The Issue Whether Respondent, The MG Herring Group, Inc. (MG Herring), was an employer of Petitioners.
Findings Of Fact Xencom provides general maintenance, landscaping, housekeeping, and office cleaning services to retail facilities. In September of 2015, Xencom entered three contracts for services with CREFII Market Street Holdings, LLC (CREFII). The contracts were to provide maintenance, landscaping, and office cleaning services for a mall known as Market Street @ Heathbrook (Market Street) in Ocala, Florida. Michael Ponds, Xencom’s president, executed the contracts on behalf of Xencom. Two individuals executed the contracts on behalf of CREFII. One was Gar Herring, identified as Manager for Herring Ocala, LLC. The other was Bernard E. McAuley, identified as Manager of Tricom Market Street at Heathbrook, LLC. MG Herring was not a party or signatory to the contracts. MG Herring does not own or operate Market Street. A separate entity, The MG Herring Property Group, LLC (Property Group) operated Market Street. The contracts, in terms stated in an exhibit to them, established a fixed price for the year’s work, stated the scope of services, and detailed payment terms. They also identified labor and labor-related costs in detail that included identifying the Xencom employees involved, their compensation, and their weekly number of hours. The contract exhibits also identified operating costs, including equipment amortization, equipment repairs, fuel expenses, vacation costs, health insurance, and storage costs. The contracts ended December 31, 2016. The contracts specify that Xencom is an independent contractor. Each states: “Contractor is an independent contractor and not an employee or agent of the owner. Accordingly, neither Contractor nor any of Contractor’s Representatives shall hold themselves out as, or claim to be acting in the capacity of, an agent or employee of Owner.” The contracts also specify that the property manager may terminate the contract at any time without reason for its convenience. The contracts permit Xencom to engage subcontractors with advance approval of the property manager. They broadly describe the services that Xencom is to provide. Xencom has over 80 such contracts with different facilities. As the contracts contemplate, only Xencom exerted direct control of the Petitioners working at Market Street. Property Group could identify tasks and repairs to be done. Xencom decided who would do them and how. In 2013, Xencom hired Michael Harrison to work as its Operations Manager at Market Street. He was charged with providing services for which Property Group contracted. His immediate supervisor was Xencom’s Regional Manager. In 2016, that was David Snell. Mr. Snell was not located at Market Street. Property Group also did not have a representative on site. Before Xencom hired him, Mr. Harrison worked at Market Street for Property Group. Xencom hired the remaining Petitioners to work at Market Street under Mr. Harrison’s supervision. Each of the Petitioners completed an Application for Employment with Xencom. The application included a statement, initialed by each Petitioner, stating, “Further, I understand and agree that my employment is for no definite period and I may be terminated at any time without previous notice.” All of the Petitioners also received Xencom’s employee handbook. As Xencom’s Operations Manager and supervisor of the other Petitioners, Mr. Harrison was responsible for day-to-day management of Petitioners. He scheduled their work tasks, controlled shifts, established work hours, and assigned tasks. Mr. Harrison also decided when Petitioners took vacations and time off. His supervisor expected him to consult with Property Group to ensure it knew what support would be available and that he knew of any upcoming events or other considerations that should be taken into account in his decisions. As Operations Manager, Mr. Harrison was also responsible for facilitating payroll, procuring supplies, and managing Xencom’s equipment at the site. Xencom provided Petitioners work uniforms that bore Xencom’s name. Xencom required Petitioners to wear the uniforms at work. Xencom provided the supplies and equipment that Petitioners used at work. Only Xencom had authority to hire or fire the employees providing services to fulfill its contracts with the property manager. Only Xencom had authority to modify Petitioners’ conditions of employment. Neither MG Herring, Property Group, nor Xencom held out Petitioners as employees of MG Herring or Property Group. There is no evidence that MG Herring or Property Group employed 15 or more people. Property Group hired Tina Wilson as Market Street’s on- site General Manager on February 1, 2016. Until then there was no Property Group representative at the site. The absence of a Property Group representative on-site left Mr. Harrison with little oversight or accountability under the Xencom contracts for Market Street. His primary Property Group contact was General Manager Norine Bowen, who was not located at the property. Ms. Wilson’s duties included community relations, public relations, marketing, leasing, litigation, tenant coordination, lease management, construction management, and contract management. She managed approximately 40 contracts at Market Street, including Xencom’s three service agreements. Ms. Wilson was responsible for making sure the contracts were properly executed. Managing the Xencom contracts consumed less than 50 percent of Ms. Wilson’s time. During the last weeks of 2016, Mr. Harrison intended to reduce the hours of Kylie Smithers. Ms. Wilson requested that, since Ms. Smithers was to be paid under the contract for full- time work, Ms. Smithers assist her with office work such as filing and making calls. Mr. Harrison agreed and scheduled Ms. Smithers to do the work. This arrangement was limited and temporary. It does not indicate Property Group control over Xencom employees. Ms. Wilson was Xencom’s point of contact with Property Group. She and Mr. Harrison had to interact frequently. Ms. Wilson had limited contact with the other Xencom employees at Market Street. Friction and disagreements arose quickly between Mr. Harrison and Ms. Wilson. They may have been caused by having a property manager representative on-site after Mr. Harrison’s years as either the manager representative himself or as Xencom supervisor without a property manager on-site. They may have been caused by personality differences between the two. They may have been caused by the alleged sexual and crude comments that underlie the claims of discrimination in employment. They may have been caused by a combination of the three factors. On November 21, 2016, Norine Bowen received an email from the address xencomempoyees@gmail.com with the subject of “Open your eyes about Market Street.” It advised that some employees worked at night for an event. It said that Ms. Wilson gave the Xencom employees alcohol to drink while they were still on the clock. The email said that there was a fight among Xencom employees. The email also said that at another event at a restaurant where Xencom employees were drinking, Ms. Wilson gave Ms. Smithers margaritas to drink and that Ms. Smithers was underage. The email claimed that during a tree-lighting event Ms. Wilson started drinking around 3:30 p.m. It also stated that Ms. Wilson offered a Xencom employee a drink. The email went on to say that children from an elementary school and their parents were present and that Ms. Wilson was “three sheets to the wind.” The email concludes stating that Ms. Wilson had been the subject of three employee lawsuits. On December 14, 2016, Ms. Wilson, Ms. Bowen, and Mr. Snell met at Property Group’s office in Market Street for their regular monthly meeting to discuss operations at Market Street. Their discussion covered a number of management issues including a Xencom employee’s failure to show up before 8:00 to clean as arranged, security cameras, tenants who had not paid rent, lease questions, HVAC questions, and rats on the roof. They also discussed the email’s allegations. The participants also discussed a number of dissatisfactions with Mr. Harrison’s performance. Near the end of a discussion about the anonymous email, this exchange occurred:2/ Bowen: Okay, so I know that David [Snell], I think his next step is to conduct his own investigation with his [Xencom] people, and HR is still following up with John Garrett, and you’re meeting with Danny [intended new Xencom manager for Market Street] tonight? David Snell: Yes. Bowen: To finish up paperwork, and, based on his investigation, it will be up to Xencom to figure out what to do with people that are drinking on property, off the clock or on the clock, you know, whatever, what their policy is. * * * Bowen: So, I don’t know what to make of it. I’m just here to do an investigation like I’m supposed to do and David is here to pick up the pieces and meet with his folks one-on- one, and we’ll see where this takes us. This exchange and the remainder of the recording do not support a finding that Property Group controlled Xencom’s actions or attempted to control them. The participants were responsibly discussing a serious complaint they had received, their plan to investigate it, and pre-existing issues with Mr. Harrison. The exchange also makes clear that all agreed the issues involving Xencom employees were for Xencom to address, and the issues involving Property Group employees were for Property Group to address. At the time of the December 14, 2016, meeting, the participants were not aware of any complaints from Mr. Harrison or Mr. Smithers of sexual harassment or discrimination by Ms. Wilson. On December 15, 2016, Gar Herring and Norine Bowen received an email from Mr. Harrison with an attached letter to Xencom’s Human Resources Manager, and others. Affidavits from Petitioners asserting various statements and questions by Ms. Wilson about Mr. Harrison’s and Mr. Smithers’ sex life and men’s genitalia and statements about her sex life and the genitalia of men involved were attached. Xencom President Michael Ponds received a similar email with attachments on the same day. On December 21, 2016, Mr. Ponds received a letter from Herring Ocala, LLC, and Tricom Market Street at Heathbrook, LLC, terminating the service agreements. Their agreements with Xencom were going to expire December 31, 2016. They had been negotiating successor agreements. However, they had not executed any. Xencom terminated Petitioners’ employment on December 21, 2016. Xencom no longer needed Petitioners’ services once MG Herring terminated the contract with Xencom. This was the sole reason it terminated Petitioners.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Commission on Human Relations enter a final order denying the Petitions of all Petitioners. DONE AND ENTERED this 11th day of May, 2018, 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 11th day of May, 2018.
The Issue Whether proposed rules promulgated by the Florida Marine Fisheries Commission are an invalid exercise of delegated legislative authority.
Findings Of Fact The Florida Marine Fisheries Commission (MFC) has proposed rules requiring use of bycatch reduction devices (BRD.) The proposed rules are applicable where trawling for shrimp is permitted in specified Florida waters within the Gulf of Mexico. The notice of proposed rulemaking was published in Volume 23, Number 30, Florida Administrative Weekly, July 25, 1997. The Petitioners have challenged the proposed rules, specifically the provisions prohibiting possession of an otter trawl (a type of trawling net) that is rigged for fishing aboard any vessel without having a required BRD installed. All parties have standing to participate in this proceeding. The federal government requires BRDs in the Florida waters not impacted by the proposed rules at issue in this proceeding. The federal rules are intended to protect red snapper in the Gulf and weakfish and Spanish mackerel in the Atlantic Ocean. The MFC rules are intended to offer broader protection than federal rules, and are intended to protect the Gulf ecosystem rather than specific species of organisms. Shrimp trawls operating in the Gulf of Mexico harvest approximately 2.4 pounds of non-shrimp species for every pound of shrimp harvested. The MFC goal is to reduce the level of bycatch harvested by 50 percent. The proposed rules do not cover the “Big Bend grass beds” where trawling for shrimp is already prohibited. The proposed rules do not cover Florida’s northeast coast where other BRD rules are in effect. The Petitioners challenge the same provision in three separate rules. Proposed Rule 46-31.010(4), Florida Administrative Code, provides: In the Northwest Region, no person harvesting shrimp as a food shrimp producer shall operate or fish any otter trawl, or possess any otter trawl that is rigged for fishing aboard any vessel, which otter trawl does not have a bycatch reduction device (BRD) installed therein meeting the requirements of Rule 46-31.045. (emphasis supplied) Proposed Rule 46-31.012(4), Florida Administrative Code, provides: In the Southwest Region, no person harvesting shrimp as a food shrimp producer shall operate or fish any otter trawl, or possess any otter trawl that is rigged for fishing aboard any vessel, which otter trawl does not have a bycatch reduction device (BRD) installed therein meeting the requirements of Rule 46-31.045. (emphasis supplied) Proposed Rule 46-31.013(2), Florida Administrative Code, provides: In all waters of the Southeast Region outside nearshore and inshore Florida waters, no person harvesting shrimp as a food shrimp producer shall operate or fish any otter trawl, or possess any otter trawl that is rigged for fishing aboard any vessel, which otter trawl does not have a bycatch reduction device (BRD) installed therein meeting the requirements of Rule 46-31.045. (emphasis supplied) On a shrimping boat, “otter trawl” nets are suspended from the ends of “outriggers” attached to the sides of the boat. When in use, the nets are dropped from the outriggers into the water. Once in the water, the nets are dragged along behind the boat, collecting shrimp and other marine species. The non-shrimp marine species collected are referred to as the “bycatch.” The phrase “rigged for fishing” means that the nets are shackled to the outriggers and are in a condition ready to fish, but are not yet in the water or being dragged along the bottom of the water. Nets attached to the outriggers of a shrimping boat and ready to be dropped into the water are rigged for fishing. Nets lying on the deck of the boat which are not attached to the outriggers are not rigged for fishing. It takes no more than a few minutes to attach the nets to the outriggers. The phrase being challenged in the proposed rules essentially prohibits a shrimp boat operator from suspending the nets above the water prior to dropping the nets into the water without having the BRD installed in the nets. Although there is no credible evidence indicating the reason shrimp boats leave the docks with nets in a position rigged for fishing, many apparently do so. There is no credible evidence suggesting any reason nets would be suspended from the outriggers other than in anticipation of initiation of shrimp harvest activity. There is no credible evidence that any impact would result from requiring that non-BRD equipped nets remain unrigged for fishing until outside of waters affected by the proposed rule. Use of the BRDs results in a substantial reduction of bycatch. There is no evidence that use of the BRDs results in any reduction in shrimp harvest. The evidence establishes that the reduction in bycatch will contribute towards the preservation of renewable marine fishery resources and will benefit the continuing health of the resources. There is no evidence that the proposed rules are unfair or inequitable to any persons including shrimp boat operators. The Petitioners assert that because the penalty for violations of the rules may eventually result in incarceration, the cited phrase creates a criminal presumption that a shrimp boat operator with non-BRD equipped nets is presumed to be fishing without a BRD. The evidence fails to support the assertion. There is no presumption being created by the proposed rule. The challenged rules are gear specifications for shrimp trawls, and are clearly within the realm of the MFC's rulemaking authority. The cited phrase does not prohibit the mere possession of a net without a BRD installed. The cited phrase prohibits suspension of a net from an outrigger without having a BRD installed in the net. There is no reason, other than in anticipation of immediately dropping the net into the water, that a trawl net must be suspended from an outrigger. The Petitioners assert that the rule would impact shrimp boat operators who are passing through Florida waters traveling to waters outside the areas impacted by the proposed rules. There is no evidence that the proposed rules would interfere with fishing operations. In the example of boat operators fishing outside Florida waters and using non-BRD equipped nets, compliance with the rule requires only that the nets remain unrigged for fishing while passing through Florida waters. The Petitioners assert that there are instances due to emergency, weather or otherwise, that may result in a shrimp boat operator working waters outside those covered by the proposed rules, raising non-BRD equipped nets and moving through into Florida jurisdictional waters. In such an event, the Petitioners assert that an operator could be subject to application of the rule even though the non-BRD equipped nets, still rigged for fishing, were not used in Florida waters. The Florida Marine Patrol will be responsible for enforcement of the proposed rules. Obviously, a Marine Patrol officer’s judgment will be required to determine the existence of an emergency and whether any official action is appropriate. A shrimp boat officer cited for violation of the proposed rules is entitled to challenge the application of the rule.
The Issue Whether Respondent committed the offenses set forth in the Administrative Actions in these consolidated cases, and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: At all times material hereto, Fowler Liquors was licensed by the Division, having been issued license number 46- 04643, Series 3-PS. The license permits Fowler Liquors to make packaged sales of beer, wine, and liquor at its convenience store located at 3450 Fowler Street in Fort Myers. In an Administrative Action dated July 11, 2002, the Division charged Samer Barghouthi, the majority owner and principal officer of Fowler Liquors, with selling alcoholic beverages to a person under the age of 21 on May 19, 2002. Fowler Liquors conceded there were no disputed issues of fact and requested that the matter be resolved in an informal hearing. In a Final Order dated October 25, 2002, the Division ordered Fowler Liquors to pay a fine of $1,000 and serve a seven-day license suspension. The Administrative Action regarding the May 19, 2002, sale arose from an incident in which 20-year-old Tony Cubello was beaten, robbed, and shot to death in the parking lot of Fowler Liquors after making a purchase in the liquor store. The murder of Mr. Cubello was the subject of articles in the Fort Myers newspaper. The Fort Myers Police Department investigated Mr. Cubello's murder and came to believe that Samer Barghouthi could identify the killers but was refusing to cooperate. The Fort Myers police requested the assistance of the Division in securing Mr. Barghouthi's cooperation. The Division commenced an investigation, interviewing young people who had known Mr. Cubello. During the course of these interviews, the Division became aware that Fowler Liquors was widely reputed as a place where underage people could buy alcoholic beverages. During its investigation, the Division also learned that the Department of Revenue had a tax warrant against Fowler Liquors, and that the City of Fort Myers had issued citations against Fowler Liquors for hours-of-sale violations. During its investigation, the Division sent an underage operative into Fowler Liquors to attempt to purchase alcoholic beverages. The operative was wearing a hidden microphone, allowing the Division's officers to hear what transpired in the liquor store. As the sale was about to be completed, a van full of construction workers pulled up outside the store. The person working behind the counter at Fowler Liquors said that there were "cops" in the van, and declined to complete the sale to the operative. On June 14, 2002, Captain Tania Pendarakis, district supervisor for the Division's Fort Myers office, met with Samer Barghouthi. She informed Mr. Barghouthi that the Division might consider filing administrative charges rather than criminal charges against Fowler Liquors, if Mr. Barghouthi would cooperate with the Fort Myers Police Department's murder investigation. During this conversation, Mr. Barghouthi assured Captain Pendarakis that he was going to start checking identifications and stop selling alcoholic beverages to underage children. The next day, June 15, 2002, David P. Green, then sixteen years old, entered Fowler Liquors early in the evening to buy beer. In the liquor store, Mr. Green recognized other people whom he knew from his high school. Mr. Green testified that it was widely known at his school that underage people could purchase alcohol at Fowler Liquors. Mr. Green purchased a twelve-pack of Budweiser Light beer. He tendered ten dollars cash to the cashier and asked if the store sold "dip," i.e., finely ground tobacco. The cashier told him no, but offered to sell Mr. Green cigarettes. The cashier did not ask Mr. Green his age, nor request any identification from Mr. Green to prove that he was at least 21 years of age. At the hearing in this matter, conducted nearly nine months after the fact, Mr. Green looked no older than sixteen. When he purchased the beer at Fowler Liquors, Mr. Green made no attempt to alter his appearance or otherwise disguise the fact that he was only sixteen years old. When Mr. Green exited Fowler Liquors, he saw a police officer parked in a police cruiser directly in front of him. Mr. Green put his twelve-pack of beer down next to a garbage can, then got into his car and drove away. Several of Mr. Green's friends were also in his car. The police officer who witnessed this scene, Officer Bradley J. Ades of the Fort Myers Police Department, testified at the hearing. Officer Ades testified that, because of the ongoing problems the police were having with Fowler Liquors, he stopped by there to check it out as part of his normal duties. As he pulled into the parking lot, he saw a "very young white male" walking out the front door of Fowler Liquors. The boy was carrying a twelve-pack of Budweiser Light beer. Officer Ades stated that he was surprised not to see the boy's father follow him out of the store, because the boy looked so young. The boy got into his car and drove away. Officer Ades followed him for a little more than one block, then pulled him over. Officer Ades interviewed Mr. Green and photographed him. Mr. Green admitted that he bought the beer in Fowler Liquors, and that he and the other boys in his car intended to drink it. Because the sale of alcohol to a minor is a misdemeanor, and he did not witness the sale, Officer Ades could not make an arrest. The next day, he forwarded to the Division the information concerning his stop of Mr. Green. Agent Brian D. Sauls of the Division contacted Mr. Green and asked him to come to the Division's offices for an interview. Mr. Green agreed. Agent Sauls conducted a photographic suspect lineup, and Mr. Green identified Samer Barghouthi as having been behind the counter at Fowler Liquors at the time he purchased the twelve-pack of Budweiser Light on June 15, 2002. The incident involving the sale to Mr. Green formed the basis of the Administrative Action that led to DOAH Case No. 03-0431. Fowler Liquors did not contest the evidence that a sale was made by Fowler Liquors to Mr. Green, an underage person, on June 15, 2002, or that Samer Barghouthi was present at the counter when the sale was made. On the evening of June 17, 2002, Justin C. Bender, then eighteen years of age, entered Fowler Liquors to buy beer. Mr. Bender testified that he had purchased alcohol at Fowler Liquors more than 40 times and had never been asked for any identification. Mr. Bender stated that he has seen friends and other people whom he knew from school inside Fowler Liquor Store. Mr. Bender also testified that he had discussions with other people about Fowler Liquors being a place where underage people could purchase alcoholic beverages. On June 17, 2002, Mr. Bender purchased a twelve-pack of Budweiser beer and a quart of Heineken beer, then left the store. Mr. Bender purchased the beer from Steve Barghouthi, the father of Samer Barghouthi. Steve Barghouthi did not ask Mr. Bender his age, nor request any identification to prove that he was at least 21 years of age. Mr. Bender had made no effort to alter his appearance or make himself look older than eighteen. On June 17, 2002, Anthony J. Smith, the chief of law enforcement for the Division, visited the Fort Myers office. He asked Captain Pendarakis to inform him of cases her office was involved in, and the subject of Fowler Liquors was discussed. After dinner that evening, Chief Smith drove by Fowler Liquors to take a look at the store. As he drove through the parking lot, Chief Smith saw Mr. Bender exiting the store with his beer. Chief Smith stopped him to determine how old he was. Mr. Bender produced a valid driver's license that showed he was eighteen years old. Chief Smith searched Mr. Bender for fake identification, but found none. Chief Smith asked Mr. Bender if he would be willing to return to Fowler Liquors and make another purchase that Chief Smith could observe. Mr. Bender agreed to do so. Chief Smith telephoned Captain Pendarakis and asked her to bring marked cash for Mr. Bender to purchase beer. Captain Pendarakis arrived with the cash. She went into Fowler Liquors to ascertain whether it would be safe for Mr. Bender to return to the store. After Captain Pendarakis determined the store was safe, Mr. Bender entered the store. Chief Smith and Captain Pendarakis watched the transaction from across the street. They had a clear view through the window of the liquor store. They observed Mr. Bender get a carton of beer, put it on the counter, pay for it, and walk out the door. After Chief Smith and Captain Pendarakis viewed the sale to Mr. Bender, they went into the store to arrest the person who had made the sale, Samer Barghouthi. Mr. Barghouthi was arrested and taken to the Lee County Jail. The incident involving the sale to Mr. Bender formed the basis of the Administrative Action that led to DOAH Case No. 03-0217. Fowler Liquors did not contest the evidence that a sale was made by Fowler Liquors to Mr. Bender, an underage person, on June 17, 2002, or that Samer Barghouthi, the licensee, had made the sale. In mitigation, counsel for Fowler Liquors argued that license revocation would be unfair because Samer Barghouthi is no longer involved in the operation of the business, having signed over his interest to his uncle, Shahir Daghara. Counsel contended that Mr. Daghara acted to remove Samer Barghouthi from the premises of Fowler Liquors as soon as he learned that Mr. Barghouthi was making sales to underage persons. This contention is not credible. The two sales that are the subject of these proceedings occurred nearly one month after the murder of Mr. Cubello, which was widely known to have occurred after Mr. Cubello purchased alcoholic beverages in Fowler Liquors. The two sales also occurred after Mr. Barghouthi had been interviewed by Captain Pendarakis about sales of alcoholic beverages to minors. Moreover, Officer Cecil Pendergrass of the Fort Myers Police Department testified that Samer Barghouthi was still working at Fowler Liquors on July 1, 2002, two weeks after his arrest for selling alcoholic beverages to Justin Bender. There is no record evidence that Mr. Barghouthi transferred his interest in the business to Mr. Daghara. At most, the Division's files indicate that at some point, Fowler Liquors represented to the Division that Mr. Daghara had taken a 49 percent interest in the business. The file also contains an undated "Current Licensee Update Data Sheet" on which Samer Barghouthi's name is crossed through, but Fowler Liquors offered no sworn testimony to explain the significance of this document. Further, even if Mr. Daghara did take over the business, there is no evidence that he took any steps to remove Mr. Barghouthi from the premises of Fowler Liquors, or did anything else to address the problem of selling alcoholic beverages to minors. Officer Pendergrass, who is the community coordinator for the area of Fort Myers that includes Fowler Liquors, also testified that he has been called to Fowler Liquors on a regular basis to deal with code enforcement problems, fights between family members, drug sales, robberies in the parking lot, and civil problems between the owners over refrigeration equipment. Officer Pendergrass testified that the police department's statistics establish that Fowler Liquors is the nucleus of criminal complaints in the area, and that in the last year, the Fort Myers Police Department has had over 300 calls for service to Fowler Liquors.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco enter a Final Order revoking the license of Barghouthi Enterprises, Inc., d/b/a Fowler Liquor Store. DONE AND ENTERED this 5th day of June, 2003, in Tallahassee, Leon County, Florida. LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of June, 2003. COPIES FURNISHED: Michael Martinez, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-2202 Captain Tania Pendarkis 4100 Center Point Drive Suite 104 Fort Myers, Florida 33916 John Kyle Shoemaker, Esquire Post Office Box 1601 Fort Myers, Florida 33902 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Peter Williams, Director Division of Alcoholic Beverages and Tobacco Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Respondent, Xencom Facility Management, LLC (Xencom), terminated the employment of Petitioners solely because the contract under which they were working ended.
Findings Of Fact Xencom provides general maintenance, landscaping, housekeeping, and office cleaning services to retail facilities. In September of 2015, Xencom entered three contracts for services with CREFII Market Street Holdings, LLC (CREFII). The contracts were to provide maintenance, landscaping, and office cleaning services for a mall known as Market Street @ Heathbrook (Market Street) in Ocala, Florida. Michael Ponds, Xencom’s president, executed the contracts on behalf of Xencom. Two individuals executed the contracts on behalf of CREFII. One was Gar Herring, identified as manager for Herring Ocala, LLC. The other was Bernard E. McAuley, identified as manager of Tricom Market Street at Heathbrook, LLC. MG Herring was not a party or signatory to the contracts. MG Herring does not own or operate Market Street. A separate entity, The MG Herring Property Group, LLC (Property Group), operated Market Street. The contracts, in terms stated in an exhibit to them, established a fixed price for the year’s work, stated the scope of services, and detailed payment terms. They also identified labor and labor-related costs in detail that included identifying the Xencom employees involved, their compensation, and their weekly number of hours. The contract exhibits also identified operating costs, including equipment amortization, equipment repairs, fuel expenses, vacation costs, health insurance, and storage costs. The contracts ended December 31, 2016. The contracts specify that Xencom is an independent contractor. Each states: “Contractor is an independent contractor and not an employee or agent of the owner. Accordingly, neither Contractor nor any of Contractor’s Representatives shall hold themselves out as, or claim to be acting in the capacity of, an agent or employee of Owner.” The contracts also specify that the property manager may terminate the contract at any time without reason for its convenience. The contracts permit Xencom to engage subcontractors with advance approval of the property manager. They broadly describe the services that Xencom is to provide. Xencom has over 80 such contracts with different facilities. As the contracts contemplate, only Xencom exerted direct control of the Petitioners working at Market Street. Property Group could identify tasks and repairs to be done. Xencom decided who would do them and how. In 2013, Xencom hired Michael Harrison to work as its Operations Manager at Market Street. He was charged with providing services for which Property Group contracted. His immediate supervisor was Xencom’s Regional Manager. In 2016, that was David Snell. Mr. Snell was not located at Market Street. Property Group also did not have a representative on site. Before Xencom hired him, Mr. Harrison worked at Market Street for Property Group. Xencom hired the remaining Petitioners to work at Market Street under Mr. Harrison’s supervision. Each of the Petitioners completed an Application for Employment with Xencom. The application included a statement, initialed by each Petitioner, stating, “Further, I understand and agree that my employment is for no definite period and I may be terminated at any time without previous notice.” All of the Petitioners also received Xencom’s employee handbook. As Xencom’s Operations Manager and supervisor of the other Petitioners, Mr. Harrison was responsible for day-to-day management of Petitioners. He scheduled their work tasks, controlled shifts, established work hours, and assigned tasks. Mr. Harrison also decided when Petitioners took vacations and time off. His supervisor expected him to consult with Property Group to ensure it knew what support would be available and that he knew of any upcoming events or other considerations that should be taken into account in his decisions. As Operations Manager, Mr. Harrison was also responsible for facilitating payroll, procuring supplies, and managing Xencom’s equipment at the site. Xencom provided Petitioners work uniforms that bore Xencom’s name. Xencom required Petitioners to wear the uniforms at work. Xencom provided the supplies and equipment that Petitioners used at work. Only Xencom had authority to hire or fire the employees providing services to fulfill its contracts with the property manager. Only Xencom had authority to modify Petitioners’ conditions of employment. Neither MG Herring, Property Group, nor Xencom held out Petitioners as employees of MG Herring or Property Group. There is no evidence that MG Herring or Property Group employed 15 or more people. Property Group hired Tina Wilson as Market Street’s on- site General Manager on February 1, 2016. Until then there was no Property Group representative at the site. The absence of a Property Group representative on-site left Mr. Harrison with little oversight or accountability under the Xencom contracts for Market Street. His primary Property Group contact was General Manager Norine Bowen, who was not located at the property. Ms. Wilson’s duties included community relations, public relations, marketing, leasing, litigation, tenant coordination, lease management, construction management, and contract management. She managed approximately 40 contracts at Market Street, including Xencom’s three service agreements. Ms. Wilson was responsible for making sure the contracts were properly executed. Managing the Xencom contracts consumed less than 50 percent of Ms. Wilson’s time. During the last weeks of 2016, Mr. Harrison intended to reduce the hours of Kylie Smithers. Ms. Wilson requested that, since Ms. Smithers was to be paid under the contract for full- time work, Ms. Smithers assist her with office work such as filing and making calls. Mr. Harrison agreed and scheduled Ms. Smithers to do the work. This arrangement was limited and temporary. It does not indicate Property Group control over Xencom employees. Ms. Wilson was Xencom’s point of contact with Property Group. She and Mr. Harrison had to interact frequently. Ms. Wilson had limited contact with the other Xencom employees at Market Street. Friction and disagreements arose quickly between Mr. Harrison and Ms. Wilson. They may have been caused by having a property manager representative on-site after Mr. Harrison’s years as either the manager representative himself or as Xencom supervisor without a property manager on-site. They may have been caused by personality differences between the two. They may have been caused by the alleged sexual and crude comments that underlie the claims of discrimination in employment. They may have been caused by a combination of the three factors. On November 21, 2016, Norine Bowen received an email from the address xencomempoyees@gmail.com with the subject of “Open your eyes about Market Street.” It advised that some employees worked at night for an event. It said that Ms. Wilson gave the Xencom employees alcohol to drink while they were still on the clock. The email said that there was a fight among Xencom employees. The email also said that at another event at a restaurant where Xencom employees were drinking, Ms. Wilson gave Ms. Smithers margaritas to drink and that Ms. Smithers was underage. The email claimed that during a tree-lighting event Ms. Wilson started drinking around 3:30 p.m. It also stated that Ms. Wilson offered a Xencom employee a drink. The email went on to say that children from an elementary school and their parents were present and that Ms. Wilson was “three sheets to the wind.” The email concludes stating that Ms. Wilson had been the subject of three employee lawsuits. On December 14, 2016, Ms. Wilson, Ms. Bowen, and Mr. Snell met at Property Group’s office in Market Street for their regular monthly meeting to discuss operations at Market Street. Their discussion covered a number of management issues including a Xencom employee’s failure to show up before 8:00 to clean as arranged, security cameras, tenants who had not paid rent, lease questions, HVAC questions, and rats on the roof. They also discussed the email’s allegations. The participants also discussed a number of dissatisfactions with Mr. Harrison’s performance. Near the end of a discussion about the anonymous email, this exchange occurred:2/ Bowen: Okay, so I know that David [Snell], I think his next step is to conduct his own investigation with his [Xencom] people, and HR is still following up with John Garrett, and you’re meeting with Danny [intended new Xencom manager for Market Street] tonight? David Snell: Yes. Bowen: To finish up paperwork, and, based on his investigation, it will be up to Xencom to figure out what to do with people that are drinking on property, off the clock or on the clock, you know, whatever, what their policy is. * * * Bowen: So, I don’t know what to make of it. I’m just here to do an investigation like I’m supposed to do and David is here to pick up the pieces and meet with his folks one-on- one, and we’ll see where this takes us. This exchange and the remainder of the recording do not support a finding that Property Group controlled Xencom’s actions or attempted to control them. The participants were responsibly discussing a serious complaint they had received, their plan to investigate it, and pre-existing issues with Mr. Harrison. The exchange also makes clear that all agreed the issues involving Xencom employees were for Xencom to address, and the issues involving Property Group employees were for Property Group to address. At the time of the December 14, 2016, meeting, the participants were not aware of any complaints from Mr. Harrison or Mr. Smithers of sexual harassment or discrimination by Ms. Wilson. On December 15, 2016, Gar Herring and Norine Bowen received an email from Mr. Harrison with an attached letter to Xencom’s Human Resources Manager and others. Affidavits from Petitioners asserting various statements and questions by Ms. Wilson about Mr. Harrison’s and Mr. Smithers’ sex life and men’s genitalia and statements about her sex life and the genitalia of men involved were attached. Xencom President Michael Ponds received a similar email with attachments on the same day. On December 21, 2016, Mr. Ponds received a letter from Herring Ocala, LLC, and Tricom Market Street at Heathbrook, LLC, terminating the service agreements. Their agreements with Xencom were going to expire December 31, 2016. They had been negotiating successor agreements. However, they had not executed any. Xencom terminated Petitioners’ employment on December 21, 2016. Xencom no longer needed Petitioners’ services once MG Herring terminated the contract with Xencom. This was the sole reason it terminated Petitioners.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations issue a final order denying the petitions of all Petitioners. DONE AND ENTERED this 15th day of May, 2018, 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 15th day of May, 2018.
Findings Of Fact Petitioner, Allied Marine Group, Inc., d/b/a Stuart Hatteras, Ltd. (Allied), is the largest dealer in new and used yachts in Florida. Its Dealer Registration Number is 16-03-232. It has 175 employees and sells yachts that range in price from $100,000 to $9,000,000. In 1993 Allied sold in excess of 300 yachts and realized gross sales of $60,000,000. The yacht sales business is very competitive. Allied's sales and marketing departments target the well-to-do who can afford expensive yachts and enjoy fishing and pleasure cruising. The target group subscribes to yachting magazines, visits boat shows, attends cruising activities, and participates in fishing tournaments. To reach these individuals in these activities, Allied spent $585,000 advertising in magazines including publishing its own magazine, "Makin Wake," $166,000 participating in boat shows, and $155,000 participating in fishing tournaments and other promotions for the fiscal year ending October 31, 1993. Allied's Vice President of Sales and Operations, Tom Sanders, and salesman Chris Cunningham actively market the sale of Allied's yachts by participating in fishing tournaments and boat shows because that is where the buyers are. Fishing tournaments and boat shows are "selling events" to Allied. Neither Mr. Sanders nor Mr. Cunningham was of the opinion that Allied could remain competitive in the yacht sales business by simply displaying vessels at showrooms and waiting for customers to come. Most yacht sales are made to customers who have purchased yachts in the past. The selling of a yacht is a process that involves many contacts with a customer before the customer actually makes a purchase. Customers rarely buy million dollar vessels on the spot. Purchasers of fishing yachts like to purchase from dealers who are knowledgeable about fishing. Participation in fishing tournaments and outfitting inventory boats for fishing is a way of showing a vessel's capabilities to potential purchasers and Allied's knowledge of fishing vessels. Allied often enters fishing tournaments to demonstrate the capabilities and amenities of its yachts to prospective purchasers for the ultimate purpose of selling the yacht entered and increasing overall sales. It outfits the vessel with elaborate decor and fishing equipment to attract customers. The salespersons participate in the fishing portion of the tournament in order to get access to the tournament functions where they can meet prospective purchasers at the captains' meetings, at the fish weigh-ins and other gatherings before and after each day's fishing, and at the awards ceremony at the end of the tournament. In addition to promoting the sale of the vessel entered, Allied and other dealers enter and sponsor fishing tournaments to give their salespersons opportunities to meet with potential purchasers and to keep the name of their products, company and salespersons in the public eye. Salespersons sell yachts by networking, that is, developing and maintaining one-on-one contacts with prospective purchasers. Salespersons make and maintain contacts by referrals from other customers, by hosting parties and by frequenting boat shows, fishing tournaments and other events that boat enthusiasts attend. There are different sizes and types of fishing tournaments, and a dealer's participation may vary depending on the tournament. Allied sometimes participates in fishing tournaments by providing a crew to actually fish. When a dealer enters a vessel in a fishing tournament, the fishing element is secondary to the opportunity the tournament presents for the dealer's salespeople to make contact with potential purchasers. The main reason Allied enters its yachts in fishing tournaments is to sell the yachts entered in the tournaments and to promote Allied as a dealer in vessels made for fishing. Yacht owners that see new models at fishing tournaments often trade up to that model or newer or larger vessels. Allied promotes its yachts and its business at fishing tournaments in the same manner as it does at boat shows: by displaying its products and by sending its salespersons to mingle with the attendees, to pass out business cards, and to provide information about its products and services. Allied always stocks yachts participating in fishing tournaments with literature concerning the particular vessel and the dealership including brochures about its yachts, specification sheets for the particular yacht, and business cards of the salespersons. Allied does not have any yachts, in inventory or otherwise, that are designated as demonstrators. Vessels that are outfitted and decorated to participate in particular boat shows or fishing tournaments are always for sale to customers during or after the event. In October, 1992 Tiara Yachts delivered a 43 foot sport fishing vessel to Allied for resale. The yacht is described as a 4300 Tiara Convertible and was delivered to Allied's Fort Lauderdale marina. Between October, 1992 and May 27, 1993, Allied displayed the vessel (the Tiara) at its marina showrooms in Fort Lauderdale, Stuart, and West Palm Beach. The Tiara was held by Allied as part of inventory for resale to customers and was so reflected on Allied's accounting books and records. The Tiara was floor plan financed, meaning the manufacturer loaned Allied 95 percent of the cost of purchasing the vessel and maintained a security interest in the vessel until its resale to a customer. The manufacturer made periodic and unannounced checks of Allied's inventory to verify that the vessel was actually in Allied's possession at one of its facilities and held for resale. On May 14 and 15, 1993, the Arthur Smith, Kingfish, Wahoo and Dolphin Fishing Tournament (the Tournament) was held in Palm Beach County. It is a large tournament which draws about 600 participants. Allied paid the $300 Tournament entry fee, hired a crew, provided the Tiara, and paid for all supplies. These expenses were charged to Allied's "Tournament and Promotion" account on its general ledger. Allied listed the Tiara on the Tournament entry form as the vessel to be used in the Tournament. The participants listed were Edward Sweigart, Chris Cunningham, Monty Braune, Jim Neill, Bob Wimmer, and Kimberly Kern. Allied's address in West Palm Beach was listed as the address for each participant; however, Allied's name was not referenced on the entry form. Allied did not obtain advertising in any medium prior to, during, or after the Tournament to announce the vessel's participation in the Tournament. Allied was not a Tournament sponsor and did not donate any prizes to the Tournament. No banners, flags, or pennants with Allied's name were displayed either on land or on the Tiara during the Tournament. The transom of the Tiara was marked with the vessel's make-and-model number, which read, "4300 Tiara Convertible." All rods and reels used on the vessel during the Tournament were the personal property of Allied's salesman Chris Cunningham. At no time was there a known prospective buyer present, either on land or upon the vessel, during or after the vessel's participation in the Tournament. Participation in the Tournament included fishing from the vessel by various participants. The participants on May 14 included Allied employees: Chris Cunningham, salesman; Monty Braune, yard worker; Edward Sweigart, boat washer; as well as non-employees; Ed Steffes; and Sweigart's girlfriend, Kimberly Kern. The participants on May 15 included Allied employees, Sweigart, Braune, and David McGee, service manager; as well as non-employees Steffes, Michael McGee and Bobby Wimmer. The attire of the May 14 participants was, in part, as follows: Sweigart wore a polo shirt bearing the "Tiara" logo; Cunningham and Kern wore "Palm Beach Hatteras" t-shirts; Steffes and Braune wore t-shirts without logos. The attire of the May 15 participants was in part, as follows: Sweigart wore a polo shirt bearing the "Tiara" logo; Braune wore a "Stuart Hatteras" shirt; David McGee, Michael McGee and Steffes wore shirts with no logo and Wimmer wore a "Hatteras of Palm Beach" t-shirt. At the Tournament, the weigh-in location for the larger boats (including the Tiara) was at a park where there were no facilities to dock the Tiara for display either before or after the day's fishing. Tournament participants weighing their fish at the park were required to pull up to the dock, off-load their catches and depart so that other participants could come to weigh their fish. Mr. Cunningham got off the Tiara at the weigh-in location and remained there to mingle with prospective purchasers while the captain and crew returned the Tiara to Soveral Marina where it was available for boarding by prospective purchasers. Soveral Marina was located approximately ten minutes or five miles away from the weigh-in location. Allied would have preferred to dock the Tiara at the Tournament location for easier access by prospective purchasers. Because this was not possible, displaying the Tiara at nearby Soveral Marina was a good alternative for making the yacht available to potential customers. Mr. Cunningham knew that some of his customers would be attending the Tournament and might be interested in the Tiara. He attended the Tournament's captains' meetings, weigh-ins and other gatherings and the awards ceremony at the end of the Tournament. During the Tournament gatherings Mr. Cunningham handed out business cards and brochures describing the Tiara. For catching the largest dolphin, Edward Sweigart was awarded a prize which consisted of cash, a boat, an outboard motor, and a boat trailer. The following participants were on stage during the May 16 awards presentation after Mr. Sweigart caught the biggest dolphin of the tournament: Mr. Sweigart, wearing a "Tiara" logo shirt; Mr. Cunningham, wearing a "Palm Beach Hatteras" shirt; and Ms. Kern, wearing a "Palm Beach Hatteras" shirt. Immediately after the Tournament, Mr. Sweigart took the prize boat and a dispute arose between Allied and Mr. Sweigart over who was entitled to the prize which culminated in a lawsuit by Allied against Mr. Sweigart. A newspaper article was published criticizing Allied for trying to recover the prize from Mr. Sweigart. The negative publicity surrounding Allied's participation in the Tournament caused Allied to downplay its participation in the event. As a result of the newspaper article, Steve C. Brown, Senior Tax Specialist with the Department of Revenue's (Department) Boat Enforcement Unit, conducted an investigation into Allied's entry and participation in the Tournament. Twelve days after the Tournament, on May 27, 1993, the vessel was sold to Mr. Arthur Levitan for the sum of $506,727.80. Mr. Levitan was not at the Tournament nor did he know the vessel had been in the Tournament. Six percent sales tax of $26,727.30 along with a luxury tax of $34,504.50 was collected from Mr. Levitan. The sales tax was paid to the Department of Revenue. As a result of Mr. Brown's investigation, the Department issued a Notice of Final Assessment for Tax, Penalty, and Interest Due on a Boat, dated January 18, 1994, for use tax in the amount of $27,000, plus a late filing penalty of $13,500 and interest as of January 18, 1994 of $1,801.50, which totaled $42,301.50. Allied protested the Assessment in a Petition for Reconsideration, dated February 7, 1994, in which it alleged: that the vessel was operated on behalf of Allied as part of its promotional activities and to expose the vessel to potential buyers. Allied further alleged that no use tax was due because the vessel was at all times part of Allied's inventory for sale to customers; that such use is consistent with the vessel being offered for resale and being maintained in inventory and that entry of the vessel into the tournament was at all times solely for the purpose of promoting the sale of this vessel, Tiara Yachts, and Allied. It was also alleged that there are no rules or statutes that support the Department's assessment of use tax for vessels for resale. The Department rejected the facts and arguments in the Petition and upheld the Assessment in a Notice of Reconsideration, dated July 7, 1994, in which it concluded that the vessel was: removed from inventory and used in an activity inconsistent with it being offered for resale; that such "use" of the vessel fell within the statutory language of Section 212.02(20), Florida Statutes; that the use of a vessel held in inventory for resale and used in the manner set forth in the facts of this case constitute a taxable use, as there is no rule or statute that allows a dealer an exemption for such use. The Department's Special Programs Unit is charged with collection and enforcement of sales and use tax, especially with respect to boats. The Special Programs Unit was created by L. Lamar Gay in 1983 and was headed by Mr. Gay from its creation through June, 1989. Mr. Gay developed the policy for the unit and was responsible for hiring Steve Brown in November of 1980. From the inception of the Special Programs Unit through Mr. Gay's tenure as an assistant bureau chief and head of that unit, the Department's interpretation of the term "use" for use tax purposes was that it did not include participation of an inventory vessel in a fishing tournament. According to Brown, it is presently the policy of the Department that the promotion of vessels at boat shows by dealers is not a taxable use. The Department has not issued use tax assessments to dealers participating in boat shows.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered assesing Allied Marine Group, Inc., for payment of use tax in the amount of $27,000 plus interest incurred as a result of the participation of one of its inventoried vessels in the Arthur Smith, Kingfish, Dolphin and Wahoo Fishing Tournament of May 14-15, 1993. DONE AND ENTERED this 19th day of November, 1996, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 1996. COPIES FURNISHED: Albert J. Wollermann, Esquire Mark T. Aliff, Esquire Office of the Attorney General The Capitol - Tax Section Tallahassee, Florida 32399-1050 Craig D. Olmstead, Esquire Jane W. McMillan, Esquire Kelley, Drye and Warren 201 South Biscayne Boulevard, Suite 2400 Miami, Florida 33131 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 At issue herein is whether or not the Petitioner, Kelly Boat Service, Inc.'s and Cape Kennedy Charter Boats, et al's activities fall within the admissions tax liability imposed by Section 212.04, F.S. (1973). Based upon the pleadings filed herein, the documentary evidence introduced during the course of the hearing, the other evidence of record including the arguments of counsel, the following relevant facts are found.
Findings Of Fact In the instant matter, the Department of Revenue issued two sales tax assessments. The first such assessment is against Cape Kennedy Charter Boats and covers the audit period of March 1, 1973, through February 29, 1976. The Department also assessed Kelly Boat Service, Inc., in a series of three separate assessments covering the audit periods August 1, 1970, through January 31, 1976. Based on such assessments, a tax liability resulted in the amount of $25,072.37. Of this amount, $10,000 was paid by the tax payer on July 21, 1976 (Respondent's Composite Exhibit No. 1). The remaining tax liability plus interest which has accrued from July 21, 1976, is outstanding and continues to accrue. During the course of the hearing, the parties agreed that the specific liabilities as set forth in the assessment were not at issue. Rather, Petitioner solely challenged the legal authority of the Department of Revenue to impose the assessments in question. The Petitioners are owners and operators of a fleet of deep sea fishing boats in and around Destin, Florida, which, for a fee, carry individual fishermen to certain fishing banks which lie beyond the three-league limit in the Gulf of Mexico. While there, the Petitioners sell food and drinks to the fishermen and rent them fishing equipment. The fishing is done at the snapper banks in the Gulf of Mexico or in the vicinity of those banks. The fishing equipment and tackle used on these trips are mainly used beyond the three-league limit in the waters of the Gulf of Mexico; and most, if not all, of the food and drinks sold at the galley of the refreshment stand on the boat was outside the three-league limit of the State of Florida. In an earlier summary final judgment, the Circuit Court of Appeal declared, as authorized by Chapter 86, Florida Statutes, 1973, the liability of Kelly Boat Services, Inc., for payment of the admissions tax by Section 212.04, F.S., 1973, from which the Department of Revenue filed an appeal. In that decision, the Court held that Kelly, whose boats take on passengers at Destin for fishing in the Gulf of Mexico beyond the territorial limits of Florida, is taxable at the statutory rate on the admission fare charged at the dock, but that the State is foreclosed from assessing Kelly for taxes that should have been paid between August, 1970, and the first day of August, 1973, the period in which the Department demanded the production of Kelly's records for audit. Section 212.14(6), F.S., 1973. Kelly cross-appealed and urged that its activities were not subject to the tax, citing Straughn v. Kelly Boat Service, Inc., 210 So.2d 266 (Fla.App. 1st 1968). In its decision, the First District Court of Appeal in Dept. of Revenue v. Kelly B Boat Service, Inc., 324 So.2d 351 (Fla. 1976), indicated that the trial court was correct in its reading of its decision in Dept. of Revenue v. Pelican Ship Corp., 257 So.2d 56 (Fla.App 1st 1972), Cert. Denied, 262 So.2d 682 (Fla. 1972), Cert. Dismissed, 287 So.2d 93 (Fla. 1974), and in hold that Kelly's commercial activities, as evidenced by the record, render it liable to assessment for the admissions tax. The Court noted that the trial court was incorrect, however, in foreclosing the Department of Revenue from making the assessment for the full three-year period authorized by Subsection 212.14(6), F.S., 1973. The decision goes on to read that the State is not foreclosed by reason of the Court's 1968 decision in Straughn v. Kelly Boat Service, Inc., or otherwise to assert that on the facts evidenced by record, Kelly should satisfy its full tax liability incurred three years prior to August 1, 1973. North American Company v. Green, 120 So.2d 603 (Fla. 1960); Jackson Grain Company v. Lee, 139 Fla. 93, 190 So. 464 (1939). Based on the above decision of the First District Court of Appeal, the Department's assessment, which the parties admit is factually correct, is valid both as to the August 1, 1970, through July 31, 1973, and the August 1, 1973, through January 31, 1976, audit periods. Since this matter has previously been adjudicated, the same is res judicata as to the legal validity of the Department's assessment. Further, since the assessment relative to Cape Kennedy Charter Boats is based upon the same factual circumstances and legal authority as the one against Kelly Boat Service, Inc., which was upheld as aforementioned in the case of the Dept. of Revenue v. Kelly Boat Service, Inc., supra, there is no factual challenge to the validity of the Department's assessment and there being no assertion by the Petitioner that any rules of law other than those enunciated by the District Court of Appeal in Dept. of Revenue v. Kelly Boat Service, Inc., supra, are applicable, such assessment must likewise be upheld. I shall so recommend. 1/
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, hereby, RECOMMENDED: That the Department of Revenue's assessment in the instant matter against the Petitioners be UPHELD. Additionally, in view of the Petitioners' letter of April 11, 1979, Petitioners' motion to treat this matter as a class action is hereby DISMISSED. RECOMMENDED this 31st day of May, 1979, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675
