Findings Of Fact Vedder and Associates Incorporated's (VAI's) application for minority certification dated January 22, 1992 was received by the Department of Management Services on January 27, 1992. Petitioner's application for minority certification was denied by the Department of Management Services in a letter dated May 22, 1992. VAI was established in October of 1991 and offers as its principal service "land surveying." VAI is licensed to do business in Florida and is fifty-one percent (51 percent) owned by Kathleen Vedder, a Caucasian female, and forty-nine percent (49 percent) owned by John Vedder her husband, a Caucasian male. Kathleen A. Vedder and John F. Vedder were the sole directors of the corporation at the time of certification denial, with Kathleen A. Vedder serving as president/secretary and John F. Vedder serving as vice-president/treasurer. On September 16, 1992, after the denial of certification, John Vedder resigned as a director of VAI. No business reason was offered for this decision. Kathleen Vedder, the minority owner, is presently the sole director of the corporation. As sole director, she represents a majority of the board of directors. She continues to serve as president and secretary. John Vedder continues to serve as treasurer. It is not clear if he still serves as vice- president. (See Findings of Fact 5-11 and 28-29). At all times material, Kathleen Vedder has owned 51 percent of the stock through a greater monetary investment than John Vedder, who owns 49 percent of the stock. At all times material, Kathleen Vedder has served as the principal officers, president and secretary. At all times material, Kathleen Vedder has made up at least 50 percent of the board of directors. Since September 16, 1992, she has made up 100 percent of the board of directors. At all times material, John Vedder has served as a principal officer, treasurer. Up until September 16, 1992, John Vedder made up 50 percent of the board of directors. Thereafter, he did not serve on the board. At all times material, Article VII of VAI's Articles of Incorporation have permitted an increase or decrease in the board of directors as permitted by the bylaws, but never less than one director. At all times material, Item III of VAI's bylaws have provided that corporate officers hold office at the "satisfaction" of the board of directors; that the president shall be the chief executive officer; and that subject to any specific assignment of duties by the board of directors, the vice-president, the secretary, and the treasurer act under the direction of the president. VAI was formed by the purchase of assets from the Perry C. McGriff Company, which had employed Kathleen and John Vedder. Kathleen Vedder began her career with the surveying firm of Keith & Schnars, P.A., in Fort Lauderdale in 1976. She was the administrative assistant to the President. In 1981 she and John Vedder moved to Gainesville to manage the Perry C. McGriff Company, a wholly owned subsidiary of Keith & Schnars. John Vedder handled the surveying aspects of the business, and Kathleen Vedder handled most of the management of the company other than the surveying portion, including purchasing, handling business accounts and financial affairs, client relations, insurance, and correspondence. This continued until 1991 when the assets of the Perry C. McGriff Company were sold to VAI. Kathleen Vedder now performs for VAI basically the same functions as she did for the predecessor company with certain additions. John Vedder served as the director of survey for the Perry C. McGriff Company which employed both Mr. and Mrs. Vedder prior to the formation of VAI. In his position as director of survey at Perry C. McGriff Company, he was responsible for all contracts and negotiations and coordination of personnel to ensure timely completion of contracts. His background by education, training, and experience is extensive in the technical applications to perform land surveying. The business of VAI essentially began on December 6, 1991. Prior to that date, husband and wife had discussed the purchase of the McGriff assets. Kathleen Vedder discussed the purchase of the business with her husband and informed him that she wanted to run the business. He accepted this relationship and her role as "boss" because he hated working in the office and wanted nothing to do with running the business. Kathleen Vedder contacted the old Perry C. McGriff clients and facilitated the transition from the old company to the new company. The Perry C. McGriff Company was purchased for $100,000 with a $15,000 down payment and the remainder to be paid over 7 years. Funds for the original purchase price of the assets were obtained by cashing Kathleen Vedder's 401K plan, two IRA's, and by loans against her life insurance policies for an investment of $57,185.62 by Kathleen Vedder and $25,682.25 of marital assets held with her husband, John Vedder. John Vedder participated in the negotiations to buy Perry C. McGriff Company. John Vedder provided input and expertise regarding the assets of Perry C. McGriff Company which were to be purchased, whether survey equipment was acceptable, and the vehicles to be purchased. John Vedder discussed and consulted with Kathleen Vedder regarding the financial aspects of the purchase of Perry C. McGriff Company. He discussed with her the starting salaries of employees to be hired/transferred to VAI, and the leasing and location of business premises for VAI and purchase of furniture. Kathleen Vedder established the corporate policies, the accounting procedures, the job costing, and the standard management practices of the new company. Kathleen Vedder, as VAI president, made all of the final decisions regarding implementation of the new business such as renting the office, moving the assets purchased from the old Perry C. McGriff Company, establishing lines of insurance, determining the manner and location of the survey records purchased, and hiring the staff. Kathleen Vedder and John Vedder made it clear to all of the employees from the beginning of the company that she was the "boss". The takeover of Perry C. McGriff Company by VAI was explained to former employees during a field visit by John Vedder. His explanation was made at Kathleen Vedder's direction and took place while these employees were already in the field, during a time of transition, in a spirit of damage control when Kathleen and John Vedder were concerned that rumors might affect the new company's ability to retain good personnel from the old company and over concern that some might have trouble working for a woman. Kathleen Vedder hired six employees initially from the old Perry C. McGriff Company. Kathleen Vedder set the initial pay scale for the employees of the company and maintained the documentation relevant to this function. The additional four persons hired by the company since it began were Robert Henderson, Tom Crossman, George Gruner, and Doug Zimmerman, each of whom were hired by Kathleen Vedder who interviewed them, who set their wages and benefits, and who described their job functions to them as new employees. VAI has a business license posted on its premises issued by the City of Gainesville, Florida, in the name of John Vedder, authorizing the performance of land survey services. VAI currently employs eight permanent employees and the qualifying agent is John F. Vedder, who serves as a principal officer, treasurer. He holds a land survey license issued by the State of Florida, Department of Professional Regulation, Land Surveying Board. In order to be qualified as a licensed land surveying corporation, a principal officer must be a licensed land surveyor. The participation of John Vedder or another duly-licensed land surveyor is required to satisfy the requirements of Chapter 472 F.S., for a qualifying agent. Under that statute, the qualifying agent must have a license as a land surveyor and hold a position as a principal officer in VAI. If John Vedder were to lose his professional land surveyor license, there would be three licensed land surveyors remaining with the company, and it would be possible for VAI to continue if one of these were designated as a principal officer. Kathleen Vedder holds no license or certification other than a notary public. In terms of any special needs or requests, such as medical needs, all employees are required to report to Kathleen Vedder. Kathleen Vedder earns $14.50 per hour. The survey party chiefs, including John Vedder, now earn $13.00 per hour. These amounts are commensurate with Kathleen Vedder's percentage of VAI ownership of fifty-one percent (51 percent). The evidence is conflicting as to whether another crew chief earned more than John Vedder in one year due to a higher rate of pay or more hours worked in that period. No one in the company draws any bonus, commission or has any particular insurance coverage as a benefit of employment. The company has not posted any dividends or distributed any proceeds from business investments or engaged in any profit sharing. The corporation has, as a risk of doing business, the liability connected with its $85,000.00 promissory note to Keith & Schnars, P.A. It also has the risk associated with premises liability, with motor vehicle liability, with general errors and omissions liability, and with professional liability. Kathleen Vedder has procured insurance to cover all these risks. These premiums are paid by the corporation. There has been no additional ownership interest acquired by anyone since the inception of the corporation. There are no third party agreements. There are no bonding applications. The company has not at any time entered into an agreement, option, scheme, or created any rights of conversion which, when exercised, would result in less than fifty-one percent (51 percent) minority ownership and minority control of the business by Kathleen Vedder. Kathleen Vedder controls the purchase of the goods, equipment, business inventory and services needed in the day-to-day-operation of the business. Kathleen Vedder expressly controls the investments, loans to and from stockholders, bonding, payment of general business loans, and payments and establishment of lines of credit. The corporate business account of VAI contains the signatures of John Vedder and Kathleen Vedder on the bank signature card. Only one signature is required to transact business. Of the 823 checks issued by VAI since it began, John Vedder signed one at Kathleen Vedder's direction when it was not possible for her to be in two places at once, and Kathleen Vedder signed 822 checks. Although he is treasurer, John Vedder professed to know nothing of VAI's finances and deferred to Kathleen Vedder in all matters of financing from the very beginning. Nonetheless, the corporate documents list the treasurer as the chief financial officer in ultimate charge of all funds. Kathleen Vedder has knowledge of only the minimum technical standards required for a survey. In her certification interviews, Mrs. Vedder did not know how to establish true north or how a line survey would establish true north. She lacks basic survey knowledge and could not identify Polaris as the north star or state the standard measurement (length of a chain) for a surveyor. Identifying Polaris is not particularly important in modern surveying. Kathleen Vedder is capable of doing the necessary paper search and telephone call regarding underground utilities for surveyors in the field. Kathleen Vedder has extensive experience in the production of a surveying product and is able to manage the surveyors who perform the technical aspects of the business. Upon acquisition of the assets and formation of the new company, Kathleen Vedder began directing the two field crews newly employed by VAI to the various projects and work which she had scheduled. This direction has primarily been in the timing and coordination of projects and is commensurate with some of the work previously done by John Vedder when he was director of survey for the predecessor company, Perry C. McGriff Company. (See Finding of Fact 14). Technical problems involving a particular site do not arise very often so as to require a discussion among the land surveyors of the company but if they do, the professional land surveyors jointly or singly make all technical surveying decisions. Surveys must be signed by a registered land surveyor pursuant to Chapter 472 F.S. John Vedder provides Kathleen Vedder technical advice, coordinates field crews' work, makes decisions pertaining to technical work which is not within Kathleen Vedder's abilities, consults with Kathleen Vedder once a week concerning the general financial picture of VAI, and does some job estimating and quality control. Kathleen Vedder rarely visits work sites in the field. Employees in the field report to John Vedder whenever they have a problem and report to Kathleen Vedder if the problem is in the nature of project coordination. John Vedder is responsible for training and working with employees and providing technical training required for the performance of land surveys. He does computer aided drafting (CAD) and provides technical assistance to the CAD operator, which Kathleen Vedder cannot do, however she works it afterward on her computer. Kathleen Vedder does not work in the field, and of the two, John Vedder performs the majority of work in the field. Kathleen Vedder defers to John Vedder to handle technical matters because he has more experience. Party Chief John Vedder supervises his crew. Party Chief Louis Crosier supervises his crew. Kathleen Vedder supervises Louis Crosier and John Vedder and a third crew chief when one is used, usually Robert Henderson. Kathleen Vedder established a fee schedule for the company and a method of formulating the estimates and bids which the company would propose to prospective clients. John Vedder is not knowledgeable in this area. When a job comes in, the prospective client initially contacts Kathleen Vedder. If a client calls requesting a survey, Kathleen Vedder does the research and provides the estimate or bid without further input from any surveyor if the survey requested is a standard routine survey. If the job is complex, Kathleen Vedder requires man hour estimates from two land surveyors, one of whom is often John Vedder. She takes these estimates and applies previous histories, experience, and adjustments in order to prepare the final bid or survey estimate. Once she has received the man-hour estimate, Kathleen Vedder reviews it, compares it with previous surveys, applies a job costs analysis to it, applies any other known costs to it, and presents the final estimate or bid. There is a difference between compiling the work hours necessary for the estimate and compiling the estimate itself. Kathleen Vedder has the ultimate responsibility for finalizing complex estimates and bids. Kathleen Vedder makes presentations as a part of her function which involve technical presentations of the survey services rendered by VAI. In the fourteen month period since the business began, Kathleen Vedder has given approximately eight presentations of a technical nature to prospective clients, including the Florida Department of Transportation (DOT). Kathleen Vedder is capable of complying with DOT bid specifications to submit material on a DOS disc. DOT has qualified VAI under its Disadvantaged Business Enterprise program. Petitioner's witnesses skilled in land surveying consistently testified that without Kathleen Vedder's skilled contributions to the firm, technical land surveying could be accomplished but the firm would not show a profit. Rule 13A-2.005(3)(d)(4), requires minority owners to have managerial, technical capability, knowledge, training, education and experience to make decisions regarding the business. In interpreting this rule, the Respondent agency relies on Barton S. Amey v. Department of General Services, DOAH Case No. 86-3954, (RO 3/5/87; FO 4/21/87), aff'd Fla. DCA February 11, 1988, No. 87-235. The agency has no further refinement by way of rule or policy which applies specifically to the land surveying industry. It does not require the minority owner to have a land surveying license per se. It does not require the minority business owner to have an extensive knowledge of surveying.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered certifying Vedder Associates, Incorporated as a Minority Business Enterprise. RECOMMENDED this 7th day of June, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of June, 1993. APPENDIX TO RECOMMENDED ORDER 92-3763 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: The so-called "stipulated facts" is accepted, as stipulated, but not as to the inserted conclusion of law/argument. 1-19 Accepted except to the degree it is unnecessary, subordinate, or cumulative. 20-21 Accepted, but not dispositive, subordinate. Rejected as a conclusion of law or argument. Accepted, but not dispositive, subordinate. Rejected as a conclusion of law or argument. 25-33 Accepted as modified to more closely conform to the record, and to eliminate mere leal argument, conclusions of law, and unnecessary, subordinate, or cumulative material. Also testimony was to 823 checks. Rejected as stated as not supported by the greater weight of the credible evidence. Accepted, except to the degree it is unnecessary, subordinate or cumulative. Rejected as out of context, a conclusion of law, or argument. 37-46 Accepted, as modified, except to the degree it is unnecessary, subordinate, or cumulative. 47-48 Rejected as out of context, a conclusion of law, or argument. 49-53 Covered to the degree necessary in Finding of Fact 65, otherwise irrelevant and immaterial to a de novo proceeding under Section 120.57(1) F.S. 54-56 Accepted except to the degree unnecessary, subordinate, or cumulative. 57 Rejected as out of context, a conclusion of law, or argument. 58-60 Accepted except to the degree unnecessary, subordinate, or cumulative. Petitioner's "factual conclusions" are rejected as proposed conclusions of law not proposed findings of fact. Respondent's PFOF: 1-10 Accepted except to the degree unnecessary or cumulative. 11 Rejected as subordinate. 12-14 Rejected as stated as argument. Covered in Findings of Fact 27-30, absent argument, conclusions of law, and erroneous statements not supported by the greater weight of the credible competent evidence. Rejected as argument. Mostly accepted except to the degree it is unnecessary, subordinate or cumulative. However, the job estimating as stated is not supported by the record nor the argument of "day-to-day business." 17-19 Accepted as modified to conform to the record evidence, and except to the degree it is unnecessary, subordinate, or cumulative. 20 Rejected as argument. 21-22 Accepted but incomplete, irrelevant and immaterial in a de novo Section 120.57(1) F.S. proceeding. Also, the footnote is rejected as mere argument. 23-24 Rejected as argument. Accepted, but not complete or dispositive; unnecessary and cumulative. Accepted to the degree stated except to the degree unnecessary, subordinate, or cumulative. She also did more. Rejected as partially not supported by the record; other parts are rejected as unnecessary, subordinate, or cumulative. Accepted except to the degree unnecessary, subordinate, or cumulative or not supported by the record. Accepted in part and rejected in part upon the greater weight of the credible, competent record evidence. Rejected as argument. Rejected as stated as not supported by the greater weight of the credible, competent record evidence, also unnecessary, subordinate, or cumulative. Accepted except to the degree it is unnecessary, subordinate, or cumulative. Rejected as argument 34-35 Accepted in part. Remainder rejected as stated as not supported by the greater weight of the credible, competent record evidence, and as a conclusion of law contrary to Mid State Industries, Inc. v. Department of General Services, DOAH Case No. 92-2110 (RO 9/14/92). 36 Rejected as argument. 37-38 Accepted in part, and rejected in part because not proven as stated. Rejected as argument. Rejected as stated because out of context or not supported as stated by the greater weight of the credible, competent record evidence. Rejected as argument. Accepted, except to the degree unnecessary, subordinate or cumulative. Rejected as argument. 44-46 Rejected as subordinate. 47,(No #48),49 Accepted except to the degree unnecessary, subordinate, or cumulative. 50-55 Rejected as subordinate or unnecessary or as conclusions of law or argument. COPIES FURNISHED: Peter C. K. Enwall, Esquire Post Office Box 23879 Gainesville, FL 32602 Terry A. Stepp, Esquire Department of Management Services Koger Executive Center Suite 309, Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950 William H. Lindner, Secretary Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Susan B. Kirkland, Esquire Department of Management Services Koger Executive Center Suite 309, Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950
The Issue Whether Petitioner should be granted certification as a Minority Business Enterprise.
Findings Of Fact Petitioner, Dora Industries, Inc. (Dora Industries), was started in 1989 by Sandra Roth (Roth), an American woman. Roth owns all of the company. Initially, Dora Industries bought janitorial and maintenance products from other companies and sold the products as a distributor. Roth graduated from Hunter College with a degree in graphic arts. From 1979 to 1985, she worked for Union Carbide in North Carolina doing research for the chemical division. She was later placed in charge of dealing with third world countries on ways to use chemicals in agriculture. In 1986, Roth went to work for Gold Coast Chemical Corporation (Gold Coast Corporation), which was owned by Eli Finkleberg. Her role at Gold Coast Corporation included doing the paperwork necessary for registering the chemicals manufactured by Gold Coast Corporations with the appropriate regulatory agency. In 1989, Roth formed Dora Industries and married Eli Finkleberg. Dora Industries purchased some of its products from Gold Coast Corporation. Due to ill health, Eli Finkleberg put Gold Coast Corporation up for sale in 1993. The company was advertised for sale in trade magazines. Using funds which Roth had acquired from the dissolution of a previous marriage, she purchased the manufacturing operations of Gold Coast Corporation in 1993. The purchase price was $96,000, which consisted of $47,091 in cash and the remainder in the assumption and payment of certain leases and contracts. In addition, Roth agreed to renegotiate the lease of the real property on which Gold Coast Corporation was housed to include the costs of clean up for hazardous materials which were found in the ground underneath the Gold Coast Corporation warehouse. The landlord attributed the presence of the hazardous materials to Gold Coast Corporation. The estimated cost of the clean up was not to exceed $200,000. The inventory of Gold Coast Corporation was not included in the sale. However, the inventory remained in the warehouse previously occupied by Gold Coast Corporation and was handled for Gold Coast Corporation by Dora Industries d/b/a Gold Coast Chemical Products (Gold Coast Products). After the inventory was sold Gold Coast Corporation no longer sold any products and has not actively sold chemicals for the last two years. Currently Dora Industries is manufacturing chemical cleaning products, distributing its own products and the products of other companies, and exporting products. Eli Finkleberg is the treasurer and a salaried employee of Dora Industries. His responsibilities include interviewing applicants for sales positions, running the sales division of the company, overseeing the sales manager, and supervising the office staff. His annual salary is approximately $35,000. Due to his poor health, he works between four and six hours a day. Jerome Berman is the general manager in charge of operations for Dora Industries. Mr. Berman owned and ran a chemical company for 23 years prior to coming to work for Dora Industries. His responsibilities include ordering all materials and supplies used in the production of and resale of industrial supplies, hiring and firing of all warehouse and distribution personnel, complying with governmental regulations, bidding, and supervising the warehouse and productions. Mr. Berman's annual salary is $57,000. Both Mr. Berman and Mr. Finkleberg have the authority to sign checks on the Dora Industries account. Mr. Berman's authority is limited to $5,000. Roth is responsible for making major purchases for the business such as a telephone system which she recently acquired. Roth employs a chemist who is responsible for the formulas used in the manufacture of the chemical products. This is the third chemist which Roth has employed since she started Dora Industries. Some of the formulas are given to Dora Industries by the suppliers of the raw materials, and some formulas are developed by the chemist. Roth does not have the expertise to develop formulas but she does have the expertise to manufacture a batch of products using a formula. Each day Roth discusses the sales and operations with Mr. Finkleberg and Mr. Berman, respectively. In the hiring of sales personnel, Roth meets the applicants which have been interviewed by Mr. Finkleberg and makes the final decision on who to hire. Roth has delegated the hiring of the hourly wage personnel in the warehouse to Mr. Berman. According to Berman, he advises Roth who he intends to hire in case she should have an objection. Mr. Berman has to report the reasons that he fires personnel to Roth. Roth did the bidding for the company before Mr. Berman was hired. Mr. Berman follows a set formula of cost plus a percentage of profit in the bidding process and requests permission from Roth before making any significant deviations from the formula. Eli Finkleberg owns Trout and Associates, which is a telemarketing firm selling cleaning chemicals to companies outside of Florida. Trout and Associates has one full-time employee and one part-time employee. The full-time employee is housed in an office in the building occupied by Dora Industries. Trout and Associates buys some of its products from Dora Industries for resale.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered granting Petitioner certification as a minority business enterprise. DONE AND ENTERED this 10th day of October, 1996, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 10th day of October, 1996. COPIES FURNISHED: Lorenzo Ramunno, Esquire 1882 North University Drive Plantation, Florida 33322 Joseph L. Shields, Senior Attorney Office of the General Counsel Department of Labor and Employment Security, Division of Minority Business Advocacy and Assistance Office 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Douglas L. Jamerson, Secretary Department of Labor and Employment Security 2012 Capital Circle Southeast 303 Hartman Building Tallahassee, Florida 32399-2152 Edward A. Dion, General Counsel Department of Labor and Employment Security 2012 Capital Circle Southeast 303 Hartman Building Tallahassee, Florida 32399-2152
Findings Of Fact Wanda Forbess is an American woman. She is the president of the Petitioner corporation, Center Office Products, Inc. She owns 5l percent of that corporation's outstanding stock. The stock is full voting stock and there are no agreements in existence or anticipated which would cause any change in the percentage of ownership of Wanda Forbess, nor any change in the voting power of her stock. The Petitioner corporation and Wanda Forbess has no affiliation or relationship with any other business and Wanda Forbess is not an employee of any other business. The net worth of the Petitioner as of the date of hearing is less than one million dollars. It has also been stipulated that the Petitioner, that is, Wanda Forbess, has been performing a useful business function and operating the Petitioner's business since 1981. Wanda Forbess is the mother of Thomas J. Forbess and Raymond D. Forbess and the wife of Thomas D. Forbess. In 1981 her children were almost out of school, with her youngest child being about to enter college. She decided she wanted to start her own business. She had been active as a homemaker, a volunteer and active member of civic organizations. She decided to enter the office supply retail business in 1981 because of the low initial investment required due to the presence of two wholesale suppliers in Jacksonville who could supply goods for inventory on a rapid basis. She also chose to enter this business because there were no particular special skills, training or licenses required and because she knew something about it, since her husband worked for twenty-five years in one phase of the business, that of sales of paper products. This decision being made, Ms. Forbess approached her sons, Thomas J. Forbess and Raymond D. Forbess, to persuade them to enter into the business with her. They agreed to join her in the venture and she set about to form the Petitioner corporation. She desired to incorporate in order to limit the liability which she and her sons would be exposed to in operating the business. She retained an attorney to incorporate the business, but paid no particular attention herself concerning how the shares were to be issued and held or as to the manner of appointment of the members of the board of the directors. She simply followed her attorney's instructions who advised her to do the "standard type" of incorporation. The corporation estab- lished by her attorney provided, in its by-laws, that there would be three directors. Wanda, Ray and Thomas Forbess were each named as directors since they were the only three individuals involved with the Petitioner at its formation. The attorney also issued stock certificates for 200 shares each to the three directors. Wanda Forbess was appointed as president and chief executive officer of the Petitioner corporation. This was because the formation of the business and the company was Mrs. Forbess' idea and she had provided more than five times the amount of capital of each of the other two owners, her sons. In fact, she had provided $11,000 of her own money as initial capital and her two sons provided $2,000 each. Notwithstanding their equal ownership status and the equal vote each of the three has on the Board of Directors, as well as the requirement in the bylaws that a majority vote of the Board is controlling, Mrs. Forbess has been in control of the Petitioner corporation's operations from the day of its inception. Her sons do not question that control and established the fact of it in their own testimony at the hearing. The vice- president is Raymond D. Forbess and the secretary treasurer is Thomas J. Forbess. The bylaws provide that the property and business of the corporation is managed by its Board of Directors and that a majority of those directors shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of the majority of the directors present at any meeting at which there is a quorum shall be deemed to be the act of the board. It is also provided in the bylaws that the holders of the majority of shares of stock may remove a director at any time, with or without cause, at a duly called meeting. The president of the Petitioner is empowered to call such a meeting at any time. Any vacancy occurring as a result of removal of any director by the majority shareholders may be filled by the affirmative vote of the majority of remaining directors, even if less than a quorum shall be present. Directors are not required to be shareholders. Therefore, as a holder of 51 percent of the shares of the Petitioner, Wanda Forbess has control over the board of directors by the power to elect or remove any director by voting shares accordingly at a meeting which she may call at any time, with or without notice, as the president of the Petitioner corporation. Replacement directors could then be appointed by her vote alone and could be any person she elects, including, for example, an employee over who she has authority and who she may direct to vote a certain way. In any event, from 1981 through 1987, the Petitioner grew from a company with three employees to a company of 18 employees and more than $280,000 gross monthly sales. During this time, the Petitioner enjoyed some State of Florida contract business. Some time in 1987, Mrs. Forbess became aware that she would soon be unable to continue doing business with the state because her business was not a certified minority business enterprise. In fact, however, the Petitioner had been, from its inception, an American woman-controlled corporation in actual practice. On June 1, 1987, Mrs. Forbess directed her sons to convey sufficient stock to her so that she could become a 51 percent shareholder of the Petitioner corporation. This transfer was done to comply with section 288.703(2), Florida Statutes, concerning the definition of "minority business enterprise." It was also done to formally reflect what had been the case, as a practical matter, since the inception of the corporation: that Wanda Forbess controlled the Petitioner corporation. The company by that time had significant value reflected in the value of its stock, but neither son required payment for his stock which he conveyed to Mrs. Forbess. They considered that she was the controlling owner of the corporation from its inception anyway due to the fact that the business was her idea and that she had contributed by far the most significant amount of initial capital. Mrs. Forbess spends a majority of her time conducting the financial affairs of the Petitioner. She is more familiar and more involved with the financial affairs of the Petitioner corporation then any other owner, officer, director or employee. In that capacity, she sets all the salaries, including the salaries of her sons and her husband. All salaries are set completely at the discretion of Mrs. Forbess and always have been. She pays her two sons and her husband a higher salary than she pays herself because their financial requirements are greater, but the salient point here is that she is the manager with the discretion to set their salaries. In 1985, after the Petitioner had been operating successfully for four years, Thomas J. Forbess, the husband of Mrs. Forbess, retired from his position with Jim Walter Paper Company after 25 years of employment with that firm. Prior to that time he had no involvement with the formation, operation or management of the Petitioner corporation. He has never had an ownership interest in the Petitioner. He is an employee of the corporation and assists in some of the operations, including preparation and submittal of bids for some of the work the corporation undertakes. Mrs. Forbess controls the purchase of goods, equipment and business inventory and services used and needed in the day- to-day operation of the business. She frequently purchases significant items used in the business, such as computers, trucks, and postage machines, as well as inventory. In addition to this, the major purchases made by the business by any co-owner or employee must be made only with her approval. Evidence was offered showing the lease agreements and notes evidencing that corporate debts related to large purchases were signed by all corporate officers as a basis for an attempt to show that decisions are made by "consensus" or are joint decisions. However, the fact that lenders and lessors require all corporate officers to sign documents evidencing leases or debts does not mean each corporate officer had an equal part to play in making the decision involved. The record is replete with evidence and testimony from employees and the other owners that Wanda Forbess has a veto power on all decisions concerning purchases, loans, leases of real property and every other major business decision the Petitioner confronts. Further, the fact that discussions are had amongst the owners and officers of the business prior to making major decisions is really a sound business practice and does not mean that one of the owners, directors or officers does not have final authority to make a binding decision. The person who has final authority for such major decisions is Wanda Forbess. Mrs. Forbess also has the authority to hire and dismiss employees, a requirement of subsection 3(b) of Rule 13-8.005(3), Florida Administrative Code. She herself has interviewed employees from time to time and also has final authority to approve all hiring and discharge decisions or to veto them in those instances where she has delegated that authority. She controls which professional services are obtained by the Petitioner corporation, as shown by her decision to discontinue the services of the former company accountant. Indeed, she has delegated some of the hiring processes, given the fact that the Petitioner corporation has grown to be a business with 18 employees. That however, is a normal, acceptable business decision. The delegation of the advertising of a position, the interviewing of prospective employees and the conveying of offers of employment to prospective employees in no way indicates that the delegator does not have the final authority to hire or dismiss the employees. Wanda Forbess also controls all financial affairs of the Petitioner corporation. She thus has unsurpassed knowledge in relation to the other owners, officers and directors, of the financial structure and operations of the business. In fact, the bulk of her time spent working for the Petitioner, corporation since its inception, has been in the field of financial matters. She makes the decisions concerning debt to be incurred by the Petitioner, and approves any major expenditure, without which approval expenditures may not be made. It is significant that Mrs. Forbess has veto authority over the extension of credit to customers and establishment of credit accounts by customers. One instance was described by Jeannine Silcox and Raymond Forbess concerning Raymond Forbess' attempt to open an account to service a particular customer on a credit basis. Mrs. Forbess opposed that procedure and ordered that the account not be opened. The account was not opened. This demonstrates effectively that not only does Mrs. Forbess control the financial affairs of the company, but also wields ultimate authority amongst the co-owners of the Petitioner. Additionally, it is undisputed that Mrs. Forbess writes the vast majority of checks on the Petitioner's two checking accounts, in terms of the requirement, at subsection 3(D) of the above-cited rule, that she control the accounts of the business. She estimates that she writes 97 percent of the checks and there is no evidence to refute that estimate. Thomas J. and Raymond B. Forbess are each authorized signatories on the accounts, but their names are simply there as a matter of convenience and the only instances in which they sign checks are when there is an immediate need for the check to be paid and Mrs. Forbess is unavailable to sign herself. There is no question that Mrs. Forbess is the ultimate authority controlling the Petitioner's bank accounts. In order to comply with subsection 3(e) of the above cited rule, the minority owner must demonstrate capability, knowledge and experience in making decisions concerning the business involved. At the time of the business's inception, neither Mrs. Forbess nor her co-owner sons had the capability, knowledge or experience required to make many of the decisions concerning the retail office supply retail business. Over seven years of operation however, Mrs. Forbess has actively supervised and managed the business of the Petitioner and has developed to a high degree those attributes, in making decisions involved in operating that business successfully. She has delegated certain aspects of the company's business to the supervision of her sons. Thomas J. Forbess, for example, is involved in developing additional retail operations. Raymond B. Forbess is more actively involved in the delivery of merchandise to customers and the monitoring of customer accounts, as well as maintaining and accounting for inventory. Nonetheless, neither of the other owners effects any significant decisions without consulting Mrs. Forbess first and gaining her approval or veto. Through this supervision and control over the past seven years, as well as her current direct involvement in managing the Petitioner's affairs, Mrs. Forbess has developed the capability, knowledge and experience required to make decisions regarding the office supply business involved herein. Her operational and managerial capabilities are demonstrated by the fact that under her leadership the business started with three employees and has grown to an 18 employee business with gross sales in the neighborhood of $280,000 per month in just over seven years. Finally, Mrs. Forbess has displayed independence and initiative in conducting all major operations and details of the Petitioner since its inception, (as required by subsection (f) of the above rule). Although she has done little bid negotiating directly, she has the ability to do so and has some experience in that activity. Further, bid proposals are submitted to her for approval and are not made without her knowledge and assent. Further, she herself negotiates leases and other contracts on behalf of the Petitioner.
The Issue The issue in this case is whether the Petitioner, Lyons Towing, Inc., is entitled to certification as a minority business enterprise.
Findings Of Fact Mrs. Bobbye Lyons, an American woman, presently owns 89 percent of the corporate stock of the Petitioner, Lyons Towing, Inc. Her husband, Mr. Don Lyons, owns the other 11 percent of the corporate stock of the Petitioner. The only directors of Lyons Towing, Inc., are Bobbye Lyons and her husband, Don Lyons. Mr. Don Lyons is also the vice-president of Lyons Towing, Inc. Mr. Don Lyons is not a "minority person" within the meaning of the definition of that term at Section 288.703(3), Florida Statutes. Mrs. Bobbye Lyons also presently owns 11 percent of the corporate stock of Lyons Autobody, Inc. Her husband, Don Lyons, owns the other 89 percent of the corporate stock of Lyons Autobody, Inc. The only directors of Lyons Autobody, Inc., are Bobbye Lyons and her husband, Don Jones. Mrs. Bobbye Lyons is also the vice-president of Lyons Autobody, Inc. Lyons Autobody, Inc., is not a "minority business enterprise" within the meaning of the definition of that term at Section 288.703(2), Florida Statutes. The Petitioner, Lyons Towing, Inc., shares space with Lyons Autobody, Inc. The Petitioner, Lyons Towing, Inc., leases most of its towing trucks from Lyons Autobody, Inc. Mr. Don Lyons is authorized to sign checks on the Petitioner's checking accounts. Mr. Don Lyons is the co-maker of at least two promissory notes and security agreements on behalf of the Petitioner, Lyons Towing, Inc. The two notes are in the amounts of $36,356.26 and $51,812.65. Mrs. Bobbye Lyons is authorized to sign checks on the checking accounts of Lyons Autobody, Inc. Mrs. Bobbye Lyons and Mr. Don Lyons jointly own at least one of the storage lots on which the Petitioner stores impounded vehicles. The Petitioner corporation, Lyons Towing, Inc., is engaged primarily in the business of towing motor vehicles. Lyons Autobody, Inc., is engaged primarily in the business of repairing wrecked or damaged motor vehicles. Prior to the incorporation of Lyons Towing, Inc., Lyons Autobody, Inc., also engaged in the business of towing motor vehicles. The business of towing motor vehicles and the business of repairing wrecked or damaged vehicles are businesses in associated fields of operation. Mrs. Bobbye Lyons has been married to Mr. Don Lyons since 1975. At the time of their marriage, Mr. Don Lyons was already engaged in business. Mr. Don Lyons and his father had started a business in 1964 that engaged in both repairing wrecked or damaged motor vehicles and in towing motor vehicles. In 1975, Mrs. Bobbye Lyons began to work in her husband's business and continued to do so until 1987. During that period of time Mrs. Bobbye Lyons worked primarily on the towing side of the business, but she also did a little bit of everything in the business, except drive tow trucks. In 1987, Mr. Don Lyons decided to split his business into two separate businesses; one business to be engaged primarily in the business of repairing wrecked and damaged motor vehicles and the other to be engaged primarily in the business of towing motor vehicles. At that time the Petitioner, Lyons Towing, Inc., was incorporated and Mrs. Bobbye Lyons was installed as President and "Chief Operations Officer" of the new corporation. Sometime thereafter, 89 percent of the stock of the Petitioner, Lyons Towing, Inc., was "given" to Mrs. Bobbye Lyons. Mrs. Bobbye Lyons did not make any capital contribution to Lyons Towing, Inc., and did not purchase her shares in that corporation. At least until March 16, 1996, both the Petitioner, Lyons Towing, Inc., and Lyons Autobody, Inc., had a single motor vehicle insurance policy under which all of the vehicles owned by both corporations were co-insured. Mrs. Bobbye Lyons is a high school graduate and a graduate of Clevinger's Business College. She has attended Palm Beach Junior College and has previously been certified as a sworn law enforcement officer. She has been involved in the towing business since 1975 and appears to have sufficient experience and knowledge regarding the towing business to be able to operate a business like Lyons Towing, Inc., without assistance from her husband. Mrs. Bobbye Lyons is a regular and active participant in the day-to- day operations of Lyons Towing, Inc. She is the person who is primarily responsible for the day-to-day operations of Lyons Towing, Inc., and she directly or indirectly supervises and directs all employees of Lyons Towing, Inc. She also supervises and directs the purchase of goods, equipment, business inventory, and services needed in the day-to-day operation of the business. Similarly, she supervises and directs the hiring, firing, and work assignments of all employees. She also establishes employment policies, wages, benefits, and other conditions of employment. She is assisted in this regard by Mr. Allan Gold, who has the title of General Manager of Lyons Towing, Inc. Mr. Gold is subordinate to Mrs. Bobbye Lyons and must receive her approval before he can hire or fire employees, enter into contracts, or purchase equipment. Mrs. Bobbye Lyons makes or participates in all of the major decisions regarding hiring and firing employees, payroll, business expenditures, purchase of equipment, and contract negotiations with customers. In this regard, Mrs. Bobbye Lyons exercises control over the business affairs of Lyons Towing, Inc., on a regular and continuing basis, but always subject to the influence of, and with the tacit approval of, her husband, Mr. Don Lyons. Because of his more extensive experience in the business, Mr. Don Lyons often participates in important business decisions affecting Lyons Towing, Inc., and spends several hours each week providing guidance and assistance in the management of Lyons Towing, Inc. Further, by reason of his status as one of only two board members on the board of directors of Lyons Towing, Inc., he can effectively veto any decision by Mrs. Bobbye Lyons regarding any corporate decision with which he disagrees. And by reason of his status as an officer of Lyons Towing, Inc., and his authority to sign checks on the Lyons Towing, Inc., checking account, he has the power and authority to intervene in the day-to-day operations of the Petitioner corporation.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case denying the certification sought by the Petitioner and dismissing the petition in this case. DONE AND ENTERED this 30th day of August, 1996, at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of August, 1996.
Findings Of Fact Petitioner Coggin and Deermont, Inc. (C&D) has forty-odd employees. The company owns a building and, among other equipment, bulldozers, loaders, scrapers, graders, draglines, and dump trucks. Respondent's Exhibit No. 1. C&D clears, grubs, grades, and otherwise prepares roadbeds and constructs roads through the stage called "base work." C&D has qualified as a prime contractor with respondent Department of Transportation. The firm also builds culverts and storm drainage structures, including head walls, and does other concrete work. After Mr. Deermont died, at age 94, his partner carried on their road- building business with the help of Ralph C. Carlisle, a 25-year employee, and, until recently, president of C&D. Mr. Coggin died last year at 88, and the Carlisle family decided to acquire the rest of C&D's stock. Mr. Carlisle's wife Bertha, nee Lopez, had inherited Six Thousand Dollars ($6,000) from her father, who, like her mother, was born in Mexico. Blonde and blue-eyed, Mrs. Carlisle herself was born in the United States, on April 26, 1929. Petitioner's Exhibit No. 1. FAMILY BUYS COMPANY On February 10, 1982, the Carlisles bought all of C&D's stock Mr. Carlisle did not already own. They used Bertha's inheritance to make a Six Thousand Dollar ($6,000) cash payment and executed a promissory note in the amount of One Hundred Seventy-three Thousand, Three Hundred Twenty-five Dollars ($173,325), Petitioner's Exhibit No. 3, for the balance of the purchase price. The note was secured by a mortgage encumbering three parcels of real estate owned jointly by Ralph C. and Bertha L. Carlisle. Petitioner's Exhibit No. 2. The expectation is that income from C&D will make it possible for Mr. and Mrs. Carlisle to make the installment payments promised in Petitioner's Exhibit No. 3. C&D owes some Ninety Thousand Dollars ($90,000) to various banks. Mr. and Mrs. Carlisle are personally liable for some, if not all, of C&D's debt. They are not obligated to begin installment payments on the note they executed to pay for the stock until March 10, 1983. Mrs. Carlisle paid Two Hundred Twenty-five Dollars ($225) per share for her stock. (T. 58.) Only one hundred (100) shares are outstanding. Respondent's Exhibit No. 1. Mrs. Carlisle holds fifty-one percent (51 percent) of C&D's stock, and her husband holds thirty-four percent (34 percent). Mr. and Mrs. Carlisle have two sons, Ralph C. III and Richard D., to whom they gave ten percent (10 percent) and five percent (5 percent) of C&D's stock, respectively. All the Carlisles are directors of the corporation. Dividends have not been paid since the Carlisles took over. At some point, the Carlisles "decided [they] were going to apply for minority business enterprise [certification] and use [Mrs. Carlisle's] ethnic origin." (T. 64.) PRESIDENT'S DUTIES Mrs. Carlisle did not bring any particular expertise to C&D, even though she had accompanied her husband on some of his travels for C&D (without compensation). After graduation from high school, attendance at "business school," and two years as a clerk in a stock broker's office, she married Mr. Carlisle and began a twenty-five-year career as a housewife, which was interrupted recently by a two-year stint as an interior designer in a gift shop. (T. 65.) When she became majority stockholder, Mrs. Carlisle voted herself president of C&D. She succeeded her husband in that office. Her salary is One Thousand, One Hundred Twenty-Five Dollars ($1,125) weekly, and his is Eight Hundred Ninety-five Dollars ($895) 1/ weekly. They "combine" their salaries. (T. 90.) Machinery is not Mrs. Carlisle's strong point; she has some difficulty distinguishing among the different types of heavy equipment C&D uses. Field operations are not her primary concern. As a matter of company policy, she ordinarily visits job sites only in the company of her husband. (T. 63, 66- 67.) Her routine upon returning from site inspections she described as follows: [W]hen I come back I always check my mail and my phone calls or--something like that. Most of the time when I go out on the job, like I say, it's quite a distance away from home and I go back to the office and check to see what problems we have had, I have had. He checks his desk and I check my desk. And then we'll go on home and that's when we confer with our sons again. And business starts all over again. (T. 67-68.) She also buys most of the office supplies and signs weekly payroll checks, which are prepared by an employee and countersigned both by her husband and Patricia Kirkland, who keeps C&D's books. Mrs. Carlisle has only limited knowledge of basic accounting concepts. (T. 85-86.) She acts as C&D's "EEO representative," (T. 53) a task she took over from a secretary, Mrs. Cook. Mrs. Carlisle has other duties in connection with bid preparation. She reads some ten newspapers published in Chipley, Florida, and surrounds "to see which jobs are going to be coming up" (T. 50) and orders the plans for jobs C&D might be interested in; she and her husband ["he's the engineer and has all the experience . . ." (T. 51)] inspect the site; she inquires by telephone of "salesmen and people to get the prices" (T. 52) for pipe, concrete, and other materials, but does not negotiate prices. According to Mrs. Carlisle, her "husband is the one that is doing all of the figuring on the job," (T. 52) but Mrs. Carlisle works at figuring, particularly when she travels with her husband to Tallahassee. MINORITY OWNERS Both sons work for C&D and had held salaried positions with C&D before the Carlisles bought out the other owners. Their combined experience amounted to less than five years. The older boy, Ralph C. III, serves as corporate treasurer and as general superintendent "overseeing all the work that the company has under construction" (T. 20) and overseeing maintenance. He has power to hire and fire and has exercised it. As treasurer, he reviews a treasurer's report prepared by Mrs. Kirkland and signs rental agreements. He can operate every piece of equipment C&D owns. He has never supervised a road-building project from start to finish, but he worked on one project as a timekeeper and grade man from start to finish. He worked for C&D for a year after he graduated from high school. Since then he has had two years of college; he took math, engineering, and accounting courses. After college, he worked for Ardaman & Associates in Tallahassee for eight or nine months taking soil samples, before returning to C&D in February of 1982. He is paid Two Hundred Twenty-Five Dollars ($225) weekly. Richard D. works as foreman of a six-man crew, at a salary of One Hundred Seventy Dollars ($170) per week, and has full authority in the field in his father's absence, including the power to hire and fire the men he supervises. He began at C&D as a laborer. He has finished 60 hours of drafting technology courses at a junior college and may graduate in December. EFFECTIVE CONTROL As vice-president and general manager, answerable only to his wife, Ralph C. Carlisle has charge of C&D and manages day-to-day operations. He is trained as an engineer and does surveying for C&D. He is "the job estimator" (T. 90); he stakes out jobs and prepares cost reports. Richard D. Carlisle testified as follows: Q: Who do you report to? A: My daddy. Q: Do you receive instructions from him? A: Mostly. And I receive instructions from my brother and my mother. She will help us out. (T. 13.) Ralph C. Carlisle III testified, as follows: Well, basically I have the control of field supervising. If I make a decision in the field and it doesn't work then I ask [my father] to make a decision. That way he has a little more experience than I do, not a little more, a lot more. I make ninety- nine per cent of the decisions in the field. (T. 28-29.) He explained the lines of authority at C&D in these words: Totally to my mama, I'm totally responsible to her. But in the meantime I'm still re- sponsible to my daddy too. What I'm saying is, basically I do not have to report my day to day activities to anybody. If I have to, if there is something that arises I tell my mama first, being the stockholder, if she is available. If not then I go over it with my daddy. Basically my daddy and I have a little conference every evening on the field activ- ities, which my mama is also in on. We have a little conference every evening. We do report our activities to each other every evening. When it gets right down to it we don't have to. When asked whether decisions she makes in the field are joint decisions, Mrs. Carlisle answered: Yes. Just really because I'm president of the company that still doesn't mean -- that still means that we share it. My husband has a lot of say so just like I do. He has more knowledge in this field than I have. And this is what he is educated in too. (T. 70.) Mrs. Carlisle does not make policy for C&D by herself. (T. 76.) Mr. Carlisle is involved with all technical decisions. (T. 91.) The four owners live together as a family and discuss business at home as well as on the job.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent deny petitioner's application for certification as a minority business enterprise. DONE AND ENTERED this 9th day of September, 1982, in Tallahassee, Florida. ROBERT T. BENTON, II 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 9th day of September, 1982.
The Issue The issue is whether Petitioner is entitled to certification as a minority business enterprise.
Findings Of Fact By application dated February 6, 1998, Petitioner requested certification as a minority business enterprise. Respondent received the application on May 20, 1998, and denied the application on July 31, 1998. In denying the application, Respondent cited several reasons, including various rules, for why it was denying Petitioner's request for minority business certification. The letter cites Rules 38A-20.001(8) (statutory definition of "minority business enterprise") and (15) (lack of real control); and 38A-20.005(2) (ownership tests) and (3)(a) (control subject to restrictions), (b) (determining quorum of board of directors), (c) (minorities must be sufficiently capable and responsible to maintain control), and (d) (control may not be distributed among non-minority family members so that minority lacks dominant responsibility for management and daily operations, including purchase of inventory and equipment and financial control). Respondent does not dispute that Darlene S. Maki is a minority--i.e, female--and that Petitioner is a "small business concern." The application discloses that Petitioner is a Florida corporation in business as a machine shop. The application discloses that the only minority associated with the corporation is Ms. Maki, who at all times has owned 51 percent of the stock and serves as the president and treasurer. Initially, Mr. Maki's husband owned 14 percent of the shares; Mr. Rodhe owned 12.5 percent of the shares; Ms. Maki's other son, Michael Gritton, owned 12.5 percent of the shares; and Ronald Maki owned 10 percent of the shares. The application states that the initial board of directors consisted of three persons: Ms. Maki; her husband, Mark Maki; and one of Ms. Maki's sons, Randy L. Rodhe. In fact, the original board of directors consisted of Ms. Maki, her husband, her two sons, and Ronald Maki, the brother of Ms. Maki's husband. Petitioner is a family-owned and -operated business. Originally, Ms. Maki's husband served as vice-president, and Mr. Rodhe as secretary. The owners have had varying degrees of involvement in the corporation, ranging from Ms. Maki, who has been most involved, to Ronald Maki, whose involvement has been limited to his initial investment of $25,000. The only other persons to contribute cash for their shares were Ms. Maki and her husband. According to the application, Ms. Maki contributed $18,500, and her husband contributed $8000. The application understates their cash contributions. Individually, Ms. Maki contributed $32,000 in cash, which she raised by liquidating her Section 401(k) plan ($20,000) and bonds ($12,000). Individually, Ms. Maki's husband contributed $8000 in cash. Jointly, Ms. Maki and her husband contributed another $60,000 in cash, consisting of $30,000 in loan proceeds from a mortgage on their jointly owned home and $30,000 in charges on their joint credit cards. Prior to incorporating Petitioner in August 1997, Ms. Maki, who is 56 years old, had 20 years' experience working in a machine shop operating noncomputerized drill presses. She also worked five years as an assistant vice-president of a bank, supervising mortgage loan operations. Although Ms. Maki does not know how to operate the newer computer-assisted machines, her background would permit her to learn to do so with minimal training. However, due to a progressively debilitating disease that struck her in 1989, Ms. Maki is confined to a wheelchair and lacks feeling in her hands. Thus, she cannot efficiently operate the older manual machines or newer computer-assisted machines used in machine shops. Ms. Maki's husband lacks any experience in machining tools. He has worked over 25 years as an automobile mechanic. His brother has no experience in machining tools; he is in the construction business in Miami. Ms. Maki's sons have considerable experience in machining tools, including training and 14 and 20 years' experience in using the newer, more complicated computer-assisted equipment, which Petitioner owns. They received their stock in return for their agreement to work for wages well below what they could have earned elsewhere. Given the minimal cash flow and concerns about jeopardizing her Social Security disability payments, Ms. Maki did not withdraw money from Petitioner. However, her husband received a salary of an undisclosed amount until September 1998. Her sons also received a salary, but only about $100 weekly, mostly to cover their expenses. In May 1998, Mr. Rodhe terminated his involvement with Petitioner. At that time, he transferred his stock to Petitioner, apparently without any payment to him. The effect of this transfer was to increase Ms. Maki's percentage ownership of Petitioner. At the time of Mr. Rodhe's departure, his brother replaced him as secretary, and the board of directors were reduced to four members. These are the present officers and directors of Petitioner. Pursuant to the articles of incorporation, the board of directors directs the affairs of Petitioner. Nothing in the articles of incorporation overrides the provisions of Section 607.0824(1), Florida Statutes, which provides that a majority of directors constitute a quorum, or Section 607.0808(1), Florida Statutes, which provides that the shareholders may remove directors without cause. Ms. Maki and her husband are each authorized signatories of checks drawn on Petitioner's checking account. Each check requires only one signature. However, Mr. Maki does not typically sign the checks, consistent with his relatively little involvement with Petitioner. Someone at the bank suggested to Ms. Maki that Petitioner should authorize her husband to sign checks in case anything happened to Ms. Maki. Ms. Maki and her husband are the guarantors on a lease for a major piece of equipment used by Petitioner. In a later lease, the lender allowed only Ms. Maki to sign as a guarantor. Business has slowly been building. In July 1998, Petitioner hired a machinist and purchased another machine. When confronting a major decision, such as purchasing a new machine, Ms. Maki presents the issue to the board of directors, which then makes the decision. Ms. Maki solely handles hiring, firing, payroll, purchasing material, bidding, and scheduling jobs. She is present at the shop every workday from 7:30 AM to 4:30 PM and supervises all of the activities in the shop.
Recommendation It is RECOMMENDED that the Minority Business Advocacy and Assistance Office enter a final order denying Petitioner's application for certification as a minority business enterprise. DONE AND ENTERED this 25th day of January, 1999, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of January, 1999. COPIES FURNISHED: Darlene Maki Qualified Representative RGM Precision Machine, Inc. 18923 Titus Road Hudson, Florida 34667 Joseph L. Shields Senior Attorney Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Mary B. Hooks Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Edward A. Dion General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152
Findings Of Fact The Petitioner, Parson & Associates, Inc., d/b/a Overhead Door Company of Tampa Bay (Parsons & Associates), is a Florida corporation, having been incorporated under the laws of the State of Florida in March, 1992. The principal place of business for Parsons & Associates is 5134 W. Idlewild, Tampa, Florida. The Petitioner corporation engages in the business of the sale, installation, and repair of overhead doors, both residential and commercial. The corporation has ten (10) full-time employees and one (1) part-time employee. The only stockholders of the Petitioner corporation are: Gail Parsons, the minority owner; and her son-in-law, Robert Briesacher. Gail Parsons owns eighty (80 percent) of the stock of Parsons & Associates. Robert Briesacher, who is not a minority, owns the remaining twenty (20 percent) of the Petitioner corporation. Gail Parsons was the incorporator of Parsons & Associates when it was initially incorporated. She also is its President. Robert Briesacher is the Vice-President. Prior to the incorporation of Parsons & Associates, Gail Parsons, who has a Bachelor of Business Administration degree, worked for the Better Business Bureau. Robert Briesacher had previous experience in the overhead door business, having worked for Overhead Door Company of Clearwater. Briesacher, who at the time was engaged to marry Parsons's daughter, learned from Overhead Door Corporation (the manufacturer) that the manufacturer intended to establish a distributorship in Tampa. Briesacher told Parsons about it. While Briesacher had the knowledge and experience to successfully sell, install, and repair both residential and commercial overhead doors, he had no money to invest in the business opportunity and had no experience running his own business. Thinking that she might be able to help her daughter and future/present son-in-law, and herself, by combining her capital and business and financial skills with his knowledge and technical skill in the automatic door business, Parsons suggested to Briesacher that they go into business together. He readily agreed, and the pursued the opportunity with the manufacturer. Parsons incorporated the business, registered the fictitious name, compiled the business plan, developed the cash flow projections (with Briesacher's help), found the office/warehouse space (which the manufacturer had to approve), and negotiated, executed, and personally guaranteed the lease agreement and negotiated the Distributorship Agreement with the manufacturer. Briesacher provided none of the initial start-up monies for the Petitioner. Gail Parsons is the financial interest holder in the corporation, having made all the initial contributions to capital ($38,000), as well as making all the personal loans to the corporation thereby accepting all the financial risk. Parsons personally guaranteed the promissory note, the credit agreement, contracts required to be personally guaranteed and the warehouse lease. The Distributorship Agreement is a standard Overhead Door Corporation agreement common to all distributors nationwide. It is customary for a manufacturer like Overhead Door Corporation to offer a distributor incentives-- like yellow page advertisement, signage, and telephone numbers--in order to gain market penetration. In the case of Parsons & Associates, Overhead Door supplied a telephone number (the number Overhead Door previously had bought from the prior distributor in Tampa), a year's worth (about $10,000) of yellow page advertising, and some signage. The total fair market value of the incentives to Parsons & Associates was approximately $31,000, but the marginal cost to the manufacturer was less. In the initial months of operation of the business, Gail Parsons had to rely on Briesacher and the first employee they hired, Charles Martin, who worked under Briesacher at Overhead Door of Clearwater, to teach her what she had to know about the technical aspects of the business. She had to learn about the Overhead Door products and the basics of how to install them. This knowledge, which she quickly acquired, soon enabled her to take service orders, schedule the orders, supervise the day-to-day activities, perform trouble-shooting over the telephone and handle all of the sales calls. Meanwhile, Robert Briesacher was in the field with Martin installing and servicing Overhead Doors. Briesacher currently corresponds with the factories on product orders, schedules and supervises the installers, and takes the physical inventory. Commercial bidding is only one portion of the total corporate sales, which includes residential new construction, residential service and residential retrofit. Over ninety-five (95 percent) percent of the business of Parsons and Associates is handled over the telephone from the office where Parsons spends virtually one hundred (100 percent) percent of her time. Parsons is personally responsible for the majority of the residential sales, including negotiating and contracting with contractors, and negotiating and entering into the agreement to provide installation services for Home Depot door sales. Business from negotiating, estimating, and bidding on contracts in the field is a relatively small portion of the company's overall revenues. Gail Parson is involved in the interviewing of prospective employees, including Martin and Charles Jarvis. She confers with Briesacher, but she alone controls hiring and firing. She possesses the knowledge to evaluate employee performance and has demonstrated her supervisory authority and evaluation skills in exercising her authority to fire an employee. Actually, it is not difficult to evaluate the performance of installers: service calls on warranty work and customer complaints generally tell her all she needs to know. The Petitioner/corporation has both commercial and residential outside sales persons who prepare bids for the Petitioner. The minority owner, Gail Parsons, establishes the geographic and profit margin parameters, which ultimately control the bidding process. She inspects all bids prior to executing the contracts, thereby further controlling who, where and under what terms the Petitioner corporation does business. In fact, Parsons recently rejected an accepted bid and cancelled the job because it was too far from Tampa. While both Gail Parsons and Robert Briesacher are authorized to sign checks for Parsons & Associates, Briesacher has signed less than five checks, out of the thousands of checks written. Parsons and Briesacher draw the same salary. However, their salaries are commensurate with the work they perform for the company. Parsons has chosen the salary levels; Briesacher does not even know what Parsons's salary is. Parsons also is entitled to an 80/20 split of any future distributions as a result of the operation of the company. Briesacher has the use of a company truck, while Parsons does not. However, Briesacher is a part-time installer and service man, while Parsons is not. All installers/service technicians at Parsons and Associates have the use of company trucks, not just Briesacher. Currently, in addition to controlling the entire corporation and making all of the business decisions, Gail Parsons sets inventory parameters, purchases the inventory, sells doors in the showroom, knows the purchased products, is responsible for accounts receivable, handles the payroll, and assists in the scheduling and supervising of the installers.
Recommendation On the basis of the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Management Services enter a final order granting Petitioner's application for certification as a minority business enterprise (MBE). RECOMMENDED this 14th day of July, 1994, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of July, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-1268 To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-3. Accepted and incorporated. First sentence, rejected as contrary to facts found; the rest is accepted and incorporated. Second sentence, rejected to the extent that it implies that Briesacher has no financial interest. Otherwise, accepted and incorporated. Accepted and incorporated. Rejected, as contrary to facts found, to the extent that it implies Parsons knew it all from the start and that Parsons "supervised" Briesacher and Martin installing and servicing doors; in fact, there was a learning curve. Otherwise, accepted and incorporated. 8.-11. Accepted and incorporated. Respondent's Proposed Findings of Fact. 1.-2. Accepted and incorporated to the extent not subordinate or unnecessary. 3.-4. Accepted and incorporated to the extent not subordinate or unnecessary. Last sentence, rejected in part as contrary to facts found and as contrary to the greater weight of the evidence. (She makes sales and trouble- shoots, and is no longer just learning those aspects of the business.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. However, except for actually installing and servicing doors, Parsons also does the same jobs as Briesacher to some extent, and some of Briesacher's functions are ministerial in light of Parsons's management decisions. Penultimate sentence, rejected as contrary to facts found and as contrary to the greater weight of the evidence; he proposed "piece-work" but Parsons participated in the final decision. (Since it is standard in Florida, it was not a difficult or controversial decision.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. (However, "joint responsibility" should not be construed to mean "equal authority." Parsons has the final say.) Accepted and incorporated to the extent not subordinate or unnecessary. However, while Parsons's knowledge and skill does not exceed the others' in the area of installing and servicing doors, she has enough knowledge to control the business. The characterization "very broad" in the last sentence is rejected as contrary to facts found and as contrary to the greater weight of the evidence. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. However, again, while Parsons's knowledge and skill does not exceed the others' in the area of installing and servicing doors, and while she does not personally install and service doors, she has enough knowledge to control the business. 10.-14. Accepted and incorporated to the extent not subordinate or unnecessary. Again, while Parsons and Briesacher, and other employees, share responsibilities, Parsons has the knowledge necessary to control the business and has dominant control over the business. COPIES FURNISHED: Jonathan D. Kaplan, Esquire 6617 Memorial Highway Tampa, Florida 33615 Wayne H. Mitchell, Esquire Department of Management Services Office of the General Counsel Suite 312, Ninth Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of Management Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact On or about March 17, 1994, Petitioner, T-B Services, Inc., filed an application for certification as a minority business enterprise with the Florida Department of Management Services. The Respondent, the State of Florida Commission on Minority Economic and Business Development, has subsequently been assigned responsibility for this matter. On May 3, 1994, Petitioner's application was denied. Petitioner's application was denied based upon Respondent's conclusion that Petitioner did not satisfy Sections 288.703(2) and 287.0942(1), Florida Statues, and rules governing minority business enterprises of the Department of Management Services. Mr. Anthony D. Nelson is the minority, 100 percent, owner of Petitioner. Mr. Nelson is an African-American. The business of Petitioner, fire protection consulting, and fabrication and installation services, requires the association of an individual holding a professional license to perform those services. There are two professional license holders associated with Petitioner. Neither of the professional license holders are members of any minority. Mr. Nelson does not hold a professional license necessary for the Petitioner to provide fire protection consulting, or fabrication and installation services.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Respondent dismissing the Petition for Formal Hearing filed by T-B Services Group, Inc., and denying Petitioner's application for minority business enterprise certification. DONE AND ENTERED this 26th day of May, 1995, in Tallahassee Florida. LARRY J. SARTIN, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of May, 1995. COPIES FURNISHED: Cindy A. Laquidara, Esquire Suite 1629, Riverplace Tower 1301 Riverplace Boulevard Jacksonville, Florida 32207 Kenneth W. Williams Assistant Attorney General Office of the Attorney General PL-01, The Capitol Tallahassee, Florida 32399-1050 Crandall Jones Commission on Minority Economic and Business Development Executive Administrator Knight Building 272 Centerview Drive Tallahassee, Florida 32399-0950
The Issue Whether Florida Moving Systems, Inc. should be certified as a minority business enterprise by the Respondent, pursuant to Section 288.703(1) and (2), Florida Statutes and the applicable rules implementing the statute.
Findings Of Fact Claudia Deneen and Thomas B. Deneen, husband and wife, and another partner purchased the applicant company with joint funds in 1988. Subsequently, the business was incorporated and the name changed to Florida Moving Systems, Inc. Prior to the time of the incorporation of the business, David P. Astolfi bought out the original partner and obtained a 25 percent share in the incorporated business. Claudia Deneen, Thomas B. Deneen and David P. Astolfi presently serve as the Directors of the applicant corporation. Neither Thomas B. Deneen nor David P. Astolfi qualify for classification as a "minority." In 1992, Claudia Deneen obtained her husband's stock in the corporation without consideration, but for prior services rendered. Claudia Deneen now holds 75 percent of the outstanding stock in her name. While Claudia Deneen was out on maternity leave in 1992, Thomas Deneen ran the business. Claudia and Thomas Deneen, as well as David Astolfi each have authority to individually sign business checks. Astolfi who serves as Vice President for Sales, is paid $1100 weekly, Thomas Deneen who serves as President, is paid $1500 weekly. Claudia Deneen who serves as Vice President, Secretary/Treasurer, and chief purchasing agent, is paid $1000 weekly when money is available. Both Claudia and Thomas Deneen signed and guaranteed the business leases. All three Directors, Claudia and Thomas Deneen and Astolfi, share common ownership in a similar business called Florida Distribution Systems, Inc. which is housed adjacent to the applicant. Thomas Deneen signs 90 percent of applicant's payroll checks. Business decisions are made jointly by all directors. Claudia Deneen is the chief purchasing agent for the corporation and maintains control over the purchase of goods, equipment and services. She also participates in the hiring and firing of personnel and the setting of all employment policies. Petitioner's offer of proof, consisting of business letters or recommendation, all recommended both Claudia and Thomas Deneen as a team, not individually.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application for Minority Business Certification filed by Florida Moving Systems, Inc. on January 17, 1994, be DENIED. DONE and ENTERED this 1st day of September, 1995, in Tallahassee, 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 1st day of September, 1995. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Proposed findings of fact submitted by Petitioner. Petitioner did not submit proposed findings of fact. Proposed findings of fact submitted by Respondent. Accepted in substance: paragraphs 1-13. COPIES FURNISHED: Claudia Deneen Vice President and Secretary/Treasurer 4317 Fortune Place West Melbourne, Florida 32904 Joseph L. Shields, Esquire Senior Attorney 107 West Gaines Street 201 Collins Building Tallahassee, Florida 32399-2005 Crandall Jones Executive Administrator Collins Building, Suite 201 107 W. Gaines Street Tallahassee, Florida 32399-2000
Findings Of Fact Mill-It Corporation is a Florida Corporation licensed to do business in the State of Florida. Ben Guzman, a stipulated member of a recognized minority group, is the President of the Petitioner Corporation. Additionally, Mr. Guzman owns 26 percent of the stock. The other stockholders are James E. Quinn (24 percent), Myrna Bortell (26 percent), and Edward T. Quinn, Jr., (24 percent). Ms. Bortell is also a member of a qualified minority. The Petitioner Corporation was formed in August, 1983. The first three months of its existence was spent obtaining the necessary licenses, permits, loans, and equipment. Mr. Guzman was primarily responsible for these activities. During this time period, Mr. Guzman was required to return to Chicago, his former home, to undergo surgery on his arm. During his absence, he delegated minimal authority to Edward T. Quinn, Jr., in order that the Corporation could continue to operate. During Mr. Guzman's absence, he maintained control of the Corporation through frequent telephonic communications with Mr. Quinn. Just before Mr. Guzman was required to go to Chicago for the surgery, Mill-It Corporation had taken delivery of its milling machine. The machine had been in the possession of Mill-It Corporation for only one week and Mr. Guzman had not had an opportunity to run the machine prior to his departure. Mr. Guzman relied on Mr. Quinn because they had known each other for approximately 25 years and Mr. Guzman was aware of Mr. Quinn's knowledge of the road building business and the necessary steps to establish Mill-It Corporation as a viable business in Florida. Mr. Guzman returned to Florida for the onsite inspection by an agent of the Respondent, but he was still under a doctor's care and was on various types of medication for pain. Mr. Guzman returned to Chicago for additional medical treatment following the onsite inspection, and he did not return to Florida until January, 1984. In January, 1984, Mr. Guzman began to completely learn the operation and mechanics of running and maintaining the milling machine and he assumed the complete responsibility for overseeing all the projects of the milling operation. Mr. Guzman originally relied upon the expertise of Edward T. Quinn, Jr. in the field of bidding, but Mr. Guzman always supplied the necessary figures and data for the bid. Mr. Guzman hired Edward T. Quinn, Jr., as his sales representative and estimator. After the brief learning period, however, Mr. Guzman began to totally supervise the bidding procedures and began directing Mr. Quinn to attend various bid lettings with the figures supplied by Mr. Guzman. At the time of the onsite inspection, Mill-It Corporation had completed only its organizational phase of becoming a business entity. In fact the milling machine was such a recent acquisition that during the onsite inspection Mr. Guzman had not had time to learn the technical aspects of the operation and mechanics of the machine. After the onsite inspection, Mr. Guzman assumed responsibility for operation of the milling machine and supervising the overall performance of the job. Additionally, James Quinn also operated the machine. Mr. Guzman has the authority to hire and fire employees, sign checks, correspond on behalf of the corporation, enter into contracts, and purchase equipment on behalf of the corporation. Cancelled payroll and vendor's checks, correspondence to and from the company, bonding contracts, insurance contracts, and corporate documents were all signed by Mr. Guzman. All major business decisions are made by Mr. Guzman after considering the advise of the other officers and stockholders. All day-to-day decisions are made by Mr. Guzman.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Mill-It Corporation's application for certification as a Minority Business Enterprise be GRANTED. DONE and ENTERED this 7th day of June, 1984, in Tallahassee, Florida. DIANE K. KIESLING 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 7th day of June, 1984. COPIES FURNISHED: RUSSELL H. CULLEN, JR., ESQUIRE P. O. BOX 1114 ALTAMONTE SPRINGS, FLORIDA 32701 VERNON L. WHITTIER, JR., ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301 PAUL A. PAPPAS, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301
