Findings Of Fact Upon consideration of the pleadings and the evidence adduced at the hearings in this cause, the following pertinent facts are found: On November 25, 1974, H. M. Harmes, then Director of the School Service Center, notified respondent by letter of his appointment to teach ED 598, "Crucial Issues in Education", during Quarter II, 1975. The letter of appointment explained respondent's salary and the materials and consultants available to him. The letter further stated: "This is a credit bearing contract short course; therefore all college and university regulations pertaining to credit courses must be observed. In addition, you should read the enclosed description of instructor's procedures and follow them carefully." The letter noted that it had an enclosure. It was the practice of the Division of Continuing education to include a copy of a document entitled "Credit Institute Instructor's Procedures" with each letter of appointment. Respondent accepted the appointment on November 26, 1974, by signing the letter and returning it to the Division of Continuing Education. The course in question was a continuing education offering for teachers and administrators. The course was to begin on February 7, 1975 and meet for ten hours (three hours on Friday evening and seven hours on Saturday) on each of five weekends, the student earning five quarter credit hours upon successful completion. The "Credit Institute Instructor's Procedures" contains several provisions regarding the registration of students. It provides that: "For programs which will meet fewer than ten times, this (registration) must be done at the first meeting. If the program will have ten or more meetings, registration may continue to the second meeting, but no later." Other provisions are "under no circumstances are you to accept or handle money from students. . . for payment of fees . . ." and "students may register only during the open registration period. Therefore, all students will appear on the first class roll. None will be added." A flyer prepared by respondent to advertise the course provided for preregistration and stated that checks were to be made payable to Florida Atlantic University. On or before the date the class first met on February 7, 1975, twenty students were properly registered. On the third class meeting (Friday, February 14, 1976), three additional students appeared and inquired of respondent if they could register at that time. These three persons had wives or friends already registered in the class, and it was convenient for them to travel to and from class with those already registered. Respondent allowed these three persons to register and instructed them to date their application February 7, 1975; and to make their checks payable to respondent. Respondent informed them that he would register them for the course if possible. If not, he would register them for the same course to be offered by respondent the following quarter. This arrangement was agreeable to the three students. At that time, respondent had not been appointed to teach the course for the following quarter. He was subsequently appointed to teach the same course for Quarters III and IV. On February 14, 1975, the three late students filled out the application forms, dated them February 7th, and wrote checks payable to respondent. On February 18, 1975, respondent deposited the three checks in his personal checking account. He did not feel that the administration would permit the late applicants to register and therefore, without making inquiry, he did not register the three students for the winter quarter and the students did not receive credit for completing the course. Respondent misplaced somewhere in his office the application forms completed by the three students in question. Although requests were received by respondent from each of the three students as to their receipt of credit for the course, respondent took no steps to register these students during the following two quarters in which he taught the course. Sometime during the summer of 1975, respondent found the applications in his office. However, it was not until the University intervened on behalf of one of the three students - in September of 1975 - that respondent turned in the applications and paid the University $300.00 for their registration fees. The three students were then given credit and grades for the course. By a complaint dated October 2, 1975, petitioner charged respondent with misconduct and sought to terminate his employment contract for cause. Respondent requested a hearing on the compliant and petitioner's President requested the Division of Administrative Hearings to conduct the hearing. The undersigned was assigned as the Hearing Officer.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that respondent's contract of employment be immediately terminated for cause. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 10th day of March, 1976. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of March, 1976. COPIES FURNISHED: Mr. Glenwood L. Creech President Florida Atlantic University Boca Raton, Florida 33432 Leonard H. Klatt, Esquire University Attorney Florida Atlantic University Boca Raton, Florida 33432 Frank A. Kriedler, Esquire Attorney for Respondent 141 S.E. Avenue C P. O. Box 881 Belle Glade, Florida 33430
The Issue The issue in this case is whether Respondent discriminated against Petitioner based on Petitioner's disability.
Findings Of Fact Mr. McMahon was a member of Suncoast beginning in approximately 1986. In 2008 and 2009, Mr. McMahon had a checking account, a VISA card, a savings account, and a loan with Suncoast. Mr. McMahon claims that he is disabled and that he suffers from personality disorders, post-traumatic stress, passive aggression, and obsessive compulsive disorder. No medical evidence was presented to substantiate his claims. He has been receiving benefits from the Social Security Administration based on a personality disorder since approximately 1996. Suncoast perceived Mr. McMahon as having a disability, based on his repeated assertions that he was disabled. In November 2008, Mr. McMahon filed a complaint with the Better Business Bureau of West Florida, Inc. (BBB), alleging that Suncoast was discriminating against him by not accommodating his communication disability. The BBB investigated and found that Suncoast had blocked access to Mr. McMahon's accounts because he was delinquent on a loan. The BBB contacted Suncoast concerning the complaint, and Suncoast provided Mr. McMahon a three-month payment due date extension on the loan, lowered his monthly payments, and unblocked his account. In January 2009, Mr. McMahon was delinquent on his loan. Again Suncoast tried to help Mr. McMahon with his delinquent account. At some point, Mr. McMahon's loan payments were put on automatic payments in order to reduce his delinquencies. Money would automatically be taken out of his account to make the monthly loan payments. Mr. McMahon had a direct deposit for his Social Security benefits payments. After the loan payments began being deducted automatically, Mr. McMahon canceled his direct deposits into the account from which his payments were automatically being deducted. Thus, there was no money in the account to make the monthly payments on his loan, and Mr. McMahon ceased making payments on the loan and again became delinquent on his loan. When one of Suncoast's members becomes overdrawn with regards to either a checking or savings account or credit card, or is delinquent in making payments on any credit card or loan obligation, that member loses access to his or her services, including use of all internet services, ATM cards, ATM machines, credit cards, and debit cards. The member would also be unable to access his or her account balance or make deposits into overdrawn accounts if the member attempted to make a deposit via ATM, as those services are suspended. These restrictions are typically automatically placed upon the accounts of any member with a delinquent loan account after 60 days of delinquency, and within 30 days of any overdrawn share draft account. Any member with a delinquent or overdrawn account, where services were suspended would be prevented from applying for a mortgage loan. If the member contacted Suncoast staff to apply for a mortgage loan or to utilize any other services, the member would be directed to the loss mitigation section of Suncoast, and loss mitigation would attempt to collect the debt or rectify the delinquency. Because Mr. McMahon again became delinquent on his loan payments after stopping the direct deposits, his accounts were restricted, meaning that he could not access the accounts. Mr. McMahon began a campaign of making repeated calls to Suncoast, screaming and yelling at Suncoast representatives, talking over the representatives, making vulgar statements, and using profanity. Mr. McMahon attributes his behavior to his communication disability and requested on numerous occasions that Suncoast accommodate his disability with "patience and understanding." A note was placed in the loss mitigation's note system and in Suncoast's host system, so that all employees of Suncoast who were working with Mr. McMahon could see and accommodate his request for patience and understanding. Suncoast representatives did provide Mr. McMahon with an abundance of patience and understanding. However, nothing seemed to appease Mr. McMahon, and his repeated calls were unproductive. Because of the repeated nature of Mr. McMahon's calls and his behavior during the telephone calls, there were numerous complaints by Suncoast's representatives to management. Jacqueline Gilbert (Ms. Gilbert), vice president of loss mitigation, determined that in order to protect Suncoast's representatives from Mr. McMahon's harassing behavior that all calls should be directed to her; Linda Fales (Ms. Fales), vice president of risk management, cardholder disputes, and DSA compliance for Suncoast; or Ben Felder (Mr. Felder), Suncoast's general counsel. Suncoast's representatives were advised that Mr. McMahon's calls should be transferred to Ms. Gilbert, Ms. Fales, or Mr. Felder. When the representatives would tell Mr. McMahon that they could not help him and that his call would have to be transferred, Mr. McMahon was verbally abusive to the representatives. Many times, if Mr. McMahon was going to be transferred, he would hang up and call right back to speak with a different representative. Sometimes, Mr. McMahon would call and hang up when a representative answered the call. At different times, Ms. Gilbert, Ms. Fales, and Mr. Felder talked with Mr. McMahon to attempt to discuss the reasons that his account was restricted. However, they had little success in communicating with Mr. McMahon because of his behavior. Although Mr. Felder was not able to service Mr. McMahon's account, he decided to handle all Mr. McMahon's requests and assign any work to be done to the appropriate employee because Mr. McMahon's behavior toward Ms. Gilbert and other Suncoast employees was unacceptable. Mr. McMahon did not make any loan payments between May 2009 and August 2009. During this same time period, Mr. McMahon's VISA credit card was well overdrawn. Carolyn Stepp (Ms. Stepp) had cosigned on Mr. McMahon's loan. On or about September 4, 2009, Suncoast exercised its "right of offset" and used funds in both Mr. McMahon's and Ms. Stepp's accounts to pay off the loan. There was still an outstanding balance of $1,046.86 on his VISA credit card. On September 10 and 14, 2009, Mr. McMahon asked to apply for a mortgage loan by telephone. He was not sure that Suncoast would give him a loan because of his delinquent accounts, but he felt that he should have the opportunity to apply because the loan had been satisfied when Suncoast exercised its right of offset. Although the loan was satisfied, Mr. McMahon still had an outstanding balance on his VISA credit card, which he had not been able to use for several months because his accounts had been restricted. He was advised that he would have to contact Mr. Felder to discuss the status of his account. On September 11, 2009, Mr. Felder and Mr. McMahon discussed his account. Part of the discussion concerned Suncoast's writing off Mr. McMahon's loan and VISA credit card balance, returning the offset amounts to Mr. McMahon's and Ms. Stepp's accounts, disbursing the remaining amounts in Mr. McMahon's account to him, and closing Mr. McMahon's accounts. At the conclusion of the conversation, Mr. Felder understood that Mr. McMahon was in favor of this solution and began to take steps to accomplish the tasks. Mr. Felder advised Mr. McMahon by telephone on September 17, 2009, that the tasks had been completed and that Mr. McMahon's accounts with Suncoast were closed, meaning that services at Suncoast were terminated and that Mr. McMahon's access to information was no longer available. Mr. Felder followed up the telephone conversation with a letter dated September 17, 2009, confirming the telephone conversation. Individuals who are not members of Suncoast are not qualified to apply for a mortgage loan with Suncoast. At the time that Mr. McMahon applied for a mortgage loan on September 14, 2009, his accounts at Suncoast were in the process of being closed. Mr. McMahon's requests to apply for a mortgage with Suncoast were not denied because Mr. McMahon was disabled. They were denied because Mr. McMahon had various account delinquencies.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Suncoast did not commit an unlawful housing practice and dismissing Mr. McMahon's Petition. DONE AND ENTERED this 27th day of April, 2011, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL 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 27th day of April, 2011.
The Issue The issue for resolution in this proceeding is whether Respondent's lottery prize should be withheld to be applied against an unpaid student loan.
Findings Of Fact In an application and promissory note dated June 30, 1987, Respondent, Ms. White, applied for an auxiliary student loan in the amount of $2,000 to attend school at Orlando College in Orlando, Florida, for the loan period June 1987 through June 1988. The loan was issued by Florida Federal Savings and Loan Association (lender) in one disbursement on or about September 2, 1987. Interest accrues on the loan at a variable rate which is currently 10.27 percent per year. This loan is Loan Number AL00010400 (loan 10400) which was guaranteed by the federal government through the DOE. In an application and promissory note dated December 9, 1987, Respondent applied for a second auxiliary student loan in the amount of $2,000 to attend the school for the same loan period. That loan was made by the lender in one disbursement on or about March 8, 1988. Interest accrues on that loan at a variable interest rate which is currently 10.27 percent per year. That loan is Loan Number AL00014434 (loan 14434) which was guaranteed by the federal government through DOE. As auxiliary loans, each of Respondent's loans accrued interest from the date of disbursement. For auxiliary loans, the borrower is required to make loan payments even while attending school. However, a borrower may request a deferment or forbearance from payment for several reasons, including attending school on a minimum part-time basis. While an auxiliary loan is in deferment/forbearance status, interest still accrues on the loan. In an application dated January 4, 1988, Respondent requested a deferment of repayment because she was attending school on a full-time basis. That application was approved for any payments due between June 22, 1987, through June 20, 1988. Following the deferment period, Harper-Smith and Associates, Inc., the lender's loan servicer (herein referred to as HSA) sent Respondent a repayment disclosure letter dated August 31, 1988. The letter outlined the terms and conditions of the repayment schedule assigned to both of Respondent's loans. As of the date of the disclosure letter, Respondent owed $4,082.40 in outstanding principal and capitalized interest for both loans. Additionally, Respondent owed a total of $36.23 in accrued unpaid interest. The disclosure letter indicated that Respondent's first payment of $56.06 was due September 20, 1988. Respondent failed to make any payments on the loans and Respondent was declared in default by HSA. HSA filed a lender application for claim payment with DOE dated May 11, 1989. On November 23, 1989, DOE, as guarantor of the loans, paid HSA for both of Respondent's defaulted auxiliary student loans. When DOE acquired loan 10400 and loan 14434, the outstanding interest was capitalized, resulting in a balance of $4,680.86 ($4,082.40 in claim principal and $598.46 in claim interest). This sum is subject to a variable interest rate which is currently 10.27 per cent per year. Since DOE acquired Respondent's loans, payments received from the Respondent's federal income tax returns (herein referred to as IRS offsets) have been applied to Respondent's outstanding balance as follows: 4/09/91 $1,082 3/30/92 $1,628 10/04/93 $1,140 5/08/95 $ 614 5/08/95 $ 727 After applying each IRS offset payment according to federal regulations (outstanding interest first, then principal), Respondent's account had a net balance of $1,445.43 in principal due on May 8, 1995, and all interest was paid through that date. DOE's earlier certification of amount owed was based on DOE's records which did not include the 1993 and 1995 IRS offsets. Ms. White provided the evidence of those and DOE verified that those should be applied against her debt. On June 30, 1995, Respondent filed for Chapter 7 bankruptcy protection. The filing occurred less than seven years after Respondent's loans went into repayment on September 20, 1988. On October 17, 1995, the United States Bankruptcy Court for the Middle District of Florida, Orlando Division, issued a "Discharge of Debtor" order in Respondent's case, number 95-03350-687. That order provides in pertinent part, "The above-named debtor is released from all dischargeable debts . . . . . . [including] debts dischargeable under 11 U. S. C. [Section] 523." On April 28, 1996, the Department subrogated (sold) loan 10400 to the United States Department of Education (USDOE). DOE still owns loan 14434. On May 8, 1995, the day the last IRS offset payment was applied, Respondent owed $722.72 in principal on loan 14434 which currently accrues interest at the rate of 10.27 percent per year. No other payment was received between May 8, 1995, and the time the DOE received Respondent's lottery winnings which are the subject of this action. Ms. White produced evidence that an additional $941.69 was withheld in an IRS offset, but that was after her lottery winnings were withheld. By letter of February 12, 1999, the DOE notified the Department of the Lottery (Lottery) that Respondent owed DOE $2,811.88, in principal and interest, as a consequence of her outstanding defaulted student loan. That amount has been amended as explained in paragraph 8, above. Pursuant to Section 24.115(4), Florida Statutes, the Lottery transmitted Respondent's $800 lottery prize to the DOE. By letter of February 25, 1999, DOE notified Respondent that it was in receipt of her $800 lottery prize in accordance with Section 24.115(4), Florida Statutes. DOE applied Respondent's lottery winnings to her outstanding balance on the remaining loan, number 14434, held by DOE in accordance with federal requirements.2 DOE's letter also advised Respondent of her right to request a formal hearing pursuant to Section 120.57, Florida Statutes, to contest the action. This proceeding arose when Respondent made her request for formal hearing. DOE has demonstrated that even when the five IRS offsets noted above were properly applied to both loans, there remained a balance due on loan 14434 of $722.72 in principal as of May 8, 1995, plus interest accruing since that date, plus $585.11 in collection costs. DOE also demonstrated that loan 14434 was not discharged in bankruptcy, because it was not in repayment for more than 7 years when the bankruptcy petition was filed, the minimum time required in order for a student loan to be eligible for discharge.
Recommendation Based on the foregoing Findings of fact and conclusions of Law, it is RECOMMENDED that DOE enter a final order which authorizes Respondent's lottery prize of $800 be applied toward her outstanding debt for a defaulted student loan. DONE AND ENTERED this 2nd day of August, 1999, in Tallahassee, Leon County, Florida. MARY CLARK 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 2nd day of August, 1999.
The Issue The issues in these consolidated cases are as follows: (1) whether Respondents employed Lorene Walker, who had contact with scholarship students and who did not meet the requisite criteria to pass the Level 2 background screening as required by section 1002.421(1)(m) and (p), Florida Statutes (2019), and if so, what is the appropriate remedy; and (2) whether Respondents engaged in fraud in violation of section 1002.421(3)(d) and, if so, whether Petitioner should revoke Respondents' participation in several Florida Scholarship Programs.1
Findings Of Fact Parties, People, and Programs The Department is the government agency charged with administering numerous state scholarship programs pursuant to section 1002.421, Florida Statutes. The Department operates or has administrative responsibilities for the Gardiner Scholarship Program, the John M. McKay Scholarships for Students with Disabilities Program, the Florida Tax Credit (FTC) Scholarship Program, and the Family Empowerment Scholarship Program. See §§ 1002.385, 1002.39, 1002.394, and 1002.395, Fla. Stat. The Gardiner, McKay, FTC, and Family Empowerment scholarships defray tuition and other qualified educational expenses for eligible students who attend charter, private, or other eligible schools in the state of Florida. The Department also operates or administers the Hope Scholarship Program, which provides tuition assistance to victims of school bullying so that they can enroll in another school. See § 1002.40, Fla. Stat. The scholarship funds are awarded to eligible students to be used at eligible schools. The Commissioner is the agency head of the Department and has the authority to revoke or suspend a school's eligibility to receive scholarship monies on behalf of eligible students. The Independent Education and Parental Choice Office, also referred to as the School Choice Office (Office), is a section of the Department which oversees several school choice options outside Florida's public school system. The Office also oversees the administration of various scholarships programs under chapter 1002. The Office is in regular contact with schools that participate in these scholarship programs. Respondents have been operating as private schools for approximately six years. Since the 2013/2014 school year, they have been found eligible and participated in numerous scholarship programs pursuant to section 1002.421. Respondents operate two campuses: (1) School Code No. 4015 located at 1056 North Pine Hills Road, Orlando, Florida (Pine Hills Campus); and (2) School Code No. 8827 located at 5308 Silver Star Road, Orlando, Florida (Silver Star Campus). The Schools serve 40 to 50 scholarship students and receive approximately $200,000 per year in scholarship funds. Judith Shealey is the owner of the Schools. She carries the title of Executive Director, Principal, Headmistress, and/or Owner. Ms. Shealey has family members who are students and teachers at the Schools. Compliance Requirements As explained by RaShawn Williams, the Office, parents, and eligible schools work closely together to access the scholarship funds. The parents apply for the scholarships through the designated agency and enroll their students directly with an eligible school. The school is responsible for enrolling the student in the scholarship program awarded to that student. Essentially, the student must be deemed eligible to receive scholarship funds, and the school must be eligible to receive those scholarship funds. If a private school is deemed ineligible by the Office for participation in a scholarship program, the students at that school do not lose their eligibility for scholarship funds. Rather, they simply cannot use those funds to enroll in the ineligible school. As private school participants in the Florida Scholarship Programs, the Schools were required to register with the State through the submission of a Private School Annual Survey; and then apply for eligibility through the submission of a yearly Scholarship Compliance Form (Compliance Form). The Compliance Form specifies numerous governing statutory requirements including: (1) submitting background screenings for officers, directors, or other controlling persons; (2) certifying all staff with direct student contact have passed an FDLE Level 2 background screening; and (3) terminating or denying employment to all persons who cannot meet this requirement. The Compliance Form is completed by applicant schools online, and then a signed and notarized hard copy is mailed to the Office. The relevant portions of the Compliance Form are found in "Section 4," and involve background checks: * Has each Owner, Operator, and Chief Administrative Officer undergone a Level 2 background screening through the Florida Department of Law Enforcement and submitted the results to the Florida Department of Education in accordance with section 1002.421(1)(m), Florida Statutes? (Reports must be filed with the private school and made available for public inspection). * * * * Have all employees and contracted personnel with direct student contact submitted their fingerprints to the Florida Department of Law Enforcement for state and national background screening in accordance with section 1002.421(1)(m), Florida Statutes? * In accordance with section 1002.421(1)(m), Florida Statutes, does the school deny employment to or terminate an employee or contracted personnel with direct student contact if he or she fails to meet the background screening standards under section 435.04, Florida Statutes? * In accordance with section 1002.421(1)(m), Florida Statutes, does the school disqualify instructional personnel and school administrators from employment in any position that allows direct contact with students if the personnel or administrators are ineligible under section 435.40, Florida Statutes? A "No" answer on any of the above questions would, if unresolved, result in a private school's ineligibility for scholarship funds. The evidence establishes that the Schools answered "Yes" for sections 4A, 4C, 4D, and 4E on the notarized Compliance Forms that were submitted on December 18, 2018, and December 11, 2019. In addition to certifying the information above on the Compliance Forms every year, an eligible school must submit to the Office screening documentation for directors, principals, board members, administrators, and officers as part of the renewal of participation in the scholarship programs. Screening documentation related to other employees must be maintained by the schools and is usually only reviewed by the Office during an audit or a site visit of the school. There is no dispute that the Schools never listed Lorene Walker as an administrator for the Schools. There is no dispute the Schools never submitted any background screening information for Ms. Walker until specifically requested by the Office in November 2019. Employment of Lorene Walker Lorene Walker was hired by the Schools in 2013.3 She had children and/or grandchildren who attend the Schools. The Schools claim Ms. Walker was hired from an entity known as "Career Source." Although Ms. Walker believed that she had been cleared to work at the Schools, there is no employment file or documentation that she had undergone the Level 2 background screening required by law before being employed at the Schools. Originally, Ms. Walker worked as a "floater." As a floater, Ms. Walker cooked, cleaned, and did whatever the school needed at the time. It is unclear whether she had direct contact with students in this position. 3 Ms. Walker testified she began working there in 2015, but later stated she started in 2013. Ms. Shealey indicated by 2014, Ms. Walker had transitioned into the current position. Regardless, in 2014, Ms. Walker transitioned into a more active role at the Schools. Although the Schools claim in response to the Complaints that she was simply an administrative assistant to Ms. Shealey, the evidence establishes that Ms. Walker was the Administrator for the Schools during the time relevant to the Complaints. She reminded teachers to send out grades, attended meetings, oversaw the lunch program, and prepared school-related and financial documentation. Ms. Walker was also responsible for the Schools' students' enrollment into the scholarship programs. As Administrator, Ms. Walker also had authority, either explicit or implicit, from the Schools' owner, Ms. Shealey, to represent the Schools when dealing with the Office. She worked directly with Ms. Williams on compliance issues, including fire safety, health inspections, and completion of the Annual Survey and Compliance Form for the Schools. Ms. Walker also responded to requests for information from Ms. Williams and others in the Department. It was clear Ms. Walker was integral to the operation of the Schools. Ms. Shealey and Ms. Walker were the only two individuals with access to the Schools' email accounts that were used to correspond with the Department. The emails from one of the email addresses usually contained Ms. Shealey's signature block indicating either the title of "Principal" or "Headmistress." Ms. Walker's signature line identified her title as "Administrator." Before being hired by the Schools, Ms. Walker had been arrested for numerous offenses between 1978 and 2001 in Florida. Although most of these offenses were dismissed, dropped, and/or abandoned, she pled nolo contendere to and was found guilty of a 1994 charge for unlawful purchase of a controlled substance, a second-degree felony in violation of section 893.13, Florida Statutes (1993). The 1994 charge is a disqualifying offense which rendered Ms. Walker ineligible to be a school employee.4 There was no evidence that Ms. Walker had obtained an exemption for this qualification. As noted above, the Schools never disclosed Ms. Walker's importance in their operations in their Compliance Forms. Prior to November 2019, the Schools had never provided any screening documentation for Ms. Walker to the Office as part of the yearly compliance process. Investigation and Complaints On or around October 14, 2019, the Department received a complaint from another state agency concerning possible abuse by an employee of the School at the Pine Hills campus. Although the abuse investigation was handled outside of the Office, the Office opened an inquiry into the Schools' compliance with background check requirements and other issues. Whitney Blake conducted the investigation on behalf of the Office. The first step in this inquiry was a letter from Ms. Blake's supervisor, dated October 25, 2019, requesting (among other things) a list of all employees (including both teachers and other personnel) and results of current FDLE Level 2 background screenings for all employees. 4 Section 435.04, Florida Statutes, provides the following in relevant part: (2) The security background investigations under this section must ensure that no persons subject to the provisions of this section have been arrested for and are awaiting final disposition of, have been found guilty of, regardless of adjudication, or entered a plea of nolo contendere or guilty to, or have been adjudicated delinquent and the record has not been sealed or expunged for, any offense prohibited under any of the following provisions of state law or similar law of another jurisdiction: * * * (ss) Chapter 893, relating to drug abuse prevention and control, only if the offense was a felony or if any other person involved in the offense was a minor. On November 4, 2020, Ms. Walker sent the Department a list of all the Schools' staff, including herself as "Administrator," along with the results of her background screening, revealing her previous disqualifying offense. On November 15, 2019, Ms. Blake attempted to contact Ms. Shealey by phone because she was concerned that Ms. Walker, who was the disqualified employee, was the person sending the information from the School. When she called the Schools and requested to speak with the owner (Ms. Shealey), the person who answered purportedly claiming to be the Schools' owner did not have a distinguishable accent. Ms. Shealey was known to have a strong accent, whereas Ms. Walker did not. Regardless, on this call, Ms. Blake instructed the person on the other end of the phone line that the Schools would need to terminate Ms. Walker immediately because of her disqualifying offense. On that same day, Ms. Blake then sent a follow-up email to the Schools (at both email addresses utilized by the Schools) indicating there were outstanding items that had not been provided as requested in the October 25 letter. She also specifically requested proof Ms. Walker was no longer at the Schools. Specifically, the Department stated: Upon review of the Level 2 background screenings, it was determined Lorene Walker has disqualifying offenses pursuant to section 435.04, F.S. An employee or contracted personnel with direct student contact means any employee or contracted personnel who has unsupervised access to a scholarship student for whom the private school is responsible. To certify compliance with this requirement, please submit a signed statement indicating Lorene Walker's employment at your school has been terminated or that individual's role with your school no longer puts he/she in proximity to scholarship students. Your attention to this in the next five days will preempt any further action on our part. (emphasis added). That same date, November 15, 2019, the Schools emailed one of the items requested by Ms. Blake, an abuse poster, to the Office. Although Ms. Walker testified she did not send the email, it had her signature block and was from one of the Schools' two email accounts to which she had access. The undersigned finds Ms. Walker sent this email to Ms. Blake. On November 18, 2019, the Schools sent another item previously requested by Ms. Blake, the teaching qualifications for a teacher, to the Office. Again, although Ms. Walker claimed she did not send the email, it had her signature block and was from one of the Schools' two email accounts to which she had access. The undersigned finds Ms. Walker sent this email to Ms. Blake. Ms. Blake did not receive any proof that the Schools had removed Ms. Walker from her position within five days as requested in the November 15 email to the Schools. As a result, on November 22, 2019, Ms. Blake emailed the Schools reiterating the requirements of section 1002.421, and repeating her request for a signed statement that Ms. Walker had been terminated or had no contact with scholarship students. Ms. Blake also added: "Failure to turn in the requested documentation could impact your school's ongoing participation in the Scholarship Program." During this time, Ms. Blake spoke to Ms. Shealey numerous times on the phone regarding the outstanding requests related to another teacher and the signed documentation that Ms. Walker had been removed from her position. Ms. Shealey indicated it would be difficult to remove Ms. Walker due to Ms. Walker's oversight of the school and her familiarity with the scholarship student information. After Ms. Blake did not receive the requested proof of Ms. Walker's removal from the Schools and two other items related to a teacher, the Office issued a Notice of Noncompliance on December 5, 2019. On December 19, 2019, Ms. Shealey sent to Ms. Blake one of the outstanding items related to the teacher by email. There was no mention of Ms. Walker and no signed proof that Ms. Walker had been removed from her position. The next day, Ms. Blake wrote an email to Ms. Shealey indicating that she did not have authority to exempt Ms. Walker from the background screening requirements. She again asked for the outstanding information related to the other teacher and a signed statement indicating Ms. Walker had been removed and no longer had proximity to scholarship students. On December 23, 2019, Ms. Shealey emailed Ms. Blake that the teacher for which there was an outstanding request had resigned and no longer worked for one of the Schools. Ms. Blake responded with yet another request for the signed statement indicating Ms. Walker had been terminated or was no longer in proximity to scholarship students. In response, Ms. Shealey sent an email to Ms. Blake with an attached letter. The letter titled "Termination of your employment" and dated December 9, 2019, indicates that Ms. Shealey terminated Ms. Walker during a meeting held on December 9, 2019. The letter is unsigned. Ms. Shealey indicated in the text of the email that it was the hardest letter she had to write. Being concerned that they had not received a signed statement, Ms. Blake and Ms. Williams requested that a site visit be conducted at the Pine Hills Campus. A visit was scheduled for February 5, 2020, and the Schools were provided notice of the site visit by certified mail, email, and telephone. Additionally, the Schools were provided a checklist of the documents that should be provided to the inspector during the site visit. On February 5, 2020, Scott Earley from the Office conducted the site visit at the Pine Hills Campus. When he arrived, Ms. Shealey was not there and none of the documentation previously requested had been prepared for review. Mr. Earley testified that once Ms. Shealey arrived, she did not know where all the requested documents were, nor could she produce all of them. For example, when asked about a necessary health form, Ms. Shealey indicated that Ms. Walker would know where the document was, but she could not locate it. Mr. Earley did not recall Ms. Shealey stating during the inspection that Ms. Walker was working from home, but she gave Mr. Earley the impression that Ms. Walker's background screening issue had been resolved. Regardless, the Site Visit Staff/Consultant Worksheet filled out for the February 5 site visit does not disclose Ms. Walker as a member of staff or contracted personnel with the Pine Hills Campus. Although Ms. Walker was not at the Pine Hills Campus during the site visit, Mr. Earley believed based on his observations and conversations with Ms. Shealey that Ms. Walker was still employed by the Schools as a director or principal. Almost two weeks later on February 20, 2020, Petitioner filed the Complaints against the Schools. It was not until March 11, 2020, in response to the Complaints that the Schools submitted for the first time a signed copy of a termination letter dated December 9, 2020. Even after the Complaints had been served on the Schools, however, it was unclear what Ms. Walker's involvement was with the Schools. There may have been some confusion because Ms. Walker had been seen after her purported termination on campus. Ms. Walker claimed she was on campus only to pick up her children and grandchildren. Testimony from two of the Schools' teachers indicated that they noticed Ms. Walker was no longer at the Schools, but knew she was taking care of the Schools' paperwork from her home. Neither teacher could establish a date certain for when Ms. Walker stopped working on campus and/or when she began working at home. Prior to the filing of the Complaints in these proceedings, there was no evidence that the Schools ever reported to the Office that Ms. Walker had been working from home. Nothing in the Petition filed on March 4, 2020, indicates Ms. Walker was still employed at the Schools. It was not until March 11, 2020, in response to the Complaints that the Schools submitted for the first time a signed copy of a termination letter dated December 9, 2020. As part of the March 11 submission, Ms. Shealey sent a signed statement indicating she had not terminated Ms. Walker, but rather "had her work from home." This was the first time Ms. Shealey indicated to the Office that Ms. Walker was still working for the Schools. In the Motion filed April 10, 2020, the Schools indicated they were unaware of the specifics of the Level 2 background screening requirement, and that, once aware, "we took action immediately and terminated the employee in question." There was no indication in the body of the Motion the Schools continued to employ Ms. Walker to work at her home. Attached to the Motion, however, was the same letter submitted on March 11 indicating Ms. Walker was working from home. In the Amended Petition filed on May 15, 2020, the Schools state Ms. Walker was terminated: "I terminated Ms. Lorene Walker due to the Department's information in order to come into compliance with the Florida Department of Education." "I rectified this deficiency by terminating Ms. Walker." "Ms. Lorene Walker was terminated on December 9, 2019, as advised by Whitney Blake." Although the Amended Petition does not explicitly state Ms. Walker continued to work for the Schools at home, it does leave room for this interpretation: "As of December 9, 2019, Ms. Lorene Walker no longer works in the Lion of Judah facility." It is unclear on what date Ms. Walker stopped working from home for the Schools. What is clear is that at the time of the final hearing she was no longer working at the Schools in any location or in any capacity. ULTIMATE FACTUAL DETERMINATIONS The greater weight of the evidence establishes Ms. Walker, in her role as Administrator, should have been disclosed to the Office as an "operator" or "a person with equivalent decision making authority." The Schools were required to send her background screening documentation to the Office as required by the Compliance Form and section 1002.421(1)(p), and they did not. The Schools employed a person with a disqualifying offense in violation of sections 1002.421(1)(m) and 435.04(2)(ss). Specifically, the Schools employed Ms. Walker from 2014 (if not earlier) through December 2019 (if not later) in a position in which she was in the vicinity of scholarship students, knowing that she had been found guilty of a felony and without obtaining or providing documentation related to a Level 2 background clearance. The Schools continued to allow Ms. Walker to remain in a position that placed her in the vicinity of scholarship students after receiving notification of her ineligibility for almost a month (if not more). The greater weight of the evidence establishes the Schools engaged in fraudulent activity, to wit: (1) Ms. Shealey falsely represented to the Office that the Schools complied with Section 4 of the Compliance Form for 2018 and 2019; (2) the Schools falsely obscured Ms. Walker's role at the School and her criminal background; and (3) the Schools failed to honestly disclose Ms. Walker's employment status when they claimed to terminate her on December 9, 2020, but failed to inform the Office that they had retained (or rehired) her to work at home. The Schools made these statements of material fact either knowing they were false or in reckless disregard of the truth or falsity of the representations, which were false.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commissioner enter a final order (1) upholding the suspension; and (2) revoking the eligibility of Lion of Judah Academy (4015) and Lion Of Judah Academy (8827) to participate in the following Florida Scholarship Programs: John M. McKay Scholarships for Students with Disabilities Program, Florida Tax Credit Scholarship Program, Gardiner Scholarship Program, Hope Scholarship Program, and/or Family Empowerment Scholarship Program. DONE AND ENTERED this 3rd day of November, 2020, in Tallahassee, Leon County, Florida. S HETAL DESAI 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 3rd day of November, 2020. COPIES FURNISHED: Jason Douglas Borntreger, Esquire Department of Education Suite 1544 325 West Gaines Street Tallahassee, Florida 32310 (eServed) Judith Shealey Lion of Judah Academy 1056 North Pine Hills Road Orlando, Florida 32808 Shawn R. H. Smith, Esquire Law Office of Shawn R. H. Smith, P.A. Post Office Box 547752 Orlando, Florida 32854 (eServed) Chris Emerson, Agency Clerk Department of Education Turlington Building, Suite 1520 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Matthew Mears, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Richard Corcoran Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed)
The Issue The issue for determination is whether Respondent’s lottery prize is subject to an outstanding debt owed to the Department of Education.
Findings Of Fact Respondent is Wilbert Dudley. His address is 1962 Willow Bends, Apt 2-D, Sneads, Florida 32460. Petitioner is the Florida Department of Education. In an application dated September 25, 1981, Respondent applied for a federally guaranteed student loan for the 1981-82 academic year. The loan, in the amount of $2,500, was issued by the Ellis Bank of Blountstown (the lender) in two equal disbursements: One on or after November 9, 1981, and one on or about January 29, 1982. The loan accrues interest at the rate of 7 percent per year unless Respondent is in deferment status, such as attending school on a minimum part-time basis. Respondent’s loan, number 114103, was guaranteed by Petitioner. Respondent and the lender agreed to a repayment schedule for the loan with the first payment beginning November 15, 1984. The lender received no payment from Respondent after March 25, 1985. Subsequently, the lender declared Respondent in default and filed a claim with Petitioner. On August 8, 1986, Petitioner, as guarantor of the loan, paid the lender $2,612.67 in principal and interest for Respondent’s loan. After Petitioner acquired Respondent’s loan, the following payments were applied to Respondent’s loan: May 10, 1989 $25.00 June 13, 1990 $25.00 December 6, 1991 $50.00 March 9, 1992 $391.66 (1991 Federal Income Tax Return) May 5, 1992 $50.00 In a letter dated May 1, 1998, Petitioner notified Respondent that his salary was subject to administrative wage garnishment for the defaulted student loan in accordance with provisions of Section 112.175, Florida Statutes. Petitioner advised Respondent that the total principal and interest due on the loan at that time was $5,335.15 not counting legal fees or collection costs. Thereafter Respondent agreed to voluntary administrative wage garnishment in the amount of $25 biweekly through payroll deduction. The agreement was confirmed by Petitioner’s letter dated June 16, 1998. Based on this agreement, regular payments of $25 biweekly have been received since July 17, 1998, and credited to Respondent’s account by Petitioner. By letter dated October 14, 1998, Respondent was informed by Petitioner that a claim again Respondent’s lottery winnings of $2,500 had been made in accordance with provisions of Section 24.115(4), Florida Statutes. At that time, Respondent owed Petitioner $5,268.09 in outstanding principal and interest. Respondent’s lottery winnings were transferred to Petitioner on November 25, 1998, and applied to Respondent’s outstanding balance in accordance with federal requirements. Respondent was informed of his right to review of this action per Chapter 120, Florida Statutes. Respondent timely sought such review.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order certifying that the Department of Lottery should pay Respondent's $2,500 lottery prize to Petitioner for application to Respondent’s outstanding defaulted student loan balance. DONE AND ENTERED this 31st day of March, 1999, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 March, 1999. COPIES FURNISHED: Ronald G. Stowers, Esquire Department of Education The Capitol, Suite 1701 400 South Monroe Street Tallahassee, Florida 32399-0400 Wilbert Dudley 1962 Willow Bends, Apt 2-D Sneads, Florida 32460 Michael H. Olenick, General Counsel Department of Education The Capitol, Suite 1701 Tallahassee, Florida 32399-0400 Tom Gallagher Commissioner of Education Department of Education The Capitol, Plaza Level 08 Tallahassee, Florida 32399-0400
The Issue Whether Petitioner has defaulted on student loans and, if so, the principal amounts due on the loans, as well as accrued interest, and collection costs. Whether Petitioner's employer should be required to withhold payments from Petitioner's pay pursuant to Section 112.175, Florida Statutes.
Findings Of Fact Petitioner is Johnny Martin. Petitioner's mailing address is 11431 Quailhollow Drive, Jacksonville, Florida. Respondent is the Florida Department of Education. The Department's business address is 325 West Gaines Street, Tallahassee, Florida. The Department is a guarantee agency which holds the loan account in question after paying the claim of the lender on July 28, 1994. All loans in this proceeding are Supplemental Loan(s) for Students (SLS), also known as Florida Auxiliary Loans. SLS loans are not subsidized by the federal government. Therefore, the federal government has no responsibility for payment of interest during periods of deferment or forbearance and there is no grace period for SLS loans. During any period of deferment or forbearance, such as when a borrower is unemployed, the borrower's repayment obligation may be suspended; however, interest accrues to the account for which the borrower is responsible. When the deferment or forbearance ends, the outstanding interest is capitalized on the loan. SLS loans accrue interest at the rate of 12 percent per year from the date of disbursement. Persons eligible to receive SLS loans include parents of dependent undergraduate students. As set forth below, Petitioner, as parent of an eligible dependent undergraduate student, received four SLS loans. Loan 1: Petitioner applied for and received Loan A000000442 in 1983. This loan, in the amount of $3,000.00, will be referred to as Loan 1. Although the Department is the guarantor of Loan 1, the lender never declared the loan in default or sold it to the Department. Therefore, Loan 1 is not at issue in this proceeding. Loan 2: Petitioner applied for and received Loan A000001064 in 1984. This loan, in the amount of $3,000.00, will be referred to as Loan 2. The lender declared Petitioner in default and sold Loan 2 to the Department as guarantor. Because Loan 2 was in repayment status for more than seven years, exclusive of suspensions of the repayment period, Loan 2 was discharged in bankruptcy. Therefore, Loan 2 is not at issue in this proceeding. Loan 3: Petitioner applied for and received Loan A000003767 in 1985. This loan, in the amount of $3,000.00, will be referred to as Loan 3. The lender declared Petitioner in default and transferred Loan 3 to the Department as guarantor. Because Loan 3 was in repayment status for more than seven years, exclusive of suspensions of the repayment period, Loan 3 was discharged in bankruptcy. Therefore, Loan 3 is not at issue in this proceeding. Loan 4: On or about August 5, 1986, Petitioner executed an Auxiliary (SLS) Loan application on behalf of his daughter, Kelly Aleta Martin, an eligible dependent undergraduate student. On or about September 8, 1986, Petitioner executed the promissory note for this loan. This SLS Loan was in the amount of $3,000.00. This loan was disbursed on or about October 9, 1986. The Department guaranteed this loan. Throughout exhibits presented by the Department, the loan number for this SLS Loan is A000007005; however, for convenience, herein this loan will be referred to as Loan 4. Loan 4 is the only loan at issue in this proceeding. Petitioner's first payment for Loan 4 was due October 25, 1986. The payment due date later changed to the 20th of each month. Petitioner's last payment to the lender was made on July 17, 1990. However, as Petitioner was behind in his payments, this payment was applied to the payment due May 20, 1990. The Petitioner is considered in repayment status for 44 months, from October 1986 through May 1990. A borrower is not considered in repayment status during any suspension of the repayment period, including any period of forbearance or deferment. Petitioner applied for and received an unemployment deferment on September 18, 1990. This deferment was for the period from July 21, 1990 through December 28, 1990. Because Petitioner was not current in his payments, he requested and received a forbearance from the lender for the payments due on June 20 and July 20, 1990, in order to qualify for the unemployment deferment. The forbearance together with the unemployment deferment brought Petitioner current in his payments; however, they suspended the repayment period for Loan 4 for seven months (two months for the forbearance and five months for the deferment). Petitioner failed to make any payments following the deferment period ending December 28, 1990. Petitioner applied for and received an unemployment deferment on April 23, 1991. This deferment was for the period from February 24 through July 23, 1991. Because Petitioner failed to make any payments following the deferment ending December 28, 1990, he again requested and received a forbearance for the payments due January 20 and February 20, 1991. The forbearance and unemployment deferment brought Petitioner current in his payments; however, they again suspended the repayment period for Loan 4 by another seven months (two months for the forbearance and five months for the deferment). Following Petitioner's unemployment deferment ending July 1991, he failed to resume payment to the lender beginning August 20, 1990. Thereafter, the lender declared Petitioner in default and made application to the Department for claim payment based on the guarantee. However, the Department refused to pay the lender's claim citing due diligence violations, and as a result, Petitioner is considered in repayment status from August 20, 1991 through April 20, 1992, or nine months, even though no payments were actually received by virtue of his Fresh Start Application. Petitioner submitted a Fresh Start Application to the lender dated May 13, 1992. This document reaffirmed the student loan obligation and, when received by the lender on May 19, 1992, reinstated the Department's guarantee of Loan 4. In an application dated May 24, 1992, Petitioner requested another unemployment deferment. The lender refused Petitioner's request for an unemployment deferment due to the fact that Petitioner was working at the time. However, the lender granted Petitioner a forbearance. This forbearance covered payments due from May 20 through December 20, 1992. Thereafter, Petitioner again requested and was granted forbearance of payments due through June 20, 1993. These forbearances, from May 20, 1992 through June 20, 1993, suspended the period Loan 4 is in repayment status by 14 months. Petitioner failed to resume payments beginning July 20, 1993, the final due date at default. In 1994, the lender declared Petitioner in default on Loan 4 and made application to the Department for claim payment based on the guarantee. The Department paid the default claim on Loan 4 on July 28, 1994. Although no payments were received from July 20, 1993 through July 20, 1994, or 13 months, Petitioner is considered in repayment status for that time because there was no forbearance or deferment in place. When the Department acquired Loan 4, Petitioner owed $2,195.68 in principal and $290.19 in accrued (claim) interest. These figures were capitalized by the Department and yield the figure of $2,484.18 in capitalized principal which is subject to interest at the rate of 12 percent per year. Beginning in 1995, Petitioner entered into a voluntary wage garnishment agreement with the Department. Under this agreement and through the period Petitioner was under the bankruptcy court's jurisdiction, a total of $383.95 was received by the Department and applied to Petitioner's account in accordance with Title 34, Code of Federal Regulations Section 682.404(f), relating to how borrower payments will be applied. The entire amount received was applied to outstanding interest. Prior to filing bankruptcy, Petitioner's Loan 4 was considered in repayment status from July 29, 1994 through January 5, 1995, during the time it was held by the Department. The Petitioner was credited for being in repayment status for five months, even though he made no payments. Additionally, Petitioner was credited for being in repayment status for 12 months in 1995, whether or not regular payments were received under Petitioner's voluntary wage garnishment agreement. Because Petitioner filed for bankruptcy prior to the January 20, 1996, the payment due date, the month of January 1996 cannot be counted as being in repayment status. Petitioner filed for Chapter 13 bankruptcy protection on January 11, 1996. The Department filed a proof of claim with the bankruptcy court for Loans 2, 3, and 4 in the principal amount of $5,571.91, the amount of capitalized principal due on the accounts. The Department filed with the court the claim of $5,647.02 due on the accounts through date of filing the case. See item 5 on page 2 of Department's Exhibit 5. This amount was the capitalized principal and interest due. On February 4, 1999, the United States Bankruptcy Court for the Middle District of Florida, Jacksonville Division, issued an "Order Discharging Debtor After Completion of Chapter 13 Plan" in Petitioner's case, number 96-00175-3F3. That order provides in pertinent part, "The debtor is discharged for all debts provided for by the plan or disallowed under 11 U.S.C. [Section] 502, except any debt . . . for a student loan or educational benefit overpayment as specified in 11 U.S.C.[Section]523(a)(8)." In 1996, Title 11 United States Code Section 523(a) provided in pertinent part: A discharge under . . . this title does not discharge an individual debtor from any debt-- for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an education benefit, scholarship or stipend, unless-- such loan, benefit, scholarship, or stipend overpayment first became due more than 7 years (exclusive of an applicable suspension of the repayment period) before the date of the filing of the petition . . . Pursuant to this order, Petitioner's debt to the Department for Loans 2 and 3 was discharged. The first payment for Loan 4 was due October 25, 1986. Petitioner filed for bankruptcy on January 11, 1996, nine days prior to the payment due date of January 20, 1996. There were 111 months from the month the first payment of Loan 4 was due through the month prior to the filing of bankruptcy (the month that bankruptcy was filed cannot be counted if the payment due date was after the date Petitioner filed for bankruptcy). Petitioner was in forbearance or deferment status for 28 months which suspends the period Loan 4 is considered in repayment status. Petitioner was in repayment status on Loan 4 for 83 months regardless of whether he actually made payments on the account. Therefore, Loan 4 was not discharged. Section 682.410(b)(2) of Title 34, Code of Federal Regulations, provides that the Department shall impose collection costs as follows: Collection charges. Whether or not provided for in the borrower's promissory note and subject to any limitation on the amount of those costs in that note, the guarantee agency shall charge a borrower an amount equal to reasonable costs incurred by the agency in collecting a loan on which the agency has paid a default or bankruptcy claim. These cost may include, but are not limited to, all attorneys fees, collection agency charges, and court costs. Except as provided in [Sections] 682.401(b)(27) and 682.405(b)(1)(iv), the amount charged borrower must equal the lesser of -- The amount the same borrower would be charged for the cost of collection under the formula in 34 CRF 30.60; or The amount the same borrower would be charged for the cost of collection in the loan was held by the U.S. Department of Education. The Department established that the amount of the annual collection cost mandated by Title 34 Code of Federal Regulations Section 682.410(b)(2) for the loan at issue in this proceeding should be calculated at least annually at the rate of 25 percent of the outstanding principal and accrued interest. Petitioner agreed to pay these costs in the application and promissory note he executed. Petitioner is employed by the Duval County School Board, a political subdivision of the State of Florida. As an employee of a political subdivision of the State of Florida, Petitioner is subject to the provisions of Section 112.175, Florida Statutes, and Chapter 28-40, Florida Administrative Code. These provisions pertain to employees of the State of Florida or its political subdivisions who have defaulted on an education loan made or guaranteed by the State of Florida. The Department notified Petitioner by letter dated August 13, 1999, that he had one or more student loans in default and offered him the opportunity to make voluntary payments on the loans. The letter also advised Petitioner that the Department would seek to make involuntary withholdings if he did not make voluntary payments. Petitioner elected to request the formal hearing which triggered this proceeding. As stated above, the capitalized principal due the Department for Loan 4 is $2,485.87. This amount reflects the principal due and the outstanding interest accrued on the account at the time the Department acquired the loan from the lender. All payments received by the Department were applied to outstanding interest which accrued on the account after the loan was bought by the Department, and no payment was applied to the capitalized principal. The capitalized principal accrues interest at the rate of 12 percent per year of $.82 per day. As of February 4, 1999, after taking into consideration the $383.95 received by the Department, the unpaid accrued interest for Loan 4 was $881.74. Pursuant to federal regulations collection costs assessed at the rate of 25 percent of principal and interest due as of February 4, 1999, were $867.08. Therefore, as of February 4, 1999, the total principal, interest, and collection costs due for Loan 4 totaled $4,234.69. Interest continues to accrue to the account as provided by law and collection costs may be reassessed as provided by law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order that adopts the findings of fact and conclusions of law contained herein, finds that Petitioner, as of February 4, 1999, owes the sum of $4,234.69, and orders the involuntary wage withholding of Petitioner's pay through his employer, Duval County School Board, pursuant to Section 112.175, Florida Statutes, and Chapter 28-40, Florida Administrative Code. DONE AND ENTERED this 22nd day of December, 2000, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 22nd day of December, 2000. COPIES FURNISHED: Johnny Martin 11431 Quailhollow Drive Jacksonville, Florida 32218-3621 Ronald G. Stowers Assistant General Counsel Department of Education The Capitol, Suite 1701 Tallahassee, Florida 32399-0400 Honorable Tom Gallagher Commissioner of Education The Capitol, Plaza Level 08 Tallahassee, Florida 32399-0400 Michael H. Olenick, General Counsel Department of Education The Capitol, Suite 1701 Tallahassee, Florida 32399-0400
The Issue Whether the State of Florida, through its agencies, collected the money owed it by the Petitioner prior to receipt of a letter from her doctor certifying her disability.
Findings Of Fact On or about June 21, 1990, the Petitioner, Therese L. Hodge, applied for a student loan to pursue educational courses at Career City College in Gainesville, Florida. The loan applied for was a Stafford Loan, a student loan administered by the Department of Education (DOE) through the Office of Student Financial Assistance (OSFA). Under the Stafford Loan program, DOE through OSFA, serves as the guarantee agent performing its responsibilities in accordance with regulations promulgated by the United States Department of Education (USDOE). The essential elements and operation of the loan program are that a participating bank or financial institution agrees to make a loan to a student on the condition that the DOE will issue a written guarantee that it will repay the loan to the lender if the student defaults on the loan. When DOE repays a defaulted loan to the lender, DOE acquires the promissory note and the right to collect from the student. DOE is required by USDOE to pursue collection in order to receive reimbursement from USDOE of the amount paid to the lender. On or about July 7, 1990, OSFA issued its guarantee of a student loan to the Petitioner, and Florida Federal loaned her $1,213.00. While enrolled in her first term at college, the Petitioner suffered a stroke. The Petitioner was observed at the hearing and it was apparent that she had some moderate limitations on her ability to communicate, comprehend, and remember. Petitioner lives on Social Security disability income. Her brother- in-law, who had accompanied her to the hearing, assisted in presentation of Petitioner's case without objection from the Respondents. After the Petitioner defaulted on her student loan, the Petitioner won $5,000 in a Florida lottery game. The Petitioner made demand for payment of the prize money. The Department of Lottery checks winnings of more than $600 to determine if the winner owes any money to the State. In the course of its comparison, the Department of Lottery determined that the Petitioner owed the State money on the defaulted student loan. The Department of Lottery confirmed the indebtedness with the Department of Education, and it was determined that the Petitioner owed $1,231.98 including interest on the defaulted student loan. On January 9, 1993, the Department of Lottery forwarded the $5,000 to the Office of the Comptroller, and notified the Petitioner of her right to request a formal hearing to controvert the Department's collection of the indebtedness. On January 12, 1993, the Petitioner called the Department of Lottery and advised the Department that she was disabled. The Department forwarded to the Petitioner medical forms on January 20, 1993. Subsequently, the Petitioner's physician certified to the state that she was totally and permanently disabled. Documents introduced at hearing show that the Petitioner advised the lending bank on June 17, 1991 that she was disabled due to a stroke and unable to work. The bank sent the Petitioner medical forms in order for her to have her disability certified. The Petitioner did not return the forms due to her financial inability to obtain the required physical. After the Department of Education had repaid the student loan and had turned the matter over to a collection agency, the Petitioner advised the collection agency that she was disabled and the collection agency sent her medical certification forms which she did not have completed due to her financial inability. After she had won the lottery, the Petitioner had the medical certification forms which were forwarded to her by the Department of Education completed by a physician and these were returned to the State after the end of January, 1993 certifying that the Petitioner was totally and permanently disabled.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of the Comptroller return to the Petitioner the amount $1,231.98. DONE AND ENTERED this 16th day of June, 1993, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of June, 1993. APPENDIX TO RECOMMENDED ORDER CASE NO. 93-1218 The Petitioner's sister wrote a letter in the Petitioner's behalf which was read and considered, and is treated as a final argument. The Department of Education filed a proposed order which was read and considered. The following proposed findings were adopted, or rejected for the reason stated: Respondent's (DOE) Proposed Findings: Recommended Order: Paragraph 1-6 Adopted Paragraph 7 Irrelevant Paragraph 8 Adopted Paragraph 9 The Department was on notice of the Petitioner's disability. Total and permanent disability is a medical determination based upon medical certification. The lender was on notice of Petitioner's disability on June 17, 1991. The purpose of the bank sending Petitioner the medical forms was to confirm the medical determination. Paragraph 10-15 Adopted COPIES FURNISHED: Therese L. Hodge and 5855 West Wood Lawn Street Post Office Box 36 Dunnellon, FL 34433 Ocklawaha, FL 32179 Charles S. Ruberg, Esquire Department of Education 325 West Gaines Street Tallahassee, FL 32399-0400 Louisa Warren, Esquire Department of Lottery 250 Marriott Drive Tallahassee, FL 32301 Leslie A. Meek, Esquire Office of the Comptroller The Capitol, Room 1302 Tallahassee, FL 32399-0350 Gerald Lewis, Comptroller Department of Banking and Finance Tha Capitol Tallahassee, FL 32399-0350
The Issue The issue in this case is whether the Department of Education (Respondent) acted properly within its authority to claim lottery winnings of Kevin Frye (Petitioner).
Findings Of Fact At all times material to this case, the Petitioner was a borrower, participating in the federal student loan program. Two of the loans involved funds disbursed in 2002, and the third involved funds disbursed in 2003. Repayment of the three loans was to begin in 2005. The Respondent acted as the guarantee agency for the Petitioner's three loans under the federal student loan program. The program provided that the Respondent was obligated to repay the loan in the event of default by the borrower. Such loans were regarded as in default after passage of a 270-day payment delinquency period. Lenders reported defaulted loans by filing claims with the Respondent. The Respondent paid the claims and initiated a collection process to obtain the funds from the borrowers. The Respondent became aware of the Petitioner's defaulted loans in February 2007, when claims were filed with the Respondent by the Petitioner's lender. The Respondent paid the claims and became the owner and holder of three promissory notes documenting the loans. By letter dated March 24, 2009, the Respondent notified the Lottery that the Petitioner had outstanding student loans in the amount of $5,788.08. The amount included accrued interest as of April 8, 2009. The letter stated that such interest would continue to accrue according to the terms of the notes. The letter requested that any lottery prize proceeds won by the Petitioner be transmitted to the Respondent to be credited towards the debt. On April 9, 2009, the Lottery delivered a check in the amount of $1,000 to the Respondent with a letter identifying the amount as lottery winnings of the Petitioner. By letter dated May 13, 2009, the Respondent advised the Petitioner that the lottery proceeds had been received and would be credited towards his student loan debt. The Petitioner's request for hearing stated that he had entered into and completed a "loan rehabilitation" program and that "there is no reflection in outstanding loan balance that coincides with the lottery winnings." Although the Respondent has a program designed to rehabilitate defaulted student loans, there was no evidence presented at the hearing that the Petitioner has entered into any rehabilitation agreement with the Respondent applicable to the debt obligations relevant to this dispute.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Education enter a final order applying the $1,000 lottery prize winnings of Kevin Frye to the student loan debt referenced herein. DONE AND ENTERED this 25th day of November, 2009, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of November, 2009. COPIES FURNISHED: Robert C. Large, Esquire Department of Education 325 West Gaines Street, Suite 1244 Tallahassee, Florida 32399 Kevin Frye 7429 Oakvista Circle Tampa, Florida 33634 Lynn Abbott, Agency Clerk Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 Dr. Eric J. Smith, Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 Deborah K. Kearney, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400
