determine that the minority owner contributed funds toward the establishment of the business. Ms. Leon determined that the payroll records, reflecting that from February through April 1995, Mrs. Richeson drew less than Mr. Richeson, were not consistent with the same records for the period from October 1995 through April 1996, which reflected that Mrs. Richeson was now earning more than her husband. Further, the amount Mrs. Richeson earned constituted only 53.2 percent of the salary while her ownership interest was purportedly 66 percent. A further factor militating toward denial, in Ms. Leon's eyes, was the fact that there were only two directors. Since Mrs. Richeson was one of two, she could not control the Board, and minority directors do not make up a majority of the Board. While the documents played an important part in Ms. Leon's determination, the telephone interview was also important. Here Ms. Leon found what she felt were many inconsistencies between what was stated in the interview and Mrs. Richeson's testimony at hearing. Therefore, Ms. Leon concluded at the time of her review that the business was jointly owned and operated. It was not sufficiently controlled by the minority party, to qualify for certification. Nothing she heard at hearing would cause her to change her opinion.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Labor and Employment Security enter a Final Order denying Minority Business Enterprise status to Bay Area Window Cleaning, Inc. DONE and ENTERED this 22nd day of August, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of August, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5913 To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1. Accepted and incorporated herein. 1. - 4. Accepted and incorporated herein. Accepted and incorporated herein except for the last sentence which is rejected as a legal conclusion. Accepted that she ran the operation. Accepted and incorporated herein. Accepted as a restatement of the testimony of Mrs. Richeson and a generalized agreement with the comments made. - 10. Accepted and incorporated herein, 11. - 12. Accepted. 13. - 14. Accepted. 15. - 17. Accepted. 18. - 19. Not proper Finding of Fact, but accepted as a restatement of witness testimony. 20. - 21. Accepted and incorporated herein. 22. - 25. Accepted as a restatement of witness testimony. Respondent's Proposed Findings of Fact. 1. - 8. Accepted and incorporated herein. Rejected as contradicted by the evidence. Accepted and incorporated herein. Accepted that until after the application was filed, Mr. Richeson was paid more than Mrs. Richeson, but the difference was not great. Accepted and incorporated herein. Accepted and incorporated herein. Rejected as not consistent with the evidence of record except for the allegation concerning Mr. Richeson's authority to sign corporate checks, which is accepted and incorporated herein. COPIES FURNISHED: Miriam L. Sumpter, Esquire 2700 North Dale Mabry Avenue, Suite 208 Tampa, Florida 33607 Joseph L. Shields, Esquire Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Douglas L. Jamerson, Secretary Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 303 Tallahassee, Florida 32399-2152 Edward A. Dion, General Counsel Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189
The Issue The issue to be considered in this matter is whether Petitioner meets the requisite qualifications for certification as a minority business enterprise (MBE).
Findings Of Fact Otto A. Lawrenz, a Native American, is the sole owner of Petitioner, Mechanical Air Products (MAP), located in Jacksonville, Florida. Petitioner was certified from December 12, 1992, through December 12, 1993, as a minority business enterprise (MBE). Recertification for Petitioner as an MBE for the period December 12, 1993 through December 12, 1994, occurred without incident following application by Petitioner. Petitioner is a business which specializes in provision of heating, ventilation and air conditioning equipment to its customers. Following application in December, 1994, Respondent denied Petitioner's request for recertification as an MBE by letter dated January 6, 1995. Respondent's denial of Petitioner's recertification resulted from amendments to Respondent's definition of "[r]egular dealer" as set forth in Rule 60A-2.001(10), Florida Administrative Code, and Respondent's determination that Petitioner did not meet that definition. Petitioner does not own, operate or maintain a store, warehouse or other establishment. As stated by Otto A. Lawrenz in correspondence to Respondent and reaffirmed by him at the final hearing, Petitioner is: manufacturer representative type of business that buys directly from various suppliers and factories I [Lawrenz] repre- sent. The products are purchased from this company and shipped direct to customers ship to address. I [Lawrenz] do not stock these products for inventory. Petitioner is presently provided some storage space free of charge by another, unaffiliated business, for storage of some products.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered denying the application for certification as an MBE. DONE and ENTERED in Tallahassee, Florida, this 14th day of August, 1995. DON W. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of August, 1995. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made on the proposed findings of fact submitted on behalf of the parties. Petitioner's Proposed Findings Petitioner's post-hearing submittal consisted of documentation, not provided at the final hearing, dealing with Petitioner's heritage, and his arguments of the law relative to this case. Consequently, those matters are addressed as not relevant and argumentative for purposes of this proceeding. Petitioner may attack the rules applied to his case in a separate rule challenge proceeding. Respondent's Proposed Findings 1.-4. Accepted, but not verbatim. COPIES FURNISHED: Otto A. Lawrenz Mechanical Air Products P O Box 17746 Jacksonville, FL 32245 Joseph L. Shields, Esq. Commission On Minority Economic And Business Development 107 W Gaines St., 201 Collins Bldg. Tallahassee, FL 32399-2005 Crandall Jones Executive Administrator Commission on Minority Economic and Business Development 107 W. Gaines St., 201 Collins Bldg. Tallahassee, FL 32399-2005
Findings Of Fact Petitioner was incorporated on November 17, 1980, and, since that time, has been primarily engaged in the base work and asphalt paving business. James L. Sauder and his wife, Annette, were the incorporators of Petitioner and continue to serve as Petitioner's two directors. From the inception of the corporation through the present time, James Sauder has been Petitioner's president while Annette Sauder has filled the offices of both secretary and treasurer of Petitioner. Additionally, at all times material hereto, James Sauder has been the registered agent for the corporation. Initially, James Sauder drew a salary of $220 a week, while Annette Sauder received no salary for her work. Thereafter, the Sauders decided to declare Petitioner a "subchapter S. corporation" for income tax purposes. At the end of Petitioner's first and second years of operation, all of the undistributed shareholders' profit of the company was drawn out by James Sauder only. Petitioner's income tax returns for both 1981 and 1982 reflect that James Sauder is the stockholder, that he owns 170 shares of Petitioner's stock, and that he devotes all of his time to the business. Petitioner's bylaws describe the duties of the officers of the corporation and provide that: The President shall be the chief executive officer of the corporation, shall have general and active management of the business and affairs of the corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the shareholders and Board of Directors. The bylaws further provide, in addition to some specific duties, that the secretary and the treasurer are also required to ". . . perform such other duties as may be prescribed by the Board of Directors or the President." Accordingly, Petitioner's secretary and treasurer work under the supervision and control of the president. Petitioner's articles of incorporation authorize Petitioner to issue 250 shares of stock with a five-dollar par value. On August 20, 1980, Petitioner's stock certificate No. 1 was issued to James L. Sauder for 125 shares of Petitioner's stock. No shares were issued to Annette Sauder until March 1, 1983, when 70 shares of James Sauder's stock were transferred to her using Petitioner's stock certificate No. 2. At the same time, an additional 55 shares of stock were issued to James L. Sauder using Petitioner's stock certificate No. 3. Accordingly, James Sauder owns 110 shares of Petitioner's stock, while Annette Sauder owns only 70 shares of Petitioner's stock. The occupational license issued to Petitioner by the City of Key West, Florida, for the 1982-83 year lists James L. Sauder as the owner of Petitioner. Decisions as to hiring and firing, the purchase and/or financing of equipment and other personalty, the jobs on which bids will be submitted and the amounts of bids, the supervision of Petitioner's employees, and even actual paving work are duties performed by both James and Annette Sauder. Although operating Petitioner's business appears to be a joint effort on the part of both James and Annette Sauder, it is clear that the ultimate decision maker, as well as chief executive officer, is James Sauder. In addition to testifying primarily using the word "we," the following is illustrative of the testimony given by Annette Sauder as to whether she or her husband controls the operation of Petitioner: (Tr. 72.) Q. If your husband told you that he didn't want a piece of equipment, but you wanted it, would you go out and get it? A. Not unless I wanted a divorce, I don't think I would. On November 28, 1983, Respondent denied Petitioner's application to be certified as a Minority Business Enterprise.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's application for certification as a Minority Business Enterprise and, specifically, Women's Business Enterprise. DONE and RECOMMENDED this 23rd day of July, 1984, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of July, 1984. COPIES FURNISHED: John R. Sutton, Esquire 7721 South West 62nd Avenue, First Floor South Miami, Florida 33143 Mark A. Linsky, Esquire Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, Florida 32301-8064 Paul N. Pappas, Secretary Department of Transportation 605 Suwannee Street Tallahassee, Florida 32301-8064
