The Issue Whether the Respondents are guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust, in a business transaction in violation of subsections 475.25(1)(b),(d) and (k), Florida Statutes, by virtue of the sale of the Wal-Mar Motel by Montver, Inc., to Derek and Lucy Lea.
Findings Of Fact At times material hereto, Respondents were the holders of the following Florida real estate license numbers: John H. McCain (McCain), license number 0192076; J. H. Miller license number 364090 and Dynamic Realty, Dynamic Commercial Group, license number 0044285. The licenses issued to Respondents McCain, Miller and Dynamic Realty were as broker, salesman and corporate broker, respectively. Prior to December, 1983, Derek and Lucy Lea, who are married, were residents of England. During the summer of 1983, they became interested in purchasing property in the United States and determined that in order to immigrate they would need to purchase and become owners of an American business. In keeping with their interests, they came to Florida (Pinellas County) during October, 1983 to inquire about the purchase of a motel listed by Respondent McCain. The Leas were assisted in their search by Dynamic Realty and J. Miller as selling brokers, acting as co-broker with Edna Stokes of Great Britain. The Leas learned of properties for sale in the States through advertisements, and decided that they were interested in purchasing a motel. Their preference was to own a business on the west coast of Florida because of the residence of Mrs. Lea's relatives in the Tampa area. The Leas responded to an advertisement of Edna Stokes who offered them information pertaining to Florida properties. The Leas advised Stokes of their special requirements, including a preference for the west coast of Florida, a motel business which offered a single story residence to accommodate the physical needs of Mrs. Lea's mother and a business situated off the major thoroughfares such that they could house their numerous pets and permit them to roam freely. Edna Stokes provided information on several motels in Florida including two in the Ft. Lauderdale area. Three were noted in the Clearwater/Dunedin area, one of which was under contract to another party and therefore not available. Of the remaining two, only one had the special locale and elevation requirements requested by the Leas, the Wal-Mar Motel located in Dunedin. The Leas had no prior experience in the motel business. During 1983, Mr. Lea was unemployed and his prior experience had been as a messenger in a bookmaking establishment. The major source of family support came from Mrs. Lea's employment as a computer operator. During October, 1983, the Leas began negotiations to purchase the Wal- Mar after they inspected the property late one evening. Respondent Miller made an arrangement for Mrs. Lea to revisit the Wal-Mar the next day. The Wal-Mar was listed for sale by Respondent McCain. Mrs. Lea, in the company of Respondents Miller, McCain and Kathy McCain, the daughter of Respondent McCain and the then manager of the hotel, inspected the Wal-Mar. Mrs. Lea concluded her inspection the following day. During the evening when Mrs. Lea inspected the Wal- Mar, she spoke to her husband by phone and they then decided to make an offer to purchase. Respondent Miller prepared an offer in accordance with Mrs. Lea's instructions and as a safeguard, included provisions in the purchase offer to protect the Leas' interest by allowing a suitable time for inspection and verification of both the physical condition of the premises and the financial books and records. The Leas' offer was accepted and Mrs. Lea returned to England. Respondent Miller later assembled financial data furnished by the owner and forwarded it to the Leas for their personal review. In addition to the written information passed on by Kathy McCain, Respondent Miller included an independent summary of survey results compiled by him of similar area motels respecting comparable rates. The Leas reviewed the information provided by Respondent Miller and confirmed their approval and satisfaction of the data by returning a telegram to Respondents Miller and Dynamic stating that the pertinent condition of the contract (paragraph 17E) was approved. 1/ The Leas returned to the United States and closed the transaction on December 17, 1983. They operated the Wal-Mar Motel through approximately January, 1985. The Leas enjoyed marginal success during the winter season of 1984 and made agreed mortgage payments to the seller for three months. Thereafter, they made no further payments although they continued to live and operate the motel and collected income for approximately ten additional months. They were eventually foreclosed and the property was returned to the seller. The Leas filed a civil suit and obtained a judgement against Respondent Dynamic. Dynamic did not appeal the judgement in favor of the Leas. However, the effect of that judgement is not dispositive of the issues relating to Respondent Dynamic's alleged wrongdoings herein based on, inter alia, different standards of proof in the two forums and Respondent counsel's stated position that Dynamic chose not to seek appellate review based solely on financial considerations. When the Leas contracted to purchase the motel, there was a general expectation within the tourist industry in the Tampa Bay area that the upcoming winter season would be a banner season. One factor leading to this expectation was the scheduling of the Super Bowl which was played in Tampa during 1984 and which was expected to bring a large influx of additional visitors. However, the expected increase in tourism did not occur and the area suffered a remarkably and unusually cold winter which led to a marked drop in tourism. Kathy McCain, who had agreed to assist the Leas in operating the motel and to assure a smooth transition, was unexpectedly told by the Leas that she should prepare to leave within days following the Leas purchase of the Wal-Mar. Ms. McCain inquired of the Leas whether they wanted to review certain files she maintained of past visitors such that the Leas could canvas them to determine whether or not they could generate some business through that medium and the Leas declined her offer. Kathy McCain thereafter disposed of the motel registration cards based on the Leas' wishes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED THAT: Petitioner enter a Final Order dismissing the administrative complaint filed herein in its entirety. Recommended this 24th day of May, 1989, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 24th day of May, 1989.
The Issue Whether Respondent engaged in the conduct alleged in the Amended Notice of Specific Charges. If so, whether such conduct provides the School Board of Miami-Dade County with just or proper cause to terminate her employment.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The School Board is responsible for the operation, control, and supervision of all public schools (grades K through 12) in Miami-Dade County, Florida. At all times material to the instant case, personnel at all public secondary schools in Miami-Dade County involved in the expenditure of School Board funds were required to discharge their duties in accordance with the Manual of Internal Accounting for Secondary Schools (Accounting Manual). Among the Accounting Manual's provisions were the following: EXPENDITURE PROCEDURES PURCHASING AND RECEIVING AUTHORIZATION Authorized purchases shall be made in compliance with Florida Statutes, State Board of Education Rules, Board Rules, and administrative directives and manuals. Principal has responsibility for authorizing all internal fund purchases Principal may delegate this authority to another administrator Delegate assignment must be in writing and memorandum retained for audit Principal and his/her delegate will make the following determination before authorizing internal fund purchase Uncommitted funds are available Items to be purchased meet legal requirements governing school purchasing activities Bid requirements have been met Items to be purchased are appropriate for sponsoring account RESTRICTIONS Payment for unauthorized purchase shall be sole responsibility of person placing order School Board employees are prohibited from soliciting personal discounts on merchandise or services from School Board vendors, potential vendors and patrons . . . . FLORIDA SALES TAX RESTRICTION A. Items purchased for which school will claim ownership are exempt from sales tax. . . . BID REQUIREMENTS Lowest bid meeting all specifications must be accepted Competitive quotations may be requested but not required 2. Use of split bids to keep purchases under $1,000 is specifically forbidden Purchases of $1,000 through $6,000 Request at least three quotations which may be obtained in writing or by telephone. Use of split bids to circumvent this regulation is specifically forbidden All quotations must be recorded and filed with documentation for disbursement transaction . . . . CERTIFICATION OF RECEIPT Certification of receipt must be made by person who can certify that merchandise, as specified, has been received or service rendered and that payment is in order A school custodian or office clerk will usually sign delivery ticket for shipping representative Delivery ticket documents delivery only Delivery ticket does not certify "as specified" receipt Employee retaining custody of materials purchased will usually certify receipt "as specified" on vendor invoice Certification of receipt of goods must be forwarded to secretary/treasurer promptly to facilitate timely payment CASH DISBURSEMENTS APPROVAL Approving signature of principal or his/her designee must appear on each of the following documents Purchase order (when appropriate) Check requisition Check Documentation Invoice Vendor's name and address Date of purchase Detail of what was purchased Total obligation Extensions and additions must be checked before payment Invoice must contain signature of employee certifying receipt of goods "as specified" . . . . Order Form 1. Advance payments to commercial vendors usually not permitted. . . . Check Requisition When there is no existing documentation check requisition will include documenting explanation . . . Prohibited (will not be accepted as documentation) Monthly statements Packaging slips TIMELY PAYMENTS Payment must be made within thirty (30) days of receipt of goods unless special arrangements are made with the vendor. Deferred payment agreement must be in writing and retained for audit CHECK REQUISITION Check requisition form must be used to initiate every expenditure from internal funds Check requisition will contain following information Requisition number (check number) Name of school Date Fund to be charged Name of payee Amount Identification of transaction Necessary signatures WRITING OF CHECK (See Section 5-1.2, Recording to Journal and Ledger, for pegboard procedures) Payments must be made to specific person, company, or organization Do not make checks payable to "cash" Do not make checks payable to paying school Do not write check unless all supporting documents and complete information submitted It is the responsibility of secretary/treasurer to attach all pertinent documentation to check requisition prior to submitting check for administrative signature Documentation must include certification of receipt "as specified" or certification of advance payment requirement for government agencies or public institutions Each check issued must be signed by principal or his/her designee and one clerical co-signer After the check is signed by the principal, the invoice will be stamped "paid," and the check number and date indicated . . . . Among the public secondary schools that the School Board operates, controls, and supervises is Booker T. Washington Senior High School. Booker T. Washington Senior High School opened on August 30, 1999. Gloria Evans has been the principal of Booker T. Washington Senior High School since its inception. The site that houses Booker T. Washington Senior High School was, prior to August 30, 1999, occupied by a School Board- operated middle school, Booker T. Washington Middle School. (BTW). Irving Grice served as the principal of BTW from January of 1994 to June of 1998. He was succeeded by Ms. Evans, who was principal of the middle school from July of 1998 to September of 1998. Albert Payne replaced Ms. Evans as principal of BTW in the latter part of September of 1998. Mr. Payne remained the principal of the school until it closed at the end of the 1998-99 school year. At all times material to the instant case, Respondent was employed by the School Board as a secretary/treasurer and assigned to BTW. Respondent is still employed by the School Board as a secretary/treasurer, although she is no longer assigned to BTW. She has been suspended pending the outcome of the instant dismissal proceeding. As a noninstructional employee of the School Board occupying a secretary/treasurer position, Respondent is a member of a collective bargaining unit represented by the United Teachers of Dade (Union) and covered by a collective bargaining agreement between the School Board and the Union (Union Contract). Article XXI, Section 3, of the Union Contract contains "[p]rocedures for [c]ontinued [e]mployment of [e]ducational [s]upport [p]ersonnel." At all times material to the instant case, it has provided, in pertinent part, as follows: Upon successful completion of the probationary period, the employees' employment status shall continue from year to year, unless the number of employees is reduced on a district-wide basis for financial reasons, or the employee is terminated for just cause. Just cause includes but is not limited to, misconduct in office, incompetency, gross insubordination, willful neglect of duty, immorality, and/or conviction of a crime involving moral turpitude. Such charges are defined, as applicable, in State Board Rule 6B-4.009. The employee is entitled to be represented by up to two representatives of the Union at any conference dealing with disciplinary action(s). Where the Superintendent recommends termination of the employee, the Board may suspend the employee with or without pay. The employee shall receive written notice and shall have the opportunity to formally appeal the termination by notifying the School Board Clerk of the employee's intent to appeal such action within 20 calendar days of receipt of the written notice. Following receipt of an appeal, the Board shall appoint an impartial administrative law judge, who shall set the date and place mutually agreeable to the employee and the Board for the hearing of the appeal. Prior to the hearing, the Board will file and serve the employee with a Specific Notice of Charges. The Board shall set a time limit, at which time the findings of the administrative law judge shall be presented. The findings of the administrative law judge shall not be binding on the Board, and the Board shall retain final authority on all dismissals. The employee shall not be employed during the time of such dismissal, even if appealed. If reinstated by Board action, the employee shall receive payment for the days not worked and shall not lose any seniority or be charged with a break in service due to said dismissal. Dismissals are not subject to the grievance/arbitration procedures. Respondent was hired to work at BTW by Mr. Grice. She began working at the school in September of 1997. During the time that she was assigned to BTW, Respondent functioned as BTW's treasurer. (Another employee at the school acted as the school secretary). As BTW's treasurer, Respondent was responsible for processing invoices received from vendors doing business with the school. In those cases in which she determined that payment was warranted, she was required to provide the principal, or the principal's designee, with a completed check requisition form, accompanied by all pertinent supporting documentation, as well as a filled-out check for the principal's, or the principal's designee's, signature. On the check requisition form, the following information had to be furnished: the commodities or services being purchased, the name of the vendor/payee, the dollar amount of the check, the check number, and the internal school fund or account to be charged. After payment was made to the vendor, it was Respondent's responsibility to enter the information concerning the transaction, including the name of the vendor/payee, on a transaction register. Respondent was also responsible for maintaining the paperwork relating to each transaction. She was supposed to keep these documents in a locked file cabinet in her office. Only Respondent, the principal, and an assistant principal had keys to Respondent's office. Only Respondent and the principal had keys to the file cabinet in Respondent's office. BTW maintained a checking account at SunTrust Bank in Miami, Florida (SunTrust). It was from this SunTrust checking account that monies were taken to pay vendors doing business with BTW. Checks written on this account would be honored and cashed by SunTrust only if signed by a school administrator (the principal or the principal's designee) and by a clerical employee at the school (Respondent or the principal's secretary). At all times material to the instant case, the school administrator designated to co-sign BTW checks in lieu of the principal was Eileen Oats, an assistant principal at the school.1 Ms. Oats and Ms. Darling have known each other since the early to mid-1990's when they both worked at Miami Jackson Senior High School (Ms. Oats as a teacher and Respondent in a clerical position). After meeting at Miami Jackson Senior High School (Jackson), the two became friendly; however, when Ms. Oats left Jackson to become an assistant principal at BTW, they lost contact with each other. Their friendship was renewed when Respondent was hired to work at BTW. Respondent and Ms. Oats socialized outside of school during non-work hours. Among other things, they went shopping together at the Famous Garment Corporation's clothing store located at 2220 East 11th Avenue in Hialeah, Florida (Famous Garments). Famous Garments specializes in women's clothing. It sells only women's suits, jackets, and skirts. It does not sell, nor has it sold at any time material to the instant case, office or school supplies. Respondent was a regular customer at Famous Garments during the time that she worked at BTW. She used a lay-away account established in the name of BTW to make personal purchases at Famous Garments (on which she paid no sales tax). The clothing she purchased was paid for, in part, by monies in BTW's SunTrust checking account. Of the total cost of the items she purchased (47 women's suits), $3,905.45 was paid for with BTW funds (from BTW's SunTrust checking account). Respondent was able to misappropriate these funds for her personal use by deceiving the administrators who co-signed the BTW checks in question concerning the nature of the items being paid for. Neither the checks themselves, which Respondent wrote, nor the supporting documentation she presented to the administrators, suggested that it was women's clothing that was being purchased. The following were the BTW checks that Respondent gave to Famous Garment Corporation to pay for the suits she purchased (Famous Garments checks): check number 1421, in the amount of $295.00, dated June 5, 1998; check number 1456, in the amount of $239.00, dated May 26, 1998; check number 1552, in the amount of $429.00, dated August 3, 1998; check number 1570, in the amount of $250.00, dated September 1, 1998; check number 1597, in the amount of $250.00, dated October 2, 1998; check number 1668, in the amount of $250.00, dated November 6, 1998; check number 1723, in the amount of $276.00, dated December 14, 1998; check number 1746, in the amount of $248.00, dated January 7, 1999; check number 1773, in the amount of $250.00, dated January 26, 1999; check number 1811, in the amount of $310.00, dated February 12, 1999; check number 1816, in the amount of $327.00, dated February 19, 1999; check number 1890, in the amount of $291.45, dated March 25, 1999; check number 1895, in the amount $211.00, dated March 26, 1999; and check number 1903, in the amount of $279.00, dated March 30, 1999. Respondent's signature appears on the first signature line on each of these checks. Ms. Oats co-signed check numbers 1421, 1552, 1597, 1773, 1811, 1816, 1890, 1895, and 1903. Mr. Grice co-signed check number 1456. Ms. Evans co-signed check number 1570. Mr. Payne co-signed check numbers 1668, 1723, and 1746. Although Respondent presented the Famous Garments checks to Famous Garment Corporation after the checks were co- signed by the principal or the principal's designee, the name "Famous Garment Corporation" does not appear on the "pay to the order of" line on any of the checks. Instead, there are the following names (which were placed there by Respondent): "Famous Corp. Store" (check number 1421); "Famous Inc." (check number 1456); "Famous Corp." (check number 1552); "Famous Corp. Inc." (check number 1570); "Famous Corporation Office" (check number 1597); "Famous Corporation" (check numbers 1668, 1723, and 1890); "Corporation Inc." (check number 1746); "Office Corporation" (check number 1773); "Famous Office Corporation" (check numbers 1811 and 1816); "Famous Office Supplies" (check number 1895); and "Corporation" (check number 1903). Respondent did not indicate on any of the Famous Garments checks, on the space provided for noting the purpose of the payment (the "for" line), that it was "for" women's clothing. Respondent left blank the "for" line on check numbers 1597, 1811, and 1890. On the "for" line on check numbers 1421, 1456, 1552, and 1903, Respondent wrote "office supplies." On the "for" line on check number 1421, she also wrote, in addition to "office supplies," "# 46539," which is the number of the $295.00 invoice 2/ that Famous Garments issued when Respondent used BTW's lay-away account to purchase six women's suits on April 30, 1998. On the "for" line on check numbers 1746 and 1816, Respondent wrote "# 27102" and "# 5462," respectively. (The significance, if any, of these two numbers is unclear.) On the "for" line on the remaining checks, Respondent wrote either "lead teacher" or "lead teachers." During the 1998- 99 school year, classroom teachers employed by the School Board could each purchase, with School Board funds, up to $250.00 worth of supplies for their classrooms under the lead teacher program. To conceal what the Famous Garments checks had actually been used for, Respondent, in making transaction register entries concerning these checks, entered the following fabricated vendor/payee names (none of which, unlike the name of the real recipient of the checks, contained the word "garment"): "Famous Office Corp." (check number 1421), "Famous Office Supplies" (check number 1456), "Famous Corporation" (check numbers 1552 and 1723), "Famous Corp." (check number 1570), "Corporation Office" (check number 1597), "Famous Office" (check number 1668), "Corporation Inc." (check number 1746), "Office Connection Supplies" (check number 1773), "Office Connection" (check numbers 1811 and 1890), "Office Corporation" (check numbers 1816 and 1903), and "Office Supplies" (check number 1895). The Famous Garments checks were endorsed by Famous Garment Corporation and deposited in Famous Garment Corporation's account at Union Planters Bank in Miami, Florida. On or about March 11, 1999, Respondent submitted a Credit Application to Eastbay, Inc., a mail order company that sells athletic apparel and supplies, seeking to open an account in the name of BTW. She signed the application, although she was not authorized to do so. On the application, Respondent indicated that the "ship to name" that Eastbay should use in delivering items purchased through the account was "Mrs. Darling." The BTW account was opened on or about March 11, 1999. Within a couple of days of the opening of the account, Respondent purchased for her personal use four pairs of expensive athletic shoes from Eastbay, the cost of which ($577.91 in total) was billed to the account: Two pairs of the same colored (combination of white, black, and gray) Nike Air Jordans XIV athletic shoes, sizes 10 1/2 and 11 1/2, costing $149.99 each, plus $33.97 for United Parcel Service "next day delivery" shipping, for a total of $333.95; one pair of raisin, pimento, and cream-colored, size 10 1/2, Nike Air Max Plus athletic shoes, costing $124.99, plus $8.99 for shipping, for a total of $133.97; and one pair of orange, black, and white-colored, size 10 1/2, Reebok Fusion 3DMX athletic shoes, for a total cost of $109.99. At the time of these purchases, BTW (whose school colors were orange and black) did not buy athletic shoes for its students. As principal of Booker T. Washington Senior High School, Ms. Evans has authorized the purchase of athletic shoes for members of school teams, but she has never authorized the purchase of shoes costing in excess of $50.00. 3/ The athletic shoes that Respondent purchased from Eastbay were paid for, in part, by monies in BTW's SunTrust checking account. Of the total cost of these purchases ($577.91), all but $8.98 was paid for with BTW funds (from BTW's SunTrust checking account). The balance ($8.98) was paid by money order. Respondent wrote and signed two BTW checks, check numbers 1870 and 1882, that she sent to Eastbay, after she had Ms. Oats co-sign them. Check numbers 1870 and 1882 were made out to "East Bay, Inc." and "East Bay," respectively. Ms. Oats was familiar with East Bay. She knew that it sold sporting goods, including athletic footwear. Check number 1870 was in the amount of $333.95. It was dated March 14, 1999. Written on the "for" line of check number 1870 was "001551924," the number of the invoice for the Nike Air Jordans XIV athletic shoes that Respondent had purchased. Check number 1882 was in the amount of $234.98. It was dated March 23, 1999. Written on the "for" line of check number 1882 was "1602572, 1566457," the numbers of the invoices for the Reebok Fusion 3DMX (invoice number 1602572) and Nike Air Max Plus (invoice number 1566457) athletic shoes Respondent had purchased. In making transaction register entries concerning check numbers 1870 and 1882, Respondent entered the following vendor/payee names: "Interscholastic" (check number 1870) and "Eastbay, Inc." (check number 1882). Check numbers 1870 and 1882 were received by Eastbay and deposited in its bank account. On March 12, 1999, Respondent ordered an IBM Aptiva computer from Micro Warehouse. She ordered it in the name of BTW, although it was for her personal use. (Computers used in Miami-Dade County public schools are obtained by the School Board's Purchasing Department, through the solicitation of competitive bids.) On or about March 15, 1999, Respondent sent Micro Warehouse a School Board Internal Funds Purchase Order (purchase order number 004671) that she had prepared, in the amount of $1,167.00, for the computer. The purchase order was signed as "authorized by" Respondent, notwithstanding that she did not have the power to authorize the purchase. On the line for the "originator's signature" was an illegible signature, not that of anyone who was authorized to originate such a purchase order. Written in next to "ship to" were "Booker T. Washington" and "Treasurer." The purchase order indicated that fund 9 was the internal fund or account that would be charged for the purchase. A fund 9 purchase is supposed to be for school equipment or supplies for the day-to-day operation of the school costing no more than $750.00. The computer that Respondent ordered from Micro Warehouse was shipped to BTW on March 15, 1999. BTW was charged (by invoice number E7200041) $1,169.00 for the computer, plus $25.25 for shipping. The computer came with certain software that had been pre-installed (on January 18, 1999). On March 17, 1999, starting at around 10:00 p.m., after Respondent had received the computer, additional software (Microsoft Office and Corel Office) was installed. Voice recognition software (IBM's Via Voice) and telephone answering software (Ring Central) were subsequently loaded on the computer. Respondent used the computer (for her own personal benefit) as an answering machine that answered calls placed to her home telephone number. On March 18, 1999, Respondent ordered from Micro Warehouse, in the name of BTW, another item that was for her personal use. The order she placed this time was for a 17-inch IBM monitor that was compatible with the computer she had previously ordered from Micro Warehouse. The monitor was shipped to BTW later that same day. BTW was charged (by invoice number E7351901) $379.00 for the monitor, plus $17.48 for shipping. Monies in BTW's SunTrust checking account were used to (partially) pay for the computer and monitor that Respondent had purchased from Micro Warehouse. Respondent wrote and signed four BTW checks, check numbers 1877, 1879, 1896, and 1902, totaling $1,327.73, that she sent to Micro Warehouse, after she had Ms. Oats co-sign them. Check number 1877 was made out to "Microwarehouse Supplies." It was in the amount of $383.25 and dated March 18, 1999. On the "for" line of the check, Respondent wrote "#3606623," which was the number that Micro Warehouse had assigned the order she had placed for the computer. Check number 1879 was also made out to "Microwarehouse Supplies." It was in the amount of $396.48 and, like check number 1877, dated March 18, 1999. On the "for" line of the check, Respondent wrote "#3746706," which was the number that Micro Warehouse had assigned the order she had placed for the monitor. Check number 1896 was made out to "Microwarehouse." It was in the amount of $228.00 and dated March 26, 1999. On the "for" line of the check, Respondent wrote "#E7200041," which was number of the invoice for the computer. Check number 1902 was also made out to "Microwarehouse." It was in the amount of $320.00 and, like check number 1896, dated March 26, 1999. On the "for" line of the check, Respondent wrote "42248971," which was number of the invoice for the monitor. In making transaction register entries concerning check numbers 1877, 1879, 1896, and 1902, Respondent entered the following vendor/payee names: "Microwarehouse" (check numbers 1877, 1896, and 1902) and "Microwarehouse Supplies" (check number 1879). Check numbers 1877, 1879, 1896, and 1902 were received by Micro Warehouse and deposited in its Bank of America account. On March 25, 1999, Respondent purchased $237.85 worth of items from the Brickell Village Publix, which were used for her own personal benefit. The items were charged to BTW's account at Publix (customer charge number I-02555383) and paid for with BTW funds (from BTW's SunTrust checking account). The BTW check used to pay Publix Supermarkets, Inc. (check number 1892) was dated March 26, 1999, and in the amount of $395.49. (It covered purchases other than those, described above, that Respondent had made on March 25, 1999.) The check was signed by Respondent and co-signed by Ms. Oats. On the "for" line of the check, Respondent wrote "#2466057, 2555383, 2389160." The completed check requisition form that Respondent presented to Ms. Oats indicated that the science club was the internal fund or account that would be charged for the purchases paid for by check number 1892, even though these purchases were not for the benefit of the science club. (Indeed, the science club did not have authorization to make any purchases at the Brickell Village Publix.) In early April of 1999, during spring break, Mr. Payne went to BTW to check the mail the school had received. Only he and the custodians were present in the building. In going through the mail, Mr. Payne found a bank statement from SunTrust. Enclosed with the bank statement were various cancelled BTW checks. Among the cancelled checks were checks that Respondent had sent to Famous Garments, Eastbay, and Micro Warehouse. Also enclosed with the statement was a receipt for the purchases Respondent had made at the Brickell Village Publix on March 25, 1999. Mr. Payne became suspicious when he saw the Micro Warehouse checks (which were co-signed by Ms. Oats, not Mr. Payne). The previous month (March of 1999), Respondent had asked Mr. Payne to sign a check made out to Micro Warehouse. When Mr. Payne looked at the check requisition form that accompanied the check, he noticed that it did not indicate the "funding structure." He therefore inquired of Respondent which school program was to be charged for the purchase. Respondent had no answer. Neither was she able to name for Mr. Payne the person who had ordered the items being purchased. Given Respondent's failure to satisfactorily respond to his questioning, Mr. Payne refused to sign the check and instead wrote "void" on it. His suspicion aroused, Mr. Payne contacted the School Board's Internal Accounts office. He subsequently spoke to Julio Miranda, a director in the School Board's Office of Management and Compliance Audits, who told him "to make sure [to] hold on to these [cancelled checks that had been enclosed with the bank statement], and all the paperwork and bills." Mr. Miranda advised Mr. Payne that he "would send someone out" to BTW. After spring break, Respondent started coming to work earlier than usual, often before Mr. Payne, and leaving work later than usual. This unusual attendance pattern stopped when the investigative audit at the school, conducted by the School Board's Office of Management and Compliance Audits, began. Claude Remy was the field auditor that Mr. Miranda assigned to work at BTW on the audit. Upon arriving at BTW, Mr. Remy examined the school's transaction register, along with the records that Respondent, as the school's treasurer, was responsible for maintaining concerning purchases made with BTW funds. His examination revealed that there was no supporting documentation for some of the checks listed on the transaction register. The checks without supporting documentation were those (described above) that Respondent had used, without proper authorization, to pay for items she purchased for her personal use (Above-Described Checks). The supporting documentation that she had shown to the school administrators whom she had asked to co-sign these checks was nowhere to be found. Mr. Remy was able to locate supporting documentation for all of the other checks listed on the transaction register, however. 4/ When Mr. Remy asked Respondent where he could find the supporting documentation for the Above-Described Checks, Respondent told him that she did not know, but suggested that Mr. Payne might have removed these documents from her office during spring break. In fact, Mr. Payne had done no such thing. Mr. Payne already had in his possession copies of some of the Above-Described Checks (having received them along with the bank statement that had come in the mail during spring break). At the request of Mr. Remy, he obtained copies of the remaining Above-Described Checks from SunTrust. Mr. Payne, together with Mr. Remy, also contacted Famous Garment Corporation, Eastbay, and Micro Warehouse and asked them to provide any documentation they might have concerning transactions with BTW, a request with which these vendors complied. Mr. Remy questioned Respondent about the Famous Garments checks. Respondent told him that these checks were for "office materials," which, as she knew, was not true. (As noted above, at no time material to the instant case has Famous Garments even sold office materials or supplies.) Mr. Remy also asked Respondent about the athletic shoes that had been purchased from Eastbay. In response to Mr. Remy's inquiry, Respondent claimed that the coach of BTW's basketball team had ordered the shoes along with the uniforms he had ordered. 5/ Mr. Miranda himself visited the school during the course of the audit and interviewed Respondent. During one interview, with respect to the items that had been purchased at the Brickell Village Publix on March 25, 1999 (with BTW funds), Respondent admitted to Mr. Miranda that she had "donat[ed]" some of these items for use at an employee's bridal shower to cover her personal share of the cost of the shower (which she had agreed to assume) and that she had appropriated the remaining ($50.97 worth of) items for her own use. Mr. Miranda had first visited BTW and spoken with Respondent on April 13, 1999. During this initial visit, he talked with Respondent about the Micro Warehouse purchases. He showed her the Micro Warehouse checks that Mr. Payne had found (during spring break) in the envelope containing the bank statement from SunTrust. Mr. Miranda then asked Respondent if she knew anything about these checks. Respondent claimed not to remember what the checks were for. The following day, Thursday, April 14, 1999, Mr. Remy arrived at the school. Upon his arrival, he spoke with Mr. Payne, who told him of the concerns he had regarding the Micro Warehouse checks. Mr. Remy and Mr. Payne contacted Micro Warehouse and were faxed a copy of an invoice that reflected that BTW had purchased an IBM Aptiva computer from Micro Warehouse. The invoice contained, among other things, the serial number of the computer. After obtaining the invoice, Mr. Remy approached Respondent and asked her to show him the computer so that he could make sure that it matched the serial number set forth on the invoice and that it had a property control (PC) number. (Every School Board item costing more than $750.00 must have a PC number.) Respondent claimed that she did not know where the computer was. Mr. Remy, accompanied by Respondent, looked for the computer the remainder of that day (April 14, 1999) and the following day (Friday, April 15, 1999). The computer was not in any of the places that he searched. Upon Mr. Remy's return to BTW the following Monday morning (April 18, 1999), Respondent informed him that the computer had been located. She then took him to the computer, which was in open view in a storage area on the first floor of the school. Mr. Remy had been in this storage area the week before with Respondent and he had not seen the computer. After verifying that the computer's serial number was the same as the serial number on the invoice and noting that the computer did not have a PC number, Mr. Remy contacted Mr. Miranda. Pursuant to Mr. Miranda's instructions, Mr. Remy impounded the computer and transported it to Mr. Miranda's office. While the computer was in his possession, Mr. Miranda asked Marla Berenson, the School Board's Executive Director of Electronic Processing Audits, to look at it and check for signs of "personal usage." Ms. Berenson obtained a keyboard, mouse, monitor, and printer, hooked them up to the computer, and then turned on the computer. She discovered that software typically found on School Board-owned computers was not installed on the computer. Among the programs she noticed on the desktop was Ring Central, a program not typically used by the School Board. She opened a Ring Central file that contained a log of incoming and outgoing telephone calls (log file). The telephone numbers from which the incoming calls were made and the telephone numbers to which the outgoing calls were made, as well as the dates and times of the calls and their duration, were set forth on the log. An examination of the log revealed that the incoming and outgoing calls were made "after normal business hours at the school district." Ms. Berenson printed copies of approximately 50 pages of the log file and gave these copies to Mr. Miranda, when she returned the computer to him. The computer remained in Mr. Miranda's office until June 16, 1999, when Mr. Miranda relinquished possession of the computer to Sergeant Oren Paisant of the School Board's Division of School Police, who had been assigned to investigate the purchasing activities at BTW. Mr. Miranda also provided Sergeant Paisant with the copies of the Ring Central log file that Ms. Berenson had printed for him. Sergeant Paisant obtained telephone records for one the telephone numbers from which, according to the log, an incoming telephone call (answered by the computer) had been placed. An examination of the telephone records revealed that the call in question had been placed to Respondent's home telephone number. With the assistance of a local Florida Department of Law Enforcement (FDLE) agent, Sergeant Paisant removed the hard drive from the computer. He then placed it in a manila envelope and mailed it to the FDLE crime laboratory in Tampa, in care of Brian Criste, a crime laboratory analyst working in FDLE's computer evidence recovery section. Mr. Criste is certified by the State of Florida as a forensic computer evidence recovery analyst. In a letter accompanying the hard drive, Sergeant Paisant advised Mr. Criste that the School Board was interested in finding out if there was anything on the hard drive indicating "personal use" by Respondent. Respondent's name, date of birth, home address, home telephone number, and social security number were set forth in the letter. Mr. Criste searched the computer's hard drive using forensic software ("Encase") specifically developed for this purpose. "Encase" is the "standard software" used by forensic computer evidence recovery analysts in the United States. It is generally accepted as reliable by the analyst community. Mr. Criste himself and his agency have tested "Encase" and determined it to be reliable. "Encase" enables the user to see a "picture of everything that's on that hard drive," without modifying any of its content. Among the things that Mr. Criste saw on (and recovered from) the hard drive he had been sent by Sergeant Paisant was a registration file (named "REG.REG."), created when the Via Voice program was installed, which contained Respondent's name, home address, and home telephone number. He also recovered from the hard drive several sound files. Mr. Criste copied the recovered files on a CD-ROM, which he sent to Sergeant Paisant, along with a forensic image backup of the hard drive. The original hard drive was later returned to Sergeant Paisant. Sergeant Paisant listened to the sound files on the CD-ROM Mr. Criste had sent him. He recognized Respondent's voice on one "outgoing message leaving a greeting for anyone who was calling." He also heard the voices of people (other than Respondent) leaving messages for "Rosy" and, in one instance, for "Rosa or Rosy Darling." On October 7, 1999, following the completion of Sergeant Paisant's investigation, Norman Lindeblad, a District Director in the School Board's Office of Professional Standards (who, on May 7, 1999, had removed Respondent from the BTW school site and given her an alternative work assignment at the Region IV office) conducted a conference-for-the-record with Respondent, at which a copy of Sergeant Paisant's investigative report was presented to and reviewed with Respondent. Respondent was then given the opportunity to respond to the allegations against her. At the conclusion of the conference, Respondent was advised that recommendations for her dismissal would be forthcoming. Such recommendations were subsequently made by Ms. Evans and Ms. Payne to the Region IV office. On November 4, 1999, Mr. Lindeblad conducted a pre- dismissal conference-for-the-record with Respondent. Again, Respondent was given the opportunity to address the allegations against her. On November 17, 1999, the School Board suspended Respondent and initiated a proceeding to terminate her employment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board issue a final order terminating Respondent's employment on the grounds set forth in Counts I through VI of the Amended Notice. DONE AND ENTERED this 28th day of August, 2000, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 28th day of August, 2000.
The Issue The issues are whether Respondent is guilty of demonstrating a lack of fitness or trustworthiness to engage in the business of insurance and, if so, what penalty should be imposed.
Findings Of Fact At all relevant times, Respondent has held a 2-20 license as a property and casualty agent. At all relevant times, Respondent was the agent in charge of Carol City; in fact, he was the lone agent employed by the agency. At all relevant times, Respondent was the lone signatory on Carol City's Wachovia banking account described below. Respondent was first issued a 2-20 license in 1993. By Consent Order dated September 25, 2006, and approved October 17, 2006, Respondent agreed to cease and desist from making excess charges for insurance and from selling ancillary products with the informed consent of the insurer, to pay an administrative fine of $3000 and restitution of about $1600 to four customers, and to one year of probation. This is the sole discipline imposed on Respondent's license over 20 years. At all material times, Respondent was an appointed agent with United Auto. In this case, Carol City effectively remitted premiums directly to United Auto or, for customers who chose to finance their premiums, indirectly to United Auto by remitting premiums directly to United Finance, a premium- financing affiliate of United Auto. As relevant to this case, the subject insurance transactions are simple. Customers of Carol City purchase insurance underwritten by United Auto. As an appointed agent of United Auto, Respondent causes United Auto to commit to coverage upon Carol City's receipt of the premium payment from the customer (and the execution of certain documents that are irrelevant to this case). If the customer chooses not to finance the premium, the customer pays the premium to Carol City, which deposits the customer's check and issues a Carol City check in the same amount, net of commission, to United Auto. If the customer chooses to finance the premium, the customer pays the premium downpayment to Carol City, which deposits the customer's check and issues a Carol City check in the same amount, net of commission, to United Finance. United Finance then advances the full premium payment to United Auto and collects installment payments from the insured. At some point, the payment process changed. United Auto and United Finance electronically swept Carol City's bank account for the payments due each company, relieving Carol City of the responsibility of issuing separate checks to each company. This change in payment processing is irrelevant to this case. As detailed below, Carol City issued a number of bad checks to United Auto and United Finance. Respondent's defenses are essentially that Carol City's checks were dishonored because: 1) customers' checks to Carol City were dishonored and 2) the electronic sweeping of the Carol City account did not provide Carol City an opportunity to follow the usual procedure to avoid liability to its insurers when customers' checks to Carol City were dishonored. These defenses find no support in the evidence. First, the evidentiary record includes nine handwritten Carol City checks, corresponding to the nine counts, that failed to clear when presented for payment by United Auto or United Finance. In other words, these transactions occurred before electronic sweeping was implemented, at least by United Auto and United Finance. Second, at all times--both before and after the institution of the electronic-sweeping process--United Auto and United Finance maintained a procedure by which Carol City could void any transaction if the customer's premium-payment check to Carol City failed to clear. In this procedure, as provided by section 626.9201(2)(a), Florida Statutes, the insurance transaction is void ab initio, once the agent provides statutory notice to the customer whose initial premium payment has been dishonored. United Auto requires the agent to send the insurer a copy of the bad check and a copy of the certified notice letter to the customer, after which United Auto will void the policy, and the agency and agent will have no liability to United Auto or United Finance. Respondent testified vaguely that he thought that he had complied with this policy-cancelation process, but clearly he had not. He produced no documentary evidence of his having ever attempted to advise United Auto or United Finance that Carol City's customers had given Carol City bad checks. And Respondent had many months during which he might have advanced this contention, if it had been true. Instead, rather than following the liability-avoidance procedure outlined above or ever advising United Auto or United Finance of dishonored customers' checks, Respondent allowed United Auto's liabilities to these customers to become fixed and allowed Carol City's liabilities toward United Auto and United Finance to remain unsatisfied. By failing to follow the statutory procedure that would have allowed United Auto to relieve itself of liability to any customers who had failed to pay their initial premium, Carol City obligated itself to pay United Auto and United Finance for this coverage that Carol City allowed its customers to obtain, even if they had not paid for it. After becoming dissatisfied with Carol City's instalment remittances of the unpaid balance due from the failure of its checks to have cleared, United Auto and United Finance obtained a judgment against Carol City for an amount probably a little in excess of $10,000. After becoming dissatisfied with Carol City's payments on this judgment, United Auto and United Finance levied on Carol City's office furnishings. After losing possession of its computers and office furniture, Carol City or Respondent promptly satisfied the amount still due on the judgment. The dishonored checks that Carol City issued to United Auto or United Finance, the amounts, the last four digits of the United Auto policies corresponding to these remittances, and the dates of the checks are: Check No. Amount Policy Nos. Date of check 2640 $2233.82 6792 12/27/08 2643 $ 898.60 7231 12/30/08 7155 7060 7232 6707 2650 $ 658.04 7558 1/6/09 7642 7557 7385 7910 2648 $ 151.90 4852 1/5/09 2660 $1788.97 7986 1/17/09 8057 8322 2988 9323 7990 2659 $2197.92 7845 1/19/09 2661 $ 713.57 7989 1/20/09 8810 8433 8694 8056 2663 $ 505.61 9191 1/22/09 9092 9302 9290 2665 $ 176.25 9427 1/26/09 TOTAL $9324.68 The bank records of Carol City for January and February 2009 show a large number of $35 charges for returned checks and overdrafts, as well as a number of returned deposited items. Although it is impossible, on this record, to determine if any of these returned deposits pertain to any of the 29 policy transactions detailed in the preceding paragraph, such a finding would be irrelevant because of Respondent's above- described failure to avail himself of the available policy- cancelation procedure. Likewise, although the imposition of extraordinary $35 charges may explain why specific Carol City checks did not clear, such a finding would also be irrelevant because it would not excuse the dishonoring of Carol City's checks to United Auto and United Finance. Petitioner has proved that Respondent collected initial premiums from Carol City's customers in 29 transactions, caused United Auto to commit to insurance coverage to these customers, and either: 1) Respondent did not remit these successfully collected premiums to United Auto or United Finance or 2) when the initial premium payments by Carol City's customers were dishonored, Respondent failed to take the necessary steps to void the committed insurance coverage and relieve United Auto, Carol City, and himself of any further liability.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order finding Respondent guilty of violating section 626.611(7) and suspending his license for six months. DONE AND ENTERED this 14th day of February, 2013, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of February, 2013. COPIES FURNISHED: Orrin R. Beilly, Esquire The Law Office of Orrin R. Beilly, P.A. The Citizens Building, Suite 705 105 South Narcissus Avenue West Palm Beach, Florida 33401-5529 David J. Busch, Esquire Department of Financial Services Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0390 Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File and Relinquishing Jurisdiction by Robert S. Cohen, Administrative Law Judge of the Division of Administrative Hearings. The Department hereby adopts the Order Closing File and Relinquishing Jurisdiction as its Final Order in this matter. Accordingly, it is hereby ORDERED and ADJUDGED that Petitioner, Electric Cart Company, LLC, be granted a license to sell low-speed vehicles manufactured by Polaris Industries, Inc. (GEM) at 5480 US Highway 98 West, Santa Rosa Beach (Walton County), Florida 32459, upon compliance with all applicable requirements of Section 320.27, Florida Statutes, and all applicable Department rules. Filed February 29, 2012 9:00 AM Division of Administrative Hearings DONE AND ORDERED this 4 4 day of February, 2012, in Tallahassee, Leon she Bureau of Issuance Oversight Division of Motorist Services Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A338 Tallahassee, Florida 32399 County, Florida. Filed with the Clerk of the Division of Motorist Services this AO day of February, 2012. Nalini Vinayak, Dealer Yicense Administrator NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. JB/jc Copies furnished: Robert C. Byerts, Esquire Bass, Sox and Mercer 2822 Remington Green Circle Tallahassee, Florida 32308 Michael W. Malone Polaris Sales, Inc. 2100 Highway 55 Medina, Minnesota 55340-9770 Thomas B. Waldrop, Jr. Electric Cart Company, LLC 5480 US Highway 98 West Santa Rosa Beach, Florida 32459 Jonathan Brennen Butler, Esquire Akerman Senterfitt 222 Lakeview Avenue, Suite 400 West Palm Beach, Florida 33401 Robert S. Cohen Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator
The Issue The issues in the case are whether the allegations of the Administrative Complaint are correct, and, if so, what penalty, if any, should be imposed.
Findings Of Fact At all times material to this case, the Respondent was a seller of business opportunities registered with the Petitioner, holding registration number 2000-054, and located at 3101 Twenty-Second Avenue South, St. Petersburg, Florida 33712. The Respondent was the successor in interest to American Cash Machine, Inc., and is responsible for fulfilling the obligations of the previous company. At all times material to this case, Gilbert B. Swarts was the president and chairman of the board of the Respondent. On July 8, 2005, the Respondent entered into a contract with Bonnie Campbell as trustee of the Campbell Family Trust (purchaser) under which the purchaser agreed to purchase 36 "CardPayment" machines from the Respondent, and the Respondent agreed to place the machines in appropriate business locations on behalf of the purchaser. As required by the contract, the purchaser paid a total of $135,000 by check to the Respondent. At the time of the sale, the Respondent provided a disclosure form to the purchaser which stated that 200 "CardPayment Business Opportunities" had been sold by the Respondent to other purchasers by the end of 2005 and that 25 "Internet Kiosk Business Opportunity [sic]" had been sold by the Respondent to other purchasers by the end of 2002. The disclosure form also stated that the Respondent would provide to the purchaser, the names, addresses, and telephone numbers of the ten purchasers located closest to the purchaser; however, the disclosure form did not include the information, and the Respondent did not otherwise provide the information to the purchaser. The Respondent stocked the 36 CardPayment machines, but failed to acquire business locations for all of the machines. The Respondent has asserted that after discussions with the purchaser, the parties agreed to "upgrade" the 36 CardPayment machines identified in the contract to 18 Internet Kiosk machines. The Respondent was subsequently unable to acquire business locations for all of the Internet Kiosk machines. The Respondent has asserted that after discussions with the purchaser, the parties agreed to "upgrade" the 18 Internet Kiosk machines to 18 "Smart Terminal" machines. The CardPayment machines, Internet Kiosk machines, and Smart Terminal machines are different types of machines, and each type has a usage different from the others. The terms of the contract executed between the parties did not provide for the substitution of various machines upon failure by the Respondent to place the machines into operation. The contract required the Respondent to rebate a portion of the sales price for each month during which each CardPayment machine was not placed for operation. No contract for the purchase of either the Internet Kiosk or the Smart Terminal machines was executed by the parties. The disclosure information provided by the Respondent to the purchaser related to the Internet Kiosk machines was insufficient to comply with the statutory requirements addressed herein. No disclosure information related to the Smart Terminal machines was provided by the Respondent to the purchaser.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order finding that the Respondent has violated Subsections 559.803(11)(a) and (b) and 559.809(11), Florida Statutes (2005); imposing an administrative fine of $10,000; and placing the Respondent on probation for a period of three years subject to such conditions as the Department deems appropriate. DONE AND ENTERED this 8th day of February, 2008, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 8th day of February, 2008. COPIES FURNISHED: Eric H. Miller, Esquire Department of Agriculture and Consumer Services 2005 Apalachee Parkway Tallahassee, Florida 32301 Gilbert B. Swarts American Cash Machine, LLC 535 Twenty-Second Street South St. Petersburg, Florida 33712 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue The issue is whether Respondent violated Section 475.25(1)(e) and (1)(m), Florida Statutes (2003),1 and Florida Administrative Code Rule 61J2-2.027(2), and if so, what discipline should be imposed.
Findings Of Fact Respondent is a licensed real estate sales associate. She was licensed in 2003. Her license number is 3061179. Respondent was working for Weichert Realty in the Orlando area at the time of the final hearing. She started working for that firm in October 2006, and prior to that, she “did not do a whole lot with [her] license as far as practicing real estate.” Respondent filled out and submitted her license application over the Internet. She submitted a signed notarized statement dated January 15, 2003, attesting that she answered the questions in the application “completely and truthfully to the best of [her] knowledge.” She also submitted a fingerprint card. The evidence clearly and convincingly establishes that there were at least three material misstatements and omissions in Respondent’s license application. First, Respondent did not provide a Social Security number (SSN) in her license application. The SSN that she subsequently provided to the Division, 378-72-0704, was incorrect. Respondent testified that her SSN is 378-62-0704. That is the SSN listed for Respondent in the driver’s license records maintained by the Florida Department of Highway Safety and Motor Vehicles (DHSMV). There is evidence suggesting that Respondent’s SSN may actually be 380-80-3178, but the evidence is not clear and convincing on that point.3 The document on which Respondent provided the incorrect SSN was not offered into evidence by the Division. Respondent denied providing an incorrect SSN, and she testified that if she did provide an incorrect SSN, it must have been typographical error. Second, the only name listed for Respondent in her license application was Yolanda Orr, which was Respondent’s married name and her legal name at the time she submitted her application. Respondent answered “no” to the question that asked whether she has ever “used, been known as or called by another name (example - maiden name . . .) or alias other than the name singed to the application.” (Emphasis supplied.) Respondent’s maiden name is Yolanda Small. She used that name until July 1998, when she was married. She was divorced in February 2006, and she is again using her maiden name. Respondent currently has two valid forms of identification issued by DHSMV: a Florida driver’s license in the name of Yolanda D. Small (No. S540-964-67-7491) and a Florida identification card in the name of Yolanda D. Orr (No. O600-964-57-7490). The driver’s license was issued in March 2006,4 and expires in July 2010; the identification card was issued in August 2002, and expires in July 2007. The birth date listed on the driver’s license is July 9, 1967, whereas the birth date listed on the identification card is July 9, 1957. Respondent testified that her middle name is Daniella, not Denise. She further testified that she has never used the name Yolanda Denise Orr. In response to a request to the state court in Michigan for records relating to Respondent, the Division was provided documentation of multiple traffic offenses committed in Flint, Michigan in 1999 and 2001 by Yolanda Denise Orr, as well as documentation of criminal offenses committed in Michigan by Yolanda Daniella Orr and Yolanda Danielle Orr. The traffic records do not list the defendant’s Social Security number, but the birth date listed in the records matches Respondent’s birth date. Respondent’s testimony that the traffic offenses did not involve her was not persuasive, nor was her claim there must be multiple Yolanda Orr’s in Flint, Michigan, with the same birth date as hers. Respondent admitted to being in Flint, Michigan at the time of the traffic offenses, and she admitted that she drove a Ford vehicle at the time of the ticket that was issued to Yolanda Denise Orr in October 2001 while driving a Ford. Moreover, the Michigan driver’s license number of Yolanda Denise Orr contained in the traffic records -- O600961139544 -- is identical (except for one number) to the Michigan driver’s license number -- O600961135544 -- that Respondent surrendered to DHSMV when she first applied for a Florida driver’s license. The evidence is clear and convincing that the Yolanda Denise Orr referred to in the traffic records is Respondent, and that Respondent failed to disclose that name (and her maiden name, Yolanda Small) in her license application. Third, Respondent only disclosed one criminal offense in response to the question in the application that asked whether she had “ever been convicted of a crime, found guilty, or entered a plea of guilty or nolo contendere (no contest) . . . .” The criminal offense that Respondent disclosed was, according to the application, a 1987 offense in Louisiana which Respondent “used the wrong social security number” when “filling out [her] financial aid papers for the first time.” There is no evidence that Respondent was prosecuted for such an offense in Louisiana. Respondent was, however, prosecuted in federal court in Michigan in 1993 for using a false SSN on two separate student loan applications. Those offenses were prosecuted as part of an indictment that also included four counts of filing fraudulent tax returns with the Internal Revenue Service and two counts of using a false SSN on tax returns. In February 1995, Respondent pled guilty to one count of filing a fraudulent tax return, one count of using a false SSN on a tax return, and one count of using a false SSN on student loan applications. The other counts of the indictment were dismissed as part of her plea agreement. In September 1995, Respondent was adjudicated guilty of the offenses to which she pled guilty and was sentenced to six months in federal prison, followed by three years of probation. She was also required to pay restitution in the amount of $8,177 to the Internal Revenue Service and restitution in the amount of $2,761 to the U.S. Department of Education. Respondent testified that “the whole reason the [federal] case came about” was that she filed a tax return not knowing that one had already been filed on her behalf by H&R Block; that the investigation into the “double” filing of the tax return led to the charge involving the “student loan application that had the wrong social security number on it”; and that it was her understanding that the offenses related to the student loan application submitted to Grambling State University, not any colleges in Michigan. Respondent’s testimony regarding the circumstances giving rise to the federal offenses was not credible because, among other things, she was charged with filing false tax returns on three separate occasions -- in 1990, 1991, and 1992 - - not just one time. The background check conducted on Respondent based upon the fingerprint card that she submitted as part of her license application identified two additional criminal offenses that Respondent did not disclose in her application. The first undisclosed offense was a 1990 felony retail fraud offense prosecuted in state court in Michigan. Respondent pled guilty to the offense and was sentenced to one year of probation. The record does not reflect the circumstances surrounding the retail fraud offense, but Respondent described it as “basically a petty theft.” The second undisclosed offense was a 1991 bad check charge, which was also prosecuted in state court in Michigan. The case was not resolved until February 2001 because, according to Respondent, it involved a check she wrote prior to leaving for college and she was unaware that that a case was pending against her until she returned to Michigan after college. Respondent was required to disclose criminal traffic offenses in her license applications; she was not required to disclose traffic offenses such as “parking, speeding, inspection, or traffic signal violations.” The traffic records suggest that several of the offenses may have been criminal in nature (e.g., driving with a suspended license), but the evidence was not clear and convincing on that issue.5 Respondent testified that she did not disclose the state court offenses because she did not remember them at the time she submitted her license application. She testified that she considered the federal offenses to be related and that she thought that disclosing one of the offenses was adequate since the other offenses were related and prosecuted together. Respondent’s explanation as to why she did not disclose all of her federal offenses is not entirely unreasonable under the circumstances. The offenses were all prosecuted in a single criminal proceeding and, even though they involved offenses committed in Michigan between 1990 and 1992 (rather than in Louisiana in 1987), they did involve use of an incorrect SSN on a student loan application. Respondent’s explanation as to why she did not disclose the offenses prosecuted in state court was not plausible. It is understandable that Respondent might not recall all of the details of the retail fraud offense since it occurred more than 10 years before the date of her application, but her testimony that she did not even remember the existence of the offense at the time she filled out her application was not credible or reasonable. Respondent’s testimony that she did not remember the bad check offense at the time she filled out her license application was even less credible because the court records related to that offense reflect that the case was not finally resolved until February 2001, which only two years prior to the date of Respondent’s license application. Respondent testified that she was told by a Division employee that she did not need to disclose all of the counts of the federal case because the related offenses would be discovered as part of the background screening based upon the fingerprint card submitted by Respondent. Respondent offered no evidence to corroborate her unpersuasive, self-serving testimony on this point. Respondent testified that she was directed by the same Division employee to provide a supplemental letter to the Division explaining the federal offenses, and that she did so. However, there is no record of what, if anything, Respondent submitted to the Division. Respondent’s application did not go to the Florida Real Estate Commission (Commission) for approval even though a criminal history was disclosed in the application. The Commission policy in effect at the time authorized the Division to approve such applications on a case-by-case basis. The policy did not require an applicant such as Respondent to appear before the Commission, as is the case under current Commission policy. Respondent did not present any evidence of mitigation at the final hearing. However, in her post-hearing filing, she stated, “I am a single mother, and as such, I rely on my real estate business as my only source of income.”
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Commission issue a final order that: finds Respondent guilty of violating Section 475.25(1)(m), Florida Statutes (Count I of the Administrative Complaint); finds Respondent guilty of violating Florida Administrative Code Rule 61J2-2.027(2) and, hence, Section 475.25(1)(e), Florida Statutes (Count II of the Administrative Complaint); revokes Respondent’s license; and imposes an administrative fine of $1,000 or the Division’s investigative costs, whichever is less. DONE AND ENTERED this 19th day of February, 2007, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 19th day of February, 2007.
The Issue The issue posed for decision herein is whether or not the Petitioner is subject to the Florida corporate income tax for tax years 1972, 1973, 1974 and 1975 plus accrued penalties and interest since July 7, 1977, the date Petitioner was mailed a proposed notice, of deficiency by the Respondent, Department of Revenue.
Findings Of Fact Based on the evidence adduced at the hearing herein; the documentary evidence received; the Respondent's memorandum in support of the assessed deficiency; the Petitioner's memorandum in response thereto; and the entire record compiled herein, the following relevant facts are found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent enter a Final Order herein denying Petitioner's protest of the proposed deficiency and penalties as set forth hereinabove. RECOMMENDED this 14th day of March, 1983, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of March, 1983.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint, and, if so, the penalty that should be imposed.
Findings Of Fact Petitioner is the state agency charged with the licensure and regulation of real estate brokers and salespersons in the State of Florida pursuant to chapters 455 and 475, Florida Statutes. At all times material to this action, Respondent was licensed a real estate sales associate in the State of Florida. On November 18, 2010, Petitioner filed an Administrative Complaint against Respondent, which reads in pertinent part: On or about October 5, 2007, Respondent prepared a sales purchase contract on behalf of Anne Vincent (Buyer) and Donald Gilchrest (Seller) for a property known as 6521 SW 9th Street, Pembroke Pines, Florida 33023 for $250,000. Respondent represented in the sales and purchase contract for the Subject Property that a $2,000 deposit was held in escrow by Title Sense Inc. Respondent communicated to the Sellers that he had received a check in the amount of $2,000 from the Buyer. * * * 10. Respondent failed to place with Respondent's registered employer any funds entrusted to Respondent by the Buyer for the Subject Property. * * * 12. Respondent failed to deliver a copy of the sales and purchase contract to Respondent's Broker, Edgar Rhenals. Based upon the foregoing, Petitioner alleged that Respondent violated section 475.25 (1)(b), (1)(e), and (1)(k), Florida Statutes, as well as Florida Administrative Code Rule 61J2-14.009. As discussed in the preliminary statement of this Recommended Order, Petitioner's sole witness at the final hearing was Ms. Krystal Cordo, an investigator employed with the Division of Real Estate. Other than Ms. Cordo's description of statements made by Respondent during the investigation——in which Respondent denied all wrongdoing——Ms. Cordo's testimony and investigative report consisted entirely of hearsay, with no applicable hearsay exceptions. In light of the complete absence of incriminating non-hearsay evidence, Petitioner properly conceded that Respondent's guilt could not be established in connection with any of the charges.2 Accordingly, the undersigned finds, as a matter of ultimate fact, that Respondent is not guilty of Counts I, II, and III of the Administrative Complaint.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner enter a final order dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 28th day of March, 2011, in Tallahassee, Leon County, Florida. S EDWARD T. BAUER 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 28th day of March, 2011.
The Issue The issue for consideration herein is whether the Petitioners, MISSCO, GENERAL, AND INTERSTATE should be placed on the convicted vendor list pursuant to Section 287.133 Florida Statutes (1991).
Findings Of Fact The facts stated in the Joint Stipulations to the extent set forth below are hereby adopted as findings of fact: On April 9, 1993, DMS issued notices of intent pursuant to Section 187.133(3)(e)(1), Florida Statutes. Jt. Stips. Appen. at pp. 72-73. On April 13, 1993, MISSCO filed petitions with DMS for a formal hearing pursuant to Section 120.57(1), Florida Statutes, to determine whether it is in the public interest for MISSCO, GENERAL, or INTERSTATE to be placed on the Florida Convicted Vendor List pursuant to Section 287.133, Florida Statutes. Jt. Stips. Appen. at p. 74-77. Subparagraph 287.133(3)(e)e., Florida Statutes, establishes factors which, if applicable to a convicted vendor, will mitigate against placement of that vendor upon the convicted vendor list. On April 5, 1991, General Equipment Manufacturers, Inc., (hereinafter "General"), a Mississippi corporation, and wholly owned subsidiary of MISSCO Corporation, was convicted of the commission of a public entity crime as defined within subsection 287.133(1)(g), Florida Statutes. Jr. Stips. p. 1, Appen. at pp. 41-43. A criminal information was filed in the United States District Court for the Southern District of Mississippi against General Equipment Manufacturers, Inc., alleging a violation of Section 1001, Title 18, United States Code and applicable Federal Acquisition Regulations which occurred on or about December 2, 1988. Jt. Stips. p. 1, Appen. at p. 40. The criminal information filed in the United States District Court, Southern District of Mississippi charged General with falsely representing on or about December 2, 1988 that the equipment schedule and price list submitted to the General Services Administration (hereinafter GSA) was General's established commercial price list. (Jt. Stips. p. 2, Appen. at p. 40. Upon entry of a plea of guilty, the Court entered a judgement against General which was filed April 5, 1991. The judgement required payment of a special assessment of $200, a fine in the amount of $10,000, without interest, and restitution in the amount of $28,000. Jt. Stips. p. 2, Appen. at pp. 40-48. The GSA issued Solicitation No. FCGS-X8-38010-N for FSC Group 66 Part II, Section P, Laboratory/Pharmacy Furniture. General submitted an offer dated August 18, 1988, and signed by Charles H. Wright, General Manager of General's SystaModules Division. In connection with its offer, General submitted its purported commercial price list dated January 31, 1987. Mr. Wright certified in Section M-FSS-330, M.3, Basis for Price Negotiation, Item (c), Certificate of Established Catalog or Market Price, that: The price(s) quoted in General's proposal is based on established catalog or market prices of commercial items, as defined in FAR 15.804-3(c), in effect on the date of the offer or on the dates of revisions submitted during the course of negotiations. Substantial quantities of the items have been sold to the general public at such prices. All of the data, including sales data, submitted with General's offer are accurate, complete, and current representations of actual transactions to the date when price negotiations are concluded. By letter dated December 2, 1988, Mr. Wright, in his capacity as General Manager of General's SystaModules Division, certified on behalf of General that: . . . all data submitted with General's offer pursuant to the discount schedule ad marketing data sheets and any other data submitted as as part of General's offer on Solicitation FGS-X8-38010-N are current, accurate, and complete a of the conclusion of negotiations, which occurred on December 2, 1988. Jt. Stips. p. 2-3, Appen. at pp. 51-53. On the basis of General's offer on Solicitation No. FGS-X8-38010-N, the GSA awarded General Contract No. GS-00F-06709 on December 13, 1988. The contract was for the period February 1, 1989, through January 31, 1992. Jt. Stips. p. 3-4, Appen. at p. 53. An investigation by the Federal Bureau of Investigation determined that General provided the GSA with fabricated price lists in connection with FGS-X8-38010-N. Jt. Stips. p. 4, Appen. at pp. 53-54. The details of the criminal information against General are discussed in the findings and determination made by the GSA Office of Acquisition Policy, dated May 18, 1992, which are incorporated herein by reference. Jt. Stips. Appen. at pp. 49-71). Particular findings are as follows: Federal debarment was imposed on General and its corporate officials Messrs. Wright and Majure. Jt. Stips. Appen. at p. 50. The debarments were effective throughout the Federal Executive Branch. The debarment precluded the award, renewal, or extension of federal contracts. Jt. Stips. Appen. at p. 50. Debarment proceedings were initiated by separate notices dated November 1, 1990 based on a referral from the Federal General Services Administration (GSA), Office of Inspector General (OIG). Jt. Stips. Appen. at p. 51. General bid on GSA Solicitation No. FGS-X3-36426-N and in connection with its offer General submitted a "dealer retail price list," and certified that: its prices were based on established catalog or market prices, substantial quantities of the items had been sold to the general public at said prices: and that all of the data submitted with its offer was accurate, complete and current representations of actual transactions up to the date when price negotiations were concluded. Jt. Stips. Appen. at p. 51. General's offer on the solicitation was accepted and it was awarded contract number GS-00F-70316 on April 19, 1984. Jt. Stips. Appen. at p. 52. On June 28, 1985 General made the same representations as to GSA Solicitation No. FGS-X8-38000-N for laboratory and pharmacy furniture. The award was made to General on December 9, 1985. Jt. Stips. Appen. at p. 52. Identical representations were made by General in response to GSA Solicitation No. FCGS-X8-38010-N issued on July 7, 1988. The solicitation was for laboratory and pharmacy furniture. The award was made to General on December 13, 1988. Jt. Stips. Appen. at p. 53. Criminal Information Number J90-00080(B) was filed in the U.S. District Court for the Southern District of Mississippi on November 15, 1990. The information was based on the FBI investigation of General's submission of false commercial price lists to GSA. The criminal information charged General with violating Title 18, U.S.C. 1001 in connection with its offer on Solicitation No. FGS-X8-38010-N. It alleged that General knowingly, willfully, and falsely represented to GSA that the equipment schedule and price lists submitted with General's 1988 offer was General's established commercial price list. Jt. Stips. Appen. at p. 54. General pled guilty to Criminal Information No. J90-00080(B) on December 19, 1990 and was ordered to pay a fine of $10,000 and to make just restitution to the GSA in the amount of $28,000. The conviction was also used as the basis for the federal debarment of General. Jt. Stips. Appen. at p. 54. Mr. Wright and Mr. Majure were also debarred by virtue of their conduct in connection with the General conviction. Jt. Stips. Appen. at pp. 54- 59. General and MISSCO are affiliated companies. General is a wholly-owned subsidiary of MISSCO. MISSCO is directed and governed by its executive committee which acts in lieu of the board of directors. Mr. Majure was a director of MISSCO, a member of MISSCO'S executive committee, a senior vice president of MISSCO, and president, director, and general manager of General. Jt. Stips. Appen. at p. 59. Mr. Majure held a position of substantial responsibility in both MISSCO and General, and through MISSCO's control group is accountable for the circumstances of General's crime. Jt. Stips. Appen. at p. 60. A decision not to impose federal debarment on MISSCO was predicated on MISSCO management's decision to ensure that it did not supply the Federal government with the same goods and services formerly provided by General during the period of General's debarment: MISSCO management made a commitment to emphasize ethical business practices: the people responsible for General's crime were no longer employed by MISSCO: the GSA administrative record (with the exception of General) does not indicate a lack of business integrity or poor performance on federal contracts. Jt. Stips. Appen. at pp. 61-63. Federal debarment of General was predicated upon the following: conviction of the crime of making false statements posed a substantial risk to government business dealings: General submitted false information on solicitations over an extended period of time: General fabricated price lists and false certification son two prior solicitations: General's crime posed a substantial danger to the integrity of the Federal government's MAS program: the accountable individuals for the crime were high-ranking officials at General. Jt. Stips. Appen. at pp. 63-66. The federal debarment proceedings found mitigating factors in that: the parties pled guilty and cooperated with the Department of Justice throughout the investigation: the parties cooperated with GSA throughout the debarment proceedings: General was not charged with deliberate overcharges on its federal MAS contracts: General promptly paid its fine and restitution: General has made good faith efforts to undertake remedial action. Jt. Stips. Appen. at pp. 68-69. On April 9, 1993, Respondent issued Notices of Intent pursuant to Section 287.133(3)(e)1, Florida Statutes, which were received by the Petitioners. Jt. Stips. p. 5, Appen. at pp. 72-73. On April 13, 1993, Petitions filed petitions pursuant to Section 287.133(3)(e)2, Florida Statutes, and Section 120.57(1), Florida Statutes, requesting an order determining that it is not in the public interest for Petitioners to be placed on the State of Florida Convicted Vendor List. Jt. Stips. p. 5, Appen. at pp. 74-75. MISSCO is a holding company which has a number of operating divisions and two wholly-owned subsidiary corporations, General Equipment Manufacturers (General) and MISSCO Exports Corporation (Exports). Jt. Stips. p. 2, Appen. at pp. 35-36. Interstate of Florida is a Division of MISSCO and is a dealer (re- seller) of General's products. Jt. Stips. p. 2. General and MISSCO are commercially distinguishable and they do not occupy the same facilities. MISSCO's primary lines of business are distribution of school equipment and supplies, office equipment and supplies, and commercial printing. Jt. Stips. p. 4. MISSCO Exports is an entity formed solely for accounting and tax purposes, has no employees, and does not engage in substantive commercial operations. Jt. Stips. p. 4. MISSCO has extensive dealings with the federal government, as supplier of goods manufactured by other entities. General is the only MISSCO entity that contracts with the government under the Multiple Awards Schedule (MAS) program. General's primary line of business is manufacturing institutional furniture. Jt. Stips. pp. 4-5. In compliance with paragraphs 287.133(3)(a) and (B), Florida Statutes, MISSCO made timely notification to the DMS and provided details of the conviction of General, by letter dated March 24, 1992 and provided copies of the criminal information, judgement and related correspondence. Jt. Stips. p. 5, Appen. at pp. 37048. Payment of the fine in the amount of $10,000 and restitution in the amount of $28,000 imposed by the conviction and judgement entered April 5, 1991 were promptly paid by General on April 15, 1991. Jt. Stips. pp. 5-6, Appen. at pp. 47-48. Subsequent to the criminal information filed in the United States District court, Southern District of Mississippi in November of 1990, General entered a plea of guilty to the charge, thus eliminating the necessity for further investigation and trial. Jt. Stips. p. 6. The GSA in its findings and determination dated May 18, 1992, cited mitigating factors favorable to General and MISSCO. The factors included, cooperation with the Department of Justice throughout its investigation; cooperation with the GSA throughout the debarment proceeding; constructive dealings by counsel for MISSCO and General with the GSA Office of General Counsel on issues relating to the restrictions on MISSCO and General's business relationship with the government and government prime contractors. Jt. Stips. p. 6, Appen. at pp. 68-69. MISSCO fully cooperated with the DMS in connection with its investigation initiated pursuant to Section 287.133, Florida Statutes. Jt. Stips. p. 6. MISSCO formally filed its disclosure pursuant to Section 287.133(3)(b), Florida Statutes with the DMS by letter dated March 24, 1992, together with exhibits attached thereto. The letter specifically referred to the criminal information filed against General and the judgement entered by the Federal District Court. A copy of the criminal information and judgement were enclosed with the letter, together with a copy of correspondence between MISSCO and the GSA. Jt. Stips. pp. 8-9, Appen. at pp. 37-39. In response to a request dated April 15, 1992 from the DMS for additional information, MISSCO promptly furnished all such information. Jt. Stips. p. 9. At its meeting held December 17, 1992, the Board of Directors of MISSCO was convened and all of the offices then held by Mr. James T. Majure, former President of General, were declared vacant and other persons were elected to those positions. Jt. Stips. p. 7, Appen. at pp. 2, 67, 70. Mr. Charles Wright was retired from General under a medical disability prior to 1990. Jt. Stips. p. 7. MISSCO Corporation fully cooperated with the GSA by proposing and implementing remedial measures including the presentation of an Ethics Seminar by Mr. Norman Roberts, past chairman of the American Bar Association's section on government contracting. Jt. Stips. p. 7. MISSCO revised its corporate Code of Ethics, revised its Employee Handbook, installed an 800 hotline telephone number permitting employees to communicate any concerns regarding business ethics, designated a Corporate Vice President as the Ethics Compliance Officer, appointed a committee of three corporate executives to monitor corporate business activities, and revised its internal audit procedures to insure that no cash is unaccounted for which might be used for the purpose of kickbacks. Jt. Stips. pp. 7-8, Appen. at pp. 28-33, 62-63. MISSCO's management undertook prompt and verifiable action to comply with the restrictions imposed on MISSCO's business dealings with the government after notices of proposed debarment. General promptly and voluntarily withdrew from the GSA contract that was tainted by the submission of a fabricated commercial price list during negotiations. Jt. Stips. p. 8. MISSCO had a code of business ethics in place when the circumstances leading to General's conviction arose. The code was amended following the initiation of debarment proceedings to specifically address the importance of truthful certifications and providing accurate information in connection with business transactions with the government. Jt. Stips. p. 8. MISSCO substantially expanded its corporate ethics compliance program and undertook extensive training in business ethics. A detailed "ethics audit" was undertaken by MISSCO, and the results of this audit were provided to the GSA. Jt. Stips. p. 8, Appen. at pp. 10-22, 28-34. General sells its products through a dealer network and not through factory direct sales. General has a dealer agreement with Interstate of Florida for the sale of its products in Florida to private and public entities. Jt. Stips. p. 9. Interstate of Florida, a division of MISSCO Corporation of Jackson, is a dealer (re-seller) of General's products. There are other dealers throughout the United States which also market and sell General's products. Interstate of Florida had gross sales of approximately $6.8 million in fiscal year 1990-91. Approximately 99 percent of those sales were to public entities. Jt. Stips. p. 9. Interstate of Florida is primarily an educational sales company which sells educational contract furnishings such as laboratory casework, auditorium seating, and folding bleachers. It has conducted business with almost every school district in Florida. The largest transactions have been conducted with the school districts of Dade and Orange Counties in Florida. The largest municipal transactions have been conducted with the City of Tallahassee. Jt. Stips. p. 10.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Department not place the names of the Petitioners on the Florida Convicted Vendor List. DONE and ENTERED this 29th day of July, 1993, in Tallahassee, Florida. STEPHEN F. DEAN 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 July, 1993. COPIES FURNISHED: William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Susan B. Kirkland, Esquire Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 C. Graham Carothers, Esquire Ausley, McMullen, McGehee Carothers & Proctor Post Office Box 391 Tallahassee, FL 32392 Terry A. Stepp, Esquire Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950
The Issue The issue presented here concerns the question of whether the Respondent, State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles, should grant the Petitioner, Crown Pontiac, Inc., a motor vehicle dealer license in accordance with Section 320.642, Florida Statutes (1979), on the basis that the Petitioners in this cause, in the face of the challenge to Crown's licensure offered by the Respondent, B & L Motors, Inc., d/b/a Bert Jackson Imports, have proven that the existing Fiat automobile dealers in the proposed territory or community for licensure are providing inadequate representation for Fiat.
Findings Of Fact On May 5, 1980, the Petitioner Fiat Motors of North America, Inc., issued a letter of intent to grant a Fiat franchise to the Petitioner Crown Pontiac, Inc., d/b/a Crown Sportscar Center to sell Fiat automobiles. (See Petitioner Fiat's Exhibit No. 13 admitted into evidence.) The Fiat dealership would be located at the sportscar facility of Petitioner Crown's overall operation which is found at 5301 34th Street North, St. Petersburg, Florida. The Respondent B & L Motors, Inc., d/b/a Bert Jackson Imports, having learned of Fiat's intentions to grant the franchise to Crown, protested Crown's licensure before the Respondent, State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles, that protest having been made in keeping with the terms of Section 320.642, Florida Statutes (1979). 2/ After receiving the Respondent, B & L Motors' Petition in protest, the Division of Motor Vehicles forwarded the case to the State of Florida, Division of Administrative Hearings for hearing pursuant to Section 120.57(1), Florida Statutes. That formal hearing was held on December 4, 1980. PARTIES Petitioner Fiat is an automobile distributor that offers Fiat motorcars for sale in the United States through its several franchise retail outlets. Its model line includes two sedans; the Brava and Strada, and two sports convertibles; the X1-9 and the Spider. The Petitioner Crown Pontiac is a retail outlet for the General Motors, Pontiac automobile, JRT-British Leyland, MG, Triumph, Jaguar and Rover, Peugeot, Nissan, and Honda, through its stores in St. Petersburg, Florida. It is the intention of Crown to sell the Fiat line through the sportscar part of its operation which now handles JRT-British Leyland products. The Respondent B & L Motors, is a retail outlet for Volkswagen automobiles, Fiats and Lancias. That dealership is located in Clearwater, Florida, within Pinellas County, Florida, the county in which St. Petersburg is found. The Respondent, Division of Motor Vehicles is an agency of the State of Florida with regulatory responsibility and authority, among those duties being the requirement to approve or disapprove the application for new motor vehicle dealer licenses in Florida sought by the prospective franchisees of the various automobile manufacturers and distributors. HISTORY OF FIAT DEALERSHIPS IN PINELLAS COUNTY, FLORIDA From 1965 through March 1, 1979, Fiat Motors of North America, Inc., had a licensed franchisee in St. Petersburg, Florida, the last of those Fiat dealers in St. Petersburg being Fifth Avenue Motors, Ltd., d/b/a International Motor Cars Limited. Notice of termination of the franchise of International was sent from Fiat on December 1, 1978, leading to the ultimate cancellation of the Florida license on March 2, 1979. Beginning 1967, Fiat has had a licensed franchise outlet in Clearwater, Florida, with B & L Motors becoming the franchise outlet in Clearwater in late 1974, and continuing to operate as a franchise outlet up through the time of the final hearing in this cause. Subsequent to the loss of the franchise by International and the cancellation of its Florida license on or about March 2, 1979, there has been no Fiat dealership in St. Petersburg, Florida. Crown had attempted to obtain the Fiat franchise by acquiring the Fiat franchise and Mercedes franchise held by Fifth Avenue Motors, Ltd., d/b/a International Motor Cars Limited. This agreement was to be consummated through an asset purchase agreement, a copy of which may be found as Petitioner Crown's Exhibit No. 2 submitted into evidence. This agreement was executed on November 1, 1978, but its terms and conditions were never carried out due to difficulty which Crown had in coming to terms with Mercedes on the purchase of that franchise. At present there is an ongoing law suit on that subject. In addition, vandalism and theft of certain parts that Crown was to purchase from Fifth Avenue has held up the contract. Fiat and Crown had begun their negotiations in October 1978 leading Fiat to make overtures to Crown to offer a franchise in early 1979, which was rejected by Crown at that time for reasons discussed above. There was contact between Crown and Fiat from March 1979 through March of 1980, and sometime in April or May Crown determined to go forward with the franchise agreement, notwithstanding the International dispute. This led to the May 5, 1980, intent to grant by Fiat and the ensuing request by Crown that the State of Florida, Division of Motor Vehicles issue a dealer license. (In connection with the question of a grant of a license to operate a Fiat dealership in St. Petersburg, the Respondent Division of Motor Vehicles had had a past policy of allowing a manufacturer to replace a dealer, within one year of the cancellation of the prior license, without entertaining protests from other competing dealers provided, further, the prior dealer lost its franchise agreement with the manufacturer. In this case, the one year grace commenced on or about March 2, 1979, and expired on or about March 2, 1980. See Joint Exhibit No. 1, affidavit of Henry C. Noxtine.) FIAT'S MARKET SHARE IN THE UNITED STATES, MAJOR MARKETS, PINELLAS COUNTY, ST. PETERSBURG AND CLEARWATER Petitioner Fiat's Exhibits Nos. 1 through 4, admitted into evidence are charts which depict the sale of import automobiles in the United States, with particular emphases on the sale of Fiat automobiles in the United States, Florida, Clearwater and St. Petersburg. Exhibit No. 1 shows the number of import auto sales as a percentage of total automobile sales in the years 1977, 1978, 1979, and the first nine months of 1980, for given market areas. From this chart, it can be seen that import automobile sales range from 17.3 percent through 18.4 percent, in 1977, depending on whether the study related to the United States, Florida, Clearwater or St. Petersburg to 27.6 percent through 28.9 percent for the first nine months of 1980, depending on which of the above referenced market areas was under consideration. Although the trend within the import market for automobiles showed an upturn as a percentage of total sales from 1977, through the first nine months of 1980, Exhibit No. 2 demonstrates that Fiat's percentage of total import sales range from a high United States percentage of 3.2 percent in 1977, to 1.6 percent in September 1980, thereby depicting a decline in overall sales of Fiat automobiles as a percentage of total imports sold in the United States. Of particular significance is the fact that the number of Fiat automobiles sold as a percentage of total imports in St. Petersburg is 2 percent in 1977, and 1.9 percent in 1978, at a time when a separate Fiat dealer was located in St. Petersburg and with the advent of the failure of the St. Petersburg dealership in 1979, the sales were 1.2 percent and in the first nine months of 1980, in which B & L was the sole Pinellas County dealer, those sales were only .5 percent in St. Petersburg. In the successive years, 1977 through the first nine months of 1980, Fiat sales in Clearwater were 2.7 percent, 2.2 percent, 2.7 percent and 1.8 percent, respectively. The figures related to Fiat sales in Clearwater in the years 1979 and 1980 and sales of Fiats in St. Petersburg in those two reporting years show a disparate break out in numbers of sales in Clearwater and St. Petersburg in those reporting years when contrasted with the 1977 and 1978 reporting years, which show the percentage of sales in Clearwater and St. Petersburg to be much closer. There are approximately 800,000 people in Pinellas County, Florida, with approximately 250,000 of those persons residing in St. Petersburg and 350,000 in the overall St. Petersburg area, which is in the southern part of the county. There is another major population center in the northern part of the county. Clearwater is the principle municipality in that area. St. Petersburg and Clearwater constitute separate and identifiable trading areas and territories within Pinellas County, Florida. In this connection, Exhibit No. 3 admitted into evidence shows Fiat's performance in 1979, in similar markets to that of Clearwater or St. Petersburg, outlining the Fiat registrations and the percentage of registrations of Fiat automobiles in those communities. This chart should be read in conjunction with Exhibit No. 4, which is admitted into evidence which shows the number of import sales in the St. Petersburg and Clearwater territories and the number of Fiat sales in those territories, together with the number of Fiat sales necessary to gain the 3.5 percent penetration and the increase in number of units sold to achieve that goal. There is a further hypothetical to demonstrate sales penetration at 5 percent and the number of prospective sales if the goal is achieved. Again, this is for the year 1979. Although the last reporting period, i.e., the first nine months of 1980, shows that the overall Fiat sales nationwide are 1.6 percent and the Florida sales are 2.2 percent, sales in what Fiat has called its "major markets" approximated 2.7 percent in 1979. It is within the "major markets" that Fiat intends to offer its future emphasis and these areas are felt to be crucial to the continued success of Fiat Motors. Sales in Clearwater and St. Petersburg, which are considered "major markets," range from .5 percent in St. Petersburg to 1.8 percent in Clearwater for the reporting period 1980, far below the 2.7 percent or even the national and Florida figures for 1980, when examining performance in St. Petersburg. The balance of Exhibits Nos. 1 through 4 by the Petitioner Fiat, although not discussed in this Recommended Order are found to be factually correct. COMPETITION Within Pinellas County, Volkswagen has two franchise dealers; British Leyland has two franchise dealers; Honda has two franchise dealers; Toyota has three franchise dealers; Dodge has three franchise dealers; Plymouth has three franchise dealers; Subaru has three franchise dealers; and Chevrolet and Ford have four franchise dealer outlets. Again referring to the charts Exhibits Nos. 1 through 4, they would show an increase in percentage of market share by the import automobile industry at a time when the overall numbers of automobile sales have declined, and of those automobile sales in decline, at lease two competitive import product lines, Volkswagen and British Leyland, have been part of the picture of general decline. Nonetheless, they have continued to have two franchises within Pinellas County. EFFECT OF INCREASING FIAT DEALERSHIPS IN PINELLAS COUNTY By increasing the number of Fiat dealerships from one to two, it increases the presence of the Fiat name in the territory by 100 percent. It adds a dealership with proper facilities for furnishing warranty and other repair services, by an organization that has already gained familiarity with the Fiat line; it creates the opportunity for the exchange of vehicles and parts between dealers in the county; it creates the opportunity for the public to engage in comparison shopping and it reduces the amount of time which South County owners must travel to receive factory approved service which now ranges from thirty minutes to an hour if the service is to be obtained from B & L Motors. All of these items relate to the success of Fiat and its franchisees in marketing the Fiat product. In this regard, the statistics offered in this hearing demonstrate that the Respondent B & L has continued to keep pace with Fiat's needs in the market in Clearwater, but it has failed take up the slack that occurred when International lost its franchise. The Petitioner Crown is in a position to assist Fiat in regaining this market share without undue detriment to the Respondent B & L. Crown, in its other automobile sales activities, has primarily concentrated on the southern half of Pinellas County, which is the St. Petersburg area or territory and it would use that experience in the market area in attempting to sell Fiat automobiles to the consuming public.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Crown Pontiac, Inc., d/b/a Crown's Sportscar Center, to be licensed as a Fiat dealer in St. Petersburg, Florida, be GRANTED. DONE AND ENTERED this 13th day of February 1981 in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of February 1981.
