Findings Of Fact When, on April 7, 1986, Eunice Odom organized petitioner Three River Contracting, Inc. (Three River) and became its first president, she kept 60 percent of the common stock for herself and gave 20 percent to each of her two children, John Howard "Butch" Odom and Sandra Steward. Ms. Odom organized Three River in order to do specialty contracting with the Department of Transportation (DOT), in fields with which she was not intimately familiar. Three River "do[es] pile jacketing and guniting, and ... a lot of joint seals on bridges .. sandblasting and painting." T.29. But Ms. Odom had considerable experience with other businesses, including one that painted and sandblasted bridges. Respondent's Exhibit No. 4. Over a period of three and a half decades, as secretary and/or treasurer of a succession of family-owned corporations, Ms. Odom has made financial decisions and worked on a daily basis with enterprises that installed septic tanks, dug graves, erected monuments, moved cemeteries, dug ditches, sandblasted and repaired municipal water tanks, and recycled plastic and lead. While Three River's original president, Ms. Odom hired Red Nichols and Dale Harris as Superintendents and foremen, giving them authority to hire and fire their crews. She also "hired a Mr. Lee as estimator for a short period of time." T.75. When Three River came into existence, her son was managing a truck stop at an interstate highway exchange. Only after he sold the truck stop in August of 1986, did he go to work for Three River as an estimator, the job he still held at the time of hearing. Among other significant business experience, he brought eight to ten year's experience as an estimator to Three River. Because the secretary-treasured of Three River, Ms. Odom's daughter, Sandra Steward, also had her own business, she was seldom at Three River's offices. This proved inconvenient, when papers had to be signed both by the corporate president and by the company's secretary-treasurer. At a meeting of the three stockholders, Ms. Odom relinquished the presidency in favor of John Howard and became Secretary-treasured of the corporation, in Ms. Steward's stead. Paragraphs four through seven of the parties' prehearing stipulation consist of the following: Eunice Odom's power is not subject to any formal or informal restrictions evidenced by bylaws, partnership agreements, trust agreements, stock voting agreements, contracts, or any other agreement enforceable in a court of law, of which DOT is aware. See FAC 14-78.005(7)(e). It is customary in the construction industry for owners to hire estimators to assist owners of construction companies in submitting competitive bids. It is customary in the construction industry for owners to hire project managers to direct the day-to-day operations of construction projects on job sites. The salaries for Eunice Odom, John H. Odom and Sandra Steward are as follows: 1986 Eunice Odom $5,250.00 John Odom 9,500.00 Sandra Steward 2,050.00 1987 Eunice Odom $20,800.00 John Odom 52,700.00 Sandra Steward 7,800.00 1988 Eunice Odom $61,400.00 John Odom 65,200.00 The 1988 salaries reflect changes accomplished after Three River had made application for certification as a disadvantaged business enterprise. After DOT indicated its intention to deny Three River's application, John Howard Odom resigned as president and Ms. Odom resumed the presidency, on the advice of counsel. Whatever her title, Ms. Odom has spent 40 hours a week in Three River's office. Depending on what estimates he needed to prepare, John Howard worked from 20 to 100 hours a week. Ms. Odom has final say on which jobs Three River bids on. Neither Ms. Odom nor her son has ever fired any Three River employee. On the job, supervisors have authority to hire and fire workmen. Ms. Odom has full authority to and has in fact hired all of Three River's managers. John Howard was authorized to and did in fact borrow money for Three River, obtaining bank loans secured by a certificate of deposit, in one instance, and by two pick up trucks, in another. But John Manor, the banker whose bank made these loans, testified that he looked to Ms. Odom as the person he "consider[ed] to be the responsible individual," (T.16) "the financially responsible person in that corporation." T.20. She and Mr. Manor had agreed to the loan secured by the certificate of deposit before John Howard came into the bank and executed the papers. The loan secured by the trucks occurred without Mr. Manor's knowledge. Because of the nature of the collateral, a consumer loan officer handled the transaction without involving other bank officers. The evidence did not show who owned the certificate of deposit. Aside from these two secured loans, totalling approximately $46,000, petitioner's application reports indebtedness of another $32,000, and puts the value of the company at $500,000. John Howard testified without contradiction that his mother has the final say on major equipment purchases, and that she had rejected his suggestions that the company acquire a light plane to facilitate estimating jobs downstate; and that Three River buy, instead of lease, a "supersnooper," a truck Specially equipped with "an arm that comes out with a man in it, and ... goes underneath the bridge." T.30.
Recommendation It is, accordingly, RECOMMENDED: That respondent grant petitioner's application for certification as a disadvantaged business enterprise. DONE and ENTERED this 17th day of November, 1989, at Tallahassee, Florida. ROBERT T. BENTON, II 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 17th day of November, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-0976 With respect to petitioner's proposed finding of fact No. 1, the evidence was unclear which month Butch started to work for Three River. Petitioner's proposed findings of fact Nos. 2 through 15, 17, 18, 20, 21, 23, 24, 25, 30, 31, and 34 have been adopted, in substance, insofar as material. With respect to petitioner's proposed findings of fact Nos. 16 and 19, Butch so testified. Petitioner's proposed findings of fact Nos. 22, 26 through 29, 32, and 33 pertain to subordinate matters. Respondent's proposed findings of fact Nos. 1 through 4 relate to free form proceedings that became immaterial, except to frame the issues, once formal proceedings were requested. Respondent's proposed findings of fact Nos. 5, 6, and 8 through 14 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 7, Ms. Odom's experience included some DOT contracting. COPIES FURNISHED: Ruth B. Dillard, Esquire Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Pete Davis, Minority Programs Office Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458 James J. Richardson, Esquire Iamonia Farms Road Post Office Box 12669 Tallahassee, Florida 32317
The Issue Whether or not Petitioner's response to Respondent's RFP 90 PY is responsive so as to be eligible for an award of "Wagner-Peyser 10% funds."
Findings Of Fact Section 7(b)(2) of the Wagner-Peyser Act, 29 U.S.C. s. 49f. is a federal grant source which permits ten percent of the sums allotted by Congress to each state to be used to provide certain services and functions within the discretion of the governors of the respective states. Included among such services are job placement services for groups determined by the Governor of Florida to have special needs as set forth in Subsection 7(b)(2) of the Wagner- Peyser Act. Petitioner Goal Employment is a private-for-profit Florida corporation engaged in the business of finding gainful employment for offenders, i.e., those persons who have been convicted of a crime but who are now out of prison seeking employment. On January 26, 1990, the Respondent, Division of Labor, Employment and Training (LET) of the Florida Department of Labor and Employment Security (LES), published a request for proposals (RFP) soliciting competitive sealed proposals for job placement programs in accordance with Section 287.057(3) F.S. and the federal grant source, commonly referred to as "Wagner-Peyser 10% funds." The response date and time for this 1990 RFP, a/k/a RFP 90 PY, was 3:00 p.m., March 23, 1990. Petitioner, Goal Employment, filed a timely proposal with Respondent, but the agency found Goal Employment's proposal to be nonresponsive and notified Petitioner of this determination in a letter dated April 4, 1990. That letter set out the grounds of the Respondent agency's determination as follows: This nonresponsiveness is due to failure to have proposed program activities that are legal and allowable, i.e., private for profit entities are not eligible to apply for Wagner-Peyser 7(b) funds. Petitioner had 72 hours from that notification in which to protest. It has been stipulated that Goal Employment's proposal would have been found responsive but for the exclusion of private-for-profit organizations from eligibility. By letter dated April 9, 1990, Petitioner gave written notice of receipt of notification of nonresponsiveness on Saturday, April 7, 1990 "around 10:00 a.m." and of its intent to file formal written protest. Date and time of Respondent's receipt of this letter of intent are not clear, but Respondent has not asserted lack of timeliness. Interim negotiations failed, and on April 17, 1990 Petitioner timely filed a formal written protest, which was "fast-tracked" at the Division of Administrative Hearings, pursuant to Section 120.53(5) F.S. In the immediate past, the Respondent agency had, indeed, permitted contracting with private-for-profit organizations, and Petitioner corporation had been a successful bidder in Respondent's 1988 and 1989 letting of similar contracts. Therefore, Petitioner's principal and president, Ernest S. Urassa, was thoroughly familiar with how these types of contracts had been bid in the past. Mr. Urassa's familiarity with the earlier agency bid policy and procedure was also the result of his prior employment by the agency. The RFP for 1989 did not prohibit private-for- profit organizations from participating. Goal Employment's contract pursuant to that prior RFP had not been completed as of the date of formal hearing, and at all times material to the 1990 RFP which is at issue in this proceeding, Mr. Urassa and Goal Employment coordinated the 1989 contract's compliance through an agency contract manager, Dan Faughn. On November 8, 1989, before the final draft of the 1990 RFP was finalized, Mr. Faughn informed Mr. Urassa by telephone that for the next program year, that is for the 1990 RFP, the agency would no longer permit private-for-profit company participation in Wagner-Peyser contracting. In response to January 11, 1990 oral inquiries from Mr. Urassa, the Chief of Respondent's Bureau of Job Training, Shelton Kemp, sent Mr. Urassa a January 16, 1990 letter as follows: The program year 1990 Request for Proposals prohibits private-for-profit companies from participating in Wagner-Peyser 7(b) contracting. The Wagner-Peyser Act, Section 7(b)(2), allows the governor of each state to provide, "...services for groups with special needs, carried out pursuant to joint agreements between the employment service and the appropriate private industry council, and chief elected official or officials or other public agencies or private nonprofit organizations,..." [Emphasis supplied] Those involved in the agency RFP process had reached the foregoing position after receiving advice from their General Counsel who, in turn, had relied on legal advice from the Governor's legal staff. Roy Chilcote, Labor Employment and Training Specialist Supervisor in Respondent's Contract Section, participated in the draft of the 1990 Project Year Request for Proposal (RFP 90 PY) which is at issue in these proceedings. Prior to drafting the 1990 RFP, Mr. Chilcote was unable to locate any written issue papers or legal opinions interpreting the following language contained in the Wagner-Peyser legislation: ...the Governor of each such State to provide-- (2) services for groups with specific needs, carried out pursuant to joint agreements between the employment service and the appropriate private industry council and chief elected officials or other public agencies or private nonprofit organizations; [Emphasis supplied] Up until that time, the issue of whether private-for-profit organizations could compete had not resulted in any specific opinion from legal personnel, however it is fair to say that lay personnel of the agency, including Mr. Urassa, who had previously been employed there, had based agency policy and earlier RFP requirements on lay interpretations either of the foregoing statutory language or of the Job Training Partnership Act's (JTPA) pre-amendment language, and that the lay interpretations had always permitted private-for- profit organizations to bid for Wagner-Peyser 10% funds just as they had competed for JTPA funds. Upon his own review of the statutory language, Mr. Chilcote, also a layman, did not share his predecessor's opinion, and he requested legal advice from the agency's General Counsel, and, in turn, received the legal interpretation that private-for-profit organizations were ineligible. Mr. Chilcote received this legal advice in the fall of 1989, and he accordingly drafted the 1990 RFP to preclude private-for-profit entities as bidders for Wagner-Peyser funds. The actual language contained in the 1990 RFP published January 26, 1990, as found on page 2 thereof, is as follows: All governmental agencies and nongovernmental organizations (both for profit and not for profit entities) may apply for funds under the JTPA Title I Program. All governmental agencies and not for profit nongovernmental organizations (private for profit entities are not eligible) may apply for funds under the Wagner-Peyser 7(b) program. Documen- tation supporting the legal structure of the proposer must be on file with the Bureau of Job Training before any contract resulting from a response to the RFP can be executed. [Original emphasis] Under the next major heading of the 1990 RFP (page 5 thereof), all potential bidders, including Petitioner, were advised: The Bureau of Job Training conducts a two step proposal review process. The first step is a technical review to determine if a proposal is responsive to the requirements of the RFP and the second step is a programmatic review of the relative merit of that proposal. The following is a description of the specific criteria that the Bureau will use to determine the responsiveness of a proposal. Each of the criteria listed must be satisfactorily addressed for a proposal to be determined responsive. A proposal determined nonresponsive will be given no further consideration. The proposer will be notified in writing of the nonresponsive determination and the reason(s) for the determination. No exception will be made to these requirements. Although the "specific criteria" listed thereafter do not make reference to the ineligibility of for-profit organizations, that contract specification was clearly noted and emphasized under the preceding heading. See, Finding of Fact 14, supra. Before publication of the 1990 RFP, Mr. Chilcote circulated the draft within the agency for comments. It was at this point, November 8, 1989, approximately 10 weeks before the 1990 RFP was published, that Mr. Faughn orally notified Mr. Urassa of its contents, that Mr. Faughn and Mr. Urassa began inquiries concerning the reinterpretation, and that Mr. Faughn and Mr. Urassa commented unfavorably on the new draft RFP because it precluded private-for- profit bidders. See, Finding of Fact 9, supra. The agency's position allowing Wagner-Peyser 7(b) funding for private- for-profit organizations prior to Program Year 1990 was based in part upon its earlier layman's understanding of the Congressional intent underlying the language of Section 7(b)(2). See, Findings of Fact 12-13, supra. In 1990, the agency altered its position so as to begin excluding for-profit organizations from eligibility for Wagner-Peyser money solely due to its reinterpretation of the statute by legal counsel. This reinterpretation was applied to prohibit the agency from contracting for the delivery of services with all private-for-profit organizations and has not been formally adopted as a rule pursuant to Section 120.54 F.S. Petitioner has been aware of this reinterpretation since November 8, 1989 (actual oral notice), was notified of it in writing on January 16, 1990 (Shelton Kemp's letter), and was again notified of it in writing on January 26, 1990 (1990 RFP publication). Petitioner did not file a formal rule challenge directly with the Division of Administrative Hearings. Prior to the March 3, 1990 bid/proposal deadline, the agency held three RFP workshops: February 20, 22, and 23, 1990. At no time during this process was Petitioner led to believe that private-for-profit entities were to compete for the 1990 RFP. Nonetheless, Petitioner, a private-for-profit entity, submitted its proposal timely before the March 23, 1990 bid closing and was rejected as nonresponsive. It thereafter proceeded solely with a bid protest. See, Findings of Fact 3, 4, and 5, supra.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Labor and Employment Security enter a final order ratifying its previous decision that the Respondent's 1990 bid/proposal is nonresponsive. DONE and ENTERED this 29th day of June, 1990, 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 29th day of June, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2667BID The following constitute specific rulings pursuant to Section 120.59(2) F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF: 1-2, 15 Accepted. Accepted except for what is unnecessary. Accepted except for what is subordinate or cumulative. 5-6 Subordinate and cumulative. 7-10, 19 Accepted. 11-14, 16, 18 Rejected as mere legal argument. 17 Rejected as subordinate. Respondent's PFOF: 1-5 Rejected as mere legal argument. Accepted. COPIES FURNISHED: Thomas W. Brooks, Esquire Meyer and Brooks, P.A. 2544 Blairstone Pines Drive Tallahassee, Florida 32301 David J. Busch, Esquire Department of Labor and Employment Security Suite 131, The Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32399-0657 Hugo Menendez, Secretary Department of Labor and Employment Security Berkeley Building 2590 Executive Center Circle, East Tallahassee, Florida 32399-2152 Stephen Barron, General Counsel Department of Labor and Employment Security The Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32399-0657 =================================================================
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.
The Issue Is Petitioner entitled under Section 57.111(4), Florida Statutes, to attorney's fees and costs incurred in DOAH Case No. 97-5194?
Findings Of Fact Outcome of Prior Administrative Proceeding Thomas A. Birkhead, d/b/a Century Center ("Birkhead," "Mr. Birkhead, or the "business") is a business in the form of a sole proprietorship. On August 4, 1997, the Division of Hotels and Restaurants (the "Division") served the business with a Notice to Show Cause. Seven weeks or so earlier, on June 13, 1997, the business had been served with an Emergency Order of Suspension. The Emergency Order suspended the business's license to operate a public lodging establishment in Cocoa Beach, Florida, as a nontransient rooming house. The license, bearing number 15-04001 H, had been issued to Mr. Birkhead by the Division. Mr. Birkhead requested a hearing on both the Emergency Order and the Notice to Show Cause. The request was referred to DOAH and assigned Case No. 97-5184. Unlike this case for fees and costs in which Mr. Severs has appeared in behalf of Mr. Birkhead, at no time during the pendency of DOAH Case No. 97-5184 did any attorney, including Mr. Severs, file a notice of appearance or appear in any capacity on behalf of Mr. Birkhead. The hearing held in April and June of 1998 (at which Mr. Birkhead appeared pro se) culminated in a Recommended Order issued October 1, 1998. The order recommended that the Notice to Show Cause be dismissed but that the Emergency Order be sustained. On May 14, 1998, the Division issued a Final Order. The Order makes no mention of Mr. Birkhead having been represented in any capacity other than pro se in post-recommended order proceedings. In acceptance of the advice of the Recommended Order, the Division dismissed the Notice to Show Cause. As for the recommendation with regard to the Emergency Order the final order stated: The Emergency Order of Suspension was a final order of the Division and subject to judicial review pursuant to section 120.60(6) and 120.68, Florida Statutes, not administrative review. Thus, the part of Birkhead's request for formal administrative review that pertained to the issuance of the Emergency Order of Suspension should have been dismissed for lack of jurisdiction. Final Order, page 9, Paragraph 16. Accordingly, the Division ordered that "Birkhead's Motion to Dismiss is hereby granted and the request for formal administrative review of the Emergency Order of Suspension is hereby dismissed." Final Order, page 10. Attorney's Fees and Costs When Case No. 97-5184 was initiated, Mr. Severs had long represented Mr. Birkhead as an attorney in various matters. His normal billing rate during the life of the case was $175 per hour. Although Mr. Severs did not appear as attorney of record in the administrative case, from the time the Emergency Order of Suspension was issued in June of 1997, through the issuance of the Final Order by the Department in Case No. 97-5184, Mr. Severs provided legal services to Mr. Birkhead. Some of the services were related to the administrative case; some were related to other matters. The fees for these services, related or unrelated, totaled $14,929.95, according to the petition filed in this case. An affidavit by Mr. Severs, attached to the petition, showed that only $4,860 of that amount was related to the administrative case. The related services were performed on at least fifteen occasions. Principally these included review and/or drafting of documents and consultation with regard to the reviewed or drafted documents. Mr. Severs' records demonstrate that at least 32.4 hours were expended in the performance of legal services related to Case No. 97-5184. (There were many telephone consultations not included in these hours because Mr. Severs moved from one firm, to his own firm, to the Titusville City Hall, where he is now the full-time City Attorney for the City of Titusville. Because of these transitions, phone records became unavailable.) At an hourly rate of $150 (the rate requested by Petitioner for this case, $25 below Mr. Severs' normal rate), total attorney's fees for 32.4 hours come to $4,860.00. These fees are reasonable. Court reporter costs in defending this action incurred by Mr. Birkhead totaled $478.50. He paid an expert witness fee in the amount of $200 to an engineer who testified in the proceeding. In addition, there were subpoenas for documents of $42; publications, such as the Fire Safety Manual 101, necessary to purchase in order to defend the case, in the amount of $49.35; photocopies of $48.10; office supplies of $56.12; postage and postage stamps of $173.52; and copier maintenance of $605.13. These costs total: $1,655.72. Mr. Birkhead also claimed additional costs of more than $10,000 used to maintain and operate the closed Century Center as an office for the duration of the administrative case. Mr. Birkhead explained this claim at hearing: The building that I was in there using as an office [Century Center] was shut down by the Division, so I could do nothing with it, except just work out of there myself to prepare this case, to work on the case. So, what I have given here is the direct charges of -- you know, that were during the time period for electricity and so forth. (Tr. 25). In addition to electricity, this sum includes charges for telephone, sanitation, pest control, water and sewer and fire extinguisher maintenance. Small Business Party The business's claim for attorney's fees and costs is filed under the authority of Section 57.111, Florida Statutes, a provision of the Florida Equal Access To Justice Act (the "Act.") Section 57.111(3)(d), Florida Statutes, of the Act defines the term "small business party," in pertinent part as: A sole proprietor of an unincorporated business . . . whose principal office is in this state, who is domiciled in this state, and whose business . . . has, at the time the action is initiated by a state agency, not more than 25 full-time employees or a net worth of not more than $2 million including both personal and business investments. . . Mr. Birkhead is the sole proprietor of the business, Thomas A. Birkhead, d/b/a Century Center. The business is unincorporated. Its principal office is in Florida. Mr. Birkhead is domiciled in Florida and his business has less than 25 full-time employees. The only criterion left in order for Thomas A. Birkhead, d/b/a Century Center to qualify as a small business party is net worth. Is Mr. Birkhead's net worth "not more than $2 million including both personal and business investments . . ."? Net Worth Mr. Birkhead's undocumented testimony that his personal net worth and that of the business was less than two million dollars was not rebutted by any evidence offered by the Division. Cross examination revealed that Birkhead's net worth in June of 1997 was certainly in excess of $1.5 million. How much in excess could not be determined because his calculation of net worth was anything but precise as shown from Mr. Birkhead's testimony: Q What is the value of the hotel located across the street from the Century Center? A The value of the hotel at that time, I believe was one and a half million dollars . . . Q What portion of the hotel did you own? A Um? Q What portion of the hotel did you own? A Two thirds. Two thirds of the stock. * * * Q . . . And what was the Century Center worth [in June of 97]? * * * A Well, I had a mortgage against it for two hundred and some thousand dollars. I gave, I believe, five hundred something. So, five hundred and something minus two, whatever it was, forty or fifty thousand, two hundred and thirty five or forty thousand. It would leave three hundred thousand dollars. Q . . . Your testimony is that you've had an equity in the Century Center of three hundred thousand dollars? A That was my intention, to say that. Yes. I subtracted out in my mind the mortgage that I had against the property, versus what I had paid for it. Q And when did you purchase it? A I purchased it . . .in 1990. Q But you don't . . . know what the value was in 1997? A Not at the Century Center. * * * Q . . . What other properties did you own, besides the Century Center, the hotel and the condo in Cape Canaveral? A I own my house. Q How much is it worth? A Well I paid sixty five thousand for it, I believe. It's probably worth a little bit more than that now. * * * JUDGE: When did you buy it? * * * WITNESS: When did I buy it? I bought it in -- let's see. Twenty five years ago or more. * * * Q Was there any other property that we didn't cover so far that you owned at that time? A Let me think a little bit. Yeah. I've got one in Cape Canaveral. It's an empty lot up there. I think I paid very little for it. I bought it because it was cheap. It's the only reason I've still got the thing. I think I gave eighteen hundred dollars for it or something like that. It think it would be worth more than that now. I don't know exactly what it would be worth. Try to sell it. These lots go up, you know, they might be worth fifteen to twenty thousand dollars. I can't -- I can't give you an exact figure on that. JUDGE: When did you buy it? * * * A . . . April of 1967, I believe. * * * JUDGE: . . . What Mr. Biggins is getting at is he wants to know about all our your personal and business investments and what their . . . net worth is. And you said you made a list and you went through and you figured this out. WITNESS: Say what? JUDGE: You said that you figured this out before you filed this motion for attorney's fees . . . WITNESS: Yeah. I called and got the figures as to what I had in June of '97. And I looked at, you know, statements that I had, and this that and the other thing, and added it all up. . . Some of the things, like I say, are joint with my wife. JUDGE: Yes, sir. But what were those things? That's what I want to know. You say you did this calculation. You got together all this information. Now, what information was it and what did the information show? WITNESS: Well, it showed the value of the things that I had in June of '97. JUDGE: And what were those things? What information did you obtain? WITNESS: Well, bank accounts, stock brokers, whatever I could, you know, had money in. JUDGE: . . . What was the value of the bank accounts? WITNESS: Not a whole lot. I don't think I probably had over -- I'm guessing a little bit now. You know, three or four thousand dollars. JUDGE: How about stock? WITNESS: Um? JUDGE: Stock? WITNESS: Stock, what? JUDGE: Equities. WITNESS: Um? JUDGE: Equities? New York Stock Exchange? WITNESS: Well, my stock is largely in a joint account with my wife. And . . . JUDGE: . . . You have control of it? WITNESS: Um? JUDGE: You have control of it? WITNESS: Well, either one of us could be called in control. It's joint . . . with right of survivorship. JUDGE: . . . Did you include the value of that stock in this calculation you did? WITNESS: I believe I did. Yes sir. JUDGE: . . . And what was the value of that stock? WITNESS: I can't recall, Your Honor, exactly what it was. JUDGE: Well, we've been . . . dealing with approximations here. So, do your best. WITNESS: Well, it's a joint account. JUDGE: And what's the value of the account? WITNESS: . . . I think it's somewhere in the neighborhood of probably seventy five or a hundred thousand dollars. JUDGE: And you can't do any better than that? WITNESS: Um? JUDGE: You can't pinpoint it any more than that, a twenty five thousand dollar swing? WITNESS: I can't to be honest with you, Your Honor . . . (Tr. 38-50). Mr. Birkhead's testimony also revealed that he owned two "low priced condos in Cape Canaveral" (Tr. 36) held as rental property. At the time he purchased them, Mr. Birkhead "gave twenty four thousand and change for them." Id. Asked when they were purchased, Mr. Birkhead replied, "I'm not sure. Before 1997." When asked to approximate when they were purchased, Mr. Birkhead testified, "Five, ten years. I don't know." Id.
The Issue The dispute in this case arises out of Respondent's attempt to collect alleged salary overpayments from Petitioner, a former state employee who allegedly continued to be paid wages after resigning her position with Respondent.
Findings Of Fact Having determined, for the reasons set forth below, that the Department lacks subject matter jurisdiction to adjudicate the instant claim for "money had and received" against its former employee, the undersigned declines to make findings of fact, as such would be a nullity.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order dismissing this administrative proceeding for lack of subject matter jurisdiction. DONE AND ENTERED this 4th day of November, 2005, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of November, 2005.
The Issue Whether Petitioner should be awarded attorney's fees and costs pursuant to the Florida Equal Access to Justice Act (the Act), Section 57.111, Florida Statutes.
Findings Of Fact These proceedings arise out of DOAH Case No. 01-2928, Department of Health, Board of Physical Therapy v. Raymond H. Cralle. There, a Recommended Order was entered on November 27, 2001, which recommended entry of a final order dismissing all charges against Petitioner. On February 8, 2002, Respondent filed with the Division of Administrative Hearings a final order of dismissal in that case. Petitioner, the prevailing small business party within the meaning of Section 57.111, Florida Statutes, timely filed his request for fees and costs pursuant to the Act. Respondent does not dispute the reasonableness of the attorney's fees claimed in the total amount of $10,050.00, nor does it dispute that costs in the amount of $2,655.95 were incurred by Cralle in the underlying case. The entire record in this case, which includes a transcript of the probable cause hearing, considered in light of the entire record in Case No. 01-2928, establishes that the total amount of fees and costs claimed here were necessarily and reasonably incurred in the successful defense of the administrative charges. In opposition to Cralle's request for reimbursement pursuant to the provisions of the Act, Respondent argues that the case falls within an exception for proceedings which were "substantially justified" at the time the charges were brought. The crux of Respondent's argument is that "[the] Administrative Law Judge decided the case primarily on the basis that, in her belief, based on the demeanor of the complainant, [Respondent] was more credible than the complainant." Respondent's argument requires that material facts be ignored. In the underlying case, Respondent had the burden to prove the administrative charges by clear and convincing evidence. Yet its factual case was based exclusively upon the testimony of Helen Mesa (Mesa). Mesa's demeanor was just one of several things noted in the Recommended Order which cast doubt upon her credibility. At the time of the probable cause hearing, it was known, or at least knowable, that Mesa fit the profile of the stereotypical "disgruntled former employee." At least a half dozen witnesses could have been expected to corroborate Mesa's testimony, and at the probable cause stage of the proceedings, Respondent's own expert recommended that at least some of these individuals be found and interviewed. With this red flag flying, and Cralle's attorney protesting that Mesa's story should be corroborated in some fashion before the litigation process was set in motion, Respondent elected to proceed on a needlessly thin investigation.
Findings Of Fact The Petitioner is a "small business party" sole proprietorship domiciled in Tampa, Florida, with less than 25 employees, and a net worth of less than $2 million. The Respondent previously initiated action against Petitioner as a result of a Medicaid audit of Petitioner's pharmacy and identified an overpayment which it then sought to recover from Petitioner. A timely request for hearing was filed by Petitioner, and the matter was transmitted by the Respondent to the Division of Administrative Hearings where it was assigned Case Number 88-1668. The final hearing was held in Tampa, Florida, on June 22, 1988, before Donald D. Conn, Hearing Officer, and thereafter a Recommended Order was filed on August 17, 1988, which recommended that Respondent enter a Final Order dismissing its action against Petitioner, refunding any funds which it had withheld, plus interest, and removing all other sanctions. The Respondent approved and adopted this recommendation in its Final Order entered on September 15, 1988, by the terms of which Petitioner prevailed in the prior action initiated by the Respondent. The Respondent was not a nominal party to the prior proceedings, and there is nothing in the record to show that the Respondent was substantially justified in bringing the prior action, or that any special circumstances exist which would make an award of fees and costs unjust. On November 2, 1988, a Petition for Costs and Attorney's Fees was filed with the Division of Administrative Hearings by the Petitioner. The Petition is accompanied by an affidavit and supporting documents which are uncontroverted, and which establish that Petitioner incurred legal fees in the amount of $14,587.50 and costs of $1,437.77, as a result of the prior proceedings in Case Number 88-1668. In the Petition for Costs and Fees, the Petitioner specifically indicated that an evidentiary hearing was not requested. No responsive pleading of any kind has been filed on behalf of the Respondent to this Petition for Costs and Fees.
The Issue Whether the Petitioner is entitled to an award of attorney's fees and costs pursuant to Section 57.111, Florida Statutes.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Effective July 1, 1997, the Department is the state agency charged with regulating the practice of medicine through the Board of Medicine ("Board"). Section 20.43, Florida Statutes; Chapters 456 and 458, Florida Statutes. Pursuant to the provisions of Section 20.43(3), Florida Statutes, the Department has contracted with the Agency for Health Care Administration ("AHCA") to provide consumer complaint, investigative, and prosecutorial services required by the Board of Medicine. Dr. Carida is, and was at all times material to this action, licensed to practice medicine in Florida, having been issued license number ME 0019622. Since January 1, 1996, Dr. Carida has practiced medicine as an employee of D.R.C. & Associates, Inc. ("D.R.C."), and he is paid an hourly wage by the company. D.R.C. is a medical management company owned by Diane Carida, Dr. Carida's daughter, who is the company's president. D.R.C. is not a professional association, and Dr. Carida has no ownership interest in the corporation. In November 1998, Dr. Carida was the only doctor employed by D.R.C.; the company's only other employees were an echo technician, a billing clerk, and a phlebotomist who also acted as Dr. Carida's medical assistant. In November 1998, the company's net worth was approximately $10,000.00. On October 30, 1998, the Board's Probable Cause Panel considered the results of an investigation into a complaint filed against Dr. Carida by the family of patient J.M. In accordance with its contract with the Department, the investigation was conducted by AHCA, and an attorney employed by AHCA presented the case against Dr. Carida to the Probable Cause Panel. The investigative file included the medical records of patient J.M. and the report of Leonard S. Williams, M.D., a physician employed by AHCA to render an expert opinion regarding Dr. Carida's care and treatment of the patient. AHCA's attorney also presented to the Probable Cause Panel a draft administrative complaint outlining the proposed charges against Dr. Carida, and AHCA's attorney recommended to the panel that the penalty of license revocation or suspension be sought as the maximum penalty against Dr. Carida. In his report, Dr. Williams presented a summary of the medical records he had reviewed and his conclusions regarding Dr. Carida's care and treatment of patient J.M. Dr. Williams stated in the report that it was his opinion that Dr. Carida had failed to meet the applicable standard of care in his care and treatment of patient J.M. and that the medical records maintained by Dr. Carida failed to document accurately and completely his care and treatment of the patient. Two members of the Probable Cause Panel, a physician and a lay member of the Board, were present and voting at the October 30, 1998, meeting. The Probable Cause Panel was represented by an attorney employed by the Florida Attorney General. Both members of the Probable Cause Panel present at the October 98, 2000, meeting acknowledged receiving the investigative file on Dr. Carida prior to the meeting, and both determined that probable cause existed to support AHCA's charges against Dr. Carida. On November 2, 1998, as a result of the decision of the Probable Cause Panel, AHCA served on Dr. Carida a two-count Administrative Complaint charging that, with respect to patient J.M., he had practiced medicine below an acceptable standard of care and that he had failed to maintain adequate written medical records relating to his care and treatment of the patient. Dr. Carida disputed the facts asserted in the Administrative Complaint, and AHCA sent the file to the Division of Administrative Hearings for assignment of an administrative law judge. A formal hearing was held, and a Recommended Order was entered, in which it was concluded, first, that AHCA had failed to prove by clear and convincing evidence that Dr. Carida practiced medicine below an acceptable standard of care with respect to the care and treatment of patient J.M. and, second, that AHCA had met its burden of proving that Dr. Carida failed to maintain adequate medical records regarding the care and treatment he provided to patient J.M. The Recommended Order was forwarded to the Board for final agency action, and, in its Final Order, the Board dismissed the charge that Dr. Carida practiced medicine below an acceptable standard of care and concluded that Dr. Carida was guilty of the charge that he had failed to maintain adequate written medical records related to patient J.M. On the basis of this violation, the Board imposed an administrative fine on Dr. Carida in the amount of $250.00 and required that he attend an approved course on proper maintenance of medical records. The evidence presented by Dr. Carida is sufficient to establish that he was the prevailing party in the proceeding styled Department of Health, Board of Medicine v. Robert V. Carida, M.D., DOAH Case No. 99-2997, DOH Case No. 95-03135. The more serious charge brought against Dr. Carida in the Administrative Complaint was that he had practiced medicine below an acceptable standard of care, and AHCA contended before the Probable Cause Panel that the appropriate penalty to be imposed against Dr. Carida for this violation was the revocation or suspension of his license. This charge against Dr. Carida was, however, dismissed by the Board in its Final Order, and Dr. Carida was found guilty only of having failed to keep adequate medical records. The penalty imposed on Dr. Carida in the Board's Final Order for this violation clearly indicates that the Board considered the medical records charge to be a minor one. The evidence presented by Dr. Carida is not, however, sufficient to establish that he is entitled to an award of attorney's fees and costs as a small business party. Rather, at the time the action against Dr. Carida was initiated, he was an employee of a medical management corporation, which was not a party to the disciplinary proceeding.
