The Issue Whether Respondent, First Commerce Credit Union (“First Commerce”), discriminated against Petitioner, Ian H. Williams, in violation of the Florida Human Rights Act; and, if so, what penalty should be imposed?
Findings Of Fact Mr. Williams is a 29-year-old, African-American male who contends he was discriminated against by First Commerce when he applied for a position as a teller at that institution. First Commerce is a credit union doing business in Tallahassee, Florida. It has more than 15 employees. On December 2, 2016, Mr. Williams submitted an employment application with First Commerce. He was seeking a part-time position as a teller, identified internally by First Commerce by Job ID No. 10201603. In his application, Mr. Williams indicated that he had received a bachelor’s degree from the University of Colorado, but that he had no experience as a teller in a bank or credit union. He also answered a question in the application about his experience handling cash; he indicated he had “None.” However, in his resume attached to the application, Mr. Williams noted that he had “Adept skill in infrastructure of cash operations.” The resume did not provide any explanation as to what that skill may have entailed. Ms. Sorne reviewed about 170 applications for the part- time teller position. Her initial review was done to determine which applicants met the minimum requirements for the job, i.e., whether the applicant had teller experience and/or experience handling cash. Ms. Sorne did not know the age, race, or gender of the applicants at that point in time. From her review of Mr. Williams’ application, Ms. Sorne determined that Mr. Williams did not meet the minimum qualifications. That is, she did not interpret the statement concerning “infrastructure of cash operations” as meeting the “cash handling” requirement. Ms. Sorne sent letters by way of email to all applicants who did not meet the minimum requirements. Unfortunately, when she sent the email to Mr. Williams, she selected the wrong “form letter” from her computer drop-down selections. The letter in the email to Mr. Williams stated: “Thank you for taking time to interview for our Teller position at First Commerce Credit Union. It was a pleasure meeting you. Although your credentials are impressive, we have chosen to pursue other candidates that better align with the needs of our company.” In fact, Mr. Williams had not been afforded an interview and had never met Ms. Sorne. He apparently believed the emailed letter was therefore indicative of some discriminatory animus by First Commerce. How he made the connection between the erroneously-selected letter and discrimination was not made clear from the evidence presented at final hearing. Nonetheless, he replied to Ms. Sorne’s email, stating, “I did not interview with you people.” Upon receiving Mr. Williams’ email response, Ms. Sorne called him to explain her mistake in sending the erroneous “form letter” concerning rejection of his application. During the telephone conversation, Mr. Williams simply advised Ms. Sorne that he would be filing a complaint with the FCHR and that he would see her in court within the year. He did not attempt to correct his erroneous application, i.e., he offered no other information concerning his experience handling cash. True to his word, Mr. Williams filed a complaint with FCHR. First Commerce, meanwhile, hired two people to fill the part-time teller position it had advertised. Both of the hired individuals were African-American; one was male and the other was female. At final hearing, Mr. Williams pointed out that the two applicants hired for the teller position may have had less education or experience than he had. He noted that he was a graduate of the University of Colorado (although his application says that he attended there for less than one year), while the two hired applicants attended Florida A & M University. He did not explain why that fact may have contributed to the discrimination against him by First Commerce. However, both of the other applicants had indicated on their application forms that they had teller experience and cash-handling experience. That is, each of them met the minimum requirements for the position. That was enough to get them a job interview. Inasmuch as Mr. Williams’ application said he did not have that experience, he was not chosen for an interview. Mr. Williams presented no evidence whatsoever that he was treated differently from any other applicant based on his race (black, African-American) or his gender (male). At final hearing he raised the issue of discrimination based on age, apparently because one of the competing applicants erroneously indicated on her application that she was “under the age of 18.” That disclosure was later determined to have been a mistake. Age was not a consideration for the part-time teller position anyway. Mr. Williams failed to establish even a prima facie case of discrimination. It is, in fact, difficult to make any connection between the way he was treated and discriminatory practices in general. Mr. Williams appears to have been treated equally with all applicants; there is no evidence that he was discriminated against for any reason.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered dismissing the Complaint filed by Ian H. Williams. DONE AND ENTERED this 29th day of August, 2017, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 29th day of August, 2017. COPIES FURNISHED: Tammy S. Barton, Agency Clerk Florida Commission on Human Relations Room 110 4075 Esplanade Way Tallahassee, Florida 32399 (eServed) Ian H. Williams Apartment 311C 2315 Jackson Bluff Road Tallahassee, Florida 32304 Jason Curtis Taylor, Esquire McConnaughhay, Duffy, Coonrod, Pope and Weaver, P.A. Suite 200 1709 Hermitage Boulevard Tallahassee, Florida 32308 (eServed) Donna Carson Utecht First Commerce Credit Union Post Office Box 6416 Tallahassee, Florida 32314 Cheyanne Costilla, General Counsel Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399 (eServed)
The Issue The issues presented for decision are whether Respondent discriminated against Derrick Bhayat on the basis of his race or national origin by failing to approve his application to purchase a condominium unit in Respondent's building, and, if so, what are the damages to which Mr. Bhayat is entitled.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: The Commission is the state agency charged with investigating complaints of discriminatory housing practices and enforcing the Fair Housing Act, Sections 760.20 through 760.37, Florida Statutes (2003). The Commission is charged with investigating fair housing complaints filed with the Commission and with the federal Department of Housing and Urban Development ("HUD") under the Federal Fair Housing Act, 42 U.S.C. Section 3601, et. seq. For the past ten years, Derrick Bhayat has been a realtor with Michael Sanders and Company in Sarasota. Before that, Mr. Bhayat worked for the United States Department of Defense in Europe. Mr. Bhayat is originally from Capetown, South Africa, where he was considered "colored." His ancestry is Malaysian, Zulu, and French. It is undisputed that Mr. Bhayat is a person of color. Respondent, One Watergate, is the duly-incorporated owners' association for the One Watergate condominium building in Sarasota. The Board is the governing body of One Watergate and is responsible for the approval or denial of potential residents and purchasers of units in the One Watergate building. Prior to May 2002, prospective buyers or residents at One Watergate were required to complete an application that asked for character references but did not require the applicant to provide bank references or other financial information. In early 2001, the Board commenced a search process to find a third-party investigative firm to conduct more detailed screenings of potential residents and purchasers at One Watergate. In April 2002, then-president Richard Bouchard provided the Board with detailed information regarding one such firm, Renters Reference of Florida, Inc. ("Renters Reference"), an investigative consumer reporting agency operating under the Federal Fair Credit Reporting Act. Renters Reference performs background checks of potential residents, employees, and contractors for such residential entities as condominiums, homeowner associations, and mobile home parks. On April 16, 2002, the Board met in a duly-noticed, regularly scheduled meeting. On the motion of Board member John Wilhelm, the Board voted to pursue a contract with Renters Reference to conduct applicant screenings. On May 2, 2002, One Watergate and Renters Reference entered into an "Agreement for Service" for the conduct of confidential background checks, credit checks, and other screenings of potential One Watergate residents. In cooperation with the Board, Renters Reference established a form "Application for Occupancy/Approval" to be completed by potential residents and a form "Application for Purchase, Transfer, Gift, Devise or Inheritance Approval" to be completed by potential unit purchasers. The forms required applicants to sign an authorization to release their banking, credit, residence, employment, and police record information to Renters Reference. The forms also required applicants to disclose their Social Security numbers to Renters Reference, which would allow Renters Reference to obtain credit reports directly from the three national credit reporting agencies, Trans Union, Experian, and Equifax. The Application for Purchase form also contained a hold harmless provision requiring the applicant to assent to the following: I understand that the Board of Directors of One Watergate Association, Inc. may cause to be instituted an investigation of my background as the Board may deem necessary. Accordingly, I specifically authorize the Board of Directors, Management and Renters Reference of Florida, Inc. to make such investigation and agree that the information contained in this and the attached application may be used in such investigation, and that the Board of Directors, Officer and Management of the One Watergate Association, Inc, itself shall be held harmless from any action or claim by me in connection with the use of the information contained herein or any investigation by the Board of Directors. Both forms advised applicants that a failure to complete any portion would result in the application being "returned, not processed and not approved." Renters Reference advised One Watergate to strictly enforce the requirement that applicants complete all portions of the forms on the ground that a waiver of application requirements for any one applicant would necessitate such a waiver for any subsequent applicant or else invite a discrimination claim by the subsequent applicant. Applicants complete the forms and submit them to Janis Farr, the resident manager of One Watergate, who forwards the materials to Renters Reference for the conduct of its background investigation. After completing the investigation, Renters Reference sends a report to One Watergate with its findings. The Renters Reference report is purely informational. Renters Reference is not authorized to approve or deny the application, and it makes no recommendations as to approval of the application. The Board has established a screening committee to act upon the applications. The screening committee consists of Ms. Farr and the sitting Board president. The screening committee's decision to approve or disapprove the application is later subject to a ratification vote by the full Board. On May 16, 2002, potential unit purchaser Marcia Lang submitted a completed form Application for Occupancy/Approval and a completed form Application for Purchase. The application was forwarded to Renters Reference, which performed a background screening that included obtaining a Trans Union credit report dated May 24, 2002. Renters Reference completed its investigation on May 29, 2002, and made its report to One Watergate. The screening committee, consisting of Ms. Farr and then-president of the Board, Richard Bouchard, approved the application and issued an undated Certificate of Approval. Ms. Lang closed on her unit in One Watergate in August 2002. Because the Board does not meet during the months of May through August, the Board did not ratify the screening committee's approval until its October 15, 2002, meeting. On May 29, 2002, Mr. Bhayat entered into a contract with Janey and Paul Hess to purchase their One Watergate unit for $315,000. On May 30, 2002, Mr. Bhayat telephoned Ms. Farr and requested that he not be required to complete the application forms. Mr. Bhayat explained that he had always been cautious about providing personal information, such as his Social Security number to businesses. This general cautiousness became alarm in 2001 when his wife, Nancy Bhayat, was the victim of an identity theft. The thief used Mrs. Bhayat's Social Security number to obtain a Visa card and make $12,000 worth of purchases. Ms. Farr responded that the application would not be accepted unless all the requested information was provided. Nevertheless, on May 31, 2002, Mr. Bhayat submitted to the One Watergate office an Application for Occupancy/Approval and an Application for Purchase. On these applications, Mr. Bhayat did not provide his or his wife's Social Security number. He did not sign the authorization to release his banking, credit, residence, employment, and police record information to Renters Reference. Mr. Bhayat also struck through the hold harmless provision on the Application for Purchase. The applications were accompanied by a cover letter from Julie Horstkamp, Mr. Bhayat's attorney. The letter repeated Mr. Bhayat's concerns about disclosure of personal information and stated that the Bhayats did not want to release any more information than necessary to process their application. The letter stated that Ms. Horstkamp was enclosing, in addition to the two applications, a "credit report prepared by MSC Mortgage." Ms. Horstkamp also included attestations concerning the Bhayats' background that were intended to obviate the need for Renters Reference to perform a criminal records check. After receiving this package of materials from Mr. Bhayat, Ms. Farr consulted with Warren Plant, the president of Renters Reference, who again advised her that it would be in the best long-term interest of One Watergate to insist that the applications be completed in full. Ms. Farr then sent a letter to Ms. Horstkamp, dated May 31, 2002, and received by Ms. Horstkamp on June 3, 2002, that stated as follows: We are in receipt of the packet delivered from your office on behalf of Derrick & Nancy Bhayat. While we can appreciate the angst felt by the Bhayat's [sic] as the result of her identity theft, we must adhere to the stipulations of our new policy. The Board of Directors of One Watergate at a duly posted meeting in April 2002 approved a contract with Renters Reference Inc. to handle the investigation of prospective purchasers and lessees. they felt to best serve the security of all One Watergate owners, the approval process needed to be utilized to it [sic] fullest. You may inform your clients they can rest assured that all the information disclosed in this application will be held in complete confidence by both One Watergate Association and Renters Reference Inc., as we are bound by both [the] Federal Fair Credit Act and Florida Statutes Chapter 718. These laws apply to both the application as well as any reports received from them. Therefore we are returning the package to be completed in full. We cannot accept or approve this sale based on the incomplete information submitted. By letter dated June 4, 2002, Ms. Farr informed One Watergate's law firm of the situation with the Bhayats. With her letter, Ms. Farr enclosed correspondence received by Mr. Bouchard and other members of the Board from Janey Hess, owner of the unit that the Bhayats were attempting to purchase. Ms. Hess had written at least three letters to the Board on June 3 and 4, 2002, demanding an emergency meeting of the full Board to consider waiving the requirements of the new application forms, which sought "invasive and unnecessary information" from the Bhayats. Ms. Hess and Mr. Bouchard were also having conversations about the issues, but these took a turn toward personal animosity on the part of Ms. Hess. Ms. Hess' letters became progressively less concerned with the Bhayats' situation than with Mr. Bouchard's status as the owner of several One Watergate units and his alleged manipulation of rules restricting the rental of those units. Mr. Bouchard testified that his own lawyer advised him to cease communications with Ms. Hess. One Watergate's lawyer, Stephen Thompson, wrote a letter to both the Bhayats and the Hesses dated June 6, 2002, that stated as follows, in relevant part: In order to help facilitate the approval process, One Watergate has contracted with Renters Reference for applicant screening. The information necessary to process the Application for [sic] includes, but is not limited to the applicant's date of birth and social security number. It is my understanding that the application submitted by Mr. and Mrs. Bhayat did not include the required social security numbers for each of the applicants. While it is Mr. and Mrs. Bhayat's right to refuse to release this information to the Association, it is the Association's duty and responsibility to conduct thorough credit and criminal background checks on potential owners and tenants. Without the applicable social security numbers, such background checks cannot be conducted by Renters Reference and therefore such applications cannot be approved by One Watergate Association. While the Association is required to either approve or disapprove an application within thirty (30) days after receipt of such application, in the present situation the thirty (30) day time frame will not begin to run until a complete application is submitted, including the applicants' social security numbers. If Mr. and Mrs. Bhayat decide to submit a completed application, One Watergate Association will use their best efforts to obtain a complete background check and render a decision prior to the anticipated June 28, 2002, closing date. Negotiations commenced between Ms. Horstkamp, the Bhayats' attorney, and Adele Kurtz, Mr. Thompson's co-counsel, on behalf of One Watergate. On June 11, 2002, Ms. Kurtz wrote a letter to Ms. Horstkamp that stated as follows, in relevant part: Pursuant to our conversation yesterday, the Board of Directors of One Watergate Association had agreed to accept Mr. and Mrs. Bhayat's Application to purchase Unit 5-D so long as said Application was complete and accompanied by copies of their current driver's license and up to date credit reports for both purchasers. This action was taken for the sole purpose of alleviating any confusion there may have been by the Seller as related to the contract between One Watergate and Renters Reference. This action did not constitute a waiver or modification of the Application requirements and One Watergate retained the right to require complete and accurate applications be submitted to the Board for review. Ms. Kurtz went on to note that an application submitted by the Bhayats on June 10, 2002, was unacceptable because it did not include the Bhayats' driver's licenses, and the hold harmless clause was again stricken from the Application for Purchase. On June 12, 2002, Ms. Horstkamp responded that the Bhayats "are okay" with including the hold harmless provision, that they had submitted their driver's license information to One Watergate, and that the credit report covering both Mr. and Mrs. Bhayat had also been submitted. On June 14, 2002, Ms. Kurtz wrote a letter to Ms. Horstkamp that stated, in relevant part: It has come to my attention that the credit report submitted by Mr. and Mrs. Bhayat is not a credit report from a national credit reporting bureau but, in fact, is a consumer report which apparently is used quite often by mortgage brokers and realtors to compile only the positive aspects of an individual's credit reports. As a result of Mr. and Mrs. Bhayat's misrepresentation and attempt to deceive the Association, at this point only a complete and accurate application will be accepted by One Watergate Association. A complete and accurate application shall include both applicant's [sic] date of birth and social security numbers, as well as all other information requested on the application. . . . The credit report in question had been obtained by Mr. Bhayat through Gary McDonald, a home mortgage consultant with MSC Mortgage, a joint venture of Wells Fargo Bank, and Mr. Bhayat's employer, Michael Sanders and Company. Mr. Bhayat gave his Social Security number to Mr. McDonald, who ordered a report from RELS Reporting Services, a Wells Fargo-affiliated company that gathers information from the major credit reporting services. The report that Mr. McDonald generated for Mr. Bhayat is called a "tri-merge" report, because it combined information from all three major reporting services into a single report. The full report was 11 pages long. At the hearing, there was a dispute as to whether Mr. Bhayat submitted the full 11-page report to One Watergate, or whether he only submitted the first two pages summarizing the information in the full report. Mr. Bhayat insisted that he submitted the full report. Ms. Farr and Mr. Bouchard both testified that they had only ever seen the two-page summary. Mr. Plant testified that One Watergate forwarded to Renters Reference only the two-page summary, not the full 11-page report. The weight of the credible evidence leads to the finding that Mr. Bhayat submitted only the two-page summary of the RELS credit report, not the full 11 pages. In any event, the result would have been the same had Mr. Bhayat submitted the full RELS report, because Mr. Plant testified that even the full report did not meet Renters Reference's criteria for a credit report. Mr. Plant stated that Renters Reference deals directly with the credit reporting bureaus and will accept only a full report from one of the three major bureaus. He termed the RELS document a "concocted report," meaning that it is the product of a third party that bought information from a credit reporting bureau, then prepared its own report. Mr. Plant testified that he has found such "concocted reports" to be unreliable because their authors may make mistakes in transcribing the information from the credit reporting bureau and, more significantly, because their authors may downplay or hide negative information to assist the potential homebuyer in obtaining a loan. Mr. Plant further testified that his company does not "mess around" with the Fair Housing Act and that he would have immediately canceled the contract with One Watergate if he had had the least suspicion that the Board was basing its actions on Mr. Bhayat's race, color, or national origin. Mr. Plant has been the president of Renters Reference throughout its 25-year existence, and his long experience in these matters is credited. The Bhayats made no further attempts to submit applications to One Watergate. Neither the screening committee, nor the full Board, ever took official action because the application was never deemed complete. The Bhayats' purchase of the Hesses' unit fell through. The Hesses ultimately leased their unit to another person. The record indicates that several subsequent purchasers completed their applications and were approved to buy and reside in units in One Watergate without incident. The record indicates that, while the majority of One Watergate's residents are white, persons of color and of varying national origins own units and reside in One Watergate. No evidence was produced of strained relations among One Watergate's residents relating to their race, color, national origin, sex, handicap, familial status, or religion. The only direct evidence of any discriminatory intent behind the actions of One Watergate toward Mr. Bhayat came from the testimony of Ms. Hess. On June 14, 2002, before she was aware that the Board considered the Bhayats' second application incomplete, Ms. Hess went to the One Watergate office to give written permission for Mr. Bhayat's housepainter to come into her unit and commence work. She spoke to Larry Farr, the building superintendent and husband of Janis Farr. Ms. Hess testified that she asked Mr. Farr whether he had any news of Mr. Bhayat's status. Mr. Farr stated that he had not heard anything, but that "I knew the minute I saw that guy he was going to be trouble." Having never seen Mr. Bhayat, Ms. Hess asked Mr. Farr what he meant. Mr. Farr stated, "Just wait till you see him. You'll know." Ms. Hess testified that she pictured Mr. Bhayat as some large, frightening man, then learned that he was neither large nor frightening. Once she learned of Mr. Bhayat's heritage, she assumed that it was his color and/or national origin to which Mr. Farr was referring. Ms. Hess testified that Larry Farr "is a great guy . . . but he is the most uninhibited speaker of anyone on the premises . . . [S]ometimes, when he says things, I feel they reflect the opinion of the group. And so when he said that, I was just . . . shocked and thought, 'Well, this must be what they all thought.' That's the feeling I got." Mr. Farr vigorously denied making those statements to Ms. Hess and denied making any statements to anyone regarding Mr. Bhayat's race or national origin. It is noted that Ms. Hess made no contemporaneous mention of this conversation during the course of her correspondence with Mr. Bouchard and the Board; rather, she first mentioned it in a letter to the Board dated July 26, 2002, more than a month after Mr. Farr allegedly made the discriminatory remarks to her and after Mr. Bhayat had filed his Complaint with the Commission. Even if Ms. Hess' version of the conversation with Mr. Farr were to be credited, along with her assumption that Mr. Farr was referring to Mr. Bhayat's race or national origin, her intuitive leap in concluding that Mr. Farr's words reflected the opinion of anyone else would be unsupported. Contrary to Petitioner's assertion, Mr. Farr was not part of One Watergate's "management team." He was the maintenance man. Mr. Farr did not attend Board meetings, had no role in the process of accepting or rejecting applications, and did not discuss Mr. Bhayat with any Board members. There was no evidence presented that Mr. and Mrs. Farr ever talked about Mr. Bhayat, other than in regard to the aforementioned housepainter. There was no evidence that any member of the Board or the screening committee discriminated against Mr. Bhayat due to his race, national origin, or for any other reason. Most of them never met Mr. Bhayat and were unaware of his race or national origin during the period in dispute. Mr. Bhayat, for reasons of his own, simply declined to submit a complete application to One Watergate, which, in turn, declined to consider his incomplete application.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief. DONE AND ENTERED this 3rd day of November, 2004, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 2004. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Derrick Bhayat 101 South Gulfstream Avenue, No. 7E Sarasota, Florida 34236 Vicki D. Johnson, Esquire Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301-4857 Harry W. Haskins, Esquire Mary R. Hawk, Esquire Porges, Hamlin, Knowles & Prouty, P.A. One Watergate Association, Inc. 3400 South Tamiami Trail, Suite 201 Sarasota, Florida 34239 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
Findings Of Fact The Petitioner, Hughlan Long, was employed by the Florida Industrial Commission from 1946 to 1952, during which time he was a member of the State and County Officer and Employee Retirement System (SCOERS). Petitioner was employed as a state attorney from 1953 to 1956. Again, during that time he was a member of SCOERS. During the period 1962 to 1964, Petitioner was a member of the Dade County Commission, at which time he was a member of SCOERS. On this occasion, as on each of the above occasions, the Petitioner obtained a refund of all contributions to SCOERS when he terminated his employment. In October of 1969, Petitioner became Public Defender for Dade County and was a member of SCOERS. From this position he was appointed a judge of industrial claims. He has stayed in that position since his appointment on December 28, 1970. Several days prior to his appointment as a judge of industrial claims, on December 1, 1970, Petitioner voluntarily transferred from SCOERS to the Florida Retirement System (FRS). Petitioner based his decision to transfer upon his reading of the statutes and the data available from the Division of Retirement upon the benefits available under the two systems. At the time he transferred to FRS, Petitioner was not eligible to purchase past service credit in SCOERS. Petitioner corresponded with Respondent and was advised he could receive two percent credit for his 10.18 years prior SCOERS service. The Division erroneously advised him that he would receive two percent credit for his past service, although at the time Petitioner was a member of FRS and only eligible for 1.6 percent credit for such service. Based upon the information provided to him, the Petitioner purchased his prior service credit of 10.18 years and paid the required interest, a total of $4,092.27. In 1975, the Division discovered its error and sent a letter to Petitioner. See Petitioner's Exhibit #11. This letter advised Petitioner that his purchase had been incorrectly computed based upon Chapter 122, Florida Statutes, because he did not have three years service prior to the time he transferred to FRS. The letter further stated, "therefore, after you completed the three continuous years you must claim prior service in this system (FRS)." This was the only reference or correction made by the Division to Petitioner until 1981. In 1981, Petitioner requested data on his retirement credit and was advised he would get 1.6 percent rather than two percent for his past service credit. No credible evidence was received that Petitioner was induced to purchase his past service by the erroneous information provided him. Petitioner filed a timely request for a hearing pursuant to Section 120.57, Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that the decision of the Division of Retirement to deny the Petitioner two percent service credit be upheld. However, because Petitioner was misadvised he should receive the option of accepting the benefit as provided by law or receiving his purchase price back with interest of six percent per annum. DONE and ORDERED this 11th day of February, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of February, 1982. COPIES FURNISHED: Jerold Feuer, Esquire 19 West Flagler Street Miami, Florida 33130 Augustus D. Aikens, Esquire Division of Retirement Cedars Executive Center Nevin G. Smith, Secretary 2639 North Monroe Street Department of Administration Suite 207C - Box 81 435 Carlton Building Tallahassee, Florida 32303 Tallahassee, Florida 32301
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Respondent holds Florida teaching certificate number 339068, covering the area of elementary education which is valid through June 30, 1993. The Respondent was employed as a teacher by the Broward County School Board through January 1983. In June 1981, the Respondent misrepresented her credit and bankruptcy history, and submitted an erroneous Social Security number and birth date to the Broward Schools Credit Union. After obtaining an account under false pretenses, the Respondent made application and received loans from the Credit Union. The Respondent also applied for and received a Master Card credit card from the Credit Union. The Respondent failed to make adequate payments on these obligations. On February 1, 1983, a default final judgement was entered against the Respondent in the amount of $12,274.22 in the Broward County Circuit Court. The judgment resulted from her failure to honor the obligations of two promissory notes and a Master Card Agreement between the Respondent and the Credit Union. On June 27, 1983, a final judgment as to unliquidated damages was entered against the Respondent in Broward County Circuit Court. The Court found that the Respondent intentionally misrepresented her credit status and other information to the Credit Union for the purposes of obtaining credit. The Court held: The facts and circumstances reflect consistency in a scheme or artifice on the part of the defendant to prepare and publish to Plaintiff materially false written statements as to her creditworthiness with wrongful intent and for purposes of misleading Plaintiff Credit Union in the extension of monies and credit. Such actions were willful, wanton, and do outrage this Court by the clear reflection of an obvious disregard for any intent to repay the indebtedness reflected under the various credit transactions herein with Plaintiff Credit Union. A punitive judgment award of $100,000 was entered against the Respondent. On September 30, 1987, the Petitioner filed an Administrative Complaint against the Respondent. The complaint charged that the Respondent fraudulently obtained membership with the Broward Schools Credit Union and submitted false statements in order to obtain credit. The complaint further alleged that the Respondent issued a worthless check to a merchant. The September 1987 Administrative Complaint further alleged that the Respondent's conduct violated Section 231.28, Florida Statutes, and Rule 6B-1.006, F.A.C., in that she had been guilty of an act of moral turpitude; had been involved in conduct which seriously reduced her effectiveness as an employee of the school board; had failed to achieve the highest degree of ethical conduct; and had failed to maintain honesty in all professional dealings. The Respondent received the complaint, but failed to file an Election of Rights form. The EPC declared the Respondent to be in default and heard the case on August 25, 1988. The EPC's Final Order of September 4, 1988, adopted the findings of fact and conclusions of law set forth in the complaint. The EPC revoked the Respondent's teaching certificate for one year and further ordered that the Respondent be placed on two years probation. The terms of probation required that the Respondent submit quarterly reports of her teaching performance, and that she make restitution to the Broward Schools Credit Union. The Respondent subsequently filed a Motion to Vacate and set aside the Final Order, claiming that she did not receive the Administrative Complaint. The EPC denied the Respondent's Motion to Set Aside. In its February 11, 1988 order, the EPC found that the Respondent had received the complaint as evidenced by her signature on the certified mail receipt. The Education Practices Commission is authorized by law to take disciplinary action against a teaching certificate. The EPC is further authorized to impose probation upon a certificate holder and may report an individual for a violation of the Florida Administrative Code for failure to comply with probation. Karen Wilde is the Executive Director of the Education Practices Commission. As part of her duties she administers the probationary terms imposed upon educators by the EPC. In her position as administrator of the EPC, Dr. Wilde stated that the EPC's order required full restitution of the debt owed to the credit union within the period of probation. Following the period of revocation, the Respondent became employed at Rochelle Elementary School in the Polk County School District in September 1989. By letters dated November 1, 1989 and February 28, 1990, Dr. Wilde advised the Respondent that her probationary period would begin upon her employment date of September 12, 1989 and continue through September 12, 1991. The letters further informed the Respondent that her conditions of probation required her to submit reports of her teaching performance, and make full restitution to the Broward Schools Credit Union. The Respondent initially failed to submit her performance reports as required. The EPC reported the Respondent to Professional Practices Services for investigation of her noncompliance. The Respondent subsequently complied with EPC's request and submitted her performance reports. On April 17, 1991, Respondent was notified that she must submit written verification of restitution to the Broward Schools Credit Union. The letter informed the Respondent that her probation could not be terminated until all of the requirement of the probation had been satisfied. On September 20, 1991, the Respondent was again notified that her probation requirements would not be completed until the Respondent submitted written verification of her full restitution to the Credit Union, and that failure to submit proof of restitution by October 12, 1991, would result in a report of her noncompliance being submitted to the Professional Practices Services. The Respondent failed to submit any proof of restitution to the EPC by October 12, 1991. As of this date, Respondent has not submitted any evidence of her complete or partial payment of the obligation. Between 1985 and 1991, the Respondent had no contact with the Credit Union nor did she attempt to make payments on the final judgment. The Credit Union refused to accept Respondent's offer of payments which was made in 1991, because of the amount of the judgment. The Respondent and the Credit Union eventually agreed to a payment plan. The Respondent made a down payment of $200.00 on December 10, 1991, and agreed to make monthly payments of $125.00. Since then, the Respondent has made payments of $125.00 in January, March, April, July, August, November, and December of 1992. As of January 12, 1993, the Respondent has paid approximately $1,000 toward the $12,000 compensatory damage portion of the judgment.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent, Janice Anderson, be found guilty of violating Section 231.28(1)(h), Florida Statutes, and Rules 6B-1.006(5)(o), F.A.C. It is further, RECOMMENDED that the Education Practices Commission revoke the Respondent's teaching certificate for two (2) years. If at the end of the two year period the Respondent has made complete restitution of the compensatory damages portion of the final judgment to the Credit Union, she shall be eligible to reapply for certification. If the Respondent has not made complete restitution to the Credit Union, the period of revocation shall remain in effect until the restitution is complete. It is further, RECOMMENDED that if and when recertified, the Respondent shall be placed on ten (10) years probation with the EPC under such terms as the Education Practices Commission deems appropriate. DONE and ENTERED this 25th day of February, 1993, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1993.
The Issue Whether Respondent Corporation, Southern Insight, Inc., failed to secure payment of workers' compensation coverage as required by Chapter 440, Florida Statutes, and the Florida Insurance Code, and if so, whether the Department of Financial Services, Division of Workers' Compensation (Department) has lawfully assessed the penalty against Respondent in the amount of $27,805.11.
Findings Of Fact The Department is the state agency responsible for enforcing Section 440.107, Florida Statutes, which requires that employers secure the payment of workers' compensation coverage for their employees and otherwise comply with the workers' compensation coverage requirements under Chapter 440, Florida Statutes. Respondent has been a Florida corporation, actively involved in the construction industry providing framing services, during the period of February 16, 2006, through August 17, 2007 (assessed penalty period). At all times material, Respondent has been an "employer," as defined by Chapter 440, Florida Statutes. At all times material, John Cauley has been Respondent's president and sole employee. At no time material did Respondent obtain workers' compensation insurance coverage for John Cauley. On August 17, 2007, Department Investigator Lynise Beckstrom conducted a random workers' compensation compliance check of a new home construction site in Palm Coast, Florida. At that time, Ms. Beckstrom observed four men, including John Cauley, framing a new home. Utilizing the Department's Compliance and Coverage Automated System (CCAS) database, which contains all workers' compensation insurance policy information from the carrier to an insured and which further lists all the workers' compensation exemptions in the State of Florida, Ms. Beckstrom determined that for the assessed penalty period, Respondent did not have in effect either a State of Florida workers' compensation insurance policy or a valid, current exemption for its employee, John Cauley. During the assessed penalty period, Respondent paid remuneration to its employee, John Cauley. John Cauley admitted that during the assessed penalty period he was not an independent contractor, as that term is defined in Section 440.02(15)(d)(1), Florida Statutes. Section 440.05, Florida Statutes, allows a corporate officer to apply for a construction certificate of exemption from workers' compensation benefits. Only the named individual on the application is exempt from workers' compensation insurance coverage. On or about April 15, 2006, John Cauley, as Respondent's President, applied for such an exemption. That application was denied. Mr. Cauley received neither an exemption card nor a denial of exemption from the Department. During the assessed penalty period, Respondent was a subcontractor of the contractor, Mass Builders, Inc. 9. Sections 440.107(3) and 440.107(7)(a), Florida Statutes, authorize the Department to issue stop-work orders to employers unable to provide proof of workers' compensation coverage, including proof of a current, valid workers' compensation exemption. Based on the lack of workers' compensation coverage and lack of a current, valid workers' compensation exemption for Respondent corporation's employee, John Cauley, the Department served on Respondent a stop-work order on August 17, 2007. The stop-work order ordered Respondent to cease all business operation for all worksites in the State of Florida. Immediately upon notification by Investigator Beckstrom of his lack of valid exemption, Mr. Cauley submitted a new exemption application, which was granted, bringing Respondent corporation into compliance. However, in order to have the stop-work order lifted so that he can work as a corporation again, Mr. Cauley must pay a percentage of the penalty assessment and enter into a payment plan with the Agency. In the meantime, Mr. Cauley cannot pay the percentage required by the Department if he cannot find work as someone else's employee, which he had been unable to do as of the date of the hearing. Herein, it is not disputed that Respondent was inadvertently out of compliance. Mr. Cauley seeks merely to reduce the amount of the penalty assessment so that removal of the stop-work order against Respondent corporation can be negotiated. On the day the stop-work order was issued, Investigator Beckstrom also served Respondent with a "Request for Production of Business Records for Penalty Assessment Calculation," in order to determine a penalty under Section 440.107(7), Florida Statutes. Pursuant to Florida Administrative Code Rule 69L-6.015, the Department may request business records for the three years preceding the date of the stop-work order. Logically, however, Ms. Beckstrom only requested business records dating back to February 14, 2006, Respondent's date of incorporation in Florida. The requested records included payroll, bank records, check stubs, invoices, and other related business records. Ms. Beckworth testified that, "Business records requests usually consist of payroll, bank records, taxes, check stubs, invoices, anything relating to that business." This is a fair summation of a much more detailed listing of records required to be kept pursuant to Rule 69L-6.015, Florida Administrative Code, which was in effect at all times material. In response to the Request for Production, Respondent provided Southern Insight Inc.'s corporate bank statements for the assessed penalty period, detailing corporate income and expenses through deposits and bank/debit card purchases. However, Investigator Beckworth did not deem the corporate bank statements produced by Respondent to be an adequate response, and she did not base her calculations for penalty purposes thereon. Mr. Cauley expected that the Department would, and has argued herein that the Department should, have subtracted from the total deposits to Respondent's corporate account (the minuend) the total corporate business expenses (the subtrahend) in order to determine the Respondent's payroll to Mr. Cauley (the difference), upon which difference the Department should have calculated his workers' compensation penalty. In fact, the Department, through its investigator, did not utilize the total amount deposited to Respondent's corporate account, because some deposits "could" have come from a family member of Mr.Cauley. That said, there are no individual names on the account; the account is clearly in the name of the Respondent corporation; and there is no proof herein that any deposits to Respondent's corporate bank account were derived from anyone other than Mr. Cauley, as Respondent's President. Ms. Beckstrom testified that if the Agency had accepted the total of the deposits to this corporate account for the assessed penalty period as Respondent's payroll, the result would have been more than the total amount actually determined by her to constitute Mr. Cauley's payroll, but that statement was not demonstrated with any specificity. The Department also did not use any of the subtracted amounts shown on the corporate bank statements, even though the bank statements listed the same information as would normally be found on a corporate check, including the transaction number, recipient of the money, the date, and the amount for each bank/debit card transaction. All that might be missing is the self-serving declaration of the check writer on the check stub as to what object or service was purchased from the recipient named on the bank statement. Ms. Beckstrom testified that if Mr. Cauley had provided separate receipts for the transactions recorded on the bank statements as bank/debit card entries, she could have deducted those amounts for business expenses from the corporation's income, to arrive at a lesser payroll for Mr. Cauley. In other words, if Mr. Cauley had provided separate receipts as back-up for the transactions memorialized on the corporate bank statements, the Department might have utilized the bank/debit card transactions itemized on Respondent's corporate bank statements as the amount deducted for Respondent corporation's business expenses, so as to obtain the payroll (difference) paid to Mr. Cauley. It is the amount paid to Mr. Cauley as payroll, upon which the Department must calculate the workers' compensation penalty. The reason Ms. Beckworth gave for not using Respondent's bank statements was that without more, the transactions thereon might not be business expenses of the corporation. However, she also suggested that if, instead of submitting bank/debit card statements, Mr. Cauley had submitted checks payable to third parties and if those corporate checks showed an expenditure for a deductible business expense, like motor vehicle fuel, she might have accepted the same expenditures in check form (rather than the statements) in calculating Respondent's payroll. Ultimately, Ms. Beckworth's only reasons for not accepting the bank statements showing recipients, such as fuel companies like Amoco, was "agency policy," and her speculation that Amoco gas could have been put into a non-company truck or car. She also speculated that a prohibition against using bank statements showing deductions might possibly be found in the basic manual of the National Council on Compensation Insurance (NCCI) or in a rule on payrolls (Rule 69L-6.035) which became effective October 10, 2007, after the assessed penalty period. However, the NCCI manual was not offered in evidence; a rule in effect after all times material cannot be utilized here; and no non-rule policy to this effect was proven-up. In addition to not using Respondent's bank statements to calculate a penalty, the Department also did not "impute" the statewide average weekly wage to Respondent for Mr. Cauley. Ms. Beckworth testified that to impute the statewide average weekly wage would have resulted in a higher penalty to Respondent. As to the amount of the statewide average weekly wage, she could only say she thought the statewide average weekly wage was "about $1,000.00". Instead of using Respondent's corporate bank statements or imputing the statewide average weekly wage, Investigator Beckstrom determined that Mass Builders, Inc., was the prime contractor on the jobsite being worked by Respondent, and that Mass Builders, Inc., had not produced proof of securing workers' compensation coverage for Respondent, its sub- contractor. Therefore, she sought, and received, Mass Builders, Inc.'s "payroll records" of amounts paid by the prime contractor, Mass Builders, Inc., to Respondent Southern Insight, Inc., via a separate site-specific stop-work order and business records request directed to Mass Builders, Inc. The only "payroll records" that Mass Builders, Inc., offered in evidence were Mass Builders, Inc.'s check stubs, which Ms. Beckstrom utilized to come up with an income/payroll amount for Respondent Southern Insight, Inc. Mr. Cauley did not know until the hearing that Mass Builders, Inc.'s check stubs had been utilized in this fashion by the Department. However, he ultimately did not dispute the accuracy of the check stubs and did not object to their admission in evidence. In calculating Respondent's total payroll for the assessed penalty period, Investigator Beckstrom considered only the total of the check stubs from Mass Builders, Inc. It is unclear whether or not she reviewed Mass Builders, Inc.'s actual cancelled checks. No one from Mass Builders, Inc., appeared to testify that the stubs represented actual cancelled checks to Respondent or Mr. Cauley. The Department also did not deduct from the total of Mass Builders, Inc.'s check stubs any of the bankcard deductions made by John Cauley from Respondent's corporate bank account, for the same reasons set out above. Mr. Cauley testified, without refutation, that some of the expenses noted on Respondent's bank statements, paid by bank/debit card, most notably expenses for gasoline for his truck, constituted legitimate business expenses of Respondent corporation, which should have been deducted from either the bank statement's total income figure or from the amounts paid by Mass Builders, Inc., to Respondent corporation, before any attempt was made by the Department to calculate the amount paid by Respondent corporation to Mr. Cauley as payroll. Utilizing the SCOPES Manual, which has been adopted by Department rule, Ms. Beckstrom assigned the appropriate class code, 5645, to the type of work (framing) performed by Respondent. In completing the penalty calculation, Ms. Beckstrom multiplied the class code's assigned approved manual rate by the payroll (as she determined it) per one hundred dollars, and then multiplied all by 1.5, arriving at an Amended Order of Penalty Assessment of $27,805.11, served on Respondent on August 22, 2007. Subsequent to the filing of its request for a disputed-fact hearing, in an effort to have the penalty reduced, Respondent provided the Department with additional business records in the form of portions of Southern Insight, Inc.'s 2006 and 2007 U.S. Income Tax Returns for an S Corporation (2006 and 2007 income tax returns). However, neither itemized deductions nor original receipts for Respondent's business expenses were provided to Ms. Beckworth at the same time, and she determined that without itemized deductions, there was no way to calculate Respondent's legitimate business deductions so that they could be deducted from the total of Mass Builders, Inc.'s, check stubs to determine a lesser payroll applicable to Mr. Cauley. Investigator Beckstrom testified that the tax returns, as she received them, did not justify reducing Respondent's payroll used in calculating the penalty. The vague basis for this refusal was to the effect that, "The Internal Revenue Service permits different business deductions than does the Department." Itemization pages (schedules) of Respondent's income tax returns were not provided until the de novo disputed-fact hearing. Confronted with these items at hearing, Ms. Beckworth testified that ordinary business income is not used by the Department to determine payroll, but that automobile and truck expense and legitimate business expenses could be deducted, and that she would probably accept some of the deductions on Respondent's 1020-S returns. Also, if Respondent's bank statement corresponded to the amount on the tax form, she could possibly deduct some items on the bank statements as business expenses before reaching a payroll amount. However, she made no such calculations at hearing. Ms. Beckworth testified that if she had Respondent's checks or "something more" she could possibly deduct the motor fuel amounts. Although Respondent's 2006, and 2007, income tax returns reflected Respondent corporation's income minus several types of business deductions, Ms. Beckstrom testified that the tax deductions were not conclusive of the workers' compensation deductions, because the Internal Revenue Service allows certain deductions not permissible for workers' compensation purposes, but she did not further elaborate upon which tax deductions were, or were not, allowable under any Department rule. She did not "prove up" which deductions were not valid for workers' compensation purposes. Respondent's 2006, tax deductions for "automobile and truck expense" were $2,898.00, and for 2007, were $4,010.00. There was no further itemization by Respondent within these categories for fuel. Other business deductions on the tax returns were also listed in categories, but without any further itemization. The only supporting documentation for the tax returns admitted in evidence was Respondent's bank statements. Respondent believed that the tax returns and possibly other documentation had been submitted before hearing by his accountant. It had not been submitted. The Department never credibly explained why it considered a third party's check stubs (not even the third party's cancelled checks) more reliable than Respondent's bank statements or federal tax returns. Even so, at hearing, the Department declined to utilize the business deductions itemized on Respondent's tax forms or any bank/debit card deductions on its bank statements so as to diminish the amount arrived-at via the Mass Builders, Inc.'s check stubs, and ultimately to arrive at a difference which would show a lesser payroll to Mr. Cauley. Although Mr. Cauley's questions to Ms. Beckstrom suggested that he would like at least all of the fuel company deductions on his bank statements to be considered as business deductions of Respondent Southern Insight, Inc., and for those fuel company expenditures to be subtracted from either the total deposits to the corporate bank account or deducted from the payroll total as calculated by Ms. Beckstrom from Mass Builders, Inc.'s check stub total, he did not testify with clarity as to which particular debits/charges on the bank statements fell in this category. Nor did he relate, with any accuracy, the debits/charges on the bank statements to the corporate tax returns. Upon review by the undersigned of Respondent's bank statements admitted in evidence, it is found that the bulk of Respondent's bank/debit card deductions during the assessed penalty period were cash withdrawals or ATM debits which cannot be identified as being paid to fuel companies or purveyors of construction material. As Investigator Beckstrom legitimately observed, "Big Al's Bait" is not a likely source of motor fuel. "Publix" and "Outback Steak House" are likewise unlikely sources of fuel or construction material, and cannot stand alone, without some other receipt to support them, as a legitimate corporate business entertainment expense. Other debits/charges on the bank statements are similarly non-complying, ambiguous, or defy categorization. However, the undersigned has been able to isolate on the corporate bank statements purchases from the known fuel distributors "Amoco" and "Chevron" on the following dates: 7/09/07, 7/10/07, 6/04/07, 6/04/07, 6/11/07, 5/03/07/ 4/09/07, 4/10/07, 4/13/07, 4/16/07, 3/02/07, 3/05/07, 3/13/07, 3/15/07, 3/20/07, 1/29/07, 5/01/06, 6/02/06, 8/02/06, 11/03/06, totaling $556.98.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers' Compensation, that affirms the stop-work order and concludes that a penalty is owed; that provides for a recalculation of penalty to be completed, on the basis set out herein, within 30 days of the final order; and that guarantees the Respondent Southern Insight, Inc., a window of opportunity to request a Section 120.57 (1) disputed-fact hearing solely upon the recalculation. DONE AND ENTERED this 1st day of July, 2008, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS 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 1st day of July, 2008. COPIES FURNISHED: Anthony B. Miller, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 John Cauley, President Southern Insight, Inc. Post Office Box 2592 Bunnell, Florida 32110 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
