Findings Of Fact Petitioner is Carl R. Glass, d/b/a Osceola Forge located at 2749 North Orange Blossom Trail, Kissimmee, Florida 34744. Petitioner is engaged in the business of manufacturing and fabricating burglar bars, steel gates, decorative plastic ornamental castings and injection moldings. Petitioner built and erected one double sided billboard on his business property at 2749 North Orange Blossom Trail, Kissimmee, Florida. It is anchored by its owns supports into the ground as a permanent improvement to Petitioner's real property. The size of the billboard is approximately 12' x 38', plus an apron that runs along the length of the bottom of the billboard. Petitioner leases the face and apron of each side of billboard to customers who are generally required to supply their own labor and material to create an advertising message. The billboard was built to provide double-sided advertising for lanes of traffic going northbound or southbound past Petitioner's place of business. Petitioner has rented the billboard to various lessees for a monthly rental fee over the relevant period. Petitioner did not charge or collect sales and use taxes on the rental fee. Respondent conducted an audit of Petitioner's entire business, for the period May 1, 1986 through April 30, 1991. There was only one item assessed as a result of the audit which was on the lease of the billboard located on Petitioner's business property. Petitioner was assessed sales and use taxes, interest and penalties totalling $6,142.38, including taxes ($4,017.76) with a per diem interest rate of $1.32 to be computed from 10/3/91 to the present. Additional interest due, as of July 1, 1993, was calculated to equal $842.16 (638 days x $1.32). The sales tax assessment was based on invoices and other information provided by the Petitioner and followed the Department of Revenue routine procedures required for all audits. From January 1987 through February 1991, Petitioner, or his secretary, made five telephone calls from Osceola Forge to the Taxpayer Assistance Number of the Department of Revenue's regional office located in Maitland, Florida, requesting assistance. On each occasion, the Department's employee advised Petitioner or his employee that they could call the Department's Tallahassee 800 taxpayer assistance number. On at least one occasion, Petitioner's secretary or Petitioner was advised that the transaction was tax exempt, and need not be collected. Petitioner was aware of the 800 taxpayer assistance number in Tallahassee and tried to call the number. However, he was unable to get through, and called the local office only. On April 9, 1992, Petitioner personally telephoned the Titusville office of the Department of Revenue. On each occasion, Petitioner inquired whether or not sales or use taxes should be collected on the rental of the billboard. A free, updated Sales and Use Tax Rules Book is available to any tax payer upon request. In addition, a taxpayer could personally appear and bring documentation relating to any questions relating to the sales and use tax at any regional office. Petitioner did not obtain an updated rules book or personally appear at a regional office. On April 30, 1992, Petitioner filed a Protest Letter with Respondent challenging the abovementioned tax assessment. Respondent issued to Petitioner a Notice of Decision dated December 1, 1992. On January 8, 1993, Petitioner filed a Request for a Formal Administrative Hearing with Respondent. To date, Petitioner has not paid any of the contested taxes, interest, and penalties to Respondent. Petitioner relied on information provided by his secretary, his accountant, and brief phone conferences with the DOR's Maitland office to determine that the rental fees were tax exempt, and did not collect the sales tax from his customers. The DOR Audit Supervisor testified that there is a clear distinction between the taxable rental of a billboard and the nontaxable services of placing an advertising message on the billboard. The rental of the face of the billboard is a taxable transaction. On the other hand, if a person rents or leases a billboard, then hires a third party to place an advertising message on the billboard, this advertising service is tax exempt.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Revenue enter a Final Order upholding its sales and use tax assessment, waive penalties and interest accrued prior to October 2, 1991, and assess a tax of $4,017.76, plus interst from the date due. DONE and ENTERED this 14th day of July, 1993, in Tallahassee, Florida. DANIEL M. KILBRIDE 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 14th day of July, 1993. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Proposed findings of fact submitted by Petitioner. Petitioner did not submit proposed findings of fact. Proposed findings of fact submitted by Respondent. Proposed findings submitted by Respondent are accepted except as noted below. Those proposed findings neither noted below nor included in the Hearing Officer's findings were deemed unnecessary to the conclusions reached. Rejected as argument: paragraphs 37, 38, 39 COPIES FURNISHED: Carl R. Glass 2749 North Orange Blossom Trail Kissimmee, Florida 34741 James McAuley, Esquire Assistant Attorney General Capitol Building Tallahassee, Florida 32399-1050 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint filed against her, and, if so, what disciplinary action should be taken, if any.
Findings Of Fact Respondent Anne E. Carr is and has been at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0268356. In 1988 Helen B. Moser and her husband, John J. Moser, Jr., obtained their real estate salesman licenses. In 1989 they became real estate brokers. Upon becoming licensed brokers, they decided that they would like to open their own real estate office. They began contacting various real estate brokers seeking advice on how to open and operate a real estate business. Respondent was one of the brokers the Mosers contacted for advice. She and the Mosers already knew each other from previous professional activities. At the time, Respondent was the broker and sole stockholder of Carr Real Estate, Inc. She also was spending a substantial amount of time selling luxury condominiums for a particular developer, which required her to be on-site at the development. Respondent suggested to the Mosers that they join Carr Real Estate, Inc., and run the office for her rather than opening their own office, which would give them immediate access to her listings and many clients and allow her to devote her time to sales for the large real estate development. The Mosers agreed that was a good opportunity for all concerned and joined Carr Real Estate, Inc., as broker/salesmen in October of 1989. The Mosers began running the business for Respondent at her request, providing Respondent with monthly accountings. During 1990 the Mosers earned approximately $90,000 as a result of the listings they took over from Respondent and as a result of the listings Respondent referred to them. Throughout that year Carr Real Estate, Inc., remained a major presence in the Highland Beach area where Respondent was well known both for her flamboyant fashions and her ability to list and sell luxury ocean-front and water-front properties. During the first week of December 1990 Respondent advised the Mosers that due both to financial problems she was experiencing and pressure on her from the developer to devote full time to his sales she would be closing the business on December 31 unless the Mosers wanted to purchase the company from her. They advised Respondent they were interested in doing so and that they would draft the documents for Respondent's signature. Many discussions took place between Respondent and the Mosers over the next several weeks formulating the terms of the sale of the business, and the Mosers submitted to Respondent a number of drafts of documents. While the negotiations were on-going, Respondent filled out and executed on December 12, 1990, the documents necessary for her to file for personal bankruptcy. On December 15 she faxed written instructions to her attorney to not file the bankruptcy petition because she was selling her company. On December 20, 1990, Respondent and the Mosers executed a Purchase and Sale Agreement and a Bill of Sale. It is noted that those documents also involved the sale of Respondent's interest in two other corporations to the Mosers but that portion of the transaction raises no issues involved in this proceeding. The Purchase and Sale Agreement provided that its effective date would be January 1, 1991. The Agreement specifically represented that Carr Real Estate, Inc., was being sold free of any liabilities and encumbrances and that the corporation did not own any tangible assets. The Agreement further provided that Respondent would indemnify the Mosers from all obligations and liabilities incurred by Carr Real Estate, Inc., prior to January 1, 1991. The Agreement provided for no money to change hands as a result of the Mosers' purchase of Respondent's business; rather, the purchase price for the corporation was five percent of all sales commissions received by the corporation for a period of two years. On December 29, 1990, Respondent executed the Seller's Affidavit given to her by the Mosers. The portion of the Seller's Affidavit pertinent to this dispute is that Respondent attested that there were no actions or proceedings then pending in any state or federal court in which "the Affiant or Corporations" are parties, including bankruptcy. It was very clear in Respondent's mind that what she was selling under the Purchase and Sale Agreement and the Bill of Sale and what she was attesting to in the Seller's Affidavit was in regard to the corporation and not her personally. It never occurred to Respondent that she was representing to the Mosers that she personally had no bills and no assets. Respondent had no intention of defrauding the Mosers. Supporting this intent is the clear language contained in the Purchase and Sale Agreement, the Bill of Sale, and the Seller's Affidavit that she would personally indemnify and hold harmless the Mosers from any liabilities incurred by the corporation prior to the effective date of the sale. In mid-January 1991, approximately two weeks after the effective date of the sale, the Mosers discovered that a bankruptcy petition had been filed on behalf of Respondent as an individual. Although that petition did not involve the corporation, John Moser immediately contacted Respondent who did not know that her attorney had filed the petition contrary to Respondent's instructions. On January 23, 1991, Respondent wrote to Helen Moser apologizing for the erroneous filing of her bankruptcy petition and assuring her that it would be corrected. Respondent immediately contacted her attorney to ascertain how the petition could be dismissed. She was advised by her attorney that the only way she could dismiss the petition was to not attend the first meeting of creditors which would cause the petition to automatically be dismissed. Respondent did fail to attend the first meeting of creditors. Due to her failure to attend, her bankruptcy petition was dismissed. She immediately contacted Helen Moser to advise her of the dismissal. On February 1, 1991, John Moser called Respondent to inform her that a statement for a monthly automobile lease payment in the name of Carr Real Estate had been received. Respondent immediately sent the Mosers a note indicating that she had contacted G.M.A.C. but that company refused to allow her to transfer responsibility for her automobile lease payments from the corporation to herself. She acknowledged that she was responsible for any of the lease payments and requested that the Mosers acknowledge that the automobile was not an asset of the corporation. At the time Respondent knew that she was responsible for the lease payments because she signed the lease agreement as an individual. Respondent's contact with G.M.A.C. was unnecessary since her automobile had been leased to her as an individual in June of 1988, a date which preceded the existence of Carr Real Estate, Inc. The automobile was insured in Respondent's individual name and was registered in the name of G.M.A.C. at Respondent's address. The Bill of Sale executed by Respondent and the Mosers does not list the automobile as an asset of the corporation that was conveyed. The automobile leased by Respondent was not an asset of the corporation. The only relationship between Respondent's leased automobile and Carr Real Estate, Inc., concerns the deduction of automobile expenses as business expenses on the tax return for Carr Real Estate, Inc. On February 6, 1992, Helen Moser asked Respondent for a copy of the 1990 corporate tax return for Carr Real Estate, Inc., and Respondent provided a copy to her that same day. The return had been prepared in August or September of 1991 by Mary Dorak, a person enrolled with the Internal Revenue Service. It contained an entry entitled "loan from shareholder" in the sum of $107,060. Respondent had been the sole shareholder of the corporation. On February 26, 1992, the Mosers obtained an opinion letter from an attorney advising them that the corporation was not liable to Respondent for any debts. Neither the Mosers nor their accountant ever contacted Dorak or Respondent about the information contained in that tax return. Instead, the Mosers filed an amended corporate tax return for 1990 for Carr Real Estate, Inc. They removed the automobile as a corporate asset while leaving the shareholder's loan because it benefited them tax-wise. Instead of amending the return, the Mosers could have filed a 1991 return showing Respondent's stock exchange for the basis that was left of the stock in the corporation because the transaction took effect on January 1 of that year. Doing so would have caused no adverse tax consequences to the Mosers. Respondent typically provided Dorak with a listing of Respondent's income and expenses for the year and would then simply sign the return after Dorak had prepared it without reviewing the return first. Without any input from Respondent, Dorak had listed the automobile and some personal debts of Respondent on the 1990 corporate tax return because Respondent could take advantage of certain business deductions. That action had no adverse tax consequences for the Mosers. The Mosers never requested a tangible property tax return which would have reflected if there were any assets in the corporation. Had they made this request, they would have been told that there was none in existence because the corporation had no assets. At the time that Respondent and the Mosers executed the Purchase and Sale Agreement, the Bill of Sale, and the Seller's Affidavit in December, all three believed that the corporation had no assets or liabilities and that any assets and liabilities of Respondent were hers personally. As of January 1, 1991, the effective date of the sale, the corporation had no assets or liabilities. There were no tax consequences to the Mosers because of the listing of the shareholder loan in the 1990 corporate tax return because in that Subchapter S corporation the person ultimately adversely affected by the sale would be Respondent since she owned all of the shares in 1990. On the other hand, the filing of an amended 1990 corporate tax return by the Mosers without Respondent's knowledge and consent has resulted in adverse tax consequences to her, an unnecessary result. In November 1988 Respondent was involved in the sale of a condominium unit owned by Mr. and Mrs. Roy Heinz. Due to extended negotiations, the buyer's decision to not purchase the unit, and instructions from Heinz who was her client, Respondent delayed in placing the buyer's deposit check in her escrow account. Petitioner filed an Administrative Complaint against Respondent only and not also against Carr Real Estate, Inc., since that corporation was not yet in existence. After a formal evidentiary hearing, a Hearing Officer of the Division of Administrative Hearings specifically cleared Respondent of any intentional wrongdoing and of any culpable negligence. Respondent was found guilty, however, of what was specifically characterized to be a technical violation of failure to immediately place the deposit check into her escrow account. The minimum penalty permissible was assessed against Respondent. Respondent was also dismissed from the civil lawsuit filed by Roy Heinz which emanated out of the same circumstances for which the administrative action was brought. The Mosers knew about the disciplinary action and the civil lawsuit pending against Respondent individually prior to their execution of the December 1990 documents transferring Carr Real Estate, Inc., from Respondent's ownership to theirs effective January 1, 1991. The "Roy Heinz matter" was specifically raised by John Moser during the negotiations among the Mosers and Respondent. In April of 1991 Respondent sent Helen Moser a copy of the Recommended Order finding Respondent not guilty of any dishonest conduct or culpable negligence, and Helen Moser failed to even read the entire Order since she considered it unimportant and because she knew the transaction involved occurred prior to the formation of Carr Real Estate, Inc. The Mosers continue to operate Carr Real Estate, Inc. The business has been diminishing, however, since 1991 due to the reduction in the number of salespersons affiliated with the business, John Moser's inability to attract listings and retain clients, and the amount of time the Mosers have been devoting to John Moser's computer business. Respondent's actions and/or inactions have not been the cause of the decline in Carr Real Estate, Inc.'s, business. Moreover, the Mosers have not been harmed financially or in any other way due to any statements contained in the Purchase and Sale Agreement, Bill of Sale, or Seller's Affidavit executed by Respondent. The sale of Carr Real Estate, Inc., by Respondent to the Mosers benefited all three of them. In her negotiations surrounding that sale, Respondent agreed to the terms desired by the Mosers, acted honestly, and did not knowingly or intentionally misrepresent any material fact. Those misrepresentations alleged by the Mosers and Petitioner to be contained in the closing documents, such as any statement that Respondent personally had no assets or liabilities, were not material to the sale and purchase of the corporation.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered finding Respondent not guilty of the allegations contained in the Administrative Complaint filed against her and dismissing that Administrative Complaint. DONE and ENTERED this 16th day of December 1994, at Tallahassee, Florida. LINDA M. RIGOT 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 December 1994. APPENDIX TO RECOMMENDED ORDER Petitioner's proposed findings of fact numbered 1-4, 6-11, 13, 15, 18, and 19 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed findings of fact numbered 5, 16, and 17 have been rejected as not being supported by the weight of the credible evidence. Petitioner's proposed findings of fact numbered 12 and 14 have been rejected as being subordinate. Respondent's proposed findings of fact numbered 1-29, 31, and 33-36 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed finding of fact numbered 30 has been rejected as not being supported by the weight of the credible evidence in this cause. Respondent's proposed findings of fact numbered 32 has been rejected as not constituting a finding of fact but rather as constituting argument of counsel. COPIES FURNISHED: Jack McRay, Esquire Acting General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Theodore R. Gay, Senior Attorney Department of Business and Professional Regulation 401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128 Harold M. Braxton, P.A. Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156-7815
The Issue The issue in this case is whether the Petitioner should be issued a sales tax exemption certificate either as a "church" or as a "religious organization."
Findings Of Fact The Petitioner, In His Service, is a not-for-profit organization formed to give structure to a Bible study and prayer group Shirley B. Cole leads. Cole is the Petitioner's "pastor," but she is not ordained, does not officiate at weddings or funerals, and has no formal religious training other than participation in similar study groups in the past. The Petitioner is affiliated with an organization called the Federation of Independent Churches, which has an office on East Bird Street in Tampa, Florida. (In a post-hearing submission, Cole asserted that the Petitioner's "outreach is from Greater Ministries International, basically functioning as a satellite church, but there was no evidence regarding Greater Ministries International.) Portions of the Petitioner's by-laws were admitted in evidence at the final hearing. The by-laws make reference to three officers--president, vice-president, and secretary-treasurer--but Cole testified that she was the secretary and that someone else was the treasurer, and she did not seem to know anything about a president or vice-president. In addition, while the by-laws refer to a board of directors and meetings of the board of directors, Cole does not know anything about either. The Petitioner is small (not more than 15 members). It consists primarily of Cole and her friends and neighbors and some others who hear about the meetings. The group has met in various locations, including Cole's home at 5155 20th Avenue North, St. Petersburg, Florida, and the homes of other members of the group. In addition to Bible study and prayer, the group discusses health issues and other topics of interest and shares reading materials and tapes on topics of interest. From time to time, the group collects items of donated personal property for the use of members of the group and others in need who could use the items. In late June 1998, the Petitioner applied for a sales tax exemption certificate as a church. In response to a question from a representative of the Respondent DOR Cole stated that the Petitioner held services in her home every Thursday from 7:30 to 9:30 or 10 p.m. A DOR representative attempted to confirm Cole's representation by attending a meeting in Cole's home on Thursday, October 8, 1998, but no services were being held there, and no one was home. If there was a meeting on that day, it was held somewhere else. On or about December 28, 1998, DOR issued a Notice of Intent to Deny the Petitioner's application because the Petitioner did not have "an established physical place of worship at which nonprofit religious services and activities are regularly conducted and carried on." In January 1999, Cole requested an administrative proceeding on the Petitioner's application, representing that she was holding the Petitioner's meetings at her home every Monday from 7:30 p.m. On Monday, April 5, 1999, a DOR representative visited Cole's home at 7:30 or 7:35 p.m., but no one was home. At final hearing, Cole testified that she went to pick someone up to attend the meeting and was late returning. Cole had an April 1999 newsletter admitted in evidence. It indicates that she holds weekly Bible study meetings on Mondays at her home. It also indicates: "The week of April 19th will be our maintenance [health] meeting." It also indicates that the Monday, April 26, 1999, meeting would be a "covered dish dinner with prayer and praise fellowship afterward." Cole also had a book/tape loan check-out list admitted in evidence. The list indicates that two items were checked out on January 21, one on February 8, two on February 14, one on February 15, one on March 8, one on March 21, two on March 22, one on April 4, one on April 5, and four on April 12, 1999. (Two entries dated April 13 precede two on April 12, so it is assumed that all were on April 12, 1999). Cole owns her home, pays the taxes, and pays the utility bills. Cole also claims a homestead exemption. There are no signs, no physical attributes, or anything else that would identify Cole's house as a church. No part of the home is set aside for the Petitioner's exclusive use. The Petitioner pays no rent to Cole and does not reimburse Cole for any of her expenses (such as taxes and utility bills) of home ownership. Under local City of St. Petersburg zoning ordinances, Cole would have to obtain a special exception from the Environmental Development Commission to use her home as a church. Cole has not attempted to do so. Had she tried, the special exception would be denied because her home does not meet the ordinance's minimum lot and yard size criteria for such a special exception. (It is not clear whether Cole's home would meet the ordinance's parking, maximum floor area ratio, and maximum surface ratio criteria for a special exception for a church.) In light of past discrepancies between the Petitioner's representations and the facts, it was not clear from the evidence presented in this case that meetings have taken place, are taking place, or will take place in Cole's home on a regular basis.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the DOR enter a final order denying the Petitioner's application for a tax exemption certificate. DONE AND ENTERED this 18th day of May, 1999, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON 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 18th day of May, 1999. COPIES FURNISHED: Shirley Cole, Pastor In His Service 5155 20th Avenue, North St. Petersburg, Florida 33710 Kevin ODonnell, Assistant General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issue is whether Petitioner is entitled to reasonable attorney's fees and costs (fees and costs), pursuant to Section 57.111, Florida Statutes (2003), as the prevailing party in DOAH Case No. 02-1659.
Findings Of Fact Sometime in February 2002, Respondent filed an Administrative Complaint against Petitioner. Petitioner requested an administrative hearing, and DOAH Case No. 02-1659 ensued (the underlying case). Respondent admits that Petitioner was the prevailing party in the underlying case. The Recommended Order in the underlying case recommended that the agency enter a Final Order finding the facility not guilty of the violation alleged in the Administrative Complaint. The Final Order adopted the findings and conclusions in the Recommended Order. Respondent does not contest that fees and costs in the amount of $10,889.00 are reasonable. Petitioner incurred fees of $6,890.00 and $3,760.00, respectively, in the underlying case and in this proceeding. Petitioner incurred costs of $239.00 in the underlying case. Petitioner submitted the only evidence concerning the amount of fees and costs and the reasonableness of that amount. Respondent defends the request for fees and costs on two grounds. Respondent contends that Petitioner is not a small business party and that the agency had substantial justification for initiating the underlying case. Petitioner is a small business party within the meaning of Section 57.111, Florida Statutes (2003). Petitioner is a closely held corporation with its principal office in the state. The record in this proceeding and that in the underlying case clearly show that Petitioner has only one place of business. When the agency initiated the underlying case, the facility operated by Petitioner had no more than 25 full-time employees and had a net worth of less than $2 million. The facility contained 34 beds and 17 residents in 2002. The fair market value on May 1, 2003, was $1,840,000. Thereafter, the facility expanded by eight rooms and 16 beds and has a projected fair market value of $2,150,000 in May 2004. Contrary to the assertion in Respondent's PFO, the testimony of the sole shareholder is not the only evidence of the net worth of the facility. Documentary evidence includes two written appraisals and a federal income tax return for the 2002 tax year. The tax return reports total assets and liabilities, respectively, of $1,295,010 and $501,088. Respondent was substantially justified in initiating the underlying case. Respondent had a solid basis in fact for the position that it took in the underlying case. On June 27, 2002, the facility transferred a resident to a hospital for a urinary tract infection. The hospital treated the resident intravenously for five days with an antibiotic identified in the record as Tequin, until the resident was asymptomatic, and discharged the resident to the facility. The discharge summary directed the resident to continue Tequin orally, but the hospital did not issue a prescription slip for Tequin. The facility did not administer Tequin to the resident, the infection recurred, and the hospital readmitted the resident. The allegations in the Administrative Complaint and survey findings did not state a legally correct basis for initiating the underlying case. The Administrative Complaint alleged, in relevant part, that the facility violated Florida Administrative Code Rule 58A-5.0185(7)(f) by failing to ensure that prescriptions are "refilled." It was undisputed in the underlying case that a prescription for Tequin did not exist before the date of discharge from the hospital. The agency alleged that the facility failed to "refill" the prescription either by overlooking the prescription slip provided by the hospital or by failing to review the discharge summary to determine that the hospital had failed to include a prescription slip for Tequin. The agency alleged that in either event the facility failed to "refill" an existing prescription. The agency never produced the prescription slip for Tequin that the agency alleges the hospital included with other prescriptions on the date of discharge. The facility "filled" or "refilled" the other prescriptions provided by the hospital. The absence of a prescription slip for Tequin raises an issue of whether the facility received adequate notice of its duty to "fill" or "refill" a prescription for Tequin. The agency's proposed resolution of the notice issue was legally incorrect. The agency alleged that the facility failed to note "either the Resident's discharge instructions or the prescription slip." In the absence of a prescription slip, the failure to note the discharge instructions may have violated a rule of the agency, but the failure to note the discharge summary did not violate the rule requiring Petitioner to take appropriate steps to "refill" a prescription. Respondent's expert witness in this proceeding contradicted the charge in the underlying case that distinguished discharge instructions from a prescription slip. Respondent's expert testified that the agency was substantially justified in initiating the administrative action because the hospital "discharge instructions" constituted a "prescription." Respondent's expert attempted to explicate his administrative interpretation of the relevant rule by stating that the pharmacist would need to telephone the prescribing physician to "verify the prescription" in the discharge summary, but would not need to do so if the hospital had issued a prescription slip. The testimony of Respondent's expert conflicts with the statutory definition of a prescription in Section 893.02(20), Florida Statutes (2003), and is neither credible nor persuasive. The statute defines a prescription, in relevant part, to include a physician's order for drugs that is transmitted by telephone. A pharmacist that telephoned a physician to "verify a discharge summary" notation would actually fill the order for medication that the physician transmitted by telephone to the pharmacist. For reasons stated in Findings 8 and 9, the agency was substantially justified in initiating the administrative action. However, the agency charged the facility with committing acts that, if proven, did not violate the rule cited in the Administrative Complaint. For reasons stated in the Recommended Order in the underlying case, an agency cannot charge the facility with violating one rule and prove that the facility violated a rule not cited in the Administrative Complaint. To do so, would violate fundamental principles of due process as well as essential requirements of the Administrative Procedure Act.
The Issue Whether the Petitioner, Edward J. Miller, is entitled to be licensed as a resident life and variable annuity insurance agent.
Findings Of Fact The Petitioner, Edward J. Miller, is employed at Washington Mutual Bank. His supervisor is Tracy Tarach. It was Ms. Tarach's desire that Mr. Miller become licensed as a resident life and variable annuity insurance agent. To that end, she and Mr. Miller filed the necessary papers with Washington Mutual Bank to approve the application process as well as the course to become licensed. The process of having the bank issue the check to cover the licensing procedure was timely. Additionally, the Petitioner could only be scheduled for the licensure class and completion of the licensing process when the bank took favorable action on the request. Accordingly, for this Petitioner the licensing process was dragged out over the course of several months. In January 2003 the Petitioner completed the state application for licensure but did not transmit it to the state. He submitted the request to the bank for course approval and planned to submit the paperwork when it was successfully completed. At that time, the Petitioner did not have any criminal charges pending against him and the answers noted on the application were all correct and truthful. In February 2003 the Petitioner was stopped for DUI. The next workday the Petitioner went to his supervisor and fully disclosed the arrest as well as the charge. The Petitioner made no effort to hide the arrest from his employer and the employer considers the Petitioner a valuable employee, despite the incident. In March 2003 the Petitioner was formally charged with DUI, a misdemeanor. Meanwhile, the bank approved the Petitioner's request to take the course for licensure. The forty-hour course in another work location required the Petitioner to travel to the school site and reside in a hotel for a week while the course work was completed. Obviously the Petitioner's supervisor was willing to invest the costs of licensure school and accommodations for the Petitioner with full knowledge of the Petitioner's pending criminal matter. After successfully completing the licensure course in April 2003 the Petitioner submitted the license application to the state. He failed to double-check the forms. He failed to correct an answer that was now incorrect. That is, he failed to fully disclose the arrest. Subsequently, the criminal case went to hearing, and the Petitioner entered a plea and was placed on probation. The resolution of the DUI charges was completed after the application was submitted. Section 3 of the license application asks several screening questions of applicants for licensure. Applicants are required to answer "yes" or "no", depending on the information sought. In this case, it is undisputed that the Petitioner failed to correct his answers to the questions posed in Section 3. More specifically, the Petitioner failed to truthfully disclose that he had been arrested for DUI. This failure was an oversight on the Petitioner's part, and not intended to deceive the Department. The answers should have been corrected when the Petitioner amended the application form to include the information regarding his completion of the Gold Coast School of Insurance class on April 11, 2003. He did not do so. When the Department reviewed the Petitioner's application and discovered the false answer, it took action to deny the licensure request. That denial was entered on January 22, 2004. A notice of the denial was provided to the Petitioner and he timely challenged the proposed action. On October 31, 2003, the Petitioner completed all of the terms of his court-ordered probation and the entire DUI incident was put to rest.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a Final Order granting the Petitioner's application for licensure. DONE AND ENTERED this 30th day of July, 2004, in Tallahassee, Leon County, Florida. S ___________________________________ J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 2004. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Dana M. Wiehle, Esquire Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399 Edward J. Miller 6205 Northwest West Deville Circle Port St. Lucie, Florida 34986
The Issue Whether Respondent committed the violations alleged in the "Administrative Complaint for Revocation of Certificate of Registration" (Administrative Complaint) filed with DOAH on April 20, 2009, and, if so, the action that should be taken.
Findings Of Fact Petitioner is the agency of the State of Florida responsible for administering the revenue laws of the State of Florida, including the imposition and collection of the state's sales and use taxes pursuant to chapter 212, Florida Statutes. Respondent is an active for-profit corporation with its principal address at 8461 Lake Worth Road, #189, Lake Worth, Florida. Respondent is a "dealer" as that term is defined by section 212.06(2), and holds certificate of registration number 16-8014804285-5. Respondent operates a restaurant in Broward County, Florida. Respondent's Registered Agent is Michael Letts, whose address is 1166 North State Road #7, Lauderhill, Florida 33313. WARRANT 1000000100712 Petitioner audited Respondent for payment of sales and use taxes for the period June 1, 2004 through May 31, 2007. Petitioner assigned the number 200031264 to that audit. As a result of audit number 200031264, Petitioner issued to Respondent a Notice of Proposed Assessment on May 28, 2008, that assessed Respondent $50,326.67 in tax; $7,549.01 in penalty; and $13,540.49 in interest as of May 28, 2008, for a total of $71,416.17. The assessment became final on July 28, 2008. Petitioner issued tax warrant numbered 1000000100712, and recorded the warrant in the public records of Broward County, Florida, on November 24, 2008. The total of the warrant, which included an updated interest amount and a $20.00 filing fee, was $73,483.72. Interest continues to accrue until the tax is paid in full. As of February 15, 2011, the total sum of $80,634.81 remained unpaid as a result of the assessment, the continued accrual of interest thereon, and the cost of the filing fee.1 RETURNS WITHOUT REMITTANCES Respondent filed with Petitioner sales and use tax returns without remitting the taxes due with the returns for the months of August - December 2008 and January - February 2009. Respondent failed to remit to Petitioner $6,953.36 in sales and use taxes for those months. For that failure, Petitioner assessed Respondent with taxes in the amount of $6,953.36; a penalty in the amount of $505.98; interest as of March 17, 2009, in the amount of $169.45, and a collection fee in the amount of $80.00. That assessment, which totaled $7,708.79, remained unpaid at the time of the formal hearing. Interest continues to accrue until the tax is paid in full. PROCEDURAL COMPLIANCE Petitioner made efforts to negotiate a Compliance Agreement with Respondent and met with a representative of the Respondent. Those efforts were unsuccessful. Respondent has failed to remit payment for the tax, penalty, interest, and fees due and owing to Petitioner pursuant to chapter 212. Petitioner established that it complied with all applicable procedural requirements prior to filing the Administrative Complaint with DOAH.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order that revokes Respondent's certificate of registration. DONE AND ENTERED this 24th day of March, 2011, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON 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 24th day of March, 2011.
The Issue The issues to be determined in this case are whether Respondent violated Article II, Section 8, Florida Constitution (“Article II, Section 8”), and section 112.3144, Florida Statutes, by filing an inaccurate CE Form 6: Full and Public Disclosure of Financial Interests (“Form 6”) in 2013, 2015, or 2017; and, if so, what penalty should be imposed.
Findings Of Fact Introductory Stipulated Facts Respondent was a candidate for the Florida House of Representatives, District 108, in 2010. Respondent served in the Florida House of Representatives on behalf of District 108 from 2010 through 2016. Respondent was a candidate for the Florida Senate, District 38, in 2016. Respondent served in the Florida Senate on behalf of District 28 from 2016 through 2018. Respondent was a candidate for the Florida Senate, District 28, in 2018. Respondent was required to file a true and accurate Form 6 in each year from 2010 through 2018. Respondent read and understood the instructions to the Form 6 for 2013, 2015, and 2017 prior to completing and filing the forms. 2013 Form 6 On June 17, 2014, Respondent filed her 2013 Form 6. By her signature on the face of the Form 6, Respondent affirmed under oath that the information disclosed, thereon, was “true, accurate, and complete.” Instructions for the 2013 Form 6, Part A, for calculating net worth, include the following relevant directives: In order to determine your net worth, you will need to total the value of all your assets and subtract the amount of all your liabilities. Simply subtracting the liabilities reported in Part C from the assets reported in Part B will not result in an accurate net worth figure in most cases. (emphasis in original). Instructions for the 2013 Form 6, Part C, for calculating liabilities, include the following relevant directives: List the name and address of each creditor to whom you were indebted on the reporting date chosen for your net worth (Part A) in an amount that exceeded $1,000 and list the amount of the liability. Liabilities include: accounts payable; notes payable; interest payable; debts or obligations to governmental entities other than taxes (except when the taxes have been reduced to a judgment); and judgments against you. * * * You do not have to list on the form any of the following: credit card and retail installment accounts, taxes owed (unless the taxes have been reduced to a judgment), indebtedness on a life insurance policy owed to the company of issuance, or contingent liabilities. A “contingent liability” is one that will become an actual liability only when one or more future events occur or fail to occur, such as where you are liable only as a partner (without personal liability) for partnership debts, or where you are liable only as a guarantor, surety, or endorser on a promissory note. If you are a “co-maker” on a note and have signed as being jointly liable or jointly and severally liable, then this is not a contingent liability. (emphasis supplied). Respondent submitted her Form 6 with a reported net worth of $417,094 in Part A, as of her chosen reporting date, June 12, 2014. Mortgage Note Joseph Brennan, bail bondsman and owner of Coral Gables Bail Bonds, Inc., testified that in his business he is typically contacted by either a defendant, or a friend or family member of a defendant, to assist in obtaining a bail bond to secure the defendant’s release from custody after the person’s arrest. When a friend or family member signs for the defendant, Mr. Brennan requires them to pay 10 percent of the bond amount, which is also known as a premium. The premium is a non- refundable payment. It is common in Mr. Brennan’s business for a customer to sign a mortgage note to secure a bond. Respondent and her then-husband, Hubert Campbell, used Coral Gables Bail Bonds to obtain a bail bond for their son, Gregory Campbell, following his arrest. In June of 2011, Gregory Campbell had a bond of $250,000 following his arrest. In order to post a bond for Gregory, Respondent was required to pay a premium of $25,000. Respondent paid $10,000 of the premium, which left an unpaid balance of $15,000. To secure the remaining $15,000, Respondent and her husband executed a mortgage obligating their property as collateral. The property that was mortgaged to secure the bond had an address of 14625 NE 4th Ave., Miami, Florida, 33161 (“Miami Property”). The mortgage was recorded in the public records of Miami-Dade County on June 30, 2011, at book 27740, pages 4740 through 4741. Respondent and her husband also executed a mortgage note, which includes a requirement to remit payment of $400 on the first of each month beginning August 1, 2011. The mortgage note reflects that Respondent and her husband promised “jointly and severally” to pay the $15,000 premium balance to Coral Gables Bail Bonds. This means, as Mr. Brennan explained in his testimony, that Respondent would still be responsible for payment of the full $15,000 to Coral Gables Bail Bonds, even if her husband passed away. Respondent stipulated to the fact that she was responsible for repayment on a $15,000 mortgage, dated June 29, 2011, from Coral Gables Bail Bonds. The $25,000 premium payment was not refunded to Respondent after her son appeared in court. As Mr. Brennan explained, in his business, the premium amount is owed regardless of whether the defendant subsequently appears in court. A satisfaction of the mortgage was signed on June 18, 2018; and was recorded on August 7, 2018, in the public records of Miami-Dade County at book 31091, page 1561. When applying the clear instructions on the face of the Form 6 to the equally clear terms of the mortgage note, it is decidedly obvious that the mortgage note was not a contingent liability exempt from disclosure. Respondent’s testimony that she believed that the mortgage note was a contingent liability within the meaning of the Form 6 instructions is not credible when balanced with the overwhelming weight of evidence to the contrary. The mortgage note was a reportable liability that should have been disclosed on Respondent’s 2013 Form 6. Respondent did not disclose the mortgage note as a liability on her 2013 Form 6. Code Enforcement Lien Cindy Hoskin, legal liaison for the Miami-Dade County Code Compliance Division, handles the interactions between governmental agencies and the County Attorney’s Office on escalated code enforcement matters. As stipulated by the parties, Respondent’s home was cited for code enforcement violations in July of 2011. There are two components to correcting a code enforcement violation: one is payment of the citation; and the other is physical correction of the violation. When a code violation citation is issued, an inspector will assess the property and issue an affidavit of noncompliance if he or she finds that the source of the citation is left uncorrected or the fines due under the citation remain unpaid. Through a “Notice of Assessment of Continuing Penalties,” dated March 6, 2012, Respondent was notified that she owed an assessment stemming from the code enforcement citation on the Miami Property. Respondent had 20 days from March 6, 2012, to appeal the assessment. Respondent submitted an untimely appeal, which was signed and dated on September 18, 2012, and date-stamped as having been received by Miami-Dade County on September 19, 2012. As stipulated by the parties, Respondent did not fulfill payment on the code enforcement fines; and subsequently, a lien was placed on the Miami Property by Miami-Dade Code Enforcement in October of 2012. On October 17, 2012, a lien in the amount of $10,590.16 was recorded against Respondent’s Miami Property in the public records of Miami-Dade County at book 28317, page 1429. When a lien is recorded against real property, the purpose is to notify the public that there is a cloud on the property’s title based on an outstanding debt. The lien on Respondent’s Miami Property is evidence that she owes a debt to Miami-Dade County. At the time of the final hearing, the lien remained unsatisfied. Based on the credible testimony of Ms. Hoskins, Miami-Dade County generally does not consider it necessary to reduce liens to judgments because the lien itself is evidence of the debt. The lien against Respondent’s Miami Property is not a contingent liability as that term is defined by the Form 6 instructions, because it is an existing debt that does not require any future event to occur or fail to occur before it attaches. Rather, it clearly fits within the definition of liabilities on the face of the Form 6, which includes as an example: “debts or obligations to governmental entities other than taxes.” The code enforcement lien was a reportable liability that should have been disclosed on Respondent’s 2013 Form 6. Respondent did not disclose the code enforcement lien as a liability on her 2013 Form 6. Federal Tax Lien Respondent testified that she owes a federal tax lien, which was in existence as of the reporting date for her 2013 Form 6, and that was still outstanding in an amount of at least $10,000 at the time of the final hearing. The lien had not been reduced to a judgment, meaning that it was not required to be specifically disclosed as a liability on Respondent’s 2013 Form 6 based on the instructions. Respondent was required, however, to include the tax lien in the calculation of her net worth. Respondent testified that she did not include the federal tax lien in the calculation of her net worth on her 2013 Form 6. Ultimate Finding of Fact Respondent did not file a full and public disclosure of her financial interests with respect to her 2013 Form 6. 2015 Form 6 The relevant instructions for the 2015 Form 6, Part A, for calculating net worth; and Part C, for calculating liabilities, are identical to the 2013 Form 6. On her 2015 Form 6, Respondent reported a net worth of $199,091.21, as of June 6, 2016. By her signature on the face of the Form 6, Respondent affirmed under oath that the information disclosed was “true, accurate, and complete.” Although the mortgage note may have remained a reportable liability with respect to Respondent’s 2015 Form 6, the evidence did not conclusively establish whether the balance exceeded the $1,000 threshold specified in the instructions. Even if the balance left on the mortgage was below $1,000, however, the mortgage had not yet been satisfied as of Respondent’s reporting date. Thus, the mortgage was still required to be included in the calculation of Respondent’s net worth regardless of the amount. Respondent testified that she did not include the mortgage note when calculating her net worth. The code enforcement lien against Respondent’s Miami Property remained unsatisfied at the time of the final hearing in this case. Accordingly, the lien should have been reported as a liability on Respondent’s 2015 Form 6. Respondent did not disclose the code enforcement lien as a liability on her 2015 Form 6. Respondent testified that she owes a federal tax lien that was still outstanding in an amount of at least $10,000 at the time of the final hearing. The lien had not been reduced to a judgment, meaning that it was not required to be specifically disclosed as a liability on Respondent’s 2015 Form 6 based on the instructions. Respondent was required, however, to include the tax lien in the calculation of her net worth. Respondent testified that she did not include the federal tax lien in the calculation of her net worth on her 2015 Form 6. Ultimate Finding of Fact Respondent did not file a full and public disclosure of her financial interests with respect to her 2015 Form 6. 2017 Form 6 The relevant instructions for the 2017 Form 6, Part A, for calculating net worth; and Part C, for calculating liabilities, are identical to the 2013 Form 6 and the 2015 Form 6. On her 2017 Form 6, Respondent reported a net worth of $416,642 as of June 15, 2018. By her signature on the face of the Form 6, Respondent affirmed under oath that the information disclosed was “true, accurate, and complete.” Although the mortgage note may have been a reportable liability with respect to Respondent’s 2017 Form 6, the evidence did not conclusively establish that there was any balance left on the mortgage, which was recorded in the public records as being satisfied three days after Respondent’s reporting date. Respondent testified that she did not include the mortgage when calculating her net worth for her 2017 Form 6, but it is uncertain whether she was required to do so. The code enforcement lien against Respondent’s Miami Property remained unsatisfied at the time of the final hearing in this case. Accordingly, the lien should have been reported as a liability on Respondent’s 2017 Form 6. Respondent did not disclose the code enforcement lien as a liability on her 2017 Form 6. Respondent testified that she owes a federal tax lien that was still outstanding in an amount of at least $10,000 at the time of the final hearing. The lien had not been reduced to a judgment, meaning that it was not required to be specifically disclosed as a liability on Respondent’s 2017 Form 6 based on the instructions. Respondent was required, however, to include the tax lien in the calculation of her net worth. Respondent testified that she did not include the federal tax lien in the calculation of her net worth on her 2017 Form 6. Construction Lien Pierre Richard Raymond is a contractor and owner of MPR Construction. Respondent, who was the property owner at the time, contracted with MPR Construction to complete a project to repair water damage at Respondent’s Miami Property. While Mr. Raymond expected Respondent’s insurance company to pay MPR Construction for its work on the project, Respondent was still liable for payment under the contract if the insurance company did not pay. After the construction project was complete, Mr. Raymond filed a claim of lien for $41,000 against Respondent’s Miami Property on March 2, 2018, which was recorded in the public records of Miami-Dade County, at book 30881, page 1013. The construction lien was satisfied on August 7, 2018. The construction lien was a reportable liability that should have been reported on Respondent’s 2017 Form 6 because it was a note payable to MPR Construction in an amount exceeding $1,000 as of the reporting date, June 15, 2018. Respondent did not disclose the construction lien as a liability on her 2017 Form 6. Quit Claim Deeds Respondent’s son, Gregory Campbell, changed his name to Mikel Mittal. A quit claim deed prepared by “MITTAL 2018 BUSINESS HOLDING TRUST,” dated May 19, 2018, was recorded in the public records of Miami-Dade County at book 30987, pages 294 through 296. The deed conveyed Respondent’s Miami Property from Respondent and Hubert Campbell to an entity identified as “14625 NE 4th AVE MIAMI LLC.” The deed included the notarized signatures of Respondent and Hubert Campbell, as well as the signatures of four witnesses. Respondent confirmed that the driver license number attributed to her in the notary block was accurate. Respondent is not a member of the business entity, 14625 NE 4th AVE MIAMI LLC. A second quit claim deed, dated June 20, 2018, was recorded in the public records of Miami-Dade County at book 31026, pages 2331 through 2332. The second deed conveyed the Miami Property from 14625 NE 4th AVE MIAMI LLC to Respondent’s son, Mikel Mittal. Instruments filed in a county’s public records, such as the quit claim deeds at issue in this case, plainly fall within the category of “evidence of a type commonly relied upon by reasonably prudent persons in the conduct of their affairs,” which is the applicable evidentiary standard under section 120.569(2)(g), Florida Statutes. It is undisputed that the quit claim deeds conveying Respondent’s Miami Property were recorded in the public records of Miami-Dade County. It is further undisputed that the driver license number on the first quit claim deed belongs to Respondent. Respondent, however, disputed that she executed the first quit claim deed or had any contemporaneous knowledge of its existence, despite the fact that a notarized signature purporting to be hers appears on the document. Upon testifying to her ignorance of the two quit claim deeds conveying her property up until she saw it on the news, Respondent was questioned as to whether she ever reported the fraudulent conveyance of her property or asked her son about it. Respondent evaded the questions and ultimately did not articulate any direct answers. The inherent reliability of a recorded instrument cannot be overcome by Respondent’s vague and illogical denial of its authenticity. Respondent’s Miami Property was returned to her through a third quit claim deed on August 27, 2018. As of Respondent’s reporting date for her 2018 Form 6, the Miami Property was not in Respondent’s name. Therefore, it was not an asset belonging to her and should not have been included in the calculation of Respondent’s net worth. However, Respondent listed the property as an asset valued at $471,642, and included it in the calculation of her net worth. Ultimate Finding of Fact Respondent did not file a full and public disclosure of her financial interests with respect to her 2017 Form 6.
Conclusions For Advocate: Melody A. Hadley, Esquire Office of the Attorney General Plaza Level 01 The Capitol Tallahassee, Florida 32399-1050 For Respondent: James Jean-Francois, Esquire Law Offices of James Jean-Francois Suite 211-A 6100 Hollywood Boulevard Hollywood, Florida 33024
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order and Public Report be entered finding that Respondent, Daphne Campbell, violated Article II, Section 8, Florida Constitution, and section 112.3144, Florida Statutes, on three separate occasions and recommending the imposition of a public censure and reprimand, and a civil penalty of $15,000 ($5,000 per violation). DONE AND ENTERED this 19th day of November, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: S BRITTANY O. FINKBEINER Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 2021. Millie Wells Fulford, Agency Clerk Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Melody A. Hadley, Esquire Office of the Attorney General Plaza Level 01 The Capitol Tallahassee, Florida 32399-1050 James Jean-Francois, Esquire Law Offices Of James Jean-Francois Suite 211-A 6100 Hollywood Boulevard Hollywood, Florida 33024 Christopher Anderson, III Executive Director Florida Commission on Ethics Post Office Drawer 15709 Tallahassee, Florida 32317 Caroline Marsh Klancke, General Counsel Florida Commission on Ethics Post Office Box 15709 Tallahassee, Florida 32317-5709
The Issue The issue for determination is whether Petitioner is liable for the tax, penalty, and interest assessed.
Findings Of Fact Petitioner is a Florida corporation with its principal place of business located at 2836 North Tamiami Trial, Sarasota, Florida. Petitioner primarily engages in the business of selling classic, vintage automobiles. Petitioner sells automobiles for delivery in-state, interstate, and internationally. Petitioner also engages in the business of selling other collectible items, including jukeboxes. Respondent is the state agency responsible for the administration of the Florida sales and use tax pursuant to Sections 20.21 and 213.05, Florida Statutes (1991). (All references to Florida Statutes are to Florida Statutes 1991 unless otherwise stated.) In accordance with Section 212.34, Respondent audited Petitioner's business records for the period from May 1, 1991, through July 31, 1996 (audit period). Respondent determined a deficiency and assessed Petitioner for $114,878.68, including tax, penalty, and interest through January 26, 1999. Respondent assessed tax in the amount of $55,771.16, penalty in the amount of $26,528.02, and interest through January 26, 1999, in the amount of $32,579.50. Additional interest accrues at the daily rate of $20.97. The assessed tax is based on several alleged deficiencies. Some deficiencies involve alleged failures of Petitioner to comply with taxing provisions. Other deficiencies involve alleged failures of Petitioner to comply with the requirements of claimed exemptions. Taxing provisions are construed narrowly against the taxing authority while the provisions authorizing exemptions are construed narrowly against the person claiming the exemption. The assessment against Petitioner includes tax on $51,353.10 in under-reported retail sales for 1994. Respondent compared the gross income reported by Petitioner for the 1994 tax year with the state sales tax revenues reported by Petitioner for the same year and determined that Petitioner under-reported sales tax revenues in the amount of $51,353.10. Mr. Martin Godbey is a corporate officer for Petitioner and a controlling shareholder. Mr. Godbey testified at the hearing. Mr. Godbey testified that $45,000 of the $51,353.10 was not under-reported gross sales in 1994. According to Mr. Godbey, Petitioner's accountant over-reported gross income for purposes of the federal income tax. Petitioner derives some income from providing brokerage services as an liaison between a buyer and seller. Mr. Godbey testified that Petitioner earned $1,400 in 1994 as a broker for the sale of a 1956 Jaguar XJ140 roadster on behalf of an automobile dealership in Virginia. The testimony is that Petitioner introduced the seller and buyer but never possessed the vehicle or delivered the vehicle. The price of the vehicle was approximately $45,000. Mr. Godbey testified that Petitioner's accountant incorrectly reported $45,000 as gross income under the federal income tax law and reported the difference between $45,000 and $1,400 as the cost of goods sold. The testimony of Mr. Godbey was credible and persuasive. However, the testimony was not supported by documentary evidence of Petitioner's federal income tax return or by testimony of Petitioner's accountant. The unsupported testimony of Mr. Godbey does not rise to the level of a preponderance of the evidence. Petitioner failed to show by a preponderance of the evidence that Petitioner over-reported gross income for the purpose of the federal income tax rather than under-reported gross sales for the purpose of the state sales tax. The testimony of Mr. Godbey did not explain the difference between the $51,353.10 amount determined by Respondent and $45,000 amount testified to by Mr. Godbey. For the period from 1991 through 1993, Petitioner collected sales tax on retail sales but did not remit the tax to Respondent. Rather, Petitioner paid the tax to two automobile dealers identified in the record as International Antique Motors, Inc. (IAM) and Autohaus Kolar, Inc. (AK). Petitioner registered with Respondent as a dealer sometime in 1991. However, Petitioner did not obtain a retail dealer's license from the Department of Motor Vehicles (Department) until late in 1993. From 1991 through most of 1993, Petitioner was licensed by the Department as a wholesale dealer and was not authorized by the Department to engage in retail sales of motor vehicles. Section 320.27(2) prohibited Petitioner from selling motor vehicles at retail and made such sales unlawful. Petitioner asserts that it could not have engaged in retail sales, within the meaning of Section 212.06(2)(c) and (d), because Petitioner had no legal authority to do so. From 1991 through 1993, Petitioner engaged in retail sales within the meaning of Section 212.06(2)(c) and (d). Petitioner engaged in retail sales by selling automobiles at retail in violation of Section 320.27(2). Respondent does not dispute that Petitioner collected sales tax on each sale. Petitioner did not engage in retail sales and collect sales tax on each sale in the capacity of an agent for IAM or AK. Petitioner acted in his own behalf as a principal. IAM and AK had no actual or legal control over the sales conducted by Petitioner. IAM and AK merely processed the title work for each retail sale conducted by Petitioner. Even if Petitioner were an agent for IAM and AK, Petitioner engaged in retail sales as a dealer defined in Florida Administrative Code Rule 12A-1.0066. (All references to rules are to rules promulgated in the Florida Administrative Code during the audit period.) Petitioner registered the vehicles sold at retail from 1991 through 1993 by way of a business arrangement with IAM and AK. After Petitioner collected sales tax on each retail sale, Petitioner remitted the tax to IAM and AK. IAM and AK then registered the vehicles with the Department. Respondent does not dispute that Petitioner paid to IAM and AK the sales tax that Petitioner collected from each customer. Nor does Respondent dispute that the amount of tax Petitioner paid to IAM and AK was sufficient to pay the tax due. Section 212.06(10) requires IAM and AK to issue a receipt for sales tax with each application for title or registration. IAM obtained title or registration for 21 vehicles sold by Petitioner and at issue in this case. AK obtained title or registration for three vehicles at issue in this case. Section 212.06(10) does not operate to create a factual presumption that IAM and AK paid the sales tax due on the 24 vehicles at the time that IAM and AK applied for title or registration of each vehicle. In practice, the receipt issued by dealers with each application for title or registration contains a code indicating that the dealer has collected the tax and will pay the tax in the dealer's ensuing sales tax return. After IAM applied for title or registration for the vehicles evidenced in Petitioner's Exhibits 2, 4, 6, and 21, IAM remitted taxes to Respondent in an amount sufficient to pay the tax due on those sales by Petitioner. Respondent has no record of any tax deficiencies against IAM. Respondent's admitted policy is to avoid the collection of tax if the tax has already been paid. After IAM applied for title or registration for the vehicles evidenced in Petitioner's Exhibits 1, 3, 5, and 7 through 20, IAM remitted taxes to Respondent in an amount that was insufficient to pay the tax due on those sales. Petitioner failed to show by a preponderance of the evidence that IAM remitted to Respondent the taxes that Petitioner collected and paid to IAM in connection with the sales evidenced in Petitioner's Exhibits 1, 3, 5, and 7 through 20. Petitioner is not entitled to a set-off of the taxes remitted to Respondent by IAM after the sales evidenced in Petitioner's Exhibits 1, 3, 5, and 7 through 20. There is insufficient evidence to show that the taxes remitted by IAM were collected on the sales at issue in this case rather than other sales made by IAM. AK processed three vehicles for Petitioner that are at issue in this case. AK paid to Respondent the sales tax due on the three retail sales at issue. The relevant sales are evidenced in Petitioner's Exhibits 24 through 26. AK remitted taxes in an amount that was more than sufficient to pay the tax due on those sales by Petitioner. Respondent has no record of a tax deficiency against AK. Respondent's policy is to avoid the collection of tax if tax has already been paid. Several deficiencies are attributable to disallowed exemptions for 16 sales that include 14 vehicles and two jukeboxes. Statutory requirements for exemptions are strictly construed against the person claiming the exemption. Petitioner did not satisfy essential requirements for any of the disallowed exemptions. The exemptions asserted by Petitioner in its PRO are discussed in greater detail in the following paragraphs. During the audit period, Petitioner sold a 1972 Italia Spyder automobile, VIN: 50413414, to a Texas automobile dealership identified in the record as North American Classic Cars/Gene Ponder, of Marshall, Texas (North American). Petitioner claims that the sale to North American is exempt because it is a sale for resale to a non-resident dealer. The sale to North American is not exempt. Petitioner failed to obtain a non-resident dealer affidavit at the time of sale in violation of Section 212.08(10). During the audit, Petitioner obtained a Sales Tax Exemption Affidavit (DR-40) from North American. A DR-40 is not appropriate for a sale for resale to a non-resident dealer. The appropriate affidavit would have required the non-resident dealer to attest that "the motor vehicle will be transported outside of the State of Florida for resale and for no other purpose." Hand written notations on the bill of sale for the Italia Spyder indicate the North American representative took possession of the automobile in Florida. In addition, a hand- written letter to Petitioner indicates that the Italia Spyder was purchased for the private collection of the owner of North American rather than for resale. During the audit period, Petitioner sold a 1959 Mercedes Benz 190SL automobile, VIN: 12104-10-95012, to Mike Hiller, of Coral Springs, Florida (Hiller). Petitioner claimed, on the bill of sale, that the sale was exempt because it was a sale to a non-resident dealer for resale. The sale to Hiller is not exempt. At the time of the sale, Petitioner failed to obtain a non-resident dealer affidavit or a resale certificate. The bill of lading lists Hiller as an exporter and indicated that Hiller, as the exporter, took possession of the automobile in Florida. The bill of lading does not show unbroken, continuous transportation from the selling dealer to a common carrier or directly out of Florida as required in Section 212.06(5)(b)1. During the audit period, Petitioner sold a 1959 MGA Roadster, VIN: 54941, to Fabiana Valsecchi, of Rome, Italy. Petitioner claims the sale is exempt as a sale for export. The sale to Valsecchi is not exempt. At the time of the sale, Petitioner failed to obtain a bill of lading, or other shipping documentation that shows unbroken, continuous transportation from Petitioner to a common carrier or directly out of Florida. The bill of sale signed by the purchaser's agent shows that the agent took possession of the automobile in Florida. Petitioner failed to show that the sale was exempt because it was a sale for resale. Petitioner did not provide a resale certificate from the purchaser. During the audit period, Petitioner sold a 1961 Triumph TR3 automobile, VIN: TS753 38L, to Classic Automobile Investors, Inc., of Germany (Classic). Petitioner claims that the sale is exempt because it was a sale for export. The sale to Classic is not exempt. At the time of sale, Petitioner failed to obtain a bill of lading, or other shipping documentation which shows unbroken, continuous transportation from Petitioner to a common carrier or directly out of Florida. During the audit period, Petitioner sold a 1947 Bentley MKVI automobile, VIN: B137B, to Mr. Bob Erickson, of Palmetto, Florida. Petitioner failed to collect and remit Local Government Surtax on the sale and owes the uncollected tax. During the audit period, Petitioner sold two jukeboxes and other items of tangible personal property to Mr. C.P. Loontjens. Petitioner claims that the sales are exempt from sales tax because they were sales for export. At the time of the sale, Petitioner failed to obtain documentation from the buyer to show that items sold were delivered to a common carrier or directly delivered outside of Florida. During the audit period, Petitioner was engaged in the business of selling items of tangible personal property other than vehicles and jukeboxes. Petitioner failed to collect and remit sales tax on the sale of these items of tangible personal property. Respondent properly assessed Petitioner for sales tax due on tangible personal property other than vehicles and jukeboxes in the amount of $3,352.50. Vintage rented commercial real property for its business. Rental payments for such real property are subject to sales tax pursuant to Section 212.031. During the audit period, Petitioner failed to pay sales tax on two payments for the commercial rental of real property. Petitioner is liable for use tax on the use of real property during the audit period. Respondent properly assessed Petitioner for additional use tax in the amount of $108.00. Although Petitioner maintained some books and records of sales and purchases, Petitioner failed to maintain adequate records. Respondent properly conducted an audit by sampling Petitioner's available books and records in accordance with Section 212.12(6)(b) but limited the claimed penalty to a delinquent penalty. The trier of fact cannot determine the taxes, interest, and penalty that are due after eliminating the deficiencies found in paragraphs 21 and 24 not to exist in connection with the sales evidenced in Petitioner's Exhibits 2, 4, 6, 21, and 24 through 26. Only Respondent can make that calculation using the same sampling formula that Respondent used to calculate the tax, interest, and penalty in the assessment.
Recommendation Based upon the foregoing findings of fact and the conclusions of law, it is RECOMMENDED that Respondent enter a Final Order ordering Petitioner to pay the tax, interest, and penalty that is due after Respondent recalculates the assessment against Petitioner in accordance with the findings pertaining to Petitioner's Exhibits 2, 4, 6, 21, and 24 through 26. DONE AND ENTERED this 6th day of March, 2003, in Tallahassee, Leon County, Florida. ___________________________________ DANIEL MANRY 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 6th day of March, 2003. COPIES FURNISHED: Carrol Y. Cherry, Esquire Office of the Attorney General Department of Legal Affairs The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Martha F. Barrera, Esquire Office of the Attorney General Department of Legal Affairs The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 R. John Cole, II, Esquire Law Offices of R. John Cole, II 46 North Washington Boulevard, Suite 24 Sarasota, Florida 34236 Bruce Hoffmann, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact On or about August 18, 1977, Respondent, Charles Leon Winkleman (Winkleman), filed an application with Petitioner, Office of the Comptroller, Department of Banking and Finance (Department) for registration as an associated person with Tax Favored Securities, Inc., now known as Global Investors Securities, Inc. Winkleman's application was granted November 1, 1977. On April 11, 1984, Winkleman pled guilty to an information filed in the United States District Court, Southern District of Florida (District Court) , Case No. 84-6043-Cr-JLK, which charged that he: did wilfully and knowingly aid assist in, and counsel, procure, and advise the preparation and presentation to the Internal Revenue Service of a United States Individual Income Tax Return (Form 1040) of William I. and Amy Steele Donner for the calendar year 1978 which was false and fraudulent as to a material matter, in that it represented that said William I. Donner was entitled under the provisions of the Internal Revenue laws to claim deductions in the sum of $83,313.00 representing an ordinary loss of income, as a result of being owner of a sole proprietorship managed by Charles L. Winkleman, whereas, as . Winkleman . . . then and there well knew and believed William I. Donner was not entitled to said deductions all in violation of Title 26 United States Code, Section 7206(2). 1/ On April 18, 1984, Winkleman filed an amended Form U-4 with the Central Registration Depository, and thereby advised interested parties that he had pled guilty to the information filed in the District Court. A copy of the amended Form U-4 was, contemporaneously, filed with the Department. 2/ On June 6, 1984, the District Court entered a judgment of guilt on Winkleman's plea. Winkleman was sentenced to six months imprisonment and fined $3,000.00. Winkleman failed, however, to notify the Department of such conviction until April 10, 1987, and offered no explanation at hearing for such failure. Following Winkleman's plea of guilty in the District Court, the Department of Commerce and Economic Development, Division of Banking, Securities and Corporations (Department of Commerce) in Juneau, Alaska, issued a notice of intent to revoke Winkleman's registration. This notice, dated June 4, 1984, sought revocation based primarily on Winkleman's plea of guilty to the charges filed in the District Court. Winkleman failed to notify the Department of the pendency of the Alaska proceeding until April 10, 1987, and offered no explanation at hearing for such failure. On March 10, 1987, the Department of Commerce entered an order revoking Winkleman's registration in Alaska based on his conviction in the District Court. By amended Form U-4, filed April 10, 1987, Winkleman advised the Department of his conviction in the District Court and the revocation of his registration by the State of Alaska. 3/ The order of the Department of Commerce, revoking Winkleman's registration, is currently on appeal. Winkleman seeks reversal of such order predicated on his assertion that the Department of Commerce breached an agreement to allow him to withdraw his registration in lieu of revocation. On July 20, 1987, the court, which is reviewing the Department of Commerce proceedings, entered an order staying the order of revocation pending the disposition of Winkleman's appeal. On April 1, 1987, a hearing was held before the National Association of Securities Dealers, Inc. (NASD), to consider whether Winkleman, because of his conviction, should be disqualified as a registered representative with Global Investors Securities, Inc. On August 13, 1986, NASD entered a "Notice Pursuant to Rule 19h-1 of the Securities and Exchange Act of 1934" whereby it proposed that Winkleman not be disqualified. On January 8, 1987, the Securities and Exchange Commission (SEC) rendered its decision that it would not invoke Section 15A(g)(2) of the Securities and Exchange Act of 1934 to direct NASD to disqualify Winkleman.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the registration of Respondent, Charles Leon Winkleman, as an associated person under the Florida Securities and Investor Protection Act be REVOKED. DONE AND ENTERED this 6th day of October, 1987, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of October, 1987.
