The Issue Is the taxpayer, Epic Hotel, LLC, entitled to a refund of $10,000 of sales tax paid for building materials that were used for the rehabilitation of real property located in an enterprise zone, on the basis that 20 percent of its permanent, full-time employees are residents of the Enterprise Zone?
Findings Of Fact The Department is an agency of the State of Florida and is authorized to administer the tax laws of the State of Florida. In 2008 Epic constructed and began operation of a hotel in a State of Florida Enterprise Zone in Miami-Dade County, Florida. Epic sought a refund of sales tax paid on building materials for the construction of the hotel. The sales tax paid on building materials used in the rehabilitation of real property located in an Enterprise Zone may be exempt up to $10,000, upon a showing that the items have been used for the rehabilitation of real property located in an Enterprise Zone and that 20 percent or more of the taxpayer’s fulltime, permanent employees reside in the Enterprise Zone. On or about August 24, 2009, Epic filed an Application for Refund–Sales and Use Tax. It requested refund of $10,000 in sales tax for building materials used to build the hotel. It submitted a completed Department form DR-26S and other documents, including a completed Department form EZ-M. The form EZ-M is the Department’s “Application for Eligibility” for the Florida Enterprise Zone Program Building Materials Sales Tax Refund. The form included a completed Section I identifying permanent, full-time employees Epic represented reside in the Enterprise Zone. The form represented that 22 percent of Epic’s full-time, permanent employees reside in the Enterprise Zone. The Enterprise Zone Coordinator for the area signed the EZ-M certifying, “that I have examined the statements contained on this application certificate, and to the best of my knowledge and belief they are true, correct and complete.” The record does not indicate whether the Enterprise Zone Coordinator is an employee of the Department. John Shettle, Tax Auditor for the Department, audited Epic’s refund application. Mr. Shettle is responsible for auditing refund applications. His duties include verifying that refund applications are complete and accurate, and that the applicant has provided the documentation required by the refund statute. The Department issued Epic a Notice of Intent to Make Refund Claim Changes, Form DR-1200R (for Refund Number R09246069). It proposed to deny the refund claim for $10,000. The Notice asked Epic to provide additional documentation aimed at establishing that Epic owned the property where the hotel was located and that the individuals identified in Section I to the form EZ-M were full-time, permanent employees of Epic. The requested documents included a copy of Epic’s 940 Federal Unemployment Tax Return and a copy of Epic’s W3 form. Mr. Shettle conducted independent research on the employee issue. He used the State’s unemployment tax records and the Department of Business and Professional Regulation’s employee leasing company registration data. He was unable to locate any evidence that the employees listed in Schedule A were employed by Epic. Epic has not presented any. Epic has a Hotel Operating Agreement with Kimpton Hotel & Restaurant Group, LLC. The Agreement provides for Kimpton to “supervise, direct, and control the management, operation, and promotion of the Epic hotel.” The employees identified as Epic employees on Section I of Epic’s EZ-M form are employees of Kimpton who provide the contracted services at Epic. They are not direct employees of Epic or employees leased by Epic. Epic relied upon the Final Order of the Department of Revenue in The Angler Resorts, LLC v. State of Florida, Department of Revenue, Case No. DOR-08-17-FOI (Fla. Dept. of Rev., March 16, 2008), in its dealings with the Department. In reliance upon that Final Order, Epic maintained that it was not required to provide anything more than the certified form EZ-M and a completed Department form DR-26S. The Department denied Epic’s refund application on the basis that Epic could not be verified as the owner, lessee, or lessor of the rehabilitated parcel, and that the individuals listed in Section I could not be confirmed as employees of Epic. During the course of this dispute about entitlement to the refund, Epic established ownership of the property at the time of the application. The Department consequently issued Epic a refund of $5,000. The Department has adopted rules governing the manner and form of refund applications.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is Recommended that the Department of Revenue grant Epic’s refund application and approve a sales tax refund for the total amount of $10,000. DONE AND ENTERED this 2nd day of August, 2010, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II 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 2nd day of August, 2010. COPIES FURNISHED: Marshall Stranburg, General Counsel Department of Revenue The Carlton Building, Room 204 501 South Calhoun Street Tallahassee, Florida 32314-6668 Carrol Y. Cherry, Esquire Office of the Attorney General Revenue Litigation Bureau The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Herb Friesner Economic Development Consultants, Inc. 14361 Commerce Way, Suite 205 Miami Lakes, Florida 33016 Lisa Echeverri, Executive Director Department of Revenue The Carlton Building, Room 104 501 South Calhoun Street Tallahassee, Florida 32399-0100
The Issue The issues in this bid protest are, first, whether, as Petitioner alleges, Intervenor's failure to attach copies of "occupational licenses" to its proposal was a deviation from the requirements of the Request for Proposal; second, whether any such deviation was material; and third, whether Respondent's preliminary decision to award Intervenor the contract at issue was clearly erroneous, arbitrary or capricious, or contrary to competition.
Findings Of Fact On September 18, 2009, Respondent Department of Transportation ("Department") issued Request for Proposal No. RFP-DOT-09/10-4007FS (the "RFP"). Through the RFP, which is entitled, "Treasure Coast Road Ranger Service Patrol," the Department solicited written proposals from qualified providers who would be willing and able to perform towing and emergency roadside services on Interstate 95 in Martin County, St. Lucie County, and Indian River County. The Department intended to award a three-year contract to the "responsive and responsible Proposer whose proposal is determined to be the most advantageous to the Department." The Department anticipated that the contract would have a term beginning on December 1, 2009, and ending on November 31, 2012. The annual contract price was not to exceed $1.59 million. Proposals were due on October 13, 2009. Four firms timely submitted proposals in response to the RFP, including Petitioner Sunshine Towing @ Broward, Inc. ("Sunshine") and Intervenor Anchor Towing and Marine of Broward, Inc. ("Anchor"). An evaluation ensued, pursuant to a process described in the RFP, during which the Department rejected two of the four proposals for failing to meet minimum requirements relating to technical aspects of the project. As a result, Sunshine and Anchor emerged as the only competitors eligible for the award. Sunshine offered to perform the contractual services for an annual price of $1,531,548. This sum was less than the price that Anchor proposed by $46,980 per year. Despite Sunshine's lower cost, Anchor nevertheless edged Sunshine in the final score, receiving 92.86 points (out of 100) from the Department's evaluators, to Sunshine's 87.75. On November 30, 2009, the Department duly notified the public of its intent to award the contract to Anchor. Sunshine promptly initiated the instant protest, whereby Sunshine seeks to have Anchor's proposal disqualified as nonresponsive, in hopes that the Department will then award the contract to Sunshine as the highest-ranked (indeed the sole) responsive proposer. Sunshine alleges that Anchor's proposal failed to conform strictly to the specifications of the RFP, principally because Anchor did not attach copies of its "occupational licenses" to the proposal. Anchor insists that its proposal was responsive but argues, alternatively, that if its proposal deviated from the specifications, the deviation was merely a minor irregularity which the Department could waive. Anchor further contends that Sunshine's proposal contains material deviations for which it should be deemed nonresponsive. The Department takes the position that Anchor's failure to attach "occupational licenses" was a minor irregularity that could be (and was) waived.1 The RFP includes a "Special Conditions" section wherein the specifications at the heart of this dispute are located. Of particular interest is Special Condition No. 8, which specifies the qualifications a provider must have to be considered qualified to perform the services called for under the contract to be awarded. Special Condition No. 8 provides as follows: QUALIFICATIONS General The Department will determine whether the Proposer is qualified to perform the services being contracted based upon their proposal demonstrating satisfactory experience and capability in the work area. The Proposer shall identify necessary experienced personnel and facilities to support the activities associated with this proposal. Qualifications of Key Personnel Those individuals who will be directly involved in the project should have demonstrated experience in the areas delineated in the scope of work. Individuals whose qualifications are presented will be committed to the project for its duration unless otherwise excepted by the Department's Project Manager. Where State of Florida registration or certification is deemed appropriate, a copy of the registration or certificate should be included in the proposal package. Authorized To Do Business in the State of Florida In accordance with sections 607.1501, 608.501, and 620.169, Florida Statutes, foreign corporations, foreign limited liability companies, and foreign limited partnerships must be authorized to do business in the State of Florida. Such authorization should be obtained by the proposal due date and time, but in any case, must be obtained prior to the posting of the intended award of the contact. For authorization, [contact the Florida Department of State].[2] Licensed to Conduct Business in the State of Florida If the business being provided requires that individuals be licensed by the Department of Business and Professional Regulation, such licenses should be obtained by the proposal due date and time, but in any case, must be obtained prior to the posting of the intended award of the contract. For licensing, [contact the Florida Department of Business and Professional Regulation]. References and experience must entail a minimum of three (3) years of experience in the towing industry in Florida. NOTE: Copies of occupational licenses must also be attached to the back of Form 'F'. (Boldface in original.) Special Condition No. 19, which defines the term "responsive proposal," provides as follows: RESPONSIVENESS OF PROPOSALS Responsiveness of Proposals Proposals will not be considered if not received by the Department on or before the date and time specified as the due date for submission. All proposals must be typed or printed in ink. A responsive proposal is an offer to perform the scope of services called for in this Request for Proposal in accordance with all the requirements of this Request for Proposal and receiving fifty (50) points or more on the Technical Proposal.[3] Proposals found to be non-responsive shall not be considered. Proposals may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A proposal may be found to be irregular or non-responsive by reasons that include, but are not limited to, failure to utilize or complete prescribed forms, conditional proposals, incomplete proposals, indefinite or ambiguous proposals, and improper and/or undated signatures. (Emphasis and boldface in original.) In the "General Instructions to Respondents" section of the RFP there appears the following reservation of rights: 16. Minor Irregularities/Right to Reject. The Buyer reserves the right to accept or reject any and all bids, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if the Buyer determines that doing so will serve the State's best interests. The Buyer may reject any response not submitted in the manner specified by the solicitation documents. Anchor did not attach copies of any "occupational licenses" to the back of Form 'F' in its proposal. Anchor contends that it did not need to attach such licenses because none exists. This position is based on two undisputed facts: (1) The Florida Department of Business and Professional Regulation ("DBPR") does not regulate the business of providing towing and emergency roadside assistance; therefore, neither Anchor nor Sunshine held (or could hold) a state-issued license to operate, and neither company fell under DBPR's regulatory jurisdiction. (2) The instrument formerly known as an "occupational license," which local governments had issued for decades, not for regulatory purposes but as a means of raising revenue, is presently called (at least formally) a "business tax receipt," after the Florida Legislature, in 2006, amended Chapter 205 of the Florida Statutes, changing the name of that law from the "Local Occupational License Tax Act" to the "Local Business Tax Act." See 2006 Fla. Laws ch. 152. Sunshine asserts that the terms "occupational license" and "business tax receipt" are synonymous and interchangeable, and that the RFP required each offeror to attach copies of its occupational licenses/business tax receipts to the proposal. Sunshine insists that Anchor's failure to do so constituted a material deviation from the specifications because, without such documentation, the Department could not be sure whether an offeror was authorized to do business in any given locality. Sunshine presses this argument a step further based on some additional undisputed facts. As it happened, at the time the proposals were opened, Anchor held a local business tax receipt from the City of Pembroke Pines, which is the municipality in which Anchor maintains its principal place of business. Anchor had not, however, paid local business taxes to Broward County when they became due, respectively, on July 1, 2008, and July 1, 2009. Anchor corrected this problem on December 14, 2009, which was about two weeks after the Department had posted notice of its intent to award Anchor the contract, paying Broward County a grand total of $248.45 in back taxes, collection costs, and late penalties. As of this writing, all of Anchor's local business tax obligations are paid in full. Sunshine contends, however, that during the period of time that Anchor's Broward County business taxes were delinquent, Anchor was not authorized to do business in Broward County and hence was not a "responsible" proposer eligible for award of the contract. In support of this proposition, Sunshine relies upon Section 20-15 of the Broward County, Florida, Code of Ordinances ("Broward Code"), which states: Pursuant to the authority granted by Chapter 205, Florida Statutes, no person shall engage in or manage any business, profession or occupation, as the same are contemplated by Chapter 205, Florida Statutes, unless such person first obtains a business tax receipt as required by this article, unless other exempt from this requirement . . . . On this latter point regarding Anchor's authority to operate in Broward County, Sunshine appears to be correct, at least in a narrow legal sense. It is abundantly clear, however, and the undersigned finds, that, as a matter of fact, Anchor was never in any danger of being shut down by the county. Indeed, even under the strict letter of the local law, Anchor was entitled to continue operating in Broward County unless and until the county took steps to compel the payment of the delinquent taxes. Broward Code Section 20-22, which deals with the enforcement of the business tax provisions, provides: Whenever any person who is subject to the payment of a business tax or privilege tax provided by this article shall fail to pay the same when due, the tax collector, within three (3) years from the due date of the tax, may issue a warrant directed to the Broward County Sheriff, commanding him/her to levy upon and sell any real or personal property of such person liable for said tax for the amount thereof and the cost of executing the warrant and to return such warrant to the tax collector and to pay him/her the money collected by virtue thereof within sixty (60) days from the date of the warrant. . . . The tax collector may file a copy of the warrant with the Clerk of the Circuit Court of Broward County[, which shall be recorded in the public records and thereby] become a lien for seven (7) years from the due date of the tax. . . . Any person subject to, and who fails to pay, a business tax or privilege tax required by this article, shall, on petition of the tax collector, be enjoined by the Circuit Court from engaging in the business for which he/she has failed to pay said business tax, until such time as he/she shall pay the same with costs of such action. There is no evidence suggesting that the county ever sought to enjoin, or that a court ever issued an injunction prohibiting, Anchor from engaging in business, nor does it appear, based on the evidence, that a tax warrant ever was issued, filed, or executed to force Anchor to pay its back taxes. Given the relatively small amount of tax due, the likelihood of such enforcement actions being taken must reasonably be reckoned as slim to none. While paying taxes when due is certainly the obligation of a good corporate citizen, it would not be reasonable, based on the facts established in this case, to infer that Anchor is a scofflaw for failing to timely pay a local tax amounting to about $80 per year. Anchor, in short, was a responsible proposer. Sunshine's other argument has more going for it. The RFP clearly and unambiguously mandated that "occupational licenses" be attached to a proposal. If, as Sunshine maintains, the terms "occupational license" and "business tax receipt" are clearly synonymous, then Anchor's proposal was noncompliant. For reasons that will be explained below, however, the undersigned has concluded, as a matter of law, that the term "occupational license" does not unambiguously denote a "business tax receipt"——at least not in the context of Special Condition No. 8. The specification, in other words, is ambiguous. No one protested the specification or otherwise sought clarification of the Department's intent. The evidence shows, and the undersigned finds, that the Department understood and intended the term "occupational license" to mean the instrument now known as a "business tax receipt." The Department simply used the outdated name, as many others probably still do, owing to that facet of human nature captured by the expression, "old habits die hard." The Department's interpretation of the ambiguous specification is not clearly erroneous and therefore should not be disturbed in this proceeding. Based on the Department's interpretation of Special Condition No. 8, the undersigned finds that Anchor's failure to attach copies of its occupational licenses was a deviation from the requirements of the RFP. That is not the end of the matter, however, for a deviation is not necessarily disqualifying unless it is found to be material. The letting authority may, in the exercise of discretion, choose to waive a minor irregularity if doing so will not compromise the integrity and fairness of the competition. There is no persuasive direct evidence in the record that the Department made a conscious decision to waive the irregularity in Anchor's proposal. Documents in the Department's procurement file show, however, that the Department knew that Anchor's proposal lacked copies of occupational licenses, and in any event this was a patent defect, inasmuch as nothing was attached to the back of Anchor's Form 'F'. It is therefore reasonable to infer that the Department elected to waive the irregularity, and the undersigned so finds. Necessarily implicit in the Department's action (waiving the deficiency) is an agency determination that that the irregularity was a minor one. The question of whether or not Anchor's noncompliance with Special Condition No. 8 was material is fairly debatable. Ultimately, however, the undersigned is unable to find, for reasons more fully developed below, that the Department's determination in this regard was clearly erroneous. Because the Department's determination was not clearly erroneous, the undersigned accepts that Anchor's failure to submit occupational licenses was a minor irregularity, which the Department could waive. The Department's decision to waive the minor irregularity is entitled to great deference and should be upheld unless it was arbitrary or capricious. The undersigned cannot say that waiving the deficiency in question was illogical, despotic, thoughtless, or otherwise an abuse of discretion; to the contrary, once it has been concluded that the irregularity is minor and immaterial, as the Department not incorrectly did here, waiver seems the reasonable and logical course of action. The upshot is that the proposed award to Anchor should be allowed to stand. The foregoing determination renders moot the disputed issues of fact arising from Anchor's allegation that Sunshine's proposal was nonresponsive. It is unnecessary, therefore, for the undersigned to make additional findings on that subject.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order consistent with its preliminary decision to award Anchor the contract at issue. DONE AND ENTERED this 6th day of April, 2010, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings 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 6th day of April, 2010.
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.
The Issue Whether Petitioner owes the assessment for sales and use tax as alleged by the Department of Revenue.
Findings Of Fact George Schoenrock is a resident of the State of Florida. His address is 7600 Miami View Drive, Northgate Village, Miami, Florida. Mr. Schoenrock is the owner of a company known as Action Marine. This company is located in the State of Florida and manufactures and sells new boats. In 1996 Mr. Schoenrock also formed a company in North Carolina called Action Boatworks. This company, Action Boatworks, is the Petitioner in this cause. In 1996 Petitioner purchased a boat made in Wanchese, North Carolina and named it the "Action Lady." The boat was purchased to re-sell for profit by Petitioner, a dealer in North Carolina. Action Boatworks is not registered in Florida to sell boats nor does it possess a Florida sales tax dealer's license or a tax number from the Florida Department of Revenue. At the time of purchase Mr. Schoenrock considered the "Action Lady" unfinished as it lacked canvas, fishing equipment, chair rigging, and electronic equipment for navigation. The total paid to Davis Boatworks, Inc. (the manufacturer) for the "Action Lady" was in excess of $571,000.00. The invoice for this purchase, dated May 21, 1996, did not list Petitioner as the purchaser of the vessel but identified a "Barney Schoenrock." After the purchase of the boat, Mr. Schoenrock brought the "Action Lady" to South Florida where he intended to complete the installation of the items noted above and re-sell it. The vessel entered the State of Florida by the end of May 1996, and proceeded down the coast to a dock at Mr. Schoenrock's residence. One deterrent to the re-sale of the "Action Lady" was immediately discovered by Mr. Schoenrock. That is, the diesel engines did not pass a "P.I.D." inspection required for the warranty to be effective. This inspection required Detroit Diesel to complete the P.I.D. test and to certify the engines were acceptable. The vessel eventually passed this inspection some eight or nine months after Mr. Schoenrock had received the boat. The first effort to repair the vessel in order to pass the P.I.D. test was in June of 1996 when it was taken to a repair facility known as Safety Harbor. The "Action Lady" remained at Safety Harbor until August 7, 1996, when it returned to Mr. Schoenrock's residence. Thereafter, on or about October 24, 1996, the vessel went back to Safety Harbor for additional repairs which lasted approximately two weeks. After the repairs were completed, sometime in November 1996, the boat was returned to Mr. Schoenrock's residence. In October 1996 Mr. Schoenrock listed the "Action Lady" for sale with Walsh Yachts. The asking price was noted at $695,520.00. Also at this time it was placed in the Fort Lauderdale boat show. Except for the time the boat was in repairs or on exhibition during the October boat show, the "Action Lady" remained docked at Mr. Schoenrock's residence. Eventually, Petitioner sold the vessel in South Florida to Joseph Gregory in March of 1997. According to Mr. Schoenrock the boat was not used for his own personal use. It was not used by others for personal use. It was subject to repairs, testing, and demonstration the entire time it was in Florida prior to its sale. According to Mr. Schoenrock, when he purchased the boat in North Carolina, he paid sales tax in that state totaling $2500.00. Mr. Schoenrock's company, Action Marine, was never in any way an owner of the "Action Lady." Mr. Schoenrock insured the vessel for its value and was the beneficiary of the policy. From June 1, 1996, through its resale in March 1997, the "Action Lady" did not leave the State of Florida.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a Final Order affirming the use tax assessment. DONE AND ENTERED this 5th day of May, 1999, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 5th day of May, 1999. COPIES FURNISHED: Eric J. Taylor, Assistant Attorney General Office of the Attorney General The Capitol, Tax Section Tallahassee, Florida 32399-1050 Eric Taylor, Assistant Attorney General 401 Northwest Second Avenue, N607 Miami, Florida 33128 Jack Stein, Esquire Arthur Rosenberg, Esquire Stein, Rosenberg & Winikoff Seventh Floor 4875 North Federal Highway Fort Lauderdale, Florida 33308 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue Whether Irene Lieberman is entitled to attorney fees and costs from Lorenzar Brown, as provided in Section 112.317(8), Florida Statutes, and if so, the amount.
Findings Of Fact At all times relevant to this proceeding, Ilene Lieberman (Lieberman) served as mayor of the City of Lauderhill, Florida (City). The City and Broward County entered into an agreement (Grant) in January, 1992, for a Self-Help Home Ownership and Repair Program in the amount of $117,500, which provided for funding and administration of Community Development Block Grant (CDBG) projects. Pursuant to the Grant, the City would be reimbursed for allowable project expenses. On July 13, 1992, the City Commission passed Ordinance No. 92-161, which approved budget adjustment BA 92-86 for the transfer of $123,000 from various budget accounts to establish the budget for the CDBG program. When entering the CDBG budget into the City's computer system, the data entry operator made some coding errors. Budget adjustment BA-92-86 showed that $22,500 was to be budgeted for account number 3110. However, when it was keyed into the computer system, the $22,500 was coded to account number 3121, which was the account for the City Attorney's hourly charges. No funds were entered as budgeted for account number 3110. Budget adjustment BA-92-86 showed that $25,000 was to be budgeted for account number 3122. However, when keying the entry, the data entry operator entered $25,500 instead of the $25,000. Lorenzar Brown (Brown), the Respondent, obtained a copy of the City Expenditure Status Report for July, 1992 (July Expenditure Report). The report reflected the errors that were made when the budget information was placed in the computer system. The report indicated that there were no expenditures made from account number 3121, the account for the City Attorney hourly charges. In July or August, 1992, Brown talked to Marcia Berkely, who was the City Planner, concerning whether CDBG funds were being used to pay City Attorney fees. Ms. Berkely advised Brown that the CDBG funds were not being used to pay the City Attorney. Brown did not show Ms. Berkely the July Expenditure Report. On August 31, 1992, Brown made a presentation to the City Commission, expressing his "concerns about the present taxpayer's dollars being expended to pay fees to the city attorney of the City of Lauderhill." Brown referenced the City's July Expenditure Report, stating, "In reviewing the monthly expenditure report for July, there was a number of other accounts budgeted to the city attorney." In particular Brown was concerned about CDBG funds being used for City Attorney's fees. Brown stated: This last month an additional $40,000.00 of Community Development Block Grant was recom- mended by the Mayor and approved by the City Commission to be used for city attorney fees. This also passed by the Ordinance 92-161. The community, especially the taxpayers, request that the City Commission look into or investigate the action of the Mayor, on the part of the Mayor in recommending that the City Commission use Block Grant Funds for the city attorney fees contrary to the contract approved by the Commission by Resolution 91-83 which was passed on July 13th, 1992. Brown's presentation was made during the communications from the public portion of the City Commission meeting. According to the policy of the City Commission, the Mayor and City Commission members are not allowed to respond to comments made during this portion of the meeting. Comments from the public officials are made during communications from the public officials portion of the meeting. Lieberman asked the Vice Chair of the City Commission to allow her to respond to Brown's presentation immediately after Brown concluded but she was not allowed to do so. Brown was unable to stay for the comments from the public officials because he had to pick up his daughter. He apologized to the Commission and told them that he had to leave. During the comments from public officials, Lieberman explained the purpose of the Community Development Block Grant Program. She stated that $40,000 was not used for City Attorney fees but that the CDBG budget did include a line item for "legal matters that are incident to home ownership." She invited the public to spend time with her and Marcia Berkely to discuss the attorney fees issue. By memorandum dated September 8, 1992, Brown advised the City Commission that he had not received a response from the Mayor's office concerning his request made on August 31, 1992, that the City Commission "investigate the propriety of the Mayor's office in recommending that the City Commission use BLOCK GRANT FUNDS for the City's Attorney fees. (92-161)." Brown did not reference the July Expenditure Report. By letter dated September 16, 1992, Richard J. Kaplan (Kaplan), Commission Vice Chair, advised Brown that the Mayor had responded to Brown's comments at the City Commission meeting on August 31, 1992, and attached a copy of the minutes of the meeting. Kaplan additionally told Brown that he had checked the ordinances cited by Brown and found that one was in error. By memorandum dated September 16, 1992, Kaplan forwarded a copy of Brown's September 8 correspondence to Lieberman and requested that she respond to Brown in writing. By letter to Kaplan dated September 21, 1992, Brown stated that he had reviewed the ordinances and the information submitted to Kaplan, that they were correct and that if the City Commission failed to investigate his allegations, that "the concern (sic) residents of Lauderhill will be compelled to file a complaint with the Ethics Commission and or the Bar Association." Brown did not reference the July Expenditure Report. Lieberman responded to Brown by letter dated September 29, 1992. She attached a copy of the budget for the CDBG program, budget adjustment request BA 92-86, Ordinance 92-161, and a portion of the transcript of the August 31, 1992, City Commission meeting. She advised that there had been no misappropriation of City funds and that according to the budget adjustment $5,500 was coming from the City Attorney's budget to the CDBG budget as matching funds from the City for the program. The budget adjustment contained a $25,000 line item for legal services for closing costs, and included the $5,500 from the City Attorney's budget. She invited Brown to contact her directly if he had any further questions. She did not review the July Expenditure Report in the preparation of her response. Brown never contacted Lieberman after the August 31 City Commission meeting to resolve any questions that he may have had. Based on prior dealings with her, he felt that she made him feel small and little and that she embarrassed and belittled him at City Commission meetings; therefore he did not feel comfortable directly asking her questions concerning the attorney fees issue. Brown never asked anyone in the City's finance department, including Donald Giancoli, the Director of Finance, Assistant City Administrator for the City, to explain the differences between budget adjustment 92-86 and the July Expenditure Report. On October 3, 1992, Brown executed Commission on Ethics Complaint No. 92-157 against Lieberman, alleging that she had violated Section 112.313(6), Florida Statutes, in that she "breached the public trust by solicitation in recommending that the City Commission Board use Community Block Grant funds for the City Attorney fees." On November 12, 1992, Brown executed an amendment to Complaint No. 92-157, enclosing additional information, which included a copy of the July Expenditure Report. Prior to filing the Complaint, Brown spoke with Theresa Gillis, the Director of the Community Development Division of Broward County. She administered the Community Development Block Grant Programs for the County including the Grant to the City of Lauderhill. He told her that the City had violated the terms of the Grant by getting reimbursed for attorney's fees. He did not reference the July Expenditure Report. Ms. Gillis checked the reimbursements made to the City and found that the City had not violated their obligations under the CDBG Program. If she had been aware of the July Expenditure Report showing funds being budgeted to the City Attorney account, she would have been concerned and asked the City for an explanation. On December 7, 1992, the Executive Director of the Florida Commission on Ethics issued a Recommendation of Legal Insufficiency, stating that the allegations in Complaint No. 92-157 were legally insufficient to indicate a possible violation of Section 112.313(6), Florida Statutes. On February 2, 1993, the Chairman of the Commission on Ethics filed a Public Report and Order Dismissing Complaint, stating that on January 28, 1993, the Commission on Ethics voted to adopt the Executive Director's legal sufficiency analysis and to dismiss Complaint No. 92-157. On January 19, 1993, Brown filed a complaint with The Florida Bar against Lieberman. The complaint stemmed from remarks Lieberman made at a December 7, 1992 City Commission meeting. The Florida Bar declined to pursue the matter, determining that his complaint did not reveal any violations of the Rules Regulating Attorneys. On February 18, 1993, Brown filed a lawsuit against Lieberman, alleging that she had defamed him in the December 7, 1992 meeting. During the January 25, 1993, City Commission meeting, Brown publicly stated that he would personally support a recall petition against Lieberman. He took this position due to Lieberman's comments against him at the December 7, 1992, meeting. Around the time that Lieberman first became mayor in 1988, she and Brown had some discusssions concerning a citation which he had received from the code enforcement board for failure to pay for garbage service at his premises. Brown was very angry and accused Lieberman of violating his constitutional rights. At a City Commission meeting in approximately September, 1992 while Lieberman was responding to a question, Brown told the gentleman seated next to him that she was lying. Brown's voice was loud enough that it was heard twenty feet away by Richard Korte, the Director for Code Enforcement for the City. After Brown filed the complaint against Lieberman, City Attorney Richard Michelson represented Lieberman as Mayor in his role as City Attorney. The City paid for these services out of the City Attorney's monthly $3,500 retainer. The total number of hours provided by the City Attorney relating to Brown's complaint and the instant fee proceeding was 23.1 hours. After Brown's complaint was dismissed, Samuel Goren was retained to represent the Mayor. Mr. Goren filed the instant fee petition. The total number of hours for Mr. Goren's law firm was 16.2 hours. After the fee petition was filed, Stuart Michelson (no relation to Richard Michelson) was retained to represent the Mayor. The total number of hours for Stuart Michelson through November 18, 1993 was 33.675. The total number of hours spent in hearing by Stuart Michelson was 17.5 hours, which included closing argument by telephone conference. Stuart Michelson spent one hour in taking the deposition of Thomas Bradley. Stuart Michelson's law clerk provided 5.45 hours of services. Each of the attorneys providing services in representing Lieberman in the complaint by Brown and in the fee petition charged the City at $125 per hour. The services of the law clerk were billed at $50 per hour. The City paid for the services provided through November 18, 1993. Jeffery Pheterson, who was qualified as an expert on attorney's fees issues, opined that based on the rates customarily charged locally the rate of $125 per hour is a modest, reasonable rate for the services provided by the attorneys. He also opined that the rate of $50 per hour for paralegal services was also a reasonable rate for the services provided. At the final hearing, counsel for Brown stipulated that the rates for Stuart Michelson and Samuel Goren were reasonable. The rates of $125 per hour for attorney services and $50 for paralegal services are reasonable rates for similar services in the community. Mr. Pheterson opined that the 23.1 hours of service provided by Richard Michelson, City Attorney, the 16.2 hours of service provided by Samuel Goren's firm, the 33.675 hours provided by Stuart Michelson and the 5.45 hours provided by Stuart Michelson's law clerk were reasonable. The hours of service provided by the above attorneys and law clerk through November 18, 1993, were reasonable. Additionally, the 17.5 hours spent by Stuart Michelson at the final hearing is reasonable and the one hour spent in taking the deposition of Thomas Bradley was reasonable.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered denying Ilene Lieberman's Verified Petition for Attorney's Fees and Costs. DONE AND ENTERED this 6th day of December, 1994, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 6th day of December, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1180EC To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Respondent Lieberman's Proposed Findings of Fact. Paragraph 1: Accepted in substance. Paragraph 2: Accepted. Paragraphs 3-25: Accepted in substance. Paragraph 26: Rejected as subordinate to the facts actually found. Paragraphs 27-29: Accepted in substance. Paragraph 30: Rejected as subordinate to the facts actually found. Paragraph 31-33: Accepted in substance. Paragraphs 34-35: Rejected as constituting argument. Paragraphs 36-37 Accepted in substance. 10 Paragraph 38: Rejected as constituting argument. Paragraphs 39-40: Rejected as constituting recitation of testimony. Paragraph 41: Rejected as constituting argument. Paragraph 42: Rejected as subordinate to the facts actually found. Paragraph 43: Rejected as constituting recitation of testimony. Paragraph 44: Accepted in substance. Paragraph 45: Rejected as subordinate to the facts actually found. Paragraphs 46-47: Accepted in substance. Paragraph 48: The first sentence is rejected as not supported by the greater weight of the evidence. The second sentence is accepted to the extent that he filed the complaint because his concerns were not answered but rejected to the extent that it states that he filed the complaint a day or two after he received Lieberman's letter. Paragraph 49: Rejected as not supported by the greater weight of the evidence. Brown knew that the July Expenditure Report showed funds being budgeted from the CDBG program to the City Attorney. The second sentence is rejected as subordinate to the facts actually found. Paragraphs 50-51: Rejected as subordinate to the facts actually found. Paragraphs 52-55: Accepted in substance. Paragraph 56: Accepted in substance to the extent that Brown never told Lieberman personally that the expenditure report showed money going to the City Attorney, but rejected to the extent that he never referenced the expenditure report in her presence because he did at the August 31, 1992, City Commission meeting. Paragraph 57: Rejected as subordinate to the facts actually found. Paragraph 58: Rejected as cumulative. Paragraphs 59-69: Accepted in substance. Paragraphs 70-71: Rejected as constituting argument. Paragraphs 72-73: Rejected as mere recitation of testimony. Paragraphs 74-75: Accepted in substance. Paragraphs 76-77: Rejected as mere recitation of testimony. Paragraph 78: Accepted in substance to the extent that he refers to the ordinance but not as to the expenditure report. Lieberman did not address the expenditure report which Brown referenced in the August 31 meeting. Paragraph 79: Rejected as subordinate to the facts actually found. Paragraphs 80-81: Accepted in substance. Paragraphs 82-88: Rejected as constituting argument. Paragraph 89: Rejected as subordinate to the facts actually found. Paragraphs 90-92: Rejected as constituting argument. Paragraph 93: Accepted in substance to the extent that there was a posting error. Paragraphs 94-95: Rejected as constituting argument. Paragraph 96: Accepted in substance. Paragraph 97: Rejected as not supported by the greater weight of the evidence. Paragraph 98: Accepted in substance. Paragraph 99: Rejected as subordinate to the facts actually found. Paragraphs 100-102: Rejected as constituting argument. Complainant Brown's Proposed Findings of Fact. Paragraphs 1-3: Accepted in substance. Paragraph 4: The first sentence is accepted in substance. The second sentence is accepted to the extent that the responses did not make any reference to the July Expenditure Report which Brown brought up during his presentation at the August 31, 1992, City Commission meeting. The third sentence is accepted in substance to the extent that Brown let Kaplan know that he was not satisfied with the responses. Paragraphs 5-6: Rejected as subordinate to the facts actually found. Paragraph 7: The first sentence is accepted to the extent that Brown had a copy of the Expenditure Status Report prior to the August 31, 1992, City Commission meeting and rejected as not supported by the greater weight of the evidence that Brown received the document from the City's finance department. The evidence is not clear how Brown received the document. The last sentence is accepted in substance. Paragraphs 8-10: Accepted in substance. Paragraph 11: The first and third sentences are accepted in substance. The second sentence is accepted in substance except that the July Expenditure Report was not attached to the original complaint but to an amendment to the complaint. Paragraph 12: Accepted in substance to the extent that Lieberman personally did not expend funds or was obligated to pay the attorney's fees. Paragraph 13: Rejected to the extent that his services were included in his retainer fee. Paragraph 14: Accepted in substance. COPIES FURNISHED: Stuart R. Michelson, Esquire 1111 Kane Concourse, Suite 517 Bay Harbor Islands, Florida 33154 Anthony J. Titone, Esquire 7471 West Oakland Park Blvd., Suite 110 Ft. Lauderdale, Florida 33319 Bonnie Williams Executive Director Florida Commission On Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Phil Claypool, Esquire General Counsel Ethics Commission 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Carrie Stillman Complaint Coordinator Commission on Ethics Post Office Box 15709 Tallahassee, Florida 32317-5709
The Issue The issue in this case is whether the taxpayer owes use tax, penalty and interest on the purchase of tangible personal property under Chapter 212, Florida Statutes.
Findings Of Fact Iseaseal, LLC, a Delaware corporation, has its principal place of business at 695 East Main Street, Suite 103, Stamford, Connecticut. Its federal employer identification number is 06-1600000. On November 22, 2000, the taxpayer purchased a 1982, 72-foot, Hatteras CPMY yacht, named “Windcrest,” with hull number HATBN3270182 and 60 net tons of admeasurement. The purchase was made through a registered yacht broker. The yacht’s sales price was $725,000. On November 21, 2000, at the closing for the yacht, the taxpayer’s managing member, Paul Bakker, signed an Affidavit for Exemption of Boat Sold for Removal from the State of Florida by a Nonresident Purchaser. The yacht was also registered with the Coast Guard. However, to date, the yacht has not been registered or titled in Florida or any other U.S. state or territory. The taxpayer took possession of the yacht at Pier 66, in Fort Lauderdale, Florida, on November 22, 2000. Also, on November 22, 2000, the taxpayer was issued a 90-day decal known as a “cruising decal.” A cruising decal, with certain restrictions, exempts the purchase of a yacht from sales tax if the purchaser agrees to remove the yacht from Florida within 90 days after the date of purchase and does remove the purchased yacht. On December 28, 2000, the taxpayer removed the yacht from Florida to the Bahamas. The removal occurred within 90 days after the purchase date. As a result, the sale became exempt from Florida sales tax and the Petitioner did not pay Florida sales tax on the purchase of the yacht. On January 15, 2001, the taxpayer returned the yacht to Florida for repairs. A repair bill shows that the yacht remained at the repair facility for four and a half hours on January 16, 2001. The repair visit was within six months after the departure date of December 28, 2000. There was no evidence that the repair facility was registered with the Department of Revenue or how long the boat remained in Florida waters. The yacht also returned to Florida for repairs on May 21, 2001. Again there was no evidence that the repair facility was registered or how long the boat remained in Florida waters. The evidence did not establish that the tax exemption related to use of Florida waters for 20 days or repairing a boat in Florida apply. Since the purchase date, the Petitioner has leased mooring space in Florida. The Petitioner’s insurance policy also indicates that the yacht was moored in Florida and includes a Florida endorsement for such mooring. Additionally, the Petitioner reported to Connecticut’s Department of Revenue that the yacht was exempt from Connecticut sales tax because the yacht was purchased and berthed in the State of Florida. Based on copies of the bill of sale, closing statement, banking statements, credit card statements, mortgage documents, insurance agreements, mooring agreements, repair and parts receipts and a chronological listing of the yacht’s whereabouts since the date of purchase, the yacht has operated, and continues to operate, in Florida waters. Indeed, the yacht remained in Florida for more than 183 days from July 1, 2002 through December 31, 2002. Moreover, since September 11, 2002, the yacht has been moored or stored in Florida the majority of the time because the main users of the yacht lost interest in sailing the yacht and travel after the terrorist attack on the twin towers in New York City. The Department found that the Petitioner was liable for use tax on its use and storage of the yacht here in Florida. On May 5, 2004, the Department issued an enforcement billing to the Petitioner for use tax, penalty and interest, pursuant to Sections 212.05(1)(a)2 and 212.06(8), Florida Statutes. The Department assessed the Petitioner use tax and interest based on the sales price of the yacht. The Department also assessed the Petitioner a mandatory penalty equal to the tax because it returned the yacht to Florida within six months of the departure date. The Petitioner admitted that, through ignorance of Florida’s tax exemption law, he violated Chapter 212, but argues that the assessment of tax, interest and mandatory penalty is excessive. On May 24, 2004, the Department issued the Petitioner a Notice of Final Assessment for Sales and Use Tax, Penalty and Interest Due. The Notice set forth the basis for the assessment of tax, in the sum of $43,500, penalty, in the sum of $43,500, and interest, in the sum of $14,759.84, plus additional interest that accrues at the rate of $10.73 per day. The Department issued the Petitioner the Final Assessment because it returned the yacht to Florida within six months of the departure date and the yacht remained in Florida for more than 183 days in a calendar year. Since the Petitioner returned the yacht to Florida within 6 months of the purchase date and allowed the yacht to remain in Florida for more than 183 days in a calendar year, the Petitioner is liable for use tax, penalty and interest in the use and storage of the yacht in Florida.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Revenue enter a final order upholding the assessment of use tax, penalty and interest against the Petitioner. DONE AND ENTERED this 31st day of January, 2005, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of January, 2005. COPIES FURNISHED: Paul Bakker Iseaseal, LLC 695 East Main Street Stamford, Connecticut 06901 Carrol Y. Cherry, Esquire Assistant Attorney General Office of the Attorney General Revenue Litigation Section Plaza Level 01, The Capitol Tallahassee, Florida 32399-1050 Bruce Hoffman, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issues are whether the Florida Commission on Ethics (Ethics Commission) has jurisdiction over Counts I and IV of the Advocate's Amended Recommendation, pursuant to section 122.322(1), Florida Statutes; if jurisdiction exists over Count IV, whether Respondent, while a commissioner and vice mayor of the City of Margate (City), violated section 112.313(7), Florida Statutes, by appearing before the City commission on behalf of his employer, which was seeking a beer and wine license for consumption on the premises (2COP); and whether Respondent is entitled to an award of attorneys' fees and costs, pursuant to section 57.105(5), Florida Statutes.
Findings Of Fact The Complaint is on a Ethics Commission form (Form 50) that asks the complainant for a full explanation of the complaint. The complaint form refers twice to documents. The complaint form asks the complainant not to attach copies of lengthy documents; the form assures that, "if they are relevant, your description of them will suffice." The oath printed on the complaint form states: "I . . . do depose on oath or affirmation . . . that the facts set forth in the foregoing complaint and attachments thereto are true and correct to the best of my knowledge and belief." The Complaint, which is signed and notarized, contains no explanation or narrative, but Complainant attached 11 pages of copies of documents, which are marked as pages 3 through 13. Page three of the Complaint is an article dated March 8, 2012, and posted on MargateNews.net.5/ This article reports that, by a 3-2 vote, the City commission reprimanded Respondent for abusing City credit card privileges, even though Respondent claimed to have repaid any unauthorized charges. The article reports that one commissioner expressed a belief that Respondent misused a City credit card and committed a "few other abuses." At page four of the Complaint is a copy of the City credit card agreement signed by Respondent. Handwritten notations add: "This (i.e., the credit card agreement) states that he (Respondent) cannot use card for personal use in which he did[.] [H]e bought beer and wine for his bar with cash advance. Says he paid it back in cash be has no repcit (sic) for it." All handwritten notes on documents attached to the Complaint and Amended Complaint were made by Complainant.6/ At page five, a MargateNews.net article dated August 16, 2010, reports alleged tax and purchasing violations by McLean's Bar & Grill, which was located at 2160 Mears Parkway. This article mentions other matters, including Respondent's voting a pay raise for City commissioners and a property-tax hike, Respondent's "history of financial instability . . . and fiduciary irresponsibility," and Respondent's two residential evictions from 1996-2006 for lease defaults. At page six is an unsigned, typewritten letter about Respondent. This letter twice charges that Respondent misused a City credit card and also alleges that he failed to repay $15,000 from "a Margate taxpayer"--Complainant--and violated unspecified tax and purchasing laws as to alcoholic beverages. A handwritten note adds: "I read this at the commissioner meeting." Below this note is printed Complainant's name. At pages seven and eight, a MargateNews.net article dated October 30, 2011, states that Complainant had lent Respondent $15,000 for a kitchen addition at McLean's Bar & Grill, but Respondent had failed to repay the loan after the business closed. This article alludes to some bad debts and judgments against Respondent or his businesses, but portions of the article are illegible, and the meaning of these portions of the article is unclear. The same article reports that Respondent was now operating Dave's Tiki Bar, which was located at 238 North State Road 7. Part of this portion of the article is also illegible, but seems to report that Jean LeBlanc, a co-owner with Respondent of a "former Tiki Bar," cancelled the bar's 2COP beer and wine license, effectively closing the bar. To reopen the Tiki Bar, according to the article, Respondent convinced his fellow City commissioners to hold a special meeting of the City commission in August 2011 to grant a 2COP license to "Tiki bar petitioner, Kenneth Suhandron," whom the article describes as Respondent's "partner." The article notes that Respondent abstained from voting due to a conflict of interest. The article states that Respondent acquired the corporate owner of the bar days after the special meeting, so Respondent now holds the temporary 2COP license, even though he had not paid for it. An online update indicates that Respondent paid for the 2COP license on November 1, 2011. At page nine, a MargateNews.net article dated August 20, 2011, describes a special meeting of the City commission on August 15. This article states that Respondent had been managing the Tiki Bar when a disagreement between him and his partner, Mr. LeBlanc, resulted in the cancellation of the bar's 2COP beer and wine license. According to the article, Respondent found a new investor, Mr. Suhandron, to apply for a new 2COP license and called for a special meeting of the City commission to provide the necessary City approval for the applicant to obtain a 2COP license. The article notes that Respondent appeared at the meeting to represent the listed applicant, Mr. Suhandron, but abstained from voting due to a conflict of interest. At pages 10 through 12 are a final summary judgment against Respondent and McLean's Bar & Grill, Inc., for $29,638.60 and a final judgment against Respondent for $20,073.63. At page 13 is an email from Complainant that pertains to the charge of Respondent's misuse of a City credit card. Redacted from the email is reportedly an email that another City commissioner had sent to Complainant, who added a handwritten note to this effect. The Amended Complaint is on the same form as the Complaint and is also notarized.7/ Like the Complaint, the Amended Complaint contains no explanation or narration of the charges, but it contains 41 pages of copies of documents, which are attached as pages A-3 through A-43. At pages A-3 through A-4, a letter dated May 16, 2012, from the Ethics Commission to Complainant focuses on Respondent's alleged failure to repay the $15,000 loan from Complainant and Respondent's misuse of a City credit card. To this letter, Complainant added a handwritten note stating: I cannot prove he use[d] [a City credit card for cash advances] for alcohol. . . for bar but just the cash advance alone is breaking the law over [sentence abruptly ends]. Just last week he got fined again for selling illigiel [sic] beer that he bought from a gas station in his bar[.] It will be in margate news.net next week[. I]f you want I can email you a copy. This man is a con artist. Pages A-5 through A-8 comprise a promissory note evidencing the $15,000 loan from Complainant. Complainant handwrote on the note: "He never gave me 1 payment or any interest payments." Pages A-9 through A-14 are the minutes of a meeting of the City commission on March 7, 2012. The sole handwritten addition to these minutes is at the top of the first page: "Each one of the following [commissioners?] has info on it[. A]ll are highlighted or outlined for your use." According to the minutes, one commissioner stated that she believed that Respondent had misused a City credit card and wanted him to resign, but he refused to respond to her statement or, clearly, to resign. This commissioner asked the City attorney to identify the options available to the City commission. The City attorney informed the commission that there had not been a determination that Respondent had violated the standards of conduct or code of ethics in his use of a City credit card and advised that the City commission could order an investigation, prospectively clarify the restrictions on the use of City credit cards and provide for forfeiture of office for a violation of these restrictions, publicly censure or reprimand a City commissioner, or prohibit a City commissioner from using a City credit card. According to the minutes, another commissioner--the mayor--then stated that what Respondent had done was wrong. The commissioner who had called for Respondent's resignation then asked for an investigation to be conducted by the county Board of Ethics or the Ethics Commission. The mayor responded that either this commissioner or a resident would need to file such a request because the City commission was not in a position to do so itself. A motion to censure Respondent, revoke his City credit card, and order an investigation then failed for the lack of a second. A motion followed to censure Respondent and revoke his City credit card. This motion was amended to add a directive to the City attorney to add restrictions to the use of City credit cards and provide for forfeiture of office for their violation. Prior to a vote on this amended motion, someone made a motion to table the amended motion, but the motion to table failed by a 2-3 vote. The commission then considered the amended motion, which passed 3-2. Respondent voted to table the amended motion and against the amended motion. At pages A-15 through A-21, the minutes of a meeting of the City commission on March 21, 2012, state that Respondent asked the City manager to cancel his City credit card "in light of the recent inquiries on his use of the card." (It appears, though, that the adoption of the March 7 amended motion should already have resulted in the cancellation of Respondent's City credit card.) According to the minutes, Respondent then "apologized for the mistrust the matter had caused" and added that "he did not intentionally misuse his position to mistrust anyone." Reverting to more conventional syntax, Respondent concluded: "He could not change what happened, but he had made it right and said it would not happen again." Complainant drew a box around this paragraph of the minutes, and he drew an arrow pointing to a corner of the box. Later in the meeting, the City commission unanimously agreed to advertise an ordinance restricting the use of City credit cards and providing for the dismissal of any employee violating these restrictions. A handwritten note states that Respondent should nonetheless be removed from office for his misuse of a City credit card because "[h]e used card for cash advances and said he paid city back in cash, but no one has a record of him doing that." Pages A-22 through A-37 are the minutes of a meeting of the City commission on April 18, 2012, and four executed memoranda of voting conflict that appear to have been attached to the minutes. These minutes describe City commission votes on alcoholic beverage licenses as to which Respondent abstained from voting due to his employment, but the establishments seeking City commission approvals appear to have been unrelated to Respondent. As indicated in the joint factual stipulation, at all material times, Respondent served as a commissioner and vice mayor of the City commission, and, as such, Respondent was subject to part III, chapter 112, Florida Statutes. As indicated in the joint factual stipulation, Respondent misused a City credit card. As indicated in the joint factual stipulation, while serving as a commissioner and vice mayor of the City, Respondent represented his employer before the City commission in the employer's application for a license from the City commission. Respondent timely disclosed his employment relationship to the City commission, abstained from voting on the issue, and timely filed a Memorandum of Voting Conflict. Under the circumstances, the appearance of Respondent, as an employee of the Tiki Bar, at the August 15, 2011, special meeting of the City commission did not constitute, or serve as a precursor to, a continuing or frequently recurring conflict between Respondent's private interests and public duties, nor did this appearance impede the full and faithful discharge of Respondent's public duties. The key facts are the lack of significant regulatory jurisdiction of the City commission over the issuance and use of 2COP licenses, the one-time nature of the Tiki Bar's need for City commission approval for its request for a 2COP license, the employment relationship that existed between Respondent and the Tiki Bar, and the absence of any responsibilities imposed on Respondent due to his employment with the Tiki Bar to represent other parties in requests before the City commission.
Recommendation It is RECOMMENDED that the Ethics Commission enter a final order dismissing Counts II and IV, determining that Respondent violated section 112.313(6) as alleged in Count I, and imposing an administrative fine of $3000, censure, and a reprimand against Respondent. DONE AND ENTERED this 28th day of August, 2014, 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 28th day of August, 2014. 1/ Available at
Findings Of Fact The petitioner, William L. Strine, began employment with the Miami Transit Company, a private company, operating the Miami Transit bus system on or about November 26, 1948 in the position of stock clerk. The Petitioner was employed with that entity until February 9, 1962 when he became an employee of Dade County upon the purchase of the Miami Transit Company by the county. The Petitioner was then permitted to purchase his service time between November 26, 1948 and February 9, 1962 as creditable service under the Florida Retirement System. The county, through the Metro Dade County Transit Authority, which had the authority to perform day-to-day management and operation of its bus service with its own employees, or to contract for such management service with private companies, chose the latter option and on or about October 1, 1964 contracted with National City Management to provide all the day-to-day management and operation services for, and instead of, the Metro Dade County Transit Authority. On or about that date Mr. Strine became an employee of National City Management. National City Management is a private company and a subsidiary of National City Lines, which is primarily in the bus transportation business. Its home offices are in Chicago, Illinois and it is still in existence and in the bus transportation business at this time. National City, then, performed all tie day-to-day management and operations for the Dade County Transit Authority's bus service pursuant to that management service contract through March 1, 1975. On October 15, 1974 however, the county adopted Ordinance No. 74-92, wherein it adopted a program to place the public transportation system under the directorship of the county manager by merging the bus system with the rapid transit development program. As a result of thin development, the management service contract with National City Management Company was not renewed. The purpose of this ordinance was to phase out the private management of the county's bus service and to revert to day-to-day management and operations by full-time county employees. The county at all times had the legal authority to conduct its own management and operation of the subject bus service; however, it contracted away the right to National City Management Company during the times the subject service contract was valid. In enacting Ordinance No. 74-92, contrary to the position of the Respondent, the county did not establish dual or parallel positions to those occupied and performed by the management and employees of National City Management because, by contract, only National City could perform those functions and fill those employment positions during the viable life of the contract. The transition period between full management and operations under National City Management and the inauguration of full control and management by the county and its employees was only a five month period and the only possibility of any duplication in employment positions would have been within that five month period, which is a temporary situation. Certainly the county never did, and never intended to establish dual or parallel employment and management positions for the transportation system when it was contractually obligated to let National City do all of that. Thus, the Petitioner in returning to county employment on March 1, 1975 was not moving laterally to a duplicate or parallel position in government from the identical position still existing with the private employment entity, but rather transferred from a position and functions which no longer existed with the private entity to an identical position and functions which had newly arisen with the public employer, Dade County, with the expiration of the contract. Dade County has the authority to grant retroactive sick leave, vacation leave, and longevity benefits to the Petitioner, which it did, but it has no authority to grant retroactive retirement benefits in the Florida Retirement System. The Division of Retirement contends that in considering whether to grant such benefits, it considers whether a contract exists specifying the terms by which the employees of a private entity are to become public employees and considers whether employees must be employed with the government agency taking over the private functions in order to maintain their jobs. It bases its contention primarily on the belief that the employees of National City were not required to transfer to county employment and those who did, in this case the Petitioner, merely voluntarily transferred to a parallel or duplicative job in public employment. In this instance, however, the Petitioner had effectively no real choice but to transfer to employment with the county since his position and all transit management operations of National City were abolished by the enactment of the subject ordinance, coincident to the expiration of the contract and because the effect of the ordinance was to supplant entirely the bus service management and operations duties performed by National City personnel with county personnel. No job commensurate with his skills and expertise remained with any other employer in that locality. Upon the passage of the subject ordinance and the expiration of tie contract with National City, the county was free to create a position of Chief Accountant, or financial officer, for it transit system and hire someone other than Strine to fill that position and perform those duties, which would have been a duplication of Strine's duties and functions; however, the county elected not to do so, but transferred Strine, with is duties and functions over to its employ. No other employees were affected by the transfer because all who had been performing similar management duties had died or retired on or before tie time of the pertinent change of management in March, 1975. The Petitioner will have to pay thousands of dollars to the Division of Retirement in order to buy the eleven years creditable service time. There will be no financial or actuarial detriment imposed by that procedure on the Division of Retirement or the beneficiaries of its retirement system.
Recommendation Having considered the competent, substantial evidence in the record, the foregoing Findings of Fact and Conclusions of Law, as well as pleadings and arguments of counsel, it is RECOMMENDED that the Petitioner, William L. Strine, be permitted to purchase and receive past service credits from the Florida Retirement System for the period October 1, 1964 to March 1, 1975 pursuant to Section 121.081(g) Florida Statutes. DONE and ENTERED this 17th day of December, 1980 in Tallahassee, Florida. P. MICHAEL RUFF, 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 17th day of December, 1980. COPIES FURNISHED: Denis Dean, Sr., Esquire Dean and Hartman, P.A. New World Tower, Penthouse Suite 100 North Biscayne Boulevard Miami, Florida 33132 Stanley M. Danek, Esquire Assistant Division Attorney Division of Retirement Cedars Executive Center 2639 North Monroe Street Suite 207C- Box 81 Tallahassee, Florida 32303
The Issue Whether a final order dismissing the Petitioner's rule challenge should be entered because Respondent, United Safety Council, Inc., doing business as Florida Safety Council (United Safety Council), is not an "agency" within the Florida Administrative Procedures Act (APA), and there is no claim challenging a rule enacted by Respondent, Department of Highway Safety and Motor Vehicles (Department). HOLDINGS United Safety Council is not an “agency” within the definition of section 120.52(1), Florida Statutes (2010); thus Project Refocus' rule challenge against United Safety Council is not subject to the APA. Consequently, United Safety Council's Motion for Summary Final Order is Granted. Project Refocus' petition in the instant case does not challenge a Department rule or action, and the Department was never added or served as a party. Therefore, the Department's motion to remove it as a party is Granted.
