Findings Of Fact On October 14, 1985, Petitioner, Nicholas Cozzo, entered into a Stock Purchase Agreement for the sale of sixty (60) shares of the issued and outstanding capital stock of C & S Deli Sandwich and Fish, Inc., a Florida corporation, (the Company) to Robert A. Krueger and Joe Ellen Krueger (collectively, the Kruegers). As a result of the sale, Petitioner retained ownership of no further stock of the Company. (Exhibit A) On October 14, 1985, the Kruegers executed two (2) promissory notes in the amounts of $53,000.00 and $5,000.00, respectively, to Petitioner and a Security Agreement securing payment of the notes. (Composite Exhibit B and Exhibit C) On October 14, 1985, Petitioner tendered his resignation as Director, President and Treasurer of the Company. (Exhibit D) Petitioner's security interest to the furniture, furnishings, fixtures, equipment and inventory of the Company (the "collateral") was duly perfected by the filing of a Uniform Commercial Code Financing Statement with the Uniform Commercial Code Bureau, Florida Department of State, on October 21, 1985. (Exhibit E) A Uniform Commercial Code Financing Statement was recorded by the Petitioner in the Public Records of Pasco County, State of Florida, on October 15, 1985, in Official Records Book 1451, page 0493. (Exhibit F) In early 1987, the Kruegers defaulted under the terms of the promissory notes. Prior to April 24, 1987, Petitioner repossessed the furniture, furnishings, fixtures, equipment and inventory of the Company. No consideration was paid by Petitioner to the Company or the Kruegers upon his repossession of the foregoing described collateral. At no time did ownership of any of the capital stock of the Company revert back to Petitioner. On May 5, 1987, Petitioner by private sale disposed of the collateral to Vincent Lopez and Glen Delavega. (Exhibits G, H, and I) No surplus funds resulted from the sale of the repossessed collateral by Petitioner to Vincent Lopez and Glen Delavega. At no time material hereto did the Florida Department of Revenue issue a tax warrant against the Company respecting any unpaid sales tax. On or about May 6, 1987, Petitioner paid under protest to the Respondent Department of Revenue the delinquent unpaid sales tax of the Company in the amount of $1392.53. The Department is still attempting to verify that amount at this date. The Petitioner maintains he paid the amount in order for the Department to issue a sales tax certificate and number to Vincent Lopez and Glen Delavega. The Department maintains its procedure at the time was to issue a sales tax number to the new owners and then proceed against them under Section 212.10, Florida Statutes. It is the position of the Respondent that the Petitioner's repossession of the collateral constituted a sale within the purview of Section 212.10(1), Florida Statutes (1985), and Rule 12A-1.055, Florida Administrative Code, which places tax liability on the successor of a business whose previous owner has not satisfied outstanding sales tax obligations. Respondent further notes that the case Petitioner relies on, General Motors Acceptance Corporation v. Tom Norton Motor Corp., 366 So.2d 131 (Fla. 4th DCA 1979) was issued on January 10, 1979, while Section 679.105(5), Florida Statutes, which upholds tax laws when in conflict with security agreements, took effect January 1, 1980. Petitioner on the other hand claims that a lawful repossession of collateral under Florida's Uniform Commercial Code, Section 679.504, Florida Statutes (1985), does not constitute a "sale" of a business making him liable for the Company's unpaid sales tax. Petitioner continues to rely on GMAC, supra, and notes that it was cited by American Bank v. Con's Cycle Center, 466 So.2d 255 (Fla. 5th DCA 1985). A refund application was submitted by Petitioner to the Department of Revenue on June 10, 1987. This application was denied by the Department of Revenue by letter dated January 28, 1988. (Exhibit J)
Findings Of Fact Heede is in the business of leasing tower cranes as a distributor for Linden Tower Crane Company. It has been in this business for many years. In the early 1980's, Heede began subcontracting for the transportation, erection, and dismantling of the cranes it leased. Linden tower cranes are the "climbing cranes" found on all modern high- rise construction sites. They are initially installed by being mounted on a concrete pad and attached by bolts. During construction the crane is frequently "climbed" as the building construction goes up. The cranes are used for many functions as part of the construction process, including placing concrete forms and pouring cement. The crane does not become a permanent part of the building, but is dismantled and removed after construction, leaving the concrete pad and bolts at the site. It does not become a part of the building as tangible personal property affixed to or incorporated into the real property. These cranes are like other forms of construction equipment utilized in the erection of high-rise buildings. At issue here are seven Equipment Rental Agreements for separate jobs (Respondent's Exhibit 1) and seven corresponding sets of invoices relating to the freight-in (transportation from Heede's equipment yard), erection, dismantling, and freight-out (Respondent's Exhibit 2). Both parties relied on a summary of those invoices and charges, which is set forth below for ease of reference. NOTE: The chart attachment is in an unscanable format and therefore not shown in paragraph 5. of this Recommended Order. It is available for review from the Division's Clerk's Office. The audit period began after the first construction job, number 3050, had commenced so that only the dismantling and freight-out charges were covered by the audit. Similarly, the audit ended before the final two jobs were completed, job numbers 3090 and 3099. Therefore only the freight-in and erection portion of those invoices were subject to this audit. The parties filed a Joint Stipulation as to Amount in Controversy and therein stipulated that the amount in controversy is: Tax $12,071.77 Penalty $ 3,015.01 Interest through 5/20/91 $ 5,762.65 TOTAL $20,849.43 Daily interest continues to accrue at $3.97 per day. This Joint Stipulation was signed by the Department of Revenue and expressed in writing what the parties had agreed on throughout the proceedings, namely that the freight charges were not subject to tax based on the holding in Florida Hi-Lift v. Department of Revenue, 571 So.2d 1364 (1st DCA 1990). However, as will be discussed further in the Conclusions of Law supra, the Department, for the first time in its Memorandum of Law in Support of Respondent's Proposed Recommended Order, now seeks to be relieved from its stipulations and to include the freight charges in calculation of the tax due. The seven Equipment Rental Agreements are essentially similar in form. Attached to each is a separate typed sheet identified at the top as "Equipment Rental Agreement Continued" and also as "Additional Agreement Continued." With the exception of job number 3090, each of the printed forms provides on its face: Said equipment shall be shipped to Lessee at , on or about the day of , 19 , freight or delivery charges Collect from Port of Entry or from see additional agreement [or see attachment]. On the second page of the Equipment Rental Agreement, entitled Conditions of Lease, paragraph 13 provides: 13. TRANSPORTATION--The Lessor shall at its own expense load the equipment for transit to the Lessee and unload it upon its return. The Lessee shall at its own expense do all other loading, unloading, installing, dismantling and hauling and shall pay all transportation charges from and to Lessor's shipping and receiving points; provided, however, unless otherwise agreed, that the Lessee shall not pay return transportation charges greater than those necessary to return the equipment to the point from which it was originally shipped to the Lessee. The "Additional Agreement Continued" attached to each Equipment Rental Agreement essentially contains the following additional paragraphs: Lessor will freight to and from the project, erect, climb, dismantle, and remove the crane from the project. Tower crane operator to be furnished by lessee during erection, climbing, and dismantling. We hereby propose to furnish labor and material complete in accordance with the above agreement for the sum of [sum inserted]. Ira Schmidt, the Comptroller and Secretary/Treasurer and a shareholder of Heede, explained how the books and records of Heede are maintained and what is intended by the Additional Agreement. His testimony was uncontroverted and is accepted as fact. According to Schmidt, Heede leases the tower crane under a separate rental agreement which requires the lessee to transport, erect and dismantle and return the crane to Heede's yard. Numerous parties can bid for the performance of the transportation, erection, dismantling and freight-out at the time the crane is leased. Heede is one of those bidders. Heede generally gets the subcontract for the transportation, erection, dismantling, and freight- out because it has a trained crew that can perform the work less expensively on the Linden cranes. The cranes are loaded onto the convoy of trucks at Heede's yard by Heede personnel as part of the Rental Agreement. If Heede is the successful bidder for the subcontract, it pays the carrier for transportation to the job site and its crew travels by separate transportation to the site, arranging to meet the truck convoy on arrival. Arrangements are made to lease a truck crane from another subcontractor who provides an operator. With the use of the truck crane, Heede's crew then proceeds to erect and test the tower crane. After instructing the contractor's crane operator, the equipment is turned over to the contractor. After the job is completed, the Heede crew, again with the assistance of the subleased truck crane, dismantles and loads the tower crane equipment on a truck convoy to be returned to Heede's yard in Charlotte, North Carolina. On arrival, Heede personnel unload the truck convoy. The freight-in and freight-out costs in all seven of the transactions are F.O.B. Heede's yard, but all such freight charges on these particular rentals are paid by Heede as part of the Additional Agreement subcontract total charge. These freight charges are reflected by separate bills and invoices as shown in the sets of invoices found in Respondent's Exhibit 2. Heede has rented cranes to contractors who have subcontracted with others for the transportation, erection, dismantling, and freight-out. Heede has also bid on and been awarded the subcontract to transport, erect, dismantle and freight-out cranes that were not leased to the contractor by Heede. Job number 3090 is somewhat different in the handling of the transportation portion of the Rental Agreement and Additional Agreement. The lessee in job 3090 and job 3075 was the same. Job 3075 involved the lease of the tower crane at the Caribbean Condominiums in Daytona Beach, Florida, until October, 1987. Job 3090 involved the lease of the tower crane at the Ashley Condominiums in Daytona Beach, Florida, beginning in November, 1987. Because the lessee and the specific tower crane were the same, it would have been ridiculous to transport the crane to Heede's yard in North Carolina and then transport it back to Daytona Beach. The lessee deleted the transportation provisions in the Rental Agreement for job 3090 and entered into a subcontract with Heede for the transportation and erection of the crane at the new site. The transportation charges were then divided between the two jobs as shown in the separate invoices for these two jobs. The transportation charges for job 3090 are included in the parties stipulation as to the amount in controversy because of the deletion of the transportation provisions in that Rental Agreement and because the crane was not F.O.B. Heede's yard. The $675.00 freight charge for job 3090 is included in the tax assessment which the Department seeks and in the stipulated amount in controversy. The stipulated tax amount in controversy represents the tax allegedly due on the freight charge for job 3090 and for the erection and dismantling charges arising from the subcontracts, which includes the costs actually incurred by Heede (trucking and truck crane and operator) and the charges for labor, hotel, food, gas, truck expenses, insurance, and estimated profit.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a Final Order and therein reverse and deny the assessment, penalties and interest, against Heede Southeast, Inc., for the transportation, erection and dismantling services which were not a taxable part of the rental transaction. RECOMMENDED this 4th day of October, 1991, in Tallahassee, Florida. DIANE K. KIESLING 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 4th day of October, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4627 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Heede Southeast, Inc. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(7); 3(5); 4(6); 7(9&10); 8(12); 9(16); 10(13&14); 11&12(2); 13(15); and 15(2). Proposed findings of fact 2, 5, 6, and 14 are subordinate to the facts actually found in this Recommended Order. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Revenue Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: (1) and 5(9). Pproposed findings of fact 2, 3, 6, 7, 10, 12, and 13 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 8 and 11 are irrelevant. Proposed findings of fact 4 and 9 are unsupported by the credible, competent and substantial evidence. COPIES FURNISHED: J. Thomas Herndon Executive Director Department of Revenue 104 Carlton Building Tallahassee, FL 32399-0100 Vicki Weber General Counsel Department of Revenue 204 Carlton Building Tallahassee, FL 32399-0100 Bengamin K. Phipps Attorney at Law 802 First Florida Bank Tower Tallahassee, FL 32301 Lealand L. McCharen Assistant Attorney General Department of Legal Affairs Tax Section, The Capitol Tallahassee, FL 32399-1050
The Issue The issue in this case is whether the Petitioner is entitled to an award of attorney's fees and costs pursuant to section 57.111, Florida Statutes (2011).1/
Findings Of Fact The parties have stipulated that the Petitioner is a "small business party" as the term is defined at section 57.111(3)(d). On June 21, 2010, the Petitioner applied to acquire an existing alcoholic beverage "quota" license from another licensee. The Petitioner had to pay a fee to transfer the license pursuant to section 561.32(3)(a), Florida Statutes (2010), which provides as follows: Before the issuance of any transfer of license herein provided, the transferee shall pay a transfer fee of 10 percent of the annual license tax to the division, except for those licenses issued pursuant to s. 565.02(1) and subject to the limitation imposed in s. 561.20(1), for which the transfer fee shall be assessed on the average annual value of gross sales of alcoholic beverages for the 3 years immediately preceding transfer and levied at the rate of 4 mills, except that such transfer fee shall not exceed $5,000; in lieu of the 4-mill assessment, the transferor may elect to pay $5,000. Further, the maximum fee shall be applied with respect to any such license which has been inactive for the 3-year period. Records establishing the value of such gross sales shall accompany the application for transfer of the license, and falsification of such records shall be punishable as provided in s. 562.45. All transfer fees collected by the division on the transfer of licenses issued pursuant to s. 565.02(1) and subject to the limitation imposed in s. 561.20(1) shall be returned by the division to the municipality in which such transferred license is operated or, if operated in the unincorporated area of the county, to the county in which such transferred license is operated. (emphasis added). License transfer applicants are required to provide gross sales records pursuant to Florida Administrative Code Rule 61A-5.010(2)(b), which provides as follows: An applicant for a transfer of a quota liquor license shall provide records of gross sales for the past 3 years or for the period of time current licensee has held license in order that the division may compute the transfer fee. An applicant may, in lieu of providing these records, elect to pay the applicable transfer fee as provided by general law. The gross sales records provided to the Respondent by the Petitioner were for the five-month period between January 21 and June 21, 2010, and totaled $573,948.94 for the period. To compute the transfer fee, the Respondent divided the reported gross sales ($573,948.94) by five to estimate an average monthly gross sales figure of $114,789.79.2/ The Respondent multiplied the estimated average monthly gross sales by 12, to estimate annual gross sales of $1,377,477.48. The Respondent then applied the 4-mill rate to the estimated annual gross sales and determined the transfer fee to be $5,509.91. The Respondent also calculated the transfer fee through a formula set forth on a form that had been challenged as an unadopted rule by an applicant in a 2008 proceeding. While the 2008 rule challenge was pending, the Respondent commenced to adopt the form as a rule, but the dispute was ultimately resolved without a hearing, after which the Respondent discontinued the process to adopt the rule. According to the formula on the form, the transfer fee was $5,599.50. Because both of the Respondent's calculations resulted in transfer fees in excess of $5,000, the Respondent required the Petitioner to pay the statutory maximum of $5,000. The Petitioner paid the $5,000 transfer fee under protest. The Petitioner asserted that the appropriate transfer fee should have been $765.27. The Petitioner's calculation used the reported five months of gross sales ($573,948.94) as the total annual gross sales for the licensee. The Petitioner divided the $573,948.94 by three to determine a three-year average of $191,316.31 and then applied the 4-mill rate to the three-year average to compute a transfer fee of $765.27. On March 17, 2011, the Petitioner filed an Application for Refund of $4,234.73, the difference between the $5,000 paid and the $765.27 that the Petitioner calculated as the appropriate fee. The Application for Refund was filed pursuant to section 215.26, Florida Statutes, which governs requests for repayment of funds paid through error into the State Treasury, including overpayment of license fees. Section 215.26(2) requires that in denying an application for a tax refund, an agency's notice of denial must state the reasons for the denial. As authorized by section 72.11(2)(b)3, Florida Statutes, the Respondent has adopted rules that govern the process used to notify an applicant that a request for refund has been denied. Florida Administrative Code Rule 61-16.002(3) states as follows: Any tax refund denial issued by the Department of Business and Professional Regulation becomes final for purposes of Section 72.011, Florida Statutes, when final agency action is taken by the Department concerning the refund request and taxpayer is notified of this decision and advised of alternatives available to the taxpayer for contesting the action taken by the agency. By letter dated May 9, 2011, the Respondent notified the Petitioner that the request for refund had been denied and stated only that "[w]e reviewed the documentation presented and determined that a refund is not due." The Respondent's notice did not advise that the Petitioner could contest the decision. On May 16, 2011, the Petitioner submitted a Request for Hearing to the Respondent, asserting that the Respondent improperly calculated the transfer fee by projecting sales figures for months when there were no reported sales. On August 4, 2011, the Respondent issued a letter identified as an "Amended Notice of Denial" again advising that the Petitioner's refund request had been denied. The letter also stated as follows: The Division cannot process your refund application due to the fact that the transferee has not provided the Division records which show the average annual value of gross sales of alcoholic beverages for the three years immediately preceding the transfer. On September 14, 2011, the Respondent forwarded the Petitioner's Request for Hearing to the Division of Administrative Hearings (DOAH Case No. 11-4637). By letter dated October 10, 2011, the Respondent issued a "Second Amended Notice of Denial" which stated as follows: We regret to inform you that pursuant to Section 561.23(3)(a), Florida Statutes, your request for refund . . . in the amount of $4,234.73 is denied. However, the Division has computed the transfer fee and based upon the records submitted by you pursuant to Rule 61A-5.010(2)(b), F.A.C., the Division will issue the Applicant a refund in the amount of $2,704.20. The records referenced in the letter were submitted with the original application for transfer that was filed by the Petitioner on March 17, 2011. The Respondent's recalculated transfer fee was the result of applying the 4-mill levy directly to the reported five months of gross sales reported in the transfer application, resulting in a revised transfer fee of $2,295.80 and a refund of $2,704.20. On October 11, 2011, the Respondent filed a Motion for Leave to Amend the Amended Notice of Denial, which was granted, over the Petitioner's opposition, on October 21, 2011. DOAH Case No. 11-4637 was resolved by execution of a Consent Order wherein the parties agreed to the refund of $2,704.20 "solely to preclude additional legal fees and costs," but the Consent Order also stated that the "Petitioner expressly does not waive any claim for attorneys' fees in this matter pursuant to F.S. 57.111." The Petitioner is seeking an award of attorney's fees of $8,278.75 and costs of $75, for a total award of $8,353.75. The parties have stipulated that the amount of the attorney's fees and costs sought by the Petitioner are reasonable. The Respondent failed to establish that the original calculation of the applicable transfer fee was substantially justified. The evidence fails to establish that there are special circumstances that would make an award unjust.
Findings Of Fact At present Tony's Fish Market of Ft. Lauderdale, Inc. t/a Tony's Fish Market Restaurant is the holder of license no. 16-1320-SRX, series 4-COP held with the State of Florida, Division of Beverage. Prior to September 1, 1974, Armand Cerami owned 50 shares of stock in Tony's Fish Market, Inc., which represented a 50 percent interest in that corporation. In addition, Armand Cerami held 50 shares of stock in Tony's Fish Market of Ft. Lauderdale, Inc., representing a 50 percent interest in that corporation and was the holder of 50 shares of Tony's Sweet Enterprises, Inc., which represented a 50 percent interest in that corporation. During the time period of September 1, 1974, Armand Cerami had been charged with violation of the Internal Revenue Laws of the United States, under a federal indictment no. 74-407-CR-JE, in the United States District Court for the Southern District of Florida. This charge was placed against Cerami for Internal Revenue Law Violations which allegedly took place on tax returns on the tax year ,1968. In contemplation of a plea of guilty which Cerami intended to enter in the above cited case, he entered into a contract for purchase and sale of the corporate securities in the aforementioned corporations. Petitioner's Exhibit 2, admitted into evidence is a copy of the contract for purchase and sale of corporate securities, which was entered into between Armand Cerami and Pamela Ann Cerami, his wife, on September 1, 1974. The terms of the contract were that Pamela Ann Cerami would pay Armand Cerami $20,000 cash and would give to Armand Cerami a promissory note payable in the amount of $200,000, in ten equal installments of principal and interest at 6-1/2 percent payable on the anniversary date of the contract. On September 20, 1974, the Board of Directors of the three subject corporations accepted the resignation of Armand Cerami as the Secretary-Treasurer of those corporations, and elected Pamela Cerami as Secretary-Treasurer in Armand Cerami's stead. Those Board of Directors were Tony Sweet, Frank Sweet and Armand Cerami. Armand Cerami returned to federal court on October 18, 1974, and entered a plea of guilty to counts one and five of the aforementioned, indictment, for which he was sentenced to three year on each count to run concurrently, but was given a split sentence of 6 months time in confinement, thereafter to be placed on a probationary period for 2-1/2 years. A copy of the judgement and commitment is Petitioner's Exhibit number 1, admitted into evidence. They are felony offenses. Subsequent to his release from prison, Armand Cerami served as a co- manager and host of the licensed premises, Tony's Fish Market, located at 1900 N. Bay Causeway, North Bay Village, Florida, license no. 23-1624-SRX, series 4- COP and in the same capacity at Tony's Fish Market of Ft. Lauderdale, located at 1819 S.E. 17th Street, Ft. Lauderdale, Florida, license no. 16-1320-SRX, series 4-COP. He remained in this capacity until September 30, 1976, when a change in 562.13(3)(a), F.S. prohibited convicted felons from being managers of the licensed premises, licensed by the State of Florida, Division of Beverage. The change in the law took effect on October 1, 1976. At that point two separate individuals were hired as managers of the subject licensed premises. Armand Cerami remained in the position as host of those licensed premises, up to and including the date of the hearing. Although this title and this position was held by Armand Cerami, on December 16, 1976, while conducting a routine visit, beverage officer, William Valentine was told by Frank Sweet, a Director in the subject corporations, that Frank Sweet was in charge of the kitchen of the Tony's Fish Market of Ft. Lauderdale and that Armand Cerami was the real manager, ran the restaurant and was responsible for hiring and firing of employees. Pamela Ann Cerami was not shown to have any active interest in the management of the licensed premises. Pamela Ann Cerami as the Secretary-Treasurer in the three corporations which she purchased shares in, does not draw a salary from the operation of the two restaurants. Her background and financial involvement in the licensed premises, can be traced to certain trusts in her name and a certain gift from her husband, Armand Cerami. The joint composite exhibit number 1, admitted into evidence in the hearing, shows that Pamela Ann Cerami, at one time Pamela Crumly, was a beneficiary of the estates of Gail Crumly and Mildred Crumly, her grandparents. Certain distributions of money were made to Pamela Ann Cerami from those estates. On April 3, 1970, she received $6,093.94; on July 3, 1970, she received $121.88; on October 5, 1970, she received $182.82; and on December 31, 1970, she received $925.65,, which represented a partial distribution of her 1/2 interest in the Gail Crumly estate. As of April 1, 1970, she had been given $5,292.59 as a portion of the 1/3 distribution of her share in the estate of Mildred Crumly. The total value of her share in that estate being $16,157.02, and the conditions of her rights to the estate being set forth in the will of Mildred Crumly which is found in the joint composite exhibit number 1. Pamela Ann Cerami had worked as an airline stewardess prior to her marriage to Armand Cerami and had certain funds from her employment in that capacity. Other funds of the marriage include a certificate of deposit in the Bank of Nova Scotia in Nassau, Bahamas in the amount of $18,000., at 8-1/4 percent interest, as deposited May 20, 1970 with a maturity of November 20, 1970. This certificate of deposit was in the name of Armand D. Cerami and/or Pamela Crumly now Pamela Ann Cerami. The interest received on that certificate of deposit was redeposited along with the principal and a second certificate of deposit was purchased on May 23, 1974 in the amount of $23,480.74, to become mature on November 25, 1974. This certificate was withdrawn on October 18, 1974 and the receipt of 10-1/4 percent interest was paid. The amount of interest thereby being $975.89. Copies of the above mentioned certificates of deposit may be found as part of the joint composite exhibit number 1 admitted into evidence. Continuing an examination of the financial circumstances of Pamela Cerami and Armand Cerami, there is found a warranty deed from Willard H. Keland to Pamela Ann Cerami for certain real estate in Dade County, Florida, for which Pamela Ann Cerami paid Willard H. Keland the amount of $158,000. This deed is found as Petitioner's exhibit number 4 admitted into evidence and was recorded on January 11, 1974. On that same date a closing was held on the property. Petitioner's Exhibit number 5, admitted into evidence is a copy of the closing statement. Conditions of the closing was a cash deposit in the amount of $15,800 and $69,251.64 to close. A first mortgage in the amount of $67,500 and interest of $1,028.75 was given to the Miami Beach First National Bank. The $158,000 paid for this estate corresponds to a gift which was given by Armand Cerami to Pamela Ann Cerami in the amount of $158,000 as shown in the gift tax return, a copy of which is Petitioner's exhibit number 6, admitted into evidence. The effective date of the gift is established in the gift tax return as February, 1974. The federal income tax return filed by Armand Cerami for the year 1974, shows the sale of the stock of the three corporations. That income tax return would further show the $20,000 installment sale payment, a portion of which was treated as income to Armand Cerami. Finally, that return shows $13,000 of interest which was treated as income to Armand Cerami. On October 1, 1975, Pamela Anne Cerami gave a first mortgage on the property that she had paid $158,000 for this mortgage being given to Bob Erra, as trustee. A copy of the mortgage deed is found as Petitioner's Exhibit number 9, admitted into evidence. The amount of the mortgage was $40,000 and the proceeds of the mortgage amount were distributed as $7,000 to Pamela Cerami and $33,000 to Armand Cerami. These distributions were placed as time certificates of deposit with the Pan American Bank of West Dade, copies of which are found as Petitioner's composite exhibit number 8. The amount of interest returnable on the time certificate of deposit held by Armand Cerami is shown in his 1975 federal income tax return. Tony's Fish Market of Ft. Lauderdale, Inc. t/a Tony's Fish Market Restaurant made application with the State of Florida, Division of Beverage, to change Armand Cerami as Secretary-Treasurer of Tony's Fish Market of Ft. Lauderdale, Inc. and substitute Pamela Cerami as Secretary-Treasurer of that corporation and to transfer the stock ownership in the licensee corporation from Armand Cerami to Pamela Cerami. This change of officer and transfer of stock ownership involves the license no. 16-1320-SRX, series 4-COP. This application was denied by letter of April 9, 1975, from the Director of the Division of Beverage. In fact, Armand Cerami had been convicted of a felony, and is interested in an indirect way in the licensed premises.
Recommendation It is recommended that the applications to change the officer and transfer the stock ownership in license no. 16-1320-SRX, series 4-COP, set forth in this hearing be denied DONE AND ENTERED this 24th day of February, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: William Hatch, Esquire Division of Beverage The Johns Building Tallahassee, Florida 32304 Tobias Simon, Esquire 1492 S. Miami Avenue Suite 208 Miami, Florida 33130 Sy Chadroff, Esquire Suite 2806 120 Biscayne Boulevard North Miami, Florida 33132
Findings Of Fact The Department is an agency of the executive branch of the State of Florida. Mr. Crowell, prior to February, 1990, was employed as a career service employee of the Department for approximately 19 years. Mr. Crowell has worked for the State of Florida for approximately 24 years. Immediately prior to and during part of February, 1990, Mr. Crowell was employed as a Community Assistance Consultant with the Department's Community Development Block Grant Program (hereinafter referred to as the "Grant Program"). Wanda A. Jones, Planning Manager of the Grant Program, was Mr. Crowell's immediate supervisor at all times relevant to this proceeding. The Department has incorporated the provisions of Rule 22A-8.011, Florida Administrative Code, governing the use of leave, in the Department's Policies and Procedures No. 1109.01. Pursuant to Policies and Procedures No. 1109.01, Department employees are required to notify their supervisor of any illness and obtain approval of the use of annual leave. Mr. Crowell was counseled by Ms. Jones in January or February, 1989, concerning his failure to obtain authorization for use of sick leave each day that Mr. Crowell was sick. Ms. Jones also explained this requirement at two or three staff meetings. Mr. Crowell was aware of the Department's requirements concerning the use of leave. Mr. Crowell was required to travel as a part of his employment. Mr. Crowell traveled an average of two times per month. Mr. Crowell submitted an Authorization to Incur Travel Expense dated December 7, 1989 (hereinafter referred to as the "December 7, 1989, Request"), to the Department requesting authorization to travel on State business on December 13, 14 and 15, 1989. The December 7, 1989, Request was approved by the Department. Mr. Crowell indicated in the December 7, 1989, Request that "[p]ersonal car will be used for entire trip." Mr. Crowell did not own a motor vehicle during the period of time at issue in this proceeding. Mr. Crowell intended to rent an automobile, pay the rental charges himself and claim reimbursement only for mileage incurred in travel on State business. Mr. Crowell had been issued a Budget Rent-A-Car (hereinafter referred to as "Budget"), credit card by the Department on October 6, 1989. Mr. Crowell signed a Department form at the time the Budget credit card was issued acknowledging the following: that on the date above I received the above-described credit card; that I, by my signature hereon have acknowledged that I understand all policies and procedures governing the use of said card; and that I have been advised that abuse of the use of this card may result in dismissal from employment with this Department and possible prosecution under the laws of Florida. On December 13, 1989, Mr. Crowell rented an automobile from Budget. Mr. Crowell was given a Lincoln Town Car (hereinafter referred to as the "Lincoln") because of the unavailability of a smaller automobile. Mr. Crowell signed a rental agreement (hereinafter referred to as the "Rental Agreement") for the Lincoln indicating that the rental fees were to be charged to the Department through the Budget credit card issued by the Department to Mr. Crowell. Pursuant to the Rental Agreement, Mr. Crowell was to rent the Lincoln for approximately three weeks, turning it in on January 3, 1990. The Rental Agreement listed the costs of renting the Lincoln for an hour, a day, a week or a month. Mr. Crowell submitted a Voucher for Reimbursement of Traveling Expenses dated December 19, 1989, to the Department for authorized travel on December 12-15, 1989. Mr. Crowell indicated that a "[p]ersonal car was used for entire trip" and he claimed reimbursement of $107.00 for mileage driven. During early January, 1990, Mr. Crowell went to a Budget office with the intent of returning the Lincoln he had rented on December 13, 1989. Mr. Crowell was told that he owed close to $600.00. Mr. Crowell had thought that he would owe approximately $375.00 and, therefore, had not brought enough money to pay the total rental charge. Mr. Crowell left without paying the rental charge or returning the Lincoln. On December 28, 1990, Mr. Crowell submitted three separate Authorization to Incur Travel Expense forms to the Department seeking approval of travel for State business in January and February, 1990. On the three forms "pov" was noted. Mr. Crowell used "pov" as an abbreviation for "privately owned vehicle." Mr. Crowell submitted a Voucher for Reimbursement of Traveling Expenses to the Department for two authorized trips for January, 1990. Mr. Crowell indicated that a "pov was used" on one of the vouchers and he claimed reimbursement for mileage driven on both forms. Mr. Crowell used the Lincoln he had rented on December 13, 1989, for the January, 1990, trips he was reimbursed for. Sometime during January, 1990, the Tallahassee branch manager of Budget, Russell Kennedy, became concerned that Mr. Crowell was late returning the Lincoln. Therefore, Mr. Kennedy contacted Mr. Crowell and inquired about when he intended to return the Lincoln. Mr. Crowell indicated that he would return the Lincoln on February 1, 1990. On January 30, 1990, the Department's personnel director, Mark Helms, was informed by the Director of the Housing and Community Development Division, the Division in which Mr. Crowell was employed, that he had been notified that Mr. Crowell had rented the Lincoln with his Department-issued credit card and that the Lincoln had not been returned or paid for. Mr. Helms contacted Mr. Kennedy. Mr. Kennedy informed Mr. Helms that Budget considered the Department to be liable for the rental of the Lincoln. Mr. Kennedy indicated that Mr. Crowell had agreed to return the Lincoln on February 1, 1990. Mr. Crowell did not return the Lincoln on February 1, 1990. Mr. Helms spoke with Mr. Kennedy on Monday, February 5, 1990, and was informed that Mr. Crowell had not returned the Lincoln. Mr. Helms informed the Division Director. On February 5, 1990, Ms. Jones was told by the Division Director to meet with Mr. Crowell and instruct him to resolve the problem he had created by renting the Lincoln with the Department-issued Budget credit card. Ms. Jones met with Mr. Crowell at approximately 3:00 p.m., Monday, February 5, 1990. Ms. Jones informed Mr. Crowell that the Department was concerned that he had rented the Lincoln using the Budget credit card issued to him by the Department because of the Department's potential liability for the rental. Ms. Jones informed Mr. Crowell that he had to resolve the problem he had created with Budget immediately. She suggested that, although she could not tell him how to use his leave time, he should consider taking time to take care of the matter. Mr. Crowell left the meeting and returned shortly thereafter with his time sheet. Mr. Crowell requested that Ms. Jones approve annual leave from 3:30 p.m. to 5:00 p.m., February 5, 1990, and all day Tuesday, February 6, 1990. Ms. Jones approved Mr. Crowell's request. Mr. Crowell left work at approximately 3:30 p.m., February 5, 1990. Mr. Crowell did not return to work on February 6, 1990. On Wednesday, February 7, 1990, and Thursday, February 8, 1990, Mr. Crowell spoke by telephone to an employee of the Department that worked in another section and got the employee to leave a "Post-It" note on his door both days indicating "O.C./SL". Mr. Crowell did not report to work on February 7 or 8, 1990. Ms. Jones treated Mr. Crowell as having used sick leave for these two days. On February 8, 1990, Ms. Jones sent a letter to Mr. Crowell informing him that his failure to resolve the matter with Budget was a serious disciplinary matter. Ms. Jones did not attempt to telephone Mr. Crowell because he did not have a telephone. Ms. Jones did, however, telephone Cheryl Jamison, whom Ms. Jones believed to be Mr. Crowell's daughter-in-law. Ms. Jones left a message on an answering machine to have Mr. Crowell call her immediately. On Friday, February 9, 1990, and Monday, February 12, 1990, through Thursday, February 15, 1990, Mr. Crowell did not come to work, call in sick or otherwise inform the Department of the reason for his absence or obtain approval for his absence. Mr. Crowell has not returned to work at the Department since February 5, 1990. At the formal hearing Mr. Crowell testified that he did not inform Ms. Jones that he would not be at work on February 9, 1990, or thereafter because she had instructed him to not come back until he resolved the problem with Budget over the rental of the Lincoln. This testimony is inconsistent with Ms. Jones' testimony and Mr. Crowell's actions on February 5, 1990, and February 7 and 8, 1990. If Mr. Crowell had in fact been instructed not to return until he resolved the Budget problem and that he did not have to worry about following established procedures for absences, Mr. Crowell would not have gotten approval for annual leave for February 5 and 6, 1990, or informed the Department that he would not be at work on February 7 and 8, 1990, because he was sick. On February 12, 1990, Ms. Jones telephoned and spoke with Nathan Crowell, Mr. Crowell's son. Ms. Jones indicated that she needed to speak with Mr. Crowell. She was told that Mr. Crowell had been told that she was trying to contact him. Mr. Crowell received the letter sent by Ms. Jones on February 8, 1990. Mr. Crowell was also aware that Ms. Jones had called his son's telephone number attempting to get in touch with him. Mr. Crowell made no effort, however, to respond to Ms. Jones. The Division Director was informed by Ms. Jones on February 15, 1990, that Mr. Crowell had been absent for five days without authorization. The same day Mr. Helms received a memorandum from the Division Director recommending that Mr. Crowell be treated as having abandoned his employment with the Department. Mr. Helms prepared a letter for the Secretary's signature informing Mr. Crowell that the Department was treating Mr. Crowell that he had abandoned his position. At the time that the Department decided to treat Mr. Crowell as having abandoned his position, the Department was aware of efforts by Budget to contact Mr. Crowell and obtain a return of the Lincoln. Budget had sent a certified letter to Mr. Crowell on February 7, 1990, informing Mr. Crowell that criminal charges would be brought against him if he did not return the Lincoln. The return receipt was returned on February 13, 1990, signed by Mr. Crowell. Mr. Crowell still did not return the Lincoln. Mr. Kennedy had also driven by Mr. Crowell's residence several times during early February, 1990, looking for the Lincoln. The Lincoln was not found. The letter from the Secretary was sent to Mr. Crowell by certified mail, return receipt requested, on February 15, 1990. Mr. Crowell received the letter on February 22, 1990. Mr. Crowell returned the Lincoln to Budget on Sunday, February 18, 1990. Mr. Crowell did not pay for the rental of the Lincoln at that time. On February 27, 1990, Mr. Crowell telephoned Mr. Helms. This was his first contact with the Department since February 5, 1990. Mr. Crowell did not indicate that he had not abandoned his position or offer any explanation. Mr. Crowell merely asked Mr. Helms about continued insurance coverage and the payment for his accrued sick and annual leave. Mr. Crowell sent a letter to the Department of Administration dated March 6, 1990, contesting the Department's determination that he had abandoned his employment. On March 7, 1990, Mr. Crowell met with Mr. Helms and Barbara Jo Finer, a Department Senior Attorney. Mr. Crowell discussed payment of the Budget rental charges he had incurred with the payment he was to receive for his unused annual leave as a result of his termination of employment. Budget was paid the rental charges incurred by Mr. Crowell for use of the Lincoln on April 16, 1990. Budget was paid $1,734.03 of Mr. Crowell's payment from the State of Florida for his unused leave. In addition to the inconsistencies in Mr. Crowell's testimony described in Finding of Fact 29, Mr. Crowell evidenced a lack of credibility while testifying on two other matters. First, Mr. Crowell testified at the formal hearing that he did not receive a telephone call from a representative of Budget. This testimony is contrary to Mr. Crowell's testimony during his deposition taken on June 18, 1990. Secondly, Mr. Crowell testified that he was not notified that his deposition was available to read until 5:00 p.m., Thursday, July 5, 1990. This testimony was contradicted by the office manager of Accurate Stenotype Reporters, the firm which had the deposition prepared.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration enter a Final Order concluding that Oscar Crowell abandoned his position of employment with the Department and dismissing the petition in this case with prejudice. DONE and ENTERED this 28th day of September, 1990, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 1990. APPENDIX The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Mr. Crowell's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection Page I: 1st Paragraph 32. 2nd Paragraph Hereby accepted. 3rd Paragraph Not supported by the weight of the evidence. Page II: Not supported by the weight of the evidence. The first sentence is accepted. The rest of the paragraph is not supported by the weight of the evidence. The first sentence is accepted. The rest of the paragraph is not supported by the weight of the evidence. Page III: 1st paragraph Hereby accepted. Although the Department did take the position that it was not liable for the total rental charge incurred by Mr. Crowell for use of the Lincoln, Budget was taking the position that the Department was liable. Therefore, there remained a potential liability which the Department was concerned with. 2nd paragraph Not supported by the weight of the evidence. 3rd paragraph Not supported by the weight of the evidence. 4th paragraph Not supported by the weight of the evidence. 5th paragraph (including part of this paragraph which appears on page IV) Not supported by the weight of the evidence. Page IV: 1st full paragraph Not relevant to this proceeding and not supported by the weight of the evidence. 2nd paragraph The first sentence is not supported by the weight of the evidence. Even if Ms. Jones had told Mr. Crowell to resolve the problem before returning to work, it was unreasonable for Mr. Crowell to not return to work for almost two weeks without obtaining authorization for such an extended absence. The rest of the proposed findings of fact are not supported by the weight of the evidence. 3rd paragraph Not supported by the weight of the evidence. Not relevant or supported by the weight of the evidence. (including part of this paragraph which appears on page V) Not supported by the weight of the evidence. Page V: st paragraph Hereby accepted. nd paragraph The weight of the evidence failed to prove that Mr. Crowell was directed to leave and not return. The rest of this paragraph has been accepted in Finding of Fact 26. rd paragraph Not supported by the weight of the evidence. th paragraph Not supported by the weight of the evidence and argument. Page VI: 1st paragraph Not supported by the weight of the evidence. 2nd paragraph Not supported by the weight of the evidence. 3rd paragraph The first sentence is hereby accepted. The rest of the proposed findings of fact are not supported by the weight of the evidence. 4th paragraph 2. Except for the first sentence, these proposed findings of fact are not supported by the weight of the evidence. 5th paragraph This paragraph is Mr. Crowell's recommendation and not a finding of fact. The Department's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 2, 27 and 32. 2 1-2. 3 4. 4 3. 5 7. 6 Hereby accepted. 7 5. 8 6. 9 Hereby accepted. 10 12, 23-24. 11 24. 26. The last four sentences are not relevant to this proceeding. The Department treated Mr. Crowell as having taken sick leave on February 7 and 8, 1990. The Department did not treat Mr. Crowell as being absent without authorization on those days. Hereby accepted. 14-15 27. 16 30. 17-18 28. 19 31. 20 Hereby accepted. 21 36. 22 32 and 34. The first two sentences are hereby accepted. The rest of this proposed finding of fact is not relevant to this proceeding. Mr. Crowell requested a formal hearing to contest the Department's decision by letter dated March 6, 1990. His failure to discuss the matter after that date, therefore, does not support a conclusion that Mr. Crowell was abandoning his employment. 38. The last sentence is not relevant to this proceeding for the same reasons the last part of proposed finding of fact 23 is not relevant. See 29. The last sentence is not supported by the weight of the evidence. Not supported by the weight of the evidence. It is not clear what Mr. Crowell meant. See 5. Hereby accepted. Subparagraph (b) does not support a conclusion that Mr. Crowell abandoned his position. 29 12. 30 20. 31 23. 32 33. 33-34 33. 35 12, 14, 17-18 and 35. 36 Hereby accepted. 37-44 and 47 Mr. Crowell did make the statements referred to in these proposed findings of fact and they are not consistent. As the trier of fact, I do not find that Mr. Crowell's credibility was called into question by these inconsistencies. 45-46 40. COPIES FURNISHED: Oscar Crowell 1038 Preston Street Tallahassee, Florida 32304 G. Steven Pfeiffer General Counsel Barbara Jo Finer Senior Attorney Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100 Aletta Shutes, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr. General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Thomas G. Pelham, Secretary Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399
Findings Of Fact On January 31, 1984, the subject vessel, a 1969 sixty-five foot Hargrave Halmatic motor yacht, was purchased by Nelson Gross as President and principal of the corporation, Binghamton Too, Inc., for $457,500 in Houston Texas. It was financed through a Connecticut bank. The closing was held in Mr. Gross' New Jersey office. No sales or use tax has been paid on the yacht in Florida or in any other state. Mr. Gross' initial intent was to operate his new purchase as a commercial charter boat in conjunction with the "Binghamton," a ferryboat permanently moored and operating in Edgewater, New Jersey, as a floating restaurant. To get the new motor yacht there, Mr. Gross directed that it be brought to New Jersey around the Florida coast under its own power. The motor yacht reached Florida on February 17, 1984, but en route from Texas an unexpected vibration had arisen which required emergency repairs. These repairs were commissioned at Bradford Marine, Ft. Lauderdale, Florida, where the motor yacht remained, except for sea trials in connection with the vibration problem, until the first week in April, 1984. A cracked strut was diagnosed as the cause of the vibration problem. Repair costs of this emergency problem totalled $5,975. The balance of charges incurred at Bradford Marine, Ft. Lauderdale, was $21,729, including dockage. Many more of the repairs catalogued by Respondent's Exhibit 5, the Bradford Marine records for this period, were clearly voluntary, discretionary, and cosmetic in nature. The majority were of a non-emergency nature. The vessel, by then relettered "Binghamton Too," left Florida waters approximately April 20, 1984. "Binghamton Too" next spent approximately three weeks at Thunderbolt Marine Industries in Georgia at an approximate cost of $12,000. There, a strap was fabricated to hold the strut and the yacht proceeded on to New Jersey. The "Binghamton Too" began its charter business as part of the "Binghamton" operation in Edgewater, New Jersey on May 5, 1984. Seventy-five to eighty charters were accomplished between May, 1984 and October, 1984 under New Jersey state and local chartering, transit liquor, and environmental licenses and under U.S. Corps of Engineers permits. "Binghamton Too" returned to Florida waters sometime on or before October 25, 1984, when it was sighted at the Indian River Causeway Bridge. On October 26, 1984, it was sighted at Flagler Bridge in West Palm Beach. Thereafter, it went on to the Lantana Boat Works Marina, Lantana, Florida, for repairs. Lantana is the location of the yacht's original builder, whose equipment and expertise were preferable to that of other boatyards for certain strut repairs due to the peculiar nature of this type of yacht. After those repairs, the yacht was anchored in Palm Beach from January 1985 to April 1985. Although Mr. Gross testified that the strut repairs of necessity had to be done in the Lantana boatyard, his view is not necessarily conclusive of this issue because he admitted "Binghamton Too" was the first yacht he had ever purchased, because he was vague about equating desirability and necessity without any supporting direct expert testimony, and because of the facts found infra. The Lantana repair records from October 29 to December 31, 1984 show $42,521.82 in repairs, of which only $2,500 pertain to fabrication of a strut. Again, the majority of repairs was to refurbish and paint the vessel. Mr. Gross spent approximately October 1984 to April 1985, October 1985 to April 1986, and October 1986 to April 1987 in his father's home in West Palm Beach, Florida. By his own testimony, he confirmed that he established the "technical" office for his "Binghamton Too" business there. He applied, in early December 1984, for a Florida sales tax registration to operate a charter business, representing Palm Beach as his place of business. The account was established January 1, 1985 with the account number of 60-22-080051-61. The captain and mate of the "Binghamton Too" also wintered in Florida each of these years. On December 6, 1984, Mr. Gross wrote the State of New Jersey's Division of Taxation that the yacht's "principal location and headquarters are in West Palm Beach, Florida where it maintains an office and full-time employees," thus successfully arguing that the "Binghamton Too" should be exempt from New Jersey's registration requirements for any vessel residing in that state in excess of 180 days. This correspondence was in connection with a tax problem of the mother ship "Binghamton," still moored in New Jersey. Mr. Gross further represented that Florida was "Binghamton Too's" primary location with trips to the Bahamas." For most of the period from late December, 1984 to early April, 1985, the yacht was in Palm Harbor Marina, West Palm Beach, Florida, the first time not in repairs, and clearly could have returned to New Jersey under its own power had Mr. Gross chosen to do so. From January 24 to March 26, 1985, the boat was in operation, as sighted at the Pompano Beach and Fort Lauderdale bridges. From April 1985 until October of 1985, the yacht was operated as part of Petitioner's commercial charter operation in New Jersey, which included over 100 charters during this time period. Nonetheless, on June 10, 1985, Mr. Gross purchased a boat slip at Ocean Reef Club in Key Largo, Florida. This slip was later sold. Upon the foregoing Findings of Fact 6-12, which clearly establish a pattern of wintering the yacht in Florida waters, it is inferred that, despite Mr. Gross' testimony that it was "necessary" to have "Binghamton Too's" strut repaired in late 1984 by the original Florida manufacturer of the yacht, its presence in Florida from October 1984 until April, 1985 was primarily and substantially due to the preference of Mr. Gross, Petitioner's President, and not due to necessity or emergency. In October of 1985, the yacht returned to Florida where it remained until April of 1986. During this time, the boat underwent further repairs, including the complete repainting of the hull, the need for which Mr. Gross attributed to the old paint being cracked and shaken off by the vibration of the yacht. From April 1986 until October of 1986, the yacht was operated as part of Petitioner's commercial charter operation in New Jersey, which included over 100 charters during this time period. The yacht returned to Florida in October, 1986, and again remained in Florida until early April, 1987, when it left for New Jersey. In late October 1987, the yacht returned to Florida where it was traded in as part of the consideration for a larger yacht in November of 1987. The closing date was December 30, 1987. The cash equivalent received by Petitioner as credit on the trade-in was $100,000. In all, Petitioner asserts that over $200,000 was spent by the corporation on the "Binghamton Too" before it was traded. Shortly after buying the "Binghamton Too", Petitioner had begun trying to sell it for the highest price obtainable. These sales efforts included large ads in national yachting publications and listings with active yacht brokers. The highest outright offer received by Petitioner was $75,000. However, this was Mr. Gross' first sales effort of this kind, and his opinion testimony that the "Binghamton Too" was not bought from the Petitioner outright and at a good price because of latent defects and cost of repair is neither credible nor persuasive since his opinion does not possess the reliability of an expert in assessing whether it was the condition of the yacht, its unusual "Halmatic" type, or some other factor which made the "Binghamton Too" undesirable to potential purchasers. The Florida Department of Revenue issued a Notice of Delinquent Tax January 30, 1987, of five-percent use tax upon the purchase price plus 25 percent penalty. Interest was figured at 12 percent per annum. Petitioner timely protested. The agency conceded that the purchase price on the original notice was mistakenly listed at $475,000, that the assessment appropriately should have been on $457,500 (see Finding of Fact No. 1) and that the State presently claims only the tax amount of 5% of Petitioner's initial $457,500 purchase price at $22,875, the 25 percent penalty at $5,719, and interest on the tax from February 18, 1984, to June 18, 1989 at $14,650. (Interest accrues at $7.52 daily.) The total assessment through June 18, 1989 is $43,234.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Revenue enter a Final Order affirming the assessment of $22,875, with 25% penalty and interest at $7.52 per day from February 18, 1984 until paid. DONE and RECOMMENDED this 11th day of August, 1989, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 11th day of August, 1989. APPENDIX TO RECOMMENDED ORDER Upon consideration of Section 120.59(2) Florida Statutes the following rulings are made upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: 1, 2,3, 5, 10, 11, 13, 14, 15, 17, 18, 19, 21, 22: Accepted except to the degree not proven. 4: Rejected as stated because not supported by the greater weight of the evidence as a whole. 6, 12: Rejected in part as not proven, in part as subordinate and unnecessary, and in part as to the conclusion-if law as "latent." 7, 8, 9: Accepted except as subordinate and unnecessary to the facts as found. 16: Accepted that Mr. Gross testified to this amount, however, the evidence does not support the amount precisely nor that it all went to "repairs." 20: Accepted as modified to better express the record as a whole. Respondent's PFOF: 1: Accepted, but as a Conclusion of Law. 2, 3, 4, 9, 10, 12, 13, 14, 15, 16, 17, 19, 20, 21, 22, 23: Accepted. 5: Accepted in substance; what is not adopted is either mere recitation/characterization of testimony, is cumulative, or is subordinate to the facts as found. 6: Accepted but subordinate and unnecessary to the facts as found. 7: Sentence 1 is accepted. The remainder is rejected as mere legal argument or subordinate to the facts as found. 8, 11: Accepted as modified to conform to the record as a whole. Mr. Gross testified to a May 5, 1984 date for No. 8. 18: Except for mere legal argument, accepted. 24: Accepted upon the terms set forth in the Recommended Order. 25: Except as subordinate and unnecessary, accepted. COPIES FURNISHED: Gene D. Brown, Esquire 3836 Killearn Court Tallahassee, Florida 32308 Linda G. Miklowitz, Esquire Department of Legal Affairs Tax Section, The Capitol Tallahassee, Florida 32399-1050 William D. Moore, General Counsel Department of Revenue 203 Carlton Building Tallahassee, Florida 32399-0100 Katie D. Tucker Executive Director Department of Revenue 102 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issue for determination is whether Respondent should refund sales taxes collected from February, 1988, through June 1, 1995, on monthly rental payments for a boat slip.
Findings Of Fact Respondent is the governmental agency responsible for approving or rejecting claims for refunds of sales tax in accordance with Section 215.26, Florida Statutes.1 Petitioner is a resident of the state and is subject to the sales tax imposed in Chapter 212. Petitioner owns a houseboat moored at Orange Cove Marina, Cocoa Beach, Florida (the "Marina"). Petitioner purchased the houseboat on March 20, 1980, and has lived on the houseboat as his primary place of residence since 1980. The houseboat contains a galley, a head, and sleeping accommodations for up to six people. The houseboat can be moved. In the past, Petitioner took the boat out of the Marina for cruises between three and four times a year. For the past five years, Petitioner has not taken the houseboat out of the Marina. Petitioner pays a boat slip fee to the Marina each month. Petitioner has paid the monthly fee since 1980. The monthly boat slip fee includes a charge for rental, a live-aboard fee, and a variable fee for electricity. The Marina collects a six percent sales tax on the total monthly boat slip fee. Petitioner does not contest the sales tax collected on the variable fee the Marina charges for electricity. Petitioner and the Marina do not have a written lease agreement for longer than six months. Petitioner and the Marina do have a written agreement in which Petitioner agrees to abide by the rules of the Marina. Petitioner has resided in Florida continuously since October, 1979. Petitioner does not own any real property at the Marina, including the boat slip. Petitioner does not pay any property taxes on real estate at the Marina, including his houseboat. On June 1, 1995, Petitioner filed a claim for refund of sales tax collected on his monthly boat slip rental fee from February, 1988, through June 1, 1995. Respondent denied the claim for refund on August 21, 1995. Petitioner filed a written protest on October 18, 1995. Respondent issued a Notice of Decision ("NOD") on January 5, 1996.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order and thereinDENY Petitioner's request for a refund of sales tax. RECOMMENDED this 17th day of January, 1997, in Tallahassee, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 17th day of January, 1997.
Findings Of Fact Wet 'N Wild operates a water-oriented recreational amusement park known by the same name. The park is situated on about twelve acres of land, including a portion of a small lake, in Orange County, Florida. The park consists primarily of several in-ground pools and waterslides, as well as a beach on the lake. By a Purchase and Lease Agreement dated March 15, 1976, Wet 'N Wild agreed to sell to Mark IV Properties, Inc. (hereafter Mark IV), a California corporation, the subject twelve acres of land, including all buildings, improvements and fixtures attached to that land. Mark IV simultaneously agreed to lease the improved land back to Wet 'N Wild for a period of twenty years with an option to renew the lease for an additional ten years. The conveyance subsequently took place, pursuant to the terms of the Purchase and Lease Agreement. By a Lease Agreement dated February 28, 1977, Mark IV then leased the park to Wet 'N Wild, as had been agreed. The Lease Agreement requires that Wet 'N Wild pay rent in accordance with a monthly rental schedule incorporated as an exhibit to the Lease Agreement. Additionally, the Lease Agreement requires Wet 'N Wild to pay the ad valorem taxes on the land. Wet 'N Wild leases the park from Mark IV on a turnkey basis. All of the pools and the waterslides now present on the land were conveyed by Wet 'N Wild to Mark IV pursuant to the Purchase and Lease Agreement. The only significant addition to the park since that conveyance is the so-called Kamikaze Slide. This waterslide was separately conveyed to Mark IV upon its completion in November 1978. Two provisions in the Lease Agreement at least implicitly acknowledge Mark IV's ownership interest in the pools and waterslides. First, the lease requires Wet 'N Wild to maintain fire and extended hazard insurance on the improvements. Second, Mark IV is obligated to replace or repair the improvements in the event of their partial or total destruction, and, pending completion of the repairs or replacements, the rent is proportionately reduced. All of the pools and waterslides are fixed to the land in such a fashion that their removal would cause substantial injury to the premises. For example, the Kamikaze Slide is a six-story high waterslide emptying into a concrete pool of water built into the ground. The slide is supported by large steel beams and poles anchored deeply into the ground. The other pools and waterslides, all of similar physical dimensions, are equally affixed to the property. Wet 'N Wild derives its primary source of income from entrance fees which guests pay to enter, use and occupy the park. Once having paid this fee, a guest is entitled to the use and occupancy of the park without further charge. The sole exception is a rental fee paid for the use of small boats on the lake, for which rental of tangible personal property Wet 'N Wild collects and remits to the DOR a separate tax. The guest is denied access to incidental areas of the park, such as those reserved for operating machinery or maintenance. From its inception, Wet 'N Wild has duly collected and remitted to the Department an excise tax on entrance fees. The revised proposed assessment is computed exclusively on the basis of the lease payments, including ad valorem tax payments, made by Wet 'N Wild under the Lease Agreement.
Recommendation DONE AND ENTERED this 31st day of October 1979 in Tallahassee, Florida. MICHAEL R. N. McDONNELL Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of October 1979. COPIES FURNISHED: W. Kelly Smith, Esquire Robert E. Meale, Esquire Suite 1444, CNA Tower 255 South Orange Avenue Orlando, Florida 32801 Barbara Staros Harmon, Esquire Assistant Attorney General Room LL04, The Capitol Tallahassee, Florida 32301
The Issue The amount of attorney's fees and costs to be awarded to Petitioner, pursuant to the order on remand from the Second District Court of Appeal, in Raven v. Manatee County School Board, 32 So. 3d 126 (Fla. 2d DCA 2009), pursuant to Subsection 120.595(5), Florida Statutes (2009).1
Findings Of Fact Petitioner retained the law offices of Kelly & McKee, P.A., to represent him in connection with his dispute over Respondent seeking to terminate his employment. Petitioner was successful in reinstating Petitioner to his position; however, the Administrative Law Judge was without authority to order the School Board to extend his contract beyond the May 25, 2007, expiration date. Petitioner seeks attorney's fees for the underlying proceeding and the appellate proceeding in the amount of $66,881.25, representing the total number of hours billed to Petitioner. Petitioner is also seeking $5,074.98 in costs. Melissa Mihok, Esquire, billed 286.75 hours at $225.00 per hour for legal services performed. The two principals of the firm, Mark Kelly, Esquire, and Robert F. McKee, Esquire, billed 1.75 hours and 5.0 hours, respectively, of legal services, for which they billed at $350.00 per hour. Petitioner's expert witness, Mark Herdman, Esquire, who has intensive experience in this area, testified that the hourly rate for employment of attorneys in the Tampa Bay Area ranged from $200.00 to $350.00 per hour and that the amount of time expended on this case was reasonable. Respondent's expert witness, Thomas M. Gonzalez, Esquire, testified that the amount of time spent and the fees claimed were not reasonable; that the fee usually charged for an attorney with five years' experience, representing a School Board employee, was between $150.00 to $200.00 per hour; that 19 hours of preparation time for an administrative hearing that took three hours was excessive; and, further, that 102 hours to prepare essentially the same brief three times in the form of a proposed order, a one-page exception, a response to Respondent's exception, and the appellate brief was not reasonable. Based on all the evidence, including the billing statement; the fact that Ms. Mihok testified that her regular hourly rate in representing teachers in administrative hearings was $100.00 per hour; and the credible and persuasive testimony of Respondent's expert, an hourly rate of $150.00 is reasonable. The amount of time expended on this matter was excessive and should be reduced by 50 hours, plus a reduction of 35 hours from the time spent on seeking and collecting attorney's fees. The reasonable amount of time spent on this matter is 201.75 hours. Therefore, the reasonable amount of attorney's fees for Ms. Mihok in this matter is $30,262.50, which is 201.75 hours at an hourly rate of $150.00. The fee for Mr. Kelly and Mr. McKee should be reduced by 1.5 hours at $350.00 per hour for the time spent on research for collecting attorney's fees. The total due for their legal services is 5.25 hours at $350.00 for a total amount of $1,837.50. Therefore, the lodestar amount for attorney's fees for the firm is $32,100.00, plus an enhancement of $5,000.00 for the establishment of new law. As for costs, the expert witness fee for attorney's fees is not recoverable. The amount of costs sought is reduced by $1,800.00, and $1,194.70 is awarded for court reporter fees. Therefore, the total recoverable costs are $4,469.68.
The Issue The issue in this case is whether the taxpayer owes use tax, penalty and interest on the purchase of tangible personal property under Chapter 212, Florida Statutes.
Findings Of Fact Iseaseal, LLC, a Delaware corporation, has its principal place of business at 695 East Main Street, Suite 103, Stamford, Connecticut. Its federal employer identification number is 06-1600000. On November 22, 2000, the taxpayer purchased a 1982, 72-foot, Hatteras CPMY yacht, named “Windcrest,” with hull number HATBN3270182 and 60 net tons of admeasurement. The purchase was made through a registered yacht broker. The yacht’s sales price was $725,000. On November 21, 2000, at the closing for the yacht, the taxpayer’s managing member, Paul Bakker, signed an Affidavit for Exemption of Boat Sold for Removal from the State of Florida by a Nonresident Purchaser. The yacht was also registered with the Coast Guard. However, to date, the yacht has not been registered or titled in Florida or any other U.S. state or territory. The taxpayer took possession of the yacht at Pier 66, in Fort Lauderdale, Florida, on November 22, 2000. Also, on November 22, 2000, the taxpayer was issued a 90-day decal known as a “cruising decal.” A cruising decal, with certain restrictions, exempts the purchase of a yacht from sales tax if the purchaser agrees to remove the yacht from Florida within 90 days after the date of purchase and does remove the purchased yacht. On December 28, 2000, the taxpayer removed the yacht from Florida to the Bahamas. The removal occurred within 90 days after the purchase date. As a result, the sale became exempt from Florida sales tax and the Petitioner did not pay Florida sales tax on the purchase of the yacht. On January 15, 2001, the taxpayer returned the yacht to Florida for repairs. A repair bill shows that the yacht remained at the repair facility for four and a half hours on January 16, 2001. The repair visit was within six months after the departure date of December 28, 2000. There was no evidence that the repair facility was registered with the Department of Revenue or how long the boat remained in Florida waters. The yacht also returned to Florida for repairs on May 21, 2001. Again there was no evidence that the repair facility was registered or how long the boat remained in Florida waters. The evidence did not establish that the tax exemption related to use of Florida waters for 20 days or repairing a boat in Florida apply. Since the purchase date, the Petitioner has leased mooring space in Florida. The Petitioner’s insurance policy also indicates that the yacht was moored in Florida and includes a Florida endorsement for such mooring. Additionally, the Petitioner reported to Connecticut’s Department of Revenue that the yacht was exempt from Connecticut sales tax because the yacht was purchased and berthed in the State of Florida. Based on copies of the bill of sale, closing statement, banking statements, credit card statements, mortgage documents, insurance agreements, mooring agreements, repair and parts receipts and a chronological listing of the yacht’s whereabouts since the date of purchase, the yacht has operated, and continues to operate, in Florida waters. Indeed, the yacht remained in Florida for more than 183 days from July 1, 2002 through December 31, 2002. Moreover, since September 11, 2002, the yacht has been moored or stored in Florida the majority of the time because the main users of the yacht lost interest in sailing the yacht and travel after the terrorist attack on the twin towers in New York City. The Department found that the Petitioner was liable for use tax on its use and storage of the yacht here in Florida. On May 5, 2004, the Department issued an enforcement billing to the Petitioner for use tax, penalty and interest, pursuant to Sections 212.05(1)(a)2 and 212.06(8), Florida Statutes. The Department assessed the Petitioner use tax and interest based on the sales price of the yacht. The Department also assessed the Petitioner a mandatory penalty equal to the tax because it returned the yacht to Florida within six months of the departure date. The Petitioner admitted that, through ignorance of Florida’s tax exemption law, he violated Chapter 212, but argues that the assessment of tax, interest and mandatory penalty is excessive. On May 24, 2004, the Department issued the Petitioner a Notice of Final Assessment for Sales and Use Tax, Penalty and Interest Due. The Notice set forth the basis for the assessment of tax, in the sum of $43,500, penalty, in the sum of $43,500, and interest, in the sum of $14,759.84, plus additional interest that accrues at the rate of $10.73 per day. The Department issued the Petitioner the Final Assessment because it returned the yacht to Florida within six months of the departure date and the yacht remained in Florida for more than 183 days in a calendar year. Since the Petitioner returned the yacht to Florida within 6 months of the purchase date and allowed the yacht to remain in Florida for more than 183 days in a calendar year, the Petitioner is liable for use tax, penalty and interest in the use and storage of the yacht in Florida.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Revenue enter a final order upholding the assessment of use tax, penalty and interest against the Petitioner. DONE AND ENTERED this 31st day of January, 2005, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER 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 31st day of January, 2005. COPIES FURNISHED: Paul Bakker Iseaseal, LLC 695 East Main Street Stamford, Connecticut 06901 Carrol Y. Cherry, Esquire Assistant Attorney General Office of the Attorney General Revenue Litigation Section Plaza Level 01, The Capitol Tallahassee, Florida 32399-1050 Bruce Hoffman, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100
