The Issue Whether the Florida Fish and Wildlife Conservation Commission’s (“Respondent” or “FWC”) determination that Tallahassee Corporate Center, LLC (“Petitioner” or “TCC”), submitted a nonresponsive reply to FWC’s Invitation to Negotiate (“ITN”) No. 770-0235 is contrary to the Commission’s governing statutes, the agency’s rules or policies, or the solicitation specifications; and, if so, whether it was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact The following Findings of Fact are based on exhibits admitted into evidence, testimony offered by witnesses, and admitted facts set forth in the pre-hearing stipulation. ITN No. 770-0235 and Background FWC is a state agency that seeks office space to be occupied by personnel from six of FWC’s divisions. FWC currently leases office space from TCC, which expires in October 2019. On July 19, 2017, FWC issued ITN No. 770-0235, seeking vendors that could provide 53,000 square feet of office space for lease. FWC anticipates occupying the space by November 1, 2019. Between August 15, 2017, and November 2, 2017, FWC issued four addenda to the ITN, which contained amendments, modifications, and explanations to the ITN. There were no bidders that challenged the terms, conditions, or specifications contained in the ITN or its amendments. TCC and NLH were two of the potential lessors that submitted replies in response to the ITN. FWC seeks to lease either a building that already exists or a non-existing building to be constructed in the future. The ITN describes the proposals requested as follows: Competitive proposals may be submitted for consideration under this Invitation to Negotiate (ITN) for the lease of office space in either an existing building or a non- existing (build-to-suit/turnkey) building. NOTE: All buildings must comply with the Americans with Disabilities Act (ADA) as stated in Attachment A, Agency Specifications, Section 6.D., page 32. OPTION 1 - an ‘existing’ building: To be considered an ‘existing’ building, the facility offered must be enclosed with a roof system and exterior walls must be in place at the time of the submittal of the Reply. OPTION 2 - a ‘non-existing’ building: Offeror agrees to construct a building as a ‘build-to-suit’ (turnkey) for lease to FWC. Each applicant that submitted a proposal in response to the ITN was required to meet the specification in Attachment A of the ITN. The ITN provides as follows: FWC is seeking detailed and competitive proposals to provide built-out office facilities and related infrastructure for the occupancy by FWC. As relates to any space that is required to be built-out pursuant to this Invitation to Negotiate in accordance with this Invitation to Negotiate, see Attachment ‘A’ which includes the FWC Specifications detailing the build-out requirements. The specifications in Attachment A provided the basic requirements for the potential leased space such that proposals offering existing or non-existing building may be compared and evaluated together. The ITN included certain provisions to clarify the rights contemplated by the ITN, and included the following disclaimer: This ITN is an invitation to negotiate and is for discussion purposes only. It is not an offer, contract or agreement of any kind. Neither FWC nor the Offeror/Lessor shall have any legal rights or obligations whatsoever between them and neither shall take any action or fail to take any action in reliance upon any part of these discussions until the proposed transaction and a definitive written lease agreement is approved in writing by FWC. This ITN shall not be considered an offer to lease. The terms of any transaction, if consummated, shall not be final nor binding on either party until a Lease Agreement is executed by all parties. This ITN may be modified or withdrawn by FWC at any time. The ITN also included a provision expressly reserving FWC’s “right to negotiate with all responsive and responsible Offerors, serially or concurrently, to determine the best-suited solution.” The term “Offeror” was defined by the ITN to mean “the individual submitting a Reply to this Invitation to Negotiate, such person being the owner of the proposed facility or an individual duly authorized to bind the owner of the facility.” This reservation of rights placed interested lessors on notice that only responsive lessors could be invited to negotiations. While TCC and NLH were two of the potential lessors that submitted replies in response to the ITN, the bidders submitted different proposals. TCC submitted a proposal for an existing building, and NLH submitted a proposal for a non- existing building. During an initial review of all replies, FWC determined TCC’s reply to be nonresponsive based on TCC’s response to ITN section IV.G (Tenant Improvements) and a statement titled “Additional Response” that TCC submitted with its reply. As a result, FWC did not evaluate or score TCC’s reply. After TCC’s reply was declared nonresponsive, there were no further negotiations with TCC regarding the ITN. NLH’s reply passed the initial responsiveness review and was then evaluated and scored by FWC. FWC ultimately issued an intended award of the contract to NLH after conducting negotiations. Tenant-Improvement Cap The ITN prohibited vendors from proposing conditional or contingent lease rates that included a tenant-improvement cap, or allowance. A tenant-improvement cap reflects the maximum amount the landlord is willing to spend to make improvements to leased space. Mr. Hakimi asserted that the tenant-improvement cap would be an incentive to FWC to enter a lease. However, the tenant-improvement cap would also place a limit on improvements. According to ITN section IV.E, any reply offering a lease rate with a tenant-improvement cap would be deemed nonresponsive: FULL SERVICE (GROSS) RENTAL RATE The Offeror shall provide FWC with a Full Service (gross) lease structure. Therefore, the lease rate must include base rent, taxes, all operating expenses (including, but not limited to, janitorial services and supplies, utilities, water, insurance, interior and exterior maintenance, recycling services, garbage disposal, pest control, security system installation and maintenance, and any amortization of required tenant improvements to the proposed space). There shall be no pass through of additional expenses . . . . Offerors must provide their best, firm lease rates. Lease rates that are contingent, involve a basic rate plus “cap” or “range” for such things as tenant improvements will be deemed nonresponsive. The ITN also provided, in section IV.G, that any current lessor must meet all ITN requirements, including those set forth in ITN Attachment A: TENANT IMPROVEMENTS The State requires a “turn-key” build-out by the Landlord. Therefore, Offeror shall assume all cost risks associated with delivery in accordance with the required specifications detailed in this ITN, including Attachment A (see pages 28-45). Additionally, replies for space which is currently under lease with, or occupancy by, the Florida Fish and Wildlife Conservation Commission does not exclude the Offeror from meeting the requirements specified in this ITN document. Offeror agrees to provide “turn-key” build-out/improvements in accordance with the specifications detailed in this ITN. (use an X to mark one of the following): YES or NO TCC responded “NO” to the statement “Offeror agrees to provide ‘turn-key’ build-out/improvements in accordance with the specifications detailed in this ITN.” Additional Response Not only did TCC include a barred tenant-improvement cap, but TCC also attached an addendum to its proposal, which provided the following: The reality is that as the current Landlord, it would be impossible to ask FFWCC to move out of its existing office space in order to meet the requested Agency Specifications in Attachment A. If this condition makes our response to the Invitation to Negotiate (ITN) “non-responsive”, we stand willing to continue further negotiations with FFWCC. There was no provision in the ITN for additional responses outside what was requested in the ITN. More importantly, the addendum indicated TCC could not comply with the ITN, unless certain conditions were met. Mr. Hakimi confirmed the effect of what was written in the addendum when he testified that TCC is unable to meet Attachment A’s specifications because it presently has a tenant in place (i.e., FWC) that prevents it from constructing the building improvements necessary to comply with ITN Attachment A. Proof of Ownership of Property The ITN also provided that to be responsive, each lessor was required to submit certain documentation demonstrating the lessor’s control of the property proposed for the leased space: Replies must completely and accurately respond to all requested information, including the following: (A) Control of Property (Applicable for Replies for Existing and/or Non- Existing Buildings). For a Reply to be responsive, it must be submitted by one of the entities listed below, and the proposal must include supporting documentation proving control of the property proposed. This requirement applies to: The real property (land); The proposed building(s) (or structure(s); The proposed parking area(s). Control of parking includes the area(s) of ingress and egress to both the real property and the building(s). The owner of record of the facility(s) and parking area(s) – Submit a copy of the deed(s) evidencing clear title to the property proposed. The authorized agent, broker or legal representative of the owner(s) – Submit a copy of the Special Power of Attorney authorizing submission of the proposal. The Special Power of Attorney form was attached to the ITN as Attachment K. TCC’s certification was executed by TCC president, Lyda Hakimi. However, TCC did not execute Attachment K or include an executed power of attorney to demonstrate that TCC has control of the property. The evidence offered at hearing of the property’s ownership contained in TCC’s reply was a deed showing DRA CRT Tallahassee Center, LLC to be the property owner. Respondent argued that although TCC owns DRA CRT Tallahassee Center, LLC, the two are different legal entities. Because these were two different legal entities, TCC was required to provide a copy of Attachment K to its response to be deemed responsive. Broker Commission The ITN required lessors to agree to execute a broker- commission agreement, which was attached to the ITN as Attachment J: Offeror understands FWC is utilizing the services of a Tenant Broker representative for this lease space requirement and the successful Offeror shall execute a Commission Agreement, in coordination with FWC’s Tenant Broker representative, within fifteen (15) business days of notification of Award. Offeror agrees and acknowledges that a Tenant Broker Commission Agreement is a requirement and the successful Offeror shall be required to execute a Commission Agreement as described above. (use an X to mark one of the following): YES or NO The ITN included a schedule for the commission rate based on the total aggregate gross base rent that could be paid ranging from 2.50 percent to 3.50 percent. TCC conditioned its reply by agreeing to pay a two-percent broker commission, which is inconsistent with the commission schedule. By offering a lower commission rate, TCC could save money. TCC would then have a competitive advantage over other bidders. TCC’S Bid was Nonresponsive Based upon the foregoing, TCC’s bid submission added a tenant-improvement cap, failed to comply with the broker commission rate, failed to provide supporting documents to demonstrate proof of property ownership, and added additional conditions regarding compliance with the ITN requirements. The information requested and terms of the ITN were required for TCC’s bid to be responsive. TCC did not file a challenge to the specifications or any of the requirements of the ITN. It is now too late for such a challenge. TCC’s inclusion of a tenant-improvement allowance limits the amount that would pay for improvements. The lower broker commission increases the profit advantage for TCC more than for other bidders, which would be an unfair advantage over other bidders. TCC’s failure to comply with the terms of the ITN and failure to provide the required attachment to show proof of ownership were not minor irregularities, which FWC could waive. Therefore, FWC properly determined that TCC’s bid submission was nonresponsive. Standing TCC submitted a bid proposal that did not conform to the requirements of the ITN and it seeks relief that includes setting aside FWC’s rejection of its proposal. Therefore, TCC has standing to bring this protest. If it is determined that TCC was nonresponsive, NLH has standing to the extent the procurement process could be deemed contrary to competition.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Fish and Wildlife Conservation Commission enter a final order dismissing Tallahassee Corporate Center, LLC’s Petition. DONE AND ENTERED this 27th day of March, 2018, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of March, 2018.
The Issue Whether Florida Power & Light Company (hereinafter referred to as "FPL") properly refused the request of Globe International Realty & Mortgage, Inc. (hereinafter referred to as "Globe") to supply electric service to the premises located at 808 Northeast Third Avenue, Fort Lauderdale, Florida?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Kenneth V. Hemmerle, Sr., is a real estate developer. Matthew Renda is a real estate and mortgage broker. Hemmerle and Renda have known each other since about 1986. At the suggestion of Hemmerle, in February of 1993, Renda, along with Hemmerle, formed Globe. At the time, Hemmerle was involved in a development project on the west coast of Florida and he wanted Renda, through Globe, to handle "the selling and so forth for the project." Globe was incorporated under the laws of Florida. The articles of incorporation filed with the Department of State, Division of Corporations (hereinafter referred to as the "Division of Corporations") reflected that: Renda was the president of the corporation; Hemmerle was its secretary; Renda and Hemmerle were the incorporators of the corporation, owning 250 shares of stock each; they also comprised the corporation's board of directors; and the corporation's place of business, as well as its principal office, were located at 808 Northeast Third Avenue in Fort Lauderdale, Florida (hereinafter referred to as the "808 Building"). Globe is now, and has been since its incorporation, an active Florida corporation. Annual reports were filed on behalf of Globe with the Division of Corporations in both 1994 (on April 19th of that year) and 1995 (on March 23rd of that year). The 1994 annual report reflected that Renda and Hemmerle remained the officers and directors of the corporation. The 1995 annual report reflected that Renda was still an officer and director of the corporation, but that Hemmerle had "resigned 9-2-93." Both the 1994 and 1995 annual reports reflected that the 808 Building remained the corporation's place of business and its corporate address. The 808 Building is a concrete block building with a stucco finish housing eight separate offices. The entire building is served by one electric meter. At all times material to the instant case, Southern Atlantic Construction Corporation of Florida (hereinafter referred to as "Southern") owned the 808 Building. Southern was incorporated under the laws of Florida in June of 1973, and administratively dissolved on October 9, 1992. Hemmerle owns a majority of the shares of the corporation's stock. The last annual report that Southern filed with the Division of Corporations (which was filed on June 10, 1991) reflected that: Hemmerle was the corporation's president and registered agent; he also served on the corporation's board of directors; Lynn Nadeau was the corporation's other officer and director; and the corporation's principal office was located in the 808 Building. From 1975 until September 6, 1994, FPL provided electric service to the 808 Building. Charges for such service were billed to an account (hereinafter referred to as the "808 account") that had been established by, and was in the name of, Hemmerle Development Corporation (hereinafter referred to as "HDC"). HDC was incorporated under the laws of Florida in 1975, and administratively dissolved on October 9, 1992. At the time of HDC's incorporation, Hemmerle owned 250 of the 500 shares of stock issued by the corporation. The last annual report that HDC filed with the Division of Corporations (which was filed on June 10, 1991) reflected that: Hemmerle was the corporation's president and registered agent; he also served on the corporation's board of directors; Lynn Nadeau was the corporation's other officer and director; and the corporation's principal office was located in the 808 Building. Following the administrative dissolution of the corporation, Hemmerle continued to transact business with FPL in the corporation's name, notwithstanding that he was aware that the corporation had been administratively dissolved. At no time has Renda owned any shares of HDC's stock or served on its board of directors. He and Hemmerle have served together as officers and directors of only two corporations: Globe and Hemmerle's Helpers, Inc. The latter was incorporated under the laws of Florida as a nonprofit corporation in March of 1992, and was administratively dissolved on August 13, 1993. Its articles of incorporation reflected that its place of operation, as well as its principal office, were located in the 808 Building. Pursuant to arrangements Renda and Hemmerle had made (which were not reduced to writing), Globe occupied office space in the 808 Building from March of 1993, through September 6, 1994 (hereinafter referred to as the "rental period"). Renda and Hemmerle had initially agreed that the rent Globe would pay for leasing the space would come from any profits Globe made as a result of its participation in Hemmerle's Florida west coast development project. Renda and Hemmerle subsequently decided, however, that Globe would instead pay a monthly rental fee of $300 for each office it occupied in the building. 1/ Globe (which occupied only one office in the building during the rental period) did not pay in full the monies it owed under this rental agreement. The office Globe occupied in the 808 Building was the first office to the right upon entering the building. It was across the lobby from the office from which Hemmerle conducted business on behalf of his various enterprises. Globe voluntarily and knowingly accepted, used and benefited from the electric service FPL provided to its office and the common areas in the building during the rental period. Under the agreement Renda and Hemmerle had reached, Globe was not responsible for making any payments (in addition to the $300 monthly rental fee) for such service. On July 26, 1994, the 808 account was in a collectible status and an FPL field collector was dispatched to the service address. There, he encountered Hemmerle, who gave him a check made out to FPL in the amount of $2,216.37. Hemmerle had noted the following on the back of the check: "Payment made under protest due to now [sic] owning [sic] of such billing amount to prevent discontinuance of power." The check was drawn on a Sunniland Bank checking account that was in the name of Florida Kenmar, Inc., (hereinafter referred to as "Kenmar"), a Florida corporation that had been incorporated in May of 1984, 2/ and administratively dissolved on November 9, 1990. (The last annual report that Kenmar filed with the Division of Corporations, which was filed on June 10, 1991, reflected that: Hemmerle was the corporation's president and registered agent; he also served on the corporation's board of directors; and the corporation's principal office was located in the 808 Building.) Hemmerle told the field collector, upon handing him the check, that there were no funds in the Kenmar checking account. Nonetheless, the field collector accepted the check. FPL deposited the check in its account at Barnett Bank of South Florida. The check was subsequently returned due to "insufficient funds." On the same day that he was visited by the FPL field collector, Hemmerle telephoned Sandra Lowery, an FPL customer service lead representative for recovery, complaining about, among other things, a debit that he claimed had been improperly charged to the 808 account. As a result of her conversation with Hemmerle, Lowery authorized the removal of the debit and all late payment charges associated with the debit from the 808 account. Following the July 26, 1994, removal of the debit and associated late payment charges, the balance due on the account was $1,953.91, an amount that Hemmerle still disputed. In an effort to demonstrate that a lesser amount was owed, Hemmerle sent Lowery copies of cancelled checks that, he claimed, had been remitted to FPL as payment for electric service billed to the 808 account. Some of these checks, however, had been used to pay for charges billed to other accounts that Hemmerle (or corporations with which he was associated) had with FPL. As of August 29, 1994, the 808 account had a balance due of $2,387.47. These unpaid charges were for service provided between March of 1993 and August 10, 1994. On August 29, 1994, Hemmerle showed Renda a notice that he had received from FPL advising that electric service to the 808 Building would be terminated if the balance owing on the 808 account was not paid within the time frame specified in the notice. Hemmerle suggested to Renda that, in light of FPL's announced intention to close the 808 account and terminate service, Renda should either apply for electric service to the 808 Building in Globe's name or relocate to another office building. Renda decided to initially pursue the former option. Later that same day, Renda telephoned FPL to request that an account for electric service to the 808 Building be opened in Globe's name. Gigi Marshall was the FPL representative to whom he spoke. She obtained from Renda the information FPL requires from an applicant for electric service. During his telephone conversation with Marshall, Renda mentioned, among other things, that Globe had been a tenant at the 808 Building since the previous year and that it was his understanding that FPL was going to discontinue electric service to the building because of the current customer's failure to timely pay its bills. Renda claimed that Globe was not in any way responsible for payment of these past-due bills. From an examination of FPL's computerized records (to which she had access from her work station), Marshall confirmed, while still on the telephone with Renda, that the 808 account was in arrears and that FPL had sent a disconnect notice to the current customer at the service address. Marshall believed that, under such circumstances, it would be imprudent to approve Globe's application for electric service without further investigation. She therefore ended her conversation with Renda by telling him that she would conduct such an investigation and then get back with him. After speaking with Renda, Marshall went to her supervisor, Carol Sue Ryan, for guidance and direction. Like Marshall, Ryan questioned whether Globe's application for service should be approved. She suggested that Marshall telephone Renda and advise him that FPL needed additional time to complete the investigation related to Globe's application. Some time after 12:30 p.m. on that same day (August 29, 1994), Marshall followed Ryan's suggestion and telephoned Renda. Ryan was on the line when Marshall spoke with Renda and she participated in the conversation. Among the things Ryan told Renda was that a meter reader would be dispatched to the 808 Building the following day to read the meter so that the information gleaned from such a reading would be available in the event that Globe's application for service was approved. At no time did either Marshall or Ryan indicate to Renda that Globe's application was, or would be, approved. Ryan referred Globe's application to Larry Johnson of FPL's Collection Department, who, in turn, brought the matter to the attention of Thomas Eichas, an FPL fraud investigator. After completing his investigation of the matter, which included an examination of the Broward County property tax rolls (which revealed that Southern owned the 808 Building), as well a search of the records relating to Globe, HDC and Southern maintained by the Division of Corporations, Eichas determined that Globe's application for service should be denied on the basis of the "prior indebtedness rule." Eichas informed Johnson of his decision and instructed him to act accordingly. Electric service to the 808 Building was terminated on September 6, 1994. As of that date, the 808 account had a past-due balance that was still in excess of $2,000.00. Although he conducted his business activities primarily from his home following the termination of electric service to the 808 Building, Hemmerle continued to have access to the building until March of 1995 (as did Renda). 3/ During this period, Hemmerle still had office equipment in the building and he went there on almost a daily basis to see if any mail had been delivered for him. It was his intention to again actively conduct business from his office in the building if electric service to the building was restored. Hemmerle (and the corporations on whose behalf he acted) therefore would have benefited had there been such a restoration of service. After discovering that electric service to the 808 Building had been terminated, Renda telephoned FPL to inquire about the application for service he had made on behalf of Globe. He was advised that, unless FPL was paid the more than $2,000.00 it was owed for electric service previously supplied to the building, service to the building would not be restored in Globe's name. Thereafter, Renda, on behalf of Globe, telephoned the PSC and complained about FPL's refusal to approve Globe's application for service. FPL responded to the complaint in writing. In its response, it explained why it had refused to approve the application. On or about November 15, 1994, the Chief of PSC's Bureau of Complaint Resolution sent Renda a letter which read as follows: The staff has completed its review of your complaint concerning Florida Power & Light's (FPL) refusal to establish service in the name of Globe Realty, Inc. at the above- referenced location. Our review indicates that FPL appears to have complied with all applicable Commission Rules in refusing to establish service. Our review of the customer billing history indicates that the past-due balance is for service at this location and not attributable to the judgment against Mr. Hemmerle for service at another location. The interlocking directorships of Globe International Realty & Mortgage, Inc. and Hemmerle Development, Inc. suggest that the request to establish service in the name of Globe Realty is an artifice to avoid payment of the outstanding balance and not a result of any change in the use or occupancy of the building. Thus, FPL's refusal to establish service is in compliance with Rule 25-6.105(8)(a), Florida Administrative Code. Please note that this determination is subject to further review by the Florida Public Service Commission. You have the right to request an informal conference pursuant to Rule 25-22.032(4), Florida Administrative Code. Should that conference fail to resolve the matter, the staff will make a recommenda- tion to the Commissioners for decision. If you are dissatisfied with the Commission decision, you may request a formal Administrative hearing pursuant to Section 120.57(1), Florida Statutes. After receiving this letter, Renda, on behalf of Globe, requested an informal conference. The informal conference was held on November 30, 1994. At the informal conference, the parties explained their respective positions on the matter in dispute. No resolution, however, was reached. Adopting the recommendation of its staff, the PSC, in an order issued January 31, 1995, preliminarily held that there was no merit to Globe's complaint that FPL acted improperly in refusing to provide electric service to the 808 Building pursuant to Globe's request. Thereafter, Renda, on behalf of Globe, requested a formal Section 120.57 hearing on the matter.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the PSC enter a final order dismissing Globe's complaint that FPL acted improperly in refusing to provide electric service to the 808 Building pursuant to Globe's request. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 4th day of December, 1995. STUART M. LERNER 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 4th day of December, 1995.
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review pursuant to section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original notice of administrative appeal with the agency clerk of the Division of Administrative Hearings within 30 days of rendition of the order to be reviewed, and a copy of the notice, accompanied by any filing fees prescribed by law, with the clerk of the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides or as otherwise provided by law.
The Issue The threshold issue in this case is whether the decisions giving rise to the dispute, which concern the allocation and disbursement of funds appropriated to Respondent by the legislature and thus involve the preparation or modification of the agency's budget, are subject to quasi-judicial adjudication under the Administrative Procedure Act. If the Division of Administrative Hearings were possessed of subject matter jurisdiction, then the issues would be whether Respondent is estopped from implementing its intended decisions to "de- obligate" itself from preliminary commitments to provide low- interest loans to several projects approved for funding under the Community Workforce Housing Innovation Pilot Program; and whether such intended decisions would constitute breaches of contract or otherwise be erroneous, arbitrary, capricious, or abuses of the agency's discretion.
Findings Of Fact Petitioners Pasco CWHIP Partners, LLC ("Pasco Partners"); Legacy Pointe, Inc. ("Legacy"); Villa Capri, Inc. ("Villa Capri"); Prime Homebuilders ("Prime"); and MDG Capital Corporation ("MDG") (collectively, "Petitioners"), are Florida corporations authorized to do business in Florida. Each is a developer whose business activities include building affordable housing. The Florida Housing Finance Corporation ("FHFC") is a public corporation organized under Chapter 420, Florida Statutes, to implement and administer various affordable housing programs, including the Community Workforce Housing Innovation Pilot Program ("CWHIP"). The Florida Legislature created CWHIP in 2006 to subsidize the cost of housing for lower income workers performing "essential services." Under CWHIP, FHFC is authorized to lend up to $5 million to a developer for the construction or rehabilitation of housing in an eligible area for essential services personnel. Because construction costs for workforce housing developments typically exceed $5 million, developers usually must obtain additional funding from sources other than CWHIP to cover their remaining development costs. In 2007, the legislature appropriated $62.4 million for CWHIP and authorized FHFC to allocate these funds on a competitive basis to "public-private" partnerships seeking to build affordable housing for essential services personnel.1 On December 31, 2007, FHFC began soliciting applications for participation in CWHIP. Petitioners submitted their respective applications to FHFC on or around January 29, 2008. FHFC reviewed the applications and graded each of them on a point scale under which a maximum of 200 points per application were available; preliminary scores and comments were released on March 4, 2008. FHFC thereafter provided applicants the opportunity to cure any deficiencies in their applications and thereby improve their scores. Petitioners submitted revised applications on or around April 18, 2008. FHFC evaluated the revised applications and determined each applicant's final score. The applications were then ranked, from highest to lowest score. The top-ranked applicant was first in line to be offered the chance to take out a CWHIP loan, followed by the others in descending order to the extent of available funds. Applicants who ranked below the cut-off for potential funding were placed on a wait list. If, as sometimes happens, an applicant in line for funding were to withdraw from CWHIP or fail for some other reason to complete the process leading to the disbursement of loan proceeds, the highest-ranked applicant on the wait list would "move up" to the "funded list." FHFC issued the final scores and ranking of applicants in early May 2006. Petitioners each had a project that made the cut for potential CWHIP funding.2 Some developers challenged the scoring of applications, and the ensuing administrative proceedings slowed the award process. This administrative litigation ended on or around November 6, 2008, after the parties agreed upon a settlement of the dispute. On or about November 12, 2008, FHFC issued preliminary commitment letters offering low-interest CWHIP loans to Pasco Partners, Legacy, Villa Capri, Prime (for its Village at Portofino Meadows project), and MDG. Each preliminary commitment was contingent upon: Borrower and Development meeting all requirements of Rule Chapter 67-58, FAC, and all other applicable state and FHFC requirements; and A positive credit underwriting recommendation; and Final approval of the credit underwriting report by the Florida Housing Board of Directors. These commitment letters constituted the necessary approval for each of the Petitioners to move forward in credit underwriting, which is the process whereby underwriters whom FHFC retains under contract verify the accuracy of the information contained in an applicant's application and examine such materials as market studies, engineering reports, business records, and pro forma financial statements to determine the project's likelihood of success. Once a credit underwriter completes his analysis of an applicant's project, the underwriter submits a draft report and recommendation to FHFC, which, in turn, forwards a copy of the draft report and recommendation to the applicant. Both the applicant and FHFC then have an opportunity to submit comments regarding the draft report and recommendation to the credit underwriter. After that, the credit underwriter revises the draft if he is so inclined and issues a final report and recommendation to FHFC. Upon receipt of the credit underwriter's final report and recommendation, FHFC forwards the document to its Board of Directors for approval. Of the approximately 1,200 projects that have undergone credit underwriting for the purpose of receiving funding through FHFC, all but a few have received a favorable recommendation from the underwriter and ultimately been approved for funding. Occasionally a developer will withdraw its application if problems arise during underwriting, but even this is, historically speaking, a relatively uncommon outcome. Thus, upon receiving their respective preliminary commitment letters, Petitioners could reasonably anticipate, based on FHFC's past performance, that their projects, in the end, would receive CWHIP financing, notwithstanding the contingencies that remained to be satisfied. There is no persuasive evidence, however, that FHFC promised Petitioners, as they allege, either that the credit underwriting process would never be interrupted, or that CWHIP financing would necessarily be available for those developers whose projects successfully completed underwriting. While Petitioners, respectively, expended money and time as credit underwriting proceeded, the reasonable inference, which the undersigned draws, is that they incurred such costs, not in reliance upon any false promises or material misrepresentations allegedly made by FHFC, but rather because a favorable credit underwriting recommendation was a necessary (though not sufficient) condition of being awarded a firm loan commitment. On January 15, 2009, the Florida Legislature, meeting in Special Session, enacted legislation designed to close a revenue shortfall in the budget for the 2008-2009 fiscal year. Among the cuts that the legislature made to balance the budget was the following: The unexpended balance of funds appropriated by the Legislature to the Florida Housing Finance Corporation in the amount of $190,000,000 shall be returned to the State treasury for deposit into the General Revenue Fund before June 1, 2009. In order to implement this section, and to the maximum extent feasible, the Florida Housing Finance Corporation shall first reduce unexpended funds allocated by the corporation that increase new housing construction. 2009 Fla. Laws ch. 2009-1 § 47. Because the legislature chose not to make targeted cuts affecting specific programs, it fell to FHFC would to decide which individual projects would lose funding, and which would not. The legislative mandate created a constant-sum situation concerning FHFC's budget, meaning that, regardless of how FHFC decided to reallocate the funds which remained at its disposal, all of the cuts to individual programs needed to total $190 million in the aggregate. Thus, deeper cuts to Program A would leave more money for other programs, while sparing Program B would require greater losses for other programs. In light of this situation, FHFC could not make a decision regarding one program, such as CWHIP, without considering the effect of that decision on all the other programs in FHFC's portfolio: a cut (or not) here affected what could be done there. The legislative de-appropriation of funds then in FHFC's hands required, in short, that FHFC modify its entire budget to account for the loss. To enable FHFC to return $190 million to the state treasury, the legislature directed that FHFC adopt emergency rules pursuant to the following grant of authority: In order to ensure that the funds transferred by [special appropriations legislation] are available, the Florida Housing Finance Corporation shall adopt emergency rules pursuant to s. 120.54, Florida Statutes. The Legislature finds that emergency rules adopted pursuant to this section meet the health, safety, and welfare requirements of s. 120.54(4), Florida Statutes. The Legislature finds that such emergency rulemaking power is necessitated by the immediate danger to the preservation of the rights and welfare of the people and is immediately necessary in order to implement the action of the Legislature to address the revenue shortfall of the 2008-2009 fiscal year. Therefore, in adopting such emergency rules, the corporation need not publish the facts, reasons, and findings required by s. 120.54(4)(a)3., Florida Statutes. Emergency rules adopted under this section are exempt from s. 120.54(4)(c), Florida Statutes, and shall remain in effect for 180 days. 2009 Fla. Laws ch. 2009-2 § 12. The governor signed the special appropriations bills into law on January 27, 2009. At that time, FHFC began the process of promulgating emergency rules. FHFC also informed its underwriters that FHFC's board would not consider any credit underwriting reports at its March 2009 board meeting. Although FHFC did not instruct the underwriters to stop evaluating Petitioners' projects, the looming reductions in allocations, coupled with the board's decision to suspend the review of credit reports, effectively (and not surprisingly) brought credit underwriting to a standstill. Petitioners contend that FHFC deliberately intervened in the credit underwriting process for the purpose of preventing Petitioners from satisfying the conditions of their preliminary commitment letters, so that their projects, lacking firm loan commitments, would be low-hanging fruit when the time came for picking the deals that would not receive funding due to FHFC's obligation to return $190 million to the state treasury. The evidence, however, does not support a finding to this effect. The decision of FHFC's board to postpone the review of new credit underwriting reports while emergency rules for drastically reducing allocations were being drafted was not intended, the undersigned infers, to prejudice Petitioners, but to preserve the status quo ante pending the modification of FHFC's budget in accordance with the legislative mandate. Indeed, given that FHFC faced the imminent prospect of involuntarily relinquishing approximately 40 percent of the funds then available for allocation to the various programs under FHFC's jurisdiction, it would have been imprudent to proceed at full speed with credit underwriting for projects in the pipeline, as if nothing had changed. At its March 13, 2009, meeting, FHFC's board adopted Emergency Rules 67ER09-1 through 67ER09-5, Florida Administrative Code (the "Emergency Rules"), whose stated purpose was "to establish procedures by which [FHFC would] de- obligate the unexpended balance of funds [previously] appropriated by the Legislature " As used in the Emergency Rules, the term "unexpended" referred, among other things, to funds previously awarded that, "as of January 27, 2009, [had] not been previously withdrawn or de-obligated . . . and [for which] the Applicant [did] not have a Valid Firm Commitment and loan closing [had] not yet occurred." See Fla. Admin. Code R. 67ER09-2(29). The term "Valid Firm Commitment" was defined in the Emergency Rules to mean: a commitment issued by the [FHFC] to an Applicant following the Board's approval of the credit underwriting report for the Applicant's proposed Development which has been accepted by the Applicant and subsequent to such acceptance there have been no material, adverse changes in the financing, condition, structure or ownership of the Applicant or the proposed Development, or in any information provided to the [FHFC] or its Credit Underwriter with respect to the Applicant or the proposed Development. See Fla. Admin. Code R. 67ER09-2(33). There is no dispute concerning that fact that, as of January 27, 2009, none of the Petitioners had received a valid firm commitment or closed a loan transaction. There is, accordingly, no dispute regarding the fact that the funds which FHFC had committed preliminarily to lend Petitioners in connection with their respective developments constituted "unexpended" funds under the pertinent (and undisputed) provisions of the Emergency Rules, which were quoted above. In the Emergency Rules, FHFC set forth its decisions regarding the reallocation of funds at its disposal. Pertinent to this case are the following provisions: To facilitate the transfer and return of the appropriated funding, as required by [the special appropriations bills], the [FHFC] shall: * * * Return $190,000,000 to the Treasury of the State of Florida, as required by [law]. . . . The [FHFC] shall de-obligate Unexpended Funding from the following Corporation programs, in the following order, until such dollar amount is reached: All Developments awarded CWHIP Program funding, except for [a few projects not at issue here.] * * * See Fla. Admin. Code R. 67ER09-3. On April 24, 2009, FHFC gave written notice to each of the Petitioners that FHFC was "de-obligating" itself from the preliminary commitments that had been made concerning their respective CWHIP developments. On or about June 1, 2009, FHFC returned the de- appropriated funds, a sum of $190 million, to the state treasury. As a result of the required modification of FHFC's budget, 47 deals lost funding, including 16 CWHIP developments to which $83.6 million had been preliminarily committed for new housing construction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that FHFC enter a Final Order dismissing these consolidated cases for lack of jurisdiction. DONE AND ENTERED this 18th day of February, 2010, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 2010.
The Issue Whether Petitioner should have been awarded the contracts for Florida Department of Transportation (FDOT) Project No. 99004-3589 and FDOT Project No. 86999-3504.
Findings Of Fact On March 16, 1990, the Florida Department of Transportation entered the following Final Order in Case No. 89-3072: By certified mail, on March 5, 1989, the FLORIDA DEPARTMENT OF TRANSPORTATION (DEPARTMENT) gave notice to Petitioner, SIGNAL CONSTRUCTION COMPANY, INC., of intent to suspend their Certificate of Qualification pursuant to Fla. Admin. Rule 14-23 for unsatisfactory progress of work on State Project Nos. 10000-3352, 10500-3638 and 10500-3635. On May 15, 1989, Petitioner received such notice and requested an administrative hearing. The matter was referred to the Division of Administrative Hearings. Prior to hearing, the Petitioner filed a Notice of Voluntary Dismissal Without Prejudice. On December 6, 1989, the Hearing Officer, K. N. Ayers, entered an order closing the filed and cancelling the hearing. Therefore, it is ORDERED that SIGNAL CONSTRUCTION COMPANY, INC. is determined to be delinquent on State Projects 10000-3352, 10500-3638 and 10500-3635; and IT IS FURTHER ORDERED that the Certificate of Qualification of SIGNAL CONSTRUCTION COMPANY, INC. is suspended as of the date of this Order and the suspension shall continue until State Projects 10000-3352, 10500-3638 and 10500-3635 are conditionally accepted by the DEPARTMENT and for 296 days thereafter (May 26, 1989 to the date of this Final Order). During the period of suspension, neither SIGNAL CONSTRUCTION COMPANY, INC., nor its affiliates shall bid on any DEPARTMENT OF TRANSPORTATION construction contract regardless of the amount of bid, nor be approved as a subcontractor on any DEPARTMENT contract. DONE AND ORDERED this 16th day of March, 1990. The Florida Department of Transportation's (FDOT) District IV consists of the following Florida Counties: Indian River, St. Lucie, Martin, Palm Beach, and Broward. At the times pertinent to this proceeding, Teresa Martin was the Assistant District Contracts Administrator of FDOT District IV whose responsibilities included the letting of construction and maintenance contracts for projects that do not exceed $250,000. On or about October 12, 1990, Signal Construction Company (Signal), in response to advertisements for bids, requested bid documents from the District IV staff for several projects that were to be let. Included in those projects were State Job Numbers 86999-3504 and 99004-3589. Because of the dollar limit on these projects, it was within Ms. Martins's authority to review the responses and to award the bids. Prior to providing the bid documents to Signal, Ms. Martin had a member of her staff check the suspended bidders list to verify that Signal was not a suspended bidder. Because the list was outdated, Signal was not listed on the suspended bidder list used by District IV, and the bid documents were furnished to Signal. Signal did not advise the District IV staff that it had been suspended because it had challenged the suspension and was involved in litigation with FDOT over the suspension. Signal knew of the order entered by FDOT on March 16, 1990, but considered its suspension abated until resolved by the pending litigation. Pursuant to Signal's request, FDOT assembled a set of bid documents for State Job Numbers 86999-3504 and 99004-3589 as requested by Signal and delivered the same to Signal. FDOT also prepared and delivered an invitation to bid which solicited Signal's bid on these projects. Signal, in response, prepared bids for State Job Numbers 86999-3504 and 99004-3589 and at least one other project that FDOT had advertised. The invitation to bid advised bidders that bids would be accepted until November 2, 1990, at 10:30 a.m., and that there would be a mandatory pre-bid conference for these projects on October 23, 1990. In accordance with the requirements of the invitation to bid and the pertinent bidding documents, representatives of Signal attended the mandatory pre-bid conferences for State Job Numbers 86999-3504 and 99004-3589. Representatives of Signal signed the roster of attendance. Thereafter, Signal continued preparation of its competitive bids for projects State Job Numbers 86999-3504 and 99004-3589. On October 29, 1990, FDOT prepared and issued an addendum to the bid documents for both project 86999-3504 and for project 99004-3589. These addenda were delivered by FDOT to Signal by express mail, return receipt requested. Both addenda notified Signal, as a potential bidder, that the deadline for the submission of bids had been extended to Friday, November 9, 1990, at 1:30 p.m. Signal timely submitted competitive bids for State Job Numbers 86999- 3504 and 99004-3589. Ms. Martin thereafter evaluated all bids submitted for these projects, including the bids of Signal. Ms. Martin intended to award the bids for State Job Numbers 86999-3504 and 99004-3589 to Signal until she was informed by Mr. Reynold Meyer, an attorney for FDOT, that Signal was a suspended bidder. Ms. Martin had not known that Signal had been suspended as a bidder until she was so informed by Mr. Meyer on November 15, 1990. This information was provided Ms. Martin in response to a routine inquiry she made to FDOT's Contract Administration Office in Tallahassee. This inquiry was made even though the bidding documents pertinent to these projects did not require the bidder to hold a Certificate of Qualification to bid or to be prequalified as a bidder. After her conversation with Mr. Meyer on November 15, 1990, Ms. Martin disqualified Signal's bids on State Job Numbers 86999-3504 and 99004-3589. If there had been no question as to whether Signal was eligible to bid, Signal would have been awarded the contracts for both State Job Numbers 86999-3504 and 99004-3589. Neither Ms. Martin or anyone else from FDOT informed Signal that it had been disqualified as a bidder until the bid tabulations were posted by Ms. Martin on November 28, 1990. The Certificate of Qualification that had been suspended by FDOT's Final Order of March 16, 1990, had been issued to Signal on November 3, 1989, and was scheduled to expire on November 30, 1990. The forms necessary for Signal to renew its Certificate of Qualification had been furnished Signal by FDOT's Contracts Administration Office on October 2, 1990. The administrative proceeding in which FDOT's March 16, 1990, Final Order was entered was commenced by FDOT issuing on May 5, 1989, a Notice of Intent to suspend Signal's Certificate of Qualification. Signal challenged the notice and requested a formal administrative hearing in that proceeding. Thereafter, Signal filed a Notice of Voluntary Dismissal Without Prejudice, which resulted in the closing of the file of the Division of Administrative Hearings and the return of the matter to the referring agency. Thereafter, FDOT issued its Final Order on March 16, 1990. Signal appealed the Final Order of March 16, 1990, to the First District Court of Appeal. There was no evidence that any order was entered which stayed the Final Order of March 16, 1990, while the matter was on appeal. Shortly after it voluntarily dismissed the administrative proceeding, Signal filed suit in the Circuit Court in and for Hillsborough County, Florida, in an effort to resolve its dispute with FDOT, which contained a claim by Signal for monetary damages from FDOT. During the period from March 16, 1990, through November 28, 1990, Signal continued to bid for award of contracts let by FDOT based on its unilateral understanding that the Final Order of March 16, 1990, was stayed pending appeal. During this time, Signal was not awarded any FDOT contracts as the prime contractor, but it did perform work as a subcontractor on an FDOT project. It was not established which FDOT officials permitted Signal to continue to bid or who authorized Signal to accept work on an FDOT project as a subcontractor. On November 6, 1990, representatives of Signal and FDOT met in FDOT's District VII offices in Tampa, Florida, in an effort to negotiate a settlement of all matters then in dispute between Signal and FDOT, including the claims asserted in the circuit court action and the matters raised in the appeal of the Final Order dated March 16, 1990. After three offers and counteroffers, the parties were unable to reach settlement. On November 8, 1990, FDOT requested that Fred Young of Signal's parent corporation to meet with Jimmy Lairscey, the District VII Construction Engineer, on November 9, 1990, in an effort to further negotiate a settlement of all issues. Both Mr. Young and Mr. Lairscey had actively participated in the settlement negotiations of November 6, 1990, and these two representatives met again on November 9, 1990. Following this meeting, Signal was informed that verbal settlement had been reached on the matters upon which negotiations conducted on November 6, 1990, had collapsed. At Signal's request Mr. Lairscey advised FDOT District VI that Signal had been reinstated as a qualified bidder for a project that required Signal's prequalification as a bidder. On November 9, 1990, the parties contemplated that the settlement terms would have to be reduced to writing. During telephone conversations following the November 9 meeting between Mr. Lairscey and Mr. Young, counsel for the respective parties became aware that there was a disagreement between them as to the continued validity of the Final Order of March 16, 1990. On November 15, 1990, Mr. Meyer, as counsel for FDOT, wrote Signal's counsel a letter which stated, in pertinent part, as follows: Our conversations on November 9, 13 and 14, all of which took place subsequent to the meeting between Mr. Lairscey and Mr. Young, confirm that our clients have been unable to negotiate a settlement through the date of this letter. In order to avoid confusion, this letter reaffirms the Department has rejected all of your client's offers and your client has rejected all of the Department's counteroffers. As of this date, none of the Department's counteroffers are available for acceptance by your client. This letter confirms, however, the Department's continued willingness to negotiate. On November 17, 1990, John A. Barley, counsel for Signal responded to Mr. Meyer's letter of November 15, 1990. In this response, Mr. Barley summarized the negotiations between Signal and FDOT and asserted the position that settlement had been reached on November 9, 1990. On November 28-30, 1990, representatives of Signal and FDOT resumed negotiations in an effort to resolve the disputes between them through means of a written settlement agreement. On November 28, 1990, Ms. Martin posted the bid tabulations for State Job Numbers 86999-3504 and 99004-3589. Signal learned from the posting of the bid tabulations that it had been disqualified as a bidder on these two projects. Signal did not know prior to the bid posting that FDOT had disqualified it as a bidder on these two projects, although it was aware that FDOT considered the Final Order of March 16, 1990, to be effective. On November 30, 1990, FDOT and Signal entered into a written settlement agreement which provided, in pertinent part, as follows: On March 16, 1990, the DEPARTMENT issued its Final Order in Case No. 89-3072 declaring SIGNAL delinquent on State Project Nos. 10000-3352, 10500-3638 and 10500-3635. In that Final Order, SIGNAL's Certificate of Qualification was suspended from March 16, 1990, until State Project Nos. 10000-3352, 10500-3638 and 10500-3635 are conditionally accepted and for 296 days thereafter. SIGNAL timely filed it Notice of Administrative Appeal resulting in Case No. 90-1094, which is currently pending before the District Court of Appeal, First District. The parties have entered into this Joint Stipulation and Settlement to resolve the subject of appellate Case No. 90-1094 amicably without further litigation. By this Joint Stipulation and Settlement, the DEPARTMENT amends the first sentence of paragraph three of its Final Order in Case No. 89-3072 dated March 16, 1990 as follows: IT IS FURTHER ORDERED that the Certificate of Qualification of SIGNAL CONSTRUCTION COMPANY, INC., is suspended as of the date of this Order (March 16, 1990) until and including the date of the execution by SIGNAL of the Joint Stipulation and Settlement (the 30th day of November 1990). * * * 24. Signal reserves its rights to protest the Department's decision determining Signal a nonresponsive bidder on the two District 4 mini contracts let by District 4 on November 9, 1990. Paragraph 24 of the settlement agreement refers to the projects that are the subject of this proceeding, but it incorrectly reflects that Signal was determined to be a nonresponsive bidder. FDOT disqualified Signal's bids because of the March 16, 1990, Final Order, not because the bids were nonresponsive. The only substantial change made in the terms and conditions of settlement stated in the "Joint Stipulation and Settlement" and the terms and conditions of settlement orally agreed upon on November 9, 1990, was the provision making FDOT's March 16, 1990, Final Order effective through November 30, 1990.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which dismisses the bid protests filed by Signal. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 6th day of February, 1991. CLAUDE B. ARRINGTON 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 6th day of February, 1991. APPENDIX TO RECOMMENDED ORDER The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. The proposed findings of fact in paragraph 1 are adopted in part by the Recommended Order, and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 2 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 4 are adopted in part by the Recommended Order, and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 4 are adopted in part by the Recommended Order, and are rejected in part as being subordinate to the findings made or as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 6 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 7 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 8 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 9 are adopted in material part by the Recommended Order. The proposed findings of fact contained in the last sentence of paragraph 9 are considered preliminary matters. The proposed findings of fact in paragraph 10 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 11 are adopted in part by the Recommended Order, and are rejected in part as being unsubstantiated by the record. The proposed findings of fact in paragraph 12 are adopted in part by the Recommended Order, and are rejected in part as being unsubstantiated by the record. The proposed findings of fact in paragraph 13 are adopted in part by the Recommended Order, and are rejected in part as being unsubstantiated by the record. The proposed findings of fact in paragraph 14 are adopted in part by the Recommended Order, and are rejected in part as being unsubstantiated by the record. The proposed findings of fact in paragraphs 15 are adopted in part by the Recommended Order, and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 16 are adopted in material part by the Recommended Order, and are rejected in part as being subordinate to the findings made. The proposed findings regarding the request to have Mr. Lairscey notify District IV of the reinstatement of Signal is rejected as being contrary to the greater weight of the evidence. The proposed findings of fact in paragraph 17 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 18 are adopted in part by the Recommended Order and are rejected in part as being contrary to the findings made. The proposed findings of fact in paragraph 19 are adopted in part by the Recommended Order and are rejected in part as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 20 are rejected as being unnecessary to the conclusions reached. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. The proposed findings of fact in paragraph 1 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 2 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 4 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 5 are adopted in part by the Recommended Order and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 6 are adopted in part by the Recommended Order and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 7 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 8 are adopted in part by the Recommended Order and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 9 are rejected as being subordinate to the findings made. COPIES FURNISHED: John A. Barley, Esquire John A. Barley & Associates, P.A. 400 North Meridian Street P.O. Box 10166 Tallahassee, Florida 32301 Susan P. Stephens, Esquire Assistant General Counsel Florida Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, Florida 32399-0458 Ben G. Watts Secretary Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Attention Eleanor F. Turner Thornton J. Williams General Counsel Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street Tallahassee, Florida 32399-0458
The Issue Pursuant to the order of the First District Court of Appeal dated October 18, 2005, the issue before the Division of Administrative Hearings is a determination of the amount of attorneys' fees and costs to be awarded for the administrative proceeding in Department of Health v. Anthony Glenn Rogers, M.D., DOAH Case No. 02-0080PL, and for the appellate proceeding styled Anthony Glenn Rogers, M.D. v. Department of Health, Case No. 1D04-1153 (Fla. 1st DCA Oct. 18, 2005).
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency charged with regulating the practice of medicine, and the Board of Medicine ("Board") within the Department is the entity responsible for entering final orders imposing disciplinary action for violations of the laws regulating the practice of medicine. See §§ 455.225 and 458.331(2), Fla. Stat. On January 4, 2002, the Department of Health filed an Administrative Complaint charging Dr. Rogers with violations of Section 458.331(1)(m), (q), and (t), Florida Statutes (1998).3 The matter was referred to the Division of Administrative Hearings, which assigned the matter DOAH Case No. 02-0080PL. The case was heard on May 7, 2002, by Administrative Law Judge Michael J. Parrish. Judge Parrish entered his Recommended Order on February 21, 2003, in which he found that the Department had failed to prove violations of Section 458.331(1)(q) and (t), Florida Statutes (1998), and recommended dismissal of those charges. Judge Parrish found that the Department had proven a violation of Section 458.331(1)(m), Florida Statutes (1998), failing to keep medical records as required by rule, and he recommended that Dr. Rogers be required to pay a $1,000.00 administrative fine and attend a Florida Medical Association record-keeping course as the penalty for the violation. The Board entered its Final Order on February 17, 2004, in which it adopted its own findings of fact and conclusions of law; found Dr. Rogers guilty of all three charges in the Administrative Complaint; and imposed a penalty on Dr. Rogers consisting of a $10,000 administrative fine, completing of a drug course sponsored by the University of South Florida, completion of a Florida Medical Association record-keeping course, and two years' probation, during which he was not permitted to practice medicine unless his practice was monitored quarterly by a physician approved by the Board. Dr. Rogers appealed the Board's Final Order to the First District Court of Appeal, challenging the Board's determination that Dr. Rogers had violated Section 458.331(1)(q) and (t), Florida Statutes (1998). Dr. Rogers filed a motion for attorneys' fees and costs based on Section 120.595(5), Florida Statutes. In addition, Dr. Rogers filed a Motion for Stay of Final Order, which the Board opposed. The district court denied the motion for stay in an order entered April 2, 2004, and Dr. Rogers proceeded to comply with the terms of the two-year probationary period imposed by the Board, as well as fulfilling the other requirements set forth in the Board's Final Order of February 17, 2004. In an opinion issued on October 18, 2005, the First District Court of Appeal reversed the Board's Final Order with respect to its determination that Dr. Rogers had violated Section 458.331(1)(q) and (t), Florida Statutes (1998), and remanded the matter to the Board for entry of a Final Order consistent with its opinion. The district court held in its opinion that the Board had erroneously re-weighed the evidence and had rejected findings of fact in the administrative law judge's Recommended Order that were supported by competent substantial evidence. The district court also entered on October 18, 2005, the order granting Dr. Rogers's motion for attorneys' fees and costs that is the subject of this proceeding. The district court's mandate issued on February 23, 2006, and, on April 21, 2006, the Board entered a Final Order on Remand adopting the findings of fact and conclusions of law in Judge Parrish's Recommended Order, finding that Dr. Rogers had violated Section 458.331(1)(m), Florida Statutes (1998), and imposing a $1,000.00 administrative fine on Dr. Rogers and requiring him to attend a medical record-keeping course. Based on the Amended Affidavit of C. William Berger filed August 24, 2006, the total number of hours Mr. Berger spent in representing Dr. Rogers in the administrative proceeding in DOAH Case No. 02-0080PL is 79.75, a total that the Department does not challenge. Mr. Berger's billing rate was $300.00 per hour, a rate that the Department accepts as reasonable. The total amount of attorney's fees paid to Mr. Berger for his representation of Dr. Rogers through the administrative proceedings before the Division of Administrative Hearings was, therefore, $23,925.00. Dr. Rogers was ultimately found to have violated one count of the three-count Administrative Complaint filed against him by the Department, the count in which the Department alleged that Dr. Rogers had violated Section 458.331(1)(m), Florida Statutes (1998), by failing to keep adequate medical records related to the patient that was the subject of the charges against him. Mr. Berger did not record in his billing statements the amount of time he spent researching this charge, preparing for hearing on this charge, or addressing this charge in the Proposed Recommended Order he filed in 02-0080PL. It is reasonable that Mr. Berger spent 10 percent of the hours included in his billing statements preparing Dr. Rogers's defense to the charge that he failed to keep adequate medical records.4 Accordingly, Mr. Berger's attorney's fees will be reduced by 10 percent, or by $2,392.50, for a total of $21,532.50. In reaching the percentage by which Mr. Berger's fees should be reduced, consideration has been given to the amount of the fees in relationship to the failure to prevail on the medical-records violation, to the seriousness of the alleged violations on which Dr. Rogers prevailed before both the administrative law judge and on appeal,5 and the penalty ranges that the Board could impose for the violations with which Dr. Rogers was charged.6 Based on the Supplemental Affidavit of Lisa Shearer Nelson Regarding Attorneys' Fees and Costs filed September 5, 2006, Ms. Nelson claimed that she spent a total of 187.1 hours "from the issuance of the final order of the Board of Medicine through the appeal and remand and initial preparation of the petition for attorney's fees and costs." Ms. Nelson's billing statements reflect that she represented Dr. Rogers during the appellate proceedings before the First District Court of Appeal in Case No. 1D04-1153 and before the Board on remand from the district court. Ms. Nelson's billing rate was $250.00 per hour, a rate that the Department accepts as reasonable. The total amount of attorney's fees paid by Dr. Rogers to Ms. Nelson for her representation was, therefore, $46,775.00. A review of the billing statements attached to Ms. Nelson's supplemental affidavit reveals that the final billing statement, dated June 9, 2006, was for "preparation of petition for fees and costs; preparation of affidavit re same." Dr. Rogers was billed for 1.9 hours in this billing statement, for a total of $475.00. Because the work done by Ms. Nelson reflected in this billing statement did not involve the appellate proceeding arising out of the Board's Final Order of February 17, 2004, the hours claimed by Ms. Nelson are reduced by 1.9 hours, for a total of 185.2 hours. Accordingly, Ms. Nelson's attorney's fees for her representation of Dr. Rogers on appeal total $46,300.00. The total costs identified in Mr. Berger's Amended Affidavit and in the billing statements attached to the Amended Affidavit is $4,462.55. This amount is reduced by $1,000.00 attributable to a retainer paid to a Dr. Spanos, who was initially retained as an expert witness but who ultimately did not testify on Dr. Rogers's behalf. The total allowable costs for the administrative proceeding, therefore, are $3,462.55. The total costs identified by Ms. Nelson in her Supplemental Affidavit and in the billing statements attached to the Supplemental Affidavit is $1,005.01. The total costs for both the administrative and the appellate proceedings are, therefore, $4,467.56. Dr. Rogers submitted an affidavit in which he claimed that he expended total costs of $154,807.23 in fulfilling the terms of the penalty assessed against him in the Board's Final Order of February 17, 2004, which was reversed by the district court.
Conclusions For Petitioner: C. William Berger, Esquire One Boca Place, Suite 337W 2255 Glades Road Boca Raton, Florida 33486 For Respondent: John E. Terrel, Esquire Michael D. Milnes, Esquire Department of Health 4052 Bald Cypress Way, Bin C-65 Tallahassee, Florida 32399-3265
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original Notice of Appeal with the agency clerk of the Division of Administrative Hearings and a copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the Appellate District where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.
The Issue Whether Respondent violated section 112.313(6), Florida Statutes (2013),1/ by corruptly using his position as Sheriff of Flagler County to obtain a benefit for himself or others; or section 112.3148(8), by failing to report a gift valued in excess of $100.00; and, if so, what penalty should be imposed.
Findings Of Fact Respondent, James L. Manfre, served as Flagler County Sheriff from January 2001 through January 2005 (Respondent’s first term). Respondent was re-elected Sheriff in 2012 and began his second term on January 8, 2013. Respondent is a member of the Florida Bar. Between his first and second terms, Respondent was engaged in the private practice of law, with a primary focus on land use matters. While in private practice, Respondent represented two clients involved in cases with the Florida Ethics Commission. One client was a complainant who alleged misuse of position by a public official. Former Undersheriff, Frederick Staly, served as Flagler County Undersheriff with Respondent from January 2013 to April 17, 2015. Respondent chose Staly as Undersheriff, in part, because he had almost 40 years’ experience in law enforcement, and had most recently served as Undersheriff in Orange County, Florida. Undersheriff Staly advised Respondent on matters pertaining to policy and personnel decisions. In December 2012, just prior to Respondent’s second term, Respondent and Undersheriff Staly attended a one-day ethics training seminar for new law enforcement personnel. Linda Tannuzzi has been employed by the Flagler County Sheriff’s Office (FCSO) since 2001. Ms. Tannuzzi was Accounting Specialist in the FCSO Finance Department during both Respondent’s first and second terms. Ms. Tannuzzi’s responsibilities included processing the monthly FCSO credit card bill for payment. Ms. Tannuzzi’s general practice was to check the listed charges on the monthly FCSO credit card statement against the receipts submitted by employees. In the event no receipt was submitted, Ms. Tannuzzi would obtain missing receipts from either the employee or the vendor (e.g., hotel at which employee stayed). The practice of the Finance Department was to pay all credit card charges accompanied by a signed receipt from the employee. During all times pertinent hereto, the Sheriff’s office maintained a policy on credit card purchases. Pursuant to the policy, the Sheriff “will make only agency-related purchases and return receipts to Finance.” The policy did not define “agency-related purchases.” Further, the policy advised: Using an agency credit card during an ongoing investigation requires the following be adhered to: Food only in amount specified by per diem rate, must include overnight stay. No cash advances. No car rentals without approval of Sheriff. Travel voucher to be completed upon return. Receipts to be attached to travel voucher. (emphasis added). This portion of the policy did not clearly apply to use of the agency credit card outside of ongoing investigations. Respondent was issued an FCSO credit card for use during both his first and second terms. Ms. Tannuzzi never questioned any receipt submitted by Respondent until October 2013. She assumed all Respondent’s receipts were valid. However, no one instructed her to process Respondent’s credit card charges differently from other employees. Pursuant to section 112.061, at all times relevant hereto, state employees were allowed the following amounts for meals while traveling on business overnight: breakfast, $6; lunch, $11; and dinner, $19. These amounts are referred to as the per diem rates. Respondent was subject to section 112.061 at all times relevant hereto. Use of Agency Credit Card In May 2013, Respondent attended a National Law Enforcement conference in Washington, D.C. On May 14, 2013, Respondent dined at a restaurant called the “Madhatter” with his wife, as well as some sheriff’s deputies and their spouses. The total bill for the meal was $235.76, which Respondent paid for with the FCSO credit card. The tab included one alcoholic beverage. Upon returning from the conference, Respondent submitted the signed receipt to Finance for processing. Other than the meals for FCSO employees, the purchase did not serve a public purpose. Each of the meals for FCSO employees exceeded the per diem rate. In July 2013, Respondent attended the National Association of School Resource Officers conference in Orlando and stayed at the Rosen Shingle Creek hotel. On July 16, 2014, Respondent dined with his wife at an onsite restaurant. Respondent charged the total bill of $86.50, which included alcohol, to his room at the hotel. With the exception of Respondent’s meal, the purchase did not serve any public purpose. The cost of Respondent’s meal exceeded the per diem rate. Upon his return, Respondent submitted his receipt from the Rosen Shingle Creek hotel to Finance for processing. In August 2013, Respondent attended the Florida Sheriff’s Association conference in Marco Island, Florida, and stayed at a Marriott hotel. Respondent made the following room charges during his stay: On August 3, 2013, meals for himself, Undersheriff Staly, and their wives, including alcohol, totaling $158.50, and, separately, two alcoholic beverages totaling $12.46; on August 4, 2013, two meals and alcohol, totaling $62.21; and on August 7, 2013, two meals totaling $54.58. Upon his return, Respondent submitted the Marriott hotel receipt to Finance for processing. Other than Respondent’s and Undersheriff Staly’s meals, the purchases did not serve any public purpose. The amount for each of Respondent’s meals exceeded the per diem rate. Public Records Request/FCSO Audit In October 2013, the independent accounting firm of Carr, Riggs, and Igram began a routine financial audit of the FCSO for the fiscal year ending September 30, 2013. Also in October 2013, the FCSO received a public records request, or requests, seeking information from the FCSO pertaining to Respondent’s travel expenditures. In order to fully respond to the public records request(s), Ms. Tannuzzi had to obtain a detailed receipt of Respondent’s Madhatter restaurant charges from May 2013, and detailed receipts of Respondent’s restaurant and bar charges, which were reflected as room charges on the July and August 2013 hotel receipts. In mid-October 2013, Respondent had a meeting with Undersheriff Staly, the FCSO Director of Finance, and the FCSO attorney. The purpose of the meeting was to discuss charges Respondent made with the FCSO credit card. During that meeting, Respondent was advised to reimburse FCSO for all non-agency personnel meal charges and his meal charges exceeding the approved per diem rate. The Finance Director was instructed to calculate the amounts owed by Respondent. On October 31, 2013, Respondent reimbursed FCSO $344.03 for “personal meals” charged to the FCSO account. At hearing, Respondent maintained that his staff, mainly his Undersheriff and Finance Director, had the duty to inform and advise him of his obligations with respect to use of the FCSO credit card, and that they failed to perform that duty. Thus, Respondent pled ignorance as to the appropriate use of the agency credit card, and argued that when the issues were brought to his attention, he reimbursed the amounts owed and instituted new policies to provide clear guidance to all FCSO personnel. Respondent assumed no responsibility for, and was neither contrite nor apologetic for, his use of the agency credit card. Respondent assigned fault to the Director of Finance for not keeping accurate accounts and “keeping track of these amounts and [telling] me if I was over the per diem rate.” Respondent’s attitude was best reflected in his own words: I assumed and trusted that she knew what she was doing and would come to me when the money was owed. That was my assumption, that she was competent to do that. It was simple addition and subtraction that all she had to do was tell me what it was. I never refused to pay back any amounts when I was asked to. It is not my job to be the director of finance. My job was to be a sheriff and create a community that is safe, and I assumed that she was doing her job. Unfortunately, to my detriment, she was not. Respondent admitted that he knew the charges exceeded the per diem rate for meals. Apparently, he did not intend to pay for them unless requested. Use of Agency Vehicles In January 2013, Respondent drove an FCSO unmarked Ford Crown Victoria to Destin, Florida, to attend a Florida Sheriff’s Association conference. Respondent’s wife accompanied him to the conference. When the conference ended, Respondent drove the FCSO vehicle to visit his in-laws in Pensacola, Florida, then on to New Orleans for a personal trip. On May 3, 2013, Respondent drove an FCSO white Dodge Charger to Pigeon Forge, Tennessee, for a vacation with his wife. Respondent returned to Florida from Pigeon Forge on May 7, 2013. In August 2013, Respondent drove an FCSO white Dodge Charger to Virginia to view colleges with his son. During the trip, the vehicle suffered minor damage in a parking lot. Upon Respondent’s return from Virginia, Undersheriff Staly observed Respondent, along with the owner of a local body shop, in the parking lot inspecting the vehicle. Undersheriff Staly inquired whether there was anything wrong with the vehicle. In response to Undersheriff Staly’s inquiry, Respondent disclosed what had transpired. Respondent indicated that the accident did not occur in Flagler County, which Respondent knew to be “a problem.” Respondent consulted with Undersheriff Staly regarding the procedure to deal with the minor damage to the vehicle. Staly recommended Respondent write an internal report. With respect to damage to FCSO vehicles, the policy in effect at the time required officers to document damage on an incident report and report it to the Division Director through the chain of command. Respondent did not file a report pursuant to either the policy or Undersheriff Staly’s advice. The policy also required all officers to report vehicle damage to Fleet Maintenance. Respondent did report the damage to Fleet Maintenance. Respondent released a statement (in response to press inquiries about damage to the vehicle) explaining that he did not take his personal vehicle on this trip because it had a mechanical problem. Respondent testified at final hearing that his personal vehicle had a mechanical problem. At all times relevant hereto, FCSO maintained a policy on use and assignment of agency vehicles, Policy 41.3. Policy 41.3 stated, “Agency vehicles are assigned by Division Directors to individual member’s [sic] based on the criteria of their job performance.” There is no Division Director with respect to Respondent. Under Use of Vehicles, Policy 41.3 states, “The Sheriff allows personnel who have been assigned an Agency vehicle use of that vehicle while off duty with the following provisions[.]” The policy requires officers to obtain permission from their supervisor in order to take an FCSO vehicle out of the county. Respondent has no supervisor. Respondent’s position is that Policy 41.3 applied only to use of marked vehicles. On October 17, 2013, Respondent reimbursed FCSO $667 for use of the agency vehicle for personal travel to Pigeon Forge, Tennessee. Use of the agency vehicle for the trip to Virginia was publicly questioned in 2014. At that time, Respondent was advised by Undersheriff Staly to reimburse FCSO for the mileage. However, Respondent asked Staly to follow up with an attorney for the Florida Sheriff’s Association (which he did), who provided the same advice. Respondent reimbursed FCSO for use of the agency vehicle to Virginia on July 10, 2014, when he issued a check for $223.50. At final hearing, Respondent maintained that reimbursement was not necessary and was only made “in an abundance of caution on the advice of counsel.” Unreported Gift Respondent’s stay in Pigeon Forge, Tennessee, in May 2013, was courtesy of Undersheriff Staly. Staly owns three cabins in a private vacation resort in Pigeon Forge. The resort has a gated entrance, and just inside the entrance is a management office where guests check in. The resort includes amenities such as a playground, a miniature golf course, and a clubhouse. Undersheriff Staly pays commercial property insurance, and pays for utilities and cable television at a commercial rate. He also pays tangible personal property tax. Undersheriff Staly contracts with “Accommodations by Parkside,” a vacation rental management company, to manage the cabins. He pays a management fee to Accommodations by Parkside for each rental booking. Undersheriff Staly must reserve the cabins for his personal use through Accommodations by Parkside. He does not have direct access to any of the cabins. Undersheriff Staly reserved one of the cabins, “Suite Mountain View,” for Respondent to use from May 3 through May 7, 2013. The particular cabin usually rents for $430 per night during the applicable season. Undersheriff Staly offered Respondent use of the cabin for the cleaning fee of $75. The décor at Suite Mountain View does not include any family photographs or other items personal to the Stalys. Respondent paid Accomodations by Parkside $90.20 for use of the cabin during the specified dates, which included the cleaning fee and sales tax. Constitutional officers are required to file with the Florida Commission on Ethics a Form 9 Quarterly Gift Disclosure for quarters ending in March, June, September, and December of each year. Respondent did not report any gift on Form 9 for the quarter ending June 2013. Sometime in October 2013, Respondent participated in a conference call hosted by the Florida Sheriff’s Association covering a variety of ethics topics. Following the conference call, Respondent remarked to Undersheriff Staly, “I think I may have a problem with your cabin,” and stated something to the effect of “I think I was supposed to report it.” Staly advised Respondent to report it and informed Respondent the cabin rented for $430 per night. On a separate date, Respondent again discussed with Undersheriff Staly reporting use of the cabin as a gift. At that time, Respondent stated he was going to report it at a value of $44 per night. Undersheriff Staly advised against that method of valuing the cabin. Respondent’s response was something to the effect of “forty-four dollars sounds better than the $430, or a $1,200 gift.” On May 27, 2014, seven months after Respondent verbally questioned whether he should report use of the cabin as a gift, Respondent filed a Form 9 Quarterly Gift Disclosure on which he reported use of the cabin as a gift received from Undersheriff Staly May 3 through May 5, 2013, at a monetary value of $132.00, calculated based on a rate of $44 per night. On December 16, 2013, Carr, Riggs, and Ingram released its Auditor’s Report of FCSO for fiscal year ending October 2013. Of note, the report found that “certain expenditures charged to the Office’s credit card were not in accordance with allowable travel costs under Section 112.061.” In response to the public attention focused on Respondent’s use of the FCSO credit card and agency vehicles, Respondent instituted new FCSO policies in 2014. FCSO General Order 152, which took effect on January 10, 2014, prohibited non-authorized use of agency credit cards, and listed authorized and unauthorized charges. The policy defined “food and restaurant purchases” as unauthorized, as well as “alcohol, unless approved by a Senior Commander or designee for an operational necessity.” FCSO General Order 046, which took effect April 4, 2014, prohibited driving agency vehicles out of state while off- duty, unless on official business with prior approval. In May 2014, Respondent attended a Law Enforcement Officers’ Memorial service in Tallahassee, Florida, and stayed at the Four Points Sheraton hotel. During his stay, Respondent charged drinks at the bar and two breakfast buffets to his room. When Respondent checked out of the hotel on May 5, 2014, Respondent presented his personal credit card for the incidentals. The hotel clerk “swiped” Respondent’s credit card, which was approved for a charge of $50.39, the total of Respondent’s bar and restaurant charges to his room. Respondent received from the hotel clerk a receipt showing charges for his room and tax only. Due to a clerical error at the hotel, the FCSO credit card was billed for Respondent’s incidentals, as well as his lodging. The error was discovered later that same month when the FCSO credit card bill was processed. The $50.39 charge for incidentals was correctly transferred to Respondent’s personal credit card on May 27, 2014.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding that Respondent, James L. Manfre, violated section 112.313(6), Florida Statutes, in his use of the agency credit card; and section 112.3148, Florida Statutes, by failing to report a gift; and imposing a total civil penalty of $6,200, and subjecting Respondent to public censure and reprimand. DONE AND ENTERED this 16th day of February, 2016, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 2016.
The Issue The issue for determination at the final hearing was whether Respondent committed the allegations contained in the Administrative Complaint, specifically: (1) misconduct in the practice of architecture, and/or; (2) violation of a rule adopted pursuant to Chapter 481, Florida Statutes (1983).
Findings Of Fact At all times material to this proceeding, the Respondent, John H. Vongunten, has been a registered architect in the State of Florida, having been issued license number AR- 0006074 which expires on January 31, 1987. The Respondent graduated third in a class of 600 from the University of Pennsylvania. While attending the University of Pennsylvania, Respondent received several honors, including the John Stewardson Memorial Scholarship, was runner-up for the Rome prize, and was Phi Beta Kappa in architecture. Respondent first registered as an architect in Kansas in 1949 and in Florida and Ohio in 1956. Respondent is a member of the American Institute of Architects, the American Registered Architects, and the Guild for Religious Architecture. During his career, Respondent has worked as an assistant on a project with Frank Lloyd Wright, completed 56 churches, 23 automobile agencies, 15 industrial projects and 4 health care facilities. Respondent's background also includes a brief military career where he served as a carrier based fighter pilot, flew with the Blue Angels and received the Navy Cross for service during World War II. The Respondent was employed by Hunton, Shivers, Brady, Associates, P.A. from 1981 until his termination in September of 1984. The Respondent was assigned to provide services to the joint venture of Medical Facilities Consultants (MFC), of which Hunton, Shivers, Brady Associates, P. A. took part. MFC is an architectural firm under contract with the Florida Department of Health and Rehabilitative Services (HRS) to review design plans for health care facilities. Pursuant to its contract with HRS, MFC was required to provide consultative services and perform detailed analysis of proposed medical facilities construction projects and to determine compliance with state licensure standards with respect to architectural, mechanical, electrical and structural engineering disciplines. MFC is a joint business venture which combined the efforts of the architectural firm of Hunton, Shivers and Brady Associates, P.A. and Tilden, Lobnitz and Cooper, Inc. Consulting Engineers. Tom R. Hunton was designated as the representative of the firm to act as contract administrator with HRS for non-technical matters related to administration and work flow. Mr. Hunton was the only individual with complete authority to sign documents and bind the firm in matters relating to the contract. MFC is business operations consisted solely of its work for HRS. The Respondent was employed by MFC as senior architect in charge of the review process. Respondent reviewed the architectural portion of all plans that came in the office; other employees reviewed mechanical and electrical aspects of the plans. Respondent, as senior architect, was the coordinator between mechanical, electrical and architectural. The review process consists of three (3) primary stages of plan submittal to HRS. The first stage is the furnishing of schematic plans. Schematic plans are not very detailed and may consist of single line drawings of the proposed facility. The second stage is much more detailed and is called the submission of preliminary plans. Walls with elevations and other details are shown in this second stage of review of the "design development drawings." The third and final phase is the construction documents review stage. At this stage, there is a full list of plans, including architectural, engineering, landscaping and civil engineering portions of the project. Under a typical review, the design professionals seeking to build the project submit the plans to HRS through the plans and construction section of the Office of Licensure and Certification located in Jacksonville. The plans are thereafter passed on to MFC for their review of the plans pursuant to the previously mentioned contract. MFC provides assistance in all these stages of the review process. MFC then reviews the plans and submits a report to HRS which recommends approval or disapproval and may contain comments about the project. The Office of Licensure and Certification then decides to approve the project or to disapprove it. HRS receives plan review fees as a part of the plan review process. Requests for official plan review fees are made in writing by Mr. Rosenvold. MFC principals and employees generally do not have direct contact with the design professionals. However, at the schematic plans stage, often a meeting is held at the HRS office in Jacksonville between HRS officials, MFC and the design professionals. MFC officials were instructed by Richard Rosenvold, administrator for the Plans and Construction Section, not to contact the design professionals without prior approval of the Office of Licensure and Certification. During the summer of 1984, MFC was employed to review the design documents for a health-care project known as "The Cloisters of Deland" to be built in Deland by the firm of MacMahon-Cajacob Associates. The Cloisters of Deland is planned as a retirement community on an eleven and one-half acre site in downtown Deland. A multi-story building is projected to house general-use facilities on the first floor including administration, food service and activity areas, and a 60-bed skilled nursing facility on the entire second floor. The remaining 6 floors are projected to contain apartments. HRS is required to review the nursing home portion of the project. When HRS submits plans for review to MFC, MFC generally has 30 days in which to respond. An architectural review, a mechanical review, an electrical review and a fire protection review is completed. After these reviews are completed, Tom Hunton reviews the comments, if any, and signs off on a package which is sent to HRS recommending approval or disapproval and including comments. The Cloisters project was scheduled to be returned to HRS by MFC on or before August 31, 1984. Tom Hunton signed off on the The Cloisters of Deland project on August 29, 1984 recommending disapproval. Contrary to normal procedure, the disapproval package signed by Mr. Hunton was not mailed immediately to HRS, but was held up by Respondent. In the review process, it was Respondent's job to review the comments of the architect, the mechanical engineer and electrical engineer, mark the comments approved or disapproved, and give the package to Hunton. When Hunton signed off on The Cloisters project on August 29, 1984, it was disapproved in all three categories: architectural, electrical and mechanical. The Cloisters project package was not mailed out immediately after Hunton signed it because Respondent kept it in his office for an undetermined reason. On September 5, 1984, the Respondent telephoned Mr. MacMahon (supervising architect for The Cloister project) in Deland and advised him that the construction documents of The Cloisters of Deland had been reviewed and that they contained numerous violations and would be disapproved by the Office of Licensure and Certification. The Respondent advised Mr. MacMahon that he was in a position to assist them in making corrections that would avoid disapproval. The Respondent advised that he had a team of "moonlighters" available to assist them at the rate of $100 an hour per man. Respondent told MacMahon that the moonlighting service would be a way to get contingency approval, and thus, avoid rejection and considerable loss of time. Because Mr. MacMahon was planning to leave town for a short period of time, he asked his partner, Alan Cajacob, to handle the matter with Respondent. On September 6, 1984, Respondent and Mr. Cajacob spoke on the telephone. Respondent suggested a meeting to discuss the situation concerning problem areas in the plans. Mr. Cajacob was interested in finding out what the comments or problem areas found in the plans by the reviewers were; he, therefore, agreed to a meeting. The Cloisters project was under construction and time was critical to the project. Thereafter, a meeting was held on Saturday, September 8, 1984, between Mr. Cajacob, the Respondent, and Mr. Carl Stanton. Mr. Cajacob invited Mr. Stanton (supervisor and project manager of construction at The Cloisters) to attend the meeting because Stanton was thoroughly knowledgeable about the project. Mr. Cajacob anticipated that Respondent would bring a list of the deficiencies or comments from the reviewing team to the meeting for discussion. However, Respondent advised Cajacob that it was his intention to obtain a clean set of construction documents and have them marked up in red pencil with comments from a team of people who could review them quickly over the weekend. Respondent told Mr. Cajacob that his reviewing team consisted of mechanical and electrical personnel who had previously worked as reviewers for HRS for these types of plans. The Respondent repeated his assertion that his moonlighting team could avoid a complete turndown of the construction documents and obtain a conditional approval of the plans. This could be accomplished because with the comments, changes in the construction documents could be made and inserted so that costly delay would be-avoided. Therefore, Cajacob gave the Respondent a "clean" set of plans. At the conclusion of the September 8th meeting, Respondent asked Cajacob for a total of one thousand dollars ($1,000). The Respondent wanted five hundred dollars ($500) "up front" money as a retainer to pay for his time and the time and expenses of his moonlighting team. In addition, he wanted $500 which would be due the following day when he returned with the marked set of drawings. Mr. Cajacob advised the Respondent that he could not produce that amount without the approval of the project owner and that he would need an invoice from Respondent to support his request. The Respondent then left the office with an unmarked set of drawings and stated that he would contact Mr. Cajacob later after he had spoken with his team members. Before leaving, Respondent told Cajacob and Stanton that their meeting should be held in confidence. At this point, Cajacob began to have his doubts about the propriety of the conversation but decided that he would contact HRS on that Monday and determine whether the Respondent's proposal was an appropriate way to proceed. Later that day, the Respondent telephoned Mr. Cajacob at home and advised him that without the full $1,000 up front, the moonlighting team could not provide the services they were offering. During this telephone conversation, Mr. Cajacob refused to provide the $1,000 up front and asked the Respondent to return the plans so that the normal procedure could be followed. At that point, Mr. Cajacob began to feel nervous and uneasy about the Respondent's proposal The following Monday or Tuesday, Mr. Cajacobe received a note from his secretary stating that Respondent had called and that the plans had been dropped off at a nearby Holiday Inn. Mr. Cajacob's secretary picked up the plans. After the return of the plans, Cajacob received several telephone calls and at least one letter from Respondent stating each time that he (Respondent) was very sorry, he had made a terrible mistake and requesting that Cajacob forgive him. On September 10, 1984, Mr. Cajacob, after discussing the incident with his partner, Mr. MacMahon, called Mr. Rosenvold in Jacksonville and apprised him of Respondent's contact. Thereafter, Mr. Rosenvold called Mr. Hunton and advised him of the complaint that Respondent had contacted the firm of MacMahon and Cajacob in Deland. At Rosenvold's request, Hunton investigated it. On Tuesday, September 11, 1984, Hunton and the surviving partner, Brady, met with Respondent and, effective September 12, temporarily suspended him while the matter was being investigated. The Respondent was terminated on September 18, 1985. Respondent's moonlighting team consisted of himself, and two other people who were going to review the electrical and mechanical aspects of the plans. The moonlighting team would have based their work on their own knowledge and Respondent did not intend to let them use the list of comments prepared by the MFC Reviewing Team. Respondent did not advise Hunton or Mr. Rosenvold that he intended to contact MacMahon or Cajacob regarding The Cloisters. Likewise, neither Hunton nor Mr. Rosenvold authorized the contact with MacMahon and Cajacob. After a turn-down or disapproval from HRS, the design professionals may resubmit new plans directly to HRS in Jacksonville. The instance of turn-downs in plans is rare. Only about 10%-15% of plans reviewed by MFC are disapproved. The Cloisters of Deland project had been disapproved five (5) times previously.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is recommended that: Respondent be found guilty of a violation of §§481.225(1)(i) and (j), Florida Statutes (1983); and that, Respondent's license to practice architecture be suspended for a period of one year and that an administrative fine of $1,000 be assessed. DONE and ORDERED this 9th day of January, 1986 in Tallahassee, Leon County, Florida. W. MATTHEW STEVENSON, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of January, 1986. COPIES FURNISHED: Wings Slocum Benton, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Joseph A. Scarlett, Esquire Joseph R. Clark, Esquire 208 West Howry Avenue Deland, Florida 32720 Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 J. W. Hendry Executive Director Board of Architecture Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 APPENDIX The following are my specific rulings on the proposed findings of fact submitted by the parties in this case. Petitioner's Findings of Fact Paragraph Ruling Accepted; see R.O. paragraph 1. Accepted; see R.O. paragraphs 3 & 4. Accepted; see R.O. paragraphs 3 & 4. Accepted; see R. O. paragraph 5. Accepted; see R.O. paragraph 8. Accepted; see R.O. paragraphs 6 & 7. Accepted; see R.O. paragraph 8. Accepted; see R. O. paragraph 4. Accepted; see R. O. paragraph 3. Rejected as irrelevant. Accepted; see R. O. paragraph 8. Accepted; see R.O. paragraph 8.I Accepted; see R.O. paragraph 8. Accepted; see R.O. paragraph 9. Accepted; see R.O. paragraph 9. Accepted; see R.O. paragraph 13. Accepted; see R.O. paragraph 14. Accepted; see R.O. paragraph 8. Accepted; see R.O. paragraph 7. Partially accepted; see R.O. paragraphs 11 and 12; matters not contained therein are rejected as subordinate. Accepted; see R.O. paragraph 12. Rejected as not supported by credible evidence. Accepted; see R.O. paragraph 12. Accepted; see R.O. paragraph 12. Accepted; see R.O. paragraph 11. Accepted; see R.O paragraph 12. Accepted; see R.O. paragraphs 11 and 12. Accepted; see R.O. paragraph 13. Rejected as subordinate. Partially accepted; see R.O. paragraph 14. Matters not included therein are rejected as subordinate and unnecessary. Accepted; see R.O. paragraph 14. Not included in R.O. because subordinate. Not included in R.O. because subordinate. Rejected as subordinate. Not included in R.O. because subordiante. Accepted; see R.O. paragraph 13. Accepted; see R.O. paragraph 14. Not included in R. O. because subordinate. Not included in R.O. because subordinate. Accepted; see R.O. paragraph 15. Accepted see R.O. paragraph 15. Accepted; see R.O. paragraph 14. Partially accepted; see R.O. paragraph 16. Matters not included are considered subordinate. Accepted; see R.O. paragraph 16. Accepted; see R.O. paragraph 16. Accepted; see R.O. paragraph 16. Accepted; see R.O. paragraph 17. Accepted; see R.O. paragraph 17 Not included in R.O. because subordinate. Accepted; see R.O. paragraph 18. Accepted; see R.O. paragraph 18. Not included in R.O. because subordinate. Not included in R.O. because subordinate. Accepted; see R.O. paragraph 19. Accepted; see R.O. paragraph 19. Accepted; see R.O. paragraph 20. Not included in R.O. because subordinate. Not included in R.O. because subordinate. Accepted; see R.O. paragraph 21. Partially accepted; see R.O. paragraph 21. Matters not included therein are considered subordinate. Rejected as irrelevant. Rejected as irrelevant. Rejected as a recitation of testimony Rejected as not supported by credible evidence. Rejected as a recitation of testimony Rejected as a recitation of testimony Rejected as not supported by credible evidence. Rejected as a recitation of testimony. Rejected as a recitation of testimony. Accepted; see R.O. paragraphs 13, 16 and 23 Rejected as a recitation of testimony. Rejected as a recitation of testimony. Rejected as a recitation of testimony. Rejected as a recitation of testimony. Accepted; see R.O. paragraph 17. Rejected as subordinate. Partially accepted; see R.O. paragraph 17. Matters not included therein are rejected as subordinate and irrelevant. Accepted; see R.O. paragraph 16. Partially accepted; see R.O. paragraphs 13 and 16. Matters not included therein are rejected as irrelevant and subordinate. Accepted; see R.O. paragraph 24. Rejected as recitation of testimony. Accepted; see R.O. paragraph 24. Accepted; see R.O. paragraph 24. Accepted; see R.O. paragraph 22. Accepted; see R.O. paragraph 22. Rejected as irrelevant, subordinate and cumulative. Rejected as subordinate and irrelevant. Rejected as irrelevant. Accepted; see R.O. paragraph 25. Rejected as recitation of testimony and a conclusion of law. Rejected as a recitation of testimony and a conclusion of law. Partially accepted; although Respondent did teach a course in architectural ethics, at one point in his career, there was no evidence to indicate the specific content of the course on whether "conflicts of interest" were covered. RESPONDENT'S FINDINGS OF FACT Paragraph Ruling Accepted; see R.O. para. 4. Accepted; see R.O. paras. 4 and 9. Accepted; see R.O. para. 13. Accepted; see R.O. paras. 7. Accepted; see R.O. paras. 6, 7 and 14. Accepted; see R.O. para. 4. Accepted; see R.O. para. 5. Accepted; see R.O. paras. 7 and 10. Accepted; see R.O. paras. 7, 11 and 12; Partially accepted; see R.O. paras. 9 and 12. Matters not included therein are rejected as not supported by credible, competent and substantial evidence. Accepted; see R. O. paras. 13 and 14. Partially accepted; see R. O. paras. 15, 16, 17 and 18. Matters not included therein are rejected as subordinate. Rejected as argument and not supported by the evidence. Partially accepted; see R. O. para. 22. Matters not included therein are rejected as argument and subordinate. Accepted, but considered as a conclusion of law.
