The Issue The issue in this cause is whether petitioners are entitled to either an agricultural classification of their land under F.S. 193.461 or a reduced assessment of their land under F.S. 193.011 for purposes of ad valorem taxation. More specifically, the issue is whether the change made by the Palm Beach County Board of Tax Adjustment in the property appraiser's assessment of petitioners' property lacked legal sufficiency or whether the evidence presented was insufficient to overcome the appraiser's presumption of correctness. In accordance with F.S. 193.122(1) and the case of Hollywood Jaycees v. State Department of Revenue, 306 So. 2d 109 (Fla. 1975), the evidence and argument adduced at the hearing was limited to the scope of the record established before the Palm Beach County Board of Tax Adjustment (BTA).
Findings Of Fact Upon consideration of the pleadings, evidence introduced at the hearing and the oral argument presented by the parties, the following pertinent facts are found: Petitioners are the owners of approximately 300 acres of real property located in Palm Beach County. As of January 1, 1974, the subject property was used for agricultural purposes and had been so used by petitioners or their predecessor for some fifty years prior to 1974. Prior to 1974, the subject land had been assessed at $600.00 per acre and had not been reassessed in approximately six years. Prior to and including 1974, petitioners did not file an application for agricultural classification of their land. For the year 1974, the property appraiser assessed the subject property at $3,000.00 per acre under the provisions of F.S. 193.011. Petitioners appealed to the Palm Beach County BTA which found that the appraiser's presumption of correctness had been overcome and that petitioners should be allowed to retain the prior years' assessment on the property ($600.00 per acre). In support of this decision, the BTA found that it had the authority to extend the time for filing an application for agricultural classification and that it had the authority "in light of AGO 71-81 dated April 28, 1971, to grant the continuance of a prior years assessment where the facts and circumstances surrounding the subject property have not changed and are not expected to change." The BTA notified the respondent of the change in assessment pursuant to F.S. 193.122. The respondent's staff recommended that the BTA's action in this case be invalidated on the ground that the evidence presented to the BTA was insufficient to overcome the property appraiser's presumption of correctness. The petitioners requested a hearing to review the staff recommendation, the respondent's Executive Director requested the Division of Administrative Hearings to conduct the hearing and the undersigned was assigned as the Hearing Officer. Due to the fact that there was no court reporter present at the hearing, the parties stipulated that their respective positions would be reduced to writing by the submission of written memoranda. To date, no such memorandum has been received from petitioners.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that the action of the Palm Beach County Board of Tax Adjustment in granting an agricultural classification and in reducing the assessment of petitioners' property for the tax year 1974 be invalidated. Respectfully submitted and entered this 3rd day of March, 1976, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings Room 530, Carlton Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1976.
Findings Of Fact From August 18, 1976 to December 30, 1977, the date of corporate resignation, O'Brien was President, broker and active firm member for Exclusively. O'Brien also had a separate broker operation which was, and continues to be, conducted at another location as William O'Brien Registered Real Estate Broker. During the August 1976 - December 1977 period, Cocoran was a real estate salesman for Exclusively, and continued to conduct brokerage operations as Exclusively after O'Brien's December 30, 1977 resignation. Corcoran became Exclusively's broker on January 24, 1978. Corcoran was apparently the sole owner of the corporation, although O'Brien understood he was to have been a 52 percent shareholder. On October 5, 1977, O'Brien, after being advised, instructed his staff to place all moneys received from rentals in Exclusively's escrow account. Checks on this account required the signature of both O'Brien and Corcoran; the operating account checks were signed by Corcoran. On October 10, 1977, O'Brien went into the hospital and was unable to operate Exclusively's business. After he found out that moneys were not being properly accounted for and handled in mid-December, O'Brien resigned from the corporation December 30, 1977. On February 9, 1978, in an attempt to satisfy some of the claims against Exclusively, O'Brien, on advice of his attorney, signed checks on Exclusively's escrow account. These checks were dishonored by the bank as that account had been frozen. O'Brien and/or Corcoran and Exclusively were involved in-the following 18 specific transactions: About October 4, 1977, Robert Seneca extended his lease with Edward "Whitey" Ford on a condominium unit located at Suite 274, 234 Hibiscus Avenue, Lauderdale-by-the-Sea, Florida, paying to Exclusively $275.00 for the additional one month's rent. The $275.00 was deposited into Exclusively's operating account In the Sun Bank of Wilton Manors. About November 28, 1977, a check was drawn by Corcoran on the operating account for $247.50, payable to Ford, said sum representing the rental less commission. The check was subsequently dishonored due to insufficient funds and at no time subsequent has Ford received the funds due him. About November 21, 1977, a check for $600.00 was received by Exclusively as payment for rental on Edward "Whitey" Ford's condominium unit located at Suite 274, 234 Hibiscus Avenue, Lauderdale-by-the-Sea, Florida, from Julius Zinn. This $600.00 was deposited to Exclusively's escrow account and on February 9, 1978 a check was issued on Exclusively's escrow account to Ford for $540.00. The check was subsequently dishonored and Ford has not received the funds due him. About November 12, 1977, Samuel Mathes entered into a contract to lease a home owned by Lester J. Grant. Mathes deposited with Exclusively $3,300.00, which represented the first and last month's rent, and the security deposit. About December 9, 1977, Exclusively issued an accounting to Grant showing $1,980.00 due him after deduction of the commission and a check on the operating account of Exclusively for this amount. The check was subsequently dishonored and Grant has not received the $51,988.08 due him. About December 16, 1977, Neale Murphy leased the residence located at 1533 Southeast 6th Street, Deerfield, Florida, from Sam Gillotti paying $51,188.88 to Exclusively, representing the first and last month's rent. About January 20, 1970, Exclusively issued an accounting which showed $440.00 owing to Gillotti after deduction of the real estate commission and issued a check drawn on Exclusively's operating account for that amount. That check was returned due to insufficient funds and Gillotti has not received delivery of the funds due him. About November 16, 1977, Joseph T. Scanlon entered into a lease for property owned by E. P. Goodrich located at 1000 South Ocean Boulevard, Pompano Beach, Florida, paying Exclusively $1,100.00 and about November 21, 1977, a second check was given Exclusively for $2,700.00. The checks were deposited into Exclusively's operating account. About December 14, 1977, Corcoran drew a check on Exclusively's operating account for $2,700.00, the amount due the Goodriches, less commission; that check was returned for insufficient funds. On February 9, 1978, a check was drawn in Exclusively's escrow account payable to Goodrich for $2,97O.00. The bank dishonored the check and Goodrich has not received the funds due him. A lease of property was negotiated between G. Porto and P. Franklin, and $51,980.00, representing the first and last month's rent and security deposit was paid. The lease arrangement subsequently broke down and Porto released his claim to the earnest money deposit held by Exclusively authorizing payment to Franklin. Abaut October 17, 1977, Exclusively transferred the $1,980.00 from its escrow account to its operating account and Franklin has not received the 1,980.00 due him. About December 31, 1977, Exclusively leased an apartment owned by Charles Hora to Cindy Noves and received payment for the first and last month's rent plus the security deposit for a total of $740.00. About January 12, 1978, Exclusively leased to Harry Maier another apartment owned by Charles Hora and received the first and last month's rent plus the security deposit for a total of $740.00. $640.00 was to he the total commission. To this date, Hora has received only $456.09 of the $840.00 due him. About February 9, 1978, a check drawn on Exclusively's escrow account for $202.00 to Charles Hora was subsequently dishonored and at no time subsequent has Hora received the funds due him. In October, 1977, Bernard Goldstein, lessee of an apartment owned by Basil de Verteuil, exercised an option to extend his lease. About November 16, 1977, Goldstein paid to Exclusively the sum of $500.00 by check which was deposited into Exclusively's operating account, the $500.00 representing the rental payment for the additional one month extension. About January 16, 1978, Corcoran wrote a check on the operating account of Exclusively in to amount of $450.00, said sum representing the rental payment less commission. That check was dishonored by the bank and at no time subsequent thereto has Verteuil received the funds due him. About December 9, 1977, Robert Reeder leased his rental property located at 1016 Northeast 17th Way, Apartment 4, Fort Lauderdale, Florida, to Meg Wilson. Exclusively issued an accounting about December 9, 1977, which stated that they had received $370.50 from Wilson. The accounting further stated that Exclusively owed Reeder $190.00 after the deduction of the $180.00 commission. On February 9, 1978, a check was drawn on Exclusively's escrow account in the amount of $190.00 to Reeder. That check was subsequently dishonored by the bank and at no time has Reeder received the funds due. About December 6, 1977, William McCormick entered into a lease to rent real property owned by Stephen Runkle for a period of six months. About December 12, 1978, Exclusively sent an accounting to Runkle showing that they had received $790.08 representing the first and last month's rent and security deposit. The $790.00 check from McCormick was deposited to Exclusively's operating account. The accounting showed that after deduction of commission and certain cleaning charges that $578.00 was due Runkle. About January 17, 1978, a check was drawn on exclusively's operating account in the amount of $578.00. That check was dishonored and at no time subsequent has Runkle received the funds due him. About November 15, 1977, George F. Meyer executed a check payable to Exclusively in the amount of $1,200.00, representing one month's rent plus a $600.00 security deposit on a residence located at 1824 Coral Ridge Drive, Fort Lauderdale, Florida, owned by Norf Petrucci. The security deposit was never forwarded to Petrucci. The premises were inspected by Petrucci at the termination of the lease and it was determined that Meyer was entitled to the return of his security deposit but at no time has Meyer received the funds due him. About November 20, 1977, Julius Volinsky leased his residence, known as Apartment 417, l Las Olas Circle, Fort Lauderdale, Florida, to Julius Burt for a term of 12 months, through Exclusively. Burt executed a check for $1,500.00 payable to Exclusively, said sum representing the first and last month's rent and security deposit. That check was deposited to Exclusively's operating account. An accounting prepared by Exclusively about December 12, 1977, showed $400.00 due Volinsky and a check was drawn on Exclusively's operating account to Volinsky. This check was returned due to insufficient funds and at no time has Exclusively delivered the $400.00 to Volinsky. About December 4, 1977, Exclusively leased an apartment owned by Michael Bombardier to Selma Schachter. The lease was for four months with a total rent of $3,100.00 which was paid to Exclusively. About December 19, 1977, a check was drawn on Exclusively's operating account for $2,790.00 payable to Bombardier, representing the amount due Bombardier less the real estate commission of $310.00. That check was returned due to insufficient funds. In January, 1978, Exclusively gave Bombardier $480.00 as partial payment but the remaining $2,310.00 is still due. In January, 1977, Exclusively secured Robert DiTacchio to rent a condominium unit owned by Robert Knack at 3000 Rio Marsh Street, Fort Lauderdale, Florida. Exclusively received from DiTacchio $900.00 representing the first and last month's rent and the security deposit; $300.00 was to be retained by Exclusively as the commission leaving a balance due Knack of $600.00. Knack has not received the $600.00 due him. In November, 1977, Joey Clark, salesperson for Exclusively showed an Apartment 4-G, in the Royal Park Condominium, Fort Lauderdale, Florida, to Jeannette Verboom. Verboom advanced $680.00 to Exclusively to secure a lease for Apartment 4-G. Apartment 4-H was, in fact, the apartment upon which Exclusively had its listing agreement. Upon being made aware of the mistake and viewing Apartment 4-H, Verboom requested the return of her money. On February 9, 1978, a check was issued to Verboom from Exclusively's escrow account for $680.00. That check was subsequently dishonored and Verboom has not received the funds due her. About November 4, 1977, William O'Brien, broker for Exclusively, leased an apartment at 101 Royal Park Drive, Oakland Park, Florida, belonging to Elizabeth Finn to Mr. and Mrs. Eric Whittel and issued a receipt for $600.00 received from the Whittels for the rental of the apartment. At no time has Finn received the funds due her. About November 29, 1977, Edward J. Pfleger leased his apartment located at Suite 4-H, Building 113, Royal Park Condominium, 1500 Northwest 38th Street, through Exclusively to Marie Pugliese and Barbara Foreman. Exclusively received $580.00 representing the first and last month's rent, plus $100.00 security deposit. The $680.00 was deposited to Exclusively's operating account. About January 4, 1978, a check on Exclusively's operating account was drawn for $332.00 payable to Pfleger, representing the rental monies due him less the real estate commission. The check was returned due to insufficient funds, and Exclusively has not paid Pfleger the $332.00 due him. Due to the above checks that were issued without sufficient funds, an overdraft on Exclusively's operating account at the Sun Bank of Wilton Manors in the amount of $3,367.88 was created. At no point has Exclusively paid Sun Bank for the overdraft.
Recommendation From the foregoing findings of fact and conclusions of law, it is RECOMMENDED that William O'Brien be fined the sum of $2,800.00 ($200.00 for each of 14 counts) . It is further RECOMMENDED that the licenses of Michael J. Cocoran and Exclusively Rentals and Management, Inc. be revoked. DONE AND ORDERED this 20th day of November, 1980, in Tallahassee, Florida. HAROLD E. SMITHERS Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of November, 1980. COPIES FURNISHED: John Huskins, Esquire Staff Attorney Department of Professional Regulation 2009 Apalachee Parkway Tallahassee, Florida 32301 Dewey A. F. Ries, Esquire 215 NorthEast Third Street Fort Lauderdale, Florida 33301 Michael J. Corcoran 3121 NorthEast 51st Street, Apt 106-E Fort Lauderdale, Florida 33306 William O'Brien t/a Choice Listings and Rentals 4290 Northeast 7th Avenue Fort Lauderdale, Florida 33334
The Issue Whether Petitioner's September 29, 1993, claim (Claim No. 34092993) for reimbursement of expenses for medical services rendered in 1992 should be denied on the ground that said claim was not timely filed with Department of Management Services, Division of State Employees' Insurance (hereinafter referred to as the "Department")?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner is now, and has been at all times material to the instant case, a participant in the State of Florida Flexible Benefits Plan (hereinafter referred to as the "Plan") with an established Medical Reimbursement Account. The following were among the medical expenses incurred by Petitioner and members of her immediate family during the 1992 calendar year: DATE TYPE OF SERVICE AMOUNT 6/29/92 Dental $70.00 7/9/92 Dental $310.00 7/11/92 Endodontic $450.00 7/17/92 Optical $266.75 7/22/92 Dental $500.00 7/27/92 Optical $84.70 8/19/92 Optical $416.50 12/29/92 Dental $210.00 In August of 1992, Hurricane Andrew ravaged parts of South Florida. Petitioner's residence was extensively damaged by the storm. Most of the contents of the residence, including medical records and receipts, were destroyed. Petitioner and her family were forced to vacate the premises. They packed their remaining belongings and moved to another location in Dade County, with the intention of returning to their home once the damage to the structure had been repaired. As of the date of the hearing in this case, all of the necessary repairs to the home had yet to be made and therefore the family had not moved back in. Petitioner and the other members of her family were among those residents of South Florida whose lives were significantly disrupted by the hurricane and the destruction and devastation it caused In the aftermath of the hurricane, Petitioner directed her energies toward obtaining a return to normalcy in her life. Although she realized that there were medical expense reimbursement claims that she needed to file with the Department, filing these claims was not a priority of hers. She focused her attention on other matters that she considered to be more deserving of her time given her situation. In January or February of 1993, Petitioner telephoned the Department to inquire if extensions of time for filing reimbursement claims were being given to Plan participants, such as herself, who were still suffering from the consequences of Hurricane Andrew. The person to whom Petitioner spoke advised her that such extensions were indeed being given. Based upon what she had been told by this Department representative, Petitioner reasonably believed that she would be able to file reimbursement claims for 1992 medical expenses after March 1, 1993, without having these claims rejected on the ground that they had been untimely filed. She therefore felt that there was no urgency with respect to the filing of these claims and she acted accordingly. Shortly after gathering all of the supporting documentation she believed she needed, 1 Petitioner, on September 29, 1993, filed a claim with the Department requesting that she be reimbursed from her Medical Reimbursement Account for the medical expenses enumerated in Finding of Fact 2 of this Recommended Order. The Department designated the claim as Claim No. 34092993. Petitioner also sought reimbursement, through the filing of this claim, of certain medical expenses incurred in 1993, including $140.00 for dental work that Petitioner had inadvertently indicated on the claim form had been performed in July of 1992. The work had actually been done in July of 1993. By letter dated October 8, 1993, the Department advised Petitioner that "[o]nly expenses for services rendered during the January 1, 1993 through December 31, 1993 plan year are eligible for reimbursement" and that "[s]ince [her] 1992 expense does not fall within this plan year, it is not reimbursable." Petitioner responded to this advisement by sending the following letter, dated November 28, 1993, to the Department: This is a petition or application requesting a formal hearing on my Claim #34092993 for Payment/Reimbursement for expenses incurred during my period of coverage for 1992. This Claim was denied. My Name is: Luretha F. Lucky My Address is: 10430 S.W. 162nd Terrace (temporary) Miami, Florida 33157 My permanent address is: 10361 S.W. 139th Street Miami, Florida 33176 I am employed at Florida International University, Miami, Florida 33199. I filed my claim late because my home was severely damaged when hit [b]y Hurricane Andrew, August 24, 1992. In addition, the content[s] in my home w[ere] destroyed, therefore, it took awhile for me to collect documentation for my claim from medical personnel. Also, I had to move and the few items saved were packed away. Lastly, I called the Department of Management Services, Division of State Employees' Insurance to inform them of what had happened to me and asked if . . . they were providing extensions on submitting claims. I was told they were. My mistake was not asking and recording the name of the person with whom I spoke. As you can see from my temporary address, I am still not back in my home! In fact we just settled (with the assistance of the Insurance Commissioner's Office) with our insurance company to complete the work on our home. We had to request an extension on filing our income tax for 1992. This past year has been an awful experience for us, and I do hope you will provide me a hearing on my reimbursement. My Claim # is: 34092993. The decision that my claim was denied was received by regular mail. Thank you very much for considering my request.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that the Department enter a final order finding Petitioner's September 29, 1993, claim (Claim No. 34092993) for reimbursement of expenses for medical services rendered in 1992 to have been timely filed and therefore subject to consideration on its merits. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 15th day of April, 1994. STUART M. LERNER 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 15th day of April, 1994.
Findings Of Fact Petitioner is Central Phosphates, Inc. ("CPI"), a Delaware corporation, engaged in the business of processing phosphate and manufacturing phosphate fertilizer. Petitioner rents and operates a phosphate fertilizer processing plant which is located in the vicinity of Plant City, Florida (the "Plant"). At issue in this proceeding is whether a sales tax under Section 212.05, Florida Statutes (1977), is due on the rental of the Plant. The Plant was constructed in 1974. The construction was financed in an arrangement involving CF Realty, a sister company of CPI which is wholly owned along with CPI by CF Industries, Inc. CF Realty originally purchased the equipment and other personal property that constitute the Plant from certain contractors. CF Realty then sold the Plant to Plantlease Corporation ("Plantlease"), a New York for profit corporation. Plantlease is a wholly owned subsidiary of Morgan Guarantee Company, a New York lending institution. Plantlease was organized solely and specifically to acquire title to the Plant and to lease the Plant back to CPI, which would operate the Plant. Plantlease paid for the Plant by assuming CF Realty's indebtedness on the construction loan and by paying some additional cash. Plantlease then leased the Plant to CPI for an initial term of 15 years. At the end of this initial term CPI has the right to elect to extend the lease for an additional two years or it may elect to purchase the Plant from Plantlease. At the end of the first extended term, CPI has the option of renewing the lease for a second renewal term of two years, or purchasing the Plant. If the lease is extended to the full 19 years, CPI is entitled to purchase the Plant at the end of that term. CPI makes quarterly rental payments to Plantlease pursuant to the lease. Since the first payment of rent in May, 1975, CPI has also been paying to Plantlease a sales tax of four percent of the amount of each payment pursuant to Section 212.05, Florida Statutes (1977). Plantlease, in turn, has remitted these payments to the Florida Department of Revenue with which it has registered as a dealer. Plantlease, as a potential claimant of a refund of the allegedly erroneously paid rental tax, has waived its right to a refund as reflected in its letter dated May 4, 1978, to the Florida Department of Revenue. Since May, 1975, CPI has paid sales taxes into the State Treasury in the amount of $861,322.55 which rental tax along with all other rental tax payments paid on the Plant since May, 1978, would be refunded if CPI were not liable for the rental tax. On May 8, 1978, CPI filed an Application for Refund with the Comptroller's Office of the State of Florida seeking a refund of the amount allegedly erroneously paid by CPI to the State Treasury and giving reasons for the claim for a refund. CPI bases its claim for a refund on the grounds that the Plantlease rental of the Plant to CPI constitutes an occasional or isolated sales transaction under Section 212.02 (9), Florida Statutes (1977). By letter dated May 30, 1978, the Comptroller's Office denied CPI's Application for Refund and determined that CPI's transaction with Plantlease was not exempt from Section 212.05, Florida Statutes (1977), and the regulations pursuant thereto. On or about July 7, 1978, CPI timely filed a Petition for a Section 120.57(1), Florida Statutes (1977), hearing on the issue of whether, for aforementioned reasons, a refund was due on the sales tax paid on the Plant. By application dated May 9, 1975, and received by respondent on May 12, 1975, Plantlease applied to respondent for a certificate of registration to engage in or conduct business as a dealer. Item 10 on the form application calls for "Type of Business." In the blank provided, Plantlease's agent has supplied "Rental of personal property." Underneath the blank, in parentheses, are examples of types of businesses, "Grocery, hardware, jewelry " Exhibit A-I, attached to Joint Exhibit No. 2. The foregoing findings of fact should be read in conjunction with the statement required by Stuckey's of Eastman, Georgia v. Department of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976), which is attached as an appendix to the recommended order.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent deny petitioner's application for refund. DONE and ENTERED this 12th day of January, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 APPENDIX Except for the final paragraph, the findings of fact in the recommended order are based on the parties' stipulation, which was received as joint exhibit No. 2. Paragraphs one, two, three, five, nine and ten of petitioner's proposed findings of fact have been adopted in toto. The first sentence of paragraph four of petitioner's proposed findings of fact has been rejected as not being supported by the evidence. The second sentence has been adopted, in substance. Paragraph six of petitioner's proposed findings of fact has been adopted except for the second sentence, which is actually a proposed conclusion of law. Paragraph seven of petitioner's proposed findings of fact has been adopted, in substance. Paragraph eight of petitioner's proposed findings of fact has been adopted except for the second sentence, which is actually a proposed conclusion of law. Paragraphs eleven and twelve of petitioner's proposed findings of fact have been rejected as contrary to the evidence. COPIES FURNISHED: Charles Alvarez, Esquire Gary P. Sams, Esquire Mahoney, Hadlow & Adams Post Office Box 5617 Tallahassee, Florida 32301 Linda C. Procta, Esquire Harold F. X. Purnell, Esquire Assistant Attorneys General The Capitol, Room LL04 Tallahassee, Florida 32304
Findings Of Fact Introduction Petitioner, Stacey Health Care Centers, Inc. d/b/a Riverside Care Center (RCC or petitioner), operates an eighty bed nursing home at 899 Northwest Fourth Street, Miami, Florida. The facility is licensed by respondent, Department of Health and Rehabilitative Services (HRS). At all times relevant hereto, RCC was a participant in the Florida Medicaid Program. The facility has been in operation since March, 1983, and has always attained a superior rating. In July, 1984 it filled all eighty beds and has remained full since that time. As a Medicaid participant, RCC was required to submit to HRS a cost report for the fiscal year ending December 31, 1984. This was filed in the latter part of March, 1985. The report sets forth those costs which RCC claims it incurred in providing Medicaid services during the fiscal year. In 1985, HRS contracted with Grant Thornton, an independent accounting firm, to perform a field audit of RCC's books and records to verify whether RCC's reported costs for fiscal year 1984 were proper expenditures and therefore reimbursable. On May 7, 1986 an audit report and management letter were issued by Grant Thornton proposing that RCC's cost report be adjusted in nineteen respects. The report and letter were later forwarded by HRS to RCC on January 7, 1987. Contending that seven of the adjustments (2, 3, 5, 6, 7, 12 and 15) were not appropriate or justified, RCC requested a formal hearing to contest the report. This resulted in the instant proceeding. Audit Principles and Guidelines Under the Medicaid contract entered into by RCC and HRS, the provider agreed to conform with all pertinent rules and regulations governing Medicaid providers. These include, in order of importance, (a) relevant agency rules codified in the Florida Administrative Code, (b) the Florida Title XIX Long-Term Care Reimbursement Plan (Long Term Plan) then in effect, (c) the Health Insurance Manual (HIM-15), which is a compendium of federal cost reimbursement principles for nursing homes, and (d) where applicable, generally accepted accounting principles (GAAP). Of particular relevance to this proceeding is Subsection III.G.1. of the September 1, 1984 Long Term Plan which provides that "the 0wner administrator . . . compensation will be limited to reasonable levels determined in accordance with HIM-15." The latter document utilizes Bureau of Health Insurance (BHI)/2 data to determine reasonable compensation for owner- administrators in other similar sized institutions in the same geographic area. From this data, a cap or limitation is derived, and any owner compensation above this cap is disallowed and not reimbursed. The theory behind this cap is that an owner- administrator should receive no more compensation than does a non- owner administrator. Also relevant is the so-called prudent buyer concept embodied in section 2103 of HIM-15. Paragraph A of that section provides in part that "the prudent and cost- conscious buyer not only refuses to pay more than the going price for an item or service, he also seeks to economize by minimizing cost." Put another way, the buyer will pay no more than is necessary to procure a supply or service and if he does not, the expense is disallowed. The Concept of Hateriality (Items 2, 7 and 12) The audit report proposes to disallow items 2, 7 and 12 on the ground RCC did not provide adequate documentation to support the expenditures. In sum, the three items total $145. The parties have stipulated that the issue of adequate documentation is not yet ripe. Even so, petitioner suggests the expenses should be allowed since they are "immaterial to the overall cost report." However, the testimony herein reflects that even though an item is immaterial, it may still be disallowed if not in compliance with pertinent regulations. Put another way, there is no regulation or rule which requires an expenditure to be automatically approved simply because it is immaterial. Therefore, the proposed adjustments are proper. Owner's Compensation (Items 3, 5, 6 and 15) Corporate structure The majority (95 percent) of the capital stock of RCC is owned by Stacey Enterprises, Inc. (SEI) located in Cincinnati, Ohio. SEI also owns and operates a 63-bed skilled nursing facility, Gerrard Convalescent Home (GCH), in Covington, Kentucky which is subject to that state's regulatory jurisdiction. Under this corporate structure, which is called a "chain organization" in federal bureaucratese, SEI is considered to be a "home office" providing certain administrative and support functions to RCC. In theory, a home office managing more than one facility should be more efficient than a nursing home that provides its own administrative functions. This is because a home office should reduce costs through economy of scale. In the health care industry, a home office may provide such services as purchasing, personnel, payroll, accounting, computer, and the like. Ralph L. Stacey, Jr. (Stacey), who resides in Covington, Kentucky, is the president and sole stockholder of SEI. He is licensed as a nursing home administrator in Florida and Kentucky, and serves in that capacity at both RCC and GCH. However, in 1984 he had another full-time licensed administrator at RCC and consequently did not claim reimbursement for a full- time salary at either facility. Stacey is also the sole employee of the home office. As such, his duties for the three entities (RCC, GCH and SEI) overlap, and coupled with his place of residence, constitute the source of this controversy. Filing requirements Because of the chain organizational setup, HRS required the provider to file two annual cost reports, one in the name of RCC and the other by SEI as the home office. Both purported to reflect those costs which were properly allocated to Florida operations and were therefore reimbursable under the Florida Medicaid program. However, since the RCC report contains Florida's allocated portion of home office costs, the HRS audit refers only to RCC's 1984 Medicaid cost report. Content of two reports Since SEI claims it provided services in 1984 to both RCC and GCH, an allocation of its regulatory expenses ($7,504) was necessary in order to determine what portion applied to Florida operations. To do this, and for purposes of filing the home office report, SEI developed a ratio based on total patient days of the two facilities, an accepted method for making such an allocation. After removing $139 in non-regulatory expenses, SEI then allocated 54.4 percent of the remaining home office expenses to RCC, or a total of $4,007. Of that amount, over ninety-seven percent fell within the category of "travel." Included within this category are $2,103 in airline tickets, while the make up of the remaining expenses has not been identified. However, the parties have suggested they include primarily "living" expenses incurred by Stacey while living part- time in Miami in 1984. All were ostensibly incurred while Stacey served in the role of a home office employee. The home office charges are referred to on the audit report as adjustment number 5. In addition to the home office charges, RCC's cost report claims reimbursement for a pro rate portion of expenses incurred by Stacey while serving as administrator for both RCC and GCH in 1984. To allocate these costs, Stacey determined the amount of time devoted to each facility, and then assigned appropriate portions of his total expenses to each operation. The precise factor used is not of record. It is noted that the audit report classifies these expenses into three categories (gas and electric, other travel and rent) while the witnesses referred to them as rent, meals, utilities, motor vehicle expenses, supplies, salary, and other miscellaneous items. Whatever their nature, they are reflected on the audit report as adjustment numbers 3, 6 and 15. The controversy and HRS' Proposed action The principal controversy herein centers around Stacey's claimed expenses while commuting to and living in Florida in 1984, and which were charged to RCC as administrative costs or as indirect home office charges. The commuting was necessary since Stacey's primary residence was Covington, Kentucky, and he was also required to tend to duties as an administrator in Kentucky and a home office employee in Ohio. In its audit report, the agency has proposed to disallow all such costs on the general ground they were not related to patient care, relying principally on Sections 2102.3 and 2304 of HIM- 15 as authority for such action. As clarified at hearing, HRS then relied upon the prudent buyer concept and owner's compensation rule to combine Stacey's travel and lodging expenses and certain other minor items with his salary and treat them as part of owner's compensation. These items are characterized in the audit report as gas and electric charges ($2,114), "other" travel ($9,243), and rent expense ($5,910), and, as noted above, are identified as adjustments 3, and 15, respectively.2/ In addition, HRS concluded that all of the home office expenses ($4,007) were violative of the prudent buyer concept since none would be needed if RCC had used a Florida resident as administrator. Accordingly, it reclassified them as owner's compensation on the theory the expenditures benefited the owner and therefore constituted personal compensation to Stacey. These charges (both home office and administrative) collectively totaled $37,082/4 The agency then utilized what it perceived to be the proper cap under then-applicable BHI guidelines ($33,830) for owner's compensation, and applied a 55.9 percent factor to that amount./5 This produced a cap for RCC in the amount of $18,911. All expenses ($21,274) above that cap were disallowed. An analysis of the services provided During 1984, and as reflected in petitioner's exhibit 1, Stacey made numerous trips by airline between Cincinnati and Miami while visiting the RCC facility. Each month Stacey spent between nine and eighteen days in Miami. This is confirmed by his personal calendar introduced in evidence as petitioner's exhibit 1. He also executed a one-year lease on an apartment in Miami on February 1, 1984 at a cost of $465 per month. He did so on the theory it was cheaper to rent than to pay nightly motel charges. However, Stacey acknowledges that if he had elected to spend $50 per day on lodging, he would have spent $7,040, or $984 less than that amount claimed on the cost report for apartment rent and utilities. While in Miami, Stacey utilized the RCC station wagon to transport patients between the hospital and the facility, for screening purposes, and for errands to purchase supplies. This was not controverted. However, the vehicle was also used by Stacey to carry him from his apartment to the facility and return, a use considered personal by HRS. To separate the two functions, Stacey should have kept a record (e.g. a trip log) to show what part of the usage was personal, and what part was related to patient care. Here no such records were apparently maintained, and consequently a precise allocation cannot be made. But, since documentation is not in issue, this point is not now germane. In his role as administrator and home office employee, Stacey's duties included staffing the facility, dealing with governmental agencies, developing and implementing policies and procedures, handling payroll and purchasing, and approving vouchers for both reasonableness and payment. The duties and functions, if prudent and necessary, are clearly within the scope of those performed by an administrator and home office employee. However, the record is less than clear as to which duties were performed when and in what capacity. Reconciling what happened with HRS rules - A cost difficult task There is no rule or regulation that prohibits a Florida nursing home from employing a nonresident administrator. /6 Moreover, it is not uncommon for an administrator to serve in that capacity at more than one facility. At the same time HRS routinely reimburses a provider for legitimate, reasonable home office expenses such as travel, lodging and administrative functions that are incurred while performing necessary support. Notwithstanding the lack of a rule that prohibits Stacey from being administrator, his position must be viewed in light of the prudent buyer concept. Under this concept, Stacey must show that it is more efficient and economical to utilize his services as administrator than to hire one who lives in the Miami area. In this regard, the proof is lacking. More Specifically, other than self-serving statements that this type of setup was more economical and efficient, Stacey did not provide any concrete evidence that contradicted the testimony of HRS witness Donaldson./7 This is especially true since Stacey already had a full-time licensed administrator (Tim Newren) on RCC's payroll who was able to run RCC's day-to-day operations in Stacey's absence. Indeed, their functions seemed to be duplicative in nature, and Stacey, when asked to describe Newren's duties when both were in Miami, indicated that Newren "consults with me." There was also no evidence to show that Stacey performed special services that Newren could not, or that it was necessary he be in Florida around twelve days each month, particularly since Stacey acknowledged he was in daily telephonic contact with Newren when in Ohio and Kentucky. Therefore, with one exception noted hereinafter, the expenditures in adjustments 3, 6 and 15 were not prudent and were properly disallowed. As noted earlier, the RCC station wagon was used to transport and screen patients, and for errands related to patient care. Such usage would have occurred even if Stacey had not come to Florida. Because their reasonableness has not been questioned, and the expenses relate to patient care, they should be allowed subject to the provision by RCC of proper documentation. HRS regulations and acknowledged prior audit policy allow reimbursement for reasonable travel expenses associated with the provision of home office services. However, to prove their legitimacy, they must be shown to be necessary, and to ef- fectuate savings to the provider. In this case, the charges to Florida operations were principally airline tickets for periodic trips to Florida, and living expenses for Stacey while in Miami. Although the record is not altogether clear, these charges were incurred by Stacey to come to Florida where he presumably then performed certain tasks that would normally be provided by a home office. Here again, the provider did not show that it was essential to perform the services in Florida, or that they could not have been performed by Newren. As such, they were not prudent, and should be disallowed. Finally, HRS utilized the wrong BHI cap in computing compensation to be allowed the owner. Instead of using $35,824, HRS erroneously used the figure of $33,830. The former limitation is the correct amount, and results in an increase in owner's compensation of $1,131.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that petitioner's cost report be adjusted and reimbursement accordingly made in a manner consistent with this Recommended Order subject to the furnishing of proper documentation by the provider where necessary. DONE AND ORDERED this 17th day of September, 1987, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of September, 1987.
The Issue The issue in this case is whether Petitioner, Affordable Home Ownership Corporation, is eligible for a consumer certificate of exemption as a charitable institution pursuant to Section 212.08(7)(o), Florida Statutes.
Findings Of Fact Petitioner, Affordable Home Ownership Corporation (hereinafter referred to as "AHO"), is a Florida nonprofit corporation. Respondent, the Department of Revenue (hereinafter referred to as the "Department"), is an agency of the State of Florida. Among other things, the Department is charged with responsibility for implementing and administering Florida tax laws, including Chapter 212, Florida Statutes. During 1996, AHO submitted an application for an exemption under Chapter 212, Florida Statutes, as a charitable organization. According to the Articles of Corporation of AHO, its purpose is: To raise the economic, educational and social levels of the underprivileged residents of Lake City (Columbia County), Florida, and its trade area, who are substantially underemployed and have low income, by fostering and promoting community-wide interest and concern for the problems of such residents, and to that end; Racial tension, prejudice, and discrimination of economic and otherwise may be eliminated; Sickness, poverty and crime may be lessened and; Educational and economic opportunities may be expanded among the residents of Lake City (Columbia County), Florida, and its trade area. To expand the opportunities available to said residents to own, manage, and operate business enterprises in economically underprivileged or depressed areas; to assist said residents and groups in developing management skills necessary for the successful operation of business enterprises; to provide financial support for the successful operation of business enterprises by said residents and to assist said residents in obtaining such financial support from other sources. To aid, support and assist by gifts, contributions or otherwise, other corporations, community chests, funds and foundations organized and operated exclusively for charitable, religious, scientific, literary or educational purposes, no part of the net earnings of which inures to the benefit of any private shareholders or individuals, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation. To do any and all lawful activities which may be necessary, useful or desirable for the furtherance, accomplishment, fostering or attainment of the foregoing purposes, either directly or indirectly, and either along or in conjunction or cooperation with others, whether such others be persons or organizations of any kind or nature such as corporations, firms, associations, trust, institutions, foundations, or governmental bureaus, departments or agencies. The Department conceded in its proposed recommended order that AHO meets the requirement for exemption in this matter that it be designated a Section 501(c)(3) charitable organization by the United States Internal Revenue Service. The services provided by AHO are provided without charge to its clients. Those services include recruiting families who are qualified for federal home loans who are committed and able to provide their time and labor to construct their own housing. AHO brings several such families together to share the labor and effort necessary to build housing for each family. Each family shares in the labor of constructing the home of each other family in the group. AHO assists the families prepare mortgage applications necessary to receive federally subsidized loans and provides credit counseling necessary for families to qualify for such loans. Once a family qualifies for a loan, AHO assists in the selection of house plans, the selection of construction materials, the organization of the family groups, teaches general construction techniques and assists with all aspects of completing construction of housing. AHO also assists in bookkeeping necessary to administer mortgage loans. AHO does not act as a general contractor. Nor does AHO provide construction labor or materials, or the funds necessary for construction. AHO receives administrative grants through the state's Housing Finance Agency as a Community Housing Development Organization. AHO's expenses in providing its services are entirely expenses of the organization. AHO's total expenditures are for its day-to-day operations. No funds are expended directly for clients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department of Revenue denying the certificate of exemption sough by Affordable Home Ownership Corporation. DONE AND ORDERED this 2nd day of June, 1997, in Tallahassee, Leon County, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this this 2nd day of June, 1997. COPIES FURNISHED: Rufus L. Smith Executive Director, A.H.O.C. Affordable Home Ownership Corporation Post Office Box 7347 Lake City, Florida 32055 Kevin J. ODonnell Assistant General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issue in this case is whether the Respondent's real estate broker's license should be revoked or otherwise penalized based upon the charges set forth in the Administrative Complaint.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the state of Florida, in particular, Section 20.30, Florida Statutes, Chapters 120, 445 and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent, Michael L. Liddle, is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0241275 in accordance with Chapter 475, Florida Statutes. The last license was issued to Respondent as a broker, c/o Liddle Property Services, Inc., 10877 Overseas Highway, Marathon, Florida 33050. In 1988, Respondent undertook to manage the rental of an apartment for Patricia D. King and her husband Leonard King. Chris Fullum, an employee of the Respondent, was handling the details of renting the apartment for the Kings. In conjunction with the rental of the Kings' apartment, Respondent sent the Kings a net rental income check dated October 1, 1988, for $612 which the Kings attempted to deposit in their bank account. The escrow check from the Respondent was returned to the Kings on October 21, 1988, marked "NSF" (non-sufficient funds). At the request of Respondent, Ms. King attempted to redeposit the check, but it was returned again on November 1, 1988 marked "NSF" and "do not present again as a cash item enter only for collection." Ms. King filed a complaint with the Florida Department of Professional Regulation and sent a copy of her complaint letter to the Respondent on November 10, 1988. On November 15, 1988, she received a cashier's check from Respondent for the returned net rental income check plus returned check charges. In the latter part of 1988, Respondent managed the rental of an efficiency apartment (#116 Ocean Isles Fishing Village), for Marva Kay Mizell. In conjunction with the rental described in paragraph 7, the Respondent sent to Ms. Mizell her net rental income checks for September and October 1988 totaling $620.37. After Marva Kay Mizell deposited the checks, the checks were returned to her marked "NSF". Ms. Mizell sent a copy of the complaint she filed with the Department of Professional Regulation to the Respondent. Thereafter, on January 9, 1989, Respondent sent Marva Kay Mizell a cashier's check covering the returned net rental income checks plus returned check charges. On January 20, 1989 Respondent was interviewed in his office by Petitioner's investigator, George B. Sinden, who was accompanied by another investigator, William Reich. Respondent advised Petitioner's investigators that his bookkeeper had left his employ in August 1988, and Respondent had been lax in maintaining the escrow account during September and October of that year during which period of time approximately IS checks were returned for insufficient funds. At the January 20, 1989 meeting, Respondent further advised that he had "made all the checks good." In response to a request for documentation regarding the rentals he was managing, Respondent admitted he had no written rental agreements or leases. He offered as an explanation that his rentals were short term, i.e., one day to three months. Investigator Sinden determined from Respondent that Respondent typically maintains a "tally sheet" on each unit and sends the owner a monthly "recap" with their net rental income check each month. On January 20, 1989, an office inspection and audit of Respondent's escrow trust accounts was conducted by Petitioner's investigator George B. Sinden, assisted by Petitioner's investigator William Reich. Respondent's escrow accounts were found to be short in the amount of $1,236.19. There were no pending sales at the time of the audit. Respondent told Petitioner's investigators that he (Respondent) would deposit $1,236.19 into the escrow account and would provide proof thereof along with a copy of the last 13 bank statements, all returned checks and proof of payment by February 6, 1989, to the Miami FDPR office. As of February 23, 1989, the documentation promised by Respondent had not been received. As of March 28, 1989, very little documentation had been received by Petitioner's investigators. Efforts by Petitioner's investigators to contact Respondent have been unsuccessful and Respondent has failed to return phone calls from the investigators. Because of Respondent's lack of good accounting practices, both Ms. Mizell and Ms. King were unable to determine whether their real property had, in fact, been rented or leased during any given time or how often the units were rented.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order finding Respondent Michael L. Liddle guilty of all charges as alleged in Case No. 89-4981 and that the real estate broker's license of Respondent be revoked. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of February, 1990. J. STEPHEN MENTON 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 2nd day of February, 1990. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Michael L. Liddle c/o Liddle Property Services, Inc. 10877 Overseas Highway Marathon, Florida 33050 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32801 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 APPENDIX TO RECOMMENDED ORDER CASE NO. Case Number 89-4981 The Petitioner has submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order where Accepted or Reason for Rejection 1. Adopted in substance in Findings of Fact 1. 2. Adopted in substance in Findings of Fact 2. 3. Adopted in substance in Findings of Fact 3. 4. Adopted in substance in Findings of Fact 4. 5. Adopted in substance in Findings of Fact 5. 6. Adopted in substance in Findings of Fact 6. 7. Adopted in substance in Findings of Fact 7. 8. Adopted in substance in Findings of Fact 8. 9. Adopted in substance in Findings of Fact 9. 10. Adopted in substance in Findings of Fact 10. 11. Adopted in substance in Findings of Fact 11. 12. Adopted in substance in Findings of Fact 12. 13. Adopted in substance in Findings of Fact 13. 14. Adopted in substance in Findings of Fact 14. 15. Adopted in substance in Findings of Fact 15. 16. Adopted in substance in Findings of Fact 16. 17. Adopted in substance in Findings of Fact 17. 18. Adopted in substance in Findings of Fact 18.
