The Issue Did Respondent, Fresenius Medical Care (Fresenius), discriminate against Petitioner, David E. McDonald, in employment on account of his disability? Did Fresenius discriminate against Mr. McDonald in employment on account of his age?
Findings Of Fact Mr. McDonald worked for Fresenius as a social worker in its Sebring, Florida, facility. Fresenius provided Mr. McDonald family and medical leave because of back and knee problems. After Mr. McDonald exhausted the available leave, Fresenius granted him non-FMLA medical leave. Because of his continuing health problems, Mr. McDonald obtained long-term disability benefits in 2013 under a plan provided by CIGNA and sponsored by Fresenius. Mr. McDonald was 79 years old. Mr. McDonald’s testimony established that he received one year of benefit payments under the plan. On August 29, 2013, Mr. McDonald wrote Fresenius a letter identified as regarding “L.T.D. approval.” The first three paragraphs stated: On Saturday 7/27/13, I received a copy of the letter dated 7/19/13 sent to you by Ryan Zech, of CIGNA, informing you that my “claim for Long Term Disability was approved, benefits starting on 8/07/13.” This means, barring the time it takes for me to reconcile my affairs with our H.R Dept. that my employment with F.M.C. has come to an end. I had hoped that my medical condition would have improved, such that I would have been able to perform effectively, the required percentage of my duties to qualify to return to F/T employment. This has not turned out to be the case. It is therefore with mixed sentiments that I accept the medical decision/s of CIGNA and my attending physicians including my “Eye specialists." This letter stated Mr. McDonald’s voluntary decision to end his employment with Fresenius. Mr. McDonald did not present evidence that the decision was coerced or even encouraged by any representative of Fresenius. Mr. McDonald voluntarily terminated his employment with Fresenius. Mr. McDonald does not maintain that Fresenius discriminated against him on account of age or disability. He testified repeatedly and clearly that he does not claim that Fresenius discriminated against him in any way on account of his age or physical condition. Mr. McDonald bases his complaint upon his assertion that CIGNA representative Mr. Zech did not properly advise him that the long-term disability policy provided only one year of payments. Mr. McDonald also did not present any evidence that could support an inference that Fresenius discriminated against him on account of his age or a disability. Mr. McDonald did not argue or present evidence that CIGNA employee Ryan Zech was an employee or agent of Fresenius.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations deny the Petition for Relief of David E. McDonald. DONE AND ENTERED this 13th day of May, 2015, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of May, 2015.
The Issue Is Respondent obligated to pay $1,100.00, pursuant to a September 8, 2000, Notice of Penalty Assessment Order because on August 30, 2000, he was an employer engaged in the "construction industry" as that term is defined by Section 440.02(7), Florida Statutes (2000), and had one or more employees.
Findings Of Fact Petitioner is the state agency charged with enforcing the statutory requirement that employers secure workers' compensation insurance for their employees. On August 30, 2000, Lisa Lyonais, Petitioner's investigator, conducted an on-site inspection of a single-family residence under construction in Ocala, Florida. She was accompanied by investigators of the Department of Insurance. Ms. Lyonais observed three persons working inside the house. One person was cleaning-up and sweeping. Ms. Lyonais determined this person to be an employee of Nadeau Construction Unlimited, Inc. (Nadeau). Due to what the other two persons told her, Ms. Lyonais pursued an investigation of Respondent. The building permit posted on the job board outside the house listed Nadeau as the general contractor and as the owner of the house. Ms. Lyonais telephoned Mr. Nadeau. Mr. Nadeau came to the job site and spoke with Ms. Lyonais. Due to what Mr. Nadeau told her, Ms. Lyonais contacted Respondent. Ms. Lyonais interviewed Respondent when he arrived at the job site. Respondent admitted then, and at hearing, that he was laying tile in the house; that he did not have a workers' compensation exemption; and that he did not carry workers' compensation insurance. Respondent's sister-in-law had requested that Mr. Nadeau hire Respondent to lay the tile in the house which Mr. Nadeau was constructing for her. A price for the tile- setting had been agreed-upon between Mr. Nadeau and Respondent prior to Respondent's commencing the work. By his answers to Requests for Admission, Respondent admitted this agreement constituted a "contract." He enlisted the help of his "church brothers," Brown and Sims, who were the two men originally interviewed on the job site by Ms. Lyonais. On August 30, 2000, Ms. Lyonais served on Respondent a Request for Business Records, so that she could determine whether Respondent was required to provide workers' compensation insurance. Respondent provided no records. Petitioner is the state agency authorized to issue workers' compensation exemptions and to which insurance carriers report that they have issued workers' compensation insurance policies to employers. Petitioner's electronic data base of this information allows its investigators to determine whether a particular employer has obtained an exemption or secured workers' compensation insurance. Ms. Lyonais verified on this electronic data base that Respondent had not secured workers' compensation insurance. Based on her observations on the job site, the search results of Petitioner's data base, and her understanding of the Florida Workers' Compensation Law, Ms. Lyonais issued a Stop Work Order on August 30, 2000, for Respondent's failure to secure workers' compensation insurance for himself and his two employees, Brown and Sims. On September 7, 2000, Respondent signed an Employer Payroll Affidavit in which he declared that he was a sole proprietor, that he had employees, and that he did not currently have workers' compensation insurance. Respondent also completed an Employee Payroll Worksheet in which he indicated that he employed the other two tile workers, Brown and Sims, whom he would pay $300.00 and $80.00 respectively, once he was paid by Mr. Nadeau. Mr. Nadeau paid Respondent $1,800.00, by business check dated September 8, 2000, for ceramic tile labor. Respondent endorsed the check and used some of the proceeds to pay Brown and Sims. The National Council on Compensation Insurance (NCCI) classifies types of employment and prescribes workers' compensation insurance premium rates for those classifications. Petitioner has adopted NCCI's SCOPES Manual by rule. See Rule 38F-5.111, Florida Administrative Code. Tile setting is classified by the SCOPES Manual under class code 5348 (stone, mosaic or terrazzo or ceramic tile work). The premium rate for each $100.00 of compensation paid under class code 5348 is 0.116. Ms. Lyonais calculated the evaded premium, or the premium that Respondent would have paid had he secured workers' compensation insurance, by multiplying the gross compensation to employees by the premium rate, resulting in a total of $208.80. She calculated the statutory penalty as twice that amount ($417.60) or $1,000.00, whichever is greater, and assessed $100.00 for each day the employer operated in violation of the Workers' Compensation Law. There is some evidence that Respondent, Brown, and Sims worked more than one day at the job site. Although an assessment might have been made for every day which Respondent, Brown, and Sims worked the job site, Petitioner is satisfied with assessing a $100.00 penalty only for the one day of August 30, 2000. At hearing, Respondent did not refute the foregoing formula or Ms. Lyonais' calculations, noted that he had paid the $1,100.00 penalty to Petitioner when it was assessed and that to do so had been a hardship on his family. He asserted that he had made an honest mistake because he felt he was working for his sister-in-law, whom he believed to be the homeowner. Respondent's wife also testified that the house belonged to her sister. However, Respondent presented no corroborative documentary evidence that his sister-in-law, in fact, owned the house at any time material. He also did not present any documents to refute the building permit. (See Finding of Fact No. 4). Respondent did not suggest that he had filed proof with the Agency of his financial ability to pay compensation, which filing, under Chapter 440, Florida Statutes, is an alternative to securing coverage through an insurance company. Respondent did not suggest that he, Brown, or Sims had filed an election not to be covered by Chapter 440, Florida Statutes.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Labor and Employment Security, Division of Workers' Compensation enter a Final Order declaring Respondent to have been a statutory employer on August 30, 2000; ratifying the $1,100.00 penalty assessment; and denying Respondent any refund. DONE AND ENTERED this 30th day of March, 2001, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 2001.
Findings Of Fact 9. The factual allegations contained in the Stop-Work Order and Order of Penalty Assessment issued on April 21, 2009, and the Amended Order of Penalty Assessment issued on July 29, 2009, attached as “Exhibit A” and “Exhibit B”, respectively, and fully incorporated herein by reference, are hereby adopted as the Department’s Findings of Fact in this case.
Conclusions THIS PROCEEDING came on for final agency action and Alex Sink, Chief Financial Officer of the State of Florida, or her designee, having considered the record in this case, including the request for administrative hearing received from A-1 SUNRISE CONSTRUCTION COMPANY, the Stop-Work Order and Order of Penalty Assessment, and the Amended Order of Penalty Assessment, and being otherwise fully advised in the premises, hereby finds that: 1. On April 21, 2009, the Department of Financial Services, Division of Workers’ Compensation (hereinafter “Department”) issued a Stop-Work Order and Order of Penalty Assessment and a Request for Production of Business Records for Penalty Assessment Calculation in Division of Workers’ Compensation Case No. 09-058-D5 to A-1 SUNRISE CONSTRUCTION COMPANY. The Stop-Work Order and Order of. Penalty Assessment included a Notice of Rights wherein A-1 SUNRISE CONSTRUCTION COMPANY was advised that any request for an administrative proceeding to chalienge or contest the Stop-Work Order and Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Stop-Work Order and Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 2. On April 22, 2009, the Stop-Work Order and Order of Penalty Assessment and the Request for Production of Business Records for Penalty Assessment Calculation were served by personal service on A-1 SUNRISE CONSTRUCTION COMPANY. A copy of the Stop- Work Order and Order of Penalty Assessment is attached hereto as “Exhibit A” and incorporated herein by reference. . 3. On July 29, 2009, the Department issued an Amended Order of Penalty Assessment to A-1 SUNRISE CONSTRUCTION COMPANY. The Amended Order of Penalty Assessment assessed a total penalty of $103,215.64 against A-1 SUNRISE CONSTRUCTION COMPANY. The Amended Order of Penalty Assessment included a Notice of Rights wherein A-1 SUNRISE CONSTRUCTION COMPANY was advised that any request for an administrative proceeding to challenge or contest the Amended Order of Penalty Assessment must be filed within twenty-one (21) days of receipt of the Amended Order of Penalty Assessment in accordance with Sections 120.569 and 120.57, Florida Statutes, and must conform to Rule 28-106.2015, Florida Administrative Code. 4. On October 2, 2009, the Amended Order of Penalty Assessment was served by Process Server on A-1 SUNRISE CONSTRUCTION COMPANY. A copy of the Amended Order of Penalty Assessment is attached hereto as “Exhibit B” and incorporated herein by reference. 5. On October 23, 2009, A-1 SUNRISE CONSTRUCTION COMPANY filed a petition for administrative review with the Department. The petition for administrative review was forwarded to the Division of Administrative Hearings on December 11, 2009, and the matter was assigned DOAH Case No. 09-6726. A copy of the petition is attached hereto as “Exhibit C” and incorporated herein by reference. 6. On May 21, 2010, Counsel for A-1 SUNRISE CONSTRUCTION COMPANY filed a Motion to Withdraw with the Division of Administrative Hearings. 7. On May 24, 2010, the Administrative Law Judge issued an Order Granting Leave To Withdraw and Requiring Respondent to File Written Statement, which granted counsel for A-1 SUNRISE CONSTRUCTION COMPANY leave to withdraw as counsel and required A-1 SUNRISE CONSTRUCTION COMPANY to inform the court by June 4, 2010, if it wished to proceed with the section 120.57(1), Florida Statutes, hearing. 8. A-1 SUNRISE CONSTRUCTION COMPANY failed to file a written statement with the Department of Administrative Hearing on or before June 4, 2010. On June 9, 2010, the Administrative Law Judge issued an Order Closing File and relinquishing jurisdiction to the Department for final disposition. A copy of the Order Closing File is attached hereto as “Exhibit D” and incorporated herein by reference.
Findings Of Fact Petitioner is the governmental agency responsible for issuing licenses to practice real estate. Petitioner is also responsible for regulating the practice of real estate on behalf of the state. Respondent is licensed as a real estate broker under license number 0602015. The last license was issued to Respondent as a broker t/a Oliver Realty and Management, 2431 Lot a Fun Avenue, Winter Park, Florida. On August 23, 1994, Respondent was licensed as a real estate sales person. He was employed by Mr. Kevin Jon Pribell, a licensed real estate broker. On August 29, 1994, Mr. Pribell terminated Respondent's employment. On August 30, 1994, Mr. Pribell delivered a copy of a termination form to Respondent at Respondent's residence. Mr. Pribell agreed to compensate Respondent on all transactions that were pending on or before the date of termination. The First Transaction On August 23, 1994, Respondent made an offer to purchase residential property for $80,500. Mr. Bruce and Mrs. Benitta Tegg owned the property (the "sellers"). The details of the offer were described in a standard contract for sale and purchase approved by the Florida Association of Realtors and the Florida Bar Association and in an attached addendum. The addendum required the sellers to hold a purchase money first mortgage of $80,500, amortized over 12 years at an annual interest rate of 8.5 percent. The addendum stated that the sellers were to receive $29,000 at closing as payment of the first 48 months payments. The sellers would then receive 30 equal monthly installments of $893.60, which would total $26,808. The unpaid balance was due in a balloon payment of $46,980.47 at the end of 78 months. The total amount to be paid the sellers, including interest, was $102,788.47. Respondent included a $1,000 earnest money deposit with the contract for sale and purchase. The sellers accepted Respondent's offer. Closing was set for September 6, 1994. 2/ On September 1, 1994, Respondent submitted a document to the sellers for their acceptance and signature. The document was entitled, "Partial Purchase/Cash Flow Agreement" (the cash flow agreement"). Respondent never mentioned the cash flow agreement to the sellers as part of the original offer. The cash flow agreement required the sellers to assign the mortgage of $80,500 to Orange Hearing Aid Center Employee Pension Plan (the "pension plan"). Respondent would have no money invested in the property initially. The initial payment of $29,000 would be a loan from the pension plan to Respondent. Respondent would repay the pension plan over time. The loan from the pension plan to Respondent was to be secured by the sellers' property. In the event Respondent defaulted on the loan from the pension plan, the sellers' property would be sold. The sale proceeds would first pay off the loan from the pension plan to Respondent. Any remaining sale proceeds would go the sellers. The sellers refused to accept Respondent's amendment of the original offer. Respondent defaulted on his original offer. The transaction did not close. The sellers' real estate agent divided Respondent's $1,000 earnest money deposit with the sellers because Respondent defaulted on the original offer accepted by the sellers. Respondent did not attempt to engage in "equity skimming." 3/ The sellers were not required to transfer title to Respondent prior to receiving $29,000. Respondent would not receive any other equity in the property. 4/ The cash flow agreement had the effect of converting Respondent's obligation on the purchase money mortgage from recourse to non-recourse debt. 5/ It also had the effect of subordinating the purchase money mortgage to the $29,000 loan to Respondent. 6/ Respondent is not guilty of violating Section 475.25(1)(b). Respondent is not guilty of dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in a business transaction. Respondent disclosed the terms of the cash flow agreement to the sellers approximately six days before the scheduled closing. The sellers had adequate time to review the proposal. They chose to reject it. The sellers received approximately $500 after Respondent's default. That amount was reasonable compensation for taking their property off of the market for two weeks. The Second Transaction On September 1, 1994, Respondent offered to purchase a residential property owned by Ms. Gloria Alexander. Respondent offered to purchase the property for $114,500. Ms. Alexander accepted the offer. On September 1, 1994, Respondent was not licensed as a broker. Respondent's employing broker had terminated Respondent's employment two days before the contract for the second transaction was executed. The second transaction was not pending on or before August 29, 1994, when Respondent was still employed by Mr. Pribell, and Mr. Pribell was not legally entitled to a commission on the second transaction. In an abundance of caution, Respondent indicated on the contract that the selling broker was Mr. Pribell. Respondent acted in his own behalf in the second transaction. He was the buyer, i.e., a principal and not an agent for a principal. Respondent indicated on the written offer that he was acting as the buyer's agent. Respondent made a good faith attempt to disclose on the contract that he had been terminated from Mr. Pribell's employment and was not acting as the agent of the selling broker. Respondent did not deceive anyone and did not intend to do so. Respondent did not violate Sections 475.42(1)(a) and 475.25(1)(e) by operating as a broker without a valid broker's license.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent not guilty of violating Sections 475.25(1)(b), 475.25(1)(e), and Sections 475.42(1)(a). RECOMMENDED this 14th day of August, 1996, in Tallahassee, Florida. DANIEL MANRY, 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 August, 1996.
The Issue The issue is whether Respondent was an employee engaged in the construction industry and required to obtain workers' compensation insurance while working on the roof of the Myakka Animal Clinic and, if so, what penalty should be imposed.
Findings Of Fact On August 24, 1998, Petitioner's investigator observed Respondent working on the roof of the Myakka Animal Clinic in Venice, Florida. At the time, Respondent was regularly employed by Paradise Roofing, Inc., where he had an exemption from workers' compensation insurance coverage. He has never previously been guilty of a violation of the workers' compensation laws. The contract price was $800. However, the evidence is conflicting as to the identity of the party that entered into the contract with the Myakka Animal Clinic. The veterinarian testified that her understanding of the agreement was that Respondent was to do the work, but, if any problems arose, he was not alone, and she could go to Paradise Roofing, Inc., to ensure that the labor and materials were satisfactory. Although there are other indications in the record that Respondent may have been working on his own on this job, there is sufficient conflict in the evidence that Petitioner has failed to prove that Respondent was doing the job as a self- employed person, rather than an exempt employee of Paradise Roofing, Inc. Respondent's understanding of the contractual relationship carries less weight than the veterinarian's understanding of this relationship.
Recommendation It is RECOMMENDED that the Division of Workers' Compensation enter a final order dismissing the Notice and Penalty Assessment Order and any related stop work order. DONE AND ENTERED this 2nd day of April, 1999, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 1999. COPIES FURNISHED: Edward A. Dion, General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Mary Hooks, Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Louise T. Sadler, Senior Attorney Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Eric Kristiansen 3750 Aba Lane North Port, Florida 34287
The Issue The issue for determination is whether Petitioner has enough creditable service in the Florida Retirement System (FRS), within the meaning of Subsection 121.021(17)(a), Florida Statutes (2009),1 to be "vested" and, therefore, eligible for a retirement benefit.
Findings Of Fact Petitioner is not currently an employee of any FRS employer. Petitioner was an employee of several different FRS employers during the 1970's and 1980's. Petitioner proved that he had creditable earnings from three FRS employers. The creditable earnings were from Hillsborough County from October 1977 through April 1978, Pasco County from August 1987 through December 1987, and Hernando County from March 1988 through August 1989. Petitioner has 3.09 years of creditable service in the FRS. The creditable service is not sufficient to vest Petitioner and does not entitle Petitioner to retirement benefits. Petitioner was employed with the City of Largo, Florida, for some time. However, that municipality was not an FRS participating employer during the period of employment. Petitioner worked for the U.S. Postal Service for some time. That agency is not an FRS participating employer. Petitioner was a student on work study at both the University of Florida and Florida State University. Paid student positions at state universities were not positions which were included in the FRS during that time. Petitioner also seeks to purchase his military time of approximately 22 months. Members of the FRS are allowed to purchase certain military service after they vest in the FRS. A preponderance of the evidence does not support a finding that Petitioner has sufficient years of service to vest in the FRS and then purchase military service. Petitioner was employed in some state positions prior to 1975. Until 1975, the FRS was a "contributory" system. Employers withheld contributions to the retirement system from the wages of participating members and forwarded the withheld amounts to the Division. It is undisputed from Petitioner's testimony that no retirement contributions were ever withheld from his wages during the period that FRS was a contributory system.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division enter a final order denying Petitioner's request for retirement benefits. DONE AND ENTERED this 5th day of April, 2010, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 5th day of April, 2010.
Findings Of Fact In 1950 Donald Freund acquired property in Chicago on which ice constructed an apartment building. The property was held in trust with his wife as beneficiary of the trust. In 1560 the building was remodeled and converted into a nursing home at a cost of approximately $600,000. By lease dated May 8, 1963 (Exhibits 6 and 7) this property was leased to Sunset Nursing Home, Inc., a Delaware corporation, for a term of 28 years at a rental of $75,000 per year with provision for increases over the $75,000 of up to $9,000 per year if the lessee made net profits before taxes in excess of $45,000. In January 1973 the Chicago nursing home had a depreciated or book value of approximately $230,000 and a first mortgage lien against it of some $466,000. On January 18, 1963 after several months of negotiations Freund entered into an exchange agreement (Exhibit 1) with National Health Services, Inc., a Delaware corporation, in which the Chicago nursing home with its $466,000-odd mortgage was exchanged for three nursing homes in the Miami area encumbered by mortgages totaling approximately $3,425,000 (Exhibit 1). All properties were operated as nursing homes at the time of this exchange. This was considered by the parties to be a tax free exchange of like properties. Exhibit 1 recited that the parties had agreed that for exchange purposes the Chicago property had a value of $1,445,000 and the Miami properties a value of $4,400,000. The three nursing homes acquired by Freund in this exchange are known as the North Miami Convalescent Home, Ramsey Nursing Home and Hialeah Convalescent Home. At the hearing it was testified that six mortgages including a wrap around on the three homes acquired existed upon acquisition in the amount of $2,971,553. Since the mortgage on the Chicago property exceeded the basis at the time of the exchange Freund was required to pay capital gains taxes to IRS, but that fact is not relevant to the issues here involved. After acquiring the Miami nursing homes they were apparently transferred by Freund to Sunset Nursing Homes, Inc. (Sunset), a Florida corporation, and the Petitioner herein. No evidence of this transfer was presented at the hearing; however, the testimony was uncontradicted that Donald Freund, his son, Bruce Freund, and his wife, each own one third of the stock outstanding in Sunset Nursing Homes, Inc. and that the principal assets of Sunset Nursing Home, Inc. are the three nursing homes in North Miami, Hialeah and Dade County. Donald Freund is president of Sunset and for the fiscal year ending April 30, 1976, he received compensation of $93,606 and his son received $80,582. The combined annual salaries of the president and vice president of a corporation operating 100 nursing homes in a chain headquartered in Tacoma, Washington is $173,000. Professional Medical Group headquartered in Virginia Beach, Virginia, pays its chief executive officer $100,000 per year and its next four top executives together received $120,000. In addition to owning and managing some 30 nursing homes in Southeast United States, they provide computer services to many other nursing homes in the area. The maximum compensation allowed by HEW for a nursing home owner is $24,000 per year regardless if he owns more than one nursing home. The Department of Health and Rehabilitative Services has here stipulated that Sunset would be allowed $48,000 compensation for its executives exclusive of the current salaries paid to the individual nursing home supervisors. Donald Freund also owns six nursing homes in Georgia and his testimony (Tr. p. 43) was that these nursing homes are not owned by Sunset. Sunset Nursing Homes, Inc. is the sole shareholder of Sunshine, a management company that provides management services to both the Florida and Georgia nursing homes and pays the salaries of the Freunds. The total salaries paid to the Freunds was charged to Sunset as an operating expense. The appropriateness of this charge is contested by Respondent. Donald Freund testified that he spends most of his time supervising the operation of the three nursing homes owned by Sunset. His son Bruce spends approximately 60 percent of his time supervising the 6 nursing homes in Georgia and 40 percent on the Florida homes. No evidence was presented regarding the charges made by Sunshine for the management services it provides the Georgia homes. Each of the nursing homes owned by Sunset are separately licensed and each is designated as a provider. Infraction of rules by one of these nursing homes that could lead to revocation of that nursing home's license would not affect the licenses issued to the other two homes owned by Sunset. Petitioner's contention that the three homes owned by Sunset should be allowed to submit a consolidated report was supported only by the testimony that it would be more equitable to allow such reporting because the $98,000 overpayment allegedly made to Hialeah Convalescent Home resulted from it being the only one of the three whose allowable costs were below the caps established by HEW and Florida (HRS). The operating costs for the other two homes exceeded the maximum amount payable to them by some $173,000. These costs were computed using the expenses of salaries and depreciations here contested. The original report submitted by Sunset carried the three nursing homes at historical costs or its predecessor in title's book value. It is Sunset's attempt to change the depreciable value of these properties to the "fair market" value that is one of the issues here involved. All other multiple nursing homes owned by individuals or corporations submit separate reports for each nursing home and are not permitted to file consolidated reports.
Findings Of Fact During the audit period in question, i.e., December 1, 1975 through March 31, 1979, Petitioner Ormond Hotel Corporation operated the Ormond Hotel, Ormond Beach, Florida. It was licensed during the audit period by the Division of Hotels and Restaurants, Department of Business Regulation, and classified as a retirement establishment. (Interrogatories) The Ormond Hotel is an old wooden structure containing 350 rooms with 258 rooms available for rental. The remaining rooms are not in proper condition for rental. Most of the hotel guests are over 65 years of age and reside there either permanently or on a seasonal basis, usually from December through March of each year. A few married couples have accommodations at the hotel, but most of the residents are single individuals occupying one room. Prior to 1978, Petitioner advertised the hotel in a national magazine called "Retirement Living" and conducted advertising on billboards, brochures, and in the classified section of the local telephone book under the hearing "Retirement Homes." The latter advertisement states that the facility is "a residential hotel," but also includes the words "DAY-WK-MO-YR." Similarly, the hotel's brochure recites that accommodations are available by day, month, or year. All units are available for rental to permanent tenants, but short-term occupancy is accepted if there are available rooms. The hotel does not have a swimming pool, but does have restaurant facilities and recreation areas. The hotel does not primarily cater to transient guests. (Testimony of Salveson, interrogatories) Respondent's auditor conducted an audit of Petitioner's business operations for the period December 1, 1975, through March 31, 1979. In arriving at whether or not the Ormond Hotel was subject to tax imposed by Section 212.03, Florida Statutes, on its rentals, he examined the Petitioner's books to ascertain the number of total available rental units and the status of tenants at the hotel during the months of April, May, and June of each year. If he found that 50 percent or more of the total units had been rented to persons residing there continuously for the specific three-month period, those tenants were considered to be permanent rather than transient tenants and the hotel was deemed exempt from tax pursuant to Rule 12A-1.61(1), F.A.C. In arriving at his determination of exempt status, the auditor did not deduct unoccupied rooms from the total number of units in arriving at his "fifty percent" determination. Although the auditor analyzed the advertising brochures of Petitioner, and was aware that the hotel was listed in the telephone directory under retirement homes, and concluded that such advertising was directed primarily to the acquisition of permanent guests, he predicted his audit findings solely on the "fifty percent" test concerning occupancy of total units. In this manner, he determined that Petitioner was exempt from taxation in 1975 based on the fact that for the April through June period for that year, 135 of the 264 total units had been occupied continuously by "permanent" tenants. In a similar manner he found that the hotel did not qualify for exemption during the succeeding years of the audit period. In this respect, he found that for 1976, there were only 119 such guests during the three-month period out of the 263 total units, which was less than 50 percent. In 1977, there were 102 such tenants out of 261 total units, which was less than 50 percent. In 1978, there were 98 such tenants and 259 total units, which was less than 50 percent. The auditor's worksheet reflects that there were 124 vacant rooms during the three-month period in 1975, 140 in 1976, 153 in 1977, and 153 in 1978. He concedes that if he had applied the "fifty percent" rule by comparing the number of three-month or "permanent" tenants with the number of occupied rooms for the three-month period each year, the number of rooms occupied by "permanent" guests would have been over fifty percent for each year of the audit period. (Testimony of Boerner, Exhibits 1-2, 4) Based on the audit, Respondent issued two separate "Second Revised Notices of Proposed Assessment" on January 15, 1980. The first assessment covered the period December 1, 1975 through November 30, 1978. It asserted tax due on room rentals in the amount of $21, 362.91 plus a delinquent penalty, and interest through January 15, 1980, for a total sum of $28,062.45. The assessment also asserted tax, penalty and interest for purchases unrelated to room rentals in the amount of $984.92, for a total assessment of $29,047.37. The assessment reflected that a partial payment had been made on October 2, 1979, in the amount of $2,590.62, leaving a balance due of $26,456.75. The other assessment showed tax on room rentals in the amount of $6,001.75, plus delinquent penalty of $300.10, and interest through January 15, 1980 in the amount of $611.76 for a total of $6,913.61. It also asserted tax, penalty, and interest on purchases in the amount of $23.39 for a total assessment of $6,937.00. This assessment also showed partial payment on October 2, 1979, in the amount of $132.08, leaving a balance due of $6,804.92. In a letter transmitting the assessments, dated January 16, 1980, Respondent advised Petitioner that the hotel did not qualify as an exempt facility under Rule 12A- 1.61(1)(a), F.A.C., during the audit period, because less than fifty percent of the facility's units were occupied by guests who had resided there three or more months as of July 1 each year. The letter further stated that "an analysis" of the rental of units submitted by Petitioner as to its exempt status did not conform to the requirements of the rule because the facility advertised to guests on a daily, weekly and monthly basis in addition to long-term leasing, the analysis used an annual rather than a three-month period prior to July as a basis, and the number of tenants at the facility rather than total units. (Exhibit 2) Petitioner's accountant prepared an analysis of the room status at the Ormond Hotel during the period July 1, 1977 to June 30, 1978. It reflects that 165 rooms, or 64.5 percent of the total of 256 units rented during the year, were occupied by tenants for a continuous period of over three months. On March 31 of that year, 157 rooms, or 61 percent of the total of 258 room available for occupancy, were occupied by guests for more than three months. Sixty-nine of the rooms were occupied by transient tenants or those with less than three- months occupancy (17 percent) and 32 rooms were unoccupied (12 percent). As of June 30, 1978, the hotel had 110 guests who had resided there for more than three months, and 18 guests with residency of less than three months. (Testimony of Salveson, Exhibit 3)
Recommendation That the proposed tax assessments against Petitioner Ormond Hotel Corporation arising out of the rental of living accommodations at the Ormond Hotel during the period December 1, 1975 through March 1, 1979, be vacated, and that the remainder of the proposed assessments be enforced. DONE and ORDERED this 10th day of June, 1980, in Tallahassee, Florida. THOMAS C. OLDHAM, 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 10th day of June, 1980. COPIES FURNISHED: J. Lester Kaney, Esquire Post Office Box 191 Daytona Beach, Florida 32015 Linda C. Procta, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301 John D. Moriarty, Esquire Department of Revenue Room 104 Carlton Building Tallahassee, Florida 32301
Findings Of Fact This proceeding results from the filing of an application for a commercial bank charter by Respondent Sunny Isles Bank (proposed) (hereinafter "Sunny Isles Bank") with the Respondent Office of Comptroller (hereinafter "Comptroller") on August 9, 1984. The organizers of the proposed Sunny Isles Bank were originally listed as Sami Behar, Martin Dayton, Arthur Horowitz, Sylvia Lazare, Julius Littman, Christine Mallock, Morris Massry, Robert S. Oller, and Alvin Stern. Thereafter, Sami Behar's name was withdrawn. At no time have any names of proposed officers been advanced. The organizers who are also the proposed directors propose to locate a new bank at 17140 Collins Avenue, Miami Beach, Florida. That proposed location falls within a community commonly known as Sunny Isles. Sunny Isles falls within the primary service area (hereinafter "PSA") designated by the organizers and has an eastern border of the Atlantic Ocean, a western border of the Intracoastal Waterway, a southern reach to Baker's Haulover Cut and a northern boundary at the southern edge of Golden Beach. Additionally, the organizers define their proposed PSA to include, to the west of Sunny Isles, an area called Eastern Shores, which is part of the City of North Miami Beach. The organizers' delineation also includes in their proposed PSA the town of Golden Beach lying north of Sunny Isles. The protestant Petitioner Jefferson National Bank at Sunny Isles (hereinafter "Jefferson") is a commercial bank located within the designated proposed PSA. In the charter application they certified as true and correct, the proposed directors made intentional mis- representations as to stock subscriptions for the proposed Sunny Isles Bank. Completely omitted are approximately a dozen stock subscribers. The application misrepresented the ownership of the stock at the time it was filed with the Comptroller, and the proposed directors have continued to fail to disclose at any subsequent time the facts which had been omitted. The application further misrepresents the shares subscribed to by Morris Massry. The application states that Massry had subscribed to 10,000 shares of the proposed Sunny Isles Bank. In fact, the stock subscription agreements produced by the proposed Sunny Isles Bank show that Massry subscribed to only 5,000 shares of the proposed bank stock. The charter application also misrepresents the number of shares owned by Julius Littman by indicating that Littman owned 10,000 shares as of August 7, 1984, the date the application was filed. However, the subscription agreements reveal that Littman owned only 5,000 shares on that date although he has subsequently purchased 6,000 additional shares. The application falsely represents that, at the time of filing, no relative of a proposed director had subscribed to shares of stock in the proposed Sunny Isles Bank. In fact, Jack Massry, the brother of Morris Massry, had, as of August 7, 1984, subscribed to 5,000 shares of stock in the bank. The applicants have further failed to notify the Comptroller in writing at any subsequent time of this omission. The application also falsely represents that no elected or appointed public official other than Julius Littman was a stock holder at the time of filing the application. In fact, Joseph Moffat, an elected city councilman in North Miami Beach, had subscribed to 2,500 shares before August 7, 1984. Littman is and has been a member of the North Miami Beach city council along with Moffat and, accordingly, knew at the time the application was filed of Moffat's public official status. Again, the applicants have failed to subsequently disclose this misrepresentation to the Comptroller. See Confidential Exhibit "A". See Confidential Exhibit "A". In addition to the above-described misrepresentations contained in the application, various false statements and omissions are found in the organizers' biographical reports. Alvin Stern knowingly withheld the information that numerous complaints had been filed against the Royal Glades Convalescent Home of which Stern was the principal owner for many years. Stern also failed to disclose, as was required in Section ll(C) of his biographical report, the fact that a number of investigations by the Department of Health and Rehabilitative Services had been undertaken with respect to Royal Glades. Stern testified at the final hearing that such investigations were known to him at the time they were undertaken, yet, he offered no explanation for failing to disclose those investigations. See Confidential Exhibit "A". See Confidential Exhibit "A". See Confidential Exhibit "A". There is nothing ambiguous about the disclosure forms the organizers of Sunny Isles Bank failed to complete honestly. Further, there is nothing unclear about the certification each executed. The numerous misrepresentations made by those organizers in the application and supporting biographical reports reveal a lack of honesty for a position of public trust which requires ongoing and truthful disclosure to regulatory authorities. In addition to the misrepresentations made by them, the proposed directors evidence a consistent pattern of indifference to their prospective positions and responsibilities as directors of the Sunny Isles Bank. Christine Mallock not only failed to read the charter application but cannot read English. Yet, she certified the truth and correctness of the application. Although she believes it is "flattering" to be a director of a bank, she does not know what a director or a bank does and has no information regarding the plans for the proposed Sunny Isles Bank. Alvin Stern, another proposed director, is also unfamiliar with banking and the duties of a bank director. He has no knowledge of any plans for the proposed bank including the marketing, deposit mix, or services to be offered. He is further unaware if any of the other proposed directors have any banking experience. Martin Dayton, another proposed director of the bank, has no banking experience except as a bank customer and testified to having no idea what his duties as a director would entail other than attending meetings. Dayton has no knowledge of the proposed bank's services or plans for operation. Dayton became involved with and invested in the proposed bank without doing any investigation as to the soundness of the investment opportunity or the actual functioning of the bank. Robert Oller, another organizer of the proposed bank, has no understanding about the proposed bank or his duties as a director. He does not know what services the bank will offer or what customer base it expects to develop. Moreover, he has not read the charter application, despite his signature on the application certifying that it is true and correct to the best of his knowledge and belief. Arthur Horowitz, another proposed director of the proposed bank, is primarily interested in the bank because he "would like to have been involved in a bank." Horowitz has no idea what his duties as a director would be and assumes that the job would take only a few hours a week. He did not fully read the application before it was submitted, nor did he ever discuss it with Littman. See Confidential Exhibit "A". Massry was selected by Littman to be a director of the proposed bank in the hope that he would bring funds into the bank. Massry resides primarily in Troy, New York, but recently has begun spending approximately one week per month in Broward County where he has acquired certain rental units. Even though Massry is touted as the "money man" for the proposed bank, he has made no agreement with his partners to move any of the funds relating to their Broward County investments to the proposed Sunny Isles Bank in Dade County, let alone into a non-interest- bearing account at that proposed bank. He further testified that he is satisfied with the services he receiyes from the bank in Broward County with which he currently does business. Massry has no current ties to the Sunny Isles area and, if approved as a director, would be expected to have limited participation in the affairs of the Sunny Isles Bank. Julius Littman is the chief organizer of the proposed Sunny Isles Bank. He admitted at the final hearing to having "hand-picked" only his friends and relatives to be proposed directors of the Bank in order that he could control them. It was interesting to note Littman's testimony since he primarily testified in terms of "my bank", "I will", and "I decided." Although Littman's wife, Sherry Littman, has not yet been proposed as a director, Littman testified that he intended to make her a director along with his mother-in-law, Sylvia Lazare. Littman's intention of controlling his friends and relatives at "his bank" explains, most likely, the reason why no proposed director other than Littman knows anything about the other directors; the bank's marketing plans, its proposed services and interest rates, or its proposed customer base. Littman's plan has apparently been successful thus far in that each of the proposed directors signed the application filed with the Comptroller without asking questions and without reading the application to know the contents. Each person appears to have simply signed the paper handed to them with "no questions asked" even though that paper contained a statement that each director was certifying that the application was true and correct. Littman undertook his efforts to create "his bank" while he was a member of the Advisory Board of Jefferson National Bank and while his wife Sherry Littman and his mother- in-law Sylvia Lazare were employees of Jefferson National Bank. Although Littman testified that his wife has had no involvement with his bank, she is the person who wrote to the Comptroller on stationery of Jefferson National Bank regarding the forms necessary to file the application for the proposed Sunny Isles Bank. Littman sees no conflict of interest in he and his wife and his mother-in-law organizing a bank to compete with Jefferson National while he served on Jefferson's Advisory Board and while his wife and his mother-in-law were employed by Jefferson since they began their efforts during a time when it appeared as though Jefferson might be sold. Not only did that fail to take place, but no contract for sale was ever executed. When the talk about Jefferson's alleged sale ceased, however, Littman's efforts did not. While still a member of Jefferson's Advisory Board, Littman approached two of Jefferson's officers (other than his wife and his mother-in-law) in an attempt to interest them in coming to work at the proposed Sunny Isles Bank. During the time that Littman served as an Advisory Board member at Jefferson, he, as subscription agent, was selling stock subscriptions in the proposed Sunny Isles Bank. Although Littman testified that he did not ask any of the proposed directors of the Sunny Isles Bank to keep the bank's organization a secret, the testimony of several of the directors establishes that Littman specifically requested that they not reveal the creation or the plans of the proposed bank. No proposed director of the proposed bank has any direct banking experience as required by law for approval of a bank charter application. The evidence is uncontroverted that only two of the proposed directors are alleged to have the direct banking experience required for any proposed bank: Julius Littman and his mother-in-law Sylvia Lazare. Littman's only banking experience is his membership on the Advisory Board at Jefferson. However, his role on that Advisory Board was honorary, and he served in only a community relations function. His involvement as an Advisory Board member gave him no direct experience in the operation of the bank since Jefferson did not involve its Advisory Board members in any decisions regarding the bank's operation but rather involved them only as reporters of the community's perception of Jefferson National Bank. Sylvia Lazare also lacks the banking experience required by the Comptroller. Although the application represents her to have been an officer at Jefferson National Bank familiar with all phases of banking, the evidence introduced at the final hearing in this cause clearly shows that her employment with Jefferson was as a Community Relations Officer, that is, someone who solicits customers for the bank and who helps existing customers with personal services such as filling out their deposit slips for them. Lazare testified directly opposite to the representation of her experience made in the application filed with the Comptroller. She testified that she is not familiar with the mechanics of loan transactions, nor does she understand such basic banking concepts as acceleration of indebtedness or waiver of acceleration. She has never worked in operations, has never been employed as a teller, has never made loans, and has not worked in the bookkeeping department of a bank. Most significantly, she herself admitted that she is not qualified to do anything as a bank officer or director other than community relations work. Based upon Lazare's own testimony; her inclusion in the application is a sham. She was unaware that she was to be a director of the proposed Sunny Isles Bank, was not even asked by Littman to be one, and is not interested in being a director. Although Lazare signed the charter application for the proposed bank certifying that the application was true and correct to the best of her knowledge, she never read the application and never knew that Littman was proposing her as a director. Although Sunny Isles Bank argues that any deficiency in its proposed board of directors can be cured by simply substituting other proposed directors and does not justify the denial of the application for a charter, that argument overlooks the repeated misrepresentations and complete ignorance and indifference to banking and to a director's responsibility to the public and regulatory authorities so that the substitution suggested would require a substitution of the entire proposed board of directors. Even if an entirely new proposed board of directors were required, such a substitution would not overcome Littman's stated intent of selecting only directors who would be controlled by him, a control which involves conflict of interest and intentional misrepresentations both to a regulatory agency and under oath in the formal proceeding in this cause. A bank's PSA is the small geographical area from which a proposed bank expects to draw approximately seventy-five percent of its deposits. The proposed Sunny Isles Bank improperly delineates its PSA by adding Eastern Shores and Golden Beach to the Sunny Isles community. The correct PSA for the proposed Sunny Isles Bank consists of the traditional Sunny Isles area and is bounded on the east by the Atlantic Ocean, on the south by Baker's Haulover Cut, on the west by the Intracoastal Waterway, and on the north by the southern limits of the town of Golden Beach. By improperly including Eastern Shores and Golden Beach in its PSA, the organizers somewhat improved the demographic and age characteristics of its PSA population. The inclusion of these two residential areas reduces the average age of the population and increases the affluence and size of the population. There is no data base for including the residents of Eastern Shores and Golden Beach in the proposed PSA for the Sunny Isles Bank. Rather, the actual deposit experience of Jefferson, located in Sunny Isles, reveals that it is not realistic to project significant deposit levels from Eastern Shores or Golden Beach. Residents of Eastern Shores are more likely to head toward the mainland and the 163rd Street Shopping Center commercial areas for their shopping and banking needs, while residents of the Golden Beach area are more likely to travel to Aventura Mall across the William Lehman Causeway or north to the Hallandale commercial centers for their shopping and banking needs. There is no basis for the assumption that residents of Eastern Shores and Golden Beach who have not historically shopped and banked in the Sunny Isles area will suddenly do so if a charter is granted to the proposed Sunny Isles Bank. Within the PSA proposed by the Sunny Isles Bank, there are ten offices of financial institutions offering commercial and personal banking services. These financial institutions include savings and loan associations as well as commercial banks. The evidence shows without dispute that services provided in this area by savings and loan associations and commercial banks are essentially similar. Although Jefferson is the only home office commercial bank in the PSA, there is no meaningful distinction between a home office institution and a branch office institution in the Sunny Isles area. Other facts confirm a less than dynamic commercial base for the proposed bank. The population of the service area projected by the proposed Sunny Isles Bank is 24,800. Of this number, approximately fifty-two percent are age 65 or over. The PSA as properly defined has a population of approximately 16,200, of which sixty percent are age 65 or over. Median family income using either the proposed PSA or the properly defined PSA falls below both the state and county average. The Sunny Isles area, in which the proposed bank wishes to locate, attracts tourists and transient residents, and the primary industry in Sunny Isles is tourism. Tourism, however, has declined significantly in the Sunny Isles area. Many hotels and motels have been converted to condominiums which now house transient residents. In fact, the declining economic condition of Sunny Isles is a matter of such grave concern as to prompt a study by a Dade County Task Force which concluded that, among other things, a budget of approximately $15.8 million would be necessary to begin to revitalize the troubled Sunny Isles tourist economy. Elderly residents, such as those in the Sunny Isles area, primarily make use of a bank's deposit services, based upon a tendency of an elderly population to save and not to spend. Therefore, there is less need for the traditional banking services of lending, and financial institutions are primarily recipients in such an area of time deposits rather than demand deposits. No evidence was offered by the proposed Sunny Isles Bank to indicate that the banking needs of the proposed PSA are not being met by the financial institutions presently servicing the area. To the contrary, testimony establishes that the Sunny Isles area is, in fact, highly competitive with respect to the banking business and in particular with respect to loans and lending transactions. The proposed Sunny Isles Bank has not demonstrated any ability to service the Sunny Isles area any differently or any better than the various savings and loan associations and commercial banks already established there. Accordingly, it offers no significant additional services at a substantial advantage or convenience to a significant number of people. Although Sunny Isles expects to have restricted Saturday banking hours, the evidence is not clear that this service is not already available through the other financial institutions in the area or that there is a need for Saturday banking hours in an area populated by tourists and retired persons.. Although the proposed Sunny Isles Bank intends to have a "drive-in" teller area, there is no evidence to suggest that this is a service not already available within the Sunny Isles area or that such a service would cause any residents of Eastern Shores or Golden Beach to begin banking in Sunny Isles where they have not banked previously. Of the 270 businesses in the Sunny Isles area in December, 1984, one-third were vacant. While some new businesses may have opened more recently, there is no evidence that economic conditions have, as of this time, improved significantly. Between 1980 and 1984 twenty-five percent of the motel units in the Sunny Isles area were either converted to condominiums or closed. No new motels have been built since 1980. Further, no new residential development has been completed in the past few years in the Sunny Isles area. Especially in this troubled climate, the proposed Sunny Isles Bank's projection of $7.5 million in deposits after one year is unrealistic and without evidentiary support in the record. The deposits projected by the organizers are far in excess of the actual experience of other banks in the proposed PSA. In fact, the organizers project a growth rate seven times that of Pan American's Sunny Isles bank and four times that of County National in Eastern Shores. The record fails to show a basis for the organizers' projected growth rate or projections in deposit levels or types for the proposed Sunny Isles Bank. Moreover, in the Sunny Isles area demand deposits fell by forty-five percent between December 1979 and December 1983. In view of this clear trend; the proposed Sunny Isles Bank's expected ratio of time to demand deposits is clearly unrealistic. Despite its projections of ratios of 1.5 to 1 in the first year, 1.9 to 1 in the second year and 2.3 to 1 in the third year, the experiences of other banks in the PSA indicate that a proper time to demand deposit ratio is approximately 4 to In fact, the most recent statistics show that the total amount of demand deposits have fallen from September 1983 through September 1984 in the PSA delineated by the organizers. The proposed Sunny Isles Bank has also projected unrealistically its rental expenses with respect to the banking premises it proposes to occupy. The unaccounted-for expenses will require at least an extra $16,000 in rental liabilities, plus an annual cost of living increase. The proposed Sunny Isles Bank also unrealistically projected $40,000 as sufficient for contingency and other expense items. A review of overlooked expenses indicate that attorneys' fees, insurance, accounting fees, real estate taxes and other expenses were not estimated while other anticipated expenses are significantly understated. The proposed Sunny Isles Bank further unrealistically projected that it would be able to immediately sublease 2,600 square feet of space at the proposed site of the banking house. This is a questionable expectation in an area with a significant vacancy rate. The proposed Sunny Isles Bank also failed to include in its budget a large accrued rental which has accumulated from December 1, 1984, according to the terms of the executed lease admitted in evidence herein. That sum is significant. In view of the evidence showing that both deposit levels and deposit mix will fall far short of the figures needed for profitability, and in light of the likelihood that their expenses will be substantially higher than reported by the organizers, there is no basis for concluding that the proposed Sunny Isles Bank will become profitable within three years. Accordingly, the organizers of the proposed Sunny Isles Bank have not shown that local conditions indicate reasonable promise for successful operation. There is no factual basis which would support the granting of the application for a charter for the proposed Sunny Isles Bank since there is no proposed director who has exhibited the necessary qualifications to be a director of a bank in Florida, since the-primary service area was improperly delineated causing many of the figures relied upon in the application to be invalid, since there is no showing that any public convenience and advantage would be served by the establishment of an additional commercial bank in the Sunny Isles area--let alone a substantial convenience and advantage for a significant number of people, and since there does not appear to be a reasonable promise of successful operation for the proposed Sunny Isles Bank. These deficiencies in the application prohibit any amendment to the application that would qualify it for the grant of a charter. DONE and ORDERED this 20th day of November, 1985, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of November, 1985. COPIES FURNISHED: Gerald Lewis, Comptroller State of Florida The Capitol Tallahassee, FL 32301 Carl Morstadt, Esquire Office of the Comptroller The Capitol, Suite 1302 Tallahassee, FL 32301 Kendall B. Coffey, Esquire Julie K. Oldehoff, Esquire 1401 Brickell Avenue, PH-1 Miami, FL 33131 Shalle Stephen Fine, Esquire 46 S.W. 1st Street Miami, FL 33130 Michael Colodny, Esquire 626 N.E. 124th Street North Miami, FL 33131 APPENDIX The following proposed findings of fact of Jefferson National Bank at Sunny Isles have either been adopted verbatim or have been adopted as modified to conform to the evidence: 2- 5, 11-22, 25, 26, 28, 31-42, 47-51, 53-59, and 61-70 The following proposed findings of fact of Jefferson National Bank at Sunny Isles have been rejected "as not constituting findings of fact but as constituting either argument of counsel or conclusions of law: 1, 6-10, 23, 24, 43- 46, 52, and 60. The following proposed findings of fact of Jefferson National Bank at Sunny Isles have been rejected as not being supported by competent, substantial evidence: 27. The following proposed findings of fact of Jefferson National Bank at Sunny Isles have been rejected as being subordinate: 29 and 30. The following proposed findings of fact of Sunny Isles Bank have been rejected as not constituting findings of fact but as constituting either argument of counsel or conclusions of law: 1-3, 9, and 10. The following proposed findings of fact of Sunny Isles Bank have been rejected as not being supported by competent, substantial evidence: 4-8.
The Issue The issue for consideration herein is whether the Petitioner is entitled to reimbursement from the Florida Flexible Benefits Plan Medical Reimbursement Account for expenses incurred prior to March 8, 1990.
Findings Of Fact At all times pertinent to the matters in issue here, the Petitioner, Quintin A. Clark, was a full-time employee of the Department of Health and Rehabilitative Services in its Sarasota County Public Health unit, and the Respondent, Department, was the state agency responsible for administering all state insurance plans for state employees in the State of Florida. As a part of its insurance program, the state offered the Florida Flexible Benefits Plan, (Plan). This is a benefit program for employees under which specified, incurred medical expenses may be reimbursed. The plan extends for the fiscal year December 1 to November 30 of each year. There is a reimbursement maximum of $2400.00 per year and the maximum reimbursement may not be substantially in excess of the total premium paid for the participant's coverage. During the month of October, 1989, the Respondent conducted an open enrollment period of all state employees who wished to enroll in the plan. Petitioner did not enroll during that open enrollment period. However, in February, 1990, after the birth of his daughter on January 11, 1990, he elected to enroll in the plan and was accepted on the basis that the birth of his child was considered a qualifying status change event. Mr. Clark elected to contribute $1,650.00 per year in the Medical Care account to fund reimbursement payment for medical expenses, and authorized deductions of $82.50 per paycheck for 20 biweekly pay periods. By the same token, he also elected to contribute $1,700.00 to the Dependent care account for dependent care reimbursement and authorized a payroll deduction for that expense of $85.00 per biweekly payroll cycle. Mr. Clark submitted his Form FB-2, Enrollment/Qualifying Status Change Form, on February 6, 1990. A copy of that form, revised in December, 1989, reflects, on the back of the employee's pink copy: The effective date of plan participation or qualifying status change will be the date the signed and properly completed form is received by DSEI. The form signed by Mr. Clark does not indicate it is a copy of the revised form, but there is no evidence to indicate the forms are different in this particular. Notwithstanding Mr. Clark submitted his completed form on February 6, 1990, the form was not received by Respondent, DSEI, until March 8, 1990. No explanation was given for the delay of approximately 32 days between the time the form was submitted by Petitioner and the day it reached the Department. On April 24, 1990, Mr. Clark submitted claims for medical reimbursement for his wife and infant daughter for services incurred on the following dates: 6/89 - 1/90. prenatal $130.00 11/6/89 pregnancy 30.00 11/13/89 " 30.00 11/20/89 " 30.00 12/16/89 Hosp. visit 20.30 1/10/90 Sara. Mem. 466.25 1/11/90 Epidural 112.00 1/12/90 Sara. Mem. 789.95 1/12 - 13/90 well baby care 39.00 1/26/90 " " " 37.00 3/9/90 " " " 3.70 Among these claims, the total value of which exceeded $1,386.20, were included claims for services rendered prior to the date DSEI received Petitioner's enrollment form on March 8, 1990. All these claims incurred prior to that date were denied by the Respondent for that reason. Only the March 9, 1990 claim was considered as qualifying and eligible for payment. Petitioner claims that the information contained in the literature on the program given out by the Department is unclear and contradictory. Specifically he refers to the sample instructions which are outlined on Page 17 of the September, 1989 edition of the plan brochure made available to prospective participants. In that portion entitled "Instructions & Information", which appears to be the reverse of the sample form found on Page 16, at 5, the form reads: Expenses must occur within the plan year and while the employee was a plan participant to qualify. The plan year runs from December 1 through November 30. That provision does not appear to be inconsistent with the Department's denial of reimbursement for the expenses claimed prior to March 8, 1990.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered denying Petitioner, Quintin A. Clark, reimbursement for the expenses incurred prior to February 6, 1990. RECOMMENDED this 13th Tallahassee, Florida. day of November, 1990, in ARNOLD H. POLLOCK, 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 13th day of November, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-4345 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. Accepted and incorporated herein except that Petitioner was a participant in the plan at the time the expenses were incurred. FOR THE RESPONDENT: 1 - 9. Accepted and incorporated herein. COPIES FURNISHED: Quintin A. Clark 1025 Putnam Drive Sarasota, Florida 34234 Augustus D. Aikens, Jr., Esquire General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399- 1550 Aletta Shutes Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
