The Issue The issue is whether The Department of Financial Services properly imposed a Stop Work Order and Amended Order of Penalty Assessment pursuant to the requirements of Chapter 440, Florida Statutes.
Findings Of Fact The Division is charged with the regulation of workers' compensation insurance in the State of Florida. Respondent AFS, LLC. (AFS), is a corporation located in Jacksonville, Florida, and is involved in the construction industry, primarily framing houses. Braman Avery is the owner and manager of AFS. Lee Arsenault is a general contractor whose business is located in Jacksonville, Florida. Mr. Arsenault contracted with AFS to perform framing services at a construction site located at 1944 Copperstone Drive in Orange Park, Florida. At all times material to this proceeding, AFS maintained workers' compensation coverage for its employees through a licensed employee leasing company. AFS contracted with Greenleads Carpentry, Inc. (Greenleads) to perform work at the job site in question. Prior to subcontracting with Greenleads, Mr. Avery requested from Greenleads, among other things, a certificate of insurance showing that Greenleads had general liability coverage and workers' compensation insurance. Greenleads provided a certificate of insurance to Mr. Avery showing that Greenleads had workers' compensation coverage. The certificate of insurance contains a policy number, dollar limits, and effective and expiration dates of June 1, 2004 through June 1, 2005. Debra Cochran is office manager of Labor Finders, an employee leasing company. According to Ms. Cochran, Labor Finders' corporate office issued the certificate of insurance to Greenleads. At the time of issuance, the certificate of insurance was valid. Greenleads did not follow through on its obligations to Labor Finders in that Green Leads did not "run its workers through" Labor Finders. Consequently, Greenleads' workers were not covered by workers' compensation as indicated on the certificate of insurance. Labor Finders did not issue any document showing cancellation or voiding of the certificate of insurance previously issued. Mr. Avery relied upon the face of the certificate of insurance believing AFS to be in total compliance with statutory requirements regarding workers' compensation for subcontractors. That is, he believed that the Greenleads' workers were covered for workers' compensation as indicated on the face of the certificate of insurance. Mr. Avery was not informed by Labor Finders or Greenleads that Greenleads did not, after all, have workers' compensation coverage in place on the workers performing work under the contract between AFS and Greenleads on the worksite in question. Bobby Walton is president of Insure America and has been in the insurance business for 35 years. His company provides general liability insurance to AFS. According to Mr. Walton, Mr. Avery's reliance on Greenleads' presentation to him of a purportedly valid certificate of insurance is the industry standard. Further, Mr. Walton is of the opinion that there was no obligation on behalf of Mr. Avery to confirm coverage beyond receipt of the certificate of insurance provided by the subcontractor. That is, there is no duty on behalf of the contractor to confirm coverage beyond receipt of the certificate of insurance. Allen DiMaria is an investigator employed by the Division. His duties include investigating businesses to ensure that the employers in the state are in compliance with the requirements of the workers' compensation law and related rules. On January 5, 2005, Mr. DiMaria visited the job site in question and observed 13 workers engaged in construction activities. This visit was a random site check. Mr. DiMaria interviewed the owner of Greenleads and checked the Division's database. Mr. DiMaria determined that Greenleads did not have workers' compensation coverage. After conferring with his supervisor, Mr. DiMaria issued a stop-work order to Greenleads, along with a request for business records for the purpose of calculating a penalty for Greenleads. In response to the business records request, Greenleads submitted its check ledger along with an employee cash payment ledger, both of which were utilized in calculating a penalty for Greenleads. On January 11, 2005, Mr. DiMaria issued an Amended Order of Penalty Assessment to Greenleads for $45,623.34. Attached to the Amended Order of Penalty Assessment issued to Greenleads is a penalty worksheet with a list of names under the heading, "Employee Name", listing the names of the employees and amounts paid to each employee. During the investigation of Greenleads, Mr. DiMaria determined that Greenleads was performing subcontracting work for Respondent. This led to the Division's investigation of AFS. Mr. DiMaria spoke to Mr. Avery and determined that AFS paid remuneration to Greenleads for work performed at the worksite. He checked the Division's data base system and found no workers' compensation coverage for AFS. He determined that AFS had secured workers' compensation coverage through Southeast Personnel Services, Inc. (SPLI), also a licensed employee leasing company. However, the policy with SPLI did not cover the employees of Greenleads performing work at the job site. Mr. DiMaria requested business records from Mr. Avery. Mr. Avery fully complied with this request. He examined AFS' check registry and certificates of insurance from AFS. Other than the situation involving Greenleads on this worksite, Mr. DiMaria found AFS to be in complete compliance. On January 10, 2005, after consulting with his supervisor, Robert Lambert, Mr. DiMaria issued a Stop Work Order to AFS. A Stop Work Order issued by the Division requires the recipient to cease operations on a job site because the recipient is believed to be not in compliance with the workers' compensation law. The Stop Work Order issued by Mr. DiMaria was site specific to the work site in question. Based upon the records provided by Mr. Avery, Mr. DiMaria calculated a fine. Penalties are calculated by determining the premium amount the employer would have paid based on his or her Florida payroll and multiplying by a factor of 1.5. Mr. DiMaria's calculation of the fine imposed on AFS was based solely on the Greenleads' employees not having workers' compensation coverage. On February 16, 2005, Mr. DiMaria issued an Amended Order of Penalty in the amount of $45,643.87, the identical amount imposed upon Greenleads. A penalty worksheet was attached to the Amended Order of Penalty Assessment. The penalty worksheet is identical to the penalty worksheet attached to Greenleads' penalty assessment, with the exception of the business name at the top of the worksheet and the Division's case number. Greenleads partially paid the penalty by entering into a penalty payment agreement with the Division. Greenleads then received an Order of Conditional Release. Similarly, AFS entered into a penalty payment agreement with the Division and received an Order of Conditional Release on February 16, 2005. Moreover, AFS terminated its contract with Greenleads. Lee Arsenault is the general contractor involved in the work site in question. AFS was the sole framing contractor on this project, which Mr. Arsenault described as a "pretty significant project." He has hired AFS to perform framing services over the years. However, because the Stop Work Order was issued to AFS, Mr. Arsenault had to hire another company to complete the framing work on the project. Mr. Avery estimates economic losses to AFS as a result of losing this job to be approximately $150,000, in addition to the fine. Mr. Arsenault, Ms. Cochran, as well as the Division's investigator, Mr. DiMaria, all agree with Mr. Walton's opinion, that it is customary practice in the construction industry for a contractor who is subcontracting work to rely on the face of an insurance certificate provided by a subcontractor. Robert Lambert is a workers' compensation district supervisor for the Division. When asked under what authority the Division may impose a penalty on both Greenleads and AFS for the same infraction, he replied that it was based on the Division's policy and its interpretation of Sections 440.02, 440.10, and 440.107, Florida Statutes.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Division of Workers' Compensation rescind the Amended Order of Penalty Assessment issued February 16, 2005, and the Stop Work Order issued to Petitioner on January 10, 2005. DONE AND ENTERED this 26th day of August, 2005, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS 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 26th day of August, 2005. Endnote 1/ While this Recommended Order does not rely upon the case cited by Respondent in its Notice of Supplemental Authority, Respondent was entitled to file it. COPIES FURNISHED: Colin M. Roopnarine, Esquire Douglas D. Dolin, Esquire Department of Financial Services Division of Workers' Compensation East Gaines Street Tallahassee, Florida 32399 Mark K. Eckels, ESquire Boyd & Jenerette, P.A. North Hogan Street, Suite 400 Jacksonville, Florida 32202 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Carlos G. Muniz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact The parties stipulated and it is found in (a) through (d) below: Respondent, Bruce Leazenby, is a licensed real estate broker having been issued License No. 0198529. Last known address is 130 Mandalay Road, Punta Gorda, Florida 33950. Respondent, M&M Realty, Inc., is a corporate broker having been issued License No. 0133397. Last known address is 301 West Marion Avenue, Punta Gorda, Florida 33950. At all times material herein, Respondent, M&M Realty, Inc., was a licensed real estate broker engaging in real estate activities at the address stated above. At all times material herein, Respondent, Bruce Leazenby, was the sole active broker of and for Respondent, M&M Realty, Inc., and responsible for his individual acts and of said corporation by being its active broker. On August 18, 1980, Mr. Orville S. Logsdon entered into a Management Compensation Agreement with M&M Realty, Inc. (See Petitioner's Exhibit 2). Under that agreement, Mr. Logsdon agreed to act as manager of M&M Realty and to supervise and organize the sales personnel. In exchange, Mr. Logsdon was to be compensated as follows: Manager shall receive ten percent of the commissions received, by Realtor, as a result of Real Estate transactions. Compensation shall begin with commissions received at closing as a result of Real Estate sales contracts written after August 18, 1980. Realtor shall make pay ments to Manager quarterly, beginning September 30, 1980, and at the end of each quarter thereafter, for the term of this agreement. Manager shall receive, on his individual transactions, a total of seventy percent (70 percent) of the commissions received by Realtor; Realtor shall receive thirty percent (30 percent). (See Petitioner's Exhibit 2). Mr. Logsdon continued as manager with M&M Realty, Inc. until August, 1981. His leaving resulted in part from an argument which arose after Mr. E. M. Leazenby, President of M&M Realty, informed Mr. Logsdon that they needed to discuss the commissions he had been receiving. At the time Mr. Logsdon left M&M Realty, he had been paid all commissions due him on sales and listings in which he was personally involved as a real estate salesman. Prior to his leaving M&M Realty, a dispute had arisen between Mr. Logsdon and M&M Realty as to the compensation Mr. Logsdon was due under the Management Compensation Agreement. Mr. Logsdon's interpretation of the agreement was that his compensation would be 10 percent of all commissions coming to M&M Realty. Mr. Logsdon further contended that the 10 percent override applied to all transactions including his individual transactions where he received 70 percent of the commissions received by the realtor. This would essentially give Mr. Logsdon 80 percent of the commissions coming to the realtor in Mr. Logsdon's individual transactions. This interpretation of the Management Compensation Agreement conflicts with Paragraph 2 of the agreement which provides that M&M Realty would receive 30 percent of the commission coming to M&M Realty on Mr. Logsdon's individual transactions. At the time he left M&M Realty, Mr. Logsdon claimed he was owed approximately $4,070.00 based upon a work sheet he had been given by Bruce Leazenby sometime prior to his leaving. Mr. Logsdon had made no effort to independently determine what amount, if any, he was due as compensation. Shortly after Mr. Logsdon left M&M Realty, a final audit was performed by Deloris Leazenby of the year August, 1980, to August, 1981, to determine what amount was due Mr. Logsdon as compensation as manager. During the course of the audit, it was discovered that Mr. Logsdon had been overpaid during the year on several transactions. The numbers in Petitioner's Exhibit 3, the worksheet provided to Mr. Logsdon prior to his leaving, were also discovered to be inaccurate. The figures in Petitioner's Exhibit 3 do not comport with the percentages reflected in the contract. A copy of the spread sheet prepared by M&M Realty in the course of the final accounting was provided to Mr. Logsdon. This occurred within a short time after Mr. Logsdon left M&M Realty. Mr. Logsdon made no response whatsoever to the spread sheet which reflected that he was due some $271. There was no further discussion between the parties prior to a complaint being filed with DPR sometime after the spread sheet was provided to Mr. Logsdon. There was no further demand by Mr. Logsdon for any further accounting. There was also a dispute as to the terms of the contract itself. This dispute involved a question of whether the 10 percent override applied to transactions handled by the broker, Bruce Leazenby or his mother, Deloris Leazenby. Although Mr. Logsdon testified there had been no modifications to that agreement, there had been at least three modifications to the agreement subsequent to its execution. First, Mr. Logsdon had agreed to waive the requirement for regular quarterly payments in order to help M&M Realty through an extended period of cash flow problems. Secondly, Mr. Logsdon agreed to a deduction of $20.00 from each of his commissions to help M&M Realty defray the cost of a computer. Finally, there were deductions for insurance from commissions. These insurance deductions were not addressed in the Management Compensation Agreement. Additionally, Logsdon had been overpaid the 10 percent fee on numerous transactions prior to March 31, 1981, the earliest date on Petitioner's Exhibit 3, and had also been overpaid on certain commissions during the course of the year. In summary, it cannot be determined from this record the specific amount of compensation due Mr. Logsdon, if any. It is clear, however, that the amount due, if any, is substantially less than the $4,070 claimed by Mr. Logsdon at the time he left M&M Realty, Inc. Prior to and subsequent to Mr. Logsdon leaving M&M Realty, there was a good faith reasonable dispute between Mr. Logsdon and M&M Realty as to the amount of compensation Mr. Logsdon was due as manager under the contract. Prior to his leaving M&M Realty, Mr. Logsdon was made aware that there was a dispute as to how much compensation he was to receive for being manager. He had been paid all commissions he was due as a salesman. There was no evidence of any trick, scheme, device or other dishonest acts on the part of Respondents, Bruce Leazenby or M&M Realty, Inc.
Recommendation Based upon the foregoing facts and conclusions of law, it is, therefore: RECOMMENDED: That the Respondents be found not guilty of Counts I and II of the Administrative Complaint and that such complaint therefore be DISMISSED. DONE and ENTERED this 11th day of May, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS 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 11th day of May, 1983. COPIES FURNISHED: John Huskins, Esquire Department of Professional Regulation Post Office Box 1900 400 West Robinson Street Orlando, Florida 32801 John S. Dzurak, Esquire 306 East Olympia Avenue Post Office Box 400 Punta Gorda, Florida 33951 Mr. Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Post Office Box 1900 Orlando, Florida 32802
The Issue Whether there is probable cause for Petitioner to bring an action against Respondents for violation of the Florida Deceptive and Unfair Trade Practices Act?
Findings Of Fact Respondents sell used cars in Pensacola, about 500 a year. On or about June 19, 1981, when Fannie Mae Tunstall bought a '76 Buick LeSabre from Fairfield Motors, Inc. (Fairfield), she dealt with Elaine Owens Atkins, who is Fairfield's general manager, secretary-treasurer and a six-year employee. The installment sales contract specified an annual percentage rate of 29.64 percent, and was stamped with the legend, "MINIMUM $25 REPO OR COLLECTION FEE." Respondent's Exhibit No. 1. Ms. Tunstall told Ms. Atkins the payments were too much but signed the papers anyway, and did so without reading them, although Ms. Atkins had told her to read them. The payments did indeed prove too much and Ms. Tunstall fell behind. She was 13 days late with a payment in November of 1981, but Ms. Tunstall and Ms. Atkins had discussed the matter and Fairfield agreed to accept the payment late. Fairfield accepted other payments late, but arranged to have Willie Easley (formerly a singer and now a minister as well as a repossessor of cars) take possession of the Quick early in the morning of January 10, 1983, and drive it away. Ms. Tunstall had failed to make the monthly payment due December 30, 1982. Ms. Atkins had telephoned her once and gotten no answer. Later on January 10, 1983, Fairfield agreed to return the car in exchange for December's payment, another payment in advance, a six dollar late fee and a $100 repossession fee. Ms. Tunstall paid the entire balance Fairfield claimed to be owed and retrieved the car. Linda Louise LaCoste and her husband Ronnie have bought several cars from Fairfield, including a 1976 Chevrolet Suburban Mr. LaCoste bought on February 7, 1983, under an installment agreement calling for interest at an annual percentage rate in excess of 30 percent. The "cash price" was $3,459.75, and the "total sale price" was $4,613.15. Respondent's Exhibit No. 3. The LaCostes understood from prior dealings that their agreement required Mr. LaCoste to maintain insurance on the vehicle, and Mr. LaCoste contracted with Allstate Insurance Company (Allstate) for appropriate coverage. Allstate sent Fairfield a notice of cancellation for nonpayment of premium effective 12:01 A.M. April 4, 1983. Petitioner's Exhibit No. 4. At 11:25 A.M. on April 4, 1983, Allstate accepted the premium Ronnie LaCoste offered in order to reinstate the policy, No. 441361747, and Allstate's Chirstine Smith also wrote a new policy to be sure there would be coverage. Ms. Smith told Fairfield that insurance was in force on April 4, 1983. On April 20, 1983, Allstate issued another notice of cancellation for nonpayment of premium on policy No. 441361747, effective 12:01 A.M. May 4, 1983. At ten minutes past three o'clock on the afternoon of May 4, 1983, Mr. LaCoste's Chevrolet Suburban was repossessed at Fairfield's instance on account of the apparent lapse of insurance. Mrs. LaCoste and here sister appeared promptly at Fairfield's place of business and tendered payment due that day. All prior payments to Fairfield were current. When Mrs. Atkins refused payment, Mrs. LaCoste and here sister protested with such vehemence that a Fairfield employee called the sheriff's office. According to Fairfield's contemporaneous records, Fairfield employees ("we") tried to give Mrs. LaCoste a letter "advising vehichle [sic] would be held for 10 days" (i.e., that it would be sold thereafter) but "she refused to accept a copy." Respondent's Exhibit No. 3. At hearing, Ms. Atkins conceded that she had not mailed a copy of the letter to Mr. LaCoste but testified that Mrs. LaCoste accepted a copy after refusing to take it initially. Mrs. LaCoste denied that she ever received the letter, and her version has been credited. On May 7, 1983, Fairfield received another communication from Allstate. Whether insurance coverage in fact lapsed on May 4, 1983 was not clear from the record. On May 17, 1983, Fairfield sold the Chevrolet Suburban for $2,050.00. Carolyn V. Kosmas purchased a 1978 Ford LTD II from Fairfield and made a downpayment of $550.00 on June 2, 1983. Under the terms of the installment sale contract, which called for an annual percentage rate in excess of 29 percent, she was to begin seventy dollar ($70.00) biweekly payments on June 22, 1983. At the time of the sales of the Ford to Ms. Kosmas on June 2, 1983, Fairfield asked for credit information about her fiance as well as about herself. On June 24, 1983, she appeared at Fairfield's place of business and tendered not only the payment due June 22 but also the payment due July 6, a total of $140.00 in cash. Ms. Atkins refused to accept the money, telling her that her references had not panned out, and asked her to surrender the keys to the car and gather up her personal effects. Ms. Kosmas made no secret of her opinion that she was not being treated fairly, but, crying and afraid, eventually agreed to treat the transaction as a rental and accepted a refund of $104.39 on that basis. Ms. Atkins "advised if she gave me another background sheet, that I could verify, I would renegotiate with her," Respondent's Exhibit No. 5, but Ms. Kosmas told Ms. Atkins that she had lost her job at West Florida Hospital and the renegotiation eventuated in the retroactive lease. Respondent Pearl Allen was present on June 24, 1983, and took the car keys from her. It was also he who wrote her on June 27, 1983 that the 1978 Ford LTD II would be privately sold on July 6, 1983. She did not appear when and where she was told the sale would occur. The Ford was in fact sold at auction in Montgomery, Alabama, on July 19, 1983. Respondent's Exhibit No. 5. Mary Lee Hobbs' husband Forace paid Fairfield $800.00 down on a 1977 Oldsmobile 98 on February 27, 1982, agreeing to maintain insurance on the car until paid for, and to pay the unpaid principal balance of $4134.25 over a two and a half year period together with interest at an annual percentage rate of 29.79. Stamped on the contract was the legend, "MINIMUM $25 REPO OR COLLECTION FEE." In part, the installment sale contract read: * NOTE: DISCLOSURES REQUIRED BY FEDERAL LAW, Respondent's Exhibit No. 6 (reduced in size), has been omitted from this ACCESS Document. For review, contact the Division's Clerk's Office. All payments were current when, at about half past five o'clock on the morning of November 1, 1983, Fairfield's agents used a wrecker to remove the Oldsmobile, damaging the Hobbses' porch in the process. Fairfield acted because it received notice of cancellation or nonrenewal of the insurance policy that Hobbs maintained on the car. Typed on the form notice as the effective date of cancellation was November 29, 1983. Someone has written in ink "should be 10-29." In fact the insurance policy never lapsed. According to Fairfield's records, they received conflicting information, on October 29, 1983, about whether an insurance premium had been paid. The Hobbses' 27-year old "daughter said they p[ai]d--Conway Spence said they did not pay." Respondent's Exhibit No. 6. This was the same day Mr. Spence, an insurance agent, erroneously informed Fairfield that the effective date of expiration "should be 10-29." Respondent's Exhibit No. 6. Even after Mr. Spence's error was known to it, Fairfield refused to return the car without payment of a $75.00 "repossession fee," and also refused to let the Hobbs children return with the laundry they were sent to fetch from the trunk of the car. It was the refusal to give up the dirty laundry that sent Mrs. Hobbs to the authorities. Karel Jerome Bell bought a 1977 Delta 88 Oldsmobile from Fair field on July 22, 1982, under an installment sale contract calling for two "pick up notes" to be paid in August of 1982 and biweekly payments of $125.00 thereafter until payments reached a total of $4161.212. Respondent's Exhibit No. 7. The "pick up notes," each for $220.00 were due August 7 and 21, 1982, and were not treated as down payments on the installment sale form. After reducing his indebtedness to $1221.21, Mr. Bell fell two payments behind, and Fairfield repossessed the Oldsmobile on July 7, 1983. The same day Fairfield wrote Mr. Bell that it intended to sell his car, but not time or date was specified. On July 8, 1983, Mr. Bell called and asked whether he could continue making payments while the car on the lot. Respondent's Exhibit No. 7. Fairfield's Ms. Gilstrap accepted $100.00 from Mr. Bell on July 12, 1983, which she applied to satisfy a reposession fee of $100.00. On the Bell contract, too, had been stamped, "MINIMUM $25 REPO OR COLLECTION FEE." Ms. Gilstrap "told him as long as he paid something something regularly on the account, I felt sure we would hold it for him." Mr. Bell indicated he would pay an additional $125.00 the following Friday and Ms. Gilstrap made a notation to this effect in his file, where she also wrote, "Pls. don't sell he intends to pay for." Respondent's Exhibit No. 7. Mr. Bell had not made any further payment when, on July 30, 1983, without notice to Mr. Bell, Fairfield sold the car for $1,000.00 to a wholesaler. Respondents use form installment sale contracts. A blank form like the one in use at the time of the hearing was received as Respondent's Exhibit No. This was the form used in the Kosmas and LaCoste transactions. The predecessor form used in the Bell, Hobbs and Tunstall transactions was similar in many respects. The earlier form provided, "LATE CHARGES: Buyer(s) hereby agrees to pay a late charge on each installment in default for 10 days or more in an amount of 5 percent of each installment or $5.00 whichever is less." On the reverse, the form provided: ACCELERATION AND REPOSSESSION. In the event any Buyer(s) or Guarantor of this Contract fails to pay any of said installments, including any delinquency charges when due or defaults in the performance of any of the other provisions of this Contract or (c) in case Buyer(s) or Guarantor becomes insolvent or (d) institutes any type of insolvency proceedings or (e) has any thereof instituted against him, or (f) has entered against him any judgment or filed against him any notice of lien in case of any Federal tax or has issued against him any distraint warrant for taxes, or writ of garnishment, or other legal process, or (g) in case of death, adjudged incompetency, or incarceration of the Buyer(s) or Guarantor or (h) in case the seller or the holder of this Contract, upon reasonable cause, determines that the prospect of payment of said sums or the performance by the Buyer(s) or his assigns of this Contract is impaired, then, or in such event, the unpaid portion of the balance hereunder shall, without notice, become forthwith due and payable and the holder, in person or by agent, may immediately take possession of said property, together with all accessions thereto, or may, at first, repossess a part and later, if necessary, the whole thereof with such accessions, and for neither or both of these purposes may enter upon any premises where said property, may be and remove the same with or without process of law. Buyer(s) agrees in any such case to pay said amount to the holder, upon demand, or, at the election of the holder, to deliver said property to the holder. If, in repossessing said property, the holder inadvertently takes possession of any other goods therein, consent is hereby given to such taking of possession, and holder may hold such goods temporarily for Buyer(s), without responsibility of liability therefor, providing holder returns the same upon demand. There shall be no liability upon any such demand unless the same be made in writing within 48 hours after such inadvertent taking of possession. Should this contract mature by its term or by acceleration, as hereinabove provided, then, and in either such event, the total principal amount due hereunder at that time shall bear interest at the rate of 10 percent per annum, which principal and interest, together with all costs and expenses incurred in the collection hereof, including attorneys fees (to be not less than 15 percent of the amount involved), plus appellate fees, if any, and all advances made by Seller to protect the security hereof, including advances made for or on account of levies, insurance, repairs, taxes, and for maintenance or recovery of property shall be due the Holder hereof and which sums Buyer(s) hereby agrees to pay. * * * LIABILITIES AFTER POSSESSION. Seller, upon obtaining possession of the property upon default, may sell the same or any part thereof at public or private sale either with or without having the property at the place of sale, and so far as may be lawful. Seller may be a purchaser at such sale. Seller shall have the remedies of a secured party under the Uniform Commercial Code (Florida) and any and all rights and remedies available to secured party under any applicable law, and upon request or demand of Seller, Buyer(s) shall, at his expense, assemble the property and make it available to the Seller at the Seller's address which is designated as being reasonably convenient to Buyer(s). Unless the property is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Seller will give Buyer(s) reasonable notice of the time and place of any public or private sale thereof. (The requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to Buyer(s) at address shown on records of Seller at least five (5) days before the time of the sale or disposition) Expenses of retaking, holding, preparing for the sale, selling, attorneys' fees, supra, incurred or paid by Seller shall be paid out of the proceeds of the sale and the balance applied on the Buyer(s) obligation hereunder. Upon disposition of the property after default, Buyer(s) shall be and remain liable for any deficiency and Seller shall account to Buyer(s) for any surplus, but Seller shall have the right to apply all or any part of such surplus against (or to hold the same as a reverse against) any and all other liabilities of Buyer(s) to Seller. Similarly, the more recent form provides, on the obverse, Late Charge: If a payment is received more than ten (10) days after the due date, you will be charged $5.00 or five (5 percent) of the payment, whichever is less. and on the reverse, has identical provisions on "Acceleration and Repossession" and "Liabilities After Repossession."
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That Petitioner find probable cause to initiate judicial proceedings against Respondents pursuant to Section 501.207(1), Florida Statutes (1981). DONE and ENTERED this 26th day of April, 1985, in Tallahassee, Florida. ROBERT T. BENTON, II 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 26th day of April, 1985. COPIES FURNISHED: William P. White, Jr., Esquire Assistant State Attorney Post Office Box 12726 Pensacola, Florida 32501 Paul A. Rasmussen, Esquire Eggen, Bowden, Rasmussen & Arnold 4300 Bayou Boulevard, Suite 13 Pensacola, Florida 32503 Curtis A. Golden, State Attorney First Judicial Circuit of Florida Post Office Box 12726 190 Governmental Center Pensacola, Florida 32501
The Issue This case arises from a contract entered into by the Department of Health and Rehabilitative Services and the Coalition for Progress, Inc., pursuant to which the Coalition was to provide certain services for a period of 12 months for a total contract amount of $200,000.00. At the request of the Coalition the contract was shortened to cover only an 11-month period. At the same time that DHRS shortened the period of the contract, DHRS also reduced the total amount payable under the contract by one-twelfth of the original contract amount and arrived at a new contract amount of $183,333.37. In its petition in this case the Coalition asserts that it incurred reimbursable expenses in the amount of $8,434.21 over and above the revised total contract amount of $183,333.37. DHRS has refused to pay the additional $8,434.21 claimed by the Coalition. The Coalition claims that it is entitled to the additional amount of $8,434.21 because it provided services in excess of the services it was required to provide under the contract and because even if this additional amount is paid, the total amount paid under the contract will not exceed the original contract amount of $200,000.00.
Findings Of Fact On the basis of the testimony of the witnesses and the exhibits admitted into evidence, I make the following findings of fact: During June of 1982 the Department of Health and Rehabilitative Services entered into a contract with the Coalition for Progress, Inc., pursuant to which the Coalition was to provide certain services specified in the contract for a period of time beginning on July 1, 1982, and ending on June 30, 1983. The contract was a "cost reimbursement" contract pursuant to which the Coalition would be reimbursed for certain authorized expenditures it incurred in the course of fulfilling its obligations under the contract. The contract also provided that the maximum amount payable to the Coalition during the one-year period of the contract would not exceed $200,000.00. The contract also contained a provision reading as follows: This contract may be terminated by either party upon no less than thirty (30) days' notice without cause; notice shall be delivered by certified mail, return receipt requested, or in person with proof of delivery. The contract also contained a provision reading as follows: Reimbursement shall be made in monthly amounts requested on the invoice submitted by the Provider in quintuplicate provided that reimbursement is requested for items in the approved contract budget referenced in attachment 2 and that the charges on the invoice are accompanied by appropriate documentation. The Provider must submit the final invoice for payment to the Department no more than forty-five (45) days after the contract ends or is terminated; and if the Provider fails to do so, all right to payment is forfeited, and the Department will not honor any requests submitted after the aforesaid contract ends. Any payment due under the terms of this contract may be withheld until all evaluation and financial reports due from the Provider, and necessary adjustments there to, have been approved by the Department. Although the Coalition did a satisfactory job of performing its service obligations under the contract, the Coalition had difficulty staying within its authorized budget and also began to experience cash flow problems. Because of these cash flow problems, the officers of the Coalition decided it would be in the best interest of the Coalition to seek to terminate the contract on May 31 1983 rather than on June 30, 1983, as provided in the original contract. Accordingly, on April 29, 1983, the Executive Vice President of the Coalition hand delivered a letter to the Department of Health and Rehabilitative Services requesting that the Coalition be permitted to terminate the contract one month early. On May 2, 1983, the Department of Health and Rehabilitative Services hand delivered to the Coalition a letter acknowledging receipt of the request for early termination and advising the Coalition that the Department of Health and Rehabilitative Services was agreeable to the early termination. The DHRS letter of May 2, 1983, also advised the Coalition: However, since the REACT II contract will have only been effective for a period of eleven (11) months, the maximum amount reimbursable for the time period July 1, 1982 through May 31, 1983, will be $183,333.37. Expenditures above this amount will not be reimbursed. Upon not hearing from the Coalition following the letter of May 2, 1933, the Department of Health and Rehabilitative Services sent another letter to the Coalition on May 24, 1983, which included the following: Having had no response to our May 2, 1983, correspondence, this letter is to confirm that your contract will terminate, at your request, May 31, 1983. As you (sic) stated in our May 2, 1983 letter, the maximum reimbursable amount for July 1, 1982 through May 31, 1983 is $183,333.37. Expenditures above this amount will not be reimbursed. The Coalition terminated the contract effective May 31, 1983, and did not provide any services under the contract after that date. The Coalition presented its last invoice for cost reimbursement under the contract during July of 1983. The DHRS employees who reviewed the invoice submitted in July of 1983 rejected it for two reasons: (a) the invoice included a request for reimbursement for unapproved expenses (accrued vacation leave) and (b) payment of the full amount of the invoice submitted in July of 1983 would have resulted in total payments under the contract in excess of the revised contract total of $183,333.37. The invoice was returned to the Coalition and on August 10, 1983, the Coalition submitted a corrected invoice in the amount of $12,493.59. DHRS paid the corrected invoice on August 11, 1983. From the time of the DHRS letter of May 2, 1983, which advised the Coalition that early termination of the contract would result in a reduction of the total amount of funds available under the contract, until the time that the Coalition submitted and was paid for its final invoice in August of 1983, the Coalition did not reply to the DHRS letters informing the Coalition that the contract amount would be reduced by one-twelfth. Specifically, during that period of time the Coalition did not express any protest or objection to the revision of the total amount of funds available under the shortened contract period. Further, the Coalition did not present any invoices for reimbursement after the corrected invoice which was presented on August 10, 1983, and paid on August 11, 1983. Although premature termination of contracts for services entered into with DHRS are not very frequent, they have happened before. In the past it has been the consistent policy of DHRS, when dealing with early termination of cost reimbursable contracts for services for a specified period of time, to reduce the total amount of funds available under the contract in direct proportion to the reduction in the period of the contract period. Such service contracts are usually annual contracts and when the contracts are terminated sooner than the expiration of the full year for which services have been contracted, it has been the consistent policy of DHRS to reduce the total amount of funds which were available under the annual contract by one-twelfth of the original total for each month during which services are not provided. The funds which are allocated to the local districts of the Department of Health and Rehabilitative Services for the purpose of funding contracts such as that entered into with the Coalition are allocated subject to the condition that any such funds which are not spent must be returned to the state offices of the Department of Health and Rehabilitative Services for allocation to other programs. In reliance upon the Coalition's apparent acceptance of the reduction in the total amount of funds available under the contract and further reliance upon the Coalition's submission of a corrected final invoice during the month of August in 1983, the District Eleven office of the Department of Health and Rehabilitative Services returned the unspent portion of the funds which had been allocated to the contract with the Coalition to the state office of the Department of Health and Rehabilitative Services for reallocation to other programs. Accordingly, District Eleven of the Department of Health and Rehabilitative Services no longer has any funds in its budget with which to make any further payments under the contract with the Coalition. 2/
Recommendation Based upon all of the foregoing I recommend that the Department of Health and Rehabilitative Services enter a Final Order denying the Coalition's claim for $8,434.21. DONE AND ORDERED this 10th day of August, 1984, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of August, 1984.
The Issue The issue is whether Respondent properly dismissed Petitioner's Petition for Resolution of Workers' Compensation Reimbursement Dispute, pursuant to section 440.13(7), Florida Statutes.
Findings Of Fact At all material times, C. G. was employed by Solo Printing, Inc., which had workers' compensation coverage through Intervenor. On March 2, 2012, C. G. was injured at work as a result of falling onto his knee during a fight with a coworker. C. G. was transported from the worksite by ambulance to Petitioner's hospital, where he was admitted. Later the same day, C. G. underwent emergency surgery to his knee. He was discharged from the hospital on March 8, 2012. On April 2, 2012, Petitioner billed Intervenor for services rendered to C. G. during his hospitalization. On May 11, 2012, Intervenor issued a Notice of Denial. On June 8, 2012, Petitioner filed with Respondent the Petition. On June 14, 2012, Respondent issued the Dismissal. Intervenor's Notice of Denial cites three grounds for denying payment for the bill: section 440.09(3), which prohibits compensation for injuries to an employee "occasioned primarily" by his willfully trying to injure another person; lack of authorization for services; and any other defense that may become available. The Dismissal cites one ground for dismissing the Petition: Petitioner's failure to submit an EOBR with its Petition. The only ground cited in the preceding paragraph that is relevant is the first cited by Intervenor. This ground raises the issue of compensability by disclosing that Intervenor has not conceded that C. G.'s injuries are compensable. Nor has a Judge of Compensation Claims (JCC) ever entered an order determining that C. G.'s injuries are compensable. In fact, G. has never filed a claim for benefits. At the time in question, C. G. had health insurance, but his insurer reportedly denied coverage on the ground that it insured's injuries were covered by workers' compensation. It does not appear that Petitioner has commenced a legal action against C. G. for payment for the services that it rendered to him in March 2012.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a Final Order dismissing the Petition. DONE AND ENTERED this 25th day of February, 2013, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 2013. COPIES FURNISHED: Lorne S. Cabinsky, Esquire Law Offices of Lorne S. Cabinsky, P.A. Suite 1500 101 Northeast 3rd Avenue Fort Lauderdale, Florida 33301 Mari H. McCully, Esquire Department of Financial Services Division of Workers' Compensation 200 East Gaines Street Tallahassee, Florida 32399-4229 James T. Armstrong, Esquire Walton Lantaff Schroeder and Carson, LLP Suite 1575 200 South Orange Avenue Orlando, Florida 32801 Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Division of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390
The Issue Whether this cause is barred by a release of all claims.
Findings Of Fact Petitioner filed a Charge of Discrimination with the Florida Commission On Human Relations (FCHR) on or about December 13, 2003, based upon "race" and "national origin." The charge alleges that the employer removed Petitioner from working on a machine with which Petitioner had been familiar for eight years and assigned him to a machine for which he had not been trained, while the old machine was assigned to "a white person who has been working for less than one year." The original Charge did not contain allegations of lost seniority, pay, benefits, or of unlawful termination. On or about December 6, 2004, the FCHR entered its "Determination: No Cause," and notified the parties. On December 27, 2004, Petitioner filed his Petition for Relief, which alleged that the employer constantly assigned Petitioner to very "mterse" [sic.] jobs because the employer wanted Petitioner to leave, and the employer was "neglecting and careless to my needs." The Petition contains no specific allegation of constructive termination, i.e., that Petitioner was somehow forced into leaving Respondent's employ. The case was referred to the Division of Administrative Hearings (DOAH) on or about January 5, 2005. On or about January 18, 2005, Respondent responded to the Division's Initial Order by providing potential hearing dates. Petitioner filed no response. On January 28, 2005, a Notice of Hearing for April 4, 2005, was entered and mailed. On March 1, 2005, Respondent filed a Motion for Summary Final Order, together with supporting documentation including an affidavit of Joseph W. Standley, the attorney who had represented the Respondent Employer in Petitioner's workers' compensation claim against the employer. Petitioner did not timely respond in writing to Respondent's Motion, as he is permitted to do by Florida Administrative Code Rule 28-106.204. Therefore, the undersigned was at liberty to rule upon the pending Motion without a hearing. Furthermore, pursuant to Chapter 120, Florida Statutes, the pending Motion may be treated as a Motion for a Recommended Order of Dismissal. However, it was clear to the undersigned that oral argument or further memoranda on the pending Motion would be helpful, due to specific provisions of Chapter 440, Florida Statutes, The Florida Workers' Compensation Act, and the Administrative Code Rules promulgated thereunder. So, in an abundance of caution, the following provisions were contained in the Order entered March 21, 2005: The disputed-fact hearing now scheduled for April 4, 2005, is hereby cancelled. Petitioner Eligio Orellana is hereby granted to and until April 4, 2005, in which to either (a) file a written response in opposition to the Motion or (b) telephone the secretary to the undersigned at the number below to schedule oral argument by telephone. In the event Petitioner avails himself of neither option above, the Motion will be considered sua sponte. Petitioner requested of the secretary to the undersigned that oral argument by telephone be scheduled. Arrangements were made for a telephonic conference with both parties. However, Petitioner did not appear and participate in the pre-arranged telephonic conference call, so another Order was entered on April 15, 2005. That Order provided as follows: This cause came on for oral argument of Respondent's Motion for Summary Final Order by a telephonic conference on April 13, 2005. Despite Petitioner's request for this opportunity, which request was made late, pursuant to the Order entered March 21, 2005, and despite Petitioner agreeing to that date and time for the conference call, Petitioner did not appear by telephone. Therefore, Respondent was permitted to argue the pending Motion, which will be treated as a motion for a recommended order of dismissal. The undersigned having heard Respondent's argument, the parties are granted 15 days from date of this Order in which to state, in writing, filed with the Division of Administrative Hearings, their respective positions with regard to the pending Motion, specifically addressing the effect, if any, of Rule 4.143, Florida Workers' Compensation Rules and its successor, Florida Administrative Code Rule 60Q-6.123(1)(c). Copies of these rules are attached and incorporated herein as Exhibit "A." Respondent addressed the issues raised by the Petition for Relief, the pending Motion, and the foregoing Order, by timely filing further written argument and exhibits. Once again, Petitioner filed a paper but it failed to address the issues. On July 22, 2005, another Order to clarify facts and law was entered, providing Petitioner a last opportunity to be heard. That Order provided: Petitioner did not file a response in writing to Respondent's Motion for Summary Final Order as permitted by Florida Administrative Code Rule 28-106.204, and did not appear by telephone on April 13, 2005, when oral argument was scheduled for his benefit. Petitioner did file an explanation, of sorts, as to why he did not appear for the April 13, 2005, conference call, but that explanation did not address the Order entered herein on April 15, 2005, which Order allowed Petitioner to send the undersigned a written argument demonstrating his opposition to the pending Motion. Respondent responded in writing to the April 15, 2005 Order, as permitted. On its face, that material sets forth good cause why this case should be dismissed, the reason being that Petitioner entered into a full and complete release of Respondent while fully advised by an attorney. Florida Administrative Code Rule 60Y- 5.006, authorizes dismissal of discrimination complaints on several grounds, including "(2) The complaint has been resolved by negotiated settlement pursuant to subsection 60Y-5.003(10), F.A.C." However, in an abundance of caution, it is ORDERED: Petitioner shall show cause, in writing, filed with the Division of Administrative Hearings, at the address below the signature line of this document why this cause should not be dismissed. Specifically, Petitioner is permitted to send a written response (1) stating why any factual allegation contained in any of Respondent's previously filed materials is not true and correct; (2) giving any reason the Confidential Release and Settlement Agreement and Petitioner's Affidavit provided by Respondent should not be presumed valid; and (3) stating any reason this cause should not be dismissed for the reasons put forth by Respondent. In order to be considered, Petitioner's Response must be filed at the address below not later than August 10, 2005. On July 28, 2005, Petitioner filed a letter-response dated July 25, 2005, asking to speak to the undersigned and requesting that the case "stay alive" and move forward. Petitioner's letter-response disputed no facts or law asserted by Respondent. Accordingly, all the facts and documents presented by Respondent are presumed valid, and Respondent's pending Motion may be treated as a motion for recommended order of dismissal, to be determined upon the pleadings, without further evidence. On February 7, 2005, in a workers' compensation claim by Petitioner against Respondent Employer and the Employer's insurance carrier, Petitioner signed two settlement agreements. One settlement agreement complied with the requirements of Chapter 440, Florida Statutes, with regard to specific issues cognizable under the Florida Workers' Compensation Act and was entitled "Joint Stipulation for Settlement under Florida Statutes Sections 440.20(11)(c), (d) and (e) (2001)." The other settlement agreement, entitled "Confidential Release and Settlement Agreement" was more general and provided in pertinent part: Payment to Employee. The Employer/Carrier shall pay Employee the lump sum of $500.00 within fourteen (14) business days after Employee executes this Agreement and the Employee's withdrawal of the charge of discrimination, if any, which may be pending and is accepted and acted upon by the EEOC and the JEOC through an administrative dismissal of the charge or within fourteen (14) days of the approval of the Motion for Approval of Attorney's Fees, whichever is later. This settlement is being entered into simultaneously with a settlement of the workers' compensation claim and the consideration outlined above is provided for therein. [R]eleases and discharges the Employer [Premium Waters, Inc.] and Carrier, and any affiliated and related companies, and their attorneys, officers, directors, shareholders, agents, and employees of any of them, from all claims, actions demands, rights and causes of action (including any right to demand or receive attorney's fees) whether known or unknown by the Employee, that the Employee may have arising out of, based on, or relating directly or indirectly to, the Employee's employment with the Employer or the termination of that employment, the accident dated 06/25/03, and any events occurring during such employment or thereafter until the date of this Agreement. This release and waiver includes, but is not limited to, a release of any claims, actions, demands, rights or causes of action the employee may have under any federal, state, or local laws or regulations currently in effect and/or applicable to Employee, including, but not limited to Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, Section 1981 of the Civil Rights Act, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1991, the National Labor Relations Act, Chapter 440 of the Florida Statutes, Chapters 448 and 760 of the Florida Statutes, the Equal Pay Act, Fair Labor ad [sic] Standards Act, the Civil Rights Act of 1871, as amended (42 U.S.C. Section 1983 and 1985), and any other statutory or common law claims including, without limitation claims for negligence, gross negligence, wrongful discharge and/or retaliation under state or federal law, including but not limited to, Fla. Stat. 440.205, and all claims of any nature which were raised or could have been raised in any charge, arising out of the injuries, accident, and employment which are the subject of this settlement, in which the Employee now has, has had, or might ever have against the Employer or Servicing Agent, or any of its or their officers, agents, servants, employees, attorneys, directors, successors, predecessors, assigns, or any other person or entity so connected or related to the Employer or Servicing Agent, without any limitation thereof or thereon in the event the United States government or any of its entities or administrative bodies makes any claim against the Employer, its Servicing Agent, and/or its insurance Carrier, for reimbursement of any medical expenses incurred, or that may be incurred in the future as a result of the workers' compensation accident of 06/25/03, the Employee agrees to indemnify and hold the Employer, its Servicing Agent and/or its insurance Carrier harmless from any such claims. The Employee further agrees to indemnify and hold harmless the Employer and Carrier against all liabilities, claims, losses and expenses, including reasonable attorney's fees and costs, arising out of the industrial injuries which are the subject of this settlement. Dismissal/Withdrawal of Charge. As a condition precedent to receipt of payment described in Section 1 hereof, Employee shall deliver to counsel for the Employer/Carrier a copy of an executed document withdrawing the Charge, if any, with evidence that it has been filed with an EEOC and the JEOC. Upon receipt of proof that the EEOC and JEOC have dismissed the Charge, the Employer shall make payment as described above. There were clearly two types of release contemplated, two types of release executed, and two amounts of money were intended to flow from the Employer to the Petitioner. One amount of money was to be paid upon the Judge of Compensation Claims' approval of the workers' compensation settlement, and $500.00 was to be paid when Petitioner dismissed his EEOC claim. The affidavit of Joseph W. Standley, with its attachments, dated February 28, 2005, has established that the foregoing "Confidential Release and Settlement Agreement" (see Finding of Fact 22), was signed by Petitioner, under oath, and was signed by Petitioner's workers' compensation attorney; and that Petitioner's own affidavit averred that he had "read, or . . . had read to [him], and underst[oo]d the terms of the . . . Confidential Release." The affidavit of Joseph W. Standley, dated April 28, 2005, and filed with Respondent's May 2, 2005 Memorandum in response to the April 15, 2005 Order herein, established that Mr. Standley represented the employer, Premium Waters, Inc., and its insurance carrier, Cincinnati Casualty, in the settlement of Petitioner's workers' compensation claim in Eligio Orellana, [Claimant] v. Premium Water[s, Inc., Employer] and Cincinnati Casualty [Carrier], OJCC Case No. 04-029070JDO. Mr. Standley's affidavit is unrefuted that the Claimant in that case (Petitioner herein) had the benefit and assistance of legal counsel throughout his workers' compensation claim, and that Petitioner's attorney received, reviewed, and signed, along with Petitioner, and returned the documents considered in accomplishing the settlement of the workers' compensation case. Mr. Standley has sworn that Petitioner was represented by counsel throughout the workers' compensation claim, through and including accomplishment of the settlement and approval by the Judge of Compensation Claims, and that as parts of the overall settlement of Petitioner's workers' compensation claim, there were a "Joint Stipulation for Settlement" as required by Chapter 440, Florida Statutes, and a separate "Confidential Release and Settlement Agreement," and an affidavit by Petitioner that he had read, or had read to him, and understood "the terms of the Joint Stipulation for Settlement and [the] Confidential Release;" that the Confidential Release was signed under oath by Petitioner and Petitioner's attorney; and that "neither the release signed under oath by Petitioner and his attorney, nor Petitioner's affidavit were included among the papers presented to the Judge of Compensation Claims." Mr. Standley's two affidavits, together with their supporting documents, are unrefuted, because Petitioner did not offer any objection or oppositional response.
Recommendation Based on the foregoing uncontroverted or undisputed Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief and Charge of Discrimination herein. DONE AND ENTERED this 26th day of August, 2005, in Tallahassee, Leon County, Florida. S 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 26th day of August, 2005. COPIES FURNISHED: Cecil Howard, Esquire Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Eligio Orellana Post Office Box 1800 Interlachen, Florida 32148 Russell W. LaPeer, Esquire Landt, Wiechens, LaPeer & Ayres 445 Northeast Eighth Avenue Ocala, Florida 34470
The Issue The issue is whether Section 11B(3) of the Florida Workers' Compensation Reimbursement Manual for Hospitals, 2004 Second Edition, is an invalid exercise of delegated legislative authority.
Findings Of Fact The petitions filed by FFVA and TIC challenge the validity of Section 11B(3) of the 2004 Manual,4/ which prior to October 1, 2007, was adopted by reference as part of Florida Administrative Code Rule 69L-7.501(1). Florida Administrative Code Rule 69L-7.501(1) was amended effective October 1, 2007, to adopt by reference the Florida Workers' Compensation Reimbursement Manual for Hospitals, 2006 Edition ("the 2006 Manual"). Florida Administrative Code Rule 69L-7.501(1), as it existed when the petitions were filed and as it currently exists, adopts by reference the 2006 Manual, not the 2004 Manual. The 2004 Manual is no longer adopted by reference as part of Florida Administrative Code Rule 69L-7.501, or any other rule. AHCA applied the 2004 Manual in the reimbursement dispute initiated by HRMC against FFVA under Section 440.13, Florida Statutes, as reflected in the determination letter issued by AHCA on October 24, 2007, which was attached to FFVA's petition. The reimbursement dispute is the subject of the pending DOAH Case No. 07-5414. AHCA applied the 2004 Manual in a reimbursement dispute involving TIC under Section 440.13, Florida Statutes, as reflected in the determination letter issued by AHCA on January 9, 2008, which was attached to TIC's petition. The reimbursement dispute is the subject of the pending DOAH Case No. 08-0703.
The Issue Whether the Respondent violated Subsection 475.25(1)(b), Florida Statutes, by failing to reconcile his accounts, having monies stolen from him by an employee, and withdrawing money from his escrow account as commissions. Whether the Respondent violated Subsection 475.25(1)(k), Florida Statutes, by failing to maintain funds paid to him as deposits for rentals, sales taxes, and security deposits in his escrow account until after the date of the rental.
Findings Of Fact The Respondent is a licensed real estate broker and was so licensed at all times relevant to the events which are a part of the Administrative Complaint. The Respondent holds license number 0177110 issued as a broker, t/a Sunspot Realty, 16428 West Highway 98A, Panama City, Florida 32407. On February 10, 1989, Elaine Brantley, an investigator for the Department of Professional Regulation, visited the Respondent's office for the purpose of conducting a financial audit of the records of the business. The Respondent was not present; and Teresa Tuno, the Respondent's secretary and wife, stated she would prefer that Brantley not review the records in her husband's absence. On February 14, 1989, Brantley telephoned the Respondent and made arrangements to audit Respondent's books on February 15, 1989. A review of the records by Brantley on February 15, 1989 revealed that the records were in a state of disarray and the ledgers were not posted. At that time, Brantley advised the Respondent that the records had to be put in order, the ledgers posted, and accounts reconciled by February 17, 1989, when she would reinspect the records. Brantley reinspected the records on February 17, 1989, and all the ledgers had been posted and the accounts had been reconciled through January. The audit revealed that Tuno had received $47,961.45 in security deposits, sales taxes, and rental deposits which were not refundable under the lease agreement. The audit revealed that the balance of the Respondent's escrow account was $33,321.45. The difference between the balance of the escrow account and the money received by the Respondent includes $8,000 which the Respondent paid to himself with checks drawn on the account for "commissions", and $6,540 which had been stolen by an employee of the Respondent. The monies stolen included cash deposits paid by rental customers to the employee and one check on the escrow account endorsed in blank and given to the employee to pay for items purchased for one of the rental units which the employee cashed and converted to his own use. The theft was reported to the local police and their investigation revealed that the employee had disappeared under suspicious circumstances, indicating foul play. The lease agreement states that a deposit of 50% of the rental rate was required to reserve a property and the deposit was refundable only if another tenant could be found for the same period. The Respondent's agreement with the owner of the property called for a commission of 30% of the rental receipts. However, there was no mention of when the commission was earned and under what circumstances it would be paid in the original rental agreement. Upon being criticized for this practice by Brantley, the Respondent repaid the total amount of the draws. Subsequently, he had a new agreement drawn purporting to authorize early payment of management fees. The new agreement states in pertinent part: Owner agrees to compensate Agent a commission of 30% of rental receipts with the exception of long term winter rentals which will be at a rate of 20%. Agent is authorized to draw management fees upon receipt of tenant's non-refundable reservation deposit. The balance of the escrow account was sufficient to meet any potential demands against it. Had the property been leased to another renter for the same period of time, the second renter's deposit would have been deposited to the account making up the funds refunded to the first renter. The audit also revealed that the Respondent had paid monies from the escrow account to a maintenance company operated by the Respondent for work performed on various of the properties. However, the Respondent had not debited the individual property accounts at the time the check was drawn. Each of the properties had a sufficient individual balance to pay for work charged against the property. The appropriate entries were made eventually in the ledgers for the property by the Respondent. The Respondent has amended his agreement with property owners to permit him to bill for repairs on their property on a cost-plus-10% basis to eliminate this problem. None of the actions by the Respondent resulted in financial loss to any of his clients, and the Respondent was cooperative and candid with the auditor.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent: Be required to pay an administrative fine of $1,000 for violation of Section 475.25(1)(k), Florida Statutes, by distributing commissions to himself; Be required to pay an administrative fine of $1,000 for violation of Section 475.25(1)(k), Florida Statutes, by distributing payments to a maintenance company which he owned without debiting individual property accounts; and Be required to enroll and satisfactorily complete a course on maintenance of escrow funds and accounts. DONE AND ORDERED this 6th day of December, 1989, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of December, 1989. APPENDIX A TO RECOMMENDED ORDER, CASE NO. 89-2681 The Respondent filed a letter in place of proposed findings which contained legal argument which was read and considered. It did not contain any findings. The Petitioner filed proposed findings which were read and considered as follows: Paragraphs 1-3 Adopted Paragraph 4, 1st sentence Adopted Paragraph 4, 2nd sentence Rejected as irrelevant Paragraphs 5-7 Adopted Paragraphs 8-10 Rejected. The terms of the contracts do not address when Tuno was entitled to his commission. Under the terms of the contracts the renters were not entitled to a refund of their advance deposit after a reservation was made unless a new renter could be found for the same time, in which case that renter would have to make a deposit. When Tuno was entitled to his commission was not addressed in the contracts. While findings that Tuno violated the provisions of statute relating to maintenance of funds in his escrow account; this failure was based upon the lack of clarity in the contracts and the high standard of conduct in maintaining escrow accounts which is required of licensees. COPIES FURNISHED: Ms. Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32801 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Steven W. Johnson, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street P. 0. Box 1900 Orlando, Florida 32802 Mr. Robert P. Tuno 16428 West Highway 98A Panama City, Florida 32407
The Issue The issue in this case is whether the methodology that Respondent uses to determine the amounts payable to pharmacies for prescription drugs dispensed to Medicaid beneficiaries constitutes an invalid exercise of delegated legislative authority on the ground that the methodology in question, which is incorporated by reference in Florida Administrative Code Rule 59G-4.250, enlarges, modifies, or contravenes the specific provisions of law implemented.
Findings Of Fact The Parties Medicaid is a cooperative federal-state program in which Florida participates in partnership with the national government. Medicaid provides medically necessary health care—— including, relevantly, prescription drugs——to lower income persons. In addition to shouldering administrative and regulatory responsibilities, Florida partially funds the Florida Medicaid Program, contributing about 42 percent of the money budgeted for the program's operation in this state. Federal funds make up the balance. Respondent Agency for Health Care Administration (the "Agency") is the state agency charged with administering the Medicaid Program in Florida. (At the federal level, the Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services, known collectively as "CMS," is the agency authorized to administer Medicaid.) Among other things, the Agency is responsible for reimbursing Medicaid providers in accordance with state and federal law, subject to specific appropriations. In this connection, the Agency is authorized and required to prescribe, by rule, reimbursement methodologies. The Agency is permitted to publish such methodologies in policy manuals and handbooks, provided the latter are incorporated by reference in duly promulgated rules. Petitioner, The Florida Retail Federation, Inc. (the "Federation"), is a trade association whose members include all or most of the major drugstore chains doing business in Florida. These drugstore chains, which include Walgreen's, CVS, Eckerd's, Albertson's, Publix, Winn-Dixie, Target, and Wal-Mart, participate in the Federation's Chain Drugstore Council, which is the only organization in this state representing the interests of drugstore chains. Members of the Federation's Chain Drugstore Council operate more than 2,500 separate pharmacies, each of which is an enrolled Medicaid provider of prescription drugs. Given that there are approximately 4,000 pharmacy-providers participating in the Florida Medicaid Program, the Federation represents a significant percentage of the enrolled pharmacies. The Federation advocates on behalf of its members before the Florida Legislature and the state regulatory agencies. Medicaid funding is one of the organization's top priorities. The Federation brought the instant proceeding because it believes that the Medicaid Program has been under- reimbursing its members based on a methodology that contravenes the applicable Florida statutes. The Disputed Rule The Medicaid reimbursement methodology for prescribed drugs is set forth in the Florida Medicaid Prescribed Drugs Services Coverage, Limitations, and Reimbursement Handbook, July 2001 (the "Handbook), which Handbook was incorporated by reference in, and hence adopted via Section 120.54(1)(i)1., Florida Statutes, as, Florida Administrative Code Rule 59G- 4.250. The methodology, which will be referred to hereafter as the "Reimbursement Rule," limits the amount that the Medicaid Program will pay for prescription drugs, as follows: Reimbursement for covered drugs dispensed by a licensed pharmacy that has been approved to be an eligible provider, or a physician filling his own prescriptions if there is no licensed pharmacy within a ten mile radius of his office, shall not exceed the lowest of: Average Wholesale Price (AWP) minus 13.25 per cent of the drug, (also known as the Estimated Acquisition Cost or EAC) plus the dispensing fee; Wholesaler Acquisition Cost (WAC) plus 7 per cent plus the dispensing fee; Federal Upper Limit (FUL) price plus the dispensing fee; The State Maximum Allowable Cost (SMAC) plus a dispensing fee established by the state on certain categories of drugs not reviewed by CMS (formerly HCFA); or Amount billed by the pharmacy, which cannot exceed the pharmacy’s average charge to the public (non-Medicaid) in any calendar quarter, for the same drug, quality, and strength. This average is known as the pharmacy’s usual and customary charge for the prescription. By its plain terms, the Reimbursement Rule (a) requires that five separate methods for determining reimbursement be applied with respect to each prescription and (b) mandates that the maximum allowable payment for each prescription be the lowest dollar amount resulting from the application of these five methods to the claim at hand.1 For ease of reference, the five separate methods enumerated in the Reimbursement Rule will be referred to collectively as the "Limits." Individually, the Limits will be called the "First Limit," "Second Limit," etc., with the numerical adjective corresponding to the order in which the Reimbursement Rule lists the respective Limits. (Thus, for example, the First Limit is the one based on average wholesale price; the Fourth Limit references the state maximum allowable cost.)2 The Reimbursement Rule was promulgated to implement two statutes in particular. One of these was Section 409.908, Florida Statutes, which provided in pertinent part as follows: A provider of prescribed drugs shall be reimbursed the least of the amount billed by the provider, the provider's usual and customary charge, or the Medicaid maximum allowable fee established by the agency, plus a dispensing fee. § 409.908(14), Fla. Stat. (2003). The other was Section 409.912, Florida Statute, which directed, in relevant part, that "[r]eimbursement to pharmacies for Medicaid prescribed drugs shall be set at the average wholesale price less 13.25 percent." § 409.912(40)(a)2., Fla. Stat. (2003). The Challenge The Federation filed its Petition for Invalidity of Rule ("Petition") on May 19, 2004, initiating the instant proceeding. The Petition describes a straightforward objection to the Reimbursement Rule, namely that the prescribed Limits include methods for determining reimbursement in addition to "average wholesale cost less 13.25 percent," which latter, according to the Petition, constitutes the exclusive method for reimbursing pharmacies, pursuant to Section 409.912(40)(a)2., Florida Statutes (2003). Thus, the Federation alleged, only the First Limit is permissible; the rest are unauthorized, and the Reimbursement Rule enlarges, modifies, or contravenes Section 409.912(40)(a)2. for using them, making the Reimbursement Rule an invalid exercise of delegated legislative authority pursuant to Section 120.52(8)(c), Florida Statutes. As this proceeding progressed, the Federation's position became a bit more complicated. Forced to deal with Section 409.908(14), Florida Statutes (2003), which was not mentioned in the Petition, the Federation effectively conceded (assuming it ever disputed) that "amount billed" and "usual and customary charge" are statutorily authorized methods for calculating reimbursement, in addition to discounted average wholesale price. Unable as a result to argue that the Fifth Limit should be rejected in toto, the Federation claimed instead that the Reimbursement Rule's definition of "usual and customary charge" enlarges, modifies, or contravenes the use of that term in Section 409.908(14), Florida Statutes (2003). On this point, the Federation presented expert testimony at hearing that "usual and customary charge" is a term of art used in the industry to mean the amount a pharmacy charges cash paying customers who have no insurance coverage for the prescription in question. The Reimbursement Rule's definition, in contrast, does not restrict the scope of "usual and customary charge" to uninsured customers, but rather requires that charges to all non-Medicaid customers be taken into account in determining the average charge that equals "usual and customary charge." Because private insurers and HMOs typically negotiate discounts not available to uninsured consumers, the inclusion of amounts charged to insured customers in the equation for calculating "usual and customary charge," à la the Reimbursement Rule, is likely to produce, in most instances, a lower "usual and customary charge" than would obtain were charges to insured customers excluded from the calculation. The Federation argues that the legislature intended "usual and customary charge" to have the more generous technical meaning that the industry ascribes to it, and therefore that the Reimbursement Rule enlarges, modifies, or contravenes the specific law implemented by giving the term a different, more parsimonious meaning. Confronting Section 409.908(14) also compelled the Federation to argue that, while the section imposes (and hence enables the Agency to implement) limits on reimbursement in addition to discounted average wholesale price, the reference therein to "the Medicaid maximum allowable fee established by the agency" as an alternative reimbursement limit nevertheless cannot be construed as authority for the adoption of a methodology that would result in reimbursement at less than the least of (a) the amount billed by the provider, (b) the provider's "usual and customary charge" (as the Federation would define that term), or (c) average wholesale cost less 13.25 percent. In this regard, the Federation asserts that Section 409.908(14) and Section 409.912(40)(a)2.——which might at first blush appear to be inconsistent with one another——can easily be harmonized by construing "Medicaid maximum allowable fee established by the agency" to mean "average wholesale price less 13.25 percent." The Agency's Defense of Reimbursement Rule The Agency's arguments in support of the Reimbursement Rule can be reduced to two principal propositions. First, the Agency insists that if it were to reimburse pharmacies for all prescribed drugs at average wholesale price less 13.25 percent, the resulting payments, in the aggregate, would exceed federal limits on reimbursement, for reasons that need not detain us here. Exceeding federal limits, the Agency asserts, could cause CMS to take adverse action against the Florida Medicaid Program, perhaps putting at risk Florida's continued receipt of federal matching funds. Second, the Agency contends that Section 409.912(40)(a)2., Florida Statutes (2003), which requires that reimbursement be set at the average wholesale price less 13.25 percent, does not establish a floor (as the Federation maintains) but rather, when read in conjunction with Section 409.908(14), Florida Statutes (2003), prescribes another potential ceiling in addition to the pharmacy's actual charge, "usual and customary charge," and "the Medicaid maximum allowable fee established by the agency," which are the other potential ceilings pursuant to Section 409.908(14). Under this interpretation of the statutes, application of the Reimbursement Rule always produces the Medicaid maximum allowable fee established by the Agency——a statutorily authorized limit——and if that fee happens in a given situation to be less than the discounted average wholesale price, so be it. The New Statutory Methodology The 2004 Legislature amended Sections 409.908(14) and 409.912(40)(a)2., Florida Statutes (2003), enacting a bill (House Bill No. 1843) that was signed by the governor while this case was pending, on May 28, 2004. See Laws of Florida, Ch. 2004-270, §§ 12 and 17. The relevant statutory amendments took effect on July 1, 2004, id. at § 25, which was shortly after the final hearing in this case——and prior to the date of this Final Order. As amended, Section 409.908(14), Florida Statutes (2004), reads in relevant part as follows, with the recently added language underlined: A provider of prescribed drugs shall be reimbursed the least of the amount billed by the provider, the provider's usual and customary charge, or the Medicaid maximum allowable fee established by the agency, plus a dispensing fee. The Medicaid maximum allowable fee for ingredient cost will be based upon the lower of: average wholesale price (AWP) minus 15.4 percent, wholesaler acquisition cost (WAC) plus 5.75 percent, the federal upper limit (FUL), the state maximum allowable cost (SMAC), or the usual and customary (UAC) charge billed by the provider. As amended, Section 409.912(40)(a)2., Florida Statutes (2004), provides in pertinent part as follows, with the newly added language underlined and recently deleted language stricken through: Reimbursement to pharmacies for Medicaid prescribed drugs shall be set at the lesser of: the average wholesale price (AWP) minus 15.4 percent, the wholesaler acquisition cost (WAC) plus 5.75 percent, the federal upper limit (FUL), the state maximum allowable cost (SMAC), or the usual and customary (UAC) charge billed by the provider the average wholesale price less 13.25 percent. Collectively, Sections 409.908(4) and 409.912(40)(a)2., Florida Statutes (2004), will be referred to hereafter as the "New Statutory Methodology."
