Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background On July 15, 1992, respondent, Department of Health and Rehabilitative Services (HRS), issued a document entitled "Solicitation of Offers For Legal Service Contracts-Child Support Enforcement Program" inviting legal firms or attorneys to submit proposals for providing legal services and representation of HRS in matters involving child support enforcement cases throughout the State of Florida for a nine-month period beginning on October 1, 1992, and ending on June 30, 1993. Although the solicitation was for services in all counties of the State, this case involves only the solicitation of services for representation in those counties within HRS District II that comprise the Second Judicial Circuit (Circuit). They include Franklin, Gadsden, Jefferson, Leon, Liberty and Wakulla Counties. The solicitation provided that three contracts would be awarded within the Circuit, one for Gadsden and Liberty Counties, the second for Leon and Jefferson Counties, and the third for Franklin and Wakulla Counties. The solicitation called for written offers to be filed with the HRS District II office in Tallahassee by August 17, 1992, and for all such offers to be opened the following day. Thereafter, the offers would be evaluated by a review committee whose role was to make a recommendation to the District II administrator. The administrator would then have the responsibility of making a "final decision" to accept an offer and award a contract with an anticipated award date of September 1, 1992. Finally, in paragraph XVIII of the document, HRS reserved the right "to reject any or all offers received, or to cancel this solicitation, regardless of evaluation, if it is determined to be in the best interest of the department." A total of seven law firms in the Circuit filed proposals in response to the solicitation. They included petitioner, Smith and Thompson, P.A., and intervenor, Knowles and Randolph, both of whom are minority firms located in Tallahassee, Florida. Petitioner and intervenor filed proposals for each of the three pairs of counties within the Circuit although intervenor's proposal for Gadsden and Liberty Counties was technically nonresponsive and was therefore not considered. Both petitioner and intervenor have previously provided services for HRS under similar contracts and both are considered to be technically competent to perform the work. By certified letters dated September 2, 1992, HRS advised each of the law firms filing proposals that it had decided to reject all offers and instead to implement a pilot program to provide in-house legal services in the Second Judicial Circuit. No other explanation was given. The letter granted each firm a point of entry to contest that decision. Thereafter, petitioner and intervenor timely filed notices of intent to protest the decision. However, by letter dated September 10, 1992, HRS advised petitioner and intervenor that its prior letter was in error and that instead "the decision of the department to reject all the responses to our recent solicitation of offers for the 2nd Judicial Circuit cannot be the subject of a protest". Even so, on September 18, 1992, petitioner filed a written protest and request for a hearing. This request was ultimately forwarded by HRS to the Division of Administrative Hearings (DOAH). On November 10, 1992, intervenor was authorized to participate herein as a party. In its order of October 27, 1992, transmitting the request for hearing to DOAH, HRS stated in part that: Since there was no bid award ... there can be no protest of an award. Neither can a right to a bid protest proceeding be created by mistake, whether by HRS or otherwise.... Simply put, no bid protest can be permitted under these circumstances. The action of the agency in rejecting all offers and deciding instead to provide legal services through in-house employees rather than through contract attorneys is agency action as that term is understood in the context of Chapter 120. Petitioner may be entitled to a determination as to whether or not that action was an appropriate exercise of agency discretion. For this reason the pleading filed by petitioner (bid protest) will be considered to be a request for an administrative hearing under the provisions of Section 120.57(1), Florida Statutes, for the purpose of testing that determination. Prior Contracts for Child Support Services To place this controversy in perspective, it is necessary to review certain events surrounding the award of the contracts in prior years. Petitioner, or individual members of the firm, had held the HRS contract to provide child support enforcement services in Leon and Gadsden Counties during the years 1979 to 1989. The firm is considered to be competent and reliable and was characterized by one District employee as being the "best" of all contract firms in the state. In May 1989, HRS solicited proposals for the following fiscal year and in July 1989 received three proposals, including ones from petitioner and the law firm of Welch, Munroe and Whitley (WMW). In September 1989, the contract was awarded to WMW. It is fair to draw an inference that because Whitley was a former law partner and roommate of the Governor's general counsel, Munroe's wife was the Governor's chief cabinet aide, and an HRS employee had helped the firm complete its bid package, there may have been some favoritism in awarding the contract to that firm. The contract ran from October 1, 1989, through June 30, 1990. Because of problems by WMW in fulfilling the terms of the contract, the contract was terminated by HRS in April 1990. By then, Whitley had become a member of another Tallahassee law firm, Barrett, Bajoczky, Hoffman and Harper (BBHH). Just prior to terminating the contract, HRS found a serious backlog of cases and knew that, in order to process this backlog, an experienced law firm would have to provide the services for the remainder of the contract year. Accordingly, HRS requested that petitioner provide such services. At the same time, however, the HRS program administrator insisted that, as a condition to receiving the contract, petitioner must sign a joint venture agreement with BBHH wherein it agreed to share its fees with that firm because of Whitley's association. Petitioner reluctantly agreed to do so and executed such an agreement on May 7, 1990. The contract was then awarded to petitioner. Under the terms of the agreement, petitioner was obligated to give 26% of total attorney and paralegal fees to BBHH in return for BBHH providing "secondary legal services required by the child support contract". During the remainder of the contract, all warrants were issued to petitioner who deposited the warrants and then issued a check to BBHH pursuant to their agreement. As it turned out, however, BBHH was never sent any case files and performed no work under the contract to earn its fees. Recognizing that it could obtain the new contract for 1990-91 only by continuing to split fees with BBHH, petitioner made a "business decision" to submit a joint response with BBHH to the new solicitation. The previously executed joint agreement remained in effect. In July 1990, a proposal for the contract year 1990-91 was filed in the name of both firms, and the contract for Leon and Gadsden Counties was thereafter awarded to petitioner and BBHH. Petitioner submitted invoices for work performed to HRS and all warrants were thereafter issued by HRS in the names of both firms. However, after obtaining BBHH's endorsement, the checks were deposited in petitioner's bank account, and petitioner then issued a check to BBHH. Although BBHH was supposed to provide "secondary legal services" to earn its 26% of fees, the firm was never sent any case files and it performed no services during the year. Even so, petitioner was obligated to pay $80,000 to BBHH pursuant to their agreement. It should be noted, however, that petitioner exceeded the goals established by HRS under the contract and performed all work in a competent and professional manner. Further, there is no evidence that HRS paid more than was required for the services performed by petitioner. Rather, petitioner's income was reduced by the amount of payments made to BBHH. Petitioner has never taken any legal action against BBHH for failing to perform under the contract. When BBHH declined to perform any work under the contract, petitioner began voicing oral (but no written) complaints about its arrangement to various HRS personnel, all at the District program administrator level or lower, but received no help. It was told by one District employee that he was sorry but it was something they would have to live with given the circumstances. When a new administration took office in January 1991, which was midway through the contract year, petitioner again complained and eventually its complaints caught the ear of the new Governor's inspector-general. It also asked that the joint contract be terminated. After an investigation was conducted by the inspector- general, in which petitioner fully cooperated, a highly critical report was issued on May 29, 1991, and the HRS program administrator was immediately terminated from employment. The matter was then referred to the Federal Bureau of Investigation (FBI) for possible federal criminal violations, and thereafter the FBI launched an investigation of the contracts. The federal investigation still remains pending. Although petitioner is not now a target or subject of the investigation, it was once a subject of the investigation and is still a part of the overall investigation. In addition, its members have been given use immunity for their testimony. There has also been fairly widespread newspaper coverage of the investigation, and it is fair to say the investigation gained some public notoriety. Even so, petitioner was allowed to complete the contract year and since July 1991 has continued to provide services for HRS in Leon and Gadsden Counties under an interim contract scheduled to expire on December 1, 1992. Post-1991 Events Leading Up to the 1992-93 Contract As early as the spring of 1991, the HRS Secretary had recommended to the Governor that HRS be allowed to consider an in-house program as an alternative to using contract attorneys. There was also a desire to make the competitive process more cost-effective, free of political considerations, and open to minority participation. This desire was reinforced by the findings in the inspector-general's report. In December 1991 the Governor first expressed an interest in HRS conducting an in-house pilot program and to compare the results of that program with the results being obtained under the various contracts. This interest was founded at least in part on financial considerations since the program involves total annual federal and state expenditures of more than $18 million. At the direction of the Governor and HRS Secretary, in January 1992 a blue ribbon committee began exploring the possibility of HRS performing legal services in-house, and, as noted previously, to develop a new solicitation that was more cost-effective, competitive, free of conflict of interest, and open to minority participation. However, due to a press of time, the committee was unable to sufficiently study the in-house issue so as to incorporate that into the 1992-93 solicitation. Even so, there were on-going, informal discussions by various HRS personnel, including the Secretary, regarding an in-house pilot program prior to the solicitation of offers in dispute here. Further, based on several conversations with the Governor, the Secretary was under the impression that the Governor was "adamant" about implementing such a program. HRS often uses District II as a location for pilot programs because of its proximity to the Tallahassee headquarters and its ideal urban-rural mix. In addition, the Second Judicial Circuit is the only judicial circuit wholly within District II. This meant that HRS would be dealing with only one "set" of judges and thus better results could be obtained in a pilot study. Finally, the excellent work rendered by petitioner on prior contracts provided a good point of comparison for a pilot program. The Evaluation Process After the proposals were filed, on August 18, 1992, an HRS evaluation committee opened the proposals and began its evaluation. The proposals were evaluated on both a technical and cost (but not ethical) basis, and a total score was given to each bidder. Pursuant to the terms of the solicitation, the firm with the highest score would be ranked first. The evaluation committee was made up of four District II employees. After reviewing the proposals, the committee voted to recommend that petitioner be awarded the contracts for all six counties since petitioner's proposals had a higher total score than those submitted by the other firms. Intervenor was ranked second in Leon, Jefferson, Franklin and Wakulla Counties. However, its proposed cost was around 25% higher than that of petitioner. The rankings and scores are reflected on petitioner's exhibit 5 received in evidence. The committee's recommendation, including those for the other counties within the District, was reduced to writing in the form of a report and was given to Dr. John M. Awad, District II administrator. On August 27 and 28, 1992, or after the committee report was prepared, meetings were held in the HRS general counsel's office regarding the contract in issue. Four HRS lawyers attended the meeting. There was a concern over the fact that even though petitioner was the highest ranked contractor, it was a part of the FBI investigation. In addition, one attorney represented to the others that he had been told by the Governor that the contract should not be awarded to petitioner because of that investigation and the Governor's desire to implement an in-house program. The same attorney expressed the view, although unsubstantiated, that petitioner may have had inside information in preparing its proposal. Accordingly, the attorneys discussed alternatives available to the agency in the event it decided not to award the contract to petitioner. One attorney concluded that the agency would not be able to give a valid reason for refusing to award the contract to petitioner, the highest ranking contractor, and thus it should reject all offers and go with a pilot program. Accordingly, it may be inferred that HRS legal counsel's subsequent recommendation to reject all bids was based primarily on legal counsel's inability at that point in time to articulate a valid reason for rejecting petitioner's proposal. These concerns were then presented to Dr. Awad. After he received the committee's recommendations, Dr. Awad awarded contracts for all counties except those within the Circuit. As to those counties within the Circuit, he did not sign off on the recommendation and execute a contract since he says he desired to first ascertain whether the agency intended to implement an in-house pilot program within the Circuit. Although he did not say so, it can be inferred that Dr. Awad's decision to not award the contract was based at least in part on his conversations with District counsel and his awareness that the top bidder was associated with contracts under active federal investigation. Accordingly, he called a meeting for Tuesday, September 1, 1992, to address this issue at the District level. Also, on August 31, 1992, Dr. Awad instructed Mr. William J. McEvoy, the District program administrator, to prepare cost figures for doing an in-house pilot program in the Second Judicial Circuit. This was the first knowledge that Mr. McEvoy had that HRS was considering a pilot program for the 1992-93 contract year. Using information derived from the various proposals as a benchmark, Mr. McEvoy developed a proposed first year cost based on the assumption that HRS could perform the work by hiring three staff attorneys and six support staff. This study, which was prepared over the course of an afternoon, was then given to Dr. Awad on September 1, 1992. It reflected an annualized cost in the first year of $402,599.00 but projected lower costs in the following years. These costs approximated or were slightly lower than the costs proposed by petitioner and were 25% lower than the next highest bidders. However, until the pilot program is actually run, a true comparison of costs cannot be made. A second meeting concerning the contract was held on September 1, 1992. Attendees were Dr. Awad, the HRS Secretary, four HRS staff attorneys, and perhaps an HRS assistant secretary. At that time, a concern was expressed to the Secretary that petitioner was a part of an investigation by the FBI. One HRS attorney advised the participants that, because of the pending investigation of the HRS contracts and petitioner's association with those contracts, and a desire to implement an in-house program, the Governor did not wish the contract to be awarded to petitioner. The participants also discussed the cost and feasibility of implementing an in-house program, the time frame for doing so, and the perameters of the program. At that point, the driving force to go in- house with the services was the fact that the highest ranking contractor was associated with prior contracts being investigated by the FBI. A decision was then made by the Secretary to reject all proposals, withdraw the solicitation, and implement an in-house pilot program within the Circuit beginning on December 1, 1992. As stated by him at hearing, the Secretary rejected petitioner's offer because of his concern with not only the contractor's integrity, but also the integrity of the process as a whole. More specifically, he was concerned with the fact that $80,000 of state funds had been paid to BBHH for doing no work and he questioned the propriety of awarding a contract to a firm under active investigation by the FBI. The associated decision to reject all offers and initiate a pilot program was premised on the notion that (a) the second highest ranking firms submitted proposals having substantially higher costs than petitioner, (b) projected first year in-house costs were equal to or less than that proposed by petitioner, and (c) the Governor had asked that an in-house program be given priority. Accordingly, the Secretary decided to reject all bids and withdraw the solicitation of offers. It is noted that under paragraph 10.b., Part 74, Appendix G of Chapter 45, Code of Federal Regulations, HRS is required to give consideration to the "contractor integrity" in making an award. Thus, even though HRS did not correlate its concern over the contractor's integrity with the above federal regulation until this point in the process, the reliance on the regulation as a reason to reject a contractor was still valid and appropriate. In other words, since there was always a concern with the federal investigation, the fact that HRS did not initially discover that a federal regulation supported its theory was not a fatal flaw in the decision- making process. Finally, the undersigned has rejected as being unsubstantiated the contention by petitioner that an HRS attorney favored another contractor obtaining the award and thus improperly influenced the agency's decision. Is the Solicitation a Bid? The contract in question is funded primarily with federal funds and is thus subject to relevant federal regulations, one of which requires that the contract be awarded through a competitive process. Therefore, even though HRS is exempt from the competitive sealed bid and proposal requirements of Chapter 287, Florida Statutes, when procuring outside legal services, the federal regulations require a competitive process. Accordingly, in soliciting offers from law firms, HRS was obliged to use a competitive process akin to that required under chapter 287. In that vein, it prepared a document which called for sealed competitive bids (offers) from prospective contractors, provided for a competitive evaluation and ranking by an independent committee, and further provided that the contract would be awarded to the highest ranking contractor. In addition, paragraph IX of the solicitation of offers provided that in the event a participant wished to file a protest to an award, it must do so within seventy-two hours after receiving "notice of contract award or intended contract award" and must then file a "formal written notice of protest" within ten days thereafter. The same document also provided that if protests were filed, the agency would seek to informally resolve the dispute within seven calendar days, and if a protest was not resolved by mutual agreement, the protestant was entitled to a formal hearing before DOAH. These procedures essentially track the procedures for resolving bid disputes that are codified in Subsection 120.53(5), Florida Statutes. Therefore, the undersigned has rejected the contention by HRS that the process used herein does not fall within the ambit of a bid dispute.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by respondent dismissing the protests of petitioner and intervenor. DONE AND ENTERED this 17th day of December, 1992, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 17th day of December, 1992. APPENDIX TO RECOMMENDED ORDER CASE NO. 92-6440BID Petitioner: 1. Partially adopted in finding of fact 1. 2. Rejected as being unnecessary. 3-4. Partially adopted in finding of fact 10. 5. Partially adopted in finding of fact 17. 6. Partially adopted in finding of fact 13. 7. Partially adopted in finding of fact 2. 8-11. Partially adopted in finding of fact 5. 12. Partially adopted in finding of fact 12. 13-14. Partially adopted in finding of fact 13. 15. Partially adopted in finding of fact 2. 16-18. Partially adopted in finding of fact 13. 19. Rejected as being argument. 20. Rejected as being irrelevant. 21-24. Partially adopted in finding of fact 14. 25. Rejected as being irrelevant. 26-27. Partially adopted in finding of fact 14. 28. Partially adopted in finding of fact 15. 29. Rejected as being contrary to the evidence. 30-32. Partially adopted in finding of fact 15. Partially adopted in finding of fact 16. Rejected as being irrelevant. Partially adopted in finding of fact 10. Partially adopted in finding of fact 15. 37-42. Partially adopted in finding of fact 3. 43. Rejected as being unnecessary. 44. Partially adopted in finding of fact 3. 45-48. Partially adopted in finding of fact 5. 49. Partially adopted in findings of fact 5 and 6. 50-57. Partially adopted in finding of fact 6. 58-62. Partially adopted in finding of fact 7. 63-71. Partially adopted in finding of fact 8. 72. Rejected as being uncorroborated hearsay. 73-74. Partially adopted in finding of fact 8. 75. Partially adopted in finding of fact 3. 76-77. Rejected as being irrelevant. 78. Partially adopted in finding of fact 12. 79. Partially adopted in finding of fact 16. 80. Partially adopted in finding of fact 2. Respondent: 1-3. Partially adopted in finding of fact 1. 4. Rejected as being unnecessary. 5. Partially adopted in finding of fact 2. 6-8. Partially adopted in finding of fact 11. 9-10. Partially adopted in finding of fact 16. 11. Rejected as being unnecessary. 12-14. Partially adopted in finding of fact 12. 15. Partially adopted in finding of fact 1. 16. Rejected as being unnecessary. 17-18. Partially adopted in finding of fact 1. 19-21. Rejected as being unnecessary. 22. Partially adopted in finding of fact 13. 23-32. Partially adopted in finding of fact 16. 33-37. Partially adopted in findings of fact 9 and 10. Partially adopted in finding of fact 16. Partially adopted in finding of fact 10. Partially adopted in finding of fact 11. Partially adopted in finding of fact 16. Partially adopted in finding of fact 11. 43-44. Partially adopted in finding of fact 16. 45. Rejected as being unnecessary. 46. Partially adopted in finding of fact 3. 47-57. Partially adopted in finding of fact 5. 58. Partially adopted in finding of fact 7. 59-62. Partially adopted in finding of fact 6. 63. Partially adopted in finding of fact 7. 64-65. Partially adopted in finding of fact 8.. 66-78. Partially adopted in finding of fact 7. 79-83. Partially adopted in finding of fact 8. 84. Partially adopted in finding of fact 9. 85-87. Partially adopted in finding of fact 8. Partially adopted in findings of fact 15 and 16. Partially adopted in finding of fact 8. Partially adopted in finding of fact 13. Rejected as being unnecessary. 92-93. Partially adopted in finding of fact 17. 94. Partially adopted in findings of fact 16 and 17. 95-96. Partially adopted in finding of fact 2. 97. Partially adopted in finding of fact 16. 98-99. Partially adopted in finding of fact 2. 100-101.Partially adopted in finding of fact 13. Partially adopted in finding of fact 15. Rejected as being unnecessary. Partially adopted in finding of fact 8. 105-106.Rejected as being unnecessary. 107. Rejected as being cumulative. Note - Where a proposed finding has been partially adopted, the remainder has been rejected as being irrelevant, unnecessary, not supported by credible, persuasive evidence, subordinate, or a conclusion of law. COPIES FURNISHED: Robert L. Powell, Agency Clerk Department of Health and Rehabilitative Services Building One, Room 407 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John S. Slye, Esquire Building One, Room 407 1323 Winewood Boulevard Tallahassee, FL 32399-0700 W. Crit Smith, Esquire 1530 Metropolitan Boulevard Tallahassee, FL 32308 Harold M. Knowles, Esquire 528 East Park Avenue Tallahassee, FL 32301 Susan P. Stephens, Esquire Department of Legal Affairs The Capitol, Suite 1502 Tallahassee, FL 32399-1050
Conclusions Having reviewed the Administrative Complaints (Ex.1), and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. Filed June 11, 2013 8:42 AM Division of Administlative Hearings 2. The Agency issued the attached Administrative Complaints and Election of Rights forms to the Respondent. (Ex. 1) The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent’s assisted living facility license number 8345 for the operation of Apple House I is RELINQUISHED and deemed cancelled effective June 20, 2013.. The Respondent and Mary Ann B. Vinarta, Individually, or as one holding an ownership interest in any applicant, shall not seek initial licensure nor operate any facility licensed by the Agency, other than the currently licensed Apple House II facility, for a period of 5 years from the date of this Final Order. 3. An administrative fine and survey fee totaling $9,000.00, payable in Agency Case Numbers 2012007505, 2012009335, and 2013003691', and an administrative fine of $9,250.00 payable to Agency Case Numbers 2012005203, 2012007816, 2012009374, and 2012012761, is imposed. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 180 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 4. An additional administrative fine of $18,250.00 is imposed against the Respondent in Agency Case Numbers 2012005203, 2012007816, 2012009374, and 2012012761, but is STAYED for purposes of collection as long a Respondent does not seek any new type of licensure from the Agency. In the event Respondent or Mary Ann B. Vinarta, Individually or as one holding an ownership interest in another entity, seeks licensure from the Agency after the period set forth above, the Respondent or Mary Ann B. Vinarta, Individually, or as one holding an ownership interest in another entity, will pay the sum of $18,250.00 as a condition precedent to consideration of any such application for licensure. ORDERED at Tallahassee, Florida, on this [2 day of Heine > 2013. Elizabeth Dudtk, Secretary Agency ealth Care Administration 1 The settlement agreement contains a scrivener’s error on page 4 in listing the case number as 2013009691. 2
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct_capy of this Final Order was served on the below-named persons by the method designated on this _4 “day of Jee , 2013. Richard Shoop, Agency Cler Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Thomas J. Walsh II, Senior Attorney Facilities Intake Unit Office of the General Counsel (Electronic Mail) Agency for Health Care Administration (Electronic Mail) Finance & Accounting Shaddrick Haston, Unit Manager Revenue Management Unit Assisted Living Unit (Electronic Mail) Agency for Health Care Administration (Electronic Mail) Katrina Derico-Harris Kriste Mennella, Field Office Manager Medicaid Accounts Receivable Area 3 Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Shawn McCauley John F. Gilroy, Esquire Medicaid Contract Management 1695 Metropolitan Circle Agency for Health Care Administration Tallahassee, Florida 32308 (Electronic Mail) (U.S. Mail) F. Scott Boyd Administrative Law Judge Division of Administrative Hearings (Electronic Mai!) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity. -- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
The Issue Whether disciplinary action should be taken against Respondent’s license to practice contracting, license number CGC 060878, based on violations of Subsection 489.129(1), Florida Statutes (2005)1, as charged in the three-count Administrative Complaint filed against Respondent in this proceeding. Whether Respondent violated Subsection 489.129(1)(g)2., Florida Statutes (Count I) by committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer; Subsection 489.129(1)(j), Florida Statutes (Count II) by abandoning a construction project in which the contractor is engaged or under contract as a contractor, and Subsection 489.129(1)(m), Florida Statutes (Count III) by committing incompetency or misconduct in the practice of contracting. And, if so, what discipline should be imposed, pursuant to Section 489.129, Florida Statutes, and Florida Administrative Code Rule 61G4-17.002.
Findings Of Fact Based on the evidence and testimony of the witnesses presented and the entire record in this proceeding, the following facts are determined: At all times material, Respondent was a certified general contractor, having been issued license number CGC 060878 by the Florida Construction Industry Licensing Board (CILB). At all times material, Respondent was the qualifier of Epic Building and Development Corporation, a Florida Corporation, with its principal place of business in the Fort Myers area. On February 22, 2005, Respondent entered into a contract with Edward Dueboay to rebuild a house owned by Dueboay and his wife, located at 22299 Laramorre Avenue, Port Charlotte, Florida, which had been distroyed some months earlier by Hurricane Charlie. The price of the contract was $150,000.00. On or about March 24, 2005, Dueboay gave Respondent a check in the amount of $3,500 payable to Contractors Marketing America, Inc. (CMA, Inc.), for the engineering plans. On May 6, 2005, Dueboay paid Respondent $5,000, as an advance on the contract. Respondent did not obtain the building permit from the Charlotte County Building Department until December 12, 2005, and work on the project did not start until January 2006. Because of the enormous damage caused by the hurricane, contractors in the area were flooded with jobs, and significant shortages in building materials also occurred. On January 13, 2006, Respondent billed Dueboay $11,000.00 for land clearing and filling, $750.00 for permit fees, and $3,200.00 for a temporary electric pole. The bill gave credit for the $5,000.00 Dueboay paid on May 6, 2005, and showed a balance due of $10,000.00. On January 20, 2006, Dueboay paid the above-mentioned invoice, by check to Respondent, in the amount of $10,000.00. Respondent paid $4,600.00 to the sub-contractor who performed the lot clearing and filling, but billed Dueboay $11,000.00. However, the contract provided for a $2,500.00 allowance for clearing and filling, and a $750.00 allowance for permit fees. Section 11.c of the contract also provided that Respondent shall provide and pay for all materials and utilities and all other facilities and services necessary for the proper completion of the work on the project in accordance with the contract documents. To pay for the remainder of the contract, Dueboay negotiated and obtained a loan in the total amount of $153,000.00 from Suncoast Schools Federal Credit Union (Credit Union). On March 21, 2006, Dueboay and the Credit Union signed the construction loan agreement. On March 21, 2006, Respondent was paid $18,235.00 by the Credit Union for the pre-cast walls used in the erection of the structure. On May 11, 2006, Respondent finished Phase I of the project. On May 15, 2006, Respondent received $11,350.00 as the first draw by the Credit Union. On June 20, 2006, Respondent finished Phase II of the project. On June 20, 2006, Respondent was paid $26,335.00 as the second draw by the Credit Union. From June 2006 to November 2006, Respondent performed no work on the house under the Dueboay contract. Because the roof was not completed, mold appeared on and in the house. On August 21, 2006, Dueboay paid $109.95 to America’s Best Cleaning and Restoration, Inc., for mold removal. On or before September 13, 2006, Dueboay hired an attorney to clarify billing charges related to lot filling, permit fees and the temporary electric pole, and to prompt Respondent to resume work abandoned since June 2006. Under the Credit Union Loan Agreement, after several extensions, the completion of the Dueboay home should have taken place on or before October 17, 2006. On October 18, 2006, the Loan Agreement extension expired, and Dueboay was required to pay mortgage and interest on the loan, even though construction of the house was not completed. On November 10, 2006, Dueboay’s attorney sent Respondent a third letter advising him that the project was stagnating; that after eighteen months since the signing of the contract, the roof of the house was not yet completed; and that, under the contract, Respondent was obligated to substantially complete all work in a reasonable time after construction had started. On or about December 1, 2006, the building permit expired and had to be renewed. At some point after November 10, 2006, Respondent resumed work and finished Phase III on March 8, 2007, with the exception that some doors were not installed, including the garage door. Respondent submitted a sworn Contractor’s Affidavit stating that all subcontractors had been paid, and that there are no liens against Dueboay’s property. However, Dueboay had to pay Charlotte County Utilities $224.93 on October 29, 2007, and $240.00 to Pest Bear, Inc., on May 7, 2008, to avoid two liens being recorded against his property. From March 8, 2007, until July 2007, Respondent performed no work under the contract. David Allgood, another general contractor, was hired by Respondent to complete some of Respondent’s projects in the Port Charlotte area, including the Dueboay house. However, Dueboay was not informed of this arrangement. There was no contract directly between Dueboay and Allgood. On September 4, 2007, relying on advice from his attorney, Dueboay changed the locks to the house, with the intent to keep Respondent and his employees off his property. Shortly thereafter, employees of general contractor David Allgood broke the front lock and entered the property in September 2007, without Dueboay’s permission. Dueboay, again, following advice from this attorney, called law enforcement to eject Allgood’s employees from his property. Allgood attempted to invoice Dueboay for installing some doors on the house that Respondent had previously paid for, and which Respondent should have installed. However, following advice from his attorney, Dueboay resisted Allgood’s request to pay him for the doors. Respondent was paid a total of $122,246.03 for the Dueboay project, before the contract was cancelled. Respondent did not complete work from Phases IV and V, with the following exceptions: he did some work on the driveway, painted the interior, did some cabinet work, exterior trim and soffit, siding, stucco, and some interior trim. Therefore, Respondent completed, at best, three out of seven operations from Phase IV (interior and exterior paint, interior trim and doors, and exterior trim and soffits) and worked on, but did not complete, stucco and some cabinets. From Phase V, Respondent only worked on the driveway and sidewalks, which had to subsequently be repaired. Dueboay hired Storybook Homes, Inc. (Storybook), to complete work abandoned by Respondent from Phases IV and V. Storybook was hired to complete work as follows: install cabinets and vanities, install ceramic tiles, repair stucco, install custom tub, all electrical and plumbing per code, complete exterior paint, install hardware, sinks and faucets in the baths and showers, complete floors, install all appliances, complete air conditioning and heat, and obtain the certificate of occupancy. The amount of $122,246.03 paid to Respondent at the time when Respondent abandoned the Dueboay project represents 81 percent of the total contract price of $150,000.00. Respondent completed, at best, 75 percent of the job by completing only three out of seven operations of Phase IV and working on some additional operations that needed to be redone, like the driveway, sidewalks and stucco. Due to Respondent’s failure to perform work on time, Dueboay incurred $5,116.42 in additional expenses, as follows: $109.95 on August 21, 2006 (mold removal), $360.00 on November 23, 2006 (legal fees), $175.00 on June 4, 2007 (legal fees), $375.00 on September 4, 2007 (legal fees), $224.93 on October 29, 2007 (to satisfy lien), $668.34 on November 3, 2007 (legal fees), $200.00 on April 4, 2008 (legal fees), $1,151.05 on May 7, 2008 (to correct work performed deficiently by Respondent), $390.00 on May 7, 2008 (to repair driveway), $240.00 on May 7, 2008 (to avoid lien), and $412.00 on May 12, 2008 (to install safe room door that Respondent failed to install). The total investigative costs of this case to Petitioner, excluding costs associated with any attorney’s time, for Petitioner’s case no. 2005-028129 was $276.18.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Board render a Final Order as follows: Finding Respondent guilty of having violated Subsection 489.129(1)(g)2., Florida Statutes, as alleged in Count I of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $1,500. Finding Respondent guilty of having violated Subsection 489.129(1)(j), Florida Statutes, as alleged in Count II of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $2,500. Finding Respondent guilty of having violated Subsection 489.129(1)(m), Florida Statutes, as alleged in Count III of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $1,500. Respondent’s license to practice contracting (CGC 060878) be suspended for a period of three months, followed by a period of probation for two years, upon such conditions as the Board may impose, including the payment of costs and restitution. Requiring Respondent to pay financial restitution to the consumer, Edward Dueboay, in the amount of $5,116.42 for consumer harm suffered due to payment of additional expenses. Requiring Respondent to pay Petitioner’s costs of investigation and prosecution, excluding costs associated with an attorney’s time, in the amount of $276.18. DONE AND ENTERED this 21st day of July, 2009, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE 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 21st day of July, 2009.
Findings Of Fact Pursuant to the Order of the Second District Court of Appeal, Dr. Spiegel was reinstated as Chairman of the Orthopaedic Department at the University of South Florida (USF), retroactive to October 31, 1988. He was given a contract as Chairman to run until October 19, 1990. On February 2, 1990, USF commenced proceedings to remove Dr. Spiegel as Chairman of the Orthopaedic Department, and the matter was referred to the Division of Administrative Hearings for a formal 120.57(1), Florida Statutes, hearing. Prior to the commencement of the formal hearing, Dr. Spiegel's contract as Chairman of the Orthopaedic Department expired and was not renewed by the USF. On the expiration date of that contract, October 19, 1990, the USF proceedings to remove Dr. Spiegel as Chairman of the Orthopaedic Department became moot. Dr. Spiegel's appointment as Chairman of the Orthopaedic Department ended as provided in this contract, the contract was not renewed, and Dr. Spiegel was no longer chairman of the Orthopaedic Department. Dr. Spiegel timely filed a grievance to challenge the non-renewal of his contract as Chairman of the Orthopaedic Department. By stipulation of the parties, the issues raised in the grievance merged into the instant proceedings to remove Dr. Spiegel as Chairman of the Orthopaedic Department. Since that issue became moot with the expiration of Dr. Spiegel's contract on October 19, 1990, the only issue now remaining is whether the failure to renew Dr. Spiegel's contract was in violation of Dr. Spiegel's right to academic freedom or for the alleged impermissible violation of his First Amendment right to freedom of speech. In other words, the allegation is that Dr. Spiegel's contract was not renewed because he exercised the rights guaranteed to him under the First Amendment of the United States Constitution.
