Findings Of Fact On September 21, 1987, petitioner, Terrell Oil Company (TOC), filed an application for renewal of its certification as a disadvantaged business enterprise (DBE) with respondent, Department of Transportation (DOT). TOC had been previously certified as a DBE for a two-year period commencing in January 1986. After reviewing the application, DOT advised TOC by letter dated January 20, 1988, that its application had been denied on the grounds the firm "(did) not appear to be performing a commercially useful function nor (was) it an independent business entity as required by D. O. T. Rule 14-78.05, Florida Administrative Code." 2/ The letter of denial precipitated this proceeding. Later correspondence from DOT on February 8, 1988, advised TOC that its existing certification would remain in effect until this proceeding was concluded. According to its original application dated September 21, 1987, TOC was established on February 5, 1986, and engaged in the business of "oil-gas- petroleum products." Its offices were then located at 1908 West Cass Street, Tampa, Florida. The application identified Grady F. Terrell, Jr., a black man, as being the sole stockholder in the firm, its president and chairman of the board. Other directors included Richard W. Gilliam, a white man, and Walter Scott, a black man. The application represented that Terrell served as president and treasurer of TOC while Gilliam held the positions of vice president and secretary. The application reflected also that Terrell and Gilliam shared the power in the areas of policy making, financial decisions, job estimating, bidding and supervising field operations and that Terrell alone had the power to dismiss employees and sign checks. Finally, the application represented that the corporation owned no equipment, it had earned $14,000 in calendar year 1986, Terrell had invested $6,000 of his own money in the firm, and it had two full-time and two cart-time employees. After receiving the original application, two DOT employees made an on- site investigation of the business and conducted an interview with Terrell on October 20, 1987. They found no sign on the building at 1908 West Cass Street indicating that TOC occupied the premises, but they were directed by the landlord to a small 8' x 10' rear corner office. During the interview, Terrell was asked for copies of TOC business contracts but had none. Also, he did not have any cancelled checks, insurance coverage or bonding at that time. Terrell stated he had no employees so no insurance was needed. He represented further that he was "self-employed" by TOC and devoted 100% of his time to that endeavor. When the parties reviewed the application item by item and found several discrepancies or incorrect responses, Terrell agreed to amend his application in the presence of the DOT representatives. As amended, the application reflected that Terrell, Gilliam and J. Anthony Belcher, a white man, were the current directors, the firm had one full-time (Terrell) and no part- time employees, Terrell, Gilliam and Belcher served as president, vice-president and treasurer, respectively, while William V. Gruman, a white man and attorney, served as secretary, and there were no written, oral or tacit agreements concerning the operation of the firm between any persons associated with the firm. Terrell denied that Belcher worked for Belcher Oil Company (BOC), a large oil concern, and described him as a retired individual serving as an independent consultant for TOC. As to Gilliam, Terrell described him as an independent contractor who worked on a 100% commission basis and solicited business for the firm. During the same interview, Terrell represented that the $6,000 investment in capital was actually a loan from a local bank and denied that TOC owned or leased any equipment. Terrell could offer no proof that the firm had earned $14,000 in 1986 and indicated the firm had no projects underway. He described his business as being a broker of gasoline, diesel fuel and motor oil and that other persons supplied and delivered the fuel. According to Terrell, business transactions were conducted in the following manner. He first determined the market price of fuel from BOC, his principal supplier, and based upon that price, submitted a bid on a job. If TOC was successful, Terrell made a telephone call to BOC requesting that the fuel be delivered to the buyer. Through BOC, Terrell was able to purchase fuel two percent below the "rack" rate. TOC then added a percentage of profit to its sales price. In actuality, TOC never had physical possession of the fuel and, accordingly, needed no equipment to engage in this activity. At the same inspection, the DOT personnel confirmed through reading the firm's bylaws that each of three directors had one full vote, regardless of the number of shares held. Thus, the two white directors could outvote Terrell on any TOC decision. Also, a quorum of the directors could convene a meeting and theoretically conduct business without Terrell's knowledge. On November 23, 1987, or a little over a month after the DOT visit was made, TOC adopted a corporate resolution authorizing any one of the three directors to execute binding contracts on behalf of TOC. Thus, either of the two white directors had the authority to enter into contracts without Terrell's approval. A copy of the resolution has been received in evidence as respondent's exhibit 12. Shortly after the above resolution was approved, Gilliam and Belcher were given the opportunity to each purchase 19% of TOC's stock while Gruman was allowed to purchase the remaining 2%. This meant the three white officers now owned 40% of the stock while Terrell owned the remaining 60%. On December 1, 1987, TOC and BOC entered into an agreement whereby TOC agreed to buy fuel and petroleum products from BOC for resale to customers, and in return, BOC extended TOC a $200,000 line of credit. The agreement has been received in evidence as respondent's exhibit 1. Under the agreement, TOC's invoices to customers had to be approved by BOC, and the customers were required to remit moneys due for fuel to a special bank account controlled by BOC. That firm then sent its invoices to the bank and was paid out of the proceeds. The remainder in the account was for the use of TOC. This agreement was negotiated on behalf of TOC by Belcher, whose family once owned BOC, and until 1987 served as a consultant to that oil company. Because of numerous concerns raised during the October 10 visit, DOT continued its investigation of TOC. Besides learning about the above resolution, stock sale and agreement, DOT obtained various corporate records of T0C, including tax returns, cancelled checks, records of fuel sales and applications for minority certification with other governmental entities. Through its investigation, DOT uncovered the fact that Terrell did not devote 100% of his time to TOC as he had earlier claimed but had been employed as a car salesman by Crown Pontiac in St. Petersburg, Florida, on a full-time basis since July 1987. Indeed, Terrell worked there more than fifty hours per week. Contrary to Terrell's representation, authority to sign TOC checks had been delegated to Gilliam who had done so on numerous occasions prior to and after the application was submitted. As to Terrell's contention that TOC owned no equipment, the firm's corporate income tax return indicated it purchased a small tank truck in 1986 and carried the same on its books. The claim that Terrell alone controlled the business was refuted by the firm's corporate records which reflected that the two white board members could effectively control all management decisions and run the business on a day-to-day basis. DOT learned also that, although TOC had five customer accounts in 1988, of which four came from the private sector, the fifth account was with Hillsborough County, a governmental entity, and comprised more than 99% of its total business. In addition to the DOT application, TOC has sought minority business status from the City of St. Petersburg, the City of Orlando, Hillsborough County, Broward County and the federal government. A review of these applications revealed a maze of conflicting information submitted to the respective agencies. For example, Terrell represented to Hillsborough County that one Noble Sissel (a black man) was TOC's vice-president, secretary, treasurer and board member when in fact Sissel never held any of those positions. Terrell represented to Hillsborough and Broward Counties that TOC had two full-time employees while the amended DOT application reflected that TOC had only one. Further, Terrell gave conflicting answers to the various agencies as to the equipment owned by TOC and the purported gross receipts of the firm. In order to perform a commercially useful function, a DBE must manage and perform at least 51% of its work. In other words, the firm cannot subcontract out more than 49% of its business. Also, there is a requirement that a DBE's principal customers be entities other than governmental agencies in order to perform a commercially useful function. Through testimony and admissions of its officers, TOC acknowledged that it was merely acting as a broker. In industry parlance, this means that TOC did all its work by telephone, obtained a seller and buyer and then obtained a common carrier to deliver the product. As such, TOC never took physical possession of the product on its own equipment since it owned none, and it was not responsible for the movement of the product from the terminal to the customer. Further, since TOC purchased virtually all of its fuel from BOC, and under an agreement customer checks went directly to that firm, TOC was, in essence, conducting a broker operation for BOC. Therefore, TOC was not performing a commercially useful function. At hearing, Gilliam was TOC's only witness, and he attempted to establish TOC's entitlement to certification. Besides pointing out that Terrell was a black man and the majority shareholder in the firm, Gilliam attempted to show that Terrell actually controlled and ran the business. Also, he attempted to demonstrate the commercially useful function of the firm by the fact that 80% (4 out of 5) of TOC's five accounts are nongovernmental customers. Although not reflected on the amended or original applications, Gilliam acknowledged that TOC owns one 1200 gallon truck capable of making fuel deliveries. Gilliam contended further that Terrell had made an initial contribution to the corporation of $120,000 of his own funds. However, no proof of this claim was submitted. Given the overwhelming contradictory evidence of record, and the numerous inconsistencies in the testimony of TOC representatives, Gilliam's testimony is not accepted as being credible.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered denying the application of Terrell Oil Company for certification as a Disadvantaged Business Enterprise. ENTERED this 9th day of November, 1988, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of November 1988.
Findings Of Fact At all times pertinent to the issues herein, the Department had the authority to certify those firms who qualified as MBE's for the purpose of contracting with it under the provisions of Chapter 13-8, F.A.C. When an application for MBE status is received at the Department's certification office in Tallahassee, it is assigned to one of five certifying officers who reviews it and determines whether it is complete as submitted or requires additional documentation. This is called a desk audit review. In the event all required documents have not been submitted with the application, they are requested in writing and the applicant has thirty days to provide them. Failure to do so results in denial of the application. If, on the other hand, all the required documentation is present, a decision is then made as to whether an on-site visit of the applicant's operation is necessary. If so, Department personnel go to the site and look to see if the business can qualify as an MBE. If an on-site visit is appropriate, but for some reason cannot be made, Department personnel try to get the required information by phone. The decision to approve or deny certification is made, based on the reviewing certifying officer's recommendation, by the certification manager who, before making a decision, personally reviews the file and, if appropriate, sends it to the Department's legal staff for additional review. Once the legal staff has made its recommendation, if the decision is made to deny the application, a letter of denial is sent to the applicant who may then appeal that decision. An application must meet all criteria set out in Rule 13-8, F.A.C. to be certified as an MBE. Each application is looked at on a case by case basis to see if those criteria are met. In the instant case, the denial was based on the Department's concern over several factors. These are related to Rule 13- 8.005(3), F.A.C. and included A question as to whether the business was actually controlled by Ms. Hogan. The nature of the corporate structure. The application of Chapter 47, F.A.C., dealing with the construction industry. The ability of both Hogan and Perretta to sign business checks. Whether Ms. Hogan had the technical and mechanical capability, skills and training to run a construction company, and Whether Ms. Hogan could effectively control such areas as financing, purchasing, hiring and firing, and the like. In arriving at its decision to deny Petitioner's application, the Department relied only on those matter submitted with the application. It did not ask for or seek any information about the company and its operation beyond that initially provided. Notwithstanding her recommendation in this case, Ms. Freeman has previously recommended the certification of numerous woman owned businesses as MBEs. On April 6, 1990, Ms. Hogan, as owner of E.C. Construction, Inc., a licensed general contractor qualified under the license of Carmen M. Perretta, applied to the Department for certification as a woman owned MBE. The application form reflected Ms. Hogan as the sole owner of the business, a corporation created under the laws of Florida. Ms. Hogan was listed on both the Articles of Incorporation, (1989), and the application form in issue here as the sole officer and director of the corporation, as well. Mr. Perretta was to be merely an employee of the firm, E.C. Construction, Inc.. In that regard Ms. Hogan claims, and it is so found, that the letters, "E. C." in the corporate name do not stand for Elinor and Carmen. Instead, they stand for Elite and Creative. Ms. Hogan is a 63 year old widow who professes a long-standing interest in building, design and decorating. In 1950, she and her husband started a floor covering business in another state which they operated for nineteen years. In 1969 they moved to Florida where her husband started a lawn maintenance business in Sarasota. She worked full time as a nurse at a local hospital and still found time to assist her husband in every aspect of their business including marketing, bookkeeping, public relations, etc. Her husband took ill in early 1986 and from that time on and after his death in May, 1988, until the business was sold almost a year later, she exercised complete control. She still runs a wedding supply and stationery business from her home. She sold the lawn business because she wanted to break the emotional links with the past and since she had some experience in construction, design and remodeling of her own home, went into the construction business establishing the Petitioner firm. In the few preceding years, she had designed and supervised several construction projects in the area in which she attended to financing, hiring the1 subcontractors, and supervision of the work. She also took some courses in design and has taken other courses and seminars in financing, accounting, marketing, advertising and operating a small business. Ms. Hogan and her husband met Mr. Perretta in 1987 when they put an addition on their house and she was impressed by his talents. When she decided to look into going into the construction business, she turned to him for advice and ultimately recruited him as the corporation's qualifying agent. Notwithstanding the fact that neither the corporate documents nor the application for MBE status so reflect, Ms. Hogan's lawyer now indicates that Perretta was also made a Vice-President of the firm, but his authority was limited to those actions necessary to meet the minimum compliance requirements of Florida law. When confronted with this discrepancy, Ms. Hagan claimed that the corporate papers and the application were in error and that she didn't know what they meant when she signed them. Ms. Hogan claims to be in full and complete control of all corporate activities, and to delegate to Mr. Perretta those responsibilities and functions, relating to the actual construction, that he is best qualified to carry out. She claims she does not share dominant control of the daily business activities of the firm though the evidence indicates both she and Mr. Perretta can individually sign corporate checks. In that regard, she claims he has signed only 19 of more than 500 checks issued by the firm since its inception. They have an understanding he will sign checks only for the purchase of materials, and then only in an emergency situation. He claims to no longer use that authority. The Department introduced no evidence to the contrary. Ms. Hogan admits to not having formal construction training or experience but, based on her other experience, believes she is qualified to run a business. Under her leadership the company has reportedly secured over one million dollars in contracts and for the most part, has performed them successfully. Under oath she claims to negotiate the contracts, prepare the estimates and deal with contracting customers in all the projects in which the company is engaged. She claims to have made those contractual decisions independent of Mr. Perretta to whom she is not accountable. Yet, as was seen, the Articles of Incorporation wrongfully indicate her as the only officer when Mr. Perretta was actually a Vice-President, and she claims not to have known that. This gives rise to some doubt as to her business credentials. In reality, Mr. Perretta actually directs and supervises the actual construction work at all job sites and schedules the subcontractors and materials to insure their presence at the job when needed. When changes are required, Mr. Perretta gives the necessary information to Ms. Hogan who prepares the change orders, including the typing, and forwards them as appropriate. Ms. Hogan has also entered into an agreement, dated June 25, 1989, with Mr. Perretta whereby, in lieu of salary as qualifying agent and field superintendent for the company, he is to receive 40% of the gross profits of each construction project. He gets a periodic draw against that percentage. In addition, in May, 1989, Ms. Hogan, as President, and Mr. Perretta, as Vice- President, entered into an agreement with Raymond Meltzer to retain him as general manager of E.C.'s Designer Structures division. Under the terms of the agreement, Mr. Meltzer was to have "absolute, unlimited and exclusive authority" to conduct all affairs of the division, except to incur debt other than short term debt to subcontractors. Mr. Meltzer was to have the right to draw checks on a separate E.C. account in a bank of his choosing, and was to receive 95% of all monies received as a result of the activities of that division. E.C. was to obtain the required permits or licenses for projects and to provide such supervision as is required by law. Though Petitioner did not incorporate under the name Designer Structures, nor did it register that name under the fictitious name statue, it continues to do business under that name. When it does, business is not conducted out of E.C.'s office, but from Meltzer's office instead. This is not consistent with Petitioner's MBE application which reflects only one office. Petitioner submitted at the hearing a notarized statement dated December 8, 1990, from Mr. Meltzer in which he admits to seeking to originally use Mr. Perretta and E.C. primarily as a qualifying agent for his own construction activities. The terms of the agreement referenced above tend to confirm that arrangement. Nonetheless, he is of the opinion that Ms. Hogan possess excellent business acumen and administrative abilities, and, he claims that, based on his initial meeting with her, he abandoned his plans to set up his own business and went into a business relationship with her. The evidence indicates he develops the work for the division and gets 95% of the fee. Ms. Hogan claims to be considering terminating the arrangement since it has not proven to be a lucrative one. She is apparently not aware the agreement specifically states it is for a three year term and carries options to renew. Though both Petitioner's application for MBE status and its bonding application indicate E.C. has no employees, Ms. Hogan testified that both Mr. Perretta and Mr. Meltzer are employees. She claims to use only subcontractors in the accomplishment of company projects and this appears to be so. She claims to have the strength of character and the will. to manage, hire and fire subcontractors as required. There is other evidence in the record, however, to indicate that Mr. Perretta actually schedules the subcontractors and materials to insure their presence at the job site when needed. It is found that there are no other employees who do direct, hands on contracting work, but while there may be a question of word meaning, it is clear that both Perretta and Meltzer qualify as employees. E.C.'s application for MBE status also indicates that it had not executed any promissory notes, yet there is a note for $3,500.00 from E.C. to Mr. Perretta, dated May 10, 1989, on which no payments have been made. Though Ms. Hogan claims to be fully in charge of running the business side of the operation, she is apparently also unaware of certain basic facts other than those previously mentioned. In addition to the inconsistencies regarding the office structure and her mistake concerning the employee status of Mr. Perretta and Mr. Meltzer, as well as her error regarding the loan, she was also in error as to the company's net worth. Whereas she indicated it was set at about $30,000.00, the company's most current financial statement reflects net worth at just above, $6,000.00, revealing her estimate to be 80% off. She also did not know the character of Mr. Perretta's license, (Class E.C. owns very little construction equipment and Ms. Hogan rents all needed equipment as indicated to her by Mr. Perretta. The lack of ownership is not significant, however. The one piece of equipment the company owns is a transit level which was purchased at Mr. Perretta's insistence. He has also donated to the company some used office equipment from his prior business as a contractor. He was not paid for it. Other equipment, in addition to office space, was furnished by Mr. Meltzer.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be issued in this case denying E.C. Construction, Inc.'s application for certification as a Minority Business Enterprise. RECOMMENDED this 22nd day of January, 1991, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1991. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-5217 The following constituted my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of fact submitted by the parties to this case. FOR THE PETITIONER: None submitted FOR THE RESPONDENT: & 2. Accepted and incorporated herein. Accepted. & 5. Accepted and incorporated herein. Accepted and incorporated herein. & 8. Accepted and incorporated herein. 9. & 10. Accepted 11. - 13. Accepted and incorporated herein. 14. & 15. Accepted and incorporated herein. Rejected as to her prior experience though it was limited. Accepted and incorporated herein. - 20. Accepted and incorporated herein. Accepted. - 24. Accepted. Accepted and incorporated herein. & 27. Accepted and incorporated herein. 28. & 29. Accepted. Not proven. - 33. Accepted and incorporated herein. 34. & 35. Accepted and incorporated herein. Unknown but accepted. Accepted. Accepted and incorporated herein. COPIES FURNISHED: Guy Brisson, Personal Representative E. C. Construction, Inc. 105 Island Circle Sarasota, Florida 34232-1933 Dannie L. Hart, Esquire Joan V. Whelan, Esquire Department of General Services Suite 309, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Ronald W. Thomas Executive Director Knight Building Koger Center 2737 Centerview Drive Tallahassee, Florida 3399-0950 Susan Kirkland General Counsel DGS Suite 309, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact The Respondent, Oglesby Construction, Inc., (Oglesby) is a company with its ownership controlled by members of a protected minority. Its home office is in Norwalk, Ohio, and it also has an office in Sanford, Florida. It has been certified as a "disadvantaged business enterprise" (DBE) under pertinent regulations of the U.S. Department of Transportation, as well as State Transportation Departments in twelve or thirteen states, including Florida. Prior to 1986, the company was engaged in various types of concrete work and pavement marking jobs. Although Oglesby typically maintained several hundred contracts or ongoing jobs on its books, each job would be of relatively small dollar value and performance time. Recently, however, Oglesby has been working toward becoming a "prime" contractor, successfully bidding on larger jobs. It was successful bidding on four such projects in 1986 and 1987 which had been reserved for bidding on by minority controlled companies. Oglesby has been certified as a DBE in Florida since 1983. On January 26, 1987, Oglesby was advised by the Florida Department of Transportation that its certification "will expire" on February 18, 1987. Oglesby, in fact, because it was aware that certification had to be renewed or reapplied for annually, had already submitted its application on January 2, 1987. It included in that application indication of its gross receipts for the years 1983, 1984, and 1985. Those numbers, when averaged together, produced an average gross revenue figure of $10,491,778. Oglesby maintains that it did not know its 1986 gross revenue figure, for purposes of the three year average gross revenue, for the most recent three years, required to be shown on the application by the Department's rules, because its fiscal year ended January 31, 1987. On March 26, 1987, Oglesby's application for recertification was rejected by the Department because it did not meet the definition of a "specialty contractor" or "small business concern," for purposes of Rule 14- 78.05, Florida Administrative Code. A hearing was requested by Oglesby to contest this denial of certification. Then, on May 8, 1987, the Department circulated a memorandum to all DBE contractors stating generally that the effect of the Surface Transportation Act of 1987 (Sturra) required several changes to the Disadvantaged Business Enterprise program. Thus, contractors were asked to certify their firms' receipts for the last three years. Oglesby did so and showed receipts totaling $44,320,469 for the years 1984, 1985, and 1986. These gross receipts for the three years thus averaged $14,773,049. The Department, upon receiving this information, and after passage of the Sturra Act and a statute by the Florida Legislature incorporating those standards by reference, together with a related rule by the Department, moved to amend the basis for its denial to include, as a reason for decertification, or failure to certify, that the Respondent had exceeded the new $14,000,000 average revenue size standards incorporated in the more recent legislation. Prior to this legislative change and at the time Oglesby applied for recertification in January, 1987, the standard had been $17,000,000 average three year gross revenue receipts, instead of $14,000,000. The Department, by pleading dated August 24, 1987, had withdrawn its original grounds for denial and amended the grounds to the above-mentioned size issue of $14,000,000. Because the parties did not wish to go to hearing until January 1988, and ample time remained for Oglesby to conform its proof to the new allegations in the amended pleading, the Motion for Leave to Amend was granted. Thus the amended ground on which the Department maintains that Oglesby's application for recertification should be denied is that the company, for purposes of DBE certification, is no longer a small business concern, as defined by the Department's rule and state and federal law incorporated by reference. On April 2, 1987, when the size limit for DBE firms was lowered from $17,000,000 to $14,000,000, the new standard was immediately adopted by the Florida Legislature and, in turn, by the Department's rule. When Oglesby applied to the Department in early 1987, it did not include its 1986 gross receipts revenue figure of $18,516,598. Although Oglesby's fiscal records are computerized, Oglesby maintained that it did not yet, at the time of application in January 1987, have a complete 1986 revenue figure so instead listed the 1985 revenue receipt figure of $18,037,348. The 1984 receipts and 1983 receipts were $8,338,017 and $5,099,060 respectively. The inclusion of the significantly lower 1983 revenue receipts brought the three year average for Oglesby down to $10,491,778. In any event, although Oglesby may not have had the 1986 revenue figure immediately available upon application date, it was on notice that its revenue receipts for the year prior to that, 1985, exceeded even the $17,000,000 size limit for DBE contracting firms and thus was on notice that it might be approaching the end of its DBE status even had not the revenue size limits been lowered in the spring and summer of 1987. In any event, Oglesby's audited financial statements submitted indicate that Oglesby received $18,037,348 in construction revenue in 1985. The 1986 figures were supplied to the department due to a request made to all certified DBE's when the Department learned that the size limits were being revised downward by federal and state legislation in May of 1987. That audited financial statement figure for 1986 showed a gross revenue received of $18,399,844 in construction income, and $116,754 in equipment rental, totaling $18,516,598 gross revenues for 1986. When these amounts are averaged with the gross revenue figure listed in Oglesby's application for 1984 of $8,338,017, the average gross revenue receipts for the company for the preceding three fiscal years before application, is $14,963,987. Each year Oglesby was advised by the Department in the "certification notice," by which Oglesby was informed by the Department that its certification needed to be renewed, that its certification was "subject to continued eligibility" and further that its certification was "subject to actions of any other governmental agencies which may affect the minority status" of the company. Thus each year when Oglesby applied for and received DBE certification, it was on notice of these conditions on that certification, both by advisement of the Department's notices and by existing law. Oglesby is the only previously certified DBE which, at the time of hearing, exceeding the $14,000,000 average gross revenue size limit. Under the new federal law referenced above, incorporated by reference by the Florida Legislature and the State Department of Transportation rule at issue, an adjustment for inflation is allowed, to be made by the U.S. Secretary of Transportation. The Department, at the request of Oglesby, inquired of the federal government whether any such adjustment for inflation had been made. No such adjustments had been made by the U.S. Department of Transportation Secretary as of January 5, 1988. On November 4, 1987, a memorandum, (in evidence as Respondent's Exhibit 11) from the Federal Highway Administrator, affirmed that the inflation adjustment had not been defined as yet and would not apply until a method for arriving at an inflation adjustment is developed. The Department also contacted the Federal Highway Administration in order to determine whether an exception on the size limits required by the federal statute and pertinent regulation could be made in Oglesby's case. This was because Oglesby had made certain contractual obligations to buy out the white minority shareholders and purchase or lease a new facility supposedly based on, in part, its reliance on continued DBE status. The Department referenced these concerns of Oglesby in its request to the Federal Highway Administration for an interpretation regarding the applicability of the $14,000,000 revenue limit, but was advised, in effect, that the $14,000,000 limit was strictly interpreted because the response to the request merely amounted to a recitation of the statute and pertinent federal rule providing for that limit and how to calculate it. (See Respondent's Exhibits 9 and 10.) Additionally, Respondent's Exhibit 11, a memorandum of November 4, 1987, from the Federal Highway Administration signed by one R. A. Barnhart, in a like vein, merely indicated a strict interpretation of the federal rule cited below providing for the $14,000,000 average gross revenue limit on DBE status. This federal policy of strictly interpreting the $14,000,000 limit is somewhat borne out by the fact that the example in the federal rule itself, concerning how to apply that limit, with the result that the example firm is not entitled to DBE status, involved an average three year gross income of more than $14,000,000, but less than the three year average gross revenue of Oglesby, found above. The Department has a policy of strictly enforcing the certification requirements. The failure to comply with the federal regulations regarding DBE certification could subject the Department to withdrawal of federal funds from road building projects. Last year the Department received about $600,000,000 in federal funds and the federal government independently audits and reviews the Department's DBE certification decisions. The Department thus has not made any exception from the certification requirements for any firms. Indeed, in analogous circumstances, there have been Department-certified DBE specialty contractor firms who have outgrown their 2.5 million dollar revenue size standards which are applicable to firms in that category. These firms have not had their certifications renewed, that is, they have "graduated" from the Department's DBE program without exception and without dispute. It is the intent of the Disadvantaged Business Enterprise Program that firms participating in that program, will, as they acquire and perform contracting jobs for the Department, grow in size in terms of annual revenues and grow in expertise and competence in public contracting, eventually "graduate" in terms of revenue volume and contracting expertise to prime contractor status and will no longer be disadvantaged business enterprises. In this connection, Oglesby has recently entered into four prime contracts which are not affected by the result of these proceedings. In fact, no work already undertaken by Oglesby under contract will be affected. Even if it is not certified as a DBE, Oglesby may continue to contract with the Department as a subcontractor or a prime contractor. Mr. Mason P. Oglesby, the Petitioner's president, is a competent concrete construction contractor and has been in that business for some thirty years. He is also president of North Coast Eighty-Eight, Inc. Prior to any association with the DBE program, he managed the largest construction project his company has engaged in, which was a project involving construction at the Cincinnati, Ohio, Airport. His firm achieved DBE certification in Ohio in the early 1980's and has been so certified ever since. Oglesby has been certified in twelve or thirteen different states and has utilized 700 to 1000 part-time and full-time employees in a given year. The company does a high volume of work, including many large contracting jobs, and is large enough so that its president does not maintain personal familiarity with the nature of all its jobs contracted for in Ohio, Florida, and other states, but rather maintains a computerized listing of projects which describes the nature of work involved. The company currently has jobs in progress in Pennsylvania, Georgia, Ohio, North Carolina, South Carolina, and West Virginia and in twenty-four counties in Florida simultaneously. Mr. Oglesby closely monitors the dollar volume of work his company contracts for in an intentional effort to keep his firm within the gross revenue guidelines of the DBE program. One of the bases for Oglesby's seeking an exception to those size rules, through this proceeding, is based upon the fact that it entered into a contract to relocate its offices because, for several years, Oglesby has had problems with DBE certification with some states, related to Oglesby renting office space from the white minority owners of Oglesby. Thus the new offices are rented from North Coast Eighty-Eight, Inc., whose president is Mason Oglesby himself. The rental lease for those premises was executed on June 1, 1987, after Oglesby had already been advised by the Department that it no longer met the requirements for DBE certification. Thus, it has not been established that Oglesby underwent any additional expense or other form of detriment involved in the relocation of its offices in justifiable reliance on continued DBE certification. Oglesby also maintains that it made the related business decision to buy out the white minority shareholders in reliance on its continued DBE certification by the Florida DOT. Oglesby, however, made the business decision to undertake that buy-out and the relocation of its offices with full knowledge that its revenues for past two consecutive years were over $18,000,000 each year. Thus it was on notice that, due to a growth in its business, it would soon exceed even the former $17,000,000 gross revenue size standard and, with the advent of its 1986 gross revenues in excess of $18,000,000, was already in excess of the existing new $14,000,000 standard. Thus Oglesby Construction, Inc., entered into these arrangements with the knowledge that the company would soon be ineligible for the DBE program anyway. In fact, Oglesby currently is successful as a prime contractor in obtaining jobs which are not DBE related and has developed considerable concrete and construction expertise in operating its construction business as a public works contractor.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore RECOMMENDED that the application of Oglesby Construction, Inc., for certification as a disadvantaged business enterprise by the Florida Department of Transportation be denied. DONE AND ENTERED this 3rd day of August, 1988, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of August, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-1956 Petitioners Proposed Findings of Fact Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected; subordinate to Hearing Officer's findings. Accepted. Rejected, Immaterial. Accepted. Accepted. Rejected, immaterial. Accepted. Accepted. Rejected; subordinate to Hearing Officer's findings. Rejected, immaterial. Accepted. Rejected; subordinate to Hearing Officer's findings. Accepted. Accepted. Accented. Accepted. Accepted. Accepted. Accepted. Accepted. Respondent's Proposed Findings of Fact Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted, but not dispositive. Rejected; subordinate to Hearing Officer's findings. Rejected; Irrelevant. COPIES FURNISHED: Kaye N. Henderson, P.E., Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Judy Rice, Esquire Senior Attorney State of Florida Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Robert L. Sabo, Esquire MILLISOR & NOBIL The Huntington Center 41 South High Street, Suite 2195 Columbus, Ohio 43215
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 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.
Findings Of Fact The Florida Department of Transportation is the state agency charged with the responsibility to develop and adopt criteria for a DBE program, and administer the DBE program. Burkett is a Florida corporation whose sole stockholder is a white female American. She meets the criteria of a socially and economically disadvantaged individual. Burkett applied for certification as a DBE on July 12, 1991, and on October 1, 1991, the Department denied Burkett certification. Burkett submitted additional information and made changes in its internal organization to better conform to the Department's requirements; however, the Department has denied Burkett the designation based upon the owner's lack of expertise in the critical areas of the firm's operation, to wit; she does not possess education or experience in engineering. The parties stipulate that Burkett is substantially effected by the rules being challenged, and possesses standing to bring this rule challenge. In determining the qualifications of an applicant for DBE status, the Department utilizes Sections 334.044(2), 337.137, 339.05, and 339.0805, Florida Statutes; 49 CFR Part 23; the United States Department of Transportation administrative decisions; guidelines and training manuals from USDOT or the Federal Highway Administration (FHWA); and its own rules. At the recommendation of a representative from FHWA, the Department amended the rules being challenged regarding qualifications for DBE certification to explicate the requirement for ownership control, as required by Section 339.0805(1),(c), supra, and 49 CFR Part 23.53, to include the concept of "expertise in critical areas of operation of the business" which is required by the USDOT. The terms "expertise" and "critical areas of operation" are not defined in the Florida Statutes or DOT's rules. The DOT interprets "critical areas of operation" to mean the technical area in which the DBE certification is being sought. Management limited to the day-to-day normal business operations is not considered to be a "critical area of operation." The DOT's evaluation of "expertise" changes from business to business based upon the applicant's type of work. The department expects to see education and experience on the part of the disadvantaged owner in the technical area of operations of the business. The Department denied the Petitioner DBE certification because the disadvantaged owner did not possess engineering experience or education.
Findings Of Fact Terrell Oil Company (TOC) was incorporated in 1986 with Grady Terrell, Jr., as president; Richard W. Gilliam and J. Anthony Belcher as board director members. As of the time of this application, Grady Terrell owned 60 percent of the stock of the company, Belcher owned 20 percent, Gilliam owned 19 percent, and Anna Alverez, company secretary, owned 1 percent. The company was started with a $6000 loan made by Grady Terrell, Jr., which sum was borrowed from C & S National Bank (Exhibit 16). Grady Terrell, Jr., is a black male and, therefore, designated as a member of a minority and/or disadvantaged class by statute. Neither Belcher nor Gilliam invested capital in TOC, but received their stock in the company for services in kind. The By-Laws of TOC provide that all times at least 51 percent of the stock in TOC shall be owned by "minority individuals" as that term is defined in state and federal statutes applicable to minority business enterprises or disadvantaged business enterprises. Several lines of credit obtained by TOC from C & S Bank were guaranteed by Grady Terrell, Jr. (Exhibits 9-12). No loans to TOC were guaranteed by anyone else. Anthony Belcher resigned from the Board of Directors of Belcher Oil Company in 1982 and thereafter served as a consultant for approximately two years. He has not been affiliated with Belcher Oil Company since that time (Exhibit 15). Grady Terrell, Jr., executed the lease for the property occupied by TOC for an office (Exhibit 6). Grady Terrell, Jr., approves all major purchases, all invoices for payment, and other bills for payment except routine monthly bills for utilities, vehicle payments, etc., at TOC. In connection with the line of credit with C & S Bank, TOC assigns most of its receivables to the bank for collection. TOC is involved with bidding on and supplying various agencies of government (federal, state and local) with petroleum supplies. To make these deliveries, TOC owns two small tank vehicles of 1500 and 2500 gallon capacities, respectively. (The record is unclear whether the 2500 gallon tank vehicle replaced the 1500 gallon truck.) When necessary to deliver larger quantities than can be hauled in TOC's trucks, a commercial carrier is utilized. In all cases, however, TOC takes ownership of the oil at the loading site. TOC entered into a lockbox agreement with Belcher Oil Company in which Belcher extended TOC a line of credit to purchase petroleum products from Belcher. An arrangement was made with the bank to establish a special account into which the customer would remit payment for product delivered and the bank would credit Belcher's account for the invoice price. This lockbox arrangement with Belcher has been inactive for several years. At one time, TOC purchased nearly all of its products from Belcher, but that is no longer true. Richard W. Gilliam is the executive vice-president of Terrell. He receives no salary from TOC, but is reimbursed for out-of-pocket expenses. He has the authority to accept bids for the purchase of fuel from dealers and to execute contracts with purchasers. Gilliam has operated other businesses in the past and has considerably more experience in business matters than does Grady Terrell, Jr. However, no evidence was presented upon which a finding can be made that Gilliam is the person actually running TOC, and Grady Terrell, Jr., is but a figurehead. It is a fact that Grady Terrell, Jr., is legally in charge of, and has the authority to, fully direct the operations of TOC. In addition to the tank truck(s), TOC has leased a service station where three 3000 gallon tanks are located in which TOC can store inventory if desired. Grady Terrell, Jr., also executed this lease. TOC has been certified as a DBE by several governmental agencies, including the Defense Logistics Agency who contracts with TOC to deliver petroleum products to ships in Miami; and certification has been denied by more than two agencies to which applications were made. No evidence was presented that TOC failed to submit all information requested by DOT.
Recommendation It is recommended that Terrell Oil Company, Inc., be certified as a Disadvantaged Business Enterprise. DONE and ENTERED this 17th day of May, 1990, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of May, 1990. COPIES FURNISHED: John L. Chamblee, Jr., Esquire 202 Cardy Street Tampa, FL 33601 Vernon L. Whittier, Jr., Esquire Department of Transportation 605 Suwannee Street Tallahassee, FL 32399-0458 Ben G. Watts Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Attn: Eleanor F. Turner, MS 58 Robert Scanlan Interim General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458
Findings Of Fact Petitioner, Jim Neel & Associates, Inc., a Florida corporation, applied to the Department of Transportation (DOT) for certification as a Disadvantaged Business Enterprise. The majority stockholder of Jim Neel & Associates, Inc., is Jim Silver Eagle Neel. On his mother's side Jim Neel is a direct descendant of Creek Indians Who were enrolled in the 1832 Census for that Tribe. Additionally, his father's family is known to be descended from the Cherokee Tribe. In terms of blood lines it is estimated that Mr. Neel is one-quarter American Indian. However, Mr. Neel has the features of a Native American. However, Mr. Neel has actively participated in the activities of the Lower Creek Muskogee Tribe since the beginning of 1986. 1/ He is considered by the National and local Creek Indian Tribes to be a member of their group. Additionally, Petitioner has been recognized by the federal Bureau of Indian Affairs as being a member of the Creek Indian Tribe. Such recognition enables Petitioner to participate in the Eastern Creek Judgment Fund which was awarded against the federal government for treaty violations to members of the Eastern Creek Tribe. Prior to the beginning of 1986, Mr. Neel did not maintain any direct affiliation with a tribe. To the best of his knowledge, his mother did not maintain any direct affiliation with a tribe. However, the evidence did show his mother kept in contact with local Creeks on an informal basis. Additionally, when Mr. Neel was young, his mother would tell him stories about his Indian heritage, but advise him not to reveal the fact of his Indian heritage to others. When Mr. Neel was growing up it was not wise to declare one's Indian heritage due to the racial prejudice which would be inflicted on that individual. In fact, Mr. Neel did not feel he could freely declare his heritage until about ten years ago. Mr. Neel was raised on a poor rural farm in northwest Florida. His mother, due to her Indian heritage, was uneducated. She could not read or write and, therefore could not obtain above menial wages to support her family. The entire family, including Petitioner, existed under an economic as well as social disadvantage. Through sheer determination, Petitioner literally pulled himself up by his own bootstraps. Around 1948 he became an auto/truck mechanic. Around 1955 he began as a service manager for an Oldsmobile dealer. Because the wages of a mechanic were low at that time, Mr. Neel changed careers and joined the Panama City Police force. He was a city police officer for the next fifteen years. In 1972 he was employed by the Panama City Airport Authority as a security officer. He rose by promotion to become the Airport Manager from 1980 through 1987. At present he is a consultant to the Airport Authority. No evidence was presented by the Department which would be sufficient to demonstrate that Mr. Neel had not suffered social and economic disadvantage on an individual basis.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered granting the application of Jim Neel and Associates, Inc. for certification as a Disadvantaged Business Enterprise. DONE and ENTERED this 19th day of April, 1989, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 19th day of April, 1989.
The Issue The issue presented is whether Petitioner's application for certification as a minority business enterprise should be granted.
Findings Of Fact Petitioner Omni Outdoors, Inc., a for-profit corporation located in Coral Springs, Florida, is engaged in the business of commercial landscaping and irrigation. It was incorporated on September 19, 1995, by Bruce Reeb. When incorporated, Petitioner issued its 100 shares of stock as follows: 24 shares to Bruce, 26 shares to his wife Terry, 24 shares to Kevin McMahon, and 26 shares to Kevin's wife Michele. Accordingly, the Reebs and the McMahons each own 50 percent of the business. Both Reebs and both McMahons became the 4-member Board of Directors. Bruce became the president and the secretary of the corporation, and Kevin became the vice-president and the treasurer. According to the corporation's By-laws, the President is the chief executive officer of the corporation, responsible for the general supervision of its business. Bruce is a certified general contractor in the State of Florida and is the qualifier for Petitioner. Kevin holds an irrigation license and is the qualifier for Petitioner in that area. Bruce handles estimating, pricing, and proposal preparation and presentation. Kevin runs the field operations and purchasing of materials. In October 1996 Terry quit her job as a flight attendant to begin working for Petitioner, handling accounting and personnel matters. Her name was added to the corporation's bank accounts as an authorized signature. Bruce and Kevin remain as authorized signatures on the accounts, and only one signature is required for the corporation's checks. She was given the title "chief executive officer" of the corporation in January 1997, a position authorized by an amendment to the By-laws in March 1997. She was given a smaller salary than Bruce or Kevin, who were paid the same amount. Kevin's wife Michele has never been involved in the day- to-day activities of the corporation. She has never received a salary from the business. In January 1997 Terry filed an application with Respondent for the corporation to be certified as a minority business enterprise, under the status of "American Woman." Around the time the corporation filed its application, Terry's salary was increased to $600 per week so she would be making the same as Kevin, and Bruce's salary was decreased to $400 per week. Even after Terry's full-time employment by the corporation, the signatures of her husband or of Kevin continue to appear on corporate obligations, such as an indemnity agreement and corporate promissory notes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered denying Petitioner's application for certification as a minority business enterprise. DONE AND ENTERED this 8th day of April, 1998, in Tallahassee, Leon County, Florida. LINDA M. RIGOT 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 Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 1998. COPIES FURNISHED: Terry M. Reeb, Chief Executive Officer Omni Outdoors, Inc. 1742 Northwest 112 Terrace Coral Springs, Florida 33071 Joseph L. Shields, Esquire Department of Labor and Employment Security 2012 Capital Circle, Southeast The Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Edward A. Dion, General Counsel Department of Labor and Employment Security 2012 Capital Circle, Southeast The Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Douglas L. Jamerson, Secretary Department of Labor and Employment Security 2012 Capital Circle, Southeast The Hartman Building, Suite 303 Tallahassee, Florida 32399-2189
The Issue The primary issue in this proceeding is whether Gulf Coast is entitled to certification as a disadvantaged business enterprise under DOT rule 14-78.05 Florida Administrative Code. Ancillary issues include 1) the sufficiency of proof of Bernard Crooke's membership in a designated group, (i.e. "Hispanic Americans"); and 2) the criteria, if any, that DOT may utilize, other than an individual's membership in a designated group, to determine eligibility of that individual's firm for certification.
Findings Of Fact Gulf Coast and Traffic Engineers, Inc. is a Florida corporation with its principal place of business in Escambia County, Florida. Its address is 8203 Kipling Street, Pensacola, Florida, 32513. (Stipulation of the parties: Petitioner's Exhibit #la, tab 2) Gulf Coast is a "small business concern" as required by Rule 14-78.05, Florida Administrative Code. (Stipulation of the parties). The Florida Department of Transportation receives federal highway funds and administers the program for certification of disadvantaged business enterprises. (T-6,92) Bernard E. Crooke is President of Gulf Coast and sixty- percent owner. He directs the management policies and operations of Gulf Coast. (Stipulation of the parties; Petitioner's Exhibit la, tab 2) Cameron Villar is a remote blood relative of Bernard E. Crooke. He and a cousin did some genealogical research on the Villar family history. He obtained a list of names of genealogical societies in Spain from the American embassy in Madrid. After contacting all the societies on the list, he retained one, and obtained from it a picture of the Villar family crest and a brief history of the family name. The Villars originated in Galicia, Spain. Cameron Villar also prepared a genealogical chart tracing his family (and Bernard Crooke's) back to one of two brothers who came from Spain to the United States. The brothers, Augustus and Emmanuel, were sons of Don Jose de Villar, who is mentioned in the family history provided by the genealogical society. (T-22-24, 30-35; Petitioner's Exhibits #2-#5) Paula Margaret Davidson is related to Bernard Crooke through a common great grandmother. She has known Bernard and his family all her life. She also conducted genealogical research and prepared a chart tracing the family back to Spain. (T-45, 6, Petitioner's Exhibit #6) Joseph Davidson (known as "Buddy" Davidson) was raised by Bernard Crooke's aunt, whom "Buddy's" father married after his first wife died. It was common knowledge in the family and in the Pensacola community that the Villars, including the branch in which "Buddy" and Bernard were raised, were of Spanish heritage. There was a community of Spanish harbor pilots in the Old Warrington Woolsey area. Later the city of Warrington was displaced and was moved to New Warrington. (T-71, 74-75) Bernard's grandfather was one of the bar and harbor pilots. (T-56). The Villar family and its various branches celebrated the Bicentennial with their first family reunion. Seven hundred and fifty members participated, including Bernard Crooke. The family was recognized as playing a significant part in the founding of Pensacola, as the two Villar brothers sailed into Pensacola with General Galvez and received land there as a reward from the King of Spain and as an incentive to create a Spanish colony in Pensacola. A booklet was published for the Bicentennial celebration, "Your Heritage," based upon the research of the family members. (T-64, 83, Petitioner's Exhibit #11). Until the Bicentennial in 1975-76, and the resultant public recognition of the family, being Spanish was not a subject of pride and there was concern about discrimination in the community. ( T- 6 9, 77, 82). Neither Bernard Crooke, nor any of the family members who testified on his behalf, could say for certain whether, as an individual, Bernard Crooke was the subject of bias or discrimination by virtue of his Hispanic cultural heritage. (T- 50, 53, 69, 73, 83). Bernard Crooke was one of nine children in a poor family. He started his construction business approximately twenty years ago with five hundred dollars and two partners. He helped support his business in the early days by delivering papers to rack stands. He put himself through Pensacola Junior College and obtained no further formal education. He eventually bought out the two partners who had other interests and were just helping him get started. (T-80-85). The business has gradually grown to one with gross annual receipts (year ending 9/30/84) of $1,761,117.37. (Petitioner's Exhibits #la, tab 2).
Recommendation Based upon the foregoing, it is hereby RECOMMENDED: That a Final Order be issued finding Petitioner, Gulf Coast, eligible for certification as a Disadvantaged Business Enterprise (DBE). DONE and RECOMMENDED this 3rd day of June, 1986, in Tallahassee, Florida. MARY CLARK 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 3rd day of June, 1986. APPENDIX The following constitute my specific rulings pursuant to section 120.59(2), Florida Statutes on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Petitioner's Proposed Findings of Fact Adopted in Paragraphs #1 and #3. Addressed in Background; otherwise rejected as unnecessary. Adopted in substance in Paragraph #11. Adopted in Paragraphs #3-6. Adopted in substance in Paragraphs #3-7. Rejected as unnecessary. Discussion of criteria for certification is found in the Conclusions of Law. Adopted in Conclusions of Law, Paragraph #10. Adopted in Conclusions of Law, Paragraph #10. Rejected as unnecessary. Rulings on Respondent's Proposed Findings of Fact Rejected as unnecessary. Adopted in Paragraph #1. Addressed in Background. Rejected as summary of evidence rather than a finding of fact. Adopted in part in Paragraph #4. The statement that Mr. Villar is not a genealogist is rejected as unsupported by the record. Adopted in part in Paragraph #4; otherwise rejected as immaterial. Rejected as immaterial, except that the Villar Spanish origins are addressed in paragraphs #4 and #7. Adopted in part in Paragraph #5, otherwise rejected as immaterial. Rejected as contrary to the weight of evidence. Adopted in Paragraph #10. Rejected as being immaterial since Petitioner has also been denied loans. See Conclusion of Law, Paragraph #9. Rejected as unnecessary and while an accurate restatement of an isolated portion of testimony, the out-of-context testimony does not reflect the substantial weight of the evidence. See Conclusion of Law, Paragraph #9. COPIES FURNISHED: Charles C. Sherrill, Esquire 435 East Government Street Post Office Box 12316 Pensacola, Florida 32581 Brant Hargrove, Esquire Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street Tallahassee, Florida 32301
